Ehrlicher v. St Farm Ins Co ( 1999 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
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No. 98-30837
Summary Calendar
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CINDY L. EHRLICHER,
Plaintiff-Appellee,
VERSUS
STATE FARM INSURANCE COMPANY, et al.,
Defendants,
NEW HAMPSHIRE INSURANCE COMPANY,
Defendant-Appellant.
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Appeal from the United States District Court
for the Eastern District of Louisiana
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March 15, 1999
Before JOLLY, SMITH, and WIENER, Circuit Judges.
JERRY E. SMITH, Circuit Judge:
Defendant New Hampshire Insurance Company (“New Hampshire”)
appeals the denial of its motion for summary judgment and the grant
of plaintiff Cindy Ehrlicher’s motion for summary judgment seeking
uninsured motorist insurance coverage for an accident incurred
during the course and scope of her employment. Concluding that the
district court erred in its application of Louisiana law, we
reverse and render summary judgment in favor of New Hampshire.
I.
We review a summary judgment de novo, employing the same
standards as did the district court. See Urbano v. Continental
Airlines, Inc., 138 F.3d 204, 205 (5th Cir.), cert. denied,
119 S. Ct. 509 (1998). Summary judgment is appropriate when,
viewing the evidence in the light most favorable to the nonmoving
party, there is no genuine issue of material fact and the moving
party is entitled to judgment as a matter of law. See Celotex
Corp. v. Catrett, 477 U.S. 317, 322-24 (1986); see also FED. R. CIV.
P. 56(c).
II.
Ehrlicher, an employee of American Healthcare, Inc.
(“American”), collided with an underinsured motorist while driving
her own car, allegedly during the course and scope of her
employment. She recovered up to the limit of the underinsured
motorist’s coverage as well as under her employer’s workers'
compensation policy. She now seeks benefits from American’s
insurance policy with New Hampshire.
III.
The district court focused on interpreting American’s
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insurance policy with New Hampshire, concluding that a signed
endorsement modified the main policy so as to provide
underinsured/uninsured motorist ("UM") coverage to employees of
American driving their own vehicles in the scope of their
employment. Specifically, the court found that the section of the
endorsement entitled “Who is an Insured” extends the contractual
scope of the UM coverage to employees in Ehrlicher’s situation.
Section B(5) of the endorsement defines “Who is an Insured” as
"[a]nyone else “occupying” an “auto” you do not own and that is a
covered “auto” under this coverage part for Liability Insurance and
is licensed and principally garaged in Louisiana."
Because the main policy defines a “covered auto” as “any
auto,” and because Ehrlicher’s car is “licensed and principally
garaged in Louisiana,” the court found that Ehrlicher can properly
claim coverage under this provision. The court relied on a similar
interpretation of a nearly identical provision in Bays v. Estate of
Zeringue, 584 So. 2d 715 (La. App. 5th Cir.), writ denied,
590 So. 2d 79 (La. 1991), writ denied, 590 So. 2d 576 (La. 1992).
New Hampshire protests that this reading of § B(5) would lead
to the absurd result of extending coverage to “any auto” that is
“licensed and principally garaged in Louisiana.” As another
Louisiana court of appeal noted, the district court’s reading could
allow “even the members of this court [to] claim UM coverage under
the policy as literally construed.” Ratcliff v. Theriot,
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634 So. 2d 1234, 1236 (La. App. 3d Cir.), writ denied, 637 So. 2d
1048 (La. 1994).1
The district court reasoned that extending UM coverage to an
employee driving her own car in the course of her employment is
hardly an absurd result. We agree with the Ratcliff court,
however, that the reading urged by the plaintiffs and adopted by
the district court provides no basis for limiting coverage to
employees driving their own cars in the scope of their employment.
Reading “covered auto” to mean “any auto” would lead to absurd
consequences, even if the particular application in this case does
not seem so absurd. “Even if the words are fairly explicit, it is
our duty to refrain from construing them in such a manner as to
lead to absurd consequences.” Cashio v. Shoriak, 481 So. 2d 1013,
1015 (La. 1986).
New Hampshire has offered a reasonable reading of § B(5) that
limits UM coverage to vehicles owned by American. It relies on the
phrase “under this coverage part” to limit the scope of “covered
autos” to those vehicles specified as covered in the UM coverage
section of the policy. Because the declaration page for the UM
coverage section states that only vehicles owned by American are
1
Bays and Ratcliff represent a circuit split within Louisiana between the
Fifth and Third Circuits. Unfortunately, the Louisiana Supreme Court denied
writs for certiorari in both cases without explanation. This leaves us with no
binding authority to resolve the question, because “a denial of a writ of
certiorari neither constitutes an approval of the court of appeal’s decision nor
does it create precedent.” Stewart v. Robinson, 521 So. 2d 1241, 1248 (La. App.
3d Cir. 1988).
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UM-covered vehicles, New Hampshire avers that § B(5) is intended to
provide UM coverage only to “anyone” occupying a vehicle owned by
American. We agree.
IV.
Because the district court found that the endorsement extended
the policy’s contractual coverage to Ehrlicher, it did not reach
the question whether UM coverage is statutorily mandated under
Louisiana law, which requires UM coverage for any person insured
under a liability policy unless such coverage is waived. See LA.
REV. STAT. ANN. § 22:1406(d)(1)(a)(I). Therefore, we cannot grant
summary judgment to New Hampshire unless we conclude that Ehrlicher
is not a “liability insured” under the American policy.
Ehrlicher concedes that the original policy specifically
excludes her and all other American employees from being
“liability insured[s]” and would constitute a waiver under
Louisiana law. She nevertheless argues that the endorsement
replaces the original policy and broadens the group of “liability
insured” persons to include any person driving a vehicle
principally licensed and garaged in Louisiana.
We agree with New Hampshire that the endorsements can be read
to avoid conflicting with the original policy’s liability
provisions (as well as avoiding another absurd result). Nothing in
the language of the UM coverage endorsement purports to change the
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group of “liability insureds” covered generally under the policy.
Rather, the UM coverage endorsement focuses on defining who is
contractually afforded UM coverage. This reading seems especially
reasonable in light of the “Louisiana Changes” endorsement, which
specifically states how it modifies the original policy’s group of
“liability insureds.” Therefore, we reject Ehrlicher’s claim of
statutory UM coverage.
For the foregoing reasons, we REVERSE the summary judgment in
favor of Ehrlicher and RENDER summary judgment for New Hampshire.
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