Navarro Pecan Co Inc v. Penn America Ins Co

UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 01-31183
Summary Calendar
NAVARRO PECAN CO., INC.,
Plaintiff-Appellant,
versus
MANSFIELD WAREHOUSING INVESTMENT CO., LLC;
MANSFIELD COLD STORAGE, INC.,
Defendants,
and
MANSFIELD WAREHOUSING SERVICES, INC.,
Defendant-Cross Claimant,
versus
PENN AMERICA INSURANCE CO.,
Intervenor Defendant-Cross Defendant-Appellee.
_________________________________________________________________
Appeal from the United States District Court
for the Western District of Louisiana
(99-CV-371)
_________________________________________________________________
March 29, 2002
Before HIGGINBOTHAM, WIENER, and BARKSDALE, Circuit Judges:
PER CURIAM:*
For this interlocutory appeal permitted by our court, Navarro
Pecan Co., Inc., contests the summary judgment awarded Penn America
Insurance Co. The district court held that Penn’s insurance policy
issued to Mansfield Warehousing Services, Inc. (MWSI), did not
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
cover the loss of Navarro’s property because, pursuant to a policy
exclusion, it was in MWSI’s care, custody, or control. Navarro
advances two contentions: the terms of the policy are ambiguous;
and the district court failed to properly apply Louisiana law.
Navarro was a depositor of approximately 1.4 million pounds of
pecans in a cold-storage warehouse owned by Mansfield Cold Storage,
Inc., and operated by MWSI. Navarro received warehouse receipts
for loads of pecans delivered to MWSI, providing that the pecans
would be returned upon payment of storage fees and presentation of
the applicable warehouse receipt(s) to MWSI. The rupture of a
frozen fire sprinkler pipe allegedly damaged the pecans. Navarro
sued MWSI, and subsequently Penn (MWSI’s insurer), for $1.5
million.
Summary judgment was awarded Penn. We review de novo. E.g.,
Stults v. Conoco, Inc., 76 F.3d 651, 654 (5th Cir. 1996). As
noted, the policy excludes from coverage “[p]ersonal property in
the care, custody or control of the insured [MWSI]”.
Navarro first contends the “care, custody or control”
exclusion is ambiguous, precluding summary judgment for Penn.
However, because MWSI is a depositary (or bailee) and a
warehouseman, it is deemed to have “care, custody or control” over
the personal property it accepts for deposit. See Hendrix Elec.
Co., Inc. v. Casualty Reciprocal Exch., 297 So.2d 470, 474 (La.
App. 2d Cir. 1974); see also LA. CIV. CODE art. 2926 (deposit
requires person to receive property and preserve it); LA. REV. STAT.
ANN. §§ 10:7-204 (warehouseman has duty of care) & 10:7-209
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(warehouseman given lien over goods covered by receipt).
Accordingly, under the circumstances of this case, the provision is
not ambiguous. See Home Ins. Co. v. A.J. Warehouse, Inc., 210 So.
2d 544 (La. App. 4th Cir.), application denied, 214 So. 2d 162,
163, 165 (La. 1968).
Navarro further contends Reynolds v. Select Properties, Ltd.,
634 So. 2d 1180 (La. 1994), provides the only circumstances where
the “care, custody, or control” exclusion applies in Louisiana.
The Louisiana Supreme Court stated, however, that “the first, and
most common, circumstance usually occurs” in the contractor or
subcontractor context and noted “the insured’s actual physical
possession of or control over the property determined whether the
exclusion applied”. Id. at 1184 (emphasis added). The second
circumstance occurs when “the insured has a proprietary interest in
or derives monetary benefit from the property”. Id.First, the Louisiana Supreme Court did not state these were
the only circumstances where it applies, and other Louisiana
decisions confirm the exclusion applies in other circumstances as
well. See, e.g., Keller v. Case, 757 So. 2d 920, 923 (La. App. 1st
Cir. 2000) (horse boarded at stable under insured’s care, custody,
and control); Duchmann v. Orleans Maritime Brokerage, Inc. & The
Hartford, 603 So. 2d 818, 820 (La. App. 4th Cir. 1992) (barge in
insured’s care, custody, and control during transport); Berquist v.
Fernandez, 535 So. 2d 827 (La. App. 2d Cir. 1988) (Damage to horses
being transported by insured excluded by “care, custody, or
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control” exclusion.); A.J. Warehouse, 210 So. 2d at 550 (Damage to
tiles stored in warehouse covered by the exclusion.).
Further, Reynolds involved a claim based on theft from a self-
storage unit. 634 So. 2d at 1182. The court noted that Reynolds
“merely leased storage space” and the storage contract was governed
by the Louisiana Self-Service Storage Facility Act, LA. REV. STAT.
ANN. 9:4756, which is not a deposit or covered by Louisiana’s
provisions dealing with warehousemen. Because the lease of a self-
storage space is fundamentally different from a deposit, the ruling
in Reynolds (exclusion inapplicable) does not apply here.
Finally, St. Paul Mercury Ins. Co. v. Fair Grounds Corp., 123
F.3d 336 (5th Cir. 1997), does not require reversal of the summary
judgment. There, we acknowledged the parties did not contend the
property at issue was under the control of the insured in a
contractor or subcontractor relationship (Reynolds’ “first
circumstance”) and determined that the insured did not derive a
monetary benefit from the property under the “second circumstance”.
Fair Grounds, 123 F.3d at 340.
AFFIRMED
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