Celebration Church, Inc. v. United National Insurance Co.

Case: 16-30048 Document: 00513658503 Page: 1 Date Filed: 08/30/2016
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 16-30048
FILED
August 30, 2016
Lyle W. Cayce
Clerk
CELEBRATION CHURCH, INCORPORATED,
Plaintiff - Appellant
v.
UNITED NATIONAL INSURANCE COMPANY,
Defendant - Appellee
Appeal from the United States District Court
for the Eastern District of Louisiana
USDC No. 2:14-CV-1050
Before STEWART, Chief Judge, and CLEMENT and HAYNES, Circuit
Judges.
PER CURIAM:*
Celebration Church, Incorporated, (“Celebration Church”) appeals the
district court’s grant of summary judgment in favor of United National
Insurance Company (“UNIC”). We AFFIRM.
* 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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.
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No. 16-30048
I. Background
Celebration Church is the owner of commercial property located in
Metairie, Louisiana. In 2013, Celebration Church discovered that thieves had
opened seven air conditioning units installed on the rooftop of its commercial
property and had stolen the units’ condensers, resulting in the loss of
condenser coils and refrigerant. Celebration Church filed a claim with UNIC
under its all-risk commercial property insurance policy, and UNIC denied
coverage on the basis that the theft fell under the Theft of Attached Metals or
Alloys and Associated Vandalism Total Exclusion (“Precious Metals
Exclusion”). The Precious Metals Exclusion states:
We will not pay for loss or damage caused by or
resulting from any of the following: . . .
Theft or attempted theft, and any vandalism caused
by or resulting from such theft or attempted theft, of
any copper, aluminum or any other precious or semi-
precious alloys or metals that are attached or
connected to buildings or structures, or are part of any
machinery or equipment attached or connected to
buildings or structures.
Celebration Church filed suit against UNIC in Louisiana state court, and
UNIC removed to federal court on the basis of diversity jurisdiction.
Celebration Church and UNIC filed cross-motions for summary judgment, and
the district court ruled in favor of UNIC. Celebration Church timely appealed.
II. Standard of Review
We review a district court’s summary judgment ruling de novo, applying
the same standard as the district court. Amerisure Ins. Co. v. Navigators Ins.
Co., 611 F.3d 299, 304 (5th Cir. 2010). “On cross-motions for summary
judgment, we review each party’s motion independently, viewing the evidence
and inferences in the light most favorable to the nonmoving party.” Id.
(citation omitted). We review a district court’s interpretation of an insurance
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policy de novo. Am. Home Assurance Co. v. United Space All., LLC, 378 F.3d
482, 486 (5th Cir. 2004).
III. Discussion
Celebration Church argues that the district court erred in concluding
that there was no coverage under the policy due to the Precious Metals
Exclusion. If an insurance policy’s wording is “clear and unambiguously
expresses the parties’ intent, the insurance contract must be enforced as
written.” Bilbe v. Belsom, 530 F.3d 314, 315 (5th Cir. 2008)(quoting In re
Katrina Canal Breaches Litig., 495 F.3d 191, 207 (5th Cir. 2007)); Cadwallader
v. Allstate Ins. Co., 848 So. 2d 577, 580 (La. 2003). 1 At the summary judgment
stage, UNIC has the burden of producing evidence to make a prima facie case
that the exclusion applies, at which point the burden shifts to Celebration
Church to present evidence that a genuine dispute of material fact remains.
See Bayle v. Allstate Ins. Co., 615 F.3d 350, 359 (5th Cir. 2010).
The Precious Metals Exclusion unambiguously applies to this case. It
clearly excludes from coverage losses or damages “caused by or resulting from”
the “theft . . . of . . . copper [or] aluminum” coils from rooftop air conditioning
units—in other words, from “machinery or equipment attached or connected to
buildings or structures.”
Celebration Church attempts to argue that UNIC did not meet its
burden of proving that the Precious Metals Exclusion applies because UNIC
failed to prove the composition of the condenser coils. This argument is
without merit. UNIC points to the testimony of numerous witnesses familiar
with the air conditioning units at issue, some of whom examined the air
conditioning units directly after the theft. All testified that the coils were
either copper or aluminum, both of which are explicitly listed in the Precious
1 Both parties agree that Louisiana law applies to this dispute.
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Metals Exclusion. Celebration Church unsuccessfully attempts to create a
dispute of material fact by arguing that one of the witnesses expressed
uncertainty as to the composition of the coils. In reality, however, the witness
actually testified that the condenser coils “may have been copper, may have
been aluminum. But it’s one or the other.” (emphasis added). Thus, the
witness’s uncertainty actually stemmed from an irrelevant distinction, because
both metals are expressly listed in the Precious Metals Exclusion. Celebration
Church also failed to produce any evidence suggesting that the condenser coils
were made of anything other than copper or aluminum. The district court
therefore did not err in concluding that there was no genuine dispute of
material fact as to the composition of the coils. 2 The Precious Metals Exclusion
applies.
Also unpersuasive is Celebration Church’s argument that the loss of
refrigerant as a result of the theft falls outside the scope of the Precious Metals
Exclusion. Essentially, Celebration Church attempts to argue that the loss of
refrigerant was a theft separate and apart from the theft of the condenser coils,
such that the loss of refrigerant was not a loss “caused by or resulting from”
the theft of copper or aluminum. A mechanical contractor who examined the
air conditioning units testified that in order for thieves to successfully steal the
refrigerant, it would require a time-consuming process using specialized
equipment to prevent the refrigerant from immediately evaporating into the
atmosphere. The contractor further testified that he saw no indication that
such a process was used in this instance.
2 Celebration Church claims that coverage exists by arguing that condenser coils are
“covered equipment” as defined in the policy’s Equipment Breakdown Endorsement. But the
Endorsement specifically states that UNIC will “pay for loss caused by or resulting from an
‘accident’ to ‘covered equipment.’” (emphasis added). It is undisputed here that the losses
were caused by theft, not any accident. The Equipment Breakdown Endorsement is therefore
inapplicable.
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Despite this testimony, Celebration Church failed to present any
evidence that would lend support to the implausible theory that the thieves
engaged in the complicated and time-intensive process to successfully steal the
refrigerant by maintaining it in liquid form. Accordingly, Celebration Church
failed to create a genuine dispute of material fact as to whether the loss of
refrigerant fell outside of that which was “caused by or resulting from” the theft
of the copper or aluminum coils. See Certain Underwriters at Lloyds, London
v. Law, 570 F.3d 574, 579 (5th Cir. 2009) (applying a similar standard under
Texas law 3 and concluding that damage resulting from the theft of rooftop air
conditioning coils was not covered under an insurance policy because “[t]he
plain language . . . leaves little room for debate that this was damage ‘caused
by or resulting from’ theft and is thus excluded from coverage by virtue of the
theft exclusion”).
Celebration Church also attempts to find support for its arguments from
Haas v. Audubon Indemnity Co., 722 So. 2d 1022 (La. Ct. App. 1998). This
argument fails because the relevant parts of the policy in Haas bear little
resemblance to the policy at issue here. Haas involved a policy that required
the court to distinguish between losses caused by vandalism (covered under
the policy) and losses caused by theft (not covered). See id. at 1027–28. Here,
however, the Precious Metals Exclusion clearly excludes from coverage any
losses caused by or resulting from both “[t]heft . . . and any vandalism caused
3 While Celebration Church contends that Certain Underwriters at Lloyds is
inapplicable because it applied Texas law, Texas and Louisiana law do not materially differ
in this regard because both interpret insurance policies to give effect to the “intention of the
parties as expressed in the instrument.” 570 F.3d at 577 (citation omitted); accord
Cadwallader, 848 So. 2d at 580 (“The judiciary’s role in interpreting insurance contracts is
to ascertain the common intent of the parties to the contract.”).
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by or resulting from such theft.” (emphasis added). Haas is therefore
inapplicable to this case.
The Precious Metals Exclusion bars coverage in this case. We AFFIRM.
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