UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_________________________________

No. 93-3658

________________________________

LOR, INC.,

Plaintiff-Appellant,

versus

SEUMAS IAIN COWLEY, as representative of those certain

UNDERWRITERS AT LLOYD'S, LONDON, ET AL.,

Defendants-Appellees.

___________________________________________

Appeal from the United States District Court

for the Eastern District of Louisiana

_____________________________________________

(July 22, 1994)

Before JOHNSON, BARKSDALE, AND DeMOSS, Circuit Judges:

RHESA HAWKINS BARKSDALE, Circuit Judge:

At issue is whether the punitive damages exclusion in the

policy by certain Underwriters at Lloyd's precludes coverage for

their insured, Lor, Inc., for its liability under the Alabama

Wrongful Death Act, for which the only recoverable damages have

been judicially interpreted to be punitive. Because those damages

are not punitive as that term is generally understood, the

exclusion is not applicable. We REVERSE and RENDER.

I.

In December 1989, Lor obtained an excess insurance policy from

Underwriters, containing an exclusion for punitive damages.

Several months later, an employee of a Lor operating division was
1 This action was filed in the Northern District of Alabama

and transferred to the Eastern District of Louisiana.

- 2 -

involved in an automobile accident in Alabama, resulting in the

death of Brenda May. 

May's estate filed an action against Lor and the employee

under the Alabama Wrongful Death Act, Ala. Code § 6-5-410 (1975),

with the claims sounding in negligence. There was no claim of any

wanton, willful, or intentional conduct, nor was there a request

for punitive damages. But, Underwriters denied coverage on the

basis that the action allowed only excluded punitive damages.

Lor settled with the May estate for $1.75 million dollars, of

which $1 million was paid by its primary insurer. Lor sought a

declaratory judgment that the loss was covered by the policy.1 On

cross motions for summary judgment, judgment was awarded

Underwriters. 

II.

We review a summary judgment de novo, applying the same

standard as the district court. E.g., Waltman v. International

Paper Co., 875 F.2d 468, 474 (5th Cir. 1989). Summary judgment is

appropriate if there is no genuine issue of material fact, and the

movant is entitled to judgment as a matter of law. Fed. R. Civ. P.

56. In this instance, no material fact issue exists; we are

presented solely with an issue of law. 

That issue is prompted by the fact that Alabama's Wrongful

Death Act, the sole remedy available to the May estate, has been

interpreted to permit only punitive damages, even though the Act
2 Several months after the May estate settled with Lor, the

Alabama Supreme Court reversed more than 100 years of precedent

and held that a personal injury action does survive death and may

be prosecuted along with a wrongful death action. King v.

National Spa and Pool Institute, Inc., 607 So. 2d 1241, 1246

(Ala. 1992) ("The fact that the injury that serves as the basis

for the personal injury action later gives rise to a wrongful

death claim does not extinguish the original personal injury

claim.") The court stated:

Although Alabama's law of wrongful death is unique

in the United States, the unique nature of a

"punitive only" wrongful death statute can no

longer extend to the deprivation of a universally

recognized right to compensation. This Court is

aware of no other jurisdiction in the United

States where there is no right to recover for

personal injuries that result in death. That is,

whether by statute or by judicially recognized

tort law, the appropriate party may recover

compensation for personal injuries that cause

death in every other American jurisdiction. We

will no longer stand alone on this point.

Id. at 1247. King held also that, because the Act "provides for

punitive damages for the act causing death, it also displaces any

claim for punitive damages in the personal injury action based on

the same act." Id. at 1248.

Because the May estate had already settled, it was not

affected by the reversal in King. Therefore, the issue before us

is addressed only in relation to the pre-King wrongful death

recovery.

- 3 -

does not refer to them. See, e.g., Killough v. Jahandarfard, 578

So. 2d 1041, 1044 (Ala. 1991). As discussed in note 2, infra,

Alabama appears to be unique in this regard.

Under Alabama law, a person injured through the fault of

another may recover compensatory damages and, under certain

circumstances, punitive damages. When the May estate action was

pending against Lor, however, if that person died as a result of

the injuries, punitive damages under the Wrongful Death Act was the

only recovery.2 Relying on this, Underwriters denied coverage. 
3 The policy was issued and delivered in Louisiana; and, under

the applicable choice of law provisions, Louisiana law governs

interpretation. See Industrial Chem. & Fiberglas Corp. v. North

River Ins. Co., 908 F.2d 825, 829 n.3 (11th Cir. 1990). 

- 4 -

Subject, inter alia, to its exclusions, the policy provided

coverage to Lor for its "operations anywhere in the World, for ...

the liability imposed upon [Lor] by law ... which arises" from

bodily injury, among other things. The relevant exclusion was for

"fines, penalties, punitive damages, exemplary damages, or any

additional damages resulting from the multiplication of

compensatory damages". Punitive damages were not defined by the

policy.

The parties agree that Louisiana law controls our construction

of the policy.3 

An insurance policy is a contract between the

parties and should be construed using the general

rules of interpretation of contracts set forth in

the [Louisiana] Civil Code.... If the words of the

policy are clear and explicit and lead to no absurd

consequences, no further interpretation may be made

in search of the parties' intent and the agreement

must be enforced as written.

Crabtree v. State Farm Ins. Co., 632 So. 2d 736, 741 (La. 1994)

(citations omitted). See La. Civ. Code Ann. arts. 2045-2057 (West

1987). "Interpretation of the contract is the determination of the

common intent of the parties.... Intent is determined in

accordance with the plain, ordinary and popular sense of the

language used in the agreement." Thomas v. Kilgore, 537 So. 2d

828, 830 (La. App. 1989) (citations omitted). Along that line, and

citing La. Civ. Code Ann. art. 2047, the Louisiana Supreme Court

has noted that, "[e]xcept for technical terms, the words of a
4 Article 2047 provides:

The words of a contract must be given their

generally prevailing meaning. 

Words of art and technical terms must be

given their technical meaning when the contract

involves a technical matter.

La. Civ. Code Ann. art. 2047 (West 1987).

5 Underwriters asserts, however, that the issue at hand is

controlled by the designation that Alabama has given to damages

under its Wrongful Death Act. But, Alabama's interpretation does

not automatically define the same terms used in a private

insurance contract. It is undisputed that the damages under the

Act are called punitive, but our task is to determine, regardless

of nomenclature, if they are the same as punitive damages

excluded under the policy. We do so by first determining the

general and popular meaning of the term and then comparing it to

Alabama's definition. 

Underwriters contends also that Painter v. Tennessee Valley

Authority, 476 F.2d 943 (5th Cir. 1973) controls; it concerned

whether Alabama wrongful death damages were recoverable against

the Tennessee Valley Authority, in light of the fact that

"Congress has made no provisions allowing suit against it for

punitive damages." Id. at 944. There, our court was

interpreting a waiver of sovereign immunity, not a private

insurance contract; it goes without saying that the rules

governing our interpretation differ greatly. "A waiver of

sovereign immunity cannot be implied but must be unequivocally

expressed." United States v. Mitchell, 445 U.S. 535, 538 (1980)

(internal quotation marks and citation omitted). In contrast,

when interpreting the policy, as noted above, we are bound by

Louisiana law and must look for the generally understood meaning

of the policy's language. 

- 5 -

contract must be given their generally understood meaning."

Capital Bank & Trust Co. v. Equitable Life, 542 So. 2d 494, 496

(La. 1989).4 We need not decide whether "punitive damages" is a

"technical term". For our purposes, its "technical" definition and

"generally understood meaning" are one and the same.5 

In determining such generally understood meaning,

Louisiana courts have looked to a variety of sources. See, e.g.,
- 6 -

Central Louisiana Elec. Co., Inc. v. Westinghouse Elec. Corp., 579

So. 2d 981, 986 (La. 1991) (Webster's Third New International

Dictionary); Capital Bank & Trust, 542 So. 2d at 497, n.9

(Webster's Third New International Dictionary); Tracy v. Travelers

Ins. Cos., 594 So. 2d 541, 544 (La. App. 1992) (Webster's Third New

International Dictionary and Black's Law Dictionary). See also

Loeblich v. Garnier, 113 So. 2d 95, 103 (La. App. 1959) (using

definition of punitive/exemplary damages in Black's Law Dictionary

in determining availability of punitive damages under certain

circumstances under Louisiana law).

The Random House Dictionary 499 (1981) defines punitive

(exemplary) damages as "damages awarded to a plaintiff in excess of

due compensation for his injury to punish the defendant for wanton

or reckless behavior causing the injury." Black's Law Dictionary

provides:

Exemplary damages are damages on an increased

scale, awarded to the plaintiff over and above what

will barely compensate him for his property loss,

where the wrong done to him was aggravated by

circumstances of violence, oppression, malice,

fraud, or wanton and wicked conduct on the part of

the defendant, and are intended to solace the

plaintiff for mental anguish, laceration of his

feelings, shame, degradation, or other aggravations

of the original wrong, or else to punish the

defendant for his evil behavior or to make an

example of him, for which reason they are also

called "punitive" or "punitory" damages or

"vindictive" damages. Unlike compensatory or

actual damages, punitive or exemplary damages are

based upon an entirely different public policy

consideration -- that of punishing the defendant or

of setting an example for similar wrongdoers, as

above noted. In cases in which it is proved that a

defendant has acted willfully, maliciously, or

fraudulently, a plaintiff may be awarded exemplary

damages in addition to compensatory or actual
6 This distinction is also consistent with Louisiana Code

provisions for the recovery of punitive damages. See La. Civ.

Code Ann. art. 2315.4 (Supp. West 1994)(exemplary damages may be

awarded upon proof that injuries caused by "wanton or reckless

disregard" for rights and safety of others by intoxicated

defendant); La. Civ. Code Ann. art 2315.3 (Supp. West 1994)

(exemplary damages may be awarded upon proof that injuries caused

by wanton or reckless disregard for public safety). 

- 7 -

damages. Damages other than compensatory damages

which may be awarded against [a] person to punish

him for outrageous conduct. Wetherbee v. United

Ins. Co. of America, 18 C.A.3d 266, 95 Cal. Rptr.

678, 680. Such are given as an enhancement of

compensatory damages because of wanton, reckless,

malicious or oppressive character of acts

complained of. Cape Publications, Inc. v. Bridges,

Fla. App. 387 So. 2d 436, 440.

Black's Law Dictionary 390-91 (6th ed. 1991) (emphasis added).

Other definitions include "damages awarded in excess of normal

compensation to the plaintiff to punish a defendant for a serious

wrong", Webster's Ninth New Collegiate Dictionary 955 (1990); and

"damages awarded in excess of compensatory damages or nominal

damages to punish a defendant for a gross wrong", Webster's Third

New International Dictionary 1843 (1986).

While each of these definitions differs in some respect, they

all provide that punitive damages are available upon proof of

something more than mere negligence, such as wanton or reckless

behavior or outrageous conduct.6 We need not determine

conclusively all of the elements of the generally understood

meaning of punitive damages. For purposes of this decision, we

need note only that there is no support in any of these authorities

for the position that, as generally understood, punitive damages
7 Underwriters urges that the references to punitive damages

in the policy and interpretation given damages under the Alabama

Wrongful Death Act are the same, because they are both noncompensatory and are intended to punish, as discussed infra. 

Indeed, punitive damages are designed to punish; but the

distinctive characteristic of punitive damages in their general

and popular meaning is that they are intended to punish a

particular quality of conduct -- conduct that is more than

negligence. Likewise, the fact that particular damages are not

"compensatory" does not alone render them punitive. 

- 8 -

are recoverable for simple negligence.7 Therefore, applying the

Louisiana rules of construction, "punitive damages" as used in the

policy means damages recoverable upon proof of more than

negligence. 

Damages recoverable under the Alabama Wrongful Death Act do

not satisfy this definition. The Act provides that "[a] personal

representative may commence an action and recover such damages as

the jury may assess ... for the wrongful act, omission, or

negligence of any person...." Ala. Code §6-5-410 (emphasis added).

The Alabama Supreme Court has held that the Act is designed "to

punish negligent, wanton or intentional acts" causing death.

Lankford v. Mong, 214 So. 2d 301, 302 (Ala. 1968). See also Hanna

v. Riggs, 333 So. 2d 563, 566 (Ala. 1976) (gravamen of action is

"wrongful act, omission or negligence" (internal quotation marks

and citation omitted)). Therefore, "punitive" damages, as that

term is used in relation to the Act, can be recovered, inter alia,

upon proof of simple negligence. Significantly, the damages sought

by the May estate were based solely on negligence.
- 9 -

III.

In sum, the policy excludes coverage for punitive damages,

which, as generally understood, are damages recoverable upon a

showing of something more than negligence. Punitive damages under

the Alabama Wrongful Death Act and the generally understood meaning

of punitive damages clearly share some common characteristics; both

are designed to punish. They are genuinely dissimilar, however,

with regard to the conduct to which they are applicable; this

difference is decisive. Accordingly, because the policy provides

coverage, the district court erred in granting summary judgment in

favor of Underwriters, and denying it for Lor. Therefore, the

judgment is REVERSED, judgment is RENDERED for Lor, Inc., and this

case is REMANDED for further proceedings consistent with this

opinion.

REVERSED, RENDERED, AND REMANDED