IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 10-10042

KENNETH MCQUINNIE,

Plaintiff–Appellant

v.

AMERICAN HOME ASSURANCE COMPANY,

Defendant–Appellee

Appeal from the United States District Court

for the Northern District of Texas

USDC No. 3:09-cv-00920-B

Before STEWART, PRADO, and ELROD, Circuit Judges.

PER CURIAM:

*

Kenneth McQuinnie appeals the district court’s grant of summary

judgment in favor of American Home Assurance Co. (“American”) and its denial

of his cross-motion for summary judgment. The district court held that

American was not contractually bound to pay McQuinnie “underinsured”

benefits under the Business Auto Policy (the “Policy”) held by McQuinnie’s

employer after McQuinnie was injured in a car accident with Anand Prasad

Sapkota. Sapkota drove a rented vehicle owned by Enterprise Leasing

United States Court of Appeals

Fifth Circuit

F I L E D

September 13, 2010

Lyle W. Cayce

Clerk

 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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(“Enterprise”), an undisputed “self-insurer” under the Texas Motor Vehicle

Safety Responsibility Act. The Policy explicitly excludes vehicles “owned or

operated” by self-insurers from the “uninsured” category.

On appeal, McQuinnie argues that the self-insurer exclusion in the Policy

(1) creates a “fatal ambiguity” and (2) conflicts with Texas law. Because the

Policy contains no ambiguity and does not contravene any Texas statutory

provision, we affirm the district court’s grant of summary judgment in favor of

American.

I. FACTUAL AND PROCEDURAL BACKGROUND

In August 2007, McQuinnie sustained damages in an accident between his

vehicle and a rental car driven by Sapkota. Enterprise owned the car Sapkota

drove. At the time of the accident, McQuinnie was covered by the Policy, which

his employer purchased from American. McQuinnie and Sapkota’s insurance

company reached a settlement of $50,000, the limit of Sapkota’s personal

insurance policy.

Alleging that his damages exceeded $50,000, McQuinnie filed a claim with

American, seeking benefits under the “uninsured/underinsured” provisions of the

Policy. In relevant part, the Policy provides that American “will pay damages

which an insured is legally entitled to recover from the owner or operator of an

uninsured motor vehicle because of bodily injury sustained by an insured, or

property damage caused by an accident.” (emphasis added). The Policy also

provides definitions specific to uninsured/underinsured coverage:

F. ADDITIONAL DEFINITIONS

The following are added to the DEFINITIONS section and

have special meaning for UNINSURED/UNDERINSURED

MOTORISTS INSURANCE . . .

6. “Uninsured motor vehicle” means a land motor vehicle

or trailer of any type: . . .

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d. Which is an underinsured motor vehicle. An

underinsured motor vehicle is one to which a

liability bond or policy applies at the time of the

accident but its limit of liability either:

(1) is not enough to pay the full amount the

covered insured is legally entitled to recover; or

(2) has been reduced by payment of claims to

an amount which is not enough to pay the full

amount the covered insured is legally entitled to

recover as damages.

(emphasis added). Finally, the Policy provides a list of exceptions, including the

following: “‘uninsured motor vehicle’ does not include any vehicle . . . [o]wned or

operated by a self-insurer under any applicable motor vehicle law.” (emphasis

added).

American denied McQuinnie’s claim because Enterprise is a self-insurer

under the Texas Motor Vehicle Safety Responsibility Act and therefore falls

within the Policy exception for self-insured owners or operators. McQuinnie

subsequently filed this suit against American in state court seeking to recover

benefits from American. American removed the case to federal court and filed

a motion for summary judgment, relying on the self-insurer exception.

McQuinnie filed a cross motion for summary judgment and cited 49 U.S.C.

§ 30106, which provides that:

(a) In general.—An owner of a motor vehicle that rents or leases the

vehicle to a person (or an affiliate of the owner) shall not be liable

under the law of any State or political subdivision thereof, by reason

of being the owner of the vehicle (or an affiliate of the owner), for

harm to persons or property that results or arises out of the use,

operation, or possession of the vehicle during the period of the rental

or lease, if—

(1) the owner (or an affiliate of the owner) is engaged in the

trade or business of renting or leasing motor vehicles; and

(2) there is no negligence or criminal wrongdoing on the part

of the owner (or an affiliate of the owner).

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McQuinnie used § 30106 to bolster his argument that the self-insurer exception

only applies when the insured is legally entitled to recover from the self-insurer,

and because federal law prevented any recovery from Enterprise, he should be

permitted to recover from American, despite the self-insurer exception.

The district court granted American’s motion for summary judgment,

characterizing McQuinnie’s position as “a truly novel argument unsupported by

the case authority.” The district court found that the Policy unambiguously

defined the term “uninsured motor vehicle” and included examples of vehicles

that are, and are not, included. Because the Policy excluded “any vehicles owned

or operated by a self-insurer under any applicable motor vehicle law,” and the

parties did not dispute that Enterprise is a self-insurer, the district court found

that Enterprise’s vehicle was “expressly excluded” from coverage. Finding that

“[n]othing in the written language employed by the drafters of the Policy

suggests that they intended that there be an exception for instances in which the

insured cannot legally recover against the self-insurer,” the district court

granted summary judgment in favor of American and denied it as to McQuinnie.

McQuinnie timely appealed.

II. ANALYSIS

A. Standard of Review

We review “the district court’s grant of summary judgment de novo,

applying the same standard as the district court.” Chaney v. Dreyfus Serv.

Corp., 595 F.3d 219, 228–29 (5th Cir. 2010) (citing Golden Bridge Tech., Inc. v.

Motorola, Inc., 547 F.3d 266, 270 (5th Cir. 2008)). Summary judgment is

appropriate “if the pleadings, the discovery and disclosure materials on file, and

any affidavits show that there is no genuine issue as to any material fact and

that the movant is entitled to judgment as a matter of law.” FED. R. CIV.P. 56(c).

“The district court’s interpretation of an insurance contract is a question of law

that we . . . review de novo.” Consumers Cnty. Mut. Ins. Co. v. P.W. & Sons

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Trucking, Inc., 307 F.3d 362, 365 (5th Cir. 2002) (citation omitted). “If the court

finds no ambiguity, the court’s duty is to enforce the policy according to its plain

meaning.” Valmont Energy Steel, Inc. v. Commercial Union Ins. Co., 359 F.3d

770, 773 (5th Cir. 2004) (citing Puckett v. U.S. Fire Ins. Co., 678 S.W.2d 936, 938

(Tex. 1984))

B. Sapkota Did Not Drive an Uninsured Motor Vehicle

1. American’s Policy Is Not Ambiguous

Although McQuinnie argues that a “fatal ambiguity” exists in the Policy,

he fails to direct us to the provisions he finds ambiguous. Having examined the

Policy, we find it unambiguous. “Reliance on defined terms in insurance policies

to construe those contracts is necessary to determine the intent of the parties

and integral to the application of basic principles of contract interpretation to

insurance policies.” Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211,

219 (Tex. 2003) (citations omitted). The Policy provides that American “will pay

damages which an insured is legally entitled to recover from the owner or

operator of an uninsured motor vehicle.” The Policy further defines “uninsured

motor vehicle” as an “underinsured motor vehicle.” In other words, the Policy

makes it clear that an “underinsured motor vehicle” is encompassed by the

definition of “uninsured motor vehicle.”

The Policy also provides that an “‘uninsured motor vehicle’ does not

include any vehicle . . . owned or operated by a self-insurer under any applicable

motor vehicle law.” Because the Policy does not consider a vehicle

“uninsured”—and thus provides no coverage—if it is owned or operated by a

“self-insurer,” and an “underinsured vehicle” is a type of “uninsured vehicle,” it

necessarily follows that if an owner or operator of an underinsured vehicle is a

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self-insurer, then the insured is not entitled to recover damages under the

Policy. We therefore find the Policy unambiguous.

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2. American’s Policy Is Valid under Texas Law

i. Texas Law Considers the Insured Nature of the

Vehicle, Not the Tortfeasor

McQuinnie argues that Texas law considers the insurance status of the

tortfeasor, not the insurance status of the vehicle involved in an accident, and

thus Enterprise’s self-insurer status should not defeat coverage. McQuinnie,

however, misinterprets Texas’s Insurance Code (“TIC”). TIC § 1952.101 states

that “‘uninsured or underinsured motorist coverage’ means the provisions of an

automobile liability insurance policy . . . that protects insureds who are legally

entitled to recover from owners or operators of uninsured or underinsured motor

vehicles.” (emphasis added). The TIC provisions addressing the terms

“uninsured” and “underinsured” also explicitly reference vehicles. No relevant

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statute makes mention of an uninsured or underinsured tortfeasor.

McQuinnie’s reliance on Murray v. American Family Mutual Insurance Co., 429 F.3d 1

757 (8th Cir. 2005), for his argument that we should construe the Policy’s alleged ambiguity

in his favor is misplaced. Not only did Murray interpret Missouri law rather than Texas law,

see id. at 761, the Murray court addressed a Policy with a clear and undisputed ambiguity.

See id. at 764 (“The [plaintiffs] argue that since the vehicle [the tortfeasor] was driving fits

both the description of a vehicle that is underinsured and the description of a vehicle that is

not underinsured, the policy is ambiguous.”). In this case, we find no ambiguity in the Policy

at issue.

See TIC § 1952.102 (“For purposes of the coverage required by this subchapter,

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‘uninsured motor vehicle,’ subject to the terms of the coverage, is considered to include an

insured motor vehicle as to which the insurer providing liability insurance is unable because

of insolvency to make payment with respect to the legal liability of the insured within the

limits specified in the insurance.”) (emphasis added).

See TIC § 1952.103 (“For purposes of the coverage required by this subchapter,

3

‘underinsured motor vehicle’ means an insured motor vehicle on which there is collectible

liability insurance coverage with limits of liability for the owner or operator that were

originally lower than, or have been reduced by payment of claims arising from the same

accident to, an amount less than the limit of liability stated in the underinsured coverage of

the insured’s policy.”) (emphasis added).

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In support of his position, McQuinnie argues that the Texas legislature’s

purpose behind passing TIC § 1952.103’s predecessor was to protect the people

of Texas from financially irresponsible drivers. He also cites Infante v. Texas

Farmers Insurance Co., which states:

The purpose of underinsured motorist coverage is to provide an

individual injured by a motorist carrying insurance in an amount

less than that required by law, or otherwise reduced by payments

to other claimants in the same accident, to an amount less than

required by law, with no less coverage than the injured party would

receive had the tort feasor been fully insured or fully covered in

relation to plaintiffs’ underinsured motorist coverage under the law.

640 S.W.2d 321, 323 (Tex. App—Beaumont 1982, writ ref’d n.r.e.) (citation

omitted) (emphasis added). Finally, McQuinnie cites Stracener v. United

Services Automobile Association, 777 S.W.2d 378, 380 (Tex. 1989), asserting that

it stands for the proposition that a motorist is underinsured if his or her liability

insurance will not suffice to pay for the injured party’s actual damages.

McQuinnie’s support does not overcome the clear language of the three

relevant TIC provisions, which refer to the insured nature of the motor vehicle

rather than the tortfeasor. We therefore reject McQuinnie’s argument that,

under Texas law, we must look to the insured nature of the tortfeasor rather

than the insured nature of the vehicle.

ii. The Policy Is Valid under Texas Law

TIC § 1952.103 states that “an underinsured motor vehicle is an insured

motor vehicle on which there is collectible liability insurance coverage” that does

not fully cover a victim’s damages. McQuinnie contends that, under federal law,

Enterprise had no “collectible liability insurance coverage” on the vehicle

Sapkota drove, and therefore the district court erred by considering Enterprise,

rather than only Sapkota. Thus, McQuinnie concludes, “the ‘self-insurer’

exclusion is inapplicable to defeat coverage for underinsured motorist benefits,”

because Sapkota was not a self-insurer and because Enterprise cannot be liable.

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Texas law mandates that any insurer offering automobile coverage must

provide “uninsured or underinsured motorist coverage in the policy or

supplemental to the policy.” TIC § 1952.101(b). An “underinsured motor

vehicle” is defined by Texas law as

an insured motor vehicle on which there is collectible liability

insurance coverage with limits of liability for the owner or operator

that were originally lower than, or have been reduced by payment

of claims arising from the same accident to, an amount less than the

limit of liability stated in the underinsured coverage of the insured’s

policy.

TIC § 1952.103. Texas law explicitly allows certain exclusions from its mandate

that automobile insurers provide uninsured motor vehicle coverage: “[t]he

commissioner may . . . allow ‘uninsured motor vehicle’ to be defined or . . . define

‘uninsured motor vehicle,’ to exclude certain motor vehicles whose operators are

in fact uninsured.” TIC § 1952.102. McQuinnie makes no allegation that the

commissioner did not approve American’s self-insurer exception.

As the vehicle’s “operator,” Sapkota had “collectible liability insurance

coverage,” which means that under Texas law, the car Sapkota drove was

underinsured. Under the Policy, a car that is “underinsured” is considered

“uninsured,” and nothing cited by McQuinnie suggests that an insurance

company may not define “underinsured motor vehicle” as a sub-category of

“uninsured motor vehicle” and include exclusions that apply to both. Under the

Policy, a motor vehicle is not “uninsured” if it is “owned or operated by a

self-insurer under any applicable motor vehicle law.” (emphasis added). It is

undisputed that Enterprise owned the car Sapkota drove and undisputed that

Enterprise is a self-insurer. We thus hold that the application of American’s

self-insurer exception does not violate Texas law, and it therefore bars

McQuinnie from recovery under the Policy. Accordingly, we affirm the district

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court’s grant of summary judgment in favor of American and its denial as to

McQuinnie.

III. CONCLUSION

The Policy contains no ambiguity. Additionally, the Policy does not

contravene any Texas law. We therefore affirm the district court’s grant of

summary judgment in favor of American and its denial as to McQuinnie.

AFFIRMED.

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