* Circuit Judge of the Ninth Circuit, sitting by designation.

** Pursua nt to 5 T H C IR

. 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this opinion should not be published and is not precedent except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 5 TH C IR . R. 47.5.4.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_____________________

No. 00-20406

_____________________

HOUSTON CASUALTY COMPANY,

Plaintiff-Appellant–

Cross-Appellee,

versus

CERTAIN UNDERWRITERS AT

LLOYD’S, subscribing to

reinsurance policy no. 839/DA44790,

and COLIN BAKER

Defendants-Appellees–

Cross-Appellants.

_________________________________________________________________

Appeals from the United States District Court for the

Southern District of Texas

USDC No. H-97-CV-1381

_________________________________________________________________ April 5, 2001

Before FARRIS * , JOLLY, and DAVIS, Circuit Judges.

PER CURIAM: **

In this appeal we are presented with the question whether the

Underwriters may avoid the reinsurance policy because the Houston

Casualty Company, acting through Fenchurch Insurance Brokers,

misrepresented a material fact that induced the mak ing of the2

policy. The resolution of this issue depends largely upon whether

Texas law or English law applies. We have reviewed the district

court’s choice-of-law determination de novo

, see Arochem Corp. v.

Wil omi, Inc. , 962 F.2d 496, 498 (5th Cir. 1992), and agree fully

with the district court’s careful application of the “most

significant relationship” test as set forth in the Restatem ent

( Second) of Conflict of Laws. We further agree that England has

the mor e significant relationship to the transaction and the

parties.

Applying English law, the distric t court held that the

doctrine of uberrimae fidei allowed the Underwriters to avoid the

policy because Fenchurch’s unintentional misrepresentation (that

the original insurance policy con tained language similar to LSW

507) was material and induced the Underwriters to agree to the

reinsurance policy. The district court’s conclusion was correct.

The Underwriters reasonably believed–based on Fenchurch’s negligent

misrepr esentation embodied in Endorsement 3–that the LSW 507

language was already part of the original insurance policy and

would thus “follow through” to the reinsurance policy. Moreover,

the evidence fails to show that any policy would have been issued

without the misrepresentation embodied in Endorsement 3.

HCC argues, however, that even if uberrimae fidei applies to1 Contrary to HCC’s suggestion at oral argument, there is no

indication that the English doctrine of uberrimae fidei (as opposed

to the American version of this doctrine) has been limited to

maritime contracts.

3 this case, 1 the Underwriters are entitled to avoid liability based

on only Endorsement 3 and not based on the entire contract.

Specifically, HCC contends that Fenchurch’s misrepresentation could

n ot have induced the Underwriters to enter into this reinsura nce

contract because the misrepresentation occurred approximately one

year after the slip was scratched. However, if the Underwriters

were permitted to avoid only Endorsement 3, we would be left with

a slip whose terms were so unclear with respect to the basis of

loss that Fench urch and the Lloyd’s Policy Signing Office agreed

that a policy could not be assembled. The Fenchurch employees who

drafted and approved Endorsement 3 on behalf of HCC evi dently

understood the endorsement to do nothing m ore than clarify an

amb iguous term already contained in the slip. Under these

circumstances, it is, as a matter of contract construction, legally

improper to treat the slip, the endorsement, and the final policy

as discrete and severable agreements. The district court thus did

not err in concluding that the Underwriters were entitled to avoid

the reinsurance agreement in its entirety.

With respect to the contract reformation issue raised on

cross-appeal, we must determine “only whether the court clearly

erred in its finding as to whether there was clear and convincing4

evidence of mutual mistake.” E nserch Corp. v. Shand Morahan & Co.,

Inc.

, 952 F.2d 1485, 1502 (5th Cir. 1992) . We conclude that the

district court did not err in refusing to reform the contract

because the weight of the evidence supports the conclusion that the

parties had not reached a definitive and explicit agreement as to

the basis of loss.

A F F I R M E D .