Opinion ID: 151762
Heading Depth: 2
Heading Rank: 1

Heading: Louisiana Civil Code Article 2653

Text: When faced with unsettled questions of Louisiana law, [federal courts] adhere to Louisiana's civilian decision-making process, by first examining primary sources of law: the constitution, codes, and statutes. Moore v. State Farm Fire & Cas. Co., 556 F.3d 264, 270 (5th Cir.2009). To determine whether the insurance contracts' anti-assignment clauses bar post-loss assignments to the State, the Defendants contend that Louisiana Civil Code article 2653 is the beginning and end of the matter. Article 2653 provides that [a] right cannot be assigned when the contract from which it arises prohibits assignment of that right. Because the policies' anti-assignment clauses broadly prohibit any assignment without the insurers' consent, the insurers argue that the post-loss assignments to the State are invalid. The State responds, and we agree, that Article 2653 begs the question presented in this case: whether Louisiana courts would interpret the anti-assignment clauses in these homeowner's insurance policies as prohibiting post-loss assignments. Louisiana interpretive rules provide that [w]hen the words of a contract are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties' intent. LA. CIV.CODE ANN. art. 2046. The anti-assignment clauses at issue here are broadly worded and clearly do not exclude post-loss assignments from the prohibition, but, like Article 2653, Article 2046 does not end the inquiry because even unambiguous insurance contract provisions cannot conflict with statutory law or public policy. See 15 WILLIAM SHELBY MCKENZIE & H. ALSTON JOHNSON, III, LA. CIV. L. TREATISE, Insurance Law and Practice § 4 (3d ed.2006). Thus, the issue before this court is whether the Louisiana Supreme Court would hold that a contractual prohibition on post-loss assignments violates public policy. The Louisiana Supreme Court has not answered this question, so we look to the decisions of intermediate state courts for guidance, Terrebonne Parish Sch. Bd. v. Columbia Gulf Transmission Co., 290 F.3d 303, 317 (5th Cir.2002) (citations omitted). Unfortunately, the Louisiana appellate decisions conflict.