Court Opinion

ID: 60117
Source: CourtListenerOpinion
Date Created: 2010-04-26 03:57:45+00
Date Added: 2024-06-11T09:33:27.695683
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS
                     FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                     Fifth Circuit

                                                                            FILED
                                                                          March 26, 2008
                                     No. 07-60384
                                   Summary Calendar                   Charles R. Fulbruge III
                                                                              Clerk

ALLSTATE INSURANCE COMPANY

                                                  Plaintiff-Appellee

v.

EARL PIERCE*
                                                  Defendant-Appellant

                   Appeal from the United States District Court
                     for the Southern District of Mississippi
                             USDC No. 3:05-CV-0669

Before JOLLY, DENNIS, and PRADO, Circuit Judges.
PER CURIAM:**
       Plaintiff-appellant Robert Pierce was an employee of the Mississippi
Bureau of Narcotics (“MBN”). Frank Melton was the director of the MBN at the
time of the underlying events in this case. Pierce sued Melton. According to
Pierce’s complaint against Melton for intentional infliction of emotional distress,
negligent infliction of emotional distress, gross negligence, and libel and slander,
on April 17, 2003, Melton intentionally disseminated to the press a highly

       *
        Robert Pierce is the only remaining appellant in this case after Frank Melton was
dismissed from this case for want of prosecution.
       **
          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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.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.
                                  No. 07-60384

confidential MBN memorandum with false information about Pierce. Melton
allegedly knew of the falsity of the information.       On November 3, 2005,
Defendant-appellee Allstate Insurance Company (“Allstate”) filed the present
declaratory action requesting the district court to declare that as to Pierce’s
allegations, there is no coverage for, and no duty to defend, Melton under any of
the three separate policies issued to him: a Mississippi home-owners policy, a
Texas home-owners policy, and a personal umbrella policy. The district court
dismissed the case on summary judgment in favor of Allstate. Pierce appeals
the district court decision only as to coverage and duties under the Umbrella
Policy.
      The Umbrella Policy has two related business exclusions. First, the
Umbrella Policy states: “[a]ctivities related to any business or business property
of an insured are not covered.” (emphasis added). The Umbrella Policy also
excludes “any occurrence arising out of a business or business property.”
(emphasis added). The Policy defines “business” as “any full or part-time
activity of any kind engaged in for economic gain.” The district court concluded
that the intentional leaking of a confidential memo was “related to” Melton’s
business, which was his salaried job as the director of MBN. “The interpretation
of an insurance policy, like any contract, is a legal question reviewed de novo.”
Leonard v. Nationwide Mut. Ins. Co., 499 F.3d 419, 428 (5th Cir. 2007).
      Melton’s job was an activity engaged for economic gain, i.e. his salary, and
therefore, by definition, a “business” under the terms of the policy. Whether or
not MBN is a itself business is not relevant. Even if one business exclusion may
exclude more activity than the other, the business exclusions are compatible -
they both exclude an overlapping set of personal activities - so, there is no
conflict between the exclusions. As there is no ambiguity, the court is not
required to interpret what is the plain meaning of these exclusions. See Miss.
Farm Bureau Mut. Ins. Co., 908 So. 2d 765, 769 (Miss. 2005); Aero Int’l, Inc. v.
United States Fire Ins. Co., 713 F.2d 1106, 1109 (5th Cir.1983) (“Without an

                                        2
                                   No. 07-60384

affirmative expression of an overriding public policy by the Mississippi courts or
legislature, we are constrained to enforce the parties' agreement according to its
plain meaning.”). As the appellant rightly concedes, “arising out of” is usually
interpreted very broadly in the insurance context. Am. States Ins. Co. v. Bailey,
133 F.3d 363, 370 (5th Cir. 1998) (“When an exclusion precludes coverage for
injuries ‘arising out of’ described conduct, the exclusion is given a broad, general,
and comprehensive interpretation.        A claim need only bear an incidental
relationship to the described conduct for the exclusion to apply. . . . The words
are understood to mean ‘originating from,’ ‘having its origin in,’ ‘growing out of’
or ‘flowing from.’ ”) (internal quotations omitted); see also Gonzaba v. St. Paul
Fire and Marine Ins. Co., 179 F. App’x. 218 n.7 (5th Cir. Apr. 27, 2006)
(unpublished). Melton’s actions that triggered Pierce’s lawsuit flow from his
occupation, and under a broad interpretation of “arising out of,” his actions
squarely fall within the business exclusion.
      Therefore, the Umbrella Policy does not cover the underlying acts, and the
district court’s judgment is hereby AFFIRMED.

                                         3