Court Opinion

ID: 33853
Source: CourtListenerOpinion
Date Created: 2010-04-25 19:09:42+00
Date Added: 2024-06-11T09:33:25.648250
License: Public Domain

United States Court of Appeals
                                                               Fifth Circuit
                                                            F I L E D
                 UNITED STATES COURT OF APPEALS             January 15, 2004
                      FOR THE FIFTH CIRCUIT
                                                        Charles R. Fulbruge III
                                                                Clerk
                     _______________________

                           No. 03-30664
                         Summary Calendar
                     _______________________

                 ARTHUR COPES, ORTHOTIST, INC.,

                                               Plaintiff-Appellant,

                             versus

               AMERICAN CENTRAL INSURANCE COMPANY,

                                               Defendant-Appellee.

________________________________________________________________

           Appeal from the United States District Court
               for the Middle District of Louisiana
                   Civil Docket No. 01-CV-128-A
_________________________________________________________________

Before JONES, BENAVIDES, and CLEMENT, Circuit Judges.

PER CURIAM:*

          Arthur Copes, Orthotist, Inc. (“Plaintiff”) appeals the

district court’s grant of summary judgment in favor of defendant

American Central Insurance Company.   The instant appeal revolves

around a dispute over insurance coverage for the named plaintiff.

     *
      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this opinion should not be published and is not precedent except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.
Because we agree that the insurance policy did not cover all

operations conducted at the insured premises, we affirm.

           Arthur Copes, Ph.D., currently operates various corporate

entities for the treatment of scoliosis patients.                In 1998, Copes

took out an insurance policy with American Central which named

“Dr. Arthur Copes Office,” a corporation, as the named insured.

Eventually, the policy insured the premises at 8108 Picardy Avenue,

Baton   Rouge,   Louisiana,     which   the     policy’s     declarations       page

described as a doctor’s office.             In February 2000, a fire at the

insured premises caused property damage and a temporary suspension

of business operations.       Pursuant to its policy, American Central

paid the   insured,    Dr.    Arthur    Copes      Office,   sums    relating     to

property damage, business losses and increased expenses related to

the   interruption    of     patient    treatments      through     the    office.

However, American Central refused to make additional payments and

the instant suit followed.

           American   Central     moved      for   summary    judgment     on    two

grounds: (1) the plaintiff, Arthur Copes, Orthotist, Inc., was not

the named insured on the policy, and (2) the plaintiff sought

payment for business operations beyond the terms of the policy.

The district court granted summary judgment in favor of American

Central,   finding    that    Arthur    Copes,      Orthotist,      Inc.   had    no

insurable interest in the policy and that the policy’s terms did

not extend to business activities beyond those regularly occurring

in a doctor’s office.

                                        2
            We review a district court’s grant of summary judgment de

novo.   Principal Health Care of La., Inc. v. Lewer Agency, Inc.,

38 F.3d 240, 242 (5th Cir. 1994).     Summary judgment is only proper

if the pleadings, depositions, answers to interrogatories, and

admissions on file together with the affidavits indicate that no

genuine issue of material fact exists and the moving party is

entitled to judgment as a matter of law.    Celotex Corp. v. Catrett,

477 U.S. 317, 322 (1986).        Because the interpretation of an

insurance policy is a question of law, we review the district

court’s determination de novo.    Principal Health Care, 38 F.3d at

242.

            It is undisputed that when applying for the American

Central policy, the plaintiff provided the agent with a former

policy listing “Dr. Arthur Copes Office” as the named insured.   The

plaintiff argues that no legal entity called “Dr. Arthur Copes

Office, Inc.” ever existed.       However, the plaintiff does not

dispute that the checking account for the office was drawn in the

name of “Dr. Arthur Copes, Inc.”       In addition, Copes controlled

various corporate entities other than “Arthur Copes, Orthotist,

Inc.,” including Copes Clinics, Inc., Copes Enterprises, Inc.,

Copes Foundation, Copes Laboratories, Inc., and STRS (Scoliosis

Treatment Recovery System) and STRC (Scoliosis Treatment Recovery

Centers).   Each corporate entity listed 8108 Picardy Avenue as its

mailing address.

                                  3
              The   plaintiff      admits       that    three    distinct    business

activities take place on the Picardy Avenue premises: (1) treatment

of scoliosis patients, (2) manufacturing and production of custom

scoliosis     braces   for   in-state       and    out-of-state      patients,    and

(3) physician training, or a residency program, to prepare doctors

to open satellite clinics outside of Louisiana.                     Indeed, at the

time the fire occurred, Dr. Copes’ entities included a Tampa

office, a San Diego office, and a Houston office.                        However, the

Baton Rouge office was the “hub” of the operation and all income

was directed to that office.            At the time the American Central

policy was executed, neither the company nor its agent was aware of

the multiple corporate entities or business activities taking place

at the insured location.

              An insurance policy is a contract and is subject to the

general rules of contract interpretation.                   Clements v. Folse ex

rel. Succession of Clements, 830 So. 2d 307, 312 (La. Ct. App.

2002).    Courts must endeavor to discern the common intent of the

insurer and insured.         Id.    To this end, courts must look to the

words    of   the   insurance      contract       and   infuse    them    with   their

generally prevailing meaning.          Id.       The insurance contract must be

enforced as written when the words are clear and explicit and lead

to no absurd results.        Id.

              The insurance policy at issue here covers the actual loss

of business income due to the necessary suspension of the insured’s

“operations.”       In addition, “operations” is defined by the policy

                                            4
as “business activities occurring at the described premises.”   The

policy’s declarations page describes the insured premises as a

doctor’s office.     The generally prevailing meaning of “doctor’s

office” includes neither prosthetic manufacturing facilities for

patients not treated at the office nor residency training programs.

In addition, to the extent that the covered premises served as a

hub for out-of-state operations, that lost income would not be

covered by the policy’s plain terms.1     Thus, the only business

losses to which the plaintiff is entitled flow from the necessary

suspension of the treatment of scoliosis patients at the Baton

Rouge location.    The plaintiff has already received compensation

for such loss.2

          For the foregoing reasons, the judgment of the district

court is AFFIRMED.

     1
      The only relevant physical location covered by the policy is
8108 Picardy Avenue in Baton Rouge.
     2
      The district court also held that, because Arthur Copes,
Orthotist, Inc. was not the named insured on the policy, the
plaintiff could not recover under the policy. We do not reach this
issue because we resolve the case on the policy interpretation
ground.   It is likely, however, that, to expand the policy’s
coverage to include the myriad business interests of Arthur Copes,
doing business as Arthur Copes, Orthotist, Inc., would be to assign
to the defendant risks it did not initially foresee when issuing
the policy to a doctor’s office. This result is untenable. See,
e.g., Bonadona v. Guccione, 362 So. 2d 740 (La. 1978) (noting that
an insurance policy may not be reformed when the risks assumed
would be substantially greater or different in nature).

                                 5