Court Opinion

ID: 61999
Source: CourtListenerOpinion
Date Created: 2010-04-26 04:20:14+00
Date Added: 2024-06-11T17:20:01.876780
License: Public Domain

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

                                                                            FILED
                                                                           May 29, 2008

                                      No. 07-30279                    Charles R. Fulbruge III
                                                                              Clerk

JOE TURK; EDITH TURK;
CHARLES G THERIOT;
BONNIE DONAHUE

                                                  Plaintiffs-Appellants
v.

LOUISIANA CITIZENS PROPERTY
INSURANCE CORP;
STATE FARM FIRE & CASUALTY CO

                                                  Defendants-Appellees

               Appeal from the United States District Court for the
                    Western District of Louisiana, Lafayette
                            USDC No. 6:06-CV-00144

Before REAVLEY, BENAVIDES, and ELROD, Circuit Judges.
PER CURIAM:*
       Appellants sought a declaratory ruling interpreting Louisiana’s Valued
Policy Law with respect to their homeowner’s insurance policies. The district
court granted partial summary judgment in favor of the insurance companies.
Because we are bound by our precedent, we AFFIRM and REMAND.

       *
         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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.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. 07-30279

         I.    BACKGROUND
         Plaintiffs filed a putative class action in Louisiana state court, alleging
that the members of the putative class suffered damage to their properties that
were covered by homeowner’s insurance policies issued by Defendants, State
Farm and Louisiana Citizens Property Insurance Corporation (LA Citizens).
Plaintiffs alleged that LA. REV. STAT. R.S. § 22:695, also known as the Valued
Policy Law (VPL), entitled them to recover the full coverage limits of their
respective insurance policies because (1) they suffered a “total loss” to their
properties and (2) the loss was caused in part by the covered perils of wind or
windstorm. Each of the properties was damaged by wind and flood water from
Hurricane Rita and sustained a total loss. The homeowner policies specifically
excluded coverage for flood water damage. Plaintiffs defined the putative class
as “anyone who purchased a homeowner’s insurance policy and suffered a total
loss with respect to their Louisiana home, any part of which was attributable to
wind damage from Hurricane Rita, and was not paid the value of their policy.”
         On January 26, 2006, State Farm removed the case to federal district
court. Plaintiffs filed a motion for partial summary judgment and for entry of
a judgment declaring that the Defendants were required to pay the full policy
limits if the property was rendered a total loss or constructive total loss and the
property suffered any amount of damage as a result of the peril of wind.
Subsequently, the insurers filed a cross-motion for partial summary judgment
and for entry of a judgment declaring that the VPL requires an insurer to pay
the full policy limits only when a property is rendered a total loss by a covered
peril.
         The district court denied Plaintiffs’ motion for partial summary judgment
and granted the insurers’ cross-motion for partial summary judgment. The court
held that the VPL “cannot be construed to require State Farm or LA Citizens to

                                          2
                                        No. 07-30279

pay the policy limits under their respective policies when the insured property
was rendered a total loss, in whole or in part, by a non-covered peril such as
flood waters, rather than in whole by a covered peril such as wind damage.” The
district court certified its order for interlocutory review by this Court.
       II.     ANALYSIS
       Appellants contend that the district court erred in holding that LA. REV.
STAT. R.S. § 22:695 does not require an insurer to pay the policy limits when the
property is partially damaged by a covered peril but rendered a total loss by a
non-covered peril. More specifically, Appellants assert that the statute “obviates
the need, after a total loss, to litigate percentages of destruction in order to
assign liability between covered and excluded perils, because . . . the amount to
be paid has previously been determined by the insurer.”1
       After briefing was completed in the instant case, another panel of this
Court addressed the question of whether property owners were entitled to the
agreed face value of their respective policies if their homes sustained partial
damage from a covered peril, but a non-covered peril rendered the property a
total loss. Chauvin v. State Farm Fire & Cas., 495 F.3d 232 (5th Cir. 2007), cert.
denied, __ U.S. __, 128 S. Ct. 1075 (2008). In Chauvin, “the only issue . . . was
whether, as a matter of law, any amount of damage caused by a covered loss,
however small, triggered the VPL, even though the total loss was the result of
a non-covered peril.” Id. at 236 n.4. This Court concluded that “the VPL only
requires an insurer to pay the agreed face value of the insured property if the
property is rendered a total loss from a covered peril.” Id. at 239. Chauvin

       1
         Appellants did not argue in the district court or on appeal that the covered peril would
have caused the total loss irrespective of a non-covered peril. Their position is that if there is
a total loss and any amount of damage due to a covered peril, the insurers must pay the full
value placed on the property.

                                                3
                                       No. 07-30279

controls the instant case, requiring this Court to affirm the district court’s
judgment.2

       AFFIRMED and REMANDED.

       2
           Additionally, it should be noted that, subsequent to oral argument in this case, the
Louisiana Supreme Court issued an opinion explaining that the “purpose of La. R.S. 22:695
is to determine valuation, accordingly it is a valuation statute and does not address causation
as plaintiffs’ argument presupposes.” Landry v. La. Citizens Prop. Ins., Nos. 2007-C-1907 &
2007-C-1908, __ So.2d __, 2008 WL 2151827, at * 11 (La. May 21, 2008). Landry held that the
VPL was rendered inapplicable by an alternative method of loss computation set forth in a
supplement to the insurance policy issued in that case. The Louisiana Supreme Court
explained that: “Whether the statutory valuation provisions [VPL] would require an insurer
to pay the face value of the policy when a total loss is caused concurrently with a covered and
a non-covered losses is irrelevant because those provisions no longer apply once a different
method of loss computation is validly set forth.” Id. Of course, the question deemed irrelevant
is the only question that is before this Court on interlocutory review.

                                              4