Court Opinion

ID: 68022
Source: CourtListenerOpinion
Date Created: 2010-04-26 06:28:11+00
Date Added: 2024-06-11T14:58:48.029896
License: Public Domain

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

                                                 FILED
                                                                            July 30, 2009

                                     No. 08-61091                      Charles R. Fulbruge III
                                   Summary Calendar                            Clerk

GULFPORT-BRITTANY LLC; MEREDITH APRIL MATTHEWS

                                                   Plaintiffs - Appellants
v.

RSUI INDEMNITY COMPANY

                                                   Defendant - Appellee

                   Appeal from the United States District Court
                      for the Southern District of Mississippi
                              USDC No. 1:07-CV-1036

Before JOLLY, BENAVIDES, and HAYNES, Circuit Judges.
PER CURIAM:*
       In this insurance case, Gulfport-Brittany, LLC, and Meredith April
Matthews appeal from the district court’s summary judgment in favor of
defendant-appellee RSUI Indemnity Company (“RSUI”). We affirm.
                                              I
       Gulfport-Brittany and Matthews (collectively, “Gulfport-Brittany”) co-

       *
         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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .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.
owned the Brittany Apartments (“the Apartments”) in Gulfport, Mississippi,
when the Apartments were damaged by Hurricane Katrina on August 29, 2005.
According to Appellants, they have incurred costs stemming from physical
damage to the Apartments, loss of business income, and the necessity of
complying with ordinances and/or laws associated with the demolition and
reconstruction of the Apartments.
      The property manager for the apartments, Heritage Properties, Inc., had
obtained three commercial property insurance policies covering various
properties, including the Apartments. Aspen Insurance UK Limited (“Aspen”)
provided the underlying policy with occurrence limits of $5 million, and Certain
Underwriters of Lloyd’s (“Lloyd’s”) issued the first layer of excess coverage, also
with occurrence limits of $5 million. RSUI provided the final layer of excess
coverage with policy limits of $140 million per occurrence. The RSUI policy also
included a scheduled sub-limit of $2,458,014 for the Apartments. Heritage
Properties filed claims with each insurer, and Aspen and Lloyd’s both paid up
to their $5 million limits. RSUI paid $2,458,014, but denied further liability.
Gulfport-Brittany filed suit in the district court seeking a declaration that they
were entitled to their costs up to $140 million under the policy generally as well
up to $2.5 million under the Ordinance or Law coverage. RSUI counterclaimed
for a declaration that it was not obligated to make any further payments.
Gulfport-Brittany filed a motion for partial summary judgment, and RSUI filed
a motion for summary judgment. The district court granted RSUI’s motion and
denied Gulfport-Brittany’s, and Gulfport-Brittany timely appealed.
                                        II
      We review a district court’s grant of summary judgment de novo, applying
the same standards as the district court. Chichakli v. Szubin, 546 F.3d 315, 316
(5th Cir. 2008). Summary judgment is proper when “the pleadings, the discovery

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and disclosure materials on file, and any affidavits show that there is no genuine
issue as to any material fact and that the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(c). “A genuine issue of material fact exists if
the summary judgment evidence is such that a reasonable jury could return a
verdict for the non-movant.” Stover v. Hattiesburg Pub. Sch. Dist., 549 F.3d 985,
991 (5th Cir. 2008). The facts and evidence must be taken in the light most
favorable to the non-movant. LeMaire v. La. Dep’t of Transp. & Dev., 480 F.3d
383, 387 (5th Cir. 2007).
        Because this is a diversity case, we apply Mississippi substantive law. See
Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 399
(5th Cir. 2008). “The proper construction of an insurance contract provision is
a question of law.” Farmland Mut. Ins. Co. v. Scruggs, 886 So. 2d 714, 717
(Miss. 2004).
                                        III
        Gulfport-Brittany argues first that the RSUI policy is ambiguous and
therefore must be construed in favor of the insured. See Noxubee County Sch.
Dist. v. United Nat’l Ins. Co., 883 So. 2d 1159, 1165 (Miss. 2004). In particular,
Gulfport-Brittany maintains that the Excess Physical Damage Schedule
(“Damage Schedule”) and the Excess Physical Damage Coverage Form
(“Coverage Form”) found in the RSUI policy conflict with the Scheduled Limit
of Liability endorsement. The Coverage Form states that “the limits of [RSUI’s]
liability shall be those set forth in Item 7 under the designation ‘Limit Insured’
and the Company shall be liable to pay the ultimate net loss up to the full
amount of such ‘Limit Insured.’” Item 7 of the Damage Schedule sets the “Limit
Insured” at $140 million per occurrence.
        The Scheduled Limit of Liability endorsement, on the other hand, states
that:

                                         3
      1.    In the event of loss hereunder, liability of the Company shall
            be limited to the least of the following in any one “occurrence”:

           a.      The actual adjusted amount of the loss, less applicable
                   deductibles and primary and underlying excess limits;

           b.      100% of the individually stated valu e for each
                   scheduled item of property insured at the location
                   which had the loss as shown on the latest Statement of
                   Values on file with this Company, less applicable
                   deductibles and primary and underlying excess limits.
                   If no value is shown for a scheduled item then there is
                   no coverage for that item; or

           c.      The Lim it of Liability as shown on the Declarations
                   page of this policy or as endorsed to this policy.

      Thus, Gulfport-Brittany argues, the policy is ambiguous because it is
unclear whether the per occurrence limit for damage to the Apartments is $140
million or $2,458,014 (as stated in the latest Statement of Values). “Ambiguity
however, [cannot] be forced into a policy where there is none.” Miss. Farm
Bureau Mut. Ins. Co. v. Walters, 908 So. 2d 765, 769 (Miss. 2005). The “Insuring
Clause” in the Coverage Form states that RSUI’s indemnification is “[s]ubject
to the limitations, terms and conditions contained in this Policy or added
hereto . . . .” This clearly includes the Scheduled Limit of Liability endorsement,
and we agree with the district court that there is no conflict: the policy creates
an overall $140 million per occurrence limit with scheduled sub-limits for
individual properties, including the Apartments. See id. (“[T]he contract must
be viewed as a whole. All parts must be harmonized as much as reasonably
possible, and no part or word can be stricken unless the result is fairly
inescapable.” (citation omitted)). The policy is not ambiguous, and the district
court did not err in holding that the scheduled limit applies.

                                        4
      Gulfport-Brittany also argues that RSUI owes additional payments as a
result of its adoption, through the “Maintenance of Primary Insurance” clause
found in the Coverage Form, of the Ordinance or Law endorsement contained in
the primary Aspen policy, which provides $2.5 million in coverage. As the
district court noted, however, the “Maintenance of Primary Insurance” clause
states that:
      In respect of the perils hereby insured against, this Policy is subject
      to the same warranties, terms and conditions (except as regards the
      premium, the amount and limits of liability other than the
      deductible or self-insurance provision where applicable, and the
      renewal agreement, if any; and EXCEPT AS OTHERWISE
      PROVIDED HEREIN) as are contained in or as may be added to the
      policy(ies) of the primary insurer(s) . . . .

Thus, while the RSUI policy is subject to most aspects of the Aspen policy
(including the Ordinance or Law endorsement), it is expressly not subject to the
“amount and limits of liability” in the Aspen policy. The scheduled limit in the
RSUI policy therefore applies, and the district court did not err in so holding.
                                        IV
      For the foregoing reasons, the judgment of the district court is
AFFIRMED.

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