Court Opinion

ID: 28914
Source: CourtListenerOpinion
Date Created: 2010-04-25 09:31:38+00
Date Added: 2024-06-11T12:31:55.977660
License: Public Domain

UNITED STATES COURT OF APPEALS
                        FOR THE FIFTH CIRCUIT
                        _____________________

                            No. 02-30323
                          Summary Calendar
                       _____________________

                          CITY OF HAMMOND,

                                                Plaintiff-Appellant,

                               versus

                       COREGIS INSURANCE CO.,

                                                Defendant-Appellee.

            Appeal from the United States District Court
                for the Eastern District of Louisiana
                            (01-CV-582-B)

                         September 27, 2002

Before BARKSDALE, DeMOSS, and BENAVIDES, Circuit Judges.

PER CURIAM:*

     Contending the district court erred in holding the Hammond

Airport Authority and its board of directors are not covered under

a liability policy issued by Coregis Insurance Co., the City

appeals the summary judgment awarded Coregis.

                                 I.

     The City purchased a “Public Officials and Employees Liability

Policy” from Coregis, effective 1 July 1998 to 1 July 1999.       It

provides:   “[Coregis] will pay on behalf of the Insureds Loss as a

     *
      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this opinion should not be published and is not precedent except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.
result of civil Claims made against the Insureds by reason of a

Wrongful Act”.

     The policy defines “insured” as follows:

          “Insured” means the Public Entity [(the City)]

          and any person while acting solely within the

          course and scope of his or her duties and

          responsibilities        on    behalf     of    the    Public

          Entity as:

                 ....

                 2.      a    member     o[r]    officer       of     the

          governing      board,   commission,         department       or

          unit within the total revenue indicated in the

          policy application[.]

                 ....

          Unless      specifically      endorsed      her[e]on,       the

          definition     of    “insured”    does      not    mean     the

          entity,      any    person,    past    or     present,      any

          official, member, officer of the governing

          board, commission, department, unit, employee

          or volunteer of the following:

                 school,      airport,      transit         authority,

          housing      authority,      hospital,      nursing       home,

          clinic, electric utility or gas utility.

(Emphasis added.)

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      Along this line, the insurance proposal is incorporated into

the   policy.      It    lists      the    airport       as    one   of    the    “units”

administered by the City, and then states:                        “[I]f coverage is

requested    for   these       units,     please    submit      separate     proposal”.

(Emphasis added.)        There is no evidence a separate proposal was

submitted.

      In June 1998, former airport manager Stoulig sued the Airport

Authority    and   its     board     members,       claiming,        inter      alia,    sex

discrimination.         Coregis denied coverage on the basis that the

defendants were not insureds under the policy.                            After Stoulig

obtained a judgment against the defendants, they settled for

$130,250.

      The City sought a declaration of coverage and damages in

Louisiana state court; Coregis removed.                  Cross-motions for summary

judgment followed.

      The   district      court      concluded      that,       under     the    policy’s

language, the Airport Authority and its board members were excluded

from the     definition        of   “insured”.          It    consequently       found   no

coverage or duty to defend, and, on that basis, awarded Coregis

summary judgment.

                                           II.

      “We review a grant of summary judgment de novo, applying the

same standard      as    the    district        court    ...    [and]     view[ing]      the

evidence in a light most favorable to the non-movant”.                            Vela v.

                                            3
City of Houston, 276 F.3d 659, 666 (5th Cir. 2001).                  “Summary

judgment is proper when ‘there is no genuine issue as to any

material fact and [] the moving part is entitled to a judgment as

a matter of law.’”       Id. (quoting FED. R. CIV. P. 56(c)).

                                       A.

     The City contends the following provision is sufficiently

ambiguous to not operate as an exclusion:                “Unless specifically

endorsed her[e]on, the definition of ‘insured’ does not mean ...

airport”.       Essentially, the City maintains that this provision’s

purpose is not to exclude the airport from coverage, but rather to

ensure the airport is not mistaken for the City.

     “An    insurance     policy    should    not   be    interpreted   in   an

unreasonable or a strained manner so as to enlarge or to restrict

its provisions beyond what is reasonably contemplated by its terms

or so as to achieve an absurd conclusion.”               Louisiana Ins. Guar.

Ass’n v. Interstate Fire & Cas. Co., 630 So. 2d 759, 763 (La. 1994)

(emphasis added).       On that basis, the City’s contention fails.

                                       B.

     The City next maintains that an endorsement allowing coverage

for certain employment claims operates to extend coverage in this

case.      As    the   district    court    held,   however,   “[b]ecause    it

references no entity, the endorsement logically can apply only to

parties covered, and not expressly excluded, under the definition

of insured”.

                                       4
                                C.

     Finally, the City maintains that, regardless of coverage vel

non, Coregis had a duty to defend.      “[I]f, assuming all the

allegations of [Stoulig’s] petition are true, there would be both

coverage under the policy and liability to the plaintiff, the

insurer must defend the insured regardless of the outcome of the

suit”.   C.L. Morris, Inc. v. S. Am. Ins. Co., 550 So. 2d 828, 831

(La. App. 2 1989) (emphasis added). Assuming Stoulig’s allegations

are true, there would be no coverage under the policy.

                               III.

     For the foregoing reasons, the judgment is

                                                         AFFIRMED.

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