Court Opinion

ID: 614597
Source: CourtListenerOpinion
Date Created: 2011-10-03 17:30:50+00
Date Added: 2024-06-11T17:50:30.527292
License: Public Domain

Case: 10-60609     Document: 00511620340         Page: 1     Date Filed: 10/03/2011

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

                                                                            FILED
                                                                          October 3, 2011

                                       No. 10-60609                        Lyle W. Cayce
                                                                                Clerk

NATIONWIDE MUTUAL INSURANCE COMPANY,

                                                  Plaintiff - Appellee
v.

A. H., A Minor, by and through John K. Hunter and Luvonne Hunter, her
natural parents and next friends; JOHN K. HUNTER; LUVONNE HUNTER;
TRI COUNTY CONTRACTORS, INCORPORATED; JOHN K. HUNTER, JR.,

                                                  Defendants - Appellants

                   Appeal from the United States District Court
                     for the Southern District of Mississippi
                             USDC No. 3:09-CV-402

Before JONES, Chief Judge, and STEWART and SOUTHWICK, Circuit Judges.
PER CURIAM:*
        Nationwide Mutual Insurance Company filed for a declaratory judgment
that it had no duty to indemnify Tri County Contractors, Inc., under a
commercial general liability (CGL) policy.                 The district court granted
Nationwide’s motion for summary judgment, concluding that the policy did not
cover Tri County’s claim. We AFFIRM.

        *
         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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.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.
   Case: 10-60609    Document: 00511620340      Page: 2   Date Filed: 10/03/2011

                                  No. 10-60609

                    FACTUAL AND PROCEDURAL HISTORY
      In October 2005, A. H., the minor daughter of John Hunter, Sr. and
Luvonne Hunter, was involved in an automobile accident with Christopher
Etheridge. Etheridge was severely injured. In September 2006, Etheridge and
his wife brought an action against the Hunters and A. H. for injuries sustained
in the accident. The action resulted in a two million dollar judgment against the
Hunters.
      In an effort to collect on the judgment, the Etheridges filed a writ of
execution against Tri County, a company allegedly owned solely by John Hunter,
Sr., to seize Hunter’s stock in the corporation. Following the provisions of a
state statute, the writ directed an officer of the corporation to provide a sworn
statement within 10 days of the extent of Hunter’s interest in the company.
Miss. Code Ann. § 13-3-129. Tri County failed to provide such a statement,
making the corporation liable for the full amount of the judgment. Id. The state
court found that Tri County had not complied with the statute and entered
judgment for the entire two million dollars. That judgment is now final.
      Tri County subsequently attempted to obtain coverage for the judgment
under its CGL policy with Nationwide. Nationwide filed a declaratory judgment
action in the Southern District of Mississippi seeking a ruling that it had no duty
to indemnify Tri County for damage resulting from Tri County’s violation of the
state statute. The district court granted summary judgment, ruling that the
policy did not provide any coverage. Tri County appealed.
                                 DISCUSSION
      The Nationwide CGL policy provided for coverage of “sums that the
insured becomes legally obligated to pay as damages because of ‘bodily injury’
or ‘property damage.’” The district court concluded that Tri County’s liability to
pay the Etheridges was the result of its failure to respond to the information
request and was not liability for damages due to bodily injury.

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   Case: 10-60609    Document: 00511620340      Page: 3   Date Filed: 10/03/2011

                                  No. 10-60609

      The statute that required Tri County to provide a prompt written
statement of the value of the stock is one of a series of statutes establishing the
procedures for levying on assets of a judgment debtor. See Miss. Code Ann. §§
13-3-123 to -133 (1972). If a corporation does not timely respond to a levy on
stock by stating under oath “the amount of the defendant’s stock, the number of
his shares, or extent of his interest,” the corporation becomes “liable to the
plaintiff for the full amount of the judgment” underlying the levy. Id., § 13-3-
129. This statutory penalty has existed at least since 1892. Miss. Code § 3467
(1892). An earlier statute provided that stock certificates, banks notes, and
other “evidences of debt” could be the subject of execution; the custodian of the
relevant records had to provide an accurate accounting of the debtor’s holdings
on pain of paying “double the amount of all damages” caused by the failure to
comply. Miss. Code Ch. LXI, Art. 285 (1857).
      It has not been relevant under any of these statutes whether the judgment
was for breach of contract, for damages to property, or for bodily injury. All that
matters is that the records custodian not comply with the statute.
      The issue on appeal does not concern the validity of this Mississippi
penalty for failure to disclose stockholdings. Instead, it is whether the judgment
entered against Tri County is a sum it became obligated to pay because of bodily
injury. Tri County argues that because the underlying judgment against the
Hunters was due to bodily injury sustained by Etheridge in the automobile
accident, the contempt judgment for the same amount is covered by the language
in the CGL policy. We disagree.
      The applicability of identical CGL policy language to a similar factual
situation was recently resolved by this court. The case concerned a doctor whose
letter of recommendation had failed to disclose another doctor’s drug use and
termination from employment. Preau v. St. Paul Fire & Marine Ins. Co., 645
F.3d 293, 294 (5th Cir. 2011). A patient suffered grievous injuries due to the

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   Case: 10-60609   Document: 00511620340     Page: 4   Date Filed: 10/03/2011

                                 No. 10-60609

impaired doctor’s negligence. She settled her claims against the medical center
who, apparently oblivious to his addiction, had hired the doctor. The medical
center later obtained a judgment against the recommending doctor due to his
intentional misrepresentation of the impaired doctor’s condition.            The
recommending doctor then sought recovery under a CGL policy, arguing that the
liability arose from a bodily injury. This court held that claim was instead for
the economic damages caused by the letter writer’s breach of his duty not to
engage in tortious misrepresentation. Id. at 297.
      In the present case, the district court wrote a thorough Memorandum
Opinion and Order that anticipated the reasoning of the not-yet issued Preau
opinion. The district court held that the judgment against Tri County was
“imposed strictly as a sanction for contempt based on Tri County’s violation of
the statute.” As in Preau, Tri County had not become “legally obligated to pay”
any damages as a result of a “bodily injury,” which are the relevant terms in the
CGL policy. Consequently, there was no genuine issue of material fact as to
whether coverage was owed under the CGL policy. We AFFIRM.

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