Court Opinion

ID: 22138
Source: CourtListenerOpinion
Date Created: 2010-04-25 07:52:18+00
Date Added: 2024-06-11T15:04:40.466945
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS

                         FOR THE FIFTH CIRCUIT

                         _____________________

                              No. 99-31124
                            Summary Calendar
                         _____________________

OAK RIDGE PARK, INC.; ET AL.,

                                                             Plaintiffs,

OAK RIDGE PARK, INC.,

                                                   Plaintiff-Appellant,

                                 versus

SCOTTSDALE INSURANCE COMPANY; ET AL.,

                                                             Defendants,

SCOTTSDALE INSURANCE COMPANY;
UNITED FIRE AND CASUALTY COMPANY,

                                            Defendants-Appellees.
_________________________________________________________________

      Appeal from the United States District Court for the
                  Eastern District of Louisiana
                      USDC No. 98-CV-3348-N
_________________________________________________________________
                        September 29, 2000

Before JOLLY, JONES, and BENAVIDES, Circuit Judges.

PER CURIAM:*

     This   appeal    presents   an   insurance   coverage   case   under

Louisiana law.    The plaintiffs, Quarter House Oak Ridge Park, Inc.

     *
      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this opinion should not be published and is not precedent except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.
(“ORP”)       and    Quarter      House    Home   Owners’     Association    (“Quarter

House”) seek review of the district court’s grant of summary

judgment       for     the     defendants,        Scottsdale     Insurance     Company

(“Scottsdale”) and United Fire and Casualty Company (“United”),

which dismissed the plaintiffs’ bad faith claims.1                    Specifically,

the plaintiffs argue that the district court erred in concluding

that the underlying lawsuits against the plaintiffs did not fall

within the insurance coverage provided by the defendants.                      We find

no error on the part of the district court and affirm.

                                              A

      The case has its genesis in two separate lawsuits filed

against the plaintiffs.                 The first suit was filed by Louisiana

Acorn Fair Housing (the “Acorn” suit).                      It alleged intentional

discrimination            in violation of the Fair Housing Act, 42 U.S.C.

§ 3601, et seq., and the Louisiana Open Housing Act, La.Rev.Stat.

§   51:2601.,        et    seq.         Specifically,   Acorn     alleged    that   ORP

“willfully,” ”maliciously,” and “intentionally” committed acts of

discrimination         (based      on     race,   religion,    familial   status    and

national origin) in connection with the sale of real estate.2                       The

second suit was filed by Richard J. Danenhower, a former field

          1
      The plaintiffs do not seek review of the district court’s
grant of summary judgment for the defendant, Coregis Insurance
Company (“Coregis”).
      2
       The Acorn suit was settled prior to trial.

                                              2
marketing manager for ORP.     It alleged violations of the Fair

Housing Act and the Louisiana Open Housing Act similar to those

alleged in the Acorn litigation.       Specifically, Danenhower alleged

that he was required to train employees to carry out discriminatory

policies by presenting tours to a select group of “qualified”

prospective buyers based on race, religion, handicap, national

origin, and familial status.   Because of these illegal practices,

Danenhower alleged, he was forced to resign.3        Danenhower sought

damages for loss of wages, humiliation, embarrassment, emotional

distress, mental anguish and ridicule.4         In both instances, the

defendants denied coverage to ORP and Quarter House.

     On November 10, 1998, ORP and Quarter House filed the instant

suit against Scottsdale, United, and Coregis.           The plaintiffs

alleged that its insurers wrongfully denied them a defense and

coverage in both the Acorn and Danenhower litigation.5       Following

a hearing, on September 17, 1999, the district court granted

    3
     Additionally, Danenhower alleges that he was slandered by ORP
in a public statement issued by ORP in response to a television
broadcast showing Danenhower instructing a putative marketing
trainee to discriminate in accordance with ORP’s “policies.”
        4
       Following removal to federal court, Danenhower’s suit was
dismissed for lack of standing to pursue the federal claims, and
declination to exercise pendant jurisdiction over the state law
claims. Subsequent to the district court’s dismissal, Danenhower
re-filed in state court. That state court action is still pending.
    5
     The bad faith claims stemming from the Danenhower litigation
are limited to the federal action that was dismissed. No claims
are brought with respect to the ongoing state court action.

                                   3
summary judgment for the insurers.          The plaintiffs filed a timely

notice of appeal.

                                      B

     After consideration of the briefs and the record, we hold that

the district court did not err in granting summary judgment for the

defendants.   Louisiana law is clear: “The insurer’s duty to defend

is determined solely from the plaintiffs’ pleadings and the policy,

without consideration of extraneous evidence.”              Selective Ins. Co.

of Southeast v. J.B. Mouton & Sons, Inc., 954 F.2d 1075, 1078 (5th

Cir. 1992)(citing Jensen v. Snellings, 841 F.2d 600, 612 (5th Cir.

1988);   Alombro v. Salman, 536 So.2d 764, 767 (La.Ct.App. 1988)).

The allegations contained in the complaint are to be liberally

construed and the rights of the insured are to be deemed paramount.

See Jensen, 841 F.2d at 612.          However, if after examining the

allegation    in   the   complaint,       coverage      under   the   policy    is

precluded, the insurer is relieved of its duty to defend.                      See

Resolution    Trust   Corp.   v.   Ayo,     31   F.3d    285,   293   (5th     Cir.

1994)(citing Jensen, 841 F.2d at 612).

     Turning first to the coverage provided by the Scottsdale

policy, we think that the district court correctly concluded that

in the Acorn litigation, the acts alleged against the plaintiffs

were acts that were “intended or expected”; thus, they do not “fall

under the definition of ‘occurrence’ contained in the policy.”

Additionally, the plaintiffs have failed to identify any property

                                      4
damages, bodily injuries, or personal injuries that are alleged by

the   Acorn    plaintiffs    that    arguably        fall   within      the   policy.

Finally, with respect to the Danenhower litigation, all of the

claims arose out of employment-related policies or acts that were

“unambiguously precluded under the Scottsdale employment-related

policy exclusion.”          Thus,    the       district   court   was    correct   in

concluding that the plaintiffs were not entitled to coverage under

the Scottsdale policy.

      With respect to the United policy, coverage in the Acorn

litigation was denied by United for the same reasons that it was

denied by Scottsdale under its policy--the policy excluded coverage

for intentional acts, which were the only acts alleged in the Acorn

litigation.      Further, as in the Scottsdale policy, the United

policy contained an exclusion for bodily injury and property damage

caused by employment-related practices.               As far as the Danenhower

suit is concerned, the record is bereft of any evidence indicating

that the suit was ever tendered by the plaintiffs to United for

defense.      Even assuming, however, that United had “constructive

notice” of the Danenhower suit, as the plaintiffs argue, coverage

was   expressly    excluded     by    the       “employment-related       practices

exclusion.”     Thus, the district court was correct in concluding

that “United bore no duty to defend ORP in the Danenhower suit.”

      The judgment of the district court is therefore

                                                                  A F F I R M E D.

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