Court Opinion

ID: 13924
Source: CourtListenerOpinion
Date Created: 2010-04-25 06:31:09+00
Date Added: 2024-06-11T15:04:01.519562
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS

                            FOR THE FIFTH CIRCUIT
                               _______________

                                 No. 97-30583
                               Summary Calendar
                               ______________

                     BRENDA BUTTS and RICHARD BUTTS,

                                            Plaintiffs-Appellants,

                                     VERSUS

                    ÆTNA CASUALTY AND SURETY COMPANY,

                                            Defendant-Appellee.

                         _________________________

             LOUISIANA UNITED BUSINESS SELF INSURERS FUND,

                                            Intervenor Plaintiff-Appellant,

                                     VERSUS

                    ÆTNA CASUALTY AND SURETY COMPANY,

                                            Intervenor Defendant-Appellee.

                         _________________________

             Appeal from the United States District Court
                 for the Western District of Louisiana
                              (96-CV-1777)
                       _________________________

                         January 22, 1998
Before JONES, SMITH, and STEWART, Circuit Judges.

JERRY E. SMITH, Circuit Judge:*

     *
         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should   not be published and is not precedent except under the limited
                                                               (continued...)
       Brenda Butts sued Aetna Casualty and Surety Company (“Aetna”),

demanding      coverage      under    her   employer's       automobile      insurance

policy.       The district court found that the employer, Kilpatrick

Life       Insurance   Company       (“Kilpatrick”),        had    waived    uninsured

motorist (“UM”) coverage and granted summary judgment for Aetna.

We affirm.

                                            I.

       Butts was driving her car in the course and scope of her

employment with Kilpatrick when she was struck broadside by a car

driven by James Chatman.           Chatman's liability insurance provided a

policy limit of $25,000SSan amount Butts says was insufficient to

compensate      her    for   the     serious     injuries    she    suffered   in   the

accident.        Butts    then     sought    compensation         under   Kilpatrick's

automobile insurance policy, issued by Aetna.

       Aetna denied coverage, arguing that Kilpatrick had waived UM

coverage.       Butts sued Aetna, but the court agreed that Kilpatrick

had waived UM coverage and granted Aetna summary judgment.                          The

court found that a valid waiver had been executed by Max Corley,

who, although not an employee of Kilpatrick, had been granted

implied actual authority to waive UM coverage on Kilpatrick's

behalf.

       We review grants of summary judgment de novo.                  Knight v. U.S.

       *
        (...continued)
circumstances set forth in 5TH CIR. R. 47.5.4.

                                            2
Fidelity & Guar. Ins. Co., 65 F.3d 34, 36 (5th Cir. 1995).                      All

facts must be viewed in the light most favorable to the non-movant

and all reasonable inferences drawn in his favor.                       Texas v.

Thompson, 70 F.3d 390, 392 (5th Cir. 1995).            The parties agree that

Louisiana law governs this diversity case.

                                        II.

     The central issue is whether there is a disputed material fact

concerning Corley's authority to waive UM coverage on behalf of

Kilpatrick.    We conclude that no material facts regarding this

issue are in dispute and that the district court properly granted

summary judgment.

                                         A.

     In Louisiana, UM coverage is included in every liability

policy    unless     it    is   rejected      “clearly,    unambiguously,      and

unmistakably.”       Henson v. Safeco Ins. Cos., 585 So. 2d 534, 538

(La. 1991).    Both sides agree that the waiver language was plain

and unambiguous and that Corley knowingly signed the waiver.                    The

disputed question is whether Corley enjoyed the authority to

execute a waiver that is binding on Kilpatrick.

     Under Louisiana law, one may bind a corporation if he has

implied   actual     authority     to    do   so.    Louisiana       courts    have

recognized    that    an    agency      relationship      may   be   created    by

                                         3
implication when

     from the nature of the principal's business and the
     position of the agent within that business, the agent is
     deemed to have permission from the principal to undertake
     certain acts which are reasonably related to the agent's
     position and which are reasonable and necessary con-
     comitants of the agent's express authorization. Implied
     authority connotes permission from the principal for the
     agent to act, though that permission is not expressly set
     forth orally or in writing. Generally, one should look
     from the viewpoint of the principal and the agent to
     determine whether the agent has implied authority.

AAA Tire & Export, Inc. v. Big Chief Truck Lines, Inc., 385 So. 2d
426, 429 (La. App. 1st Cir. 1980).    Written documents, such as a

contract or corporate minutes, are not necessary to prove agency,

nor is it necessary that the board of directors expressly authorize

the agent to act for the corporation.    Agency may be established

through proof of a course of business or through proof that the

board of directors knew of, or acquiesced in, the agent's authority

and actions.   Karam v. Travelers Ins. Co., 813 F.2d 751, 754 (5th

Cir. 1987) (quoting 2 W. FLETCHER, CYCLOPEDIA   OF THE   LAW   OF   PRIVATE

CORPORATIONS § 444, at 346 (rev. perm. ed. 1982)).

                                B.

     Corley is not Kilpatrick's employee. He is, however, the vice

president of the Rose-Neath Funeral Home (“Rose-Neath”), a company

that is commonly managed with Kilpatrick.   Virginia Shehee is the

link between the two businesses, serving as chief executive officer

and president of both.

                                 4
      Aetna argues that Corley was an authorized agent of Kilpatrick

because Shehee orally instructed Corley to waive UM coverage on

behalf of Kilpatrick and because Corley had routinely signed

insurance policies for Kilpatrick.               Shehee testified that Corley

had “handled the insurance” for both Kilpatrick and Rose-Neath for

at least a dozen years.           In his deposition, Corley corroborated

Shehee's understanding.          Roughly a year after Corley signed the

waiver, the Kilpatrick shareholders passed a resolution providing

that “all       acts    of   Officers   and   Directors   of    Kilpatrick    Life

Insurance Company, or any other designated individual, in handling

the affairs, investments, and contributions of said Corporation

since the last Annual Meeting of Shareholders are hereby ratified

and approved.”

      It   is    undisputed     that    Corley   regularly     signed   insurance

policies on behalf of Kilpatrick with Shehee's permission.                   It is

undisputed that both Shehee and Corley believed that he had the

authority to continue this longstanding practice when he signed the

waiver at issue here.           That Corley executed a binding waiver is

further supported by the shareholders' subsequent ratification of

his actions.           Despite Butts's argument that a dispute exists

regarding Shehee's express grant of authority,1 we find nothing in

      1
        Butts rebuts Aetna's claim that no disputed material facts exist by
pointing to the testimony of Crystal Baer, an Aetna employee. Baer testified
that Shehee “was not sitting” at the meeting where Shehee says she granted Corley
express authority to waive coverage.      Butts argues that the district court
improperly accepted Aetna's facts when it erroneously concluded that Butts failed
                                                                 (continued...)

                                          5
the record to contradict Aetna's claim that Corley enjoyed implied

actual authority to waive UM coverage on Kilpatrick's behalf.

Accordingly, the summary judgment is AFFIRMED.

     1
      (...continued)
timely to file her separate statement of disputed facts. Because we conclude
that even given Baer's testimonySSand other facts Butts says were wrongly
excludedSSthere exists no disputed material fact concerning Corley's implied
authority, we see no need to revisit the question of timeliness.

                                     6