Court Opinion

ID: 26601
Source: CourtListenerOpinion
Date Created: 2010-04-25 08:54:24+00
Date Added: 2024-06-11T12:15:38.289721
License: Public Domain

UNITED STATES COURT OF APPEALS
                           FOR THE FIFTH CIRCUIT
                           _____________________

                               No. 01-60576
                             Summary Calendar
                          _____________________

FRONTIER INSURANCE COMPANY,

                            Plaintiff - Counter Defendant - Appellee,

versus

TINA HAI PHAN, Etc.; ET AL.,

                                                                  Defendants,

TINA HAI PHAN, doing business as
Vina Realty,

                        Defendant - Counter Claimant - Appellant.
_________________________________________________________________

           Appeal from the United States District Court
             for the Southern District of Mississippi
                         (3:00-CV-297-BN)
_________________________________________________________________
                         January 14, 2002
Before JOLLY, SMITH, and STEWART, Circuit Judges.

PER CURIAM:*

     D.P.S., Ltd., Inc. (DPS) retained Appellee Tina Phan, a

licensed Mississippi real estate broker, to assist it with the sale

of a motel.    DPS filed suit against Phan in state court, alleging

that Phan sold the motel for $2.1 million, but told DPS it had sold

for $1.9 million, and that she wrongfully retained the $200,000

difference.     DPS    asserted   claims   against   Phan   for    breach   of

fiduciary   duty,     misrepresentation    and   concealment,      breach   of

     *
      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this opinion should not be published and is not precedent except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.
implied covenant of good faith, negligence, malpractice, fraud,

outrage, and continuing misrepresentation and concealment.

     Frontier   Insurance   Company,   Phan’s   errors   and   omissions

carrier, filed an action against Phan in federal district court.**

Frontier sought a declaratory judgment that it has no liability

for, and no duty to defend, Phan in the state court action filed by

DPS, because its policies exclude coverage for intentional wrongful

acts.

     The district court denied Phan’s motion to dismiss and granted

Frontier’s motion for judgment on the pleadings.         It held that,

although DPS asserted claims against Phan for negligence and other

unintentional torts, the factual allegations of DPS’ complaint,

which control whether an insurer has a duty to defend, accused Phan

only of intentional conduct, for which coverage under Frontier’s

policy was excluded.

     On appeal, Phan contends that there are numerous factual

allegations in DPS’ complaint which trigger coverage under the

Frontier policies.   She contends further that, even if all of DPS’

claims are not covered under the policies, Frontier nevertheless

     **
      On December 3, 2001, Frontier filed a Suggestion of
Rehabilitation of Insurer, advising that it was involved in
rehabilitation proceedings in New York. The Rehabilitation Order
provides that “[a]ll persons are enjoined and restrained from
commencing or prosecuting any actions, lawsuits or proceedings
against Frontier, or the Superintendent as Rehabilitator.”
Frontier did not, however, seek a stay of this appeal or assert
that the Rehabilitation Order should have any effect on our
disposition.

                                  2
owes her a duty to defend the claims for negligence, malpractice,

and breach of fiduciary duty.        Alternatively, she argues that

Frontier’s declaratory judgment action should be stayed pending the

outcome of the state court action.       Finally, she contends that

Frontier’s motion for judgment on the pleadings was untimely and

should have been denied on that basis alone.

     We have reviewed the record and the briefs, and we discern no

error in the district court’s reasoning and conclusions.     As the

district court correctly held, under Mississippi law, it is the

factual allegations of the complaint, and not the legal theories

alleged, which control whether an insurer has a duty to defend or

indemnify.    See American Guarantee & Liability Ins. Co. v. 1906

Co., ___ F.3d ___, ___, 2001 WL 1413066, at *4 (5th Cir. Nov. 12,

2001) (applying Mississippi law); Equal Employment Opportunity

Comm’n v. Southern Publ’g Co., 894 F.2d 785, 790-91 (5th Cir.

1990).     Phan does not dispute that Frontier’s policy excludes

coverage for intentional acts. DPS alleged that Phan secretly took

$200,000 in cash from the purchaser of the motel and concealed its

existence from DPS, telling DPS that the motel sold for $1.9

million when the purchaser in fact paid $2.1 million.   Although DPS

asserted claims for negligence and other unintentional conduct, the

facts alleged in its complaint, which control whether Frontier has

a duty to indemnify or defend Phan, involve only intentional

conduct.     Therefore, the district court did not err by denying

                                 3
Phan’s motion to dismiss and by granting Frontier’s motion for

judgment on the pleadings.

     The district court did not abuse its discretion by denying the

stay requested by Phan. Because Frontier’s duty is premised on the

factual allegations of DPS’ complaint against Phan, the state

court’s ultimate resolution of DPS’ claims has no bearing on

whether DPS has a duty to defend or indemnify Phan.

     Finally, the district court did not abuse its discretion by

denying Phan’s motion to strike Frontier’s motion for judgment on

the pleadings.   Although Frontier’s motion was filed beyond the

deadline established by the district court, the court concluded

that denying the motion on the ground that it was untimely would

waste the resources of both the court and the parties.   Certainly

it was within the district court’s discretion to consider the

motion, despite the fact that it was untimely.

     For the foregoing reasons, the judgment of the district court

is

                                                  A F F I R M E D.

                                4