Case: 20-61139 Document: 00516073506 Page: 1 Date Filed: 10/28/2021
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
October 28, 2021
No. 20-61139 Lyle W. Cayce
Clerk
Colony Insurance Company,
Plaintiff—Appellee,
versus
Brandon Keon Wright, on behalf of the wrongful
death beneficiaries of Marion Earl Wright; V & B
International, Incorporated,
Defendants—Appellants,
______________________________
Brandon Keon Wright, On behalf of the Wrongful
Death Beneficiaries of Marion E. Wright, Deceased,
Plaintiff—Appellant,
versus
Colony Insurance Company,
Defendant—Third Party Plaintiff -Appellee,
versus
V & B International, Incorporated,
Third Party Defendant—Appellant.
Case: 20-61139 Document: 00516073506 Page: 2 Date Filed: 10/28/2021
No. 20-61139
Appeal from the United States District Court
for the Southern District of Mississippi
USDC No. 5:19-CV-88
USDC No. 5:20-CV-43
Before Elrod, Southwick, and Costa, Circuit Judges.
Leslie H. Southwick, Circuit Judge:
The district court issued a declaratory judgment that an automobile
driver’s death was not covered by the terms of the defendant insurance
company’s policy. The wrongful-death beneficiaries of the driver appeal,
claiming that the driver’s death was covered under the policy. We
AFFIRM.
FACTUAL AND PROCEDURAL BACKGROUND
Marion Wright was driving his personal vehicle to a logging site in
Claiborne County, Mississippi on the morning of January 31, 2018. As
Wright drove by a sawmill owned by V & B International, Inc., he collided
with the sawmill’s metal gate that had swung out across the road. Wright
suffered multiple traumatic injuries and died at the scene.
Prior to Wright’s death, V & B had purchased a commercial general
liability insurance policy from Colony Insurance Company. The policy
provides coverage for bodily injury and property damage suffered on V & B’s
premises during the coverage period. Section 2.g of the policy, though,
excludes coverage for “ ‘bodily injury’ or ‘property damage’ arising out of
the ownership, maintenance, use, or entrustment to others of any aircraft,
‘auto’ or watercraft owned or operated by or rented or loaned to any
insured.” Further, an endorsement titled the “absolute auto exclusion”
purports to replace Section 2.g and excludes “ ‘bodily injury’ or ‘property
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damage’ arising directly or indirectly out of the ownership, maintenance, use
or entrustment to others of any aircraft, ‘auto’ or watercraft.”
On February 2, 2018, Wright’s wrongful-death beneficiaries notified
Colony of their potential claims under V & B’s policy. On February 27, 2018,
Colony contacted V & B to deny coverage under the absolute auto exclusion.
About three weeks later, the wrongful-death beneficiaries sued V & B in the
Circuit Court of Claiborne County, Mississippi. On August 30, 2019,
counsel for Wright’s beneficiaries notified Colony that they had
compromised their claims against V & B and demanded coverage. The state
court entered a final judgment on September 17, 2019, explaining that V & B
settled with Wright’s beneficiaries for $900,000, to be collected “only
against applicable insurance proceeds, if any.”
On September 19, 2019, Colony filed this action in the United States
District Court for the Southern District of Mississippi, requesting a
declaration that it had no liability under the policy for Wright’s death. On
October 28, 2019, the wrongful-death beneficiaries sued Colony in state
court seeking a declaratory judgment regarding the policy. Colony removed
that action, which was consolidated with the action for declaratory relief. All
parties moved for summary judgment. The district court granted summary
judgment for Colony, concluding that the policy unambiguously excludes
coverage for any injury arising from an automobile accident, regardless of the
car’s ownership.
DISCUSSION
We review a grant of summary judgment de novo, using the same
standard a district court is to apply. Bolton v. City of Dallas, 472 F.3d 261, 263
(5th Cir. 2006). The moving party has the burden to show the absence of a
genuine dispute of material fact. Stearns Airport Equip. Co., Inc. v. FMC
Corp.,
170 F.3d 518, 521 (5th Cir. 1999). We view all evidence in the light
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most favorable to the non-moving parties, drawing all reasonable inferences
in their favor. Bolton, 472 F.3d at 261.
This diversity action is governed by Mississippi substantive law. Delta
& Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 399 (5th
Cir. 2008). When interpreting an insurance policy under Mississippi law,
courts “look at the policy as a whole, consider all relevant portions together
and, whenever possible, give operative effect to every provision in order to
reach a reasonable overall result.” J & W Foods Corp. v. State Farm Mut.
Auto. Ins. Co.,
723 So. 2d 550, 552 (Miss. 1998). An endorsement “controls
the policy insofar as it enlarges, modifies or restricts the terms” of the policy.
Camden Fire Ins. Ass’n v. New Buena Vista Hotel Co.,
24 So. 2d 848, 850
(Miss. 1946).
“[I]f a contract is clear and unambiguous, then it must be interpreted
as written.” Corban v. United Servs. Auto. Ass’n, 20 So. 3d 601, 609 (Miss.
2009) (quoting United States Fid. & Guar. Co. v. Martin,
998 So. 2d 956, 963
(Miss. 2008)). Although “ambiguities must be resolved in favor of the
non-drafting party,” they “do not exist simply because two parties disagree
over the interpretation of a policy.”
Id. Instead, “[a]mbiguities exist when a
policy can be logically interpreted in two or more ways, where one logical
interpretation provides for coverage.”
Id. “Exclusions and limitations on
coverage are also construed in favor of the insured.”
Id.
Colony and the wrongful-death beneficiaries do not dispute that
Wright’s death is an occurrence under the policy that would be covered
unless there is an applicable exclusion. Accordingly, the only issue before
this court is whether a valid exclusion applies.
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At the district court and on appeal, the wrongful-death beneficiaries
argued that the policy unambiguously covered Wright’s death. 1 Section 2.g
of the policy states that the insurance does not apply to:
“Bodily injury” or “property damage” arising out of the
ownership, maintenance, use or entrustment to others of any
aircraft, “auto” or watercraft owned or operated by or rented or
loaned to any insured. Use includes operation and “loading or
unloading.”
This exclusion applies even if the claims against any insured
allege negligence or other wrongdoing in the supervision,
hiring, employment, training or monitoring of others by that
insured, if the “occurrence” which caused the “bodily injury”
or “property damage” involved the ownership, maintenance,
use or entrustment to others of any aircraft, “auto” or
watercraft that is owned or operated by or rented or loaned to
any insured.
(emphasis added).
This original Section 2.g auto exclusion was replaced by the absolute
auto exclusion which “deleted and replaced” the original text with this:
[This insurance does not apply to] “[b]odily injury” or
“property damage” arising directly or indirectly out of the
ownership, maintenance, use or entrustment to others of any
1
At the district court, the plaintiffs argued that the accident was covered under
what is called the “concurrent-cause doctrine.” Because they do not identify this as an
issue on appeal, we do not consider it. Besides dropping one argument, the wrongful-death
beneficiaries seek to raise a new argument on appeal concerning a separate endorsement,
“the unmanned aircraft exclusion.” The district court never considered that exclusion
because briefing on summary judgment did not refer to it. “[A]rguments not raised before
the district court are waived and cannot be raised for the first time on appeal.” LeMaire v.
La. Dep’t of Transp. & Dev., 480 F.3d 383, 387 (5th Cir. 2007). We therefore do not address
this separate exclusion.
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aircraft, “auto” or watercraft. Use includes operation and
“loading or unloading”.
This exclusion applies even if the claims against any insured
allege negligence or other wrongdoing in the supervision,
hiring, employment, training or monitoring of others by that
insured, if the “occurrence” which caused the “bodily injury”
or “property damage” involved the ownership, maintenance,
use or entrustment to others of any aircraft, “auto” or
watercraft.
There is no coverage for injuries arising “directly or indirectly out of
the . . . use . . . of any ‘auto’” without limiting the provision’s effect to the
insured’s autos. The policy must be interpreted “as written.” Corban, 20
So. 3d at 609. Taking the absolute auto exclusion as written, the policy
excludes coverage regardless of any nexus — or lack thereof — between the
insured and the auto.
We agree with the district court’s well-reasoned and thorough order
on summary judgment explaining why there is no coverage for the tragic
events underlying this litigation. AFFIRMED.
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Gregg Costa, Circuit Judge, concurring:
I fully join the court’s opinion, which affirms that the district court
correctly decided the issues before it. I also agree that the appellant failed to
raise, and thus forfeited, the argument that the insurance policy is ambiguous
because of two potentially conflicting endorsements. I write separately to
address the often-invoked-but-rarely-applied exception to the forfeiture rule
that the appellant urges us to apply and explain why it does not.
The enigmatic exception allows a court to overlook forfeiture when
“the newly raised issue concerns a pure question of law and a refusal to
consider it would result in a miscarriage of justice.” Volkswagen of Am., Inc.
v. Robertson, 713 F.2d 1151, 1166 (5th Cir. 1983). Almost four decades ago, we
said that this exception will “usually” overcome forfeiture when its
conditions are met.
Id.
That is no longer true. Our most recent published decision I could
find excusing forfeiture on these grounds is more than a decade old. See AG
Acceptance Corp. v. Veigel, 564 F.3d 695, 701 (5th Cir. 2009). Although the
exception seems like a relic of an era more forgiving of forfeiture, it is still
part of our jurisprudence. Jacobs v. Nat’l Drug Intel. Ctr.,
548 F.3d 375, 378
(5th Cir. 2008) (noting that “one panel of our court may not overturn another
panel’s decision” absent a change in law by the Supreme Court, our en banc
court, or Congress).
With the exception still on the books, the question becomes when we
should apply it. A panel of this court recently noted the seeming arbitrariness
of the exception, warning that courts “must be on guard for the risk of judicial
bias when it comes to discretionary practices such as addressing forfeited
issues.” Rollins v. Home Depot USA, 8 F.4th 393, 398 (5th Cir. 2021). There
is a difference, however, between ad-hoc “all things considered” discretion
and discretion guided by the background rationales underlying certain rules.
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Frederick Schauer, Exceptions, 58 U. Chi. L. Rev. 871, 895–97 (1991)
(distinguishing between the two). The latter—guided discretion—is
standard fare in many doctrines that require judges to exercise judgment. See
Henry J. Friendly, Indiscretion About Discretion,
31 Emory L.J. 747, 784
(1982) (“[D]iscretionary choices are not left to a court’s ‘inclination, but to
its judgment; and its judgment is to be guided by sound legal principles.’”
(quoting United States v. Burr,
25 F. Cas. 30, 35 (C.C. Va. 1807) (Marshall,
C.J.))).
The few cases from the last two decades in which we invoked the
“pure question of law and miscarriage of justice” exception provide a clue to
help guide our discretion in this area. We overlooked forfeiture when a
plaintiff argued for the first time on appeal that the Prison Litigation Reform
Act’s exhaustion requirement does not apply to former prisoners. Bernal v.
Bexar County, 757 F. App’x 316, 318–19 (5th Cir. 2018) (unpublished).
Considering the newly raised issue was justified because our caselaw had
already endorsed the plaintiff’s plain reading of the statute.
Id. at 320 (citing
Janes v. Hernandez,
215 F.3d 541 (5th Cir. 2000)). Similarly, because our
precedent already held that a statute barred attorneys’ fees, we excused a
party’s failure to so argue in the district court. AG Acceptance Corp.,
564 F.3d
at 701 (citing Utica Lloyd’s of Tex. v. Mitchell,
138 F.3d 208, 210 (5th Cir.
1998)). In both cases, an opinion from our court already recognized the legal
principle that was belatedly invoked on appeal. Finding the issue forfeited
would have resulted in a decision contrary to binding precedent and the laws
the legislatures had enacted.
One of the keys to understanding the exception, then, is the “pure”
modifier to the “question of law” element. Most appeals will involve some
questions of law. The issue in this case—how to interpret a contract—is a
legal question subject to de novo review. But such a question of law is not
necessarily, or even usually, the same as a pure question of law. See Rollins, 8
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F.4th at 398 (observing that whether a material fact dispute exists to preclude
summary judgment—a legal question we review de novo—is “plainly not a
pure question of law”). Interpreting a contract requires us to do more than
read a case or statute. We must inspect something in the record: the contract
itself. And if the contract turns out to be ambiguous, we may have to dive
into extrinsic evidence. Once we start dissecting the record, we find
ourselves exactly where the forfeiture rule says we should not be—deciding
issues based on inadequately developed facts. See City of Waco v. Bridges, 710
F.2d 220, 228 (5th Cir. 1983). A pure question of law thus exists “when the
unpreserved issue is completely detached from the facts.” Andrey Spektor
& Michael A. Zuckerman, Ferrets and Truffles and Hounds, Oh My: Getting
Beyond Waiver,
18 Green Bag 77, 88 (2014).
It is telling that the two cases from recent decades finding this
complete detachment from the facts involved issues of statutory
interpretation. See AG Acceptance Corp., 564 F.3d at 701; Bernal, 757 F.
App’x at 319. If these examples are representative, then the pure question of
law exception may largely overlap with another exception to the preservation
requirement: forfeiture does not apply when the court is interpreting a
statute. McMillen v. New Caney Indep. Sch. Dist.,
939 F.3d 640, 647 n.4 (5th
Cir. 2019) (quoting Young v. United Parcel Serv., Inc.,
135 S. Ct. 1338, 1353
(2015)). Put another way, what a lawyer argues cannot change what the
legislature wrote.
This review of our caselaw applying the “pure question of law plus
miscarriage of justice” exception shows that the first requirement is missing
here. The appellant’s argument cannot be resolved solely by reading a court
opinion or the words of a statute. The ambiguity claim instead requires
examining the insurance policy and endorsements that make up the record of
this case (and perhaps more if extrinsic evidence is relevant). As a result, the
unpreserved ambiguity argument is forfeited.
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