Doughten v. State Farm Mutual

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT _______________

m 01-10269 _______________

MARY DOUGHTEN,

Plaintiff-Appellant,

VERSUS

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY,

Defendant-Appellee.

_________________________

Appeal from the United States District Court for the Northern District of Texas (4:00-CV-1799) _________________________

February 6, 2002

Before SMITH and DEMOSS, Circuit Judges, This appeal is intended to present two ques- and LAKE, District Judge.* tions: (1) Can a district court decide legal issues at summary judgment? (2) Does the PER CURIAM:** Texas Insurance Code permit an insurance contract to exclude coverage for an insured party’s bodily injuries sustained while riding in * District Judge of the Southern District of an uninsured family member’s car? We Texas, sitting by designation. conclude that it is unnecessary to reach either ** issue, because the plaintiff, Mary Doughten, 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 R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the ** limited circumstances set forth in 5TH CIR.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. (...continued) (continued...) 47.5.4.

waived those issues by failing to raise them in avers that the district court erred in giving ef- the district court. fect to the exclusionary clause, because it vio- lates Texas public policy. I. Doughten was a passenger in her son-in- II. law’s car when a third party rear-ended their Doughten’s failure to respond to the vehicle, injuring her. Her son-in-law, James motion for summary judgment means that she Gray, also was a member of Doughten’s did not raise, in the district court, the issues household. Defendant State Farm Mutual she urges on appeal. Fifth Circuit cases do not Automobile Insurance Company (“State consistently describe the standard for Farm”) insured her and her vehicle and insured considering an issue raised for the first time on Gray under a separate policy. appeal. Some panels have stated that we need not do so “unless it is a purely legal issue and Doughten sought and recovered money our refusal to consider it would result in a mis- from three sources: (1) The negligent driver’s carriage of justice.” E.g., Heci Exploration insurance carrier paid up to its third-party Co. v. Holloway, 862 F.2d 513, 518 & n.7 policy limits; (2) State Farm paid up to the (5th Cir. 1988) (emphasis added). More re- limit of Gray’s underinsured motorists policy; cently, panels have explained that this court and (3) State Farm paid up to the limit of can consider an issue for the first time on ap- Doughten’s Personal Injury Protection Policy. peal if “the issue presents a pure question of Doughten sought payment from State Farm law or [is] an issue which, if ignored, would under her Texas personal automobile policy result in a miscarriage of justice.” E.g., United for underinsured motorists. State Farm denied States ex rel. Wallace v. Flintco, Inc., 143 payment, and Doughten filed this suit in state F.3d 955, 971 (5th Cir. 1998) (emphasis add- court, seeking actual damages for breach of ed). We need not resolve the conflict to the insurance contract and extra-contractual decide whether Doughten can make new damages pursuant to article 21.21 of the Texas arguments on appeal, because she failed to Insurance Code. State Farm removed on the respond to the summary judgment motion basis of diversity jurisdiction. altogether.

State Farm moved for summary judgment; The courts of appeals retain broad Doughten did not respond. The court granted discretion to hear issues not presented to the summary judgment based on a clause in the in- district court.1 On the facts of this case, we surance policy that excludes payment for will not exercise that discretion, for to do so “bodily injury sustained while occupying, or would interfere with the managerial role of the when struck by, any motor vehicle or trailer of district court and would confuse our position any type owned by you or any family member which is not insured for this coverage under the policy.” 1 Singleton v. Wulff, 438 U.S. 106, 121 (1978) (“The matter of what questions may be taken up Doughten alleges two errors. First, she ar- and resolved for the first time on appeal is one left gues that declaratory judgment, rather than primarily to the discretion of the courts of appeals, summary judgment, was proper. Second, she to be exercised on the facts of individual cases.”); Heci, 862 F.2d at 518 & n.7 (same).

with that of the district court. however, State Farm would prevail, for the reasons cogently set forth by the district court. When a party fails to file any response to a summary judgment motion or offer an excuse III. for its failure, the district court should not face Doughten alleges that the court should have reversal based on novel issues. At summary resolved the legality of the contract’s ex- judgment, Dought en failed to make any legal clusionary clause through a declaratory arguments or identify the fact issues necessary judgment action rather than at summary to justify a trial. Her error went far beyond the judgment. Doughten misunderstands the failure to raise a single legal argument and nature of a motion for summary judgment. more resembles the failure to raise an entire claim or defense. We have previously ignored Summary judgment is appropriate if the defenses when argued for the first time on evidence on record “show[s] that there is no appeal.2 genuine issue as to any material fact and that the moving party is entitled to judgment as a On appeal, Doughten does not even offer matter of law.” FED. R. CIV. P. 56(c). The an excuse for failing to respond to the moving party bears the initial burden of summary judgment motions. Her failure to demonstrating an absence of evidence respond should not permit her, effectively, to supporting the nonmovant’s case. Celotex circumvent the district court entirely. When Corp. v. Catrett, 477 U.S. 317, 325 (1986). If exercising our discretion to hear issues first the nonmovant bears the burden of proving the raised on appeal, we should consider how it issue at trial, the movant merely can point to would affect judicial economy and man- the absence of evidence in the record. Id. at agement. Payne v. McLemore’s Wholesale & 323-24. The nonmoving party may not rest on Retail Stores, 654 F.2d 1130, 1146 (5th Cir. the mere allegations or denials of its pleadings Unit A Sept. 1981). but must respond by setting forth specific facts indicating a genuine issue for trial.3 The risk of interfering with the district court’s ability to resolve cases at summary Courts should resolve disputed legal issues judgment outweighs the slight chance of in- at summary judgment, even though they lack justice posed by denying Doughten’s new and the power to resolve factual disputes. 4 The dubious arguments. Even if we were to consider Doughten’s issues on the merits, 3 Webb v. Cardiothoracic Surgery Assocs, P.A., 139 F.2d 532, 536 (5th Cir. 1998); Figgie Int’l, Inc. v. Bailey, 25 F.3d 1267, 1269-70 (5th 2 Estate of Martineau v. ARCO Chem. Co., 203 Cir. 1994). F.3d 904, 913 (5th Cir. 2000) (refusing to consider 4 a limitations argument that the party had failed to Hang On, Inc. v. City of Arlington, 65 F.3d raise when briefing a motion for summary 1248, 1257 (5th Cir. 1995) (explaining power of judgment). Cf. Hinsley v. Boudloche, 201 F.3d district court to evaluate legal theory’s merits at 638, 645 (5th Cir. 2000) (refusing to consider summary judgment); Neff v. Am. Dairy Queen plaintiff’s arguments for tolling the statute of Corp., 58 F.3d 1063, 1065 (5th Cir. 1995) (hold- limitations where she had not raised them at ing that district court properly resolved question of summary judgment). (continued...)

district court correct ly chose to resolve the unbroken line of cases holding that insurers legal issue of the exclusionary clause’s validity lawfully can exclude some of a family’s at summary judgment. We review that vehicles from coverage.6 decision de novo. Rushing v. Kan. City S. Ry., 185 F.3d 496, 504 (5th Cir. 1999). Doughten relies on two cases to show that the exclusion violates Texas public pol- IV. icySSStephens v. State Farm Mut. Auto. Ins. Texas Insurance Code article 5.06-1 Co., 508 F.2d 1363 (5th Cir. 1975), and Bri- requires automobile liability insurance to ones v. State Farm Mut. Auto. Ins. Co., 790 include coverage against uninsured and S.W.2d 70 (Tex. App.SSSan Antonio 1990, underinsured motor vehicles. The insured can writ denied). Neither is good law. waive such coverage in writing. TEX. INS. CODE ANN. art. 5.06-1 (Vernon 1981). In Stephens, 508 F.2d at 1367, we held that Doughten argues that this statutory requirement creates an amorphous public policy that invalidates St ate Farm’s 5 (...continued) exclusionary clause. Farm Mut. Ins. Co. v. Conn, 842 S.W.2d 350, 351-52 (Tex. App.SSTyler 1993, writ denied) The language of the statute presents the (enforcing clause excluding uninsured family mem- first major obstacle for Doughten. The statute bers’ cars from coverage against underinsured provides that “[t]he coverages required under motorists); Tex. Farm Bureau Mut. Ins. Co. v. this Article shall not be applicable where any Tatum, 841 S.W.2d 89, 92 (Tex. App.SSTyler insured named in the policy shall reject the 1992, writ denied) (same); Tex. Farmers Ins. Co. v. McKinnon, 823 S.W.2d 345, 346-47 (Tex. coverage in writing.” Id. Because the statute App.SSBeaumont 1992, writ denied) (same). expressly permits waiver, Doughten would have to advance a unique reason that waivers 6 Holyfield v. Members Mut. Ins. Co., 572 of claims against uninsured family members S.W.2d 672, 673 (Tex. 1978) (establishing rule violate public policy. She fails to do so. that insurer can refuse to insure certain vehicles consistent with Texas statute requiring liability Several Texas courts of appeals have ruled insurance); Farmers Tex. County Mut. Ins. Co. v. that an insurance company can lawfully Griffin, 868 S.W.2d 861, 868-69 (Tex. disclaim uninsured motorists liability for App.SSDallas 1994, no writ); Conlin v. State accidents involving uncovered family Farm Auto. Ins. Co., 828 S.W.2d 332, 336-37 members.5 This rule is consistent with an (Tex. App.SSAustin 1992, writ denied); Harwell v. State Farm Mut. Auto. Ins. Co., 782 S.W.2d 518, 520 (Tex. App.SSHouston [1st Dist.] 1990, no writ); Berry v. Tex. Farm Bureau Mut. Ins. Co., 4 (...continued) 782 S.W.2d 246, 247 (Tex. App.SSWaco 1989, contract interpretation at summary judgment writ denied); Beaupre v. Standard Fire Ins. Co., because it was a legal issue). 736 S.W.2d 237, 238 (Tex. App.SSCorpus Christi 1987, writ denied); Broach v. Members Ins. Co., 5 Reyes v. Tex. All Risk Gen. Agency, Inc., 855 647 S.W.2d 374, 375 (Tex. App.SSCorpus Christi S.W.2d 191, 191-92 (Tex. App.SSCorpus Christi 1983, no writ); Stagg v. Travelers Ins. Co., 486 1993, no writ) (upholding identical clause); State S.W.2d 399, 402-04 (Tex. Civ. App.SSBeaumont (continued...) 1972, no writ).

Texas law prohibited an insurer from authority by Texas’s intermediate appellate excluding some of an insured’s vehicles from courts favors validity.7 The district court uninsured motorists policies while covering properly upheld the validity of the exclusionary other vehicles. We recognized that two clause at summary judgment. intermediate appellate courts had reached the opposite conclusion but interpreted dictum AFFIRMED. from the Texas Supreme Court as leaning toward invalidity. Id.

We no longer need to rely on dictum, how- ever, because the Texas Supreme Court has held such clauses valid. Holyfield, 572 S.W.2d at 673. We recognized the change in state law and upheld a vehicle exclusion in American Economy Insurance Co. v. Tomlin- son, 12 F.3d 505, 509 (5th Cir. 1994).

In Briones, the court invalidated an exclu- sionary clause in an underinsured motorists insurance contract, 790 S.W.2d at 74, that barred insureds from recovering if the vehicle was “available for” the insured’s “regular use,” id. at 71. The court characterized the question on appeal as a factual dispute over whether the plaintiff had used the truck “regularly.” Id. at 72. Despite evidence that he had used it regularly over five years, the court allowed recovery. Id. at 74. The court relied heavily on Stephens and on an interpretation of a Texas Supreme Court case later rejected in Holyfield. Id. See Holyfield, 572 S.W.2d at 673. The court emphasized that the employer had provided the vehicle and that courts should make this determination on a case-by- case basis. Briones, 790 S.W.2d at 74.

We conclude that the Texas Supreme Court would at least restrict Briones to its facts. The authorities that Briones relies on have since been discredited, and Briones itself describes a very limited holding. Briones does not extend to invalidate waivers of claims against uninsured family members. The weight of 7 Cases cited supra note 5.