Colony Insurance v. Wright
16f4th1186
5th Cir.2021Background:
- Marion Wright died when his personal car struck a metal gate that V & B International’s sawmill had swung across a public road on January 31, 2018.
- V & B carried a commercial general liability policy from Colony that included an original auto exclusion (Section 2.g) later replaced by an "absolute auto exclusion" excluding "‘bodily injury’ or ‘property damage’ arising directly or indirectly out of the ownership, maintenance, use or entrustment to others of any ... ‘auto.’"
- Wright’s wrongful-death beneficiaries notified Colony, sued V & B, and ultimately recovered a $900,000 settlement payable only from applicable insurance proceeds, if any.
- Colony filed for declaratory judgment that the policy provided no coverage; the beneficiaries sued Colony and the actions were consolidated in federal court.
- The district court granted summary judgment for Colony, holding the absolute auto exclusion unambiguously barred coverage regardless of the vehicle’s ownership or any nexus to the insured; the Fifth Circuit affirmed.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the absolute auto exclusion bars coverage for Wright’s death | Exclusion ambiguous; policy should cover the death (concurrent-cause theory raised below) | Exclusion unambiguously excludes any injury arising from an auto, irrespective of ownership or nexus | Exclusion is unambiguous and excludes coverage; summary judgment for Colony affirmed |
| Whether beneficiaries may rely on a separate endorsement (unmanned-aircraft exclusion) not raised below | Raise the separate endorsement to argue ambiguity | Argument was not presented below and thus waived | Forfeited; court declined to consider the unmanned-aircraft endorsement |
| Whether forfeiture should be excused under the "pure question of law and miscarriage of justice" exception | Ask court to overlook forfeiture because issue is legal and merits review | Exception inapplicable because the dispute requires contract/endorsement examination and possible extrinsic evidence | Exception not satisfied; forfeiture stands |
Key Cases Cited
- Bolton v. City of Dallas, 472 F.3d 261 (5th Cir. 2006) (standard of review for summary judgment on appeal)
- Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395 (5th Cir. 2008) (diversity action governed by forum state substantive law)
- J & W Foods Corp. v. State Farm Mut. Auto. Ins. Co., 723 So. 2d 550 (Miss. 1998) (policy must be read as a whole; give effect to all provisions)
- Camden Fire Ins. Ass’n v. New Buena Vista Hotel Co., 24 So. 2d 848 (Miss. 1946) (endorsement controls the policy to the extent it modifies terms)
- Corban v. United Servs. Auto. Ass’n, 20 So. 3d 601 (Miss. 2009) (clear insurance contracts are enforced as written; ambiguities construed for insured)
- Volkswagen of Am., Inc. v. Robertson, 713 F.2d 1151 (5th Cir. 1983) (articulating the "pure question of law and miscarriage of justice" exception to forfeiture)
- AG Acceptance Corp. v. Veigel, 564 F.3d 695 (5th Cir. 2009) (example of excusing forfeiture where panel precedent supported the newly raised legal point)