Fruge v. Amerisure Mutual Insurance
663 F.3d 743
5th Cir.2011Background
- Amerisure and Chubb issued separate CGL and umbrella policies to Drilling and MWD, with MWD named on Amerisure policies.
- Fruge sues for negligence; Amerisure and Chubb assume MWD defense in 2007; Drilling is dismissed in 2007.
- Amerisure later deleted MWD as named insured via policy change forms and claimed clerical error, ending defense in 2007.
- Chubb seeks declaration of Amerisure's duty to defend MWD, policy ranking, and defense-cost contributions.
- District court granted partial summary judgment adverse to Amerisure, holding Louisiana law bars extrinsic evidence, and ranking and standing issues pending appeal.
- This appeal challenges the district court’s application of Louisiana law, the exclusion of extrinsic evidence, and related remedial effects; this court reverses for failure to consider extrinsic evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether extrinsic evidence may prove mutual mistake | Amerisure argues extrinsic evidence should be admissible. | Chubb argues extrinsic evidence is barred by Louisiana law. | District court erred; extrinsic evidence permitted to prove mutual mistake. |
| Choice of law governing interpretation and reformation | Amerisure contends Texas law should apply. | Chubb/collectively Louisiana law governs; Amerisure waived choice-of-law by not raising earlier. | Waiver of choice-of-law argument; Louisiana law applies. |
| Effect of mutual-mistake reformation on third-party tort victim’s rights | Amerisure seeks reformation to reflect mutual mistake. | Reformation should be allowed to reflect true intent even post-loss. | Louisiana allows post-accident reformation to reflect mutual intent; not barred by policy. |
| Whether the district court properly addressed ranking and standing | Amerisure's ranking and standing to seek defense-cost allocation were improperly decided. | Chubb argues the district court should determine ranking and costs. | Not decided on the current appeal; remand for extrinsic-evidence issue. |
| Reformation and statutory provisions (22:1262) relevance | 22:1262 blocks retroactive annulment by agreement; reformation not barred. | Statute barriers should preclude reformation. | Section 22:1262 does not bar post-accident reformation; not controlling here. |
Key Cases Cited
- Samuels v. State Farm Mut. Auto. Ins. Co., 939 So.2d 1235 (La. 2006) (parol evidence admissible to show mutual error even if policy not ambiguous)
- Washington v. Savoie, 634 So.2d 1176 (La. 1994) (uninsured motorist context; relevance to loss-bearing allocation)
- Cadwallader v. Allstate Ins. Co., 848 So.2d 577 (La. 2003) (application of Louisiana contract interpretation rules)
- Moore v. State Farm Fire & Cas. Co., 556 F.3d 264 (5th Cir. 2009) (choice-of-law and reformation principles in ERIE context)
- Staten v. Sec. Indus. Ins. Co., 414 So.2d 1328 (La.App. 2d Cir. 1982) (illustrative authority on reformation principles (per curiam))