WH Holdings, L.L.C. v. ACE American Insurance
481 F. App'x 894
5th Cir.2012Background
- WH Holdings owned the Ritz Carlton renovation project; Gootee Construction contracted to perform renovations.
- Hurricane Katrina damaged the Ritz exterior during the renovation.
- ACE American Insurance Company issued a builder’s risk policy to Gootee; WH would be insured only if it qualifies as a Broad Named Insured.
- The district court granted ACE summary judgment, holding WH was not insured because Gootee was not responsible for purchasing the property insurance.
- The district court read amended General Conditions (including 11.4.1 and 11.1.5(g)) to require WH to provide the insurance for renovation work.
- The Fifth Circuit vacated and remanded, finding the contract ambiguous and requiring consideration of extrinsic course-of-conduct evidence on remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the property insurance obligation unambiguous as to who must purchase it? | WH contends the contract does not unambiguously assign the duty. | ACE/Gootee contend 11.1.5(g) makes WH responsible for renovation insurance. | Ambiguity; not unambiguous who must insure. |
| May extrinsic evidence be used to interpret the ambiguity on remand? | Course-of-conduct evidence should be considered to clarify intent. | Extrinsic evidence is not allowed if contract unambiguous. | Remand allowed to consider extrinsic evidence and other admissible evidence. |
Key Cases Cited
- Apache Corp. v. W & T Offshore, Inc., 626 F.3d 789 (5th Cir. 2010) (summary judgment standard de novo; factual disputes must be genuine)
- Brown v. Driller’s, Inc., 630 So.2d 741 (La. 1994) (extrinsic evidence admissible only if contract terms are ambiguous)
- Crooks v. Placid Oil Co., 981 So.2d 125 (La. Ct. App. 2008) (interpretation aided by course of conduct when ambiguity exists)
- Liljeberg Enters., Inc. v. Lifemark Hosps. of La., Inc., 620 So.2d 1331 (La. Ct. App. 1993) (parol evidence to clarify ambiguity, not to amend contract)
- Total Minatome Corp. v. Union Tex. Prods. Corp., 766 So.2d 685 (La. Ct. App. 2000) (consider contractual performance in interpreting terms)
- McCarroll v. McCarroll, 701 So.2d 1280 (La. 1997) (parol evidence may clarify ambiguity; not to vary authentic acts)