*1 cantly aggravating more factors than are case;
presented in the instant the Hernan- guilty dez defendant was found of a “co- CONSEDINE, Michael F. Insurance offense,” conspiracy caine and his sentence Commissioner of the Commonwealth possession was increased based on the Pennsylvania, capaci- in his official three firearms at the time of the offense— ty Statutory Liquidator of Reliance style “two AK—47 handgun and rifles.” Co., Plaintiff-Appellant (internal quotation Id. marks omit- Cross-Appellee ted). v.
Although directly the instant case falls MANAGEMENT, PERSONNEL in precedent between our Avalos-Mar- INC., Defendant-Appellee denying relief when confronted tinez— Cross-Appellant. with a one-month difference—and Her- granting relief based on a 12- nandez — No. 11-31202. discrepancy, month we believe that States Appeals, United Court of closely aligned facts of this case are more Fifth Circuit. Our Hernandez. failure to correct sentencing light error in the of the six- Sept. month difference between Martinez’s sen- Joseph Mcreynolds, Lee Esq., Senior top tence and the end of the accurate Deutsch, Trial Attorney, Kerrigan & range, Guidelines and the district court’s Stiles, L.L.P., Orleans, LA, New Meredith Guidelines, clear misapplication of the Hayes, Monroe, LA, Moore Esq., seriously would affect the integrity Plaintiff-Appellant Cross-Appellee. remand, judicial process. On court should re-sentence Martinez with Harper, Esq. Harper Jerald R. Law proper advisory guidelines Firm, reference to the LA, Shreveport, for Defendant-Ap- range. pellee Cross-Appellant.
III. above,
For the judg- reasons stated ment of the district court is REAVLEY, DENNIS, Before CLEMENT, Judges. Circuit
REVERSED and REMANDED. *
PER CURIAM: appeal This arises out of an insurance contract dispute between workers’ com- carrier, pensation insurance Reliance In- (Reliance), surance Co. is now liquidation, employer, and the insured Per- (PMI). Management, sonnel Inc. seeks from PMI * 47.5, Pursuant to 5th Cir. R. the court has the limited circumstances set forth in 5th Cir. opinion determined that this should not be R. 47.5.4. published precedent except and is *2 agents PMI’s Reliance and surance. in deductible
premiums terms, and Reliance pricing policy. agreed on PMI owes under the it claims losses one-page “Binder of trial, separate then issued a court a bench the district Following Insurance,” pric- the same which contained Reli- awarding judgment a final entered Binder. The terms as in the CIP ing the ad- relief in the form of partial were issued and deliv- but, themselves after premiums justed after the terms and agents to PMI’s to follow ered breached its Reliance policy The first were finalized. conditions claims-adjustment procedures, 1,1998 April April of period the re- covered Reliance’s claim for rejected 1, was renewed for a $604,435 policy 1999. The losses. We in deductible maining 1, April of year covering period second affirm. policies’ The de- April 2000. a deduct- specified endorsement ductible I. $100,000 claim, per in the amount of ible A. deductible limits subject aggregate payroll volume.2 based on PMI’s arose out of two parties’ dispute and related compensation policies functionally Binder and workers’ A identical CIP 1990s, late negotiated in the of were issued for agreements Binder PMI is a Loui- renewed by year pol- Reliance to PMI. before the issued second an em- operates premium The annual corporation icy siana was delivered. in- Reliance is an an agency. year, the first based on estimated ployee-leasing for existing $6,300,000, organized by PMI dur- corporation payroll supplied surance In Pennsylvania. policy, laws of negotiation under the ing $85,000. in- compensation $95,120, a workers’ sought with a cash collateral It hired an insurance for the second premium surance carrier. The estimated $145,160, its workers. procure insurance for based on an estimated agent policy was $12,063,199, an insurance on informa- agent payroll turn solicited based broker policy, and the PMI. PMI those supplied broker to secure tion Compa- Pacific Insurance the cash collater- contacted Union estimated In- was an affiliate of Reliance ny, which al. “Reliance”) at (together, Company surance principal were three features There The broker asked Reliance the time.1 and claims- coverage pre- Reliance response, and in quote first, the insurance handling arrangement: In- “Casualty called a pared a document adjustable, based on premiums would be “CIP”) (or Binder, Program” surance second, PMI’s in- payroll; PMI’s annual coverages, premiums, de-
which outlined “high poli- be a deductible” surance would limits, ductibles, fi- aggregate and other PMI to cy, effectively requiring self-insure would be nancial terms on which the $100,000 claim, with Reliance to up per issued. third, $100,000; and Reli- pay claims over ance, claims admin- through professional the services of PMI decided to retain istrator, investigate, and process, in- would compensation Reliance for its workers’ years agree policies for both merged, parties leav- The two affiliates have since 1. $100,000 existing company. and the ing Reliance as the sole deductible had a agree by that deductible term. to abide inadver- The deductible endorsement was policy, but the tently from the first omitted pay any claims filed employees, PMI’s covered that the actual payroll was over would then twice the reimburse amount that PMI had estimated (over within limit. deductible million rather than $14 million $6.3 effect, the parties agreements: had two 1998 and million rather than $31.4 $12 first, provide 1999). Reliance would insurance million in *3 coverage payroll, based on and PMI would The details of the parties’ deductible second, pay adjustable premiums; the and agreement are also not contained in one Reliance would administer the claims-han- single The document. outline of the par- dling for all process employees, of PMI’s ties’ deductible was set in forth pay PMI would out all claims valued part in the itself and in the second $100,000, similar to an administra- policy’s deductible endorsement. Howev- (“ASO”) tive services contract.3 er, the details of the deductible agreement adjustable premium agreement was was set forth in documents sepa- issued on the parties’ based anticipation rately from each policy, the “Insurance payroll change drastically PMI’s could (IPAs). Program trial, At Agreements” “ coverage period, over the insurance there- PMI described each IPA as the ‘custom- by affecting parties’ both degree of risk. ized’ document ... set[ting] forth the fact, during coverage period the be- ‘guts’ high of the deductible policy.” The tween 1998 and PMI underwent sub- by IPAs set the which forth method the growth. Its payroll expanded stantial by deductibles would be calculated and 1,000 from 600 to over and it the tripled which processing the would be han- business, of states which it did number parties sign dled. While the did not from In anticipation three to nine. of the IPAs, finalize parties the both acknowl- company’s growth, parties agreed on a edge they intended the IPAs to be adjusting policy premiums method of de- enforceable. The district court concluded pendent payroll on PMI’s actual volume in that the IPA documents did not “constitute given year. a policies contained pro- insurance,” part of the although entitling visions Reliance to audit PMI’s “PMI a received considerable benefit from payrolls and to ac- the application of the terms contained Five, cordingly. Part Section E of both Nevertheless, within the[m].” policies provided, in part: relevant always that “Reliance con- concluded final premium will be
[T]he determined sidered that the part was a [IPA] by after this ends using the actu- Program, because it contained al, estimated, not the premium basis and binders, provisions, reflected proper classifications rates that establishing aggregate limits. Those lim- lawfully apply to the and work business PMI, its were of considerable benefit[ ] policy. covered this If the final pre- because limited maximum they PMI’s ex- is more than the premium you mium posure for deductible losses. Reliance has us, you must pay us balance. always given PMI the benefit of aggre- Likewise, Five, Thus, gate Part Section G limits.” the district court poli- con- “[ijnformation developed cies stated that cluded that while the IPAs were not part themselves, will be the they audit used to determine final of were in- premium.” timely Rebanee tended to a of Reliance’s conducted be “Insur- physical payroll Program” audits of PMI’s and dis- governed handling See, al., e.g., Jeffrey Mamorsky Munnelly, D. 2 Em- John et J. Administrative Services (2013); Contracts, (1982). ployee Benefits Handbook 46:87 17 Forum 988-89 the de- losses, payment account for loss fund and deductible
of PMI’s directly. The IPA states this in- losses ductible conduct reflected to fund and agrees Insured that “[t]he tention. Article Losses accordance for Paid trial, agreed that parties At both III of the Agreement.” Article III of “high deduct- to be were intended part, that “[t]he in relevant provided, IPA re- PMI would be whereby policies” ible for the an account shall establish Insured $100,000 of claims first for the sponsible The IPA did Paid Losses[.]” payment portion of pay the and Reliance would would fund specify As con- value. exceeding that dollar claim nev- Although escrow account. deduct- large purchasing sideration document, un- or executed this signed er large deduct- given policy, ible $100,000, at trial established testimony credit, amount of contradicted ible *4 the IPA of to execute price the failure substantially parties’ reduced which year, first or Reli- policy’s pricing In the premiums. not affect the additional did and, down not- brought credits obligation to losses ance’s $304,000 $95,000, in second and above, acknowledged to parties from both ed $235,000. $492,960to year, from abide they intended to trial that of the IPA. terms endorse- deductible policy’s The second Re- PMI must reimburse ment stated dispute stems principal your on we make payments liance “for process claims-administration from the provide, to required was PMI behalf.” third-party by Reliance employed and security for its reimburse- provide, did and Binders of The CIP claims administrator. letters in either cash or obligations, ment Reliance’s claims- advertised both for the security amount of credit. The which Program,” “Service administration $85,000, $235,000 for and policy first “appli- Reliance services a list of provided provid- also CIP binders the second. The including “loss con- programs,” all cable to to obligation to PMI’s upper ed an limit anal- exposure “loss engineering,” trol and for the deductibles reimburse Reliance evaluation,” program ysis,” “loss control payroll, of percentage on a based “claims han- “training programs,” and $310,111 for ultimately to amounted that all binders stated dling.” CIP $612,324.00 for the year policy first by Sterling, would be serviced claims trial, ac- At Reliance second year. administrator, on behalf third-party claims was entitled to ben- knowledged that PMI However, poli- after the first of Reliance. though aggregate limits efit from those executed, a different Reliance hired cy was binders. in the CIP they appeared Co., administrator, & Crawford third-party effect, arrangement adjustment. claims assist PMI would be self-insured provided that were claims-handling services Reliance’s $100,000,but that Reliance up claims out in other documents. fully fleshed more service perform the administrative would by reference incorporated The IPA paying out all claims adjusting (CSA) executed Agreement Service Claims For claims that PMI’s behalf. Reliance. The between Crawford behalf that were under paid on PMI’s basic ser- a list of thirteen limit, set forth be CSA $100,000 PMI deductible would provide Reli- was to vices that Crawford reimbursing As Reliance. responsible for all adjustment of PMI in the IPA, ance and contemplat- stated Those services were: an or claims. establish escrow ed that would To respect establish a file with to each listings erated of claims or account trans- Claim[;] investigate all Claims and [t]o posted actions system Crawford’s dur- to recommend the amount of loss re- ing previous month. serve to be established with respect to For the policy periods, Reliance, two Claim[;] each such provide each [t]o Crawford, through adjusted claims file with a chronology Claim written of brought by PMI’s employees paid out all actions taken with respect losses. Reliance introduced evidence that Claim[;] underlying all [t]o furnish claim $619,000 had over in adjust- necessary forms proper claims ad- ed under first and over ministration!;] adjust, settle or resist [t]o $1,259,000 in adjusted under the all Claims within the discretionary set- policy year. the second produced authority tlement limit of Service asCo. evidence suggesting that a number of the agreed upon by Insurer, Service Co. and high-value claims Reliance were (the writing, from time to time “Au- sufficiently investigated, leading to the Limit”)[;] thority adjust, [t]o settle or payment implausible or inflated claims.
resist all Claims excess the Author- that, Reliance also introduced evidence due ity Limit express prior with the approval volume, payroll PMI’s increased it was Insurer!;] supervise litigation all [t]o entitled to in adjusted premi- proceedings other involving any *5 ums. and, permitted, Claim where to attend During policy periods in which Reli- any judicial or administrative hearing provided PMI, coverage to Reliance Claim!;] involving any ... monitor [t]o experienced financial difficulties and ulti- all treatment programs to recommended mately liquidation went into Pennsylva- by any a Claimant care provider!;] [t]o that, nia in 2001. PMI provide alleges during this Vocational Rehabilitation and period, On-site Reliance Management provide any Case failed to services for claims!;] Compensation claims-adjustment Workers’ ... services to which provide Bill Hospital they agreed. [t]o Audit Services had PMI asserts that Reli- claims, ance, for Workers’ Compensation contrary to the understand- warranted, when through the ap- vendor ing agreement, paid for all claims Insurer!;] proved by ... fur- [and] [t]o informing itself without PMI of the nature nish to designees Insurer its on a claims, progress and/or investiga- of its basis, monthly a “Loss Run” and a claims, tion into the or the number Activity “Loss Fund Report.” The term value of claims that paid Reliance on “Loss Run” a computer generat- means PMI’s simply kept behalf. Rebanee its listing ed post- claims that have been and, accounting own of the claims after ed to Service Co.’s Statistical Insurance years, several requested that PMI reim- (“SISDAT”) Support System!.] Data burse it for all of the claims had its behalf within PMI’s deductible limit. required The CSA further Crawford to During policy year, the first PMI effective- transmit all payment claim data to Reli- ly $85,000 monthly “pre-paid” ance on the losses with the tapes, data which were collateral, and then converted to an Reliance continued to fund electronic format compatible with Reliance’s losses once the collateral was exhaust- computer sys- tem and payment. During policy year, verified for ed. the second Reli- Crawford was also required to furnish to Reliance continued to fund the losses itself. and its designees monthly loss run and PMI asserts that it never an in- received activity losses, loss fund reports computer-gen- voice for the and that it therefore — and the Binder dures outlined CIP it had so few losses believed PMI, Reliance’s failure According to at the IPA. $85,000 it furnished in collateral for client commu- procedures follow the to period had of the first beginning super- the administration nication and of that by the end yet been exhausted the contract and of claims breached trial vision argued PMI Accordingly, period. losses, relieving unnecessary caused PMI that Reliance breached having repay to deductible monthly PMI from with a loss failing to furnish PMI losses. the third- unilaterally altering report, by Sterling from to administrator trial, After a bench Crawford, altering the by unilaterally adjusted premiums awarded Reliance such program claims-administration The dis- deductible losses.6 but not the PMI, Reliance, funded all loss- rather than a valid that there was trict court concluded monthly for the billing es instead delivered, and properly that was contract losses, system by failing up to set adjusted premiums awarded communications be- implement essential $115,909 for the first in the amounts adjusters, Reli- PMI and the claims tween $233,784 second policy period and ance and Crawford. However, the district court policy period. “breached its obli- liqui- that Reliance placed Reliance was found properly gations Pennsylvania. Reliance sent sev-
dation letters, a result of its failure the claims as from 2003 eral demand namely, by unilaterally adjusted premiums payment communicate”— losses, such that Reli- changing in deductible PMI, ance, would fund all among rather than pay, and refused to disputed losses; unilaterally changing the third- failure because of Reliance’s other reasons Sterling from party claims administrator claims-adjustment ser- provide adequate Crawford; failing to communicate *6 by vices. claims; the status of and with PMI about monthly failing B. to furnish PMI with Having found Reliance reports. run loss 2006, Pennsylvania breach, court denied Reli- Reliance’s be- filed suit on Commissioner5 deductible losses. ance’s claim for of Louisiana half in the Western District requests that we appeals and adjusted seeking reimbursement for the PMI, in its favor judgment and render in reverse and deductible losses. cross-appeals defense, on both of its claims. that no valid contract argued its and, alternative, that there is no valid contract formed, argues and in the had been adjusted entitle Reliance to the the contract that would Reliance breached argues that argues further that Reli- premiums; PMI following adjustment proce- by not vania; law, he is vested with under state undisputed paid out more It is that Reliance 4. $602,435 rights pursue than the can in deductible losses Reliance’s contract reimbursement, but which it predecessors, seeks of his claims on its behalf. One ag- agrees to honor the present suit Reliance Koken, original complaint Diane filed the M. in the CIP gregate deductible limits set forth Reliance. For ease of reference on behalf of binder, and therefore seeks party in as the interest. we refer to Reliance in deductibles. Inc., 06-2277, Mgmt., No. 6. Koken v. Pers. Plaintiff-Appellant Michael Consed- Named 21, 2011). (W.D.La. Nov. WL 5855068 2011 Pennsyl- ine is the insurance commissioner
571
anee breached its
to properly
contract,
Whether a
breached a
that,
policy,
material,
its
under the
whether a
contract term is
are
questions of fact.
accordingly,
E.g.,
Reliance is therefore not enti-
Flint Hills Res.
Inc.,
Jag
373,
LP v.
Energy,
tled to
relief.7
559 F.3d
375
(5th Cir.2009) (breach);
Elevator,
Allied
II.
Inc. v. E.
Buna,
Tex. State Bank
965
(5th
34,
Cir.1992)
F.2d
38
(materiality).
Two issues are before us in
appeal.
First, we must decide whether the district
“Findings of fact
... must not be set
clearly
court
erred in finding that Reli-
erroneous,
aside
clearly
unless
and the
constructively
delivered the insur-
reviewing court must give
regard
due
required
to PMI as
by Loui-
the trial
opportunity
court’s
judge
siana law. See La.Rev.Stat.
22:873. If
credibility.”
witnesses’
Fed.R.Civ.P.
not,
then the district
correctly
52(a)(6); see
City
Anderson v.
Bessemer
awarded Reliance the
premiums.
N.C.,
City,
564, 573,
470 U.S.
105 S.Ct.
“
Second, we must decide whether the dis- 1504,
(1985).
64, L.Ed. 82 58 S.Ct. ed.2012) alia, (4th Yount v. (citing, inter re- choice-of-law 10 the Louisiana “Under (La.1993)). Maisano, 148, 152 the insur- So.2d of the state where 627 the law gime, executed issued and contract was interpretation governs generally A. Co., Power 556 Am. Elec. that contract.” delivery of Reliance’s First we consider v. Bow- (citing n. 2 F.3d at 286 Woodfield (5th obligation policies and PMI’s the insurance Cir.1999)). 354, It man, 193 F.3d By stat adjusted premiums. that Louisiana substantive undisputed is insurance ute, requires that all Louisiana governs law this suit.8 contract in to the properly be delivered policies a con- defines The Louisiana Civil Code La. binding. valid and to become sureds more by two or as “an tract orig (requiring Rev.Stat. 22:873 created, whereby obligations are the insured or a be “delivered to policy inal modified, La. extinguished.” Civ.Code a reasonable thereto within person entitled is of a contract “Interpretation art.1906. issuance”); see time after its period of intent of of the common the determination Co., Ins. 202 La. v. S. Pruitt Great Life La. art.2045. parties.” Civ.Code (1943). 527, 12 “The test of So.2d Louisiana, is an insurance “[a]n compa delivery is whether the a sufficient subject to the contract aleatory, nominate intentionally agent parts ny or its interpretation as rules of contract general control or dominion civil code. forth in [Louisiana’s] set or dominion of [the] it in the control places con- coverage under an insurance extent of him with person acting for insured or some intent of on the common dependent tract is a valid and thereby making purpose Thus, in- when the insured and insurer. Pruitt, 12 binding contract of insurance.” contract, courts terpreting an (citation quotation marks So.2d at 262 the common in- attempt to discern must omitted). argues that Reliance did insurer.... [An] tent of the insured and re policies not confect or deliver ... is construed ambiguous provision quired law. who furnished the con- against the insurer found that Reliance The district court in favor of the insured.” tract’s text and statutory duty to deliver the fulfilled its Fannaly Lafayette v. Ins. Succession of (La.2002) consid- PMI. The district court Co., (citing policies to 805 So.2d (“In gave the art.2045; the evidence that Reliance art. 2056 ered id. La. Civ.Code broker, and PMI’s insurance policies otherwise that cannot be case of doubt resolved, gave the insurance broker must be provision a contract agent, agent. to PMI’s insurance party who fur- interpreted against turn, custom and testified that it was his executed in a its text. A contract nished to his practice inter- to deliver form of one must be standard testimo- doubt, The court credited their clients. in case of favor preted, omitted). (other were deliv- ny and found citations party.”)) other *8 that, also noted The district court Thus, are con- ered. Louisiana insurance delivery agency principles, law expecta- reasonable “to fulfill the strued See agent was sufficient. Shelby PMI’s insurance parties.” of the William tions Int’l, III, Lloyds Inc. v. Under- In- McDermott H. Alton Johnson McKenzie & agree substantive law designated that Louisiana IPA New York sub- 8. While the law, govern. rules and choice-of-law parties’ choice of stantive law as London, (5th writers 120 F.3d properly adjust claims and the district Cir.1997) (“[DJelivery if has occurred that, therefore, court’s conclusion PMI is ‘places policy] insurer the control or [the reimbursing excused from Reliance for the ... person acting dominion of some for deductible losses it paid on PMI’s behalf ” Pruitt, (quoting 12 So.2d [the insured].’ pursuant to the claims-adjustment agree- 262) omitted)). Moreover, (emphasis ment. finding the district court reasoned that its supported by was the fact that PMI matter, As an initial we find no clear Reliance substantial over the error in the finding district court’s years. course of two The district court’s provide Reliance failed to the claims-ad- erroneous, finding clearly is not and we justment services it advertised and failed will not disturb it on appeal. properly adjust claims and communicate PMI genuinely challenge does not the with PMI about the status of its claims. district court’s point, but The district court found that Reliance instead argues Reliance did not deliv breached its by failing to PMI IPA, er both the and the to adhere to the procedures set out in the says PMI vitiates the entire insur CIP binder requiring Reliance to commu- agreement. The district court con nicate and regarding consult with PMI its cluded that the IPAs were part not losses, adjustment by unilaterally themselves, insurance but instead changing third-party administrator they documented the parties’ agree Crawford, Sterling from by unilat- ment which Reliance would erally opting to fund the losses itself rath- PMI’s PMI obligated claims and would be billing the deductible er than PMI for the losses within a cer losses on a (“Ev tain § limit. La.Rev.Stat. 22:881 monthly basis. Cf. ery insurance contract shall be construed findings These were clearly errone- according entirety to the of its terms and professional ous. PMI was a employment policy, conditions as set forth in the and as business; such, leasing alleged extended,
amplified, or any modified that, rider, court, endorsement, words of the district application or attached id. part to or made a policy.”); “particularly well-suited to assist third 22:867(A) (“No in conflict party administrators in connection with with, modifying, extending coverage adjustment exposure reduction of of any contract of insurance shall be valid claims, compensation workers’ ... in writing physically unless it is made is ‘pass through’ able to such costs to its or other written evi only timely client when the insurer notifies insurance, dence of or it incorporated is it of such losses and the status thereof.” or other written evidence of The district court found that Reliance and by specific insurance reference to another agent did not set up system Crawford insurance.”). policy or written evidence of by which could Crawford communicate agree We with the district court that Reli pending with PMI about its claims. Con- ance carried duty out its under section found, sequently, the district court 22:873 when it delivered the pol investigation, “had no idea how the mitiga- icies to PMI.
tion[,] and settlement of of its claims B. progressing[.]” were While Crawford did generate reports, loss fund We next review the district court’s find- ing that Reliance obligation breached its to court found that the went reports
574 beyond valid binder shall be PMI, and that “[n]o to because Craw-
Reliance and not to which it of the the issuance for contact information basic ford lacked however, was argument, This Reliance, given.” also part, on its personnel. will court. “We not made to the district to PMI as information provide failed to judgment court’s disturb the district not found that Reli- The district court agreed. presented for the upon argument an based program” “fundamentally altered ance party raising A an appeal. time on first agreed, “so that had to which must have raised it before appeal issue losses, of a instead Reliance funded all degree court ‘to such the district submitted to billing of losses monthly ” Pluet v. Frasi may rule on it.’ trial court Accordingly, the district PMI.” Cir.2004) (5th er, 381, (quot 385 355 F.3d found, how the investi- PMI “had no idea F.3d Corp., 6 ing In re Fairchild any of settlement of mitigation and Aircraft gation, (5th Cir.1993), 1119, citing Vogel 1128 ... progressing [and] its claims were (5th 729, Veneman, 276 F.3d Cir. v. amount of losses knowledge no of the had 2002)). first until it received its and claims $524,070.” later, bill, years five almost Moreover, court relied on the distl’ict clearly err in did not The district court forth in its writ- arguments set Reliance’s failures that these fundamental following the arguments bench closing, ten that of contract such amounted to a breach trial, that acknowledged Reliance trial. At Reliance reimbursing PMI was relieved obligations under the it had contractual during it incurred for the deductible losses reports run and to policies to furnish loss process. claims, that PMI adjust the properly obligation to reim- would be relieved of its no that it was under argues Reliance losses if Reliance for the deductible burse perform to ser- obligation obligations Reliance indeed breached and in in the CIP binders vices described fact, In Reli- properly adjust the claims.9 into which it entered Craw- the CSA it its obli- length that met argued argues ford. Reliance properly under the gations concluding that it was obli- court erred upheld it and claims and how Crawford those services because gated provide obligations under respective their in the binder they were set forth CIP CSA, proce- the claims which set forth themselves. While and not benefit, for PMI’s they dures would follow that those recognizes Rebanee by reference which was incorporated binder, Reliance were set forth the CIP by the IPA. appeal, time on argues, for the first very well have The district court could representations it made promises documents were concluded that were not enforceable CIP in the CIP binder “binders” within merely insur- not they of the because were 22:870, rather that but meaning cites section policy. support, CIPs, along with the IPAs Revised Stat- section V section 22:870 of Louisiana CSA, pax-ties’sepa- utes, “ and the set forth that an insurance provides to handle the for Reliance tempo- rate is used bind insurance ‘binder’ of PMI’s claims. processing policy,” administrative rarily pending the issuance Harrison, See, party a defense and an the other has v. H.D. tract e.g., Olympic Ins. Co. 9. (5th Cir.1972) Inc., (collecting non-performance.”) F.2d excuse ("Louisiana principle recognizes cases); La. Civ.Code arts. see also substantially a con- breaches where one
575 The services set forth in the claims-handling CSA would V, services in its section mean little if agreed, Reliance had not Program,” “Service which was separate through representations it made in the and distinct from the insurance terms. It binder, that provide CIP it would expert is also consistent with the district court’s claims-handling services. But the district findings that the IPAs not part were of the upon was not called to make such an insurance policies but that they were part explicit Reliance, finding because in its of the program.”11 “insurance We there- trial never briefing, point raised the and fore consider whether the district even acknowledged that if it breached its court’s finding of breach clearly erro- obligations properly adjust the claims as neous, and, above, for the reasons stated PMI alleged, PMI would be relieved of its we conclude it was not. obligations to repay the deductible losses. Accordingly, we AFFIRM the judgment Finding no manifest error the district of the district court. binders, court’s treatment of the CIP we conclude that Reliance has waived its sec- CLEMENT, EDITH BROWN Circuit argument tion 22:870 that it raises for the Judge, dissenting. first time appeal. The majority preserves Similarly, PMI objects that if Reliance court’s internally rulings by inconsistent breached its properly adjust inventing a framework the court below did claims, it is relieved of duty pay its both time, not apply. For the first majority premiums and the deductible declares the existence of a “claims-adjust- losses—not just losses, the deductible agreement” ment that it together cobbles However, the district court concluded. from various documents the district court stated, just the reasons we find no error in itself held did not “constitute the district court’s implicit finding that the policies of majority insurance.” The finds parties in agreements: effect had two one no error in the implicit in which district court’s provide would insurance finding in effect coverage had two payroll, based on and PMI would agreements: one in pay adjustable which Reliance premiums; and another Reliance, provide in which would through coverage third-party its based administrator, on payroll, claims and PMI pay would would the ad- administer the justable claims-handling process premiums; for all and another of PMI’s Reliance, employees, pay would all through third-party $100,OOO.10 administrator, valued under This finding is would administer consistent with the district the claims-handling process court’s conclu- all sion that the CIP documents detailed Reli- employees, PMI’s and PMI would ance’s obligations to furnish the $100,000. various all claims valued under 2007, Levy (Louisiana Gardens Partners L.P. v. n. 10 insurance contracts are con- Cf. Co., Commonwealth Land Title Ins. 622, 706 F.3d expectations strued “to fulfill the reasonable (5th Cir.2013) (affirming implied 631 alia, Yount, parties”) (citing, inter 627 trial); following of district court bench 152); Fannaly, So.2d at Succession States, Century Marine Inc. v. United 153 F.3d 1137; ("A So.2d at La. Civ.Code art. 1967 (5th 1998) (same). 230-31 Cir. party may obligated by promise be when he promise knew or should have known that the Marine, Indus., Inc., 11. Ham Inc. v. Dresser party rely would induce the other on it to (5th 1995) (existence 72 F.3d Cir. his detriment and the other was reason- fact); question generally contract is a see relying.”). able in so Johnson, 1.4, supra, McKenzie & at 8 & *11 agreements the to added). Pray returning Under (emphases Op. revision, was not unsigned, Reliance separate agreements), (using two approach (1) making a thereby of purpose court’s “for the the district majority affirms the insurance,” of binding in the contract to Reliance valid and relief partial award of (2) rather, draft rejec- that and repudiating but of form contends, loss- deductible Reliance claim for another. requesting of Reliance’s tion Program the valid the assumes approach agrees, an and the court es. Such part of the governing a contract constitute Agreements of do not formation support the is handling that without insurance. policies of Be- or the record. opinion court district omitted). (internal citations 1324 n. 8 R. nor the court neither the district cause consider did not the court thus district or how Reliance when majority identifies part of to be the IPAs or CIP binders sup- it the contractual incurred against PMI it enforced insurance breached, dissent respectfully I posedly to Reli- company it ordered when claim for Reliance’s of from the denial amounts. premium ance the additional payments. deductible agree- finding” of a second “implicit I. proce- adjustment governing ment that the court found The district from another footnote likely comes dures binding contracts constituted of insurance why, explain to used and awarded PMI and Reliance between right to reimburse- opinion, Reliance’s premium in additional Reliance aggregate limits subject was ment In “that payments. in the binders. The specified insurance and delivered were confected court stated: district law,” court ad- district required by earlier, Reliance admits mentioned As various other docu- in a footnote dressed program agreement that no insurance may ments, agreements, binders Reli- by parties. signed was ever the con- part formed may not have or that the insurance instead asserts ance parties: tract between never meant agreement was program of a contain drafts Hartan’s files also Importantly, policy. part be a Program Agree- “Insurance separate Pro- always considered However, document was ment.” the In- part was a gram Agreement by PMI. signed agreed never Program, because contained surance Hartan, in- fact, returned the Pray, of binders, reflected provisions, Reliance, program surance limits. Those establishing aggregate lan- updated requesting alterations benefit limits were of considerable never Reliance admits was guage, which PMI, they limited PMI’s maxi- because en- separate is a document sent. There losses. exposure mum for deductible Casualty Management “Personnel titled always given PMI the ben- Rebanee has Effective: Program Insurance 04/01/98 aggregate limits. efit of 014567-00,” pre- Binder W.C. NWA findings in the footnote R. n. 12. The of Reliance for Mike pared by McKeown (“Program an IPA not show how either document do separate the 1998 (“Insurance binder Agreement”) or CIP Artale of Reliance by Cynthia prepared could bind Reliance Program”) were policy, which for the 1999 renewal First, “no insur- obligation. by Pray as “binders” both identified signed was ever program agreement ance that the acts of insurance. asserts parties,” suggesting that there was The majority seeks to evade 22:870 in First, never mutual consent to be bound or a ways. three it reasons that Reli- Second, “meeting of the minds.” even if argument makes this for the “first always “Reliance appeal,” considered that Pro- time on and cites as supporting gram Agreement part authority of the Insur- cases where argu- waived Program,” Program ments making them before the dis- Second, never constituted of the insurance trict court. it claims that “the *12 policies themselves. district court relied on argu- Reliance’s ments set forth in its closing argu- written binders, Additionally, the standing CIP ments” where Reliance “acknowledged alone, could not have bound the that it had obligations contractual with contractual obligations. Section the policies to furnish loss run reports and 22:870 of the Louisiana Revised Statutes to properly the claims.” Finally, “A provides: ‘binder’ is used to bind insur the majority finds that district court “[t]he temporarily pending ance the issuance of very could well have concluded that the policy. the No binder shall be valid be CIP documents were not merely insurance yond policy the issuance of the to which ‘binders’ within the meaning of section given.” § it was La.Rev.Stat. Ann. 22:870. 22:870, but rather that section V of the appellate Louisiana courts have held that a CIPs, CSA, along with the IPAs and the “binder is of no effect or import once the set forth the separate agreement issued,” policy is Commercial Union As for Reliance to handle the administrative Serv., surance P.L.C. v. Tidewater Marine (em- processing of PMI’s claims.” Op. 574 Inc., 15 (La.Ct.App.2009), So.3d added). phasis and that policy is the which controls “[i]t and the Binder does not part constitute of respect majority’s With the waiver policy, the nor does it create any rights point, the district court considered the ... other than during period.” its effective IPAs and CSA when it determined wheth- Ads, Inc., Liberty Mut. Ins. Co. v. 357 er policies the insurance were properly (internal 1360, 1363 So.2d (La.Ct.App.1978) confected and delivered so as to create omitted). citations context, binding contracts. In that Reli- “contend[ed], ance agree[d], and the court squarely CIP binders fall within Program Agreements not d[id] majority opinion 22:870. As the ac- part constitute policies of insur- knowledges, in PMI’s “broker asked ance.” R. 1324 n. 8 The record shows that quote, Reliance for a in response, Reli- parties operated both assump- under the prepared ance a document called a ‘Casu- tion the insurance them- (or ‘CIP’) alty Binder, Program’ selves—and whatever other documents coverages, premiums, outlined de- part constituted them —were the ductibles, limits, aggregate and other fi- relevant contracts for determining par- nancial terms which the would be ties’ respective obligations. Reliance had issued,” functionally and “[a] identical CIP anticipate no reason to the district Binder and Binder of Insurance were is- unsigned, court would find that extrinsic policy year sued for the second before documents conferred independent contrac- Op. renewed was delivered.” obligations. tual added). (emphases The CIP binders be- came upon respective policies’ invalid supposed As to the district court’s reli- issuance, and could not create additional closing arguments, ance on the written rights point. after that majority position misconstrues Reliance’s obligations contractual thus becomes what Reli- obligations.
regarding owe PMI. did Reliance to communicate that it had contractu- never contested adjust claims. properly al that the district The actions or omissions obli- is that the contractual contention Its provi- breaches violated identified as adjustment are defined for claim gations “Casualty Insur- only in the found sions the CIP binders policies, and by the policies,” of both Program documents representations IPAs. Reliance’s or the themselves. Because not the majority cites to court that not “constitute did these documents position. with this are consistent insurance,” there could be failure to breach for Reliance’s legal no claim that majority’s Finally, provisions. with those comply con- very well have court “could district constitut- communicate, that the CIP documents cluded” fact albeit did in no basis in agreement” has “separate aed PMI. As district minimally, with *13 the record. opinion or note, district court May- “Susan findings of fact court’s never refer- opinion court’s nor, The district Di- was PMI’s Human Resource who agreement” or “elaims-adjustment a policy year, ences admit- during the first rector In section II.C.2 agreement.” runs from “separate a received loss ted that she that court states opinion, Crawford, the loss runs of its and identified was in mate- ini- employees that Reliance PMI also “PMI contends R. 1321. trial.” obligations under for each claim process breach of its the claims rial tiated Injury communi- forms Report a of its failure to filing result the First respect with to its to show how with the insured PMI fails cate with Crawford. “[ejvidence losses,” more. required anything that and the contracts claims require- be- policies detailed communication communications Because policies Reliance or Craw- contained in the PMI and either ments were not tween scant, themselves, could not (emphas- at best.” R. 1330 the district court ford added). how, the explaining for failure to communi- es Without have found breach equated seems to have cate. district provisions of the various CIP breaches statutory a did Reliance breach Nor themselves. a breach of in insurers. “The duty good faith for (“Reliance that there is asserts See R. 1336 duty an affirmative surer has obligated provision no make a promptly and to fairly or with PMI to communicate or Crawford with the effort to settle claims reasonable adjustment of during consult with claimant, Any or both. or the insured However, Casualty Insur- losses. duties shall be who breaches these insurer otherwise.”). Program indicates sustained as a re any damages liable for Ann. breach.” La.Rev.Stat. sult of the
II. 22:1973(A). made no The district court improperly any finding not make district court did The (or claim, that have and insurers any that Reliance Craw- finding specific ford) presumption are “entitled to settlements adjusted claims under improperly reasonableness [they] exercised Rather, that “Reli- of law it concluded policies. making the settlements.” good faith obligations under breached its Co., Binnings Am. v. Constr. Ins. Co. adjust the claims as properly of N. (La.Ct.App.1974). R. 288 So.2d to communicate.” result of its failure added). from PMI court cited no evidence district key question (emphasis presumption that would rebut
cannot have based its of breach applying statutory duty good faith In the Matter of: SOLANO WELL SER for insurers. VICES, L.L.C.; Compa Packard Gas Finally, may an although have had ny, formerly known as Amco Oil Com equity quasi-contract action in if it pany; Energy, Incorporated, Amco proved justifiably that it relied to its detri- formerly Offshore, Capco known as representations ment on Reliance made Corporation; Incorporated; Capco Operating binders, see La. Civ.Code the insurance Cap Management, Asset co Ann. art. PMI never made such an Incorporated; Capco Energy, Incorpo argument, and the district court opinion rated, formerly known as Amco Petro rely any equitable theory did not leum, Incorporated, Debtors justify its conclusions. Harris, Appellee Victor E. summary, the district court could not v.
have found that Reliance breached Pyramid Gom, Ilyas Incorporated; obligation to PMI regarding Chaudhary, Appellants. handling because no contract exist- ed between the two other than the No. 12-20449. themselves. I would re- United States Court of Appeals,
verse the district court with respect Fifth Circuit. Reliance’s deductible payments. Rather affirming, than should at a mini- Sept. mum remand the case so that the district Harrell, Jr., Charles Edwin Esq., (1) court can define whether valid Askanase, L.L.P., Hughes, Watters & contract existed between PMI and Reli- Houston, TX, Appellee. and, governing adjustment, if Higgason, Robert William The Wood- (2) so, between lands, TX, Appellants. parties. Only two after the district
court identifies which terms in which of “policies,” “documents,”
the numerous give
“binders” rise to binding contractual (3)
obligations can it determine whether (4) contract, either breached a JOLLY, DeMOSS, Before proper remedy what the should be. SOUTHWICK, Judges. Circuit *
PER CURIAM: appeal judg- is reinstated and the ment of the AFFIRMED. district court is See 5th R. 47.6. Cir.
* 47.5, opinion Pursuant to 5th Cir. R. the court has determined that this should not be