Case: 10-60643 Document: 00511436651 Page: 1 Date Filed: 04/06/2011
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
April 6, 2011
No. 10-60643 Lyle W. Cayce
Clerk
BARDEN MISSISSIPPI GAMING LIMITED LIABILITY CORPORATION,
doing business as Fitzgerald’s Casino,
Plaintiff – Appellant
v.
GREAT NORTHERN INSURANCE COMPANY; TOP LINE SEATING,
INCORPORATED,
Defendants – Appellees
Appeal from the United States District Court
for the Northern District of Mississippi
Before JOLLY, ELROD, and HAYNES, Circuit Judges.
E. GRADY JOLLY, Circuit Judge:
In this insurance dispute, Appellant Barden Mississippi Gaming LLC
(“Barden”) appeals the district court’s grant of summary judgment in favor of
Appellees Great Northern Insurance Company (“Great Northern”) and Top Line
Seating, Inc. (“Top Line”). In an earlier appeal brought by Barden, we concluded
that under the terms of an insurance policy between the parties, Great Northern
had a duty to defend Barden in a tort suit brought by an individual who had
been injured on the premises of Barden’s casino through the use of a stool sold
by Top Line. Because the question was not ripe, we did not address whether
Great Northern and Top Line had an attendant duty to indemnify Barden for the
Case: 10-60643 Document: 00511436651 Page: 2 Date Filed: 04/06/2011
No. 10-60643
underlying judgment. Upon the conclusion of that case, Barden sought a
declaratory judgment in the district court, claiming that it is entitled to
(1) indemnification for the amount of the judgment entered against it in the
underlying tort suit, and (2) recovery of costs and fees incurred in pursuing this
declaratory judgment. We AFFIRM the district court’s grant of summary
judgment to Great Northern and Top Line on both issues.
I.
The material facts of this case are undisputed. In June 2004, Mary Baier
(“Baier”) was injured while on the premises of a casino owned by Barden in
Tunica, Mississippi. She filed a civil suit against Barden and Top Line, the
manufacturer of the stool that was involved in her injury. In accordance with
an earlier settlement agreement between Barden and Top Line, Barden had
been named as an additional insured on Top Line’s insurance policy with Great
Northern. The policy provided liability coverage with respect to certain stools
that Barden had purchased from Top Line for use in its Tunica casino.
When Baier filed her tort claim against Barden, Barden tendered the
defense of that lawsuit (the “Baier Case”) to Great Northern, which refused to
defend Barden. Barden then filed a declaratory judgment action in the Northern
District of Mississippi for breach of contract and to enforce its rights under the
insurance policy. That case eventually led to an appeal in which we ruled that
Barden was entitled under the policy to a defense in the Baier Case. See Barden
Miss. Gaming LLC v. Great Northern Ins. Co. (“Barden I”), 576 F.3d 235 (5th
Cir. 2009). We further held, however, that “it is clear under the insurance policy
that the duty to indemnify will attach only if Top Line is ultimately found 100%
negligent.” Id. at 239. We therefore concluded that the question of
indemnification was premature until a jury had determined whether Top Line’s
negligence was solely responsible for Baier’s injury. Id. at 239–40. Following
2
Case: 10-60643 Document: 00511436651 Page: 3 Date Filed: 04/06/2011
No. 10-60643
remand, a jury ultimately concluded that Top Line was 50% negligent, Barden
was 50% negligent, and Baier was 0% negligent.1
After the jury trial, Barden amended its complaint in the declaratory
judgment action to request (1) indemnification from Great Northern and Top
Line for the amount of the underlying judgment in the Baier Case, and
(2) recovery of attorneys’ fees and costs associated with its declaratory judgment
action. The parties filed cross-motions for summary judgment. The magistrate
judge, sitting as district court by consent of the parties, held that Barden is not
entitled to recover either of these sums because there is no statutory or
contractual basis for indemnification absent a finding that Top Line was 100%
liable, and because Great Northern had at least an arguable basis for refusing
to defend Barden. This appeal timely followed.
II.
We are asked whether Barden is entitled to indemnification from Great
Northern and Top Line for the underlying judgment in the Baier Case, and
whether Barden is entitled to recovery of attorneys’ fees and costs incurred in
pursuing this declaratory judgment action. We review the district court’s grant
of summary judgment de novo, applying the same legal standards as the district
court. Catlin Syndicate Ltd. v. Imperial Palace of Miss., Inc., 600 F.3d 511, 513
(5th Cir. 2010). Because this is a diversity case, the substantive law of
Mississippi applies. Id.
A.
Barden argues that it is entitled to indemnity for the underlying judgment
because Great Northern improperly refused to defend it. This issue is informed
1
The defense of that case ultimately cost Barden $60,000. The parties and the district
court have agreed that this $60,000 is due and owing from Great Northern to Barden. At issue
in this case are the underlying judgment of $42,500 levied against Barden for the Baier Case,
and the fees incurred to date in the course of pursuing this declaratory judgment action, which
were $72,988.08 as of the date of this appeal.
3
Case: 10-60643 Document: 00511436651 Page: 4 Date Filed: 04/06/2011
No. 10-60643
by our precedent in Barden I, where we explained that the insurance policy
“unambiguously limits the duty to defend and indemnify to claims involving the
‘sole negligence’ of Top Line.” 576 F.3d at 238. “If the words of an insurance
policy are ‘plain and unambiguous,’ they are applied as written.” Id. (quoting
Progressive Gulf Ins. Co. v. Dickerson & Bowen, Inc., 965 So.2d 1050, 1054 (Miss.
2007)). Although Barden I held that Great Northern had a duty to defend
Barden because there was an “arguable basis for liability under the policy,” we
noted that the duty to indemnify can be more narrow than the duty to defend.
Id. at 239. Specifically, we stated that “it is clear under the insurance policy
that the duty to indemnify will attach only if Top Line is ultimately found 100%
negligent.” Id. As the district court explained, the jury in the underlying tort
suit found that Top Line was 50% negligent and Barden was 50% negligent.
Consequently, the duty to indemnify does not attach.2
B.
Barden further argues that because Great Northern breached its
contractual duty to defend, Barden incurred fees and costs in the pursuit of this
declaratory judgment action that it would not otherwise have expended. In this
diversity case we apply the law of Mississippi, which follows the “American
Rule” that attorneys’ fees are not awarded unless specifically provided for by
contract, statute, or other provision of law. See Ingalls Shipbuilding v. Federal
Ins. Co., 410 F.3d 214, 230 (5th Cir. 2005). It is undisputed that there are no
statutory or contractual provisions authorizing an award of attorneys’ fees in
this case.
2
We note also that Barden has produced no evidence that Great Northern acted in bad
faith in interpreting its duty to defend under the insurance policy. “Generally, if the insurer
has acted in good faith, it is not liable for any amount beyond the stated policy limit.” Liberty
Mutual Fire Ins. Co. v. Canal Ins., 177 F.3d 326, 336 (5th Cir. 1999).
4
Case: 10-60643 Document: 00511436651 Page: 5 Date Filed: 04/06/2011
No. 10-60643
Barden contends, however, that this case falls within an exception to the
general rule. It points to Universal Life Ins. Co. v. Veasley, 610 So.2d 290 (Miss.
1992), where the Mississippi Supreme Court suggested that attorneys’ fees
“might be available as reasonably foreseeable damages where an insurer had no
legitimate or arguable reason for denying benefits but did not act willfully,
intentionally or maliciously.” Stratford Ins. Co. v. Cooley, 985 F.Supp. 665, 673
(S.D. Miss. 1996) (citing Veasley, 610 So.2d at 295). Assuming arguendo that
this principle obtains in the Mississippi courts, Barden has failed to demonstrate
that Great Northern had “no legitimate or arguable reason” for its refusal to
defend in the Baier Case. For example, Barden has failed to rebut Great
Northern’s assertion that it did not believe the slot stool at issue in the Baier
Case was a stool that was covered under the policy in question. Barden’s
argument also overlooks that Great Northern’s duty to defend attached only
because we found that there was an arguable basis for coverage, reversing the
district court’s contrary conclusion; Great Northern’s conflicting interpretation
was not implausible or illegitimate. Barden has thus failed to establish any
possible basis for its claim to attorneys’ fees in this case.
III.
In sum, we conclude that under the insurance policy between the parties,
Great Northern and Top Line are not obligated to indemnify Barden for the
judgment in the Baier Case because the jury in that case determined that Top
Line was not solely negligent. We further conclude that there is no basis for
Barden’s claim to attorneys’ fees and costs incurred in pursuing the instant
declaratory judgment. For the foregoing reasons, the judgment of the district
court is
AFFIRMED.
5