IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
December 6, 2007
No. 07-30098 Charles R. Fulbruge III
Clerk
ALLEN GLYN SONNIER, Individually and on Behalf of Others Similarly
Situated; NOLAN PAUL MARTIN, Individually and on Behalf of Others
Similarly Situated
Plaintiffs-Appellants
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE CO
Defendant-Appellee
Appeal from the United States District Court
for the Western District of Louisiana
USDC No. 06-1439
Before GARWOOD, GARZA, and BENAVIDES, Circuit Judges.
PER CURIAM:
Allen Glyn Sonnier and Nolan Paul Martin (“Appellants”) appeal the
district court’s grant of a motion to dismiss under Federal Rule of Civil
Procedure 12(b)(6) for failure to state a claim upon which relief can be granted,
which dismissal finally disposed of Appellants’ individual and purported class
action claims. Appellants possessed automobile insurance policies from State
Farm Mutual Automobile Insurance Company (“State Farm”). Appellants allege
that State Farm breached its contractual obligation under the policies when it
refused to pay for inspection and testing of Appellants’ seatbelts and seatbelt
No. 07-30098
locking mechanisms after Appellants were involved in automobile accidents. For
the following reasons, we AFFIRM.
I. BACKGROUND
Martin and Sonnier were involved in automobile accidents in 2001 and
2004, respectively. They took their automobiles to body shops, where an
estimate for necessary repairs was provided. It is undisputed that State Farm
paid for repairs as set forth in the estimates and in subsequent supplemental
estimates. According to Appellants’ vehicle manufacturer and an independent
trade group–the Inter-Industry Conference on Collision Repairs–an automobile’s
seatbelts and seatbelt locking mechanisms (collectively, “seatbelts”) should be
thoroughly inspected after any collision.1 If a body shop deems such an
inspection unnecessary and does not list it on the estimate, then State Farm will
not cover the cost of the seatbelt inspection. Although Appellants do not allege
that their seatbelts were harmed in any way during or after the collisions, they
claim that State Farm was contractually obligated to provide an extensive
seatbelts inspection.
The district court orally granted State Farm’s Rule 12(b)(6) motion to
dismiss, finding that “based on the contractual agreement to repair, if there is
no complaint of a failure, there is nothing to repair.” Appellants appeal, arguing
that the term “cost of repair” necessarily includes the cost of the seatbelts
inspection because in order to repair something, one must first inspect to
determine what is in need of repair.
II. STANDARD OF REVIEW
This Court reviews de novo the district court’s order on a Rule 12(b)(6)
motion to dismiss. In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th
1
This extensive seatbelts inspection includes examination and testing of the seatbelts,
examination and testing of the hardware, road testing of the entire system, and checking the
system’s warning lights.
2
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Cir. 2007). The court “accepts all well-pleaded facts as true, viewing them in the
light most favorable to the plaintiff.” Id. (internal quotation marks and citations
omitted). The plaintiff must plead “enough facts to state a claim to relief that
is plausible on its face.” Bell Atl. Corp. v. Twombly, — U.S. —, 127 S. Ct. 1955,
1974 (2007). “Factual allegations must be enough to raise a right to relief above
the speculative level, on the assumption that all the allegations in the complaint
are true (even if doubtful in fact).” Id. at 1965.
III. DISCUSSION
It is undisputed that Louisiana law applies to this case. According to
Louisiana law, “[w]ords and phrases used in a policy are to be construed using
their plain, ordinary and generally prevailing meaning, unless the words have
acquired a technical meaning. An insurance policy should not be interpreted in
an unreasonable or strained manner so as to enlarge or to restrict its provisions
beyond what is reasonably contemplated by its terms or so as to achieve an
absurd conclusion.” Reynolds v. Select Props., Ltd., 634 So. 2d 1180, 1183 (La.
1994) (citations omitted). “[I]f the language of the exclusion is subject to two or
more reasonable interpretations, the interpretation which favors coverage must
be applied. It is equally well settled, however, that subject to the above rules of
interpretation, insurance companies have the right to limit coverage in any
manner they desire, so long as the limitations do not conflict with statutory
provisions or public policy.” Id. (citations omitted). A court interpreting an
insurance policy cannot “make a new contract for the parties or disregard the
evidence as expressed, or . . . refine away terms of a contract expressed with
sufficient clearness to convey the plain meaning of the parties.” Id.
The automobile insurance policies at issue obligate State Farm to pay for
“direct and accidental loss of or damage to” the automobile or its equipment.
State Farm’s limit of liability “for loss to property or any part of it is the lower
of” the automobile’s actual cash value or the cost of repair or replacement. The
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cost of repair or replacement is based upon: (1) a price agreed upon by the
insured and insurer; (2) a competitive bid approved by State Farm; or (3) “an
estimate written based upon the prevailing competitive price.” The third option
is involved in this case.
The Supreme Court of Louisiana has previously interpreted the term
“repairs,” finding that it “must be given its generally prevailing meaning and be
construed according to its common usage.” S. Cent. Bell Tel. Co. v. Barthelemy,
643 So. 2d 1240, 1250 (La. 1994). “Webster’s New Collegiate Dictionary defines
repair as, to restore by replacing a part or putting together what is torn or
broken. The jurisprudence has similarly defined it as, to fix anything that is
broken.” Id. (citing Intercoastal Pipe Serv. Co. v. Assumption Parish Sales & Use
Tax Dep’t, 558 So. 2d 1296, 1300 (La. 1990)) (internal quotation marks omitted).
This Court, applying Louisiana law, held that an automobile insurance
“policy provision requiring the insurer to pay the cost of repair or replacement
limits the insurer’s liability to the cost of restoring the vehicle to substantially
the same physical condition as before the accident so that it is as fit for operation
as it was prior to the occurrence of the damage.” Manguno v. Prudential Prop.
& Cas. Ins. Co., 276 F.3d 720, 725 (5th Cir. 2002) (citing Townsend v. State Farm
Mut. Auto. Ins. Co., 793 So. 2d 473, 480 (La. Ct. App. 2001)). In fact, we
previously interpreted the State Farm policy language at issue here, finding it
“unambiguous.” Blakely v. State Farm Mut. Auto. Ins. Co., 406 F.3d 747, 753
(5th Cir. 2005). We stated that “[t]he policy, read as a whole, defines repair or
replacement as restoring the vehicle to pre-accident mechanical function and
condition.” Id.
Applying these principles to the policy language at issue, we find that
Appellants fail to establish that State Farm breached its contractual duties.
State Farm is obligated to pay for loss or damage to Appellants’ vehicles based
upon a written estimate. In creating estimates, body shops conduct an
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No. 07-30098
inspection, list the items in need of repair, and determine the amount State
Farm owes “based upon the prevailing competitive price.” Appellants’ argument
that an estimate must necessarily include an extensive seatbelts inspection finds
no support in the policy language. There is no policy language describing State
Farm’s duty to conduct or pay for automobile inspections. State Farm’s duty is
to pay for loss or damage to Appellants’ vehicles, measured by the cost of repair.
That obligation was fulfilled in this case, and Appellants do not further identify
anything broken that needs to be fixed.
Absent a contractual provision or legislative act calling for an extensive
seatbelts inspection upon the occurrence of any automobile collision, we will not
enlarge the meaning of “cost of repair” beyond its everyday understanding. The
fact that Appellants’ automobile manufacturers and the Inter-Industry
Conference on Collision Repairs recommend such an inspection does not change
our analysis. We are solely guided by the policy language before us, which
requires State Farm to pay Appellants for loss to property based upon the cost
of repair. There is no indication that State Farm failed to honor this contractual
obligation. Thus, Appellants’ breach of contract claim is without merit.2
Since we find that State Farm did not breach its contractual obligations,
we necessarily find that State Farm is not liable for bad faith breach of contract.
Accordingly, Appellants are not entitled to any penalties or attorney’s fees under
LA. REV. STAT. ANN. §§ 22:658 or 22:1220. Therefore, the judgment is
AFFIRMED.
2
If there actually were something wrong with the seatbelts, it would be arguable that
State Farm would have to pay for the tests necessary to determine just what that was and how
to fix it as part of the costs of repairing the seatbelt. However, Appellants have refused to
allege that there is in fact anything wrong with the seatbelt (or even that there seemed to be
something wrong).
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