American Home Assurance Co. v. Stephens

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 96-20192

AMERICAN HOME ASSURANCE
COMPANY,
Plaintiff-Counter-Defendant-Appellee,

versus

BILLY CARL STEPHENS,
Defendant-Counter-Claimant-Appellant,

RORY ROSS,
Defendant-Appellant.

Appeal from the United States District Court
for the Southern District of Texas

January 25, 1999
Before REAVLEY, POLITZ, and DENNIS, Circuit Judges.

PER CURIAM:

The facts of this case are set forth in detail in our original opinion, American

Home Assurance Co. v. Stephens, 130 F.3d 123 (5th Cir. 1997). In that opinion,

we reversed the district court’s grant of summary judgment in favor of American

Home Assurance Company, concluding that the provision in the insurance policy,

limiting coverage for a therapist’s non-sexual misconduct because unrelated sexual
misconduct occurred in the course of professional treatment, was against public

policy.1 Judge Reavley dissented, being persuaded that Texas courts would not find

the insurance provision to be contrary to public policy.2

On panel rehearing, we withdrew our prior opinion and certified the

following question to the Supreme Court of Texas:

Whether it is against public policy for an insurer to limit
coverage for a therapist’s non-sexual misconduct because sexual
misconduct is alleged to have occurred in the same or related course
of professional treatment, even though sexual misconduct is
immaterial to the non-sexual misconduct claims asserted.3

The Supreme Court of Texas accepted our certification and answered the certified

question in the negative, concluding that Judge Reavley correctly applied Texas

law in his dissent to the original panel opinion.4 Therefore, in this diversity

jurisdiction action, being informed that the Supreme Court of Texas would not find

the insurance provision before us to be contrary to public policy, and because the

other claims of alleged error are without merit, the judgment of the district court

1
Id. at 126-28.
2
Id. at 128-30 (Reavley, J., dissenting).
3
American Home Assurance Co. v. Stephens, 140 F.3d 617 (5th Cir. 1998) (panel
rehearing).
4
American Home Assurance Co. v. Stephens, No. 98-0396, 1998 WL 831250 (Tex.
Dec. 3,1998) (per curiam).
2
is AFFIRMED.

3