United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS
January 8, 2007
FOR THE FIFTH CIRCUIT
Charles R. Fulbruge III
Clerk
No. 05-61039
RICHARD KUBOW, doing business as Richard’s Music,
Plaintiff-Appellant,
v.
HARTFORD CASUALTY INSURANCE COMPANY, ET AL.,
Defendants,
HARTFORD CASUALTY INSURANCE COMPANY;
HARTFORD INSURANCE GROUP,
Defendants-Appellees.
Appeal from the United States District Court for the
Southern District of Mississippi
Before KING, BENAVIDES, and CLEMENT, Circuit Judges.
BENAVIDES, Circuit Judge:
Richard Kubow appeals the district court’s grant of summary
judgment. We affirm.
I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
In an instance of particularly unfortunate timing, fire struck
Kubow’s music store during the early morning hours of September 27,
2003, just three days after the store’s insurance policy expired.
Kubow originally insured the store in September 2001, with
Hartford Insurance Group (“Hartford”), through Town & Country
Financial Services, d/b/a Colony West Financial Services, Inc.
(“Colony West”). The one year policy became effective on September
24, 2001.
Hartford renewed Kubow’s policy for an additional year on
September 24, 2002. In June 2003, however, Hartford determined
that Kubow’s insurance score was unacceptable and decided to not
renew the policy for the next year. Hartford mailed a letter to
Kubow on June 11, 2003, indicating that it would not renew the
policy after its expiration at 12:01 a.m. on September 24, 2003.
Kubow’s bookkeeper, Deborah Bolen, received the letter on June
16, 2003. She faxed the notice and most recent billing statement
to Diana Leon at Colony West, with the following note:
Attached is the notice of cancellation. Please advise if
this can be reconsidered. Also attached is a copy the
[sic] insurance statement. Please let me know what
period this covers and status of this acct. Thanks.
Leon advised Bolen over the phone that the account was current, but
did not advise as to whether the decision could be reconsidered.
Because the account was current, however, Bolen assumed the policy
would renew, and filed the notice without telling Kubow. The
policy expired on September 24, 2003.
After business hours on the 25th, Colony West faxed Kubow a
proposal to place his coverage with St. Paul Insurance. The offer
was conditioned on Kubow signing and returning the acceptance form,
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along with a $200 broker’s fee. The next day, Kubow and Bolen made
several unsuccessful attempts to reach the Colony West agent who
sent the fax. Fire struck the uninsured business during the early
morning hours of September 27.
Hartford denied Kubow’s claim because the policy was not in
effect at the time of the fire. Kubow filed suit against Hartford
in state court.1 The case was removed to federal court and Hartford
moved for summary judgment on all claims. Kubow and Hartford
indicated willingness to forgo an evidentiary hearing, and the
district court granted summary judgment for Hartford.
II. STANDARD OF REVIEW
We review a grant of summary judgment de novo, using the same
criteria employed by the district court. Hanks v. Transcon. Gas
Pipe Line Corp., 953 F.2d 996, 997 (5th Cir. 1992). Summary
judgment is appropriate when “there is no genuine issue as to any
material fact and . . . the moving party is entitled to a judgment
as a matter of law.” FED. R. CIV. P. 56(c). A court’s role at the
summary judgment stage is not to weigh the evidence or determine the
truth of the matter, but rather to determine only whether a genuine
issue exists for trial. Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 249 (1986). Because Mississippi law controls the disposition
of the claims in this diversity case, we apply the law in the same
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Kubow also originally included Colony West and its agent in
that suit. Those parties, however, subsequently settled, leaving
Hartford as the lone defendant.
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manner as a Mississippi court. DiPascal v. New York Life Ins. Co.,
749 F.2d 255, 260 (5th Cir. 1985).
III. DISCUSSION
A. Kubow cannot enforce the policy servicing agreement as
a third party beneficiary.
Hartford and Colony West entered into an Insurance Sales and
Service Agreement, through which Hartford agreed to handle billings,
policy renewals, cancellations, coverage change requests, and
similar commercial insurance services on designated policies. Kubow
attempts to enforce this agreement as a third party beneficiary.
Under Mississippi law, “‘the contract between the original
parties must have been entered into for [Kubow’s] benefit, or at
least such benefit must be the direct result of the performance
within the contemplation of the parties.’” United States v. State
Farm Mut. Auto Ins. Co., 936 F.2d 206, 209 (5th Cir. 1991) (quoting
Burns v. Washington Sav., 171 So. 2d 322, 325 (Miss. 1965)). The
agreement existed for the mutual benefit of Hartford Insurance and
Colony West, asserting each’s duties and rights for purposes of
operations. Because Hartford and Colony West did not enter into the
agreement for Kubow’s benefit, and because his benefit was not a
direct result of the agreement, Kubow is not a third party
beneficiary.
Even if Kubow were a third party beneficiary, he has not shown
that Hartford breached duties arising under the agreement: the
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agreement did not include any requirement that Hartford communicate
with him, did not require Hartford to place Kubow with another
carrier in the event of nonrenewal, and did not make Hartford
Kubow’s agent for the sake of tort claims.
B. Colony West never rescinded Hartford’s notice of non-
renewal, nor did it renew the policy.
Kubow unsuccessfully points to two acts by Colony West to argue
that it rescinded the nonrenewal or renewed the policy.
On June 17, 2003, Bolen asked Colony West whether (1) the
account was current and (2) whether the nonrenewal could be
reconsidered. Colony West made no representation with regards to
the renewal of the policy, but confirmed that the policy was
current. By her own admission, Bolen mistakenly assumed that
because the account was current, it would renew despite the notice.
Kubow cites several cases finding that an agent had bound the
principal through its representations to an insured, but all of
those cases involved express representations made on the part of the
agents that are not present in this case. See, e.g., Black v. Fid.
& Guar. Ins. Underwriters, Inc., 582 F.2d 984, 990 (5th Cir.
1978)(agent expressly assured policy holder of coverage); Canal Ins.
Co. v. Bush, 154 So. 2d 111 (Miss. 1963) (same); Liverpool & London
& Globe Ins. Co. v. Hinton, 77 So. 652, 654 (Miss. 1918)(same).
Colony West never made an express representation that Kubow’s policy
would be renewed.
Kubow’s argument that Colony West renewed the Hartford policy
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by faxing him a letter offering coverage with another company on
September 26, 2003, also fails. The letter offered insurance with
St. Paul Insurance, not Hartford. As such, the letter could not
possibly create coverage with Hartford.
Even if the letter could be interpreted as offering coverage
with Hartford, it still could not independently create that
coverage. Kubow’s Hartford policy expired at 12:01 a.m. on
September 24, 2003. The letter faxed to Kubow by Colony West came
after the expiration of the Hartford policy. Under Mississippi law,
an agent’s representations can continue coverage, but cannot serve
as a basis to create coverage. See Stewart v. Gulf Guar. Life Ins.
Co., 846 So. 2d 192, 202 (Miss. 2002); Employers Fire Ins. Co. v.
Speed, 133 So. 2d 627, 629 (Miss. 1961) (“An insurer may be estopped
by its conduct or knowledge from insisting on a forfeiture of a
policy, but the coverage or restrictions on the coverage cannot be
extended by the doctrines of waiver or estoppel.”).
C. Hartford is not vicariously liable for general
negligence by Colony West.
Kubow argues that Colony West was negligent when it failed to
fully answer Bolen’s questions on June 17, 2003, and that Hartford,
as the principal, is vicariously liable for that negligence.
It is true that Hartford, as principal, can be bound by acts
of its agent that are within the scope of the agent’s real or
apparent authority. See Ford v. Lamar Life Ins. Co., 513 So. 2d
880, 888 (Miss. 1987). Our review of Mississippi case law indicates
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that a principal can be held vicariously liable for the
misrepresentations of its agent, but not for its agent’s general
negligence. See, e.g., Andrew Jackson Life Ins. Co. v. Williams,
566 So. 2d 1172, 1180 (Miss. 1990)(citing several cases for
proposition that principal is liable for misrepresentations within
scope of agent’s actual or apparent authority). There is no
analogous case under Mississippi law holding a principal vicariously
liable for the general negligence of its agent.
Bolen asked whether the nonrenewal could be reconsidered, and
if the payments were current. Colony West answered the second
question, but never responded to the first, and so Bolen assumed the
policy would renew. Ideally, Colony West should have fully answered
the question or referred Bolen to Hartford. However, Colony West
never made a false representation, nor any representation regarding
renewal, to Bolen that gave rise to vicarious liability on the part
of Hartford. In the absence of such a representation, Hartford is
not liable for any general negligence by Colony West, and we need
not consider whether such negligence exists.
D. There is no basis for punitive damages.
Kubow asks this court to award him punitive damages. Given
that we affirm the district court’s summary judgment, no basis
exists to award punitive damages against Hartford.
IV. CONCLUSION
For the foregoing reasons, we AFFIRM the district court’s
summary judgment.
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