REVISED October 9, 2009
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
FILED
October 9, 2009
No. 09-60191
Charles R. Fulbruge III
Clerk
CHRISTOPHER M. WILEY
Plaintiff-Appellant
v.
STATE FARM FIRE AND CASUALTY COMPANY
Defendant-Appellee
Appeal from the United States District Court
for the Southern District of Mississippi
Before REAVLEY, JOLLY, and WIENER, Circuit Judges.
WIENER, Circuit Judge:
Hurricane Katrina reduced Plaintiff-Appellant Christopher M. Wiley’s
home to a slab. Although he carried a homeowner’s insurance policy from
Defendant-Appellee State Farm Fire and Casualty Company (“State Farm”),
State Farm rejected his claims thereunder because his policy contained a water
damage exclusion and an anti-concurrent cause provision. Wiley subsequently
entered the Mississippi Department of Insurance (“MDI”) Hurricane Katrina
Mediation Program, and in 2006 signed a settlement agreement (the “2006
1
Settlement”) with State Farm in which he released all claims for known damage
in exchange for $80,235. Over a year later, State Farm sent Wiley a letter
offering him an additional $26,798.13 “pursuant to the agreement reached
between State Farm and the Mississippi Department of Insurance” in exchange
for an additional release. Wiley rejected the second offer and brought suit,
seeking to recover an even greater additional amount under his original
homeowners’ policy.
The district court granted State Farm’s motion for summary judgment,
holding that the 2006 Settlement barred Wiley’s present claims. We affirm.
I. FACTS AND PROCEEDINGS
In our review of a district court’s grant of summary judgment, we present
the facts in the light most favorable to the non-moving party.1
The facts of this case are sadly familiar: On August 29, 2005, Hurricane
Katrina completely obliterated Wiley’s Biloxi, Mississippi home, save for its slab.
Wiley had insured his property2 with State Farm for $444,000. Wiley’s policy
contained a water damage exclusion that included an anti-concurrent cause
provision, however, and State Farm denied Wiley’s wind-damage claim.
In October 2006, Wiley and State Farm entered the MDI’s Hurricane
Katrina Mediation Program. According to Wiley, the State Farm
representative informed him that Mississippi law entitled State Farm to deny
his entire claim because his home had been destroyed by the storm surge, an
1
Connors v. Graves, 538 F.3d 373, 376 (5th Cir. 2008) (citing
Ballard v. Burton, 444 F.3d 391, 396 (5th Cir. 2006)).
2
Wiley’s policy covered his dwelling, a dwelling extension,
personal property, and actual loss for sustained loss of use.
2
excluded peril under his policy. Wiley took this description of the law to be true,
and, after considering and rejecting several offers, signed a settlement
agreement (the “2006 Settlement”) in exchange for $80,235. The 2006
Settlement provided that “if the insured(s) discovers additional insured damage
that was not known to the parties prior to this mediation, the insured(s) may file
a supplemental Katrina claim, which shall be treated as a new claim.” Wiley
maintains that the State Farm representative assured him that the 2006
Settlement entitled him to re-open or seek additional compensation for his
Katrina-related losses.
Over a year after the 2006 Settlement, Wiley received a letter from State
Farm (the “2007 Letter”), which explained that “pursuant to the agreement
reached between State Farm and the Mississippi Department of Insurance,”3
State Farm had re-evaluated Wiley’s claim and was prepared to offer him an
additional $26,798.13. In exchange, Wiley would have to sign a release (the
“2007 Release”), in which he would agree to “release[], acquit[], and forever
discharge[] [State Farm] from any and all claims that [Wiley] has or could have
asserted, now or in the future . . . arising out of or related to the damage or loss
from Hurricane Katrina. . . .”
Wiley contends that between the time of the 2006 Settlement and the 2007
Letter, he had learned from his neighbor, a civil engineer, that wind—and not
solely storm surge—had caused part of the damage to his property. Wiley
consequently refused to sign the 2007 Release and in May 2008, brought this
suit against State Farm, alleging breach of contract and tortious breach of
3
In April 2007, after negotiations with Mississippi regulators,
State Farm agreed to re-evaluate and offer additional compensation to
Mississippi policy-holders. Associated Press, Katrina-related re-
evaluations cost State Farm $29.8 million, CHICAGO TRIBUNE, Aug. 14, 2007, at
B3.
3
contract.
After completion of discovery, State Farm moved for summary judgment
seeking dismissal of all of Wiley’s claims. State Farm grounded its motion on
the doctrine of settlement and release based on the 2006 Settlement. In
December 2008, the District Court agreed, but held its order in abeyance and
offered Wiley two weeks in which to present an affidavit that set forth any “new
additional insured damage” that might support his claim. Wiley subsequently
moved for reconsideration, which the district court denied and, in the same
opinion, also rejected Wiley’s argument —raised for the first time in his motion
to reconsider—that the 2007 Letter and 2007 Release constituted a waiver of the
2006 Settlement. This timely appeal followed.
II. ANALYSIS
The district court exercised diversity jurisdiction under 28 U.S.C. §
1332(a),4 so we apply the substantive law of the forum state, in this case
Mississippi.5
We review a district court’s grant of summary judgment de novo.
Summary judgment should be granted only if there is no genuine issue of
material fact.6 A fact is material only if its resolution would affect the outcome
of the action,7 and an issue is genuine only “if the evidence is sufficient for a
4
Wiley is a resident of Mississippi and State Farm is
incorporated in Illinois with its principal offices in Illinois.
5
Krieser v. Hobbs, 166 F.3d 736, 739 (5th Cir. 1999).
6
Weeks Marine, Inc. v. Fireman’s Fund Ins. Co., 340 F.3d 233,
235 (5th Cir. 2003).
7
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct.
2505, 91 L.Ed.2d 202 (1986).
4
reasonable jury to return a verdict for the nonmoving party.”8 We may, however,
affirm a grant of summary judgment “on any legal ground raised below, even if
it was not the basis for the district court’s decision.”9
The district court held that the 2006 Settlement barred Wiley’s suit
because it unambiguously constituted a complete release of all Katrina-related
claims arising from insured damage known to Wiley at the time of the
settlement, i.e., the total loss of his insured property. On appeal Wiley makes
several claims of error: (1) The 2006 Settlement did not constitute a “full, final,
and complete” settlement of Wiley’s Katrina-related claims; (2) in the
alternative, the 2007 Letter constituted a modification or waiver of the 2006
Settlement;10 (3) State Farm should be estopped from relying on the 2006
Settlement because its agent misled Wiley with respect to State Farm’s ability
to deny Wiley any benefits under his policy and also with respect to Wiley’s right
to pursue additional payment for his Katrina-related losses under the 2006
Settlement. State Farm continues to defend on the ground that the 2006
Settlement constitutes a settlement and release of all Wiley’s Katrina-related
claims, as held by the district court.
A. The 2006 Settlement, 2007 Letter, and 2007 Release
8
Hamilton v. Segue Software, Inc., 232 F.3d 473, 477 (5th Cir.
2000) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106
S.Ct. 2505, 91 L.Ed.2d 202 (1986)).
9
Performance Autoplex II Ltd. v. Mid-Continent Cas. Co., 322
F.3d 847, 853 (5th Cir. 2003) (citing In re Williams, 298 F.3d 458,
462 & n.5 (5th Cir. 2002)).
10
State Farm contends that Wiley makes his waiver,
modification, and estoppel arguments for the first time on appeal,
and that they should therefore be barred. Keelan v. Majesco Software
Inc., 407 F.3d 332, 339 (5th Cir. 2005). We address this contention
below.
5
1. The 2006 Settlement
Titled “Mississippi Department of Insurance Hurricane Mediation
Program Settlement Agreement,” the 2006 Settlement is a standard, one-page
form with blank spaces for the parties’ names. It states in relevant part:
This settlement amount is full, complete and total final payment by
the insurance company to the insured(s) for the Katrina claim
brought to the mediation. Both parties release any and all Katrina
claims of any kind whatsoever against one another, except that if
the insured(s) discovers additional insured damage that was not
known to the parties prior to this mediation, the insured(s) may file
a supplemental Katrina claim, which shall be treated as a new
claim.
2. The 2007 Letter
The 2007 Letter states in relevant part:
“[State Farm] has completed its reevaluation of your claim pursuant
to the agreement reached between State Farm and the Mississippi
Insurance Department (“MID”). Based upon the information you
have provided, our review of pertinent components of the claim file,
and our agreement with the MID, State Farm is willing to offer you
$26,798.13 to conclude this disputed claim. You can accept or reject
this settlement offer.
This settlement offer represents a compromise and is not an
admission by State Farm that your claim was not correctly
evaluated during its first review or of any wrongdoing on State
Farm’s part or a concession by State Farm as to any interpretation
of the relevant insurance policy.
....
If you reject the offer, you can request mediation or a non-binding
arbitration of your claim through the Mississippi Insurance
Department. . . . You can also do nothing. If you do not accept the
offer from State Farm you retain all rights that you have, including
6
the right to pursue litigation.
3. 2007 Release
The unsigned 2007 Release states in relevant part:
(“Releasor”) . . . RELEASES, ACQUITS, AND FOREVER
DISCHARGES the Released Parties . . . [State Farm] from any and
all claims that Releasor has or could have asserted, now or in the
future, against the Released Parties, arising out of or related to
damage or loss from Hurricane Katrina to property insured by State
Farm . . . .
As noted, Wiley did not accept the 2007 offer of an additional $26,798 and
did not sign the 2007 Release.
B. Mississippi Law
The Mississippi Supreme Court has established “a three-tiered approach
to contract interpretation”11 that begins with the text and applies the familiar
“four corners test,” which focuses exclusively on “an objective reading of the
words employed in the contract to the exclusion of parol or extrinsic evidence.”12
“Only if the contract is unclear or ambiguous” is a court authorized to resort to
canons of interpretation and parol evidence. 13
1. Whether the 2006 Settlement was a final settlement
There can be no serious argument that the 2006 Settlement
11
Facilities Inc. v. Rogers-Usry Chevrolet, Inc., 908 So. 2d
107, 111 (Miss. 2005) (citing Pursue Energy Corp. v. Perkins, 558
So.2d 349, 351-53 (Miss. 1990)).
12
Id. at 111.
13
Id. at 111.
7
unambiguously represented the “full, complete and a total final payment” for
all insured damages that were known to Wiley at the time of the settlement. It
is equally unambiguous that Wiley, in exchange for the payment of $80,325,
released State Farm from “any and all Katrina claims of any kind whatsoever.”14
As Wiley forthrightly admits, Hurricane Katrina had already reduced his home
to a slab at the time of the 2006 Settlement. Thus, although the 2006
Settlement expressly reserved the right for Wiley—or any other insured
participating in the Mississippi Department of Insurance-sponsored mediation—
to file a new claim based on insured, Katrina-related damage unknown or as yet
undiscovered at the time of the 2006 Settlement, the 2006 Settlement was final
with respect to all known damage.
In Wiley’s case, Katrina’s total destruction of his home, down to the slab,
made impossible the discovery of any “additional insured damage.” Wiley’s
contention that the “additional damage” reservation extends to the subsequent
discovery of an additional or different cause of previously known damage
contravenes the plain meaning of the phrase “additional insured damage.” “The
mere fact that the parties disagree about the meaning of a provision of a contract
does not make the contract ambiguous as a matter of law . . . . The parties are
bound by the language of the instrument.”15
14
Wiley also urges us to assess his claims under principles of
accord and satisfaction. This we cannot do because the Mississippi
Supreme Court instructs us to “apply contract law analysis to
settlement agreements. This is true of any type of negotiated
settlement.” Chantey Music Pub., Inc., v. Malaco, Inc., 915 So. 2d
1052, 1056 (Miss. 2005).
15
Provident Life and Acc. Ins. Co. v. Goel, 274 F.3d 984, 992
(5th Cir. 2001) (citing Cherry v. Anthony, Gibbs, Sage, 501 So. 2d
416 (Miss. 1987)) (internal citations omitted); Delta Pride Catfish,
Inc. v. Home Ins. Co., 697 So. 2d 400, 404 (Miss. 1997).
8
2. Whether the 2007 Letter and 2007 Release waived or
modified the 2006 Settlement
In the alternative, Wiley urges that the 2007 Letter and the 2007 Release
modified or waived the 2006 Settlement and therefore permit his present suit.
State Farm counters that these arguments were not preserved for our review
because they were not raised before the district court.
Although it appears that Wiley did not straightforwardly present these
arguments to the district court, it did discern and address the waiver argument
that Wiley now urges on appeal. To the extent that his modification argument
on appeal relies on contentions identical to those made in his waiver argument
in the district court, albeit under a different label, we may review it here,
cautioning, however, that “[i]f a party wishes to preserve an argument for
appeal, the party ‘must press and not merely intimate the argument during the
proceedings before the district court.’”16
We note at the outset that Mississippi’s adherence to the parol evidence
rule does not foreclose a court’s consideration of evidence that the original
written contract was subsequently modified or waived.17 Mississippi law defines
a waiver as “an intentional surrender or relinquishment” of a known and
existing right, and
contemplates something done designedly or knowingly, which
modifies or changes existing rights, or varies or changes the terms
and conditions of a contract. It is the voluntary surrender of a right.
To establish a waiver, there must be shown an act or omission on
the part of the one charged with the waiver fairly evidencing an
16
Keelan v. Majesco Software, Inc., 407 F.3d 332, 339 (5th Cir.
2005) (internal citations omitted).
17
Leonard v. Nationwide Mut. Ins. Co., 499 F.3d 419, 441 n. 19
(5th Cir. 2007) (citing Dixie S. Indus. Coating Inc. v. Miss. Power
Co., 872 So. 2d 769, 772 (Miss. Ct. App. 2004)).
9
intention permanently to surrender the right alleged to have been
waived.18
Similarly, “[t]he subsequent actions of parties pursuant to a contract may
support a finding that the original contract has been modified to an extent
consistent with the subsequent course of conduct.”19
These doctrines offer only cold comfort to Wiley. In the 2007 Letter, State
Farm’s offer to Wiley of an additional amount was plainly made “pursuant to the
agreement reached between State Farm and the Mississippi Insurance
Department (“MID”),” not pursuant to the 2006 Settlement. The 2007 Letter
expressly stated that the additional settlement offer “is not an admission by
State Farm that your claim was not correctly evaluated,” nor “a concession.”
This language indisputably preserved the status quo established by the 2006
Settlement, and cannot reasonably be interpreted as evincing “an intention
permanently to surrender the right alleged to have been waived.”20
For substantially the same reasons, the 2007 Letter and 2007 Release
cannot be construed as modifying the 2006 Settlement. The 2007 Letter was, by
its terms, expressly not an action taken pursuant to the 2006 Settlement
between State Farm and Wiley; rather, it was issued pursuant to negotiations
between State Farm and its Mississippi regulators, to which Wiley was not a
party. Moreover, the 2007 Letter and 2007 Release required new consideration:
18
Taranto Amusement Co. v. Mitchell Assocs, Inc., 820 So.2d 726,
729-30 (Miss. Ct. App. 2002) (citing Ewing v. Adams, 573 So. 2d 1364,
1369 (Miss. 1990)).
19
Fletcher v. U.S. Restaurant Properties, Inc., 881 So.2d 333,
337 (Miss. App. 2004) (citing Kight v. Sheppard Bldg. Supply, Inc.,
537 So. 2d 1355, 1359 (Miss. 1989) (citing Stinson v. Barksdale, 245
So.2d 595, 597-98 (Miss. 1971))).
20
Taranto Amusement Co., 820 So.2d at 730 (internal citations
omitted).
10
In exchange for paying Wiley an additional $26,798.13, State Farm would
receive an additional release from Wiley—a release not limited to the known,
insured damage covered by the 2006 Settlement, but extending to any claim that
Wiley “has or could have asserted, now or in the future....” The fact that, in the
2006 Settlement, Wiley—by virtue of the total destruction of his home, and
therefore the impossibility of discovering “additional damage”—had already
released any and all claims he might have had against State Farm does not
mean that the reference to any potentially outstanding claims in the 2007
Release somehow serves to resurrect rights already relinquished in the 2006
Settlement. Neither does the 2007 Letter’s statement that “if you do not accept
the offer from State Farm, you retain all the rights you have, including the right
to pursue litigation” somehow revive Wiley’s right to litigate that which he had
released under the 2006 Settlement.
3. Whether estoppel applies
Wiley’s recourse to the doctrine of estoppel—on the grounds that State
Farm’s representative misled him regarding the state of Mississippi law
governing Wiley’s policy and the 2006 Settlement—is similarly unavailing.
State Farm insists that this argument was never properly before the district
court, and we agree. 21 Even though “‘[n]o bright-line rule exists for determining
whether a matter was raised below,”22 when, as here, a district court does not
address an argument and the briefing in the trial court contained only references
21
“If an argument is not raised to such a degree that the
district court has an opportunity to rule on it, we will not address
it on appeal.” FDIC v. Mijalis, 15 F.3d 1314, 1327 (5th Cir.1994).
22
N.Y. Life Ins. Co. v. Brown, 84 F.3d 137, 142 n. 4 (5th
Cir.1996) (internal citations omitted).
11
to facts,23 but to no authority, that may support a claim of estoppel, we will not
consider that argument for the first time on appeal.
III. CONCLUSION
For the foregoing reasons, the judgment of the district court is, in all respects,
AFFIRMED.
23
In his summary judgment briefing, Wiley alleged that State
Farm’s agent told him that the anti-concurrent cause provision
included in his policy entitled State Farm to deny him any recovery
under his insurance plan, and that this lead Wiley to agree to
settle. We recently ruled that such clauses are valid under
Mississippi law. Leonard v. Nationwide Mut. Ins. Co. 499 F.3d 419,
429-36 (5th Cir. 2005).
In addition, Wiley alleged that the State Farm agent
misrepresented the terms of the 2006 Settlement. We note only that
Mississippi law provides that “a person is under an obligation to
read a contract before signing it, and will not as a general rule be
heard to complain of an oral misrepresentation the error of which
would have been disclosed by reading the contract.” Ballard v.
Commercial Bank of DeKalb, 991 So. 2d 1201, 1207 (Miss. 2008)
(internal citations omitted). Moreover, when, as here, the contract
is unambiguous, “[a]s a matter of law, one may not reasonably rely on
oral representations, whether negligently or fraudulently made by the
[other party], which contradict the plain language of the documents.”
Id. at 1207 (internal citations omitted).
12