Horn v. State Farm Lloyds

• Citation: 703 F.3d 735
• Decision Date: 21 December 2012
• Docket Number: No. 12–40410.,12–40410.
• Parties: Dennis HORN; Mary Horn, Plaintiffs–Appellees, v. STATE FARM LLOYDS, Defendant–Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

703 F.3d 735

Dennis HORN; Mary Horn, Plaintiffs–Appellees,

v.STATE FARM LLOYDS, Defendant–Appellant.

No. 12–40410.

United States Court of Appeals, Fifth Circuit.

Dec. 21, 2012.

Mitchell A. Toups (argued), Weller, Green, Toups & Terrell, Beaumont, TX, Allen Craig Eiland, Galveston, TX, John Steven Mostyn, Mostyn Law Firm, Houston, TX, for Plaintiffs–Appellees.

David V. Jones, Benjamin G. Kemble, Jones, Andrews & Ortiz, P.C., San Antonio, TX, Michael P. Kenny (argued), Tiffany Lynne Powers, Alston & Bird, L.L.P., Atlanta, GA, Lynne Liberato, Kent Geoffrey Rutter, Haynes & Boone, L.L.P., Houston, TX, for Defendant–Appellant.

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

Before JOLLY, PRADO and HIGGINSON, Circuit Judges.

HIGGINSON, Circuit Judge:

This appeal centers on whether the phrase “any Hurricane Ike cases,” in a contract covering “all Hurricane Ike cases that either have been filed or will be filed in the future,” encompasses class-action lawsuits. Concluding that it does, we AFFIRM.

FACTS AND PROCEEDINGS

In the wake of Hurricane Ike, hundreds of homeowners, many of them represented by the Mostyn Law Firm (“the Firm”), filed claims against State Farm Lloyds (“State Farm”) in Texas state court. In many of those cases, homeowners sued individual adjusters in their personal capacities. State Farm removed several of those cases to federal court on diversity grounds. On June 11, 2009, the Firm and State Farm entered into an agreement (the “Agreement”) whereby the Firm promised to abandon its clients' claims against individual adjusters and forgo suing them in the future in exchange for State Farm's promise not to remove any Hurricane Ike cases to federal court.

The Agreement, reproduced in its entirety, reads as follows:

The following agreement will pertain to all Hurricane Ike cases that either have been filed or will be filed in the future by The Mostyn Law Firm against State Farm Lloyds. Hurricane Ike is defined as the storm that occurred on September 13, 2008. This confirms our agreement as follows:

In exchange for The Mostyn Law Firm's agreement to non-suit with prejudice all claims against individually sued Defendants and The Mostyn Law Firm's agreement to refrain from suing individual Defendants on future Hurricane Ike lawsuits, State Farm agrees not to remove any Hurricane Ike cases filed by your firm to Federal Court. In addition, to the extent possible, State Farm Lloyds will agree to produce an adjuster who was involved in handling the Hurricane Ike insurance claim for deposition and/or trial, without the need for a subpoena. To the extent possible, the adjuster's deposition will take place at State Farm Lloyds' counsel's offices (provided these offices are in or near the county in which the lawsuit is pending), or an agreed upon location.

In a case where there is a Co–Defendant who may remove, State Farm Lloyds will not grant permission for removal pursuant to 28 U.S.C. § 1446.

It is also agreed that Plaintiffs will allow inspection of the property within the first 50 days following an appearance, or prior to mediation, at Defendants' option. Any such inspection will not preclude an additional inspection by Defendants, at a later date, during the course of the litigation. If this letter accurately reflects our agreement, please sign in the space provided and return to our office.

More than one year after the execution of the Agreement, Plaintiff–Appellee homeowners Dennis and Mary Horn (the “Horns”), represented by the Firm, filed a complaint against State Farm in Galveston County Court alleging that State Farm improperly adjusted their claim for damage to their home caused by Hurricane Ike. Eleven months later, the Horns restyled their case as a class action by amending their complaint to add a putative class of more than 100,000 Texas residents and property owners. State Farm timely removed the case to the Southern District of Texas on diversity grounds. The Horns moved to remand on the basis of the Agreement. On referral from District Judge Kenneth Hoyt, and after a hearing on the motion to remand, Magistrate Judge John Froeschner issued a Report and Recommendation (“R&R”) that the case be remanded to state court, concluding that the phrase “any Hurricane Ike cases” unambiguously encompassed class actions. Judge Hoyt overruled State Farm's objections, adopted the R&R, and remanded the case to state court. State Farm timely appealed.

DISCUSSION

The parties dispute the meaning of the contract phrase “any Hurricane Ike cases.” The Horns submit that the phrase encompasses all past, present, and future lawsuits filed by the Firm against State Farm on behalf of homeowners, as individuals or part of a class, whose properties were damaged during Hurricane Ike. State Farm responds that the phrase does not encompass class-action lawsuits. The parties agree that Texas law governs.

In disputes over the meaning of a contract, which we review de novo, we first look to the plain language of the contract to determine whether it is ambiguous. Empire Fire & Marine Ins. Co. v. Brantley Trucking, Inc., 220 F.3d 679, 681 (5th Cir.2000) (applying Texas law). “In Texas, whether a contract is ambiguous is a question of law.” Addicks Servs., Inc. v. GGP–Bridgeland, LP, 596 F.3d 286, 294 (5th Cir.2010) (applying Texas law). A contract is ambiguous “if its plain language is amenable to more than one reasonable interpretation.” Nautilus Ins. Co. v. Country Oaks Apts. Ltd., 566 F.3d 452, 455 (5th Cir.2009) (applying Texas law). If a contract is unambiguous, we apply its plain meaning and enforce it as written. Texas v. Am. Tobacco Co., 463 F.3d 399, 407 (5th Cir.2006) (applying Texas law). If a contract is ambiguous, then, and only then, do we consider extrinsic evidence for “the purpose of ascertaining the true intentions of the parties expressed in the contract.” Id. (quoting Friendswood Dev. Co. v. McDade + Co., 926 S.W.2d 280, 283 (Tex.1996)). With those principles in mind, we turn to the language of the Agreement.

The words at issue in this case are “any Hurricane Ike cases.” The Agreement defines “Hurricane Ike” as “the storm that occurred on September 13, 2008,” but leaves undefined the words “any” and “cases.” The Agreement does not indicate that the parties intended a technical or industry-specific meaning for those words, so we give them their “plain, ordinary, and generally accepted meaning.” Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex.1996). Legal or other well-accepted dictionaries are a common method of determining a word's ordinary meaning, as are leading treatises on grammar and word usage. See Gilbert Tex. Constr., L.P. v. Underwriters at Lloyd's London, 327 S.W.3d 118, 127 (Tex.2010) (referencing Black's Law Dictionary and Webster's Third New International Dictionary); Hall v. State, 283 S.W.3d 137, 161 nn. 19–20 (Tex.App.—Austin 2009, pet. ref'd) (referencing The American Heritage Dictionary of the English Language and Garner's Modern American Usage).

The word “any” takes on different meaning depending on the context in which it is used. See Nixon v. Mo. Mun. League, 541 U.S. 125, 132, 124 S.Ct. 1555, 158 L.Ed.2d 291 (2004) (“ ‘[A]ny’ can and does mean different things depending upon the setting.”). Two leading dictionaries instruct similarly that “any” can mean “one,” “some,” “every,” or “all.” Webster's Third New International Dictionary 97 (2002); The American Heritage Dictionary of the English Language 83 (3d ed. 1992). More discerningly, Garner's Modern American Usage attaches six meanings to the adjectival form of the word, depending on the kind of sentence in which it appears. Bryan A. Garner, Garner's Modern American Usage 52 (3d ed. 2009).

None of these authorities, nor caselaw brought to our attention, suggests that the word presents intractable ambiguity wherever it is found, only that it must be interpreted in light of the context in which it appears. See Med. Ctr. Pharmacy v. Mukasey, 536 F.3d 383, 395–96 (5th Cir.2008) (noting that the phrase “any drug,” when read in context, unambiguously meant “every drug,” not “only those drugs not compounded by a pharmacy”); Coal. for Responsible Regulation, Inc. v. EPA, 684 F.3d 102, 141 (D.C.Cir.2012) (“Although we agree that the term ‘any air pollutant’ is, in some contexts, capable of narrower interpretations, we see nothing in the definition of ‘major emitting facility’ that would allow EPA to adopt a NAAQS pollutant-specific reading of that phrase.”).

In the phrase “any Hurricane Ike cases,” the word “any” serves as an adjective modifying “Hurricane Ike cases.” The sentence in which it appears—“State Farm agrees not to remove any Hurricane Ike cases filed by your firm to Federal Court.”—is a negative assertion. When “any” is used as an adjective in a negative assertion, the word “creates an emphatic negative, meaning ‘not at all’ or ‘not even one.’ ” Garner's Modern American Usage,supra, at 52; cf. Dep't of Hous. & Urban Dev. v. Rucker, 535 U.S. 125, 131, 122 S.Ct. 1230, 152 L.Ed.2d 258 (2002) (“As we have explained, ‘the word “any” has an expansive meaning, that is, “one or some indiscriminately of whatever kind.” ’ ” (quoting United States v. Gonzales, 520 U.S. 1, 5, 117 S.Ct. 1032, 137 L.Ed.2d 132 (1997))). That “any” should be read expansively in this context is confirmed by reference to the Agreement's scope provision, which provides that it “will pertain to all Hurricane Ike cases that either have been filed or will be filed in the future by The Mostyn Law Firm against State Farm Lloyds” (emphasis added). See Westwood Apex v. Contreras, 644 F.3d 799, 804 (9th Cir.2011) (“Appellants' focus on the phrase ‘any defendant’ takes the words out of the context in which they are written; here the word ‘any’ is being employed in connection with the word ‘all’ later in the sentence.... Given that ‘any’ and ‘all’ are used in relation to one another, they should be read that way and...