St. Paul Guardian Ins. Co. v. Centrum Gs Ltd.

• Decision Date: 11 March 2002
• Docket Number: No. 00-11339 Summary Calendar.,00-11339 Summary Calendar.
• Citation: 283 F.3d 709
• Parties: ST. PAUL GUARDIAN INSURANCE COMPANY, Plaintiff-Appellee, v. CENTRUM GS LIMITED; Goodyork Corporation; Steiner & Associates, Inc.; Yaromir Steiner; Brenda Brushaber, Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 709

283 F.3d 709

ST. PAUL GUARDIAN INSURANCE COMPANY, Plaintiff-Appellee, v. CENTRUM GS LIMITED; Goodyork Corporation; Steiner & Associates, Inc.; Yaromir Steiner; Brenda Brushaber, Defendants-Appellants.

No. 00-11339 Summary Calendar.

United States Court of Appeals, Fifth Circuit.

March 11, 2002.

Richard Brent Cooper, Michelle Elaine Robberson, Raymond Douglas Rees, Cooper & Scully, Dallas, TX, for Plaintiff-Appellee.

Bruce Leighton Dean, Karger, Key, Barnes & Springer, Dallas, TX, for Defendants-Appellants.

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

Before EMILIO M. GARZA, STEWART and PARKER, Circuit Judges.

ROBERT M. PARKER, Circuit Judge:

Centrum GS Limited, et al., appeal the district court's denial of their motion for summary judgment and grant of summary judgment in favor of St. Paul Guardian Insurance Company upon a finding that the insurance company had no duty to defend any defendant in Gerry Perdue's underlying state court action. We affirm in part, reverse in part and remand for further proceedings not inconsistent with this opinion.

FACTS AND PROCEDURAL HISTORY

The relevant facts in this case are not in dispute. St. Paul Guardian Insurance Company (hereinafter "St. Paul") is an insurance company headquartered in St. Paul, Minnesota. Centrum GS Limited (hereinafter "Centrum") is a Texas limited partnership and owner of the Centrum Building, a nineteen-story office tower located in Dallas, Texas.¹ Goodyork Corporation (hereinafter "Goodyork") is a Texas corporation headquartered in Los Angeles, California and general partner of Centrum. Steiner & Associates, Inc. (hereinafter "Associates") is a Florida corporation and property manager of the Centrum Building. Yaromir Steiner (hereinafter "Steiner") is a citizen of the state of Florida, employed by Associates and an officer of Associates. Brenda Brushaber (hereinafter "Brushaber") is a citizen of the state of Texas and employed by Associates as the General Manager of the Centrum Building.² Gerry Perdue (hereinafter "Perdue") was a building engineer hired during the construction of the Centrum Building. Under various property management companies, Perdue maintained this position for approximately eight years until he assumed the position of Chief Building Engineer for the Centrum Building beginning February 1, 1995.

In 1994, St. Paul issued a Commercial General Liability insurance policy (hereinafter "CGL policy") to Centrum effective from December 23, 1994, to December 23, 1995. The CGL policy covers inter alia, bodily injury, property damage and personal injury liability.

On March 6, 1995, Perdue's employment as Chief Building Engineer was terminated. Perdue filed suit against Brushaber, Associates and Steiner on August 23, 1995. Perdue's claims included wrongful termination, intentional infliction of emotional distress, libel, slander, invasion of privacy, fraud, negligence and breach of contract. On February 7, 1996, Perdue filed his First Amended Original Petition adding Centrum and Goodyork as defendants. On July 18, 1997, Perdue filed his Fourth Amended Original Petition alleging that on or about December 21, 1994, Steiner, Brushaber and Associates, on their behalf and on behalf of Centrum and Goodyork, entered into an employment contract with him for a one year period beginning February 1, 1995.

Perdue further alleged that he was wrongfully terminated on March 6, 1995, and subsequent to his termination, Appellants hired eight uniformed Dallas police officers to patrol the building's lobby and parking garage and Appellants also circulated to the general public, including contractors, tenants and customers in the building, color "WANTED POSTERS" and a memorandum requesting anyone who saw him to call security. The "WANTED POSTERS" allegedly included a color photograph of Perdue, his name, his home address, his driver's license number, his social security number and his car tag number. Perdue also alleged that Appellants made defamatory statements about him and that Bill Jones, an employee and agent of Appellants, stated that Perdue tampered with or cut off pumps at the Centrum Building.

Perdue contends that his wrongful termination caused him to suffer damages including loss of salary, bonuses, benefits, commissions, medical expenses and benefits, retirement benefits, vacation, insurance and a down payment on an automobile financed during his employment. Additionally, Perdue contends that as a result of Appellants' libel, slander, invasion of privacy and intentional infliction of emotional distress, he has suffered mental distress, mental anguish, physical sickness and loss of reputation.

St. Paul first received notification of Perdue's claims against Centrum on February 26, 1997, when it received from Appellants' counsel a copy of the suit papers from the Perdue lawsuit. On June 18 1997, St. Paul filed a complaint seeking a declaratory judgment that it has no duty to defend or indemnify Centrum or any other defendant in Perdue's state court action. Subsequently, St. Paul filed a motion for summary judgment contending that Perdue's claims are not covered under the CGL policy and thus it has no duty to defend nor indemnify Appellants. Appellants in turn filed a cross-motion for summary judgment arguing that Perdue's claims are covered under the CGL policy and therefore, St. Paul is obligated to defend Appellants.

Perdue alleged both physical damages (mental distress, mental anguish, physical sickness and loss of reputation resulting from slander and invasion of privacy) and economic damages (lost salary, bonuses, benefits, health insurance, vacation, commissions and loss of property resulting from wrongful termination) in his underlying state court action. Although the district court agreed that Perdue's economic damages resulting from wrongful termination would be covered under the definition of personal injury as that term is defined in the CGL policy, the court held that Perdue's claims for economic damages were not covered because the damages were not the result of a personal injury offense as defined in and required under the CGL policy for personal injury coverage.

Furthermore, the district court found that under Texas law, Perdue alleged facts sufficient to state a cause of action for invasion of privacy and slander as those terms are defined in the personal injury provisions of the CGL policy. However, the district court found that Perdue's alleged physical damages from the personal injury offenses, invasion of privacy and slander, did not result from Appellants' "business activity" (owning and managing property) as also required for coverage under the personal injury provisions of the CGL policy. Therefore, the district court held that Perdue's claims for physical damages resulting from personal injury offenses were not covered and that St. Paul had no duty to defend or indemnify under the personal injury provisions of the CGL policy. St. Paul's motion for summary judgment was granted and Appellants' cross-motion for summary judgment was denied.

On this appeal, Appellants argue that 1) the district court erred in not granting summary judgment to Appellants because sufficient facts were pled in the Perdue lawsuit to potentially state a claim under the CGL policy's personal injury provisions, 2) the district court erred in granting summary judgment to St. Paul in finding that St. Paul had no duty to defend under the CGL policy's personal injury provisions, 3) the district court erred in not granting summary judgment to the Appellants on St. Paul's late notice defense, and 4) the district court erred in excluding Perdue's libel and libel per se claims as personal injury offenses.

STANDARDS OF REVIEW

We review a district court's grant of summary judgment de novo. New York Life Ins. Co. v. Travelers Ins. Co., 92 F.3d 336, 338 (5th Cir.1996) (citation omitted). "On summary judgment the inferences to be drawn from the underlying facts ... must be viewed in the light most favorable to the party opposing the motion." United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962). Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). We review a district court's interpretation of an insurance contract de novo. Potomac Ins. Co. of Ill. v. Jayhawk Med. Acceptance Corp., 198 F.3d 548, 550 (5th Cir.2000).

ANALYSIS

"In a diversity case state law provides the elements of the plaintiff's case." Thrash v. State Farm Fire & Cas. Co., 992 F.2d 1354, 1356 (5th Cir.1993) (citation omitted). "In Texas, insurance policies are construed according to ordinary contract principles. The interpretation of an insurance policy is a question of law." New York...