St. Paul Mercury Ins. Co. v. Fair Grounds Corp., 96-31293

• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)
• Citation: 123 F.3d 336
• Docket Number: No. 96-31293,96-31293
• Parties: ST. PAUL MERCURY INSURANCE COMPANY, Plaintiff, v. FAIR GROUNDS CORPORATION, et al., Defendants. FAIR GROUNDS CORPORATION, Defendant-Appellee, v. UNITED NATIONAL INSURANCE COMPANY, Defendant-Appellant. UNITED NATIONAL INSURANCE COMPANY, Plaintiff-Appellant, v. FAIR GROUNDS CORPORATION, Defendant-Appellee. Summary Calendar.
• Decision Date: 01 October 1997

Page 336

123 F.3d 336 ST. PAUL MERCURY INSURANCE COMPANY, Plaintiff,
v.
FAIR GROUNDS CORPORATION, et al., Defendants.
FAIR GROUNDS CORPORATION, Defendant-Appellee,
v.
UNITED NATIONAL INSURANCE COMPANY, Defendant-Appellant.
UNITED NATIONAL INSURANCE COMPANY, Plaintiff-Appellant,
v.
FAIR GROUNDS CORPORATION, Defendant-Appellee. No. 96-31293 Summary Calendar. United States Court of Appeals,
Fifth Circuit. Oct. 1, 1997.

Page 337

Joseph Lee McReynolds, Robert Emmett Kerrigan, Jr., Deutsch, Kerrigan & Stiles, New Orleans, LA, for Plaintiff-Appellant.

T. Peter Breslin, P.J. Stakelvm, III, Chehardy, Sherman, Ellis, Breslin & Murray, Metairie, LA, for Defendant-Appellee.

Appeals from the United States District Court for the Eastern District of Louisiana.

Before WIENER, BARKSDALE and EMILIO M. GARZA, Circuit Judges.

WIENER, Circuit Judge:

In this insurance coverage case, we must decide whether an exclusion clause in a comprehensive general liability (CGL) policy issued by Plaintiff-Appellant United National Insurance Company (United) to Defendant-Appellee Fair Grounds Corporation (FGC) applies to particular third-party property that was destroyed in a fire on FGC's premises. Concluding that the third-party property in question does not fall within the purview of the "care, custody, or control" exclusion of the policy issued by United to FGC, we affirm.

I.

FACTS AND PROCEEDINGS

In December 1993, a fire destroyed the Clubhouse, Grandstands, and Jockey's Room at FGC's racetrack in New Orleans, Louisiana. The fire damaged or destroyed the contents of the burned buildings, including a significant amount of property owned by third-parties. At the time of the fire, FGC had in effect a $2 million CGL policy, ¹ issued by United, but that policy excluded from coverage, inter alia, any damage to third party "personal property" in the "care, custody, or control" of FGC. At issue here is the applicability of that exclusion to (1) the computerized wagering equipment, known as the Totalisator System, owned by Autotote Systems, Inc. (Autotote), and (2) the racing equipment owned by sixty-one jockeys. ²

Autotote's own property insurer, St. Paul Mercury Insurance Company (St. Paul), paid Autotote over $1 million for its losses and filed suit in the district court against FGC asserting Autotote's subrogation rights. ³ In turn, FGC tendered Autotote's (and other third-party) claims to United, which denied coverage and filed suit in the district court seeking a declaration of non-coverage, based on the "care, custody, or control" exclusion, for all third-party property damaged or destroyed in the fire. A number of the third-parties also filed suit against FGC, which eventually paid over $205,000 to settle most of those claims. The district court consolidated

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United's declaratory judgment suit with St. Paul's subrogation suit.

In August 1995, United moved for summary judgment in the declaratory judgment suit. FGC filed a cross-motion for summary judgment and sought reimbursement from United for the amounts paid to third-parties in settlement of their claims. ⁴ The district court concluded, inter alia, that the property owned by Autotote and the jockeys was not in the "care, custody, or control" of FGC so that the exclusion did not apply to defeat United's coverage.

United filed a motion for new trial or, alternatively, to amend a finding of fact, disputing the district court's finding that FGC did not maintain or derive a monetary benefit from Autotote's property--a finding which undergirded the district court's determination of coverage. Before ruling on United's motion, however, the district judge transferred the case to a newly appointed district judge who ultimately denied the motion. The St. Paul litigation subsequently settled, but United specifically reserved its right to appeal the district court's determination of coverage.

United appealed, asserting that the district court erred in determining that the property owned by Autotote and the jockeys was not in the "care, custody, or control" of FGC and therefore is not excluded from coverage under the policy issued to FGC. In short, United urges us to hold that the subject property is excluded from coverage.

II.

ANALYSIS

A. JURISDICTION

FGC contends that United's appeal is premature for want of a certification for entry of a final judgment, pursuant to Federal Rule of Civil Procedure 54(b), as the district court did not dispose of all issues in this matter on summary judgment. ⁵ Shortly after FGC filed its appellate brief, however, United obtained a Rule 54(b) certificate from the district court. We have previously recognized that a premature notice of appeal is effective if Rule 54(b) certification is subsequently granted. ⁶ In addition, a declaratory judgment is reviewable as a final judgment, ⁷ and further necessary or proper relief based on that declaratory judgment may be granted subsequently. ⁸ We therefore conclude that we have appellate jurisdiction to hear the instant case. ⁹

B. STANDARDS OF REVIEW

We review de novo the district court's grant or denial of a motion for summary judgment, viewing the facts and all reasonable inferences therefrom in the light most favorable to the non-moving party. ¹⁰ Summary judgment is proper 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

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moving party is entitled to judgment as a matter of law." ¹¹

In addition, United appeals the district court's denial of its motion for new trial or, alternatively, to amend a finding of fact. United's motion is a peculiar one to say...