Dennis Horn v. State Farm Lloyds

703 F.3d 735, 2012 U.S. App. LEXIS 26209, 2012 WL 6634994
Court of Appeals for the Fifth Circuit·Decided December 21, 2012·No. 12-40410·Published·Cited by 11 cases

Opinion

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.

*737 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.

*738 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.

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Dennis Horn v. State Farm Lloyds, 703 F.3d 735, 2012 U.S. App. LEXIS 26209, 2012 WL 6634994 (5th Cir. 2012).

703 F.3d 735 (Dennis Horn v. State Farm Lloyds) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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