Everest Natl Ins Co v. LJM Services Inc

• Court: Court of Appeals for the Fifth Circuit
• Decided: July 13, 2001
• Docket: 01-20014
• Status: Unpublished

Opinion

UNITED STATES COURT OF APPEALS For the Fifth Circuit

No. 01-20014 Summary Calendar

EVEREST NATIONAL INSURANCE COMPANY,

Plaintiff-Counter Defendant-Appellee,

VERSUS

LJM SERVICES INC; ET AL,

Defendants

LJM SERVICES INC

Defendant-Counter Claimant-Appellant.

Appeal from the United States District Court For the Southern District of Texas, Houston (H-99-CV-3602) July 11, 2001 Before SMITH, BENAVIDES, and DENNIS, Circuit Judges. PER CURIAM:*

LJM Services, Inc. (“LJM”), appeals the grant of summary

judgment in favor of Everest National Insurance Company

(“Everest”). Everest had filed an action for declaratory judgment

* Pursuant to 5TH CIR. R. 47.5, the Court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. No. 01-20014 --2–

to determine its rights with respect to workers compensation

insurance. The district court held, inter alia, that an agent who

solicited business for Everest and wrote the policies through

Everest’s master general agent lacked the apparent authority to add

LJM as an additional insured.

The grant of summary judgment is reviewed de novo, applying

the same standard as the district court. Pratt v. City of Houston,

Texas, 247 F.3d 601, 605-606 (5th Cir. 2001).

Apparent authority in Texas is based on

estoppel. It may arise either from a

principal knowingly permitting an agent to

hold herself out as having authority or by a

principal’s actions which lack such ordinary

care as to clothe an agent with the indicia of

authority, thus leading a reasonably prudent

person to believe that the agent has the

authority she purports to exercise . . . A

prerequisite to a proper finding of apparent

authority is evidence of conduct by the

principal relied upon by the party asserting

the estoppel defense which would lead a

reasonably prudent person to believe an agent

had authority to so act.

Baptist Memorial Hospital System v. Sampson, 969 S.W.2d 945, 949 No. 01-20014 --3–

(Tex. 1998) (quoting Ames v. Great S. Bank, 672 S.W.2d 447, 450

(Tex. 1984)). “It is also the rule that apparent authority is not

available where the other contracting party has notice of the

limitations of the agent’s power.” G.D. Douglass v. Panama, Inc.,

504 S.W.2d 776, 779 (Tex. 1974). Certificates issued by the agent

specifically stated that they did not amend, extend or alter

coverage and that they were for information only and not to confer

any rights. See also Granite Constr. Co. v. Bituminous Ins. Co.,

832 S.W.2d 427, 429 (Tex.App.–Amarillo, 1992). LJM also had notice

of the agent’s limitations, see Douglass, 504 S.W.2d at 779.

Accordingly, we affirm.

AFFIRMED.