     Case: 11-30466     Document: 00511688373         Page: 1     Date Filed: 12/07/2011




            IN THE UNITED STATES COURT OF APPEALS
                     FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                     Fifth Circuit

                                                                            FILED
                                                                         December 7, 2011

                                     No. 11-30466                          Lyle W. Cayce
                                   Summary Calendar                             Clerk



INDIAN HARBOR INSURANCE COMPANY,

                                                  Plaintiff-Appellant
v.

BESTCOMP, INCORPORATED; GEORGE RAYMOND WILLIAMS, M.D.,
Orthopedic Surgery, A Professional Medical, L.L.C.,

                                                  Defendants-Appellees



                   Appeal from the United States District Court
                       for the Eastern District of Louisiana
                                 No. 2:09-CV-7327


Before DAVIS, STEWART, and CLEMENT, Circuit Judges.
PER CURIAM:*
        George Raymond Williams, M.D., Orthopedic Surgery, A Professional
Medical L.L.C. (“Williams L.L.C.”) filed a putative class action lawsuit in state
court against BestComp, Incorporated alleging violations of Louisiana law.
Indian Harbor Insurance Company subsequently filed a federal lawsuit seeking
a judgment declaring that it had no obligation to defend or indemnify BestComp


        *
         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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.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.
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in connection with the state court action. Indian Harbor then filed a motion for
summary judgment, which was granted in part and denied in part by the district
court. After the district court directed entry of final judgment pursuant to
Federal Rule of Civil Procedure 54(b), Indian Harbor filed a timely notice of
appeal. For the reasons stated below, we affirm the district court’s judgment.
                                               I.
A.      The insurance policy
        In July 2009, Indian Harbor issued a professional liability insurance policy
to Cannon Cochran Management Services, CCMSI Holdings, Inc., CCSF
Reinsurance, Ltd. (collectively “CCMSI”), and their subsidiaries. While not a
named insured party, BestComp asserts that it is covered under the policy
because it is a subsidiary of CCMSI.
        Under the policy, Indian Harbor was to provide insurance coverage by
paying “on behalf of the Insured all sums in excess of the deductible that the
Insured becomes legally obligated to pay as damages and claim expenses as a
result of a claim first made against the Insured and reported in writing to
[Indian Harbor]” from July 31, 2009 to July 31, 2010.1 The policy also states
that Indian Harbor has the “right and duty to defend in the Insured’s name and
on the Insured’s behalf a claim . . . even if any of the allegations in the claim are
groundless, false or fraudulent.”
        The policy defines a “claim” as “a demand for money or services naming
the Insured arising out of an act or omission in the performance of professional
services. A claim also includes the service of suit or the institution of an
arbitration proceeding against the Insured.” The term “claim expenses” is
defined as, inter alia, “[f]ees charged by attorneys” and “[a]ll other reasonable
and necessary fees, costs and expenses” resulting from the defense of a claim.

        1
         The insurance policy highlights all words and phrases that it specifically defines with
bold font. When quoting the policy, we will not replicate the bold font.

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The term “damages” is defined as “any compensatory sum and includes a
judgment, award or settlement[.]” Notably, the policy excludes “fines, penalties,
forfeitures, or sanctions” from the definition of “damages.”
B.      State court proceedings
        On September 30, 2009, Williams L.L.C. filed a putative class action
against BestComp in Louisiana state court (the “Williams lawsuit”). In its
petition, Williams L.L.C. alleged that it is BestComp’s duty to provide access to
preferred provider organization (“PPO”) discounted rates in connection with
Louisiana’s workers’ compensation payments. It further averred that BestComp
discounted the medical bills of numerous Louisiana health care providers. In
applying these discounts, Williams L.L.C. contended that BestComp violated the
following state statute:
        A preferred provider organization’s alternative rates of payment
        shall not be enforceable or binding upon any provider unless such
        organization is clearly identified on the benefit card issued by the
        group purchaser or other entity accessing a group purchaser’s
        contractual agreement or agreements and presented to the
        participating provider when medical care is provided. . . . When no
        benefit card is issued or utilized by a group purchaser or other
        entity, written notification shall be required of any entity accessing
        an existing group purchaser’s contractual agreement or agreements
        at least thirty days prior to accessing services through a
        participating provider under such agreement or agreements.

La. Rev. Stat. § 40:2203.1. According to the petition, BestComp failed to comply
with the notice requirements of section 40.2203.1 of the Louisiana Revised
Statutes when applying discounts to workers’ compensation medical bills. As a
result of this failure, Williams L.L.C. and its putative class sought statutory
damages in the form of “double the fair market value of the medical services
provided, but, in no event, less than the greater of $50 per day of non-compliance




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or $2000, together with attorney fees to be determined by the Court as is
provided under [state law].” See id. § 40:2203.1G.
C.      Federal court proceedings
        On November 12, 2009, Indian Harbor filed a federal lawsuit seeking a
“judgment declaring that it has no duty to defend or to indemnify BestComp, or
to pay any proceeds under the Policy, for the claims asserted against it.” In
August 2010, Indian Harbor filed a motion for summary judgment in which it
argued that because the statutory damages requested in the state court action
are properly considered penalties, they are not the type of damages covered
under the terms of the policy. Accordingly, it contended that it had no duty to
defend or indemnify BestComp in the Williams lawsuit. In response to this
motion, BestComp argued that while Indian Harbor may not be responsible for
paying statutory damages under section 40.2203.1, it was obligated to defend the
Williams lawsuit and cover claim expenses incurred as a result of this suit.
        In November 2010, the district court issued an order resolving Indian
Harbor’s motion. In its order, the district court granted Indian Harbor’s motion
in part when it concluded that damages under section 40.2203.1, along with
certain attorneys’ fees, were not covered by the policy. The district court did,
however, partially deny Indian Harbor’s motion by determining that not only did
Indian Harbor still have a duty to defend BestComp, but was also responsible
for paying claim expenses arising out of the Williams lawsuit.2 On November 8,
2011, the district court granted Indian Harbor’s motion to certify its denial of
Indian Harbor’s motion for summary judgment as a final judgment pursuant to
Federal Rule of Civil Procedure 54(b). This appeal ensued.




       2
         The district court also denied a motion for summary judgment that was filed by
Williams L.L.C.

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                                         II.
A.      Standard of Review
        We review the district court’s grant or denial of summary judgment de
novo, applying the same standard as the district court. Holt v. State Farm Fire
& Cas. Co., 627 F.3d 188 (5th Cir. 2010) (citation omitted). Summary judgment
is appropriate if there is no genuine issue as to any material fact and the moving
party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). A district
court’s interpretation of an insurance contract is a question of law subject to de
novo review. Travelers Lloyds Ins. Co. v. Pacific Emp’rs Ins. Co., 602 F.3d 677,
681 (5th Cir. 2010).
B.      Analysis
        “When, as here, jurisdiction is based on diversity, we apply the substantive
law of the forum state.” Holt, 627 F.3d at 191 (citing Erie R. v. Tompkins, 304
U.S. 64 (1938)). Louisiana is the forum state in this case; we therefore look to
its law for guidance in resolving this dispute. On appeal, Indian Harbor solely
argues that the district court erred in concluding that it had a duty to defend
BestComp in the Williams lawsuit.              Because this appeal turns on the
interpretation of an insurance policy, we begin our analysis with a consideration
of the interpretive tools provided by Louisiana law.
        “An insurance policy is a contract between parties and should be construed
by using the general rules of interpretation of contracts in the Civil Code.” In
re Katrina Canal Breaches Litig., 63 So. 3d 955, 963 (La. 2011). The judicial
responsibility in interpreting insurance contracts is to determine the parties’
common intent. La. Ins. Guar. Ass’n v. Interstate Fire and Cas. Co., 630 So. 2d
759, (La. 1994) (citing La. Civ. Code art. 2045). “The parties’ intent as reflected
by the words in the policy determine the extent of coverage.” Id. (citation
omitted). “Such intent is to be determined in accordance with the general,
ordinary, plain and popular meaning of the words used in the policy, unless the

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words have acquired a technical meaning.” Id. (citing La. Civ. Code art. 2047).
Where a policy of insurance contains a definition of any word or phrase, this
definition is controlling. E.g., Cangelosi v. Allstate Ins. Co., 680 So. 2d 1358,
1362 (La. Ct. App. 1 Cir. 1996).
      “If the words of the policy are clear and explicit and lead to no absurd
consequences, no further interpretation may be made in search of the parties’
intent and the agreement must be enforced as written.” Crabtree v. State Farm
Ins. Co., 632 So. 2d 736, 741 (La. 1994). “The policy should be construed as a
whole and one portion thereof should not be construed separately at the expense
of disregarding another.” Id. (citation omitted). “If after applying the other
general rules of construction an ambiguity remains, the ambiguous contractual
provision is to be construed against the insurer who issued the policy and in
favor of the insured.” Id. (citation omitted). With these general interpretive
tools in mind, we turn to the specific legal issue presented on appeal.
      Under Louisiana law, an “insurer’s duty to defend lawsuits against its
insured is broader than its liability for damage claims.” Mossy Motors, Inc. v.
Cameras Am., 898 So. 2d 602, 606 (La. Ct. App. 4 Cir. 2005) (citing Steptore v.
Masco Constr. Co., Inc., 643 So. 2d 1213, 1218 (La. 1994)). “The issue of whether
a liability insurer has the duty to defend a civil action against its insured is
determined by application of the ‘eight-corners rule,’ under which an insurer
must look to the ‘four corners’ of the plaintiff’s petition and the ‘four corners’ of
its policy to determine whether it owes that duty.” Id. “The duty to defend is
determined by the allegations of the plaintiff's petition, with the insurer being
obligated to furnish a defense unless the petition unambiguously excludes
coverage.”   Id. at 606-07 (citations omitted).      “The duty to defend arises
whenever the pleadings against the insured disclose even a possibility of liability
under the policy.” Id. at 607. To determine whether Indian Harbor has a duty



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to defend BestComp in the Williams lawsuit, we must therefore compare the
policy language with Williams L.L.C.’s state court petition.
      The policy states that Indian Harbor “has the right and duty to defend any
claim against [BestComp] even if any of the allegations of the claim are
groundless, false or fraudulent.” As stated above, the policy defines a claim as
“a demand for money or services naming [BestComp] arising out of an act or
omission in the performance of professional services.” Here, it is evident that
Williams L.L.C.’s state court petition is properly considered a claim as that term
is defined by the policy. In its petition, Williams L.L.C. names BestComp and
demands money as a result of BestComp’s alleged failure to abide by state notice
requirements in performing its professional services, namely, “providing PPO
discounted rates in connection with Louisiana workers’ compensation
payments.” Because the allegations in the state court petition qualify as a claim
under the policy, Indian Harbor has a duty to defend BestComp in the Williams
lawsuit. Accordingly, we conclude that the district court did not commit legal
error in so holding.
      Not only does Indian Harbor have a duty to defend BestComp, but it is
also required to cover claim expenses. The policy is unambiguous with respect
to Indian Harbor’s contractual obligation to pay claim expenses: “[Indian
Harbor] will pay on behalf of [BestComp] all sums in excess of the deductible
that [BestComp] becomes legally obligated to pay as damages and claim
expenses as a result of a claim” made against BestComp. As this language
makes clear, any claim expenses that arise as a result of the claims made in the




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state court action are therefore also covered by the plain terms of the policy. The
district court therefore did not err in arriving at the same conclusion.3
       In its brief, Indian Harbor contends that its duty to defend terminated “on
November 12, 2010 when the [d]istrict [c]ourt ruled that [its] policy
unambiguously excludes from coverage the claims asserted in the underlying
putative class action[.]” Throughout its brief, it relies heavily upon this premise
in constructing its arguments. This premise, however, mischaracterizes the
district court’s decision. Contrary to what Indian Harbor suggests, the district
court did not hold that the claims in the Williams lawsuit were outside the scope
of the policy’s coverage. Rather, it unequivocally held that “the plain language
of Indian Harbor’s policy specifically precludes recovery for damages incurred
under section 40.2203.1(G).” Put simply, the district court’s holding addressed
Indian Harbor’s legal obligation to pay damages, not its duty to defend claims
brought against BestComp. Because they are predicated on a faulty premise,
Indian Harbor’s arguments fail to provide a basis for unsettling the district
court’s judgment.4
                                             III.
       Finding no error, we AFFIRM the district court’s judgment. We also
GRANT Williams L.L.C.’s pending motion to be removed as appellee.5


       3
           At various points in its written submissions, Indian Harbor casually suggests that
the terms “damages” and “claim expenses” are “inextricably tied together” and that, as a
result, the district court’s judgment regarding damages also extinguished any duty to pay
claim expenses. Because this argument is presented in a conclusory fashion, we will not
consider it. E.g., United States v. Stalnaker. 571 F.3d 428, 440-41 (5th Cir. 2009) (concluding
that undeveloped arguments that lacked citations to relevant law were waived for inadequate
briefing).
       4
        Not only are Indian Harbor’s arguments based on a faulty premise, but they also pay
short shrift to an important portion of any dispute regarding the interpretation of an
insurance policy: the actual language of the insurance contract.
       5
         In its brief, BestComp asks for damages under Federal Rule of Appellate Procedure
38. Although Indian Harbor’s appeal borders on frivolous, we do not believe it is sanctionable.

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