                IN THE UNITED STATES COURT OF APPEALS

                         FOR THE FIFTH CIRCUIT


                         ____________________

                             No. 01-30081

                           Summary Calendar
                         ____________________


     PACIFIC INSURANCE COMPANY, LIMITED

                       Plaintiff - Appellee

          v.

     LOUISIANA AUTOMOBILE DEALERS ASSOCIATION

                       Defendant - Cross Defendant - Appellant

          and

     ROBERT C ISRAEL

                       Defendant - Appellant

          v.

     BILL WATSON FORD INC; WATSON INVESTMENT INC; BILL WATSON
     NISSAN INC

                       Defendants - Cross Claimants - Appellees

_________________________________________________________________

          Appeals from the United States District Court
               for the Middle District of Louisiana
                           No. 97-CV-676
_________________________________________________________________
                          August 3, 2001

Before KING, Chief Judge, and WIENER and DENNIS, Circuit Judges.

PER CURIAM:*

     *
        Pursuant to 5TH CIR. R. 47.5, the court has determined
that this opinion should not be published and is not precedent
     Defendants-Appellants Louisiana Automobile Dealers

Association and Robert C. Israel appeal from the district court’s

order granting summary judgment in favor of Plaintiff-Appellee

Pacific Insurance Company and rescinding two insurance policies.

For the following reasons, we AFFIRM.

               I. FACTUAL AND PROCEDURAL BACKGROUND

     Between 1993 and 1997, Plaintiff-Appellee Pacific Insurance

Company (“Pacific”) issued four insurance policies (collectively,

the Policies”) to the Defendant-Appellant Louisiana Automobile

Dealers Association (“LADA”) covering “Trustees Errors and

Omissions Insurance plus Directors and Officers Liability for

Associations with Self Insurance Funds.”   The original policy

(the “1993-1994 Policy”), which was effective from September 15,

1993 to September 15, 1994, was renewed three times (the renewal

policies are hereinafter referred to, respectively, as the “1994-

1995 Policy,” the “1995-1996 Policy,” and the “1996-1997

Policy”).   Relevant to our analysis, each application for renewal

of a Policy asked, inter alia, the following two questions: (1)

“During the last 5 years, has any claim been made, or is any

claim now pending, against the Association, it’s [sic]

Directors/Trustees or Officers?” and (2) “Is the Association

aware of any circumstances or any allegations or contentions

which may result in a claim being made against the Association or


except under the limited circumstances set forth in 5TH CIR. R.
47.5.4.

                                 2
any of its past or present Directors, Officers, Trustees or

Employees?”   Furthermore, each application stated: “Signing this

application does not bind the Underwriters to provide this

insurance, but it is agreed that this application shall be made a

part of this certificate and shall be the basis of the contract

should the certificate be issued.”   On each application for

renewal, “No” was checked in response to these questions, and

each application was signed by Defendant-Appellant Robert C.

Israel in his role as Executive Vice President of LADA.1

     Meanwhile, on July 14, 1994, a class action complaint,

“Alfred Ghoram, Eva Faye Agnelly, and All Others Similarly

Situated Versus Louisiana Automobile Dealers Association, Inc.,

Spinato-Chrysler-Plymouth, Inc., Marshall Bros. Lincoln-Mercury,

Inc., and All Others Similarly Situated” (“the Ghoram suit”), was

filed in Louisiana state court alleging that LADA and other

defendants had improperly passed an ad valorem tax on to

consumers who had purchased automobiles from the defendants.    A

similar class action complaint, “Billy Cook and Barry Kuperman

Versus Powell Buick, Inc., Hub City Ford, Inc., and Louisiana

Automobile Dealers Association, Inc.” (“the Cook suit”), was

filed in federal district court on September 20, 1994.     Neither

     1
        The 1994-1995 Policy, the 1995-1996 Policy, and the
1996-1997 Policy were signed by Israel on July 18, 1994; July 25,
1995; and July 25, 1996 respectively. The renewal forms were
actually filled out by Milda Porter, LADA’s bookkeeper, under the
direction of Israel. Porter testified that Israel told her to
answer “No” to both of the questions.

                                 3
of the complaints specifically named any past or present officer

or director of LADA as a defendant, nor was either complaint ever

amended to do so.2   Discovery on the merits in these lawsuits

began in the late spring or early summer of 1996, and as part of

discovery, the depositions of several past presidents of LADA and

the deposition of Israel were taken.3   During the course of those

depositions, the plaintiffs’ counsel offered that it was likely

that past presidents would be included individually in the

lawsuits.   On November 8, 1996, counsel for LADA notified Pacific

of that possibility by letter.   The parties to the lawsuits

decided to resolve their disputes by mediation.   Pacific did not

participate in the mediation or contribute to the defense or

settlement of the Cook or Ghoram suits.   A settlement agreement

was eventually reached, which included a release by the

plaintiffs of all claims contained in both the Cook and Ghoram

suits against LADA and its directors and officers.

     On July 9, 1997, Pacific filed suit against LADA in federal

district court seeking a declaratory judgment that Pacific had no

liability to LADA or any other insureds under the Policies for


     2
        According to the affidavit of Claude Reynaud, an
attorney at the firm hired to represent LADA in the Ghoram and
Cook suits, the plaintiffs and the defendants in those suits
informally agreed to pursue the litigation in the Cook suit.
While this agreement may have been informal, we note that the
Ghoram plaintiffs did formally intervene in the Cook suit.
     3
         Israel was deposed on July 14, 1995, and on August 23,
1995.

                                 4
any costs of defense or indemnity for the claims presented in the

Cook and Ghoram suits and seeking to rescind ab initio the 1996-

1997 Policy.   On August 28, 1997, Pacific amended its complaint

to add Israel as a codefendant.4

     On September 5, 1997, LADA and Israel answered Pacific’s

complaint and filed a counterclaim against Pacific alleging that

Pacific had a duty to defend, indemnify, and reimburse LADA and

its directors, officers, trustees, and members for the costs and

expenses related to the Cook and Ghoram suits.   LADA and Israel

alleged further that Pacific was liable for breach of contract,

bad faith, and unfair trade, insurance, and claim settlement

practices.5




     4
        Pacific also added Watson Investment, Inc., Bill Watson
Ford, Inc., and Bill Watson Nissan, Inc., two automobile
dealerships and their parent corporation (hereinafter referred to
collectively as “Watson”), as codefendants on August 28, 1997.
Although Watson has been a party to this suit since that date, it
did not file an Appellee’s brief in this appeal. It was notified
of its failure to do so on April 30, 2001, and has not responded
to that notification. For that reason, we find that we need not
include a recitation of the various counterclaims, cross-claims,
and motions for summary judgment involving Watson.
     We do note, however, that on May 24, 2000, the district
court granted Pacific’s summary judgment motion against Watson,
finding in part that the 1995-1996 Policy was subject to
rescission under Louisiana Revised Statute § 22:619. Although
§ 22:619 is the statute at issue in this appeal as well, this
particular motion for summary judgment was filed against only
Watson, and the district court’s judgment was not appealed.
     5
        On October 10, 1997, LADA and Israel filed a Motion to
Dismiss or, in the Alternative, to Stay on the Grounds of
Abstention, which was denied by the district court on June 11,
1998.

                                   5
     On September 29, 1999, Pacific moved for partial summary

judgment against LADA and Israel.     Pacific asserted that the

Policies required as a condition precedent of coverage that LADA

notify Pacific in writing of any claims filed against LADA.

Pacific contended that, because the uncontested material facts

showed that LADA failed to notify Pacific timely of claims filed

against LADA, coverage was barred as a matter of law under the

plain language of the contract.   Pacific sought partial summary

judgment (i.e., a finding that LADA did not have coverage for

claims made against it in the Ghoram and Cook suits and a

dismissal of LADA’s and Israel’s counterclaims against it).       On

November 29, 1999, the district court granted Pacific’s motion

for partial summary judgment, entered a declaratory judgment in

favor of Pacific finding that Pacific had no obligation to LADA

or its officers and directors regarding defense costs or

indemnification of claims arising out of the Ghoram and Cook

suits, and dismissed LADA’s and Israel’s counterclaims with

prejudice.

     On January 7, 2000, the district court certified the

November 29, 1999 judgment as final.     LADA and Israel appealed

the judgment, which was affirmed by this court on July 12, 2000.

See Pac. Ins. Co. v. La. Auto. Dealers Ass’n, Inc., 226 F.3d 643

(5th Cir. 2000) (table decision).

     Relevant to this appeal, Pacific moved for summary judgment

on the remainder of its claims against LADA and Israel on July

                                  6
11, 2000.   Pacific sought to rescind the 1995-1996 and the 1996-

1997 Policies based on material misrepresentations made in the

renewal applications.   Pacific asserted that the circumstances

surrounding the signing and submission of the applications for

the 1995-1996 and the 1996-1997 Policies established that LADA

and Israel had made material misrepresentations with the intent

to deceive, and therefore, those Policies were subject to

rescission under Louisiana Revised Statute § 22:619.

Specifically, Israel signed the respective renewal applications

on July 25, 1995, and July 25, 1996 stating (1) that no claim was

pending or had been made in the last five years against LADA or

its directors or officers and (2) that LADA was not aware “of any

circumstance or any allegations or contentions which [might]

result in a claim being made against the Association or any of

its past or present Directors, Officers, Trustees or Employees,”

even though the Ghoram and Cook suits had been filed in 1994 and

extensive discovery had occurred, including the depositions of

Israel and LADA’s former general counsel.   Further, Pacific noted

that Claude Reynaud, an attorney at the firm retained by LADA to

defend it in the Cook and Ghoram suits, stated that as early as

late spring or early summer of 1996, when the depositions of its

past presidents were taken, LADA was informed that claims would

likely be made against its officers.

     LADA and Israel argued to the district court that genuine

issues of material fact existed as to whether the statements were

                                 7
made with an intent to deceive.   Specifically, LADA and Israel

asserted that Israel had instructed Milda Porter, LADA’s

bookkeeper, to answer “No” to the claims questions because Israel

believed that a loss had to be sustained by LADA before it needed

to be reported as a “claim” in the insurance renewal application.

LADA and Israel contended that, although Israel may have been

incorrect in his assumption, his testimony established that he

did not make a materially false statement to Pacific with the

intent to deceive.

     On August 2, 2000, the district court granted summary

judgment in favor of Pacific and rescinded the 1995-1996 and the

1996-1997 Policies.   The court noted first that LADA and Israel

did not contest that Israel’s misrepresentations were material;

therefore, the district court adopted its prior ruling regarding

the materiality of the statements as the law of the case.

Regarding “intent to deceive,” the district court found that even

if it accepted as true Israel’s assertion — that he believed a

“claim” did not exist against LADA until it had suffered a loss —

Israel could not deny that the suits were, at a minimum,

“circumstances,” “allegations,” or “contentions” that may result

in a claim.   The district court concluded that the only

reasonable assumption that could be drawn from Israel’s execution

of the renewal applications was, therefore, that he recognized

the materiality of the misrepresentations and that he intended to

deceive Pacific.

                                  8
     LADA and Israel timely appeal.



                       II. STANDARD OF REVIEW

     We review de novo the district court’s grant of a motion for

summary judgment, applying the same standard of review as the

district court.   See Martinez v. Bally’s La., Inc., 244 F.3d 474,

476 (5th Cir. 2001).   “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.’”

Evans v. City of Houston, 246 F.3d 344, 347-48 (5th Cir. 2001)

(quoting FED. R. CIV. P. 56(c)).

     “The movant has the burden of showing that there is no

genuine issue of [material] fact.”     Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 256 (1986); see Celotex Corp. v. Catrett, 477

U.S. 317, 325 (1986) (“[T]he burden on the moving party may be

discharged by ‘showing’ — that is, pointing out to the district

court — that there is an absence of evidence to support the

nonmoving party’s case.”).   If the movant meets this burden, “the

nonmovant must go beyond the pleadings and designate specific

facts showing that there is a genuine issue for trial.”     Little

v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).




                                   9
     This court considers the evidence and all reasonable

inferences drawn therefrom in the light most favorable to the

nonmovant.    See Kennedy v. Tangipahoa Parish Library Bd. of

Control, 224 F.3d 359, 365 (5th Cir. 2000).



                            III. ANALYSIS

     LADA and Israel argue that the district court erred in

granting summary judgment in favor of Pacific because Pacific did

not prove that LADA or Israel made material misrepresentations on

the renewal applications with the intent to deceive Pacific.

Specifically, they assert that because Israel testified that he

did not believe a claim existed until there was an actual loss

and because, at the time Israel completed the applications, no

such loss had occurred in either the Ghoram or Cook suits, there

is a genuine issue of material fact regarding whether the

materially false statements were made to Pacific with the intent

to deceive.   They contend that the only evidence offered by

Pacific is the applications themselves, which merely demonstrate

Israel’s error in judgment, not any intent to deceive.

     Pacific, by contrast, avers that the circumstances

surrounding the completion of the renewal applications confirm

that LADA and Israel made material misrepresentations with the

intent to deceive, and therefore, the policies may be voided ab

initio.   Pacific contends that not only were the lawsuits



                                 10
indisputably “claims” when the renewal applications were

submitted, but also that, even if Israel believed that lawsuits

did not become claims until a loss had been sustained, he must

have been aware that the lawsuits could result in a claim, and

therefore, his negative answer to that question shows his intent

to deceive.

     Under Louisiana law, an insurance provider can avoid a

liability insurance contract if an oral or written material

misrepresentation was made by or on behalf of the insured in

negotiating the insurance contract, and if the material

misrepresentation was made with the intent to deceive.     See LA.

REV. STAT. ANN. § 22:619 (West 1995)6; Darby v. Safeco Ins. Co. of

Am., 545 So. 2d 1022, 1025-26 (La. 1989); see also FDIC v. Duffy,

     6
         Louisiana Revised Statutes § 22:619 provides:

      A. Except as provided in Subsection B of this Section
     and R.S. 22:692, and R.S. 22:692.1, no oral or written
     misrepresentation or warranty made in the negotiation
     of an insurance contract, by the insured or in his
     behalf, shall be deemed material or defeat or void the
     contract or prevent it attaching, unless the
     misrepresentation or warranty is made with the intent
     to deceive.
      B. In any application for life or health and accident
     insurance made in writing by the insured, all
     statements therein made by the insured shall, in the
     absence of fraud, be deemed representations and not
     warranties. The falsity of any such statement shall not
     bar the right to recovery under the contract unless
     such false statement was made with actual intent to
     deceive or unless it materially affected either the
     acceptance of the risk or the hazard assumed by the
     insurer.

LA. REV. STAT. ANN. § 22:619 (West 1995).

                                 11
47 F.3d 146, 151 (5th Cir. 1995) (“Under Louisiana law, an

insurance policy is null from its inception if a material ‘oral

or written misrepresentation or warranty [is] made in the

negotiation of an insurance contract, by the insured in his

behalf . . . [if] the misrepresentation or warranty is made with

the intent to deceive.’” (alterations in original) (quoting Mazur

v. Gaudet, 826 F. Supp. 188, 193 (E.D. La. 1992))); Breaux v.

Bene, 95-1004 (La. App. 1 Cir. 12/15/95), 664 So. 2d 1377, 1380.

     The insurer has the burden of proving both that the insured

misrepresented a material fact and that he did so with the intent

to deceive.   See Darby, 545 So. 2d at 1026; Cousin v. Page, 372

So. 2d 1231, 1233 (La. 1979); see also Wohlman v. Paul Revere

Life Ins. Co., 980 F.2d 283, 285-86 (5th Cir. 1992).   On appeal,

LADA and Israel do not challenge the district court’s finding

that the misrepresentations were material, only that they were

made with the intent to deceive.

     We recognize that cases which turn on state of mind are

rarely appropriate for summary judgment.   See Guillory v. Domtar

Indus. Inc. v. John Deere Co., 95 F.3d 1320, 1326 (5th Cir. 1996)

(“[S]ummary judgment is rarely proper when an issue of intent is

involved.”); Bodenheimer v. PPG Indus., Inc., 5 F.3d 955, 956

n. 3 (5th Cir. 1993) (“[W]hen state of mind is at issue, summary

judgment is less fashionable because motive or intent is

inherently a question of fact which turns on credibility.”); Krim

v. BancTexas Group, Inc., 989 F.2d 1435, 1449 (5th Cir. 1993)

                                12
(“We are not unmindful of the fact that cases which turn on state

of mind are often inappropriate for resolution at the summary

judgment stage.”); Pryor v. State Farm Mut. Ins. Co., No. 95-187

(La. App. 3 Cir. 8/30/95), 663 So. 2d 112, 114 (“[A] motion for

summary judgment ‘ . . . is rarely appropriate for a

determination based on subjective facts such as intent, motive,

malice, knowledge or good faith.’” (quoting Penalber v. Blount,

550 So. 2d 577, 583 (La. 1989))).

     However, “the presence of an intent issue does not preclude

summary judgment: the case must be evaluated like any other to

determine whether a genuine issue of material fact exists.”

Guillory, 95 F.3d at 1326; Bodenheimer, 5 F.3d at 956 n.3; Pryor,

663 So. 2d at 114 (“[E]ven though the granting of a summary

judgment based on an intent, malice or good faith issue may be

rare, it can be done when there is no issue of material fact

concerning the pertinent intent, malice, or good faith.

Accordingly, when the evidence submitted on the motion leaves no

relevant, genuine issue of fact, and when reasonable minds must

inevitably conclude that the mover is entitled to judgment on the

facts before the court, a motion for summary judgment should be

granted.” (citations omitted)).

     Because summary judgment is not well suited to cases

involving state of mind,

     the court must be vigilant to draw every reasonable
     inference from the evidence in the record in a light
     most flattering to the nonmoving party. Summary

                                  13
     judgment, to be sure, may be appropriate, “[e]ven in
     cases where elusive concepts such as motive or intent
     are at issue, . . . if the nonmoving party rests merely
     upon conclusory allegations, improbable inferences, and
     unsupported speculation.”

Int’l Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257, 1266 (5th

Cir. 1991) (alterations in original) (quoting Medina-Munoz v.

R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir. 1990)); see

also Guillory, 95 F.3d at 1326.

     Courts in Louisiana allow an insurer to carry its burden of

proof on the issue of intent to deceive based on an examination

of the surrounding circumstances.      See Coregis Ins. Co. v. Bell,

No. CIV. A. 96-2502, 1997 WL 335594, at *3 (E.D. La. June 17,

1997).

     Because of the difficulties inherent in proving that a
     person acted with the intent to deceive, the courts
     have lightened somewhat the insurer’s burden by
     considering the surrounding circumstances in
     determining whether the insured knew that
     representations made to the insurer were false: Intent
     to deceive must be determined from surrounding
     circumstances indicating the insured’s knowledge of the
     falsity of the representations made in the application
     and his recognition of the materiality of his
     misrepresentations, or from circumstances which create
     a reasonable assumption that the insured recognized the
     materiality.

Darby, 545 So. 2d at 1026 (internal quotations omitted) (quoting

Cousin, 372 So. 2d at 1233); see also Breaux, 664 So. 2d at 1380

(using surrounding circumstances to determine existence of intent

to deceive on summary judgment); Pryor, 663 So. 2d at 114 (same).

     LADA and Israel suggest that Israel’s deposition testimony

creates an issue of material fact as to whether the

                                  14
misrepresentations were made with the intent to deceive, thus

precluding summary judgment.   We disagree.   Israel testified at

his deposition:

     I’m not an expert in the field of insurance and I would
     interpret that as a claims pending to be -- you know,
     my experience with insurance quite frankly is more in
     the area of automobile accidents or liability or
     something like that.
          And to me, a claims pending would be a claim, a
     loss. And the claim -- the only one I have ever filed
     for in my experience with insurance has been an
     automobile accident, or I had a flood in my house at
     one time. And I believe that, you know, it has always
     been my assumption that you had to have a loss before
     you could file a claim.
          Since then I have -- it’s become clear to me that,
     you know, the whole area of defense is something that
     we are here at issue about, but that was not my
     specific knowledge or understanding.
          It just didn’t come into my thought process, about
     applying for defense. And what I understood is, as
     long as -- as long as this case was open and being
     litigated and had not -- there had been no claim
     against LADA, we had no loss and thereby there was no
     claim to make to you. Because if we are innocent in
     the claim, we had no loss and there wouldn’t be a
     claim.

This excerpt of Israel’s deposition testimony does not reveal a

material question of fact such that summary judgment would be

precluded.

     In addition to asking whether any claim had been made or was

pending against LADA or its Directors, Trustees, or Officers, the

renewal applications ask: “Is the Association aware of any

circumstances or any allegations or contentions which may result

in a claim being made against the association or any of its past

or present Directors, Officers, Trustees or Employees?”   We hold


                                15
that the circumstances surrounding Israel’s negative answer to

this question on the renewal applications indicate his

“‘knowledge of the falsity of the representations made in the

application and his recognition of the materiality of his

misrepresentations,’” Darby, 545 So. 2d at 1026 (quoting Cousin,

372 So. 2d at 1233), or, at a minimum, indicate “‘circumstances

which create a reasonable assumption that the insured recognized

the materiality.’”   Id. (quoting Cousin, 372 So. 2d at 1233).

     This conclusion is based on the following facts.    Israel

signed the renewal form for the 1995-1996 Policy on July 25,

1995.   At that time, Israel knew that two lawsuits had been filed

against LADA in 1994.   He himself had been deposed regarding the

Cook suit a mere eleven days before he signed the renewal form.

Although Israel stated that he believed that a claim did not

exist until a judgment was entered against a party, he also

testified that he considered the Cook suit to be a “charge,” a

“complaint,” an “assertion,” or an “allegation.”    Additionally,

Israel admitted that the inventory-tax (i.e., the ad valorem tax)

issue was the overriding legal issue facing LADA.   Finally,

Reynaud stated that it was during the depositions of the past

presidents of LADA for the Cook suit, which occurred in the late

spring or early summer of 1996, that “plaintiff’s counsel offered

that it was likely that these past presidents would be included

in the lawsuit individually.”



                                16
     All of the above “surrounding circumstances” were also

present at the time Israel signed the renewal application for the

1996-1997 Policy.    Additionally, by the time he signed this

renewal application, Israel had been deposed for the Cook suit a

second time on August 23, 1995.

     Israel himself noted that, while he did not consider the

lawsuits to be “claims,” they could be referred to as

“allegations.”    The surrounding circumstances support as a matter

of law that Israel recognized the materiality of the

misrepresentation.    Therefore, we agree with the district court

that Israel made material misrepresentations with the intent to

deceive and that Pacific is entitled to summary judgment.



                           IV. CONCLUSION

     For the foregoing reasons, we AFFIRM the judgment of the

district court.




                                  17
