                                                                         United States Court of Appeals
                                                                                  Fifth Circuit
                                                                                F I L E D
                                                                               October 30, 2003
                    IN THE UNITED STATES COURT OF APPEALS
                                                                            Charles R. Fulbruge III
                             FOR THE FIFTH CIRCUIT                                  Clerk

                              __________________________

                                     No. 03-40110
                                  Summary Calendar
                              __________________________


JUNIOR LEE HILL,
                                                     Plaintiff - Appellant-Cross-Appellee,

versus

STATE FARM LLOYDS, A Lloyds Company,

                                                  Defendant - Appellee-Cross-Appellant.

                 ___________________________________________________

                      Appeals from the United States District Court
                            for the Southern District of Texas
                                    (No. G-01-CV-632)
                 ___________________________________________________


Before JONES, BENAVIDES, and CLEMENT, Circuit Judges.
                *
PER CURIAM:

         This case concerns a dispute over a homeowner’s insurance claim that plumbing

leaks caused damage to the foundation of his home. The policy holder, Junior Lee Hill

(“Hill”), appeals a jury verdict against him on two grounds: (1) that the district court did


         *
        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not be published and is not precedent except under the limited circumstances set forth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.
not properly charge the jury; and (2) that the jury findings were contradictory. Because

Hill has failed to meet the standard for challenging a jury verdict, and because the jury

findings were consistent, we affirm the judgment of the district court.

                            I. FACTS AND PROCEEDINGS:

       In October 1998, Hill renewed his homeowner’s insurance coverage with State Farm

Lloyds (“State Farm”). The policy was a Texas Standard Homeowner’s Policy—Form B

(“Form B”), and contained two sections of coverage: one for the physical dwelling, and one

for personal property. The dwelling section insured “against all risks of physical loss to

the property . . . .” However, in an exclusion section of the policy, loss “caused by settling,

cracking, bulging, shrinkage, or expansion of foundations . . . ” was excluded from

coverage. The personal property section stated an exception to this exclusion, covering

loss caused by leaks or overflow from within a plumbing system.

       During the period that State Farm insured Hill’s home, the foundation of his home

settled into the ground, causing substantial damage to the structure. Also during that the

insured period, Hill’s home sustained plumbing leaks. Hill sought payment for these

damages from State Farm, but State Farm denied his claim. Hill then filed suit in Texas

state court, and State Farm removed to federal court under diversity jurisdiction. Hill

argued to a jury that the plumbing leaks caused the foundation to settle, and consequently,

the policy covered the damaged dwelling. State Farm argued that the settling was caused

by conditions excluded from coverage—not the plumbing leaks.

       Prior to deliberations, the court instructed the jury as follows:


                                              2
    In this case the Plaintiff claims that the damages to his home were caused in
    whole, or in part, by plumbing leaks; the Plaintiff has the burden to prove this
    claim by a preponderance of the evidence. You are hereby instructed that
    damages which result from plumbing leaks are covered by the insurance policy
    issued by State Farm Lloyds.

    The Defendant denies that the damages to Plaintiff’s home were caused in whole,
    or in part, by plumbing leaks. Rather, the Defendant claims that the damages
    were caused in whole, or in part, by other factors which are excluded from
    coverage under the terms of the insurance policy. The Defendant has the burden
    to prove, by a preponderance of the evidence, that the Plaintiff’s damages are
    excluded from coverage.

       The jury answered two questions in determining State Farm’s liability to Hill. The

first question was, “Did a plumbing leak or leaks cause any or all of the damage to Plaintiff

Junior Hill’s home?” The jury answered the question, “No.” The second question was an

inquiry into the amount of money, if any, that would compensate Hill for the costs of

tearing out and replacing the parts of his home necessary to repair his plumbing system.

The jury answered this question: $5,575. The court then denied Hill’s claim for foundation

damages and ordered State Farm to pay Hill the amount.

       Hill appeals this judgment on the grounds that the jury instructions were erroneous,

and that the two jury answers contradict each other.

                              II. STANDARD OF REVIEW

       This Court reviews challenges to jury instructions for abuse of discretion, and will

reverse a judgment only if the charge as a whole “creates substantial and ineradicable

doubt [as to] whether the jury has been properly guided in its deliberations.” FDIC v.

Mijalis, 15 F.3d 1314, 1318-19 (5th Cir. 1994) (internal citations omitted); see also C.P.



                                             3
Interests, Inc. v. California Pools, Inc., 238 F.3d 690 (5th Cir. 2001).

         Hill also challenges the district court’s judgment on the grounds that the court

wrongly applied the law because the jury findings are contradictory. To determine

whether a district court properly applied the law in entering its final judgment, this Court

reviews conclusions of law de novo. Stine v. Marathon Oil Co., 976 F.2d 254, 259 (5th Cir.

1992).

                                      III. DISCUSSION

A. Jury Instruction Challenge

         In challenging the jury instructions, Hill relies heavily on Balandran v. Safeco Ins.

Co., 972 S.W.2d 738 (Tex. 1998). In Balandran, the Texas Supreme Court held that “Form

B covers damage to the insured’s dwelling from foundation movement caused by an

underground plumbing leak.” Id. at 739 (emphasis added). The court held that the

plumbing leak exception to the excluded coverage section also applies to the physical

dwelling section of Form B. Id. at 742. Despite the fact that the exception is written in the

personal property section, Form B covers damage to the dwelling caused by plumbing

leaks. Id.

         Based on this holding, Hill argues that the district court failed to provide reasonable

instruction in the jury charge regarding the fact that plumbing leaks are covered losses.

This argument is puzzling. The district court explicitly explained the Balandrin principle

to the jury as follows: “You are hereby instructed that damages which result from

plumbing leaks are covered by the insurance policy issued by State Farm Lloyds.”


                                                4
Nevertheless, Hill argues that the court led the jury to believe that the exclusion section

applied to damage caused by plumbing leaks. He claims that in explaining State Farm’s

burden of proof with respect to the exclusions, the court failed to state that the exclusions

did not apply to the plumbing leak damage.

       Hill’s argument is insufficient to show that the court’s charge resulted in

“substantial and ineradicable doubt [as to] whether the jury ha[d] been properly guided

in its deliberations.” Mijalis, 15 F.3d at 1318. In explaining State Farm’s burden of proof

to the jury, the court stated that State Farm was denying “that the damages . . . were

caused . . . by plumbing leaks.” Following that sentence, the court further explained that

State Farm was arguing that the damages were caused by “other factors which are

excluded from coverage under the terms of the insurance policy.” (emphasis added).

These two statements make clear that plumbing leaks were not excluded from coverage.

       The only other sentence that the court stated when it explained State Farm’s

exclusionary argument was that State Farm had “the burden to prove . . . that the Plaintiff’s

damages are excluded from coverage.” Viewed alone, this sentence could conceivably

mean that the plumbing leaks were subject to the policy exclusions. However, the context

of the prior cited sentences clarifies that in referring to the damages excluded from

coverage, the court was referring to factors other than plumbing leaks. The only way to

construe this sentence, then, is that plumbing leaks are not excluded from coverage. The

ambiguity that Hill asserts does not rise to the level of “substantial and ineradicable

doubt”. Mijalis, 15 F.3d 1314 at 1318.


                                             5
B. Inconsistent Jury Findings

             Hill contends that the jury returned a contradictory verdict in finding both that (1)

the plumbing leaks beneath the structure did not cause “the damage” to his home, and (2)

State Farm owed Hill money for the costs of tearing out parts of his home to access the

leaky plumbing system. Hill argues that if a plumbing system has leaks, it must have

damaged the home; so it must have caused “the damage”.

             The entire dispute in this trial, however, was over the cause of the foundational

damage. In the context of this trial, “the damage” signified the defects resulting from the

foundation settling. Neither the fact that the plumbing system had leaks, nor the fact that

Hill would incur costs in accessing those leaks, imply that those leaks caused the disputed

foundational damage to his home. The findings are not contradictory; the judgment is
         1
valid.

C. Conclusion

             For the foregoing reasons, we AFFIRM the district court’s judgment.




             1
        Because we affirm the judgment, we do not reach the issues raised by State
Farm’s cross-appeal.

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