                                                                 United States Court of Appeals
                                                                          Fifth Circuit
                                                                         F I L E D
                      UNITED STATES COURT OF APPEALS
                           FOR THE FIFTH CIRCUIT                        September 21, 2006

                                                                      Charles R. Fulbruge III
                                                                              Clerk
                                  No. 05-31043



                           NOSERY MARK ABRAHAM,

                                                           Plaintiff-Appellee,

                                     VERSUS


         STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY,

                                                           Defendant-Appellant.



             Appeal from the United States District Court
                 For the Middle District of Louisiana


Before DAVIS, BARKSDALE, and DeMOSS, Circuit Judges.

DeMOSS, Circuit Judge:

     Defendant-Appellant State Farm Mutual Automobile Insurance

Company (“State Farm”) appeals the district court’s entry of

judgment and award of a statutory penalty, attorney’s fees, and

interest in    a     dispute   arising   out     of   an   automobile     accident

involving an uninsured motorist.         After conducting a choice-of-law

analysis, the district court applied the substantive law of the

State of Louisiana in reaching its conclusion.                See LA. REV. STAT.

ANN. § 22:680 (discussing uninsured motorist coverage).                 State Farm

challenges     the     district     court’s      application     of      Louisiana

substantive    law,    arguing    that   under    Louisiana’s    choice-of-law
provisions, Mississippi substantive law must apply instead.               We

agree with State Farm and accordingly reverse the district court’s

order and render judgment for State Farm.

                                       I.

     Nosery Abraham is retired, is under ongoing medical care, and

spends part of the year at his residence in Mississippi and part of

the year living with his daughter in Louisiana.                 He holds a

Louisiana driver’s license but is domiciled in Mississippi.               The

district court concluded that Abraham was a resident of both

Louisiana and Mississippi.         Abraham maintains he is solely a

Louisiana resident, but he has not cross-appealed.

     On January 8, 2002, Abraham was driving his vehicle in Baton

Rouge, Louisiana when he was “negligently rear-ended”1 by a vehicle

driven by an uninsured driver, Jeremy K. Barden.            Barden carried a

Georgia driver’s license, and his vehicle was licensed in Georgia.2

Abraham’s vehicle was insured by a State Farm policy issued in

Mississippi by a Mississippi agent.              Following the accident,

Abraham   submitted   a   claim   to    State   Farm   in   Mississippi   for

uninsured/underinsured motorist (“UM”) benefits under his policy.

State Farm transferred the processing of the claim multiple times,


     1
      This is the term used by the district court in its orders.
     2
      The district court suggested in its June 19, 2003 order on
Abraham’s motion for declaratory judgment that Barden was a
Georgia resident. Later in its May 26, 2005 order, and without
explanation or discussion of additional facts, the court declared
Barden a resident of Louisiana.

                                       2
but it ultimately landed in a Louisiana State Farm office after

Abraham filed suit in Louisiana state court in October 2002.

      Believing Barden to be at fault, and believing that State Farm

acted with bad faith in connection with its handling of the claim,

Abraham sought recovery of damages resulting from the accident and

also statutory penalties and attorney’s fees.              State Farm timely

removed the action to federal court on the basis of diversity

jurisdiction.

      Abraham moved for declaratory judgment, requesting the court

to    determine    whether    the   substantive      law   of    Louisiana   or

Mississippi governed his claims.          After analyzing the parties’

choice-of-law arguments, the district court concluded that the

substantive law of Louisiana applied.               State Farm subsequently

moved for partial summary judgment on Abraham’s bad faith claim as

well as on all claims made under Mississippi law (as a result of

the   court’s     ruling   that   Louisiana   law    applied).      The   court

dismissed the Mississippi claims, but denied summary judgment on

the bad faith claim.

      Prior to trial, State Farm paid Abraham the policy limits of

his UM policy plus interest (totaling over $100,000).             As a result,

only the bad faith claim remained and proceeded to a bench trial.

Following trial, and while the matter was under advisement, the

Louisiana Supreme Court issued its decision in Champagne v. Ward,

893 So. 2d 773 (La. 2005), which addressed conflicts of law in the



                                      3
context of an uninsured/underinsured motorist coverage dispute. In

light of that decision, the court requested supplemental briefing

on the issue of applicable law.

      The district court then entered its Findings of Fact and

Conclusions      of    Law    After    Trial,    concluding      that   Louisiana

substantive law applied and awarding Abraham $40,000 in statutory

penalties on the bad faith claim. The court also awarded Abraham

prejudgment interest and $23,000 in attorney’s fees.                On September

13, 2005,     the     court    entered   judgment,    and   State   Farm   timely

appealed.       The court granted State Farm’s motion to stay the

execution of judgment pending this appeal.

                                         II.

      State Farm challenges the district court’s conclusion that

Louisiana law applies to this dispute and argues that because

Mississippi law should apply, the court’s rulings and judgment must

be   vacated.       This     Court   reviews    questions   of   law,   including

conflicts of law questions, de novo and district court factual

determinations for clear error. Woodfield v. Bowman, 193 F.3d 354,

358 (5th Cir. 1999).           This Court will reverse a finding of fact

only if it is left with a “definite and firm conviction” that a

mistake has been made.          Justiss Oil Co. v. Kerr-McGee Ref. Corp.,

75 F.3d 1057, 1062 (5th Cir. 1996).

                                      III.

      In a diversity action, this Court applies state substantive


                                          4
law.       Erie R. Co. v. Tompkins, 304 U.S. 64, 78-80 (1938).                 In

deciding which state’s substantive law governs a dispute, we apply

the choice-of-law rules of the state in which the action was filed,

in this case, Louisiana.         See Klaxon Co. v. Stentor Elec. Mfg. Co.,

313 U.S. 487, 496 (1941); Smith v. Waste Mgmt., Inc., 407 F.3d 381,

384 (5th Cir. 2005).

       In Champagne v. Ward, 893 So. 2d 773 (La. 2005), the Louisiana

Supreme Court announced the appropriate choice-of-law analysis for

automobile accident litigation involving parties and insurance

policies from other states.         At the outset, Champagne instructs us

to consider the language of the UM laws from each involved state to

determine if the relevant provisions differ.                Id. at 786.    If the

respective laws are different, then we must conduct a choice-of-law

analysis as codified by Louisiana statute.                  Id. (rejecting the

argument that Louisiana law should automatically apply if the

accident occurs in Louisiana and involves a Louisiana resident).

       In   this   case   the    district     court   found,   and   the   parties

implicitly     agree,     that   there   is    a   true   conflict   between   the

relevant provisions of the two states’ laws: Louisiana law provides

uninsured motorist protection that requires an insurer’s tender

(and permits penalties in the absence of tender)3 while Mississippi


       3
      See LA. REV. STAT. ANN. § 22:658(A)(1) (2006) (“[I]insurers
. . . shall pay the amount of any claim due any insured within
thirty days after receipt of satisfactory proofs of loss from the
insured or any party in interest.”); see also id. § 22:658(B)(1)
(authorizing penalties for certain failures to make timely

                                         5
law does not require tender.    Because the two states’ laws differ,

a statutory choice-of-law analysis is required to identify which

state’s policies would be most seriously impaired if its law were

not applied to this dispute.    See id.

     The Louisiana choice-of-law rules applicable here are found in

Louisiana Civil Code Annotated articles 3515 and 3537.       Article

3515 states that when a case involves contacts with other states,

the applicable law is that “of the state whose policies would be

most seriously impaired if its law were not applied to that issue.”

LA. CIV. CODE ANN. art. 3515.    The factors used to determine the

state whose policies would be most impaired are:

     (1) the relationship of each state to the parties and the
     dispute; and

     (2) the policies and needs of the interstate and
     international systems, including the policies of
     upholding the justified expectations of parties and of
     minimizing the adverse consequences that might follow
     from subjecting a party to the law of more than one
     state.

Id.; see also Dunlap v. Hartford Ins. Co., 907 So. 2d 122, 124 (La.

Ct. App. 1st Cir. 2005).

     Article 3537, intended to be read in conjunction with article

3515, provides “an illustrative list of the factual contacts that

are usually pertinent” in determining which state’s policies would

be most impaired by the failure to apply its law.   LA. CIV. CODE ANN.

art. 3537 cmt. c.   Article 3537 additionally requires us to



payments).

                                  6
     evaluat[e] the strength and pertinence of the relevant
     policies . . . in the light of:

     (1) the pertinent contacts of each state to the parties
     and the transaction, including the place of negotiation,
     formation, and performance of the contract, the location
     of the object of the contract, and the place of domicile,
     habitual residence, or business of the parties;

     (2) the nature, type, and purpose of the contract; and

     (3) the policies referred to in Article 3515, as well as
     the policies of facilitating the orderly planning of
     transactions,   of   promoting   multistate   commercial
     intercourse, and of protecting one party from undue
     imposition by the other.

Id. art. 3537.

     The first step in determinating which state’s law applies

under these sections is to identify the policies involved for each

state.     Id. cmt. d.      State Farm maintains Mississippi law should

apply because of that state’s policy in upholding Mississippi

contracts.      See Champagne, 893 So. 2d at 788; see also Zuviceh v.

Nationwide Ins. Co., 786 So. 2d 340, 346 (La. Ct. App. 1st Cir.

2001) (“The fact that Congress has allowed fifty states to have

their    own    uniform    system    of       regulations      governing   insurance

strongly       suggests    this   is      a       legitimate   public   purpose.”).

Conversely,      Abraham    points     to     Louisiana’s      strong   interest   in

ensuring full recovery of damages by accident victims injured on

its roads.      See Zuviceh, 786 So. 2d at 345; see also Malbreaugh v.

CNA Reinsurance Co., 887 So. 2d 494, 496 (La. Ct. App. 1st Cir.

2004) (noting that the legislative aim of Louisiana’s UM statute is

to promote full recovery of damages incurred by innocent accident

                                              7
victims).    As Champagne recognized, the competing public policy

interests    of    the   states   in   this   situation   are   “profound.”

Champagne, 893 So. 2d at 788. To determine which state’s interests

control in this case we next evaluate them in light of each state’s

relationship to the parties and the dispute.              LA. CIV. CODE ANN.

arts. 3515, 3537, & 3537 cmt. d.

     Pointing out Mississippi’s connections to this dispute, State

Farm emphasizes that Abraham’s insurance policy was issued in

Mississippi, his car was registered and garaged there, the initial

contacts between Abraham and State Farm regarding this claim

originated there, and he was a dual resident of both states.

Further, State Farm contends that contacts with Louisiana were

minimal, including only the location of the accident and the

location of some of Abraham’s post-accident medical treatment.

Accordingly, it argues that Mississippi’s connection with this

dispute is stronger and its policies would be most impaired if

Mississippi law were not applied.

     Abraham argues that Louisiana has a stronger relationship to

the dispute because its Department of Public Safety responded to

the accident, the case involved courts (both state and federal) in

Louisiana, and Abraham received medical treatment in Louisiana.

     In determining which state has the stronger relationship to

the parties and the transaction, we are guided by Champagne.              In

Champagne,   the    Court   found   virtually   the   same   contacts   with


                                       8
Mississippi that are present in this case: (1) the plaintiff was a

Mississippi resident (although in this case the plaintiff was a

dual    resident),       (2)    the        insurance      contract    was    formed    in

Mississippi, (3) the vehicle was garaged and presumably registered

in Mississippi, and (4) the insurance policy was a Mississippi

contract.       Champagne, 893 So. 2d at 789.               Based on these contacts,

the Court held that “application of Louisiana law to the insurance

policy would result in the abrogation of a Mississippi contract.”

Id.

       In considering Louisiana’s countervailing interests, the Court

found that “Mississippi has a more substantial interest in the

uniform application of its laws governing insurance contracts than

Louisiana has in providing an insurance remedy to an out-of-state

resident    .    .   .   .”    Id.         As   a   result,   the    Court   held     that

“Mississippi’s policies will be most seriously impaired if its law

is not applied” and it applied Mississippi law.                      Id.

       Similarly, this Circuit’s opinion in Woodfield v. Bowman, 193

F.3d 354, 361 (5th Cir. 1999), addresses the choice-of-law issue in

the context of a UM claim where the accident occurred in Louisiana,

and coverage arose out of an insurance policy issued in Mississippi

to a Mississippi resident, and that covered a car principally

garaged in Mississippi.              This Court concluded on those facts that

Mississippi’s        “interest        in    uniform       application   of    its     laws

governing       insurance       contracts”          was     more    substantial       than


                                                9
Louisiana’s interest in “providing an insurance remedy to an out-

of-state resident who happens to sustain injury while transitorily

within the state’s borders.”         Id.

       The facts of this case parallel Champagne and Woodfield in

material respects        except   that    Abraham     is   a   dual   resident   of

Louisiana and Mississippi, and he received his medical treatment

primarily in Louisiana.       Abraham argues that because he is a dual

resident and the plaintiffs in Champagne and Woodfield were out-of-

state residents, Louisiana has a closer connection to this case,

and its policy interests are more significant.

       The district court agreed that Abraham’s dual residency weighs

in favor of finding that Louisiana has the greater connection with

this case.     The court cited with approval Baker v. Lazarus, 1992

U.S. Dist. LEXIS 7083 (E.D. La. May 14, 1992) (unpublished).                     In

Baker, the court conducted a choice-of-law analysis and concluded

that    Louisiana   law    applied       because    Louisiana’s       interest   in

protecting     insured     victims       outweighed     the     foreign    state’s

(Mississippi’s) interest in protecting insurance rates.                    Id. at

*25-26.     After a cursory review of the unpublished decade-old

opinion in Baker and contrary authority in Woodfield and Zuviceh,

the district court concluded that Abraham, as a dual resident of

Louisiana and Mississippi, had an expectation of protection by the

laws of Louisiana while in Louisiana, and it held that Louisiana

law applied.


                                         10
     While we agree that Abraham’s residence is a factor to be

considered in making the choice-of-law determination, it is not

determinative.     Champagne, 893 So. 2d at 789; Boutte v. Fireman’s

Fund County Mut. Ins. Co., 930 So. 2d 305, 319 (La. Ct. App. 3d

Cir. 2006).     Abraham’s dual residency does strengthen Louisiana’s

relationship to the dispute to a certain degree, as compared to

Champagne and Woodfield.        However, Louisiana’s policy interest in

tort victims recovering damages is not affected in this case to the

degree that it was in Champagne.          While the decision in Champagne

left the plaintiff with no redress for his injuries,                application

of Mississippi law in this case only forecloses Abraham’s ability

to recover a statutory penalty and attorney’s fees for bad faith

(since State Farm has already paid him the UM policy limit).

     Additionally, Mississippi’s relationship to this dispute and

its policy interest in upholding the justified expectations of

parties to Mississippi insurance contracts is no less significant

here than it was in Champagne and Woodfield.

     Based on consideration of the factors listed in Louisiana

Civil   Code    Annotated   articles      3515   and   3537,   we    hold   that

Mississippi--the state where the insurance policy was negotiated

and formed, where the insured vehicle was licensed and garaged, and

where Abraham had dual citizenship--bears the closer relationship

to the parties and the dispute.              Further, its public policy

interest   in   the   uniform    application     of    its   insurance      laws,


                                     11
considered in light of those factors, is more substantial than

Louisiana’s competing interests as applied in this case.               See

Champagne, 893 So. 2d at 789; Woodfield, 193 F.3d at 361.

                                     IV.

     We   REVERSE   the   district    court’s   determination   to   apply

Louisiana law, and because the parties concede that Mississippi law

does not require a tender payment by an insurance provider, we

RENDER JUDGMENT for State Farm.




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