Erin Burks v. Prudential Insurance Company, et al

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Erin Burks v. Prudential Insurance Company, et al

Doc. 0

Case: 09-30790

Document: 00511174012

Page: 1

Date Filed: 07/15/2010

IN THE UNITED STATES COURT OF APPEALS United States Court of Appeals FOR THE FIFTH CIRCUIT Fifth Circuit FILED
N o . 09-30790 July 15, 2010 Lyle W. Cayce Clerk

E R I N BURKS, P la in t if f -A p p e lla n t , versu s P R U D E N T I A L INSURANCE COMPANY OF NORTH AMERICA, D o in g Business as Prudential Financial Group; L IB E R T Y MUTUAL FIRE INSURANCE COMPANY, D o in g Business as Liberty Mutual Insurance Co., Doing Business as Liberty Mutual; P R I N C I P A L RESIDENTIAL MORTGAGE, INC.; C I T I M O R T G A G E , INC., as a Division of Subsidiary of Citicorp, a Successor-by-Merger to Principal Residential Mortgage, Inc., D e fe n d a n t s -A p p e lle e s .

A p p e a l from the United States District Court fo r the Eastern District of Louisiana N o . 2:06-CV-4173

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Case: 09-30790

Document: 00511174012

Page: 2

Date Filed: 07/15/2010

No. 09-30790 B e fo r e DAVIS, SMITH, and DENNIS, Circuit Judges. J E R R Y E. SMITH, Circuit Judge:*

E r in Burks appeals a summary judgment and the denial of a new trial. Finding no error, we affirm.

I. B u r k s filed a state suit for damages against The Prudential Insurance C o m p a n y of North America d/b/a Prudential Financial Group, Liberty Mutual F ir e Insurance Company, Principal Residential Mortgage, Inc., CitiMortgage, I n c ., Chubb Ins. Co. d/b/a Vigilant Insurance Company, and her agent, Jay Trus h e im , in July 2006, alleging property casualties sustained during Hurricane K a t r in a and other related injuries during that time period. Burks alleged that d e fe n d a n t s failed to obtain and renew flood insurance for her property, breached a forbearance agreement relating to her mortgage payments, and failed to notify h e r of an insurance lapse before the hurricane. The case was removed to federal c o u r t under federal question jurisdiction. D e fe n d a n t s argue that the closing documents show no flood insurance was e v e r required. They contend that there was no detrimental reliance, that no forb e a r a n c e agreement was reached, and that Burks's insurance had plainly lapsed b e fo r e the hurricane. The district court granted summary judgment for defendants on all claims. I t found that the defendants did not owe Burks a duty to escrow and pay for flo o d insurance on her mortgaged property. The court also granted summary ju d g m e n t to defendants on the forbearance issue, finding no legally enforceable

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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Case: 09-30790

Document: 00511174012

Page: 3

Date Filed: 07/15/2010

No. 09-30790 fo r b e a r a n c e agreement. The court held that Burks's Standard Flood Insurance P o lic y ("SFIP") had expired prior to Hurricane Katrina, so summary judgment w a s appropriate. Lastly, the court dismissed the claims Burks attempted to ass e r t against Principal Residential Mortgage, which ceased to exist following a m e r g e r with CitiMortgage in January 2005.

II. W e review a summary judgment de novo. Sandstad v. C.B. Richard Ellis, I n c ., 309 F.3d 893 (5th Cir. 2002). Summary judgment "should be rendered if t h e pleadings, the discovery and disclosure materials on file, and any affidavits s h o w that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c)(2). The nonm o v in g party must come forward with specific facts showing a genuine issue for t r ia l. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986). Where the record taken as a whole could not lead a rational trier of fact to find fo r the nonmoving party, summary judgment is appropriate. Id. We review the denial of a motion for new trial for abuse of discretion. Marcel v. Placid Oil Co., 11 F.3d 563, 568 (5th Cir. 2004) (citing Brunnemann v . Terra Int'l, Inc., 975 F.2d 175, 177 (5th Cir. 1992)). "The general rule is that a district court's denial or grant of a new trial is within its discretion and is ord in a r ily nonreviewable save for an abuse of that discretion or misapprehension o f the law." Evers v. Equifax, Inc., 650 F.2d 793, 796 (5th Cir. Unit B July 1981).

III. T h e district court's finding that CitiMortgage owed Burks no legal duty to p a y premiums for flood insurance is correct. Even assuming Burks's intent to p u r c h a s e flood insurance, the final, signed contract specifically excluded flood ins u r a n c e . That contract included no duty for CitiMortgage to procure, maintain, 3

Case: 09-30790

Document: 00511174012

Page: 4

Date Filed: 07/15/2010

No. 09-30790 e s c r o w for, or pay premiums for flood insurance. To support her argument, B u r k s points to three pre-closing documents: two estimates prepared by ALS, a t h ir d party mortgage broker, and a flood insurance application prepared by B u r k s and ALS. But Burks's application for flood insurance was not accepted; t h e final, signed closing documents show no flood insurance. Thus, no contract fo r flood insurance was formed. Additionally, the pre-closing documents were prepared by ALS, not the d e fe n d a n t s . The record makes it plain that ALS was not acting as the defend a n ts ' agent. Detrimental reliance requires a representation to be made by the d e fe n d a n t or his agent.1 Because no such representation was made, Burks's detr im e n ta l-r e lia n c e argument must fail. Even assuming, arguendo, that such a r e p r e s e n t a t io n was made, Burks's reliance on that representation would have b e e n unreasonable. She had several documents showing no flood insurance was in effect. Similarly, Burks's argument for a forbearance is legally inaccurate. In her b r ie f, Burks alleges an oral forbearance agreement. Under Louisiana law, howe v e r , only a written forbearance agreement has legal effect.2 T h e district court correctly dismissed the suits against Prudential. CitiM o r t g a g e assumed all of Principal's rights, interests, and obligations following it s acquisition of Principal, which no longer exists and cannot be sued in its own r ig h t .3 Burks offers no evidence to the contrary.
See Audler v. CBC Innovis Inc., 519 F.3d 239, 254 (5th Cir. 2008) (quoting Suire v. Lafayette City-Parish Consol. Gov't, 907 So. 2d 37 (La. 2005)) (requiring appellant to prove (1) a representation by conduct or word, (2) justifiable reliance, and (3) a change in one's position as a result of that reliance). "La. Rev. Stat. Ann. § 6:1122 precludes an action based on a credit agreement, including a promise to forbear, unless that agreement is in writing." Knight v. Magee, 835 So. 2d 636 (La. App. 1st Cir. 2002).
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Offshore Logistics Servs., Inc. v. Arkwright-Boston Mfg. Mut. Ins., 469 F. Supp. 1099, (continued...)

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Case: 09-30790

Document: 00511174012

Page: 5

Date Filed: 07/15/2010

No. 09-30790 B u r k s has given us no reason to believe that the SFIP had not lapsed befo r e the hurricane. As a matter of law, the SFIP became effective on the date of t h e loan closing, June 23, 2003.4 The renewal terms are pellucid, and it is und is p u t e d that the renewal premium was never paid. The one-year policy expired o n June 23, 2004, well before Burks contacted Liberty Mutual/Prudential about t h e hurricane damage suffered in 2005. Summary judgment for the defendants w a s appropriate. Finally, the district court correctly denied a new trial. There has been no c h a n g e in intervening law, no new evidence is available, and there is no need to c o r r e c t an obvious error of law or fact or to prevent injustice. See Schiller v. Phys ic ia n s Res. Group, Inc. 342 F.3d 563 (5th Cir. 2003). A F F IR M E D .

(...continued) 1102 (E.D. La. 1979) ("The assets and liabilities of merging corporations are the responsibility of the surviving corporation."). 44 C.F.R. 61.11(b) ("Where the initial purchase of flood insurance is in connection with the making, increasing, extension, or renewal of a loan, the coverage with respect to the property which is the subject of the loan shall be effective as of the time of the loan closing, provided the written request for the coverage is received by the NFIP and the flood insurance policy is applied for and the presentment of payment of premium is made at or prior to the loan closing.") (emphasis added).
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