Insurer's Salvage Auction, Inc. v. State Farm Mutual Automobile Insurance Company et al

Filing 34

ORDER AND REASONS granting 25 Motion for Summary Judgment. Signed by Judge Martin L.C. Feldman on 1/23/2012. (tsf, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
INSURER’S SALVAGE AUCTION, INC.

CIVIL ACTION

v.

NO. 11-879

STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY, ET AL.

SECTION: “F”

ORDER AND REASONS
Before the Court is State Farm’s motion for summary
judgment.

For the reasons that follow, the motion is GRANTED.
Background

Insurer’s Salvage Auction, Inc., the plaintiff, is a broker
of salvaged vehicles and is located in Saint Rose, Louisiana.
The plaintiff had an arrangement with State Farm, beginning in
1996 and continuing through 2008, whereby plaintiff would
warehouse and attempt to sell salvaged vehicles for State Farm in
return for compensation.
series of contracts.

The arrangement was embodied in a

Plaintiff asserts that State Farm breached

their contract when State Farm delivered salvaged vehicles to
plaintiff’s competitors after Hurricanes Katrina and Rita in
2005, and Hurricane Gustav in 2008.

Plaintiff says that State

Farm violated the exclusivity provision in their contract, which
obligated State Farm to deliver salvaged vehicles only to
plaintiff.
Claiming breach of contract, negligent misrepresentation and
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a violation of the Louisiana Unfair Trade Practices Act,
plaintiff sued State Farm in state court and six State Farm
employees.

The case is before the Court pursuant to its

diversity jurisdiction.

By Order and Reasons dated June 20,

2011, this Court denied the plaintiff’s motion to remand, and
dismissed the individual defendants as having been fraudulently
joined.
State Farm now moves for summary judgment on the plaintiff’s
claims.
II. Analysis
Federal Rule of Civil Procedure 56 instructs that summary
judgment is proper if the record discloses no genuine issue as to
any material fact such that the moving party is entitled to
judgment as a matter of law.

No genuine issue of fact exists if

the record taken as a whole could not lead a rational trier of
fact to find for the non-moving party.

See Matsushita Elec.

Indus. Co. v. Zenith Radio., 475 U.S. 574, 586 (1986).

A genuine

issue of fact exists only "if the evidence is such that a
reasonable jury could return a verdict for the non-moving party."
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
The Court emphasizes that the mere argued existence of a
factual dispute does not defeat an otherwise properly supported
motion.

See id.

Therefore, "[i]f the evidence is merely

colorable, or is not significantly probative," summary judgment

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is appropriate.

Id. at 249-50 (citations omitted).

Summary

judgment is also proper if the party opposing the motion fails to
establish an essential element of his case.
Catrett, 477 U.S. 317, 322-23 (1986).

See Celotex Corp. v.

In this regard, the non-

moving party must do more than simply deny the allegations raised
by the moving party.

See Donaghey v. Ocean Drilling &

Exploration Co., 974 F.2d 646, 649 (5th Cir. 1992).

Rather, he

must come forward with competent evidence, such as affidavits or
depositions, to buttress his claims.

Id.

Hearsay evidence and

unsworn documents do not qualify as competent opposing evidence.
Martin v. John W. Stone Oil Distrib., Inc., 819 F.2d 547, 549
(5th Cir. 1987).

Finally, in evaluating the summary judgment

motion, the Court must read the facts in the light most favorable
to the non-moving party.

Anderson, 477 U.S. at 255.
III. Discussion

The Court grants State Farm’s motion for summary judgment
because the plain language of the 2004 Agreement between the
parties does not make the relationship exclusive.
As the Fifth Circuit has held:
Under Louisiana law, the interpretation of an
unambiguous contract is an issue of law for
the court. See Texas E. Transmission Corp. v.
Amerada Hess Corp., 145 F.3d 737, 741 (5th
Cir. 1998). "When the words of the contract
are clear and explicit and lead to no absurd
consequences, no further interpretation may
be made in search of the parties' intent."
La. Civ. Code Ann. art. 2046 (West 1995). "A
contract provision is not ambiguous where
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only one of two competing interpretations is
reasonable or merely because one party can
create a dispute in hindsight." Texas E.
Transmission Corp., 145 F.3d at 741 (citing
Lloyds of London v. Transcontinental Gas Pipe
Line Corp., 101 F.3d 425, 429 (5th Cir.
1996)). In the context of contract
interpretation, only when there is a choice
of reasonable interpretations of the contract
is there a material fact issue concerning the
parties' intent that would preclude summary
judgment.
Amoco Prod. Co. v. Texas Meridian Resources Exploration, Inc.,
180 F.3d 664, 668-669 (5th Cir. 1999).
The parties agree that their 2004 Agreement governs the
period that Hurricanes Katrina and Rite struck southeastern
Louisiana.

Further, the parties agree on which provisions of the

contract are relevant for determining whether the contract was
exclusive.

The only dispute, therefore, is over the language.

Although plaintiff urges that the contractual language is
ambiguous and therefore creates a genuine issue of material fact
that precludes summary judgment, the Court disagrees.

The plain

language of the contract is clear, susceptible to only one
reasonable interpretation, and unambiguous:
This Agreement outlines the understanding
between State Farm Mutual Automobile
Insurance Company, and its subsidiary and
affiliated companies (hereinafter “State
Farm”), and Insurer’s Salvage Auction, Inc.
(hereinafter “Processor”), with offices
located at 406 Almedia Road, St. Rose,
Louisiana, wherein Processor has agreed to
offer for sale to qualified salvage buyers,
certain salvage vehicles and other salvage
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items that have come into the possession of
State Farm in the course of State Farm
handling its business.
Designated Geographic Area. This Agreement
applies to the geographic area, described as
follows: Parishes of Orleans, Jefferson,
Plaquemines, St. Bernard, St. Charles, St.
John the Baptist, and Terrebonne. Processor
and State Farm agree that salvage vehicles
that are physically located within this
geographic area are subject to this
Agreement.
Nowhere in the provisions that the parties cite do any words
indicating exclusivity appear.

Neither does the Court’s reading

of the language lead to any absurd consequences.

Mindful of the

Fifth Circuit’s mandate, the Court need not make inquiry into the
parties’ intent.1
Accordingly, IT IS ORDERED: State Farm’s motion is GRANTED.

1

This includes Robert Shearman’s affidavit, submitted by the
plaintiff. See, e.g., Campbell v. Sonat Offshore Drilling, 979
F.2d 1115, 1127 (5th Cir. 1992) (where a contract is unambiguous,
an affidavit that qualifies as parol evidence is inadmissible);
Superior Landscape & Maintenance, Inc. v. Chevron Pipe Line
Company, No. 06-4639, 2007 U.S. Dist. LEXIS 49385, at * 9 (E.D.
La. July 6, 2007) (“Because the policy is not ambiguous, the
Court is not obligated to examine extrinsic evidence to ascertain
the reasonable expectations of the parties when they entered the
contract.”).
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New Orleans, Louisiana, January 23, 2012.

______________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE

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