Doughten v. State Farm Mutual

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_______________
m 01-10269
_______________
MARY DOUGHTEN,
Plaintiff-Appellant,
VERSUS
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY,
Defendant-Appellee.
_________________________
Appeal from the United States District Court
for the Northern District of Texas
(4:00-CV-1799)
_________________________
February 6, 2002
Before SMITH and DEMOSS, Circuit Judges,
and LAKE, District Judge.*
PER CURIAM:**
This appeal is intended to present two ques-
tions: (1) Can a district court decide legal
issues at summary judgment? (2) Does the
Texas Insurance Code permit an insurance
contract to exclude coverage for an insured
party’s bodily injuries sustained while riding in
an uninsured family member’s car? We
conclude that it is unnecessary to reach either
issue, because the plaintiff, Mary Doughten,
* District Judge of the Southern District of
Texas, sitting by designation.
** 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determined that this opinion should not be
published and is not precedent except under the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.
(continued...)
**(...continued)
47.5.4.

-- 1 of 5 --

2
waived those issues by failing to raise them in
the district court.
I.
Doughten was a passenger in her son-in-
law’s car when a third party rear-ended their
vehicle, injuring her. Her son-in-law, James
Gray, also was a member of Doughten’s
household. Defendant State Farm Mutual
Automobile Insurance Company (“State
Farm”) insured her and her vehicle and insured
Gray under a separate policy.
Doughten sought and recovered money
from three sources: (1) The negligent driver’s
insurance carrier paid up to its third-party
policy limits; (2) State Farm paid up to the
limit of Gray’s underinsured motorists policy;
and (3) State Farm paid up to the limit of
Doughten’s Personal Injury Protection Policy.
Doughten sought payment from State Farm
under her Texas personal automobile policy
for underinsured motorists. State Farm denied
payment, and Doughten filed this suit in state
court, seeking actual damages for breach of
the insurance contract and extra-contractual
damages pursuant to article 21.21 of the Texas
Insurance Code. State Farm removed on the
basis of diversity jurisdiction.
State Farm moved for summary judgment;
Doughten did not respond. The court granted
summary judgment based on a clause in the in-
surance policy that excludes payment for
“bodily injury sustained while occupying, or
when struck by, any motor vehicle or trailer of
any type owned by you or any family member
which is not insured for this coverage under
the policy.”
Doughten alleges two errors. First, she ar-
gues that declaratory judgment, rather than
summary judgment, was proper. Second, she
avers that the district court erred in giving ef-
fect to the exclusionary clause, because it vio-
lates Texas public policy.
II.
Doughten’s failure to respond to the
motion for summary judgment means that she
did not raise, in the district court, the issues
she urges on appeal. Fifth Circuit cases do not
consistently describe the standard for
considering an issue raised for the first time on
appeal. Some panels have stated that we need
not do so “unless it is a purely legal issue and
our refusal to consider it would result in a mis-
carriage of justice.” E.g., Heci Exploration
Co. v. Holloway, 862 F.2d 513, 518 & n.7
(5th Cir. 1988) (emphasis added). More re-
cently, panels have explained that this court
can consider an issue for the first time on ap-
peal if “the issue presents a pure question of
law or [is] an issue which, if ignored, would
result in a miscarriage of justice.” E.g., United
States ex rel. Wallace v. Flintco, Inc., 143
F.3d 955, 971 (5th Cir. 1998) (emphasis add-
ed). We need not resolve the conflict to
decide whether Doughten can make new
arguments on appeal, because she failed to
respond to the summary judgment motion
altogether.
The courts of appeals retain broad
discretion to hear issues not presented to the
district court.1 On the facts of this case, we
will not exercise that discretion, for to do so
would interfere with the managerial role of the
district court and would confuse our position
1 Singleton v. Wulff, 438 U.S. 106, 121 (1978)
(“The matter of what questions may be taken up
and resolved for the first time on appeal is one left
primarily to the discretion of the courts of appeals,
to be exercised on the facts of individual cases.”);
Heci, 862 F.2d at 518 & n.7 (same).

-- 2 of 5 --

3
with that of the district court.
When a party fails to file any response to a
summary judgment motion or offer an excuse
for its failure, the district court should not face
reversal based on novel issues. At summary
judgment, Dought en failed to make any legal
arguments or identify the fact issues necessary
to justify a trial. Her error went far beyond the
failure to raise a single legal argument and
more resembles the failure to raise an entire
claim or defense. We have previously ignored
defenses when argued for the first time on
appeal.2
On appeal, Doughten does not even offer
an excuse for failing to respond to the
summary judgment motions. Her failure to
respond should not permit her, effectively, to
circumvent the district court entirely. When
exercising our discretion to hear issues first
raised on appeal, we should consider how it
would affect judicial economy and man-
agement. Payne v. McLemore’s Wholesale &
Retail Stores, 654 F.2d 1130, 1146 (5th Cir.
Unit A Sept. 1981).
The risk of interfering with the district
court’s ability to resolve cases at summary
judgment outweighs the slight chance of in-
justice posed by denying Doughten’s new and
dubious arguments. Even if we were to
consider Doughten’s issues on the merits,
however, State Farm would prevail, for the
reasons cogently set forth by the district court.
III.
Doughten alleges that the court should have
resolved the legality of the contract’s ex-
clusionary clause through a declaratory
judgment action rather than at summary
judgment. Doughten misunderstands the
nature of a motion for summary judgment.
Summary judgment is appropriate if the
evidence on record “show[s] 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.” FED. R. CIV. P. 56(c). The
moving party bears the initial burden of
demonstrating an absence of evidence
supporting the nonmovant’s case. Celotex
Corp. v. Catrett, 477 U.S. 317, 325 (1986). If
the nonmovant bears the burden of proving the
issue at trial, the movant merely can point to
the absence of evidence in the record. Id. at
323-24. The nonmoving party may not rest on
the mere allegations or denials of its pleadings
but must respond by setting forth specific facts
indicating a genuine issue for trial.3
Courts should resolve disputed legal issues
at summary judgment, even though they lack
the power to resolve factual disputes.4 The
2 Estate of Martineau v. ARCO Chem. Co., 203
F.3d 904, 913 (5th Cir. 2000) (refusing to consider
a limitations argument that the party had failed to
raise when briefing a motion for summary
judgment). Cf. Hinsley v. Boudloche, 201 F.3d
638, 645 (5th Cir. 2000) (refusing to consider
plaintiff’s arguments for tolling the statute of
limitations where she had not raised them at
summary judgment).
3 Webb v. Cardiothoracic Surgery Assocs,
P.A., 139 F.2d 532, 536 (5th Cir. 1998); Figgie
Int’l, Inc. v. Bailey, 25 F.3d 1267, 1269-70 (5th
Cir. 1994).
4 Hang On, Inc. v. City of Arlington, 65 F.3d
1248, 1257 (5th Cir. 1995) (explaining power of
district court to evaluate legal theory’s merits at
summary judgment); Neff v. Am. Dairy Queen
Corp., 58 F.3d 1063, 1065 (5th Cir. 1995) (hold-
ing that district court properly resolved question of
(continued...)

-- 3 of 5 --

4
district court correct ly chose to resolve the
legal issue of the exclusionary clause’s validity
at summary judgment. We review that
decision de novo. Rushing v. Kan. City S. Ry.,
185 F.3d 496, 504 (5th Cir. 1999).
IV.
Texas Insurance Code article 5.06-1
requires automobile liability insurance to
include coverage against uninsured and
underinsured motor vehicles. The insured can
waive such coverage in writing. TEX. INS.
CODE ANN. art. 5.06-1 (Vernon 1981).
Doughten argues that this statutory
requirement creates an amorphous public
policy that invalidates St ate Farm’s
exclusionary clause.
The language of the statute presents the
first major obstacle for Doughten. The statute
provides that “[t]he coverages required under
this Article shall not be applicable where any
insured named in the policy shall reject the
coverage in writing.” Id. Because the statute
expressly permits waiver, Doughten would
have to advance a unique reason that waivers
of claims against uninsured family members
violate public policy. She fails to do so.
Several Texas courts of appeals have ruled
that an insurance company can lawfully
disclaim uninsured motorists liability for
accidents involving uncovered family
members.5 This rule is consistent with an
unbroken line of cases holding that insurers
lawfully can exclude some of a family’s
vehicles from coverage.6
Doughten relies on two cases to show that
the exclusion violates Texas public pol-
icySSStephens v. State Farm Mut. Auto. Ins.
Co., 508 F.2d 1363 (5th Cir. 1975), and Bri-
ones v. State Farm Mut. Auto. Ins. Co., 790
S.W.2d 70 (Tex. App.SSSan Antonio 1990,
writ denied). Neither is good law.
In Stephens, 508 F.2d at 1367, we held that
4(...continued)
contract interpretation at summary judgment
because it was a legal issue).
5 Reyes v. Tex. All Risk Gen. Agency, Inc., 855
S.W.2d 191, 191-92 (Tex. App.SSCorpus Christi
1993, no writ) (upholding identical clause); State
(continued...)
5(...continued)
Farm Mut. Ins. Co. v. Conn, 842 S.W.2d 350,
351-52 (Tex. App.SSTyler 1993, writ denied)
(enforcing clause excluding uninsured family mem-
bers’ cars from coverage against underinsured
motorists); Tex. Farm Bureau Mut. Ins. Co. v.
Tatum, 841 S.W.2d 89, 92 (Tex. App.SSTyler
1992, writ denied) (same); Tex. Farmers Ins. Co.
v. McKinnon, 823 S.W.2d 345, 346-47 (Tex.
App.SSBeaumont 1992, writ denied) (same).
6 Holyfield v. Members Mut. Ins. Co., 572
S.W.2d 672, 673 (Tex. 1978) (establishing rule
that insurer can refuse to insure certain vehicles
consistent with Texas statute requiring liability
insurance); Farmers Tex. County Mut. Ins. Co. v.
Griffin, 868 S.W.2d 861, 868-69 (Tex.
App.SSDallas 1994, no writ); Conlin v. State
Farm Auto. Ins. Co., 828 S.W.2d 332, 336-37
(Tex. App.SSAustin 1992, writ denied); Harwell v.
State Farm Mut. Auto. Ins. Co., 782 S.W.2d 518,
520 (Tex. App.SSHouston [1st Dist.] 1990, no
writ); Berry v. Tex. Farm Bureau Mut. Ins. Co.,
782 S.W.2d 246, 247 (Tex. App.SSWaco 1989,
writ denied); Beaupre v. Standard Fire Ins. Co.,
736 S.W.2d 237, 238 (Tex. App.SSCorpus Christi
1987, writ denied); Broach v. Members Ins. Co.,
647 S.W.2d 374, 375 (Tex. App.SSCorpus Christi
1983, no writ); Stagg v. Travelers Ins. Co., 486
S.W.2d 399, 402-04 (Tex. Civ. App.SSBeaumont
1972, no writ).

-- 4 of 5 --

5
Texas law prohibited an insurer from
excluding some of an insured’s vehicles from
uninsured motorists policies while covering
other vehicles. We recognized that two
intermediate appellate courts had reached the
opposite conclusion but interpreted dictum
from the Texas Supreme Court as leaning
toward invalidity. Id.
We no longer need to rely on dictum, how-
ever, because the Texas Supreme Court has
held such clauses valid. Holyfield, 572
S.W.2d at 673. We recognized the change in
state law and upheld a vehicle exclusion in
American Economy Insurance Co. v. Tomlin-
son, 12 F.3d 505, 509 (5th Cir. 1994).
In Briones, the court invalidated an exclu-
sionary clause in an underinsured motorists
insurance contract, 790 S.W.2d at 74, that
barred insureds from recovering if the vehicle
was “available for” the insured’s “regular use,”
id. at 71. The court characterized the question
on appeal as a factual dispute over whether the
plaintiff had used the truck “regularly.” Id. at
72. Despite evidence that he had used it
regularly over five years, the court allowed
recovery. Id. at 74. The court relied heavily
on Stephens and on an interpretation of a
Texas Supreme Court case later rejected in
Holyfield. Id. See Holyfield, 572 S.W.2d at
673. The court emphasized that the employer
had provided the vehicle and that courts
should make this determination on a case-by-
case basis. Briones, 790 S.W.2d at 74.
We conclude that the Texas Supreme Court
would at least restrict Briones to its facts. The
authorities that Briones relies on have since
been discredited, and Briones itself describes
a very limited holding. Briones does not
extend to invalidate waivers of claims against
uninsured family members. The weight of
authority by Texas’s intermediate appellate
courts favors validity.7 The district court
properly upheld the validity of the exclusionary
clause at summary judgment.
AFFIRMED.
7 Cases cited supra note 5.

-- 5 of 5 --