Nationwide Mut Ins v. Berthelot, et al

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
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m 01-60492
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NATIONWIDE MUTUAL FIRE INSURANCE COMPANY,
Plaintiff-Appellee,
VERSUS
SCOFIELD C. BERTHELOT; JANICE BERTHELOT; TIMOTHY WAAGA,
AND ANDREA MARIE WOODCOCK,
BY AND THROUGH HER CONSERVATRIX, JANICE BERTHELOT,
Defendant-Appellant.
_________________________
Appeal from the United States District Court
for the Southern District of Mississippi
_________________________
(1:00-CV-94-BrR)
March 28, 2002
Before REAVLEY, SMITH, and DENNIS,
Circuit Judges.
PER CURIAM:*
Nationwide Mutual Fire Insurance Com-
pany (“Nationwide”) brought a declaratory
judgment action to uphold the validity and ap-
plication of an insurance clause; the clause ex-
cluded coverage for bodily injuries suffered by
relatives who live in the insured’s household.
The district court excluded expert testimony
on what Mississippi state insurance law should
be and, instead, followed Mississippi State
Supreme Court cases upholding family house-
hold exclusions. Finding no error, we affirm.
* Pursuant to 5TH CIR. R. 47.5, the court has
determined that this opinion should not be pub-
lished and is not precedent except under the limited
circumstances set forth in 5TH CIR. R. 47.5.4.

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I.
In August 1999, Andrea Woodcock, the
daughter of Scofield C. and Janice Berthelot,
suffered injuries when Timothy Waaga crashed
a boat into another boat operated by Donald
Snyder. Janice Berthelot held the title to
Waaga’s boat and had given him permission to
use it.
Nationwide insured the boat under a policy
issued to the Berthelots in 1976. The policy,
however, did not cover family members who
live in the household and suffer bodily
injuries.1 At the time of the accident,
Woodcock had resided at the Berthelot
household since April 1999 to assist her
mother in caring for her father after his heart
surgery. Woodcock maintained a trailer on
their property, which she sometimes slept in.
She had a separate post office box where she
received most of her mail. She belonged to
travel and camping clubs that entitled her to
park her trailer and reside at various parks and
camping areas for extended periods of time.
After the accident, Janice Berthelot sued
Waaga in state court for negligence,
requesting compensatory and punitive
damages. The Berthelots made claims under
their homeowner’s insurance policy for
Woodcock’s injuries. Waaga requested that
Nationwide defend him.
Based on diversity jurisdiction, Nationwide
filed the instant declaratory judgment against
Scofield Berthelot, Janice Berthelot, Waaga,
and Woodcock, requesting the court to declare
the defendants ineligible for coverage. After a
bench trial, the court found that the policy
excluded coverage for Woodcock’s bodily in-
juries and ruled that Nationwide did not have
an obligation to defend Waaga, should not pay
any judgments rendered against Waaga, and
should not pay any claims by Woodcock
against Waaga.
II.
John Kornegay testified that he believed the
Mississippi Supreme Court should strike down
the family household exclusion; he averred that
the state’s abrogation of interspousal immunity
logically requires invalidating family household
exclusion clauses. The district court excluded
the evidence under FED. R. EVID. 702 because
it would not “assist the trier of fact.” We
review a decision to admit or exclude expert
testimony for abuse of discretion.2 The party
asserting error must prove “substantial
prejudice.” Kona Tech. Corp. v. S. Pac.
Transp. Co., 225 F.3d 595, 602 (5th Cir.
2000).
We do not need to delve into subtle
questions about the admissibility of expert
1 The policy begins by defining the term “in-
sured” with reference to family members sharing a
residence:
“‘Insured’ means you and the following
who live in your household: a. your
relatives.”
The policy then contains the following
exclusion: “2. Coverage ESSPersonal liability does
not apply to: . . .f. bodily injury to an insured as
defined in definitions 3a and 3b.”
2 Gen. Elec. Co. v. Joiner, 522 U.S. 136, 136
(1997) (“We have held that abuse of discretion is
the proper standard of review of a district court’s
evidentiary rulings.”); Waco Int’l, Inc. v. KHK
Scaffolding Houston, Inc., 278 F.3d 523, 528 (5th
Cir. 2002) (“Review of a district court’s admission
or exclusion of evidence is for abuse of
discretion.”) (citation omitted).

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testimony on legal matters.3 The district court
correctly decided to reject Kornegay’s
testimony for the simple reason that it would
not “assist the trier of fact.” See FED. R. CIV.
P. 702. The district court and we are bound to
follow the Mississippi Supreme Court’s
existing precedent, Doddy v. Oxy, USA, Inc.,
101 F.3d 448, 461 (5th Cir. 1996), so it is
useless for an expert to speculate on what that
court should in fact do, United States v. Nine
Million Forty-One Thousand Five Hundred
Ninety-Eight Dollars and Sixty-Eight Cents,
163 F.3d 238, 255 (5th Cir. 1999).
III.
Nationwide’s policy excludes coverage for
bodily injury suffered by relatives who live in
the insured’s household. The district court
found that this family household exclusion
prevents Woodcock from recovering and that
the Mississippi Supreme Court would consider
the family household exclusion valid and
consistent with public policy. Berthelot argues
that the court erred by concluding that
Woodcock fell within the exclusion and that
the family household exclusion violates
Mississippi public policy.
When sitting in diversity, federal courts
have an obligation to apply state law as
interpreted by the highest court in the state.
Doddy, 101 F.3d at 461. If the state supreme
court has not decided an issue, we should
make an Erie guess by predicting what that
court would do. Washington v. Dep’t of
Transp., 8 F.3d 296, 299-300 (5th Cir. 1993).
We review the district court’s interpretation of
state law de novo. Doddy, 101 F.3d at 461.
A.
Courts should give effect to a “clear and
unambiguous” insurance policy or contract,
Universal Underwriters Ins. Co. v. Ford, 734
So. 2d 173, 176 (Miss. 1999), and should con-
strue ambiguous or unclear terms against the
drafter of the contract, usually the insurance
company, State Farm Mut. Auto. Ins. Co. v.
Scitzs, 394 So. 2d 1371, 1372-73 (Miss.
1981). An insurance policy is ambiguous if
people can reasonably subject it to more than
one interpretation. Universal Underwriters,
394 So. 2d at 176.
Berthelot admits that the policy excludes
coverage for relatives living in his household
but argues, first, that Woodcock lived in the
house only temporarily, and, second, that the
policy’s failure to distinguish between
temporary and permanent residence is
ambiguous. Both arguments lack merit.
Berthelot explains that Woodcock planned
to stay only until he recovered from surgery.
She sometimes slept in a travel trailer, she
rented a post office box, and she maintained
travel memberships. Despite all of these facts,
even Berthelot admits that Woodcock lived
with the Berthelots. The policy applies to all
relatives living in the household, and
Woodcock lived in their household at the time
of the accident. Berthelot does not point to
any Mississippi law that would cabin the clause
to temporary rather than permanent residents.
When asked to define similar terms like
“household resident” in other insurance
coverage disputes, Mississippi courts have
adopted a broad definition. For example, a
college child away at school still resides with
both of his adult parents. Aetna Cas. and Sur.
Co. v. Williams, 623 So. 2d 1005, 1009-10
3 Experts can only testify about legal issues tied
to factual disputes and subsidiary to the
factfinder’s ultimate question. C.P. Interests, Inc.
v. Cal. Pools, Inc., 238 F.3d 690, 699 (5th Cir.
2001).

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(Miss. 1993). Adult married children
“temporarily staying” at their parents’ homes
also count as residents for the purpose of
insurance coverage. Johnson v. Preferred
Risk Auto. Ins. Co., 659 So. 2d 866, 872-75
(Miss. 1995). Finally, a child over whom
divorced parents have custody still resides with
her mother as she drives the child to enter her
father’s custody. Thompson v. Miss. Farm
Bureau Mut. Ins. Co., 602 So. 2d 855, 856-57
(Miss. 1992).
In these cases, expanding the definition of
resident expanded the scope of coverage, but
under Berthelot’s policy, expanding the
definition of “insured,” would, in most cases,
reduce the scope of coverage. We see no
reason, however, why that should matter.
B.
The Bartholets argue the Mississippi
Supreme Court would find the family
household exclusion clause invalid because
that court has abrogated the doctrines of
parental and spousal immunity, Ales v. Ales,
650 So. 2d 482 (Miss. 1993) (parents suing
child); Glascox ex rel. Denton v. Glascox, 614
So. 2d 906 (Miss. 1993) (child suing parent);
Burns v. Burns, 518 So. 2d 1205 (1988) (wife
suing parent). The Bartholets, however,
cannot point to a single court that has applied
Mississippi law to invalidate a family
household exclusion.
The Mississippi Supreme Court has twice
upheld the validity of these exclusions,
emphasizing that the insurer and insured
should have the contractual freedom to alter
the scope of coverage. Thompson, 602 So. 2d
at 857-58; Perry v. S. Farm Bureau Cas. Ins.
Co., 170 So. 2d 628, 630 (Miss. 1965). Every
other court that has applied Mississippi law to
family household exclusions has found them
valid.4
The abrogation of spousal and family im-
munity does not compel the Mississippi
Supreme Court to overrule Thompson and
Perry. The abrogation of immunity eliminated
a mandatory, judicial barrier to tort remedies
among family members. Ales, 650 So. 2d at
485-86; Glascox, 614 So. 2d at 911; Burns,
518 So. 2d at 1211. Thompson and Perry
rested on the freedom of strangers, the
insurance company and insured, to define the
scope of their contractual liabilities ex ante.
Thompson, 602 So. 2d at 857-58; Perry, 170
So. 2d at 630. Although the Mississippi
Supreme Court has decided that family
immunities cannot bar suit for unforeseen
accidents and unanticipated losses, this does
not logically require prohibiting family
members and insurers from limiting the scope
of coverage contractually.
AFFIRMED.
4 Warren v. United States Fidelity & Guar.
Co., 797 So. 2d 1043, 1045-46 (Miss. Ct. App.
2001) (applying family household exclusion and
refusing to adopt strained interpretation because of
public policy); Atlanta Cas. Co. v. Powell, 83
F. Supp.2d 749, 751 (N.D. Miss. 1999)
(explaining validity of exclusion clause); Amer.
Fire & Indem. Co. v. Scottsdale Ins. Co., No.
198CV258, 2000 WL 991626, *1 (N.D. Miss.
June 26, 2000) (unpublished) (noting that parties
agreed that exclusionary language is “valid and
enforceable”).

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