United Fire and Casualty Co. v. Hixson Brothers Inc.

Plaintiffs who sued Hixson alleged a failure to render funeral services, and, by doing so, they alleged that Hixson failed to render professional services. These allegations do not unambiguously exclude coverage under the insurance policy endorsement.

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Click here for the full text of this decision FACTS:A class of plaintiffs from Louisiana, sued Hixson Brothers Inc., a funeral home, in Louisiana state court in May 1999. In their suit, the plaintiffs said the burial policies they had with Hixson required Hixson to perform funeral services, which included caskets, burial garments, embalming, funeral preparation, arranging flowers, etc. The plaintiffs alleged that policyholders who used any coffin other than a very cheap one would forfeit benefits under the policy and receive only a $1,000 cash credit. Hixson carried a commercial general liability policy with United Fire and Casualty Co. The policy included an endorsement extending coverage for damages arising out of the “failure to render professional services as a mortician[.]” United Fire represented Hixson for five years, then in 2004, United Fire sought a declaratory judgment in federal district court that it did not owe Hixson a duty to defend. The district court partially granted Hixson’s motion for summary judgment, ruling that United Fire owed Hixson a defense because there was a possibility of coverage under the Mortician’s Professional Liability Endorsement clause of the policy. The district court found that Hixson was liable for mental anguish damages arising out of the failure to render funeral services, as a mortician and funeral director. HOLDING:Affirmed. Applying Louisiana law and employing the eight-corners rule of lawsuits over coverage under an insurance contract, the court first examines the details of both the plaintiffs’ petition and the insurance policy itself. The petition stated that the plaintiffs’ agreements with Hixson included the provision of funeral benefits: “Casket, Burial garments, Embalming, and Preparation for Burial, Funeral coach, Use of Funeral Home, Arrangement of Flowers, Conducting the Funeral, [and] Necessary Cemetery Equipment.” The plaintiffs’ petition also alleged that Hixson “failed to provide the goods and services specified in the burial policy.” The court rejects United Fire’s suggestion that the plaintiffs’ petition should be read to refer to the “refusal” to perform instead of a “failure” to perform. The petition specifically uses the word “failure” and whether information arose after the plaintiffs filed their petition to more accurately describe what happened as a “refusal,” rather than a “failure” is irrelevant. The court next finds that the petition alleges that Hixson failed to “provide the goods and services specified in the burial policy” and that this is the equivalent of saying Hixson failed to “perform” under the policy. Furthermore, the services specified in the burial policy should be considered to be “professional” services, as the acts mentioned (embalming, burial, etc.) cannot be done by a lay person. “In sum, we hold that the state court plaintiffs allege a failure to render funeral services, and, by doing so, they allege that Hixson failed to render professional services. Since these allegations do no unambiguously exclude coverage under the Endorsement, the judgment of the district court is affirmed.” OPINION:Clement, J.; Reavley, Clement and Prado, J.J.

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