Yves J. Fontenot, Plaintiff-appellant, v. Global Marine, Inc., et al., Defendants-appellees, 703 F.2d 867 (5th Cir. 1982)

Appellant, Yves J. Fontenot, originally brought suit in Louisiana state court against his employer, Global Marine, Inc. ("Global"), for an injury aboard ship. Subsequently, on February 4, 1980, appellant amended his state petition to include Unionmutual Stock Life Insurance Company of America ("Unionmutual") as a defendant. On February 28, 1980, Unionmutual removed the lawsuit from state court to the United States District Court on the basis of diversity jurisdiction; appellant was a resident of Louisiana, Global was a Delaware corporation with its principal place of business in California, and Unionmutual was a Maine corporation with its principal place of business in that state.

Appellant began working for Global on February 9, 1979 as a seaman. He was injured five days later, on February 14, 1979 when he fell while working aboard Global's vessel. As a result of his injury, he suffered a herniated disc which he alleges rendered him totally and permanently disabled. At the time of his employment, eligible employees of Global were covered by a disability insurance policy issued by Unionmutual. Appellant claimed under that policy, but Unionmutual denied coverage on the ground that he had not been an employee long enough for policy coverage. Both appellant and Unionmutual moved for summary judgment in the district court. The court granted Unionmutual's motion, and denied that of appellant, finding that pursuant to the terms of the insurance policy appellant did not become eligible for coverage until March 1, 1979, and hence his injury of February 14 was not insured.¹ 

Subsequent to the decision of the district court, appellant moved in that court to remand the case to state court, alleging that removal had been granted improperly. He claimed: (1) the amount in controversy prerequisite to diversity jurisdiction was not met; (2) Global had failed to join in the petition for removal as required by 28 U.S.C. § 1441(a); and (3) the removal petition filed by Unionmutual was defective in failing to allege Global's principal place of business, for purposes of determining the existence of complete diversity.

The district court, by written opinion dated June 15, 1981, denied appellant's motion to remand. It found: (1) the requisite jurisdictional amount was at issue since Global's exposure to liability exceeded $10,000; (2) Global's failure to join timely in the petition for removal²  could not be relied upon by appellant at this stage of the litigation, as his conduct amounted to a waiver of his objection; and (3) any deficiency in alleging the citizenship necessary for determination of diversity jurisdiction was cured by Global's motion to join in the removal petition.

Trial before the court on the merits of the case against appellant's employer, Global, was then held. Appellant's claim against his employer was that the Global representative who interviewed him made affirmative verbal representations that he would be covered under the Unionmutual policy as soon as he began his employment. At trial, the court became aware for the first time that a certificate or abstract of insurance furnished by Unionmutual to Global was provided appellant at the time of his pre-employment interview. The court then vacated its initial ruling in favor of Unionmutual, " [b]ecause of the possibility that liability under the policy could be visited on Unionmutual under the terms of the certificate of insurance (and irrespective of the terms of the policy)." The case against Unionmutual was then submitted on the record made in the previous hearing on Global's liability, as supplemented by exhibits and briefs filed following that hearing.

On September 8, 1982, the district court rendered judgment for defendants. As to the liability of Global, the court concluded that appellant failed to carry his burden of establishing that verbal representations of coverage were in fact made to him. As to the liability of Unionmutual, the court considered the language in the abstract of coverage, in the light of Louisiana jurisprudence, and held that the abstract was neither misleading nor insufficient.

Appellant now appeals the district court's denial of his motion to remand to the state court, and the district court's judgment rendered in favor of both defendants.

Appellant argues that the district court erred in denying his motion to remand since both defendants had not joined in the original petition to remove, as required by 28 U.S.C. § 1446(a).³  Appellant advances three contentions: (1) Global never moved to join the petition for removal; (2) even if such a motion had been made, its tardy submission could not cure the original jurisdictional defect; and (3) even if the thirty-day limitations period in the removal statute does not affect the jurisdiction of the district court, appellant's conduct could not be deemed a waiver of his right to object. We find no merit in appellant's contentions.

First, we reject out of hand appellant's allegation that Global failed to file a motion to join in the removal petition, however tardy. Such a petition, as characterized by the district court, appears in the record on appeal.

Second, this Court's recent decision in Harris v. Edward Hyman Co., 664 F.2d 943 (5th Cir. 1981), establishes that the thirty-day limitations period in 28 U.S.C. § 1446(b),⁴  in which a state court defendant can file a petition to remove, "does not affect the jurisdiction of the district court and that 'failure to file the petition within the alloted time may be waived.' " Id. at 945 (quoting Weeks v. Fidelity & Casualty Co., 218 F.2d 503, 504 (5th Cir. 1955)).⁵  In Harris we concluded that "a party who delays in seeking a remand, or otherwise participates in the proceedings in the district court, also may be precluded from objecting to a defendant's untimely consent to a defective removal petition." Ibid.

The facts of the immediate case, as recited by the court below, fall squarely within the Harris decision.⁶  As well observed by the district court, this action was allowed to remain on the court's docket, without objection, for thirteen months. Counsel for plaintiff-appellant, as well as counsel for defendant-appellees, attended a status conference before a United States Magistrate on January 20, 1981. In anticipation of this conference, on December 23, 1980, appellant's counsel represented to the magistrate, in writing, that "jurisdiction is established." Further, a pretrial conference was held on February 13, 1981, which all parties attended. In the memorandum of the pretrial conference filed by the Deputy Clerk of Court there is no indication of any jurisdictional dispute. On the contrary, pursuant to the clerk's memorandum, appellant was permitted seven days in which to file a motion for summary judgment. When, on February 25, 1981, appellant did file his motion for summary judgment addressing the issue of Unionmutual's liability, appellant's memorandum specifically noted:

Jurisdiction is based on diversity of citizenship and the fact that the amount in dispute, exclusive of interest and costs, exceeds $10,000.00. Jurisdiction is not disputed.

Further, on April 3, 1981, counsel for Global filed a pretrial stipulation arising out of the pretrial conference of February 13, 1981, which was signed by all parties and which acknowledged jurisdiction. It was not until after the court granted Unionmutual's motion for summary judgment and denied appellant's summary judgment motion, that appellant voiced objection to jurisdiction.

The above recitation of facts, relied upon by the court below, clearly demonstrates appellant's full participation in the lawsuit in federal court. We find, therefore, that appellant waived his right to object to Global's tardy joinder in the removal petition. Appellant, both by his conduct and by his explicit statements, unequivocally recognized jurisdiction in the federal court at all times prior to the unfavorable district court ruling on his motion for summary judgment and the favorable ruling on defendant Unionmutual's motion. It would be manifestly unjust to permit appellant to maintain his objections to removal at the stage of the proceedings at which they were raised. Since we find that Global's tardy joinder in the removal petition did not affect the jurisdiction of the court and that appellant clearly waived his right to object to this originally defective removal petition which was subsequently cured, we conclude that the district court properly denied appellant's motion to remand.⁷ II. Liability

Appellant argues that the district court erred in its findings that neither Global nor Unionmutual were liable for his disability claim. Appellant contends that the district court erred in freeing Global of liability by concluding that Global's representative did not represent that appellant was covered by the disability policy on the day he began work. As to Unionmutual, appellant argues that the district court erred in concluding that the abstract of coverage, prepared by Unionmutual and provided appellant at the time of his pre-employment interview, was not deficient in its failure to set out the waiting period provision contained in the disability policy. We uphold the decision of the district court freeing Global and Unionmutual from liability to appellant under the insurance claim made in this case.

At the hearing below, conflicting evidence was presented as to whether representations of coverage were made to appellant at the pre-employment interview. Appellant testified that the Global representative who interviewed him for employment made affirmative representations of immediate coverage under the Unionmutual policy. The Global representative who interviewed appellant denied making any such representations. The district court concluded that appellant failed to carry his burden of establishing that such verbal representations were in fact made.

The trial court's factual determination of what transpired at the pre-employment interview may not be set aside unless clearly erroneous. " [O]n the entire evidence [we must be] left with the definite and firm conviction that a mistake has been committed." United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S. Ct. 525, 541, 92 L. Ed. 746 (1948); see McKenzie v. United States, 678 F.2d 571, 574 (5th Cir. 1982); Reyes v. Vantage Steamship Co., 672 F.2d 556, 557 (5th Cir. 1982); New Orleans v. American Commercial Lines, Inc., 662 F.2d 1121, 1123 (5th Cir. 1981); Fed. R. Civ. P. 52(a). Especially where, as here, the factual determination is made by resolving conflicts in the evidence, requiring that essential credibility determinations be made, this Court will defer to the trier of fact. Clark v. Mobil Oil Corp., 693 F.2d 500, 501 (5th Cir. 1982); New Orleans v. American Commercial Lines, Inc., supra, 662 F.2d at 1123. We have examined the entire record with the above principles in mind. We find that the district court has not clearly erred in concluding on conflicting evidence that Global's interviewer did not represent to appellant that he would be covered under the Unionmutual disability policy on the day he began his employment. Accordingly, we affirm the district court's judgment as to defendant Global.

The more serious question posed in this appeal is the issue of whether appellant was adequately informed by the certificate of insurance prepared by Unionmutual and handed to him as a new employee on the first day of employment by Global since it did not inform him that his disability insurance did not begin until after the end of the month he was employed. Under Louisiana law, an insurer may not rely upon a substantial limitation contained in a policy if that limitation is not sufficiently set out in any certificate or abstract of insurance required by statute to be furnished applicant. The furnished certificate must not be misleading. Lombard v. Manchester Life Insurance Co., 406 So. 2d 742, 744 (La.App.1981), writ denied, 410 So. 2d 764 (La.1982); Davey v. Louisiana Health Service & Indemnity Co., 357 So. 2d 1170, 1174 (La.Ct.App.), writ denied, 359 So. 2d 194 (La.1978); Colvin v. Louisiana Hospital Service, Inc., 321 So. 2d 416, 418 (La.App.), writ denied, 323 So. 2d 476 (La.1975). In the immediate case, therefore, Unionmutual would be barred from relying upon the waiting period contained in the policy, which concededly precluded appellant's claim, if the certificate of insurance was inadequate in not specifically disclosing that provision.

While the certificate did not state in terms the fact that there was a waiting period before new employees were covered, it did contain the following provision:

GENERAL INFORMATION

This statement of coverage describes the essential features of this insurance plan in general terms. All terms and conditions governing this insurance plan are those set forth in the policy underwritten by Unionmutual Stock Life Insurance Co. of America, Portland, Maine, including eligibility and effective dates of individual insurance. In the event that you are not actively at work due to a disability resulting from sickness or injury, insurance shall not become effective until you have completed one day of active work in your eligible class. (Emphasis in original).

The adequacy of this certificate is to be determined under Louisiana law. Two provisions of the Louisiana law have possible relevance. One of them, La.Rev.Stat.Ann. Sec. 22:215 A(3), has a restrictive application and a stringent requirement.⁸  The provision's requirements are limited to blanket insurance policies issued to "special groups of persons," as enumerated in that section. The only provision of possible relevance is that covering employees "defined by reference to exceptional hazards incident to such employment." La.Rev.Stat.Ann. Sec. 22:215 A(3) (b). Certificates of insurance must be provided for delivery to the insured employee, and must "disclose the benefits, limitations, exclusions and reductions contained in the policy ... and any other relevant information." La.Rev.Stat.Ann. Sec. 22:215 A(3) (g) (West Supp.1983).

The other provision, La.Rev.Stat.Ann. Sec. 22:215 A(1),⁹  simply provides for group employee health and disability benefits and only requires that these certificates "contain [ ] a statement as to the insurance protection to which [the insured] is entitled and to whom payable."

The district court in its decision assumed that the more stringent requirement of Section 22:215 A(3) applied but nevertheless concluded that the certificate met the requirements. On the other hand, it is our conclusion that this provision does not apply to the insurance policy at issue. The policy does not define covered employees "by reference to exceptional hazards incident to such employment," La.Rev.Stat.Ann. Sec. 22:215 A(3) (b). Rather, the policy covers all "full-time, active administrative, clerical, professional, technical, supervisory, and maintenance employees." Since covered employees are defined generically, rather than by "reference to exceptional hazards," the limited and more exacting provision has no application. See Davey v. Louisiana Health Service & Indemnity Co., 357 So. 2d 1170 (La.App.), writ denied, 359 So. 2d 194 (La.1978) (on rehearing). Therefore, the more general provisions for group employee disability policies apply. La.Rev.Stat.Ann. Sec. 22:215 A(1).

Under Louisiana law, it is clear that the certificate prepared by Unionmutual and handed to appellant by Global met the requirements of this section. Louisiana law recognizes that these requirements are far less stringent than those in Section 22:215 A(3) (g) discussed above. The Louisiana court, on rehearing in Davey v. Louisiana Health Service & Indemnity Co., supra, recognized that the specific certificate of insurance inclusion requirements of Section 22:215 A(3) (g) were applicable only to the limited number of "special groups" enumerated in the preceding subsections.¹⁰  Initially, the Louisiana court had erroneously applied this subsection and concluded that the certificate of insurance provided plaintiff therein was "insufficient and, perhaps, misleading." 357 So. 2d at 1174. On rehearing, the court acknowledged that it was "mistaken" in applying this subsection, and found that the applicable, more general, statutory provision was subsection A(1) (a), of Section 22:215.¹¹ 

In the case before us, the certificate itself referred to the fact that there were exceptions which were not included in the certificate. The provision specifically stated that the "essential features of this insurance plan [are described] in general terms" and referred beneficiaries to the policy to determine the governing "terms and conditions", and we stress, "including eligibility and effective dates of individual insurance." This provision, together with the basic language of the statute,¹²  makes clear that the Unionmutual certificate adequately informed appellant there were exceptions in the policy and of the possibility that he might be excepted.

Davey v. Louisiana Health Service & Indemnity Co., supra, which held that the certificate of insurance at issue did not meet even the looser standard of subsection A(1) (a), is factually distinguishable. In Davey, the certificate of insurance specifically undertook to define in detail the benefits provided an employee and the specific exemptions from coverage. The court concluded that these specific, and purportedly exhaustive, provisions were "perhaps misleading"¹³  and, as it concluded on rehearing, that the plaintiff could not "reasonably expect" from these provisions in the certificate that her oral surgery might not be covered.¹⁴  Even under the compelling facts of that case, the Davey court characterized its conclusion on rehearing as a "close call."

In the immediate case, the certificate of insurance neither purports to be nor can reasonably be interpreted as exhaustive of all exemptions provided for in the policy. Rather the certificate explicitly provides that the terms and conditions for eligibility and "effective dates of individual insurance" are contained in the policy and that the certificate does not set out all such provisions. The mere fact that the certificate highlights one important and detailed exemption,¹⁵  does not rise to the status of a misleading statement of coverage.¹⁶  Under the facts of the immediate case, we are confident that the Louisiana courts would find the general certificate requirement of Sec. 22:215 A(1) (a) adequately met by the certificate provision at issue herein. We thus conclude, that Unionmutual complied with La.Rev.Stat.Ann. Sec. 22:215 A(1) (a) and therefore was entitled to rely upon the waiting period exemption in its policy. Accordingly, we affirm the district court's judgment rendered in favor of Unionmutual.¹⁷ 

The district court did not err in denying appellant's motion to remand the case to the state court. Nor did it err in concluding that neither Global nor Unionmutual were liable to appellant on his disability claim.

AFFIRMED.