Reported / Citable
Background
Megalomedia produces My 600-lb Life, which follows people attempting to lose weight. Its general-liability policy with Philadelphia Indemnity Insurance Company contained an endorsement excluding bodily-injury and property-damage coverage arising from “any/all reality shows.” After former participants and family members sued Megalomedia in Texas state court over alleged production-related injuries, Philadelphia declined to defend or indemnify the company.
Philadelphia sought a federal declaration that it owed no defense or indemnity, while Megalomedia asserted counterclaims for breach of contract, fraudulent inducement, and violations of the Texas Insurance Code and Deceptive Trade Practices Act. The district court granted Philadelphia summary judgment on coverage and, after a bench trial, rejected Megalomedia’s remaining claims. Following a limited remand that confirmed diversity jurisdiction, the appeal returned to the Fifth Circuit.
The Court’s Holding
The Fifth Circuit affirmed. The majority did not decide whether “reality show” is ambiguous or whether My 600-lb Life could fall outside that term. It held that Megalomedia forfeited that argument by failing to raise it at summary judgment and by repeatedly describing My 600-lb Life below as a reality show while advancing a different interpretation of the exclusion. Megalomedia could not reverse that position for the first time on appeal.
The court also upheld the rejection of Megalomedia’s fraudulent-inducement claim. Evidence showed that Philadelphia repeatedly advised Megalomedia and its broker that reality television was excluded, Megalomedia removed reality-show production costs from figures submitted to Philadelphia, and it obtained separate coverage for those programs. The district court therefore did not clearly err in finding that Megalomedia could not have justifiably relied on a contrary representation. The same reliance defect defeated its Insurance Code and DTPA claims.
Judge Ho filed a separate concurrence. Judge Oldham dissented, reasoning that the undefined term “reality show” was ambiguous and should be construed against Philadelphia, and disputing the majority’s conclusion that Megalomedia’s appellate ambiguity argument was forfeited.
Key Takeaways
- An appellant generally cannot oppose summary judgment on one interpretation and then seek reversal through a contrary interpretation first advanced on appeal.
- The majority resolved the coverage challenge through forfeiture rather than deciding what “reality show” means under the policy.
- Evidence that an insured knew an exclusion applied can defeat justifiable reliance and related fraud, Insurance Code, and DTPA claims.
Why It Matters
The decision underscores the importance of preserving each distinct contract-interpretation argument in the district court. Even when an appellate argument concerns the same claim and requested relief, the Fifth Circuit may treat it as forfeited if it materially changes the theory presented below.
The divided opinions also expose disagreement over the boundary between forfeited arguments and an appellate court’s authority to identify and apply governing law. Because the majority declined to reach the merits, the decision does not establish a substantive definition of “reality show” for insurance policies.