Guaranty Nat. Ins. Co. v. Pittman
| Decision Date | 14 January 1987 |
| Docket Number | No. 57322,57322 |
| Citation | 501 So.2d 377 |
| Parties | GUARANTY NATIONAL INSURANCE COMPANY v. Adrienne E. PITTMAN. |
| Court | Mississippi Supreme Court |
Jack F. Dunbar, Holcomb, Dunbar, Connell, Chaffin & Willard, Oxford, for appellant.
Everette Verhine, Vicksburg, Ben Todd, Memphis, for appellee.
Before ROBERTSON, ANDERSON and GRIFFIN, JJ.
I.
This appeal presents important questions regarding construction of several of our rules of civil procedure--those concerning the intervention of third parties in pending actions and the granting of default judgments and subsequent attacks thereon. The Circuit Court has entered judgment by default in favor of a personal injury plaintiff and against a truck driver defendant. The liability insurer for the truck driver's putative employer then sought to intervene and to have the default judgment vacated. The Circuit Court denied all relief.
For the reasons explained below, the liability insurer should have been allowed to intervene. Refusal to set the default judgment aside, however, was well within the Circuit Court's authority and in that respect the judgment below is affirmed.
II.
This action has its genesis in a September 29, 1983, motor vehicle accident in DeSoto County, Mississippi. Bobby Eugene Hardin, a driver for a Memphis trucking concern, was alone in his tractor when he was involved in an intersection collision with an automobile driven by Tracy Nichols and occupied by Adrienne E. Pittman. The collision caused serious personal injuries to Pittman who in due course asserted claims against both Nichols and Hardin, the latter of which we are primarily concerned with today.
Somewhat more than ten months following the accident, Pittman employed counsel, Everette Verhine, Esq. of Vicksburg, Mississippi, who on August 8, 1984, addressed a letter to Hardin advising of his representation, asserting a claim on Pittman's behalf against Hardin and suggesting that Hardin refer the matter to his liability insurance carrier. Hardin took the letter to Dave Steele, president of Central States Terminals, Inc., and in due course was advised that he was not covered by insurance through Central or its liability insurance company, The Hartford Accident and Indemnity Company.
On November 5, 1984, Pittman commenced the present civil action by filing her complaint in the Circuit Court of DeSoto County, Mississippi, naming Bobby Eugene Hardin as the defendant. Hardin was effectively served with process on November 12, 1984. The summons unequivocally advised Hardin that he must answer the complaint within thirty days. Hardin took the complaint to Steele who directed that he take it to Central's insurance agent in Memphis. This was done and apparently around December 27, 1984, Hardin was advised by the insurance agency that he had no coverage for claims made against him arising out of the incident in question.
In early January of 1985, Hardin talked on the telephone with Pittman's attorney, Everette Verhine. At that time Verhine advised Hardin that Pittman's suit against him had been set for trial on February 6, 1985, in the Circuit Court of DeSoto County and that, if Hardin had not answered nor appeared by that time, Pittman would take a default judgment against him. Under the circumstances Hardin knew or should have known of the hazards of failure to answer or appear.
On February 6, 1985, Pittman and her attorney appeared in the Circuit Court in Hernando, Mississippi. Hardin had filed no answer, nor did he appear in person or through counsel. Pittman then made application for entry of Hardin's default and On or about February 26, 1985, today's Appellant, Guaranty National Insurance Company [GNIC], first learned of the pendency of this action and of the fact that judgment had on February 6, 1985, been entered against Hardin. GNIC is the liability insurance carrier for Rail Water Transport, Ltd., another Memphis based trucking concern under whose ICC permit it has been alleged that Hardin was operating at the time of the accident. On March 1, 1985, GNIC retained counsel to protect its interests. Following an apparent reservation of rights, GNIC employed counsel to represent Hardin in an effort to obtain vacation of the default judgment. In addition, GNIC has proceeded in its own behalf.
this was done by the clerk of the court. See Rule 55(a), Miss.R.Civ.P. Thereafter, Pittman applied for judgment upon Hardin's default which application was granted, subject to inquiry into Pittman's damages. See Dungan v. Dick Moore, Inc., 463 So.2d 1094, 1097-98 n. 2 (Miss.1985). A non-jury hearing was held the same day in the Circuit Court at the conclusion of which the Court assessed Pittman's damages as $400,000.00 and entered final judgment in that amount in favor of Pittman and against Hardin
On May 10, 1985, Adrienne E. Pittman brought a garnishment action in the U.S. District Court for the Northern District of Mississippi against GNIC and other diverse defendants--Central, Hartford and Rail Water--seeking a judgment declaring that those defendants are liable to Pittman in the amount of $400,000.00 pursuant to various insurance contracts which allegedly covered Bobby Eugene Hardin. GNIC has answered that suit and has filed a counterclaim seeking a declaratory judgment as to whether Hardin was an insured under its contract with Rail Water and, if so, as to the amount of its liability.
Further, on May 13, 1985, Hardin filed suit in the same U.S. District Court seeking actual and punitive damages in the amount of $5,000,000.00 against Central, Rail Water, Hartford and GNIC based on an allegation of bad faith breach of insurance contract(s) by reason of failure to indemnify and defend.
Of more immediate relevance to today's appeal, on June 25 and 26, 1985, respectively, Bobby Eugene Hardin and GNIC filed motions in the present action, then pending in the Circuit Court of DeSoto County to have the February 6, 1985, default judgment set aside. Preliminarily, GNIC also filed a motion pursuant to Rule 24(a)(2), Miss.R.Civ.P., for leave to intervene in the Circuit Court suit for the limited purpose of seeking to have the default judgment set aside. By order dated January 10, 1986, the Circuit Court denied GNIC's motion for leave to intervene on the following grounds:
(1) untimeliness;
(2) the contingent nature of GNIC's interest in the suit;
(3) the fact that GNIC could not have been sued directly by Pittman; and
(4) adequacy of representation of GNIC's interest by Shelby Duke Goza, Esq., of Oxford, Mississippi, the attorney retained by GNIC to defend Bobby Hardin.
GNIC's motion to set aside the default judgment was also denied--although in a technical sense it was never before the court, for GNIC had been denied intervention. The Circuit Court then proceeded to deny Hardin's motion to set aside the default judgment.
GNIC perfected this appeal on February 4, 1986. Bobby Eugene Hardin failed to appeal the lower court's refusal to vacate the default judgment.
III.
There is no question of appealability here. Entry of an order in one of our trial courts denying an application for leave to intervene under Rule 24 is sufficiently a final order that review of same lies within our appellate jurisdiction. See Stallworth v. Monsanto, 558 F.2d 257, 263 (5th Cir.1977); United States Fidelity & Guaranty Company v. Adams, 485 So.2d 720, 721 (Ala.1986). In any event, GNIC further
appeals entry of the final judgment in favor of Pittman and against Hardin.
IV.
GNIC first assigns error in the Circuit Court's order overruling its motion for leave to intervene. GNIC asserts here its claim of a right to intervene under Rule 24(a)(2), Miss.R.Civ.P., which provides as follows:
Upon timely application, anyone shall be permitted to intervene in an action ... when the applicant claims an interest relating to the property or transaction which is the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest, unless the applicant's interest is adequately represented by existing parties. [Emphasis added]
This language is verbatim identical with that found in Rule 24(a)(2) of the Federal Rules of Civil Procedure by virtue of the 1966 amendments thereto. See 7C Wright, Miller & Kane, Federal Practice and Procedure Sec. 1908 (2d ed.1986); 3B Moore's Federal Practice Sec. 24.07 (2d ed.1985).
We are concerned with a claim of intervention of right. Rule 24(a)(2) provides that a would be intervenor "shall" be allowed to intervene if he meets four prerequisites: (1) he must make timely application, (2) he must have an interest in the subject matter of the action, (3) he must be so situated that disposition of the action may as a practical matter impair or impede his ability to protect his interest, and (4) his interest must not already be adequately represented by existing parties. Today's case is our first occasion to construe these requirements. 1
GNIC filed its motion for leave to intervene on June 26, 1985. This was 140 days after entry of the default judgment in favor of Pittman and against Hardin back on February 6, 1985. The Circuit Court held that the motion was "not timely."
The concept of timeliness is not defined in Rule 24. The Comment, normally our most valued guide to proper construction of our rules of civil procedure, provides:
The requirement of timeliness is not of fixed meaning and provides an opportunity (even under 24(a)) for the court to take some account of the practical situation and the effect on those already parties and on the economical disposition of judicial business by allowing intervention. Rule 24(a) represents a judgment that in the situation there described justice demands that the interest of the absentee should predominate over the interests of the original parties and of trial convenience, but if the absentee has failed to move...
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