US FIDELITY & GUAR. COMPANY v. Estate of Francis

• Decision Date: 29 August 2002
• Docket Number: No. 1999-CA-01745-SCT.,1999-CA-01745-SCT.
• Citation: 825 So.2d 38
• Court: Mississippi Supreme Court
• Parties: UNITED STATES FIDELITY & GUARANTY COMPANY v. The ESTATE OF Doris FRANCIS, By and Through Will FRANCIS, Will Francis, Individually, Judy Draper, Individually and Emily Draper, By and Through her Mother and Adult Next Friend, Judy Draper.

825 So.2d 38

UNITED STATES FIDELITY & GUARANTY COMPANY v. The ESTATE OF Doris FRANCIS, By and Through Will FRANCIS, Will Francis, Individually, Judy Draper, Individually and Emily Draper, By and Through her Mother and Adult Next Friend, Judy Draper.

No. 1999-CA-01745-SCT.

Supreme Court of Mississippi.

August 29, 2002.

Janet G. Arnold, Charles G. Copeland, Ridgeland, attorneys for appellant.

David Shoemake, Collins, Eddie Bowen, Mendenhall, attorneys for appellees.

EN BANC.

ON MOTION FOR REHEARING

CARLSON, Justice, for the court.

¶ 1. The motion for rehearing is granted. The original opinions are withdrawn, and these opinions are substituted therefor.

¶ 2. United States Fidelity & Guaranty Company (USF & G) seeks review of the Simpson County Chancery Court's ruling in the action involving Will Francis, Judy Francis Draper, Emily Draper and the Estate of Doris Francis. In particular, USF & G seeks review of subject matter jurisdiction over this case, the amount of damages awarded and the prejudgment and post-judgment interest awards. Following a trial on the merits, the chancellor determined the court did have subject matter jurisdiction over the entire matter and awarded damages to the plaintiffs. Judy Draper and her daughter were also awarded prejudgment and post-judgment interest awards. USF & G appeals the ruling of the chancellor claiming three assignments of error which this Court will review.

I. WHETHER THE CHANCERY COURT ERRED BY FAILING TO TRANSFER THE MATTER TO THE CIRCUIT COURT OF SIMPSON COUNTY.

II. WHETHER THE CHANCERY COURT'S AWARD OF DAMAGES TO WILL FRANCIS, JUDY FRANCIS DRAPER, EMILY DRAPER AND THE ESTATE OF DORIS FRANCIS WAS EXCESSIVE AND AGAINST THE OVERWHELMING WEIGHT AND SUFFICIENCY OF THE EVIDENCE.

III. WHETHER THE CHANCERY COURT ERRED IN AWARDING POST-JUDGMENT INTEREST AND PREJUDGMENT INTEREST ON $50,000 OF JUDY FRANCIS DRAPER'S AWARD OF DAMAGES UNDER M.R.C.P. 59(e)

¶ 3. Because of the applicable law, we determine that the chancery court inappropriately assumed jurisdiction of this cause; however, after a thorough review of the record as to USF & G's assignments of error on direct appeal, we find there is no reversible error which requires a remand of the case on direct appeal. Accordingly, because a final judgment was entered, this Court is precluded by Article 6, § 147 of the Mississippi Constitution from reversing the chancery court's finding without determining an error in addition to the lack of subject matter jurisdiction. We also find that there was no error in the award of damages or in the award of post-judgment interest. The chancellor erred in awarding prejudgment interest, and this award must be reversed and rendered. Consistent with Article 6, Section 147 of the Mississippi Constitution, because we hold that the assignments of error on cross-appeal have merit and that the chancery court did commit error which requires a remand, these issues are remanded to the Circuit Court of Simpson County on the issue of whether USF & G is liable based on the actions of its agent. We affirm the chancery court's judgment in all other respects.

FACTS AND PROCEEDINGS BELOW

¶ 4. On July 2, 1997, Will Francis, Doris Francis, Judy Francis Draper and Emily Draper ("Francis/Draper") traveled north on U.S. Highway 49 toward Jackson from Mendenhall in a 1991 Buick Park Avenue which was owned by Will but operated by Judy. Judy Draper is the adult daughter of Will and Doris Francis; Emily Draper, Judy's daughter, is a minor. While stopped at a traffic light at the intersection of Linda Joe Drive and the highway in Richland, a vehicle operated by Lewis Henry Johnson collided into the rear of the Francis/Draper vehicle. All occupants of the Francis/Draper vehicle sustained personal injuries with Doris Francis ultimately dying as a result of those injuries.

¶ 5. At the time of the accident, Johnson maintained a liability insurance policy on his vehicle with State Farm Insurance Companies with limits of $25,000 per person and $50,000 per accident.¹ Will Francis maintained an automobile liability insurance policy issued by USF & G, numbered PPA10493088114, that provided $500,000 in liability coverage and $25,000 in uninsured motorist bodily injury (UMBI) coverage. The aforementioned Buick Park Avenue was listed on the policy as was a 1987 Nissan 720 short bed pick-up truck, providing a stacked aggregate of $50,000 worth of UMBI coverage. Will Francis was a named insured under the policy while Judy and Emily Draper were insureds under the UMBI coverage by virtue of their occupancy of the vehicle that day.

¶ 6. In addition, Judy Draper also held an automobile liability insurance policy issued by USF & G, numbered PPA10991412309, that provided $300,000 in liability coverage and $300,000 in UMBI coverage. Two vehicles were listed on the declarations page of Judy Draper's policy: her 1991 Buick LaSabre vehicle and her son's 1996 Jeep Cherokee Sport, providing a stacked aggregate of $600,000 worth of UMBI coverage. Judy Draper was the named insured and her daughter, Emily, was, of course, a relative residing in the same household, therefore qualifying for UMBI coverage under her mother's policy. Will and Doris Francis were not qualified for coverage under this policy.

¶ 7. The settlement amount paid under Johnson's liability coverage limits with State Farm was less than the $50,000 stacked UMBI limits available to Will Francis and Judy and Emily Draper under the Francis policy and far less than the $600,000 stacked UMBI limits available to Judy and Emily Draper through Judy's policy. The USF & G policies provided underinsured UMBI benefits to the extent any of the insureds were legally entitled to recover damages from Johnson in excess of his liability limits.

¶ 8. USF & G determined that $25,000 in UMBI benefits were available from the Francis policy for the wrongful death claim of Doris Francis and the bodily injury claims of Will Francis, Judy and Emily Draper by taking the stacked UMBI limits of $50,000 and deducting a Kuehling² offset for the $25,000 paid by the Johnson liability policy. Unable to determine how to appropriately divide the $25,000, USF & G deposited this amount into the registry of the Simpson County Chancery Court and filed an action for interpleader.

¶ 9. On July 7, 1998, Will Francis, Judy Francis Draper, Emily Draper and the Estate of Doris Francis filed a separate action in the Simpson County Chancery Court against USF & G and Lewis Henry Johnson. The complaint was amended on July 13, 1998, to name the Estate of Lewis Henry Johnson as a defendant.³

¶ 10. In their negligence action, Francis/Draper alleged, inter alia, that USF & G negligently failed to explain to Will Francis that he had an option to obtain up to $500,000 in UMBI coverage for each of the two vehicles listed on his policy at the time he increased his liability coverage limits to $500,000. Francis/Draper alleged that as a result of the negligence of USF & G's agent in failing to explain this option, they should be entitled to have the UMBI limits increased to $500,000 for each vehicle, for a stacked aggregate of $1,000,000.

¶ 11. Along with their separate complaint, Francis/Draper filed a motion to consolidate their action with the previously filed interpleader action. Contemporaneously with its answer, USF & G filed a motion to transfer the Francis/Draper action to Simpson County Circuit Court, alleging lack of subject matter jurisdiction in chancery court. The Francis/Draper motion for consolidation of the actions and the USF & G motion to transfer were heard on February 8, 1999, and prior to ruling, the chancellor set a trial date for August 9, 1999. On July 29, 1999, the chancellor denied USF & G's motion to transfer to circuit court and granted the Francis/Draper motion to consolidate the action over strenuous objection from USF & G.

¶ 12. On August 3, 1999, USF & G filed a motion to stay the proceedings in chancery court and petitioned this Court for an interlocutory appeal to determine whether the chancery court had jurisdiction to hear the matter. USF & G's motion to stay proceedings was denied, and the case proceeded to trial where judgment was entered in favor of Francis/Draper on September 15, 1999. Chancellor Buffington awarded damages to Will Francis in the amount of $100,000, to Judy Draper in the amount of $520,000, to Emily Draper in the amount of $35,000 and to the heirs at law of Doris Francis in the amount of $400,000. On October 18, 1999, this judgment was modified by a separate order that granted Judy Draper prejudgment interest on $50,000, post-judgment interest on $515,000, and granted Emily Draper post-judgment interest on $25,000. After the trial, this Court denied USF & G's petition for interlocutory appeal as moot. Immediately thereafter, this appeal ensued.

STANDARD OF REVIEW

¶ 13. This Court applies a limited standard of review on appeals from chancery court. Reddell v. Reddell, 696 So.2d 287, 288 (Miss.1997). Therefore, this Court should not interfere with the chancellor's findings of fact unless they were "manifestly wrong, clearly erroneous or an erroneous legal standard was applied." Bell v. Parker, 563 So.2d 594, 596-97 (Miss.1990). "A `finding of fact' is `clearly erroneous' when, although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been made." In re Taylor, 609 So.2d 390, 393 (Miss.1992) (citations omitted). However, the chancellor's interpretation and application of the law is reviewed under a de novo standard. In re Carney, 758 So.2d 1017, 1019 (Miss.2000).

DISCUSSION

I. WHETHER THE CHANCERY COURT ERRED BY FAILING TO TRANSFER THE MATTER TO THE CIRCUIT COURT OF SIMPSON COUNTY.

¶ 14. USF & G asserts that its right to a trial by jury was abrogated when the chancellor refused to transfer the case to the circuit court. USF & G reminds this Court that Article 3, §...