Aetna Cas. and Sur. Co. v. Berry

Citation669 So.2d 56
Decision Date15 February 1996
Docket NumberNo. 91-CA-00107-SCT,91-CA-00107-SCT
PartiesThe AETNA CASUALTY AND SURETY COMPANY, City Insurance, Inc., and Burt Young v. Mrs. Cherry BERRY, Administratrix of the Estate of H.H. "Jack" Berry, Deceased, and Mrs. Cherry Berry, Individually.
CourtUnited States State Supreme Court of Mississippi

Guy T. Gillespie, III, Janet G. Arnold, Robert S. Mink, Holcomb Dunbar Connell Chaffin & Willard, Oxford, Cary E. Bufkin, Jim Bullock, Shell Buford Bufkin Callicutt & Perry, Jackson, John C. McLaurin, McLaurin & McLaurin, Brandon, Whitman B. Johnson, III, Michael F. Myers, Currie Johnson Griffin Gaines & Myers, Jackson, Jimmie B. Reynolds, Steen Reynolds & Dalehite, Jackson, for appellants.

Roland C. Lewis, Jackson, Patricia R. Alexander, Law Office of Roland C. Lewis, Jackson, Lawrence J. Franck, J. Collins Wohner, Jr., Donna Brown Jacobs, Butler Snow O'Mara Stevens & Cannada, Jackson, Fred M. Harrell, Jr., Harrell & Rester, Brandon, for appellees.

En Banc.


SULLIVAN, Presiding Justice, for the Court:

The original opinions are withdrawn and these opinions are substituted therefor.

This lawsuit stems from an automobile accident in which H.H. "Jack" Berry (Mr. Berry) was killed on November 14, 1981, while riding as a passenger in a vehicle operated by his wife, Cherry Berry (Ms. Berry). The vehicle driven by Ms. Berry was a Pontiac Bonneville station wagon owned by General Motors Corporation (GM), and loaned to the Berrys by a GM district representative. The Berrys collided head-on with a 1971 Ford LTD driven by Willie B. Davis (Davis), an uninsured drunk driver. Davis later entered a plea of guilty to manslaughter and was sentenced to fifteen years incarceration.

Ms. Berry initially brought three lawsuits in the United States District Court For The Southern District Of Mississippi, on November 30, 1981, sixteen days after the accident. The federal court consolidated the three suits by Order of Consolidation on November 3, 1983. In the complaint filed in the district court, Ms. Berry named the following defendants: (1) Aetna Casualty And Surety Company (Aetna)--the insurance company that issued the garage liability policy to Mr. Berry's car dealership, Berry Pontiac-G.M.C. (Berry Pontiac); (2) Royal Globe Insurance Company of America (Royal Globe)--the company that issued the insurance policy on the borrowed vehicle in which Mr. Berry was killed; and, (3) Motors Insurance Corporation. Ms. Berry demanded judgment in the Ms. Berry then filed a Motion For Leave to File Amended Complaint in the district court alleging "additional grounds, including bad faith," on the part of Aetna and Royal Globe. In her district court motion for summary judgment, Ms. Berry stated that Aetna was guilty of the intentional tort of bad faith because it wrongfully denied her UM coverage under the policy issued to Berry Pontiac, Mr. Berry's car dealership.

sum of $100,000.00 compensatory damages and $10,000,000.00 punitive damages against the defendants jointly and severally. Motors Insurance Corporation was voluntarily dismissed on January 7, 1982.

The district court determined that Royal Globe's maximum liability was $20,000.00 in UM coverage. On April 4, 1985, District Judge Tom S. Lee issued a memorandum opinion finding that Mr. Berry was not covered as a first class insured because Berry Pontiac, not Mr. Berry, was the named insured under the Aetna policy. Further, Judge Lee found that Mr. Berry was not a second class insured under the Aetna corporate policy issued to Berry Pontiac because UM coverage under the policy only applied to owned automobiles, and at the time of the accident Mr. Berry was traveling in a vehicle owned by GM, not Berry Pontiac.

Judge Lee further found that the drive other car (DOC) endorsement attached to the Aetna policy, which provided individual liability insurance and medical coverage for Mr. Berry on cars not owned by Berry Pontiac, did not provide UM benefits because there was not a premium charged for UM coverage on the endorsement. However, because there was no written waiver of UM coverage, Judge Lee found that Aetna was liable for UM coverage in the minimum statutory amount of $10,000.00. Berry v. Aetna Cas. and Sur. Co., 607 F.Supp. 397 (D.C.Miss.1985). The court entered judgment in favor of Ms. Berry and against Aetna for the statutory minimum amount of $10,000.00 on July 29, 1985.

Ms. Berry unsuccessfully appealed Judge Lee's decision to the United States Court of Appeals for the Fifth Circuit and the United States Supreme Court. Berry v. Aetna Casualty and Surety Co., 787 F.2d 586 (5th Cir.1986), cert. denied, 479 U.S. 915, 107 S.Ct. 317, 93 L.Ed.2d 291 (1986). She then filed a complaint on November 12, 1987, nearly six years after the accident, in the Rankin County Chancery Court. The chancery court suit was styled "Complaint for Accounting of Monies Collected by Insurance Agent and Insurance Company, Specific Performance of Contract, Bill of Discovery, and Other Relief." The new complaint named as defendants Aetna, Bill Dumbauld and Keith Bayless as Aetna representatives, City Insurance Inc. (City), Burt Young (Young) in his individual capacity as the insurance agent who sold the Aetna policy to Berry Pontiac, Jackson Excavating and Leasing Company, Inc. (owner of a 1978 Dodge pick-up also involved in the accident), Walter J. Evans, Jr. (driver of the pick-up), and Willie B. Davis, the uninsured driver who negligently caused the accident.

The complaint filed in the chancery court stated that "[a]s a proximate consequence of conspiracies, conversions, frauds, negligence, breach of implied warranty of merchantability, breach of implied warranty of fitness, breach of express warranties, and under the doctrine of strict liability, Aetna, Dumbauld, Bayless, City and Young, as manufacturers of the defective insurance policy and because of their bad faith," are liable for $10,000,000.00 actual damages and $10,000,000.00 punitive damages, and attorney's fees and all costs of the cause. Furthermore, alleging that Jackson Excavating, Walter Evans, and Davis were all negligent in causing the collision that resulted in Mr. Berry's death, Ms. Berry demanded $3,000,000.00 and $5,000,000.00 punitive damages, attorney's fees and all costs of the cause as to those defendants. The court, with consent of plaintiff, dismissed defendants Bill Dumbauld (Aetna's claims supervisor) and Keith Bayless (Aetna's underwriting supervisor) without prejudice.

Ms. Berry's complaint also alleged that she suffered the following damages as a result of the defendants' bad faith:

1. Mr. Berry's conscious pain and suffering.

2. The economic value of Mr. Berry's life....

3. Mrs. Berry's conscious pain and suffering and disability, both physical and psychological.

4. Past medical bills not exceeding $20,000.00.

5. Lost wages to-date not exceeding $25,000.00.

6. Future medical bills of a minimum of $50,000.00.

7. Lost wages to-date in a sum not exceeding $50,000.00.

8. Psychological trauma for Mrs. Berry's injuries resulting from Mr. Berry's suffering fatal injury in her presence.

9. Punitive damages and attorney's fees.

Ms. Berry also demanded a judgment for an accounting of the monies paid to Aetna, City Insurance Co. and Burt Young, and the coverages therefor; for the monies due plaintiff on that accounting; for costs of suit; attorney's fees for the entire action; and, for "an accounting of all sums due to insureds throughout Mississippi where corporations have been issued uninsured motorist policies, whereby no liability can accrue therefor."

Young and City filed an answer to the complaint on January 8, 1988, moving the chancery court to dismiss the complaint and alternatively to transfer the cause to the circuit court of Rankin County. Young and City furthermore moved the chancery court to sever the claims against the defendants and transfer the cause to the circuit court of Copiah County, Mississippi. The Young and City motion to transfer was denied on January 9, 1989. Jackson Excavating and Leasing Company, Inc. and Walter J. Evans, Jr. also moved the court to transfer and sever. The court denied that motion on June 30, 1988, stating, among other things, that the two Rankin County resident defendants (Dumbauld and Bayless) were dismissed from the suit, but added that their dismissal did not deprive the court of jurisdiction. Further, the summary judgment motions filed by Young, City and Aetna were denied by the court. Aetna asserted the affirmative defenses of res judicata, election of remedies, and collateral estoppel in its answer to Ms. Berry's complaint. Aetna also filed a motion to dismiss based on those issues.

Trial was held in one to five day increments beginning with motions argued on December 8, 1988. Testimony began in January, 1989 and concluded in July, 1990. The trial extended over a period of approximately nineteen months.

At the close of Ms. Berry's case, Judge Bridges considered motions by the various defendants. He initially granted Young and City's motion for directed verdict, but later amended that ruling and reinstated Young and City as defendants after being reminded of certain testimony by Ms. Berry's counsel. The chancellor did leave his initial dismissal of the bad faith and punitive damages portion of the claim against Young and City intact. The court also granted Jackson Excavating's motion as to punitive damages only, and denied Aetna's motion to dismiss. In his written explanation denying Aetna's motion to dismiss, the chancellor did not address the res judicata and collateral estoppel issues.

Aetna requested the United States District Court for the Southern District of Mississippi, Judge Lee, to issue a temporary restraining order and a permanent injunction against the chancery court proceeding in order to protect the district court's prior judgment....

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