Allstate Ins. Co. v. Millsaps
| Decision Date | 12 May 2020 |
| Docket Number | NO. 2017-CA-01380-COA,2017-CA-01380-COA |
| Citation | 296 So.3d 163 |
| Parties | ALLSTATE INSURANCE COMPANY, Appellant/Cross-Appellee v. Gloria MILLSAPS, Individually and in Her Capacity as the Administrator of the Estate of Willie Millsaps, Deceased, Appellees/Cross-Appellants |
| Court | Mississippi Court of Appeals |
EN BANC.
McDONALD, J., FOR THE COURT:
¶1. Willie and Gloria Millsaps's home, located in Jones County, Mississippi, burned on September 3, 2015. After investigating the fire, their insurer, "Allstate"1 denied the claim. The Millsapses sued Allstate for breach of contract and other contract-related claims in the Circuit Court of Jasper County, Mississippi. A jury found in favor of the Millsapses against Allstate Insurance Company on the Breach of Contract claim and awarded them a total of $970,000 in damages. After reconvening and hearing testimony on punitive damages, the jury awarded the Millsapses an additional $230,000 in emotional damages ($115,000 for each), and $100,000 in punitive damages. The two verdicts totaled $1,300,000. Thereafter, the circuit court awarded the Millsapses attorneys fees of $520,000 and interest of $101,248.87. The total judgment amounted to $1,921,248.87.
¶2. The court denied Allstate's motion for judgment notwithstanding the verdict or a new trial, and Allstate has appealed. Allstate raises issues concerning whether venue was proper, whether it is liable for breach of contract when it had no contract with the Millsapses, whether it was improperly denied the right to present its defense of the Millsapses’ misrepresentations, whether the Millsapses had an insurable interest at the time of the fire, and whether punitive damages were proper. The Millsapses cross-appeal, arguing that the circuit court restricted their voire dire and did not allow them to collect all of their costs. After our review of the record and relevant precedent, we reverse and remand the case for a transfer to the active docket of the Circuit Court of Jones County, Mississippi.
Facts and Procedural History
¶3. Willie was a self-employed truck-driver/small business owner.2 Using $350,000 of insurance proceeds when his previous home burned in 2009, along with an insurance payout from the death of one of their sons, Willie and his wife, Gloria, built another home in Laurel, Mississippi (Jones County). Construction lasted about a year, and the family moved to their new home which located at 30 East Briarwood Drive, Laurel, in 2011. It was a six-bedroom, 5,000 square-foot home—large enough for themselves and their extended family.3 Willie and Gloria's immediate family expanded in 2014 when they adopted a two-month-old, special-needs child. There was no mortgage on the home.
The Millsapses Purchase of the Allstate Policy
¶4. In July 2015, Linda Walker, an agent with T.D. Graham Insurance Agency, who was authorized to sell Allstate products, cold-called Willie through telemarketing software and offered to sell him homeowner's insurance. During this call, Willie agreed and applied for $705,924 in dwelling coverage and $141,185 in contents coverage, subject to underwriting approval. The computer-generated application that Walker submitted listed Willie's prior property insurer as State Farm.4 Willie was never provided a copy of the application that Walker submitted. When later asked about his prior homeowner insurance, Willie responded that he could not recall if he had any, but he did recall Foremost Insurance drafting his bank account at some point in time.
¶5. Underwriting of the application was done by Allstate Insurance Company. It reviewed the limited credit report secured by the Graham agency. An Allstate vendor, Insurance Risk Services, inspected the home on August 6, 2015. After the inspection, the Millsapses were accepted as an underwriting risk and their coverage was increased to $731,567 for the dwelling and $219,471 for the contents based on the inspection. Allstate issued the homeowner's policy as well as a policy covering the Millsapses’ 2012 Cadillac CTS and 2006 Lexus GS430. Both policies were written by Allstate's subsidiary, "Allstate Vehicle and Property Insurance Company." The policies were year to year policies. The Millsapses’ August premium payment was returned to Allstate Vehicle for insufficient funds. Allstate Vehicle sent the Millsapses a notice that the policy would be cancelled on September 15, 2015, if the premium was not paid. The Millsapses did pay the needed premium with a credit card and avoided cancellation of the policy.
Tax Sale
¶6. Although they had no mortgage on the home, the Millsapses were required to pay annual taxes. They failed to pay the 2012 taxes, and their home was sold at a tax sale in August 2013 to Adair Asset Management Company.5 The Millsapses had until August 26, 2015 to redeem the property.6 At the time Willie purchased the homeowner's insurance from Allstate Vehicle in July 2015 and at the time of the underwriting inspection in August, the Millsapses had not yet redeemed the property.
¶7. During the last two weeks of August 2015, Willie and Gloria's special needs daughter was hospitalized at the Batson Children's Hospital in Jackson, Mississippi, and they forgot to make the tax-redemption payment. On August 26, 2015, when the redemption period expired, Adair's title matured, but no tax deed was issued. In September, 2015, prior to the fire that is the subject of this case, Gloria contacted Kamesha Mumford, an attorney/agent for Adair Asset, and discussed the amounts needed for the Millsapses to obtain Adair's interest. In October 2015 the Millsapses sent Mumford a cashier's check for $16,912.50. At trial, Mumford testified that because the chancery clerk had failed to give the proper statutory notice to the Millsapses, in her opinion the tax sale was void. On January 21, 2016, Adair quitclaimed its interest in the property back to the Millsapses.7 The Millsapses failed to report the tax sale, missed redemption date, and its aftermath to Allstate Vehicle.
The Fire
¶8. On the night of September 3, 2015, Willie was on the road delivering a load inter-state. Gloria was at home with their special needs child; Jacques was out with his girlfriend, Ashailyn McGill. A grease fire erupted, which Jacques found on his return to the home.8 Jacques put it out, but the fire department was still called. Although the firefighters confirmed that the fire was out, they advised Gloria and the family to spend the night elsewhere due to the smoke damage. So Gloria and the family left to spend the night with Willie's mother in Heidelberg, Mississippi (Jasper County). Later that night, the fire reignited and the home was totally destroyed along with the Millsapses’ Lexus.
Report to Allstate
¶9. Willie reported the fires to his insurer, Allstate Vehicle. At this point, Allstate, which adjusted claims for Allstate Vehicle, began its investigation. A few days after the fire, on September 8, 2015, Willie and Gloria met with two Allstate representatives, Wilbur Jordan and Craig Restor, at the home. Also present were Deputy State Fire Marshall Kevin Butler and Danny Benton of EFI Global, which Allstate had retained to determine the cause and origin of the fire. Benton took samples of the debris for testing.
¶10. Jordan and Restor recognized that the home was a total loss. After the fire, Allstate Vehicle paid for a motel room where Gloria and the minor child stayed. But they suffered from bed bugs there, so Allstate moved them to another hotel. Ultimately it was less expensive for the Millsapses to rent a house than stay in hotels. Willie's son, Keyon Coleman, owned a house in Heidelberg and offered to rent it to them. Keyon and Restor met and agreed upon a $2,200 per month lease amount. When the Millsapses moved in, they rented furniture from Aaron's. All of these living expenses were paid by Allstate Vehicle pursuant to the policy's requirements.9 The Millsapses also received a Personal Property Inventory form from Kerri Steger, the Allstate contents claims manager, to complete.
Allstate's Investigation of the Millsapses’ Claim
¶11. Initially, Allstate was concerned about potential arson. EFI submitted its report on September 22, 2015. In it, EFI said that of the four debris samples tested, one tested positive for The investigator could not rule out the possibility that the ignitable liquid may have been stored in a cabinet. The report determined that "the remaining physical evidence does not indicate the form of ignition ... the cause of the fire is classified as undetermined." Claims adjuster Jordan also spoke to Deputy Butler about other possible sources of ignition that may point to arson.10 But Jordan was not aware that the State Fire Marshal's office had determined that in its opinion the fire was intentionally set, until a copy of the report was obtained by subpoena just prior to trial in July 2017.11
¶12. Under their policy, the Millsaps had the duty to cooperate with the investigation, provide documents, submit to questioning under oath, and give truthful answers.
¶13. The Millsapses submitted lengthy lists of personal property they claimed were lost in the fire, giving the value and approximate age of each item. They totaled the personal property lost at $406,214.82. As part of its investigation, Allstate Insurance took Willie's statement shortly after the fire and thereafter conducted two "Examinations Under Oath" (EUO) of Gloria and Willie (one in October 2015 and another in December 2015). In connection with those, the Millsapses produced numerous documents requested by Allstate, including tax returns from 2011 through 2014 and bank...
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