Caldwell v. Alfa Ins. Co.

• Decision Date: 19 December 1996
• Docket Number: No. 93-CA-00722-SCT,93-CA-00722-SCT
• Citation: 686 So.2d 1092
• Parties: Abb CALDWELL, Jr., Administrator of the Estate of Keith Caldwell, Deceased, v. ALFA INSURANCE COMPANY.
• Court: Mississippi Supreme Court

Page 1092

686 So.2d 1092

Abb CALDWELL, Jr., Administrator of the Estate of Keith Caldwell, Deceased, v. ALFA INSURANCE COMPANY.

No. 93-CA-00722-SCT.

Supreme Court of Mississippi.

Dec. 19, 1996.

Paul Snow, Paul Snow & Associates, Jackson, for appellant.

Al Nuzzo, Delia Y. Robinson, Markow Walker Reeves & Anderson, Jackson, for appellee.

Before SULLIVAN, P.J., and JAMES L. ROBERTS, Jr. and SMITH, JJ.

SMITH, Justice, for the Court:

Abb Caldwell Jr. appeals to this Court from an adverse decision of the Claiborne County Circuit Court. Caldwell, in his capacity as Administrator of the Estate of Keith Caldwell, filed suit against Alfa Insurance Company on April 1, 1991, arising from the 1990 death of Keith Caldwell, his eighteen-year old son, who was killed when an intoxicated driver collided head-on with the vehicle in which Keith Caldwell was riding as a passenger.

Alfa was notified of the accident on February 15, 1991, and began its investigation. After Caldwell's imposed deadline for settlement passed on April 1, 1991, Caldwell filed suit. Alfa continued its investigation and tendered the uninsured motorist and med-pay benefits of $202,000 on May 28, 1991.

Despite payment by Alfa, Caldwell continued the "bad faith" aspect of its claim alleging unreasonable delay by Alfa in tendering payment. On May 7, 1993, Alfa moved for summary judgment which was subsequently granted by Honorable Frank Vollor on June 1, 1993. Aggrieved, Caldwell appeals citing three issues for our consideration. Issue I concerning whether the trial court erred in granting summary judgment is worthy of discussion. Issues II and III are without merit and discussion is unnecessary.

After thorough consideration we find that the trial court was correct in granting summary judgment to Alfa. Alfa gave a reasonable explanation for the delay in making payment to Caldwell. We do not find a six-week delay to be unreasonable or egregious under the facts of this case. Therefore, Alfa's conduct does not rise to a level requiring punitive damages to be considered. Alfa's conduct at most was simple negligence, if that. We affirm the trial court.

STATEMENT OF THE FACTS

This case arises from the death of Keith Caldwell, the son of the Appellant, Abb Caldwell. Keith was killed in an automobile accident on October 20, 1990, while riding as a passenger in the car of Angela Gowdy. The accident occurred when J.D. Williams, an intoxicated driver, crossed the center line of Highway 18 and collided head on with the Gowdy vehicle. Williams blood alcohol concentration registered .28 percent.

At the time of the collision, the Gowdy vehicle was insured by Allstate Insurance Company. The Gowdy policies contained Uninsured/Underinsured provisions with an aggregate total coverage of $40,000 per person and $80,000.00 per accident. The tortfeasor, J.D. Williams, carried liability coverage through the Moore Group with limits of $10,000 per person and $20,000 per accident.

At the time of the Keith's death, the Caldwell family held four automobile insurance policies issued by Alfa, all of which included uninsured motorist coverage of $50,000 per vehicle, the aggregate of which totaled $200,000. Alfa was first notified of Keith Caldwell's On July 15, 1992, Caldwell filed a Motion for Recusal with the trial court, citing the Code of Judicial Conduct Canon 3(C)(1). After review, the trial court denied the motion on October 2, 1992. In its Order, the Court found the allegations set forth by Caldwell to be without merit.

death on or about February 15, 1991, after which Alfa began investigating the claim. On March 22, 1991, Alfa received a demand letter from the Paul Snow, the Caldwells' attorney, which set an April 1, 1991, deadline to settle the case. After settlement was not reached on April 1, 1991, Abb Caldwell, in his capacity as administrator of the estate of Keith Caldwell, filed suit against J.D. Williams and Alfa Insurance Company. The claim against Alfa demanded uninsured motorist benefits, incidental damages, punitive damages, attorney's fees, and all costs of court. Alfa proceeded with its investigation and tendered payment of $202,000 on May 28, 1991. Caldwell proceeded with the "bad faith" portion of his claim against Alfa.

On January 19, 1993, the trial court, upon motion of Alfa, severed the claims against Alfa and the tortfeasor, J.D. Williams, pursuant to Miss.R.Civ.P. 21. Subsequently, a jury verdict was returned against J.D. Williams for the wrongful death of Keith Caldwell, with damages assessed at $8,000,000. This verdict was later remitted by Judge Vollor to $500,000.

On May 7, 1993, Alfa Insurance filed a Motion for Summary Judgment alleging that no genuine issues of material fact existed in the "bad faith" action and that Alfa was entitled to judgment as a matter of law. In addition to the pleadings and depositions, Alfa supported its motion with correspondence between Alfa and Plaintiff's counsel and affidavits by Ronald B. Adcock and John W. Chapman, Esq. Adcock, the Alfa Insurance claims adjuster who handled the Caldwell claim, detailed his actions regarding the Caldwell claim in his affidavit. John W. Chapman, an attorney practicing law in Brandon, Mississippi, set forth his opinion regarding Alfa's actions in this case. Chapman concluded that Alfa's method of investigation and the length of time involved did not amount to a tortious breach of contract which would warrant punitive damages.

In response to the Motion for Summary Judgment, Caldwell argued that genuine issues of material fact existed regarding Alfa's conduct and whether this conduct constituted bad faith. Caldwell's response was supported by deposition testimony from the following: Harold Cain, the 30(b)(6) representative of Alfa; Ronald Adcock, the Alfa claims adjuster; and Carolyn Crane, the Allstate adjuster who handled the Gowdy claim. The essence of Caldwell's argument is that Alfa failed to tender the policy limits of Caldwell's uninsured motorist coverage within a reasonable amount of time by relying on the pretext of continuing to investigate the Caldwell claim and other possible insurance coverage.

On June 1, 1993, the trial court granted Alfa's Motion for Summary Judgment. The court based its ruling on the following: the lack of cooperation Alfa had from the witnesses and other insurance companies; the multiplicity of insurance coverage and coverage issues; the failure of Caldwell to return Alfa's calls or help gather the standard information Alfa had indicated was necessary to complete the investigation; and the intervening bad faith suit for punitive damages with its concomitant legal questions and chilling effect. In light of these circumstances the court concluded that no rational jury could find that Alfa's conduct was malicious, willful or grossly negligent. Aggrieved, Caldwell now appeals.

DISCUSSION OF LAW

WHETHER THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT.

Caldwell argues that Alfa Insurance Company was grossly negligent in its investigation and handling of the Caldwell claim by its delay in tendering payment. Caldwell argues that notwithstanding undisputable evidence available to Alfa regarding coverage issues, other insurance, and damages, Alfa delayed making payment to the Caldwell family. Caldwell insists the passage of 103 days from the time Alfa was originally notified of the death of Keith Caldwell until final payment of the claim on May 28, 1991, was In response, Alfa argues that summary judgment was properly granted because Caldwell failed to set forth specific facts demonstrating genuine issues of material fact. Alfa contends Caldwell's response to the Motion for Summary Judgment consisted of mere allegations and denials of fact and therefore was insufficient to defeat summary judgment. Moreover, Alfa argues that only material facts preclude summary judgment even though immaterial facts may be disputed. Alfa argues that its investigation of the Caldwell claim was pursuant to its duty under Mississippi law to fully investigate all claims. Moreover, Alfa argues the total time period of 103 days for investigation of a $ 200,000 wrongful death claim involving three insurance companies did not rise to the level of a heightened tort as a matter of law.

unreasonable and amounted to bad faith. Further, Caldwell argues that Alfa's failure to tender payment after receipt of the demand letter from Plaintiff's counsel on March 22, 1991, which imposed a deadline of April 1, 1991, for settlement of the Caldwell claim constituted bad faith. Caldwell argues that Alfa's conduct creates a jury question on the issue of bad faith and therefore, summary judgment was improper.

In response, Caldwell argues although three insurers were involved, coverage and liability were immediately clear to Alfa. Caldwell argues the case was simple; a drunken driver crossed the center line and collided head on with the Gowdy vehicle which was covered by Allstate Insurance. In addition, the tortfeasor, J.D. Williams, carried the minimum limits of liability coverage which therefore resulted in the Caldwell claim being an underinsured motorist claim. Abb Caldwell carried coverage with Alfa which included coverage for underinsured motorists. By virtue of the above, Caldwell argues Alfa's need for additional time to fully investigate other possible insurance coverage and witness statements was merely a pretext for their bad faith delay in tending payment. Caldwell argues this failure to timely settle the Caldwell claim resulted in a "constructive denial" of the claim and therefore entitles Caldwell to punitive damages.

This Court recently set forth the standard of review for summary judgment in Aetna Cas. and Sur. Co. v. Berry, 669 So.2d 56 (Miss.1996).

The standard for reviewing the granting or the denying of summary judgment is the same standard as is employed by the trial court under Rule 56(c). This Court conducts de novo review of orders granting or denying summary...