Delta Pride Catfish, Inc. v. Home Ins. Co.
| Decision Date | 26 June 1997 |
| Docket Number | No. 95-CA-00116-SCT,95-CA-00116-SCT |
| Citation | 697 So.2d 400 |
| Parties | 1997-2 Trade Cases P 71,873 DELTA PRIDE CATFISH, INC. v. HOME INSURANCE COMPANY, Chicago Insurance Company, Constitution State Insurance Company, Fireman's Fund Insurance Company, Safety National Casualty Corporation, Scottsdale Insurance Company, Federal Insurance Company, International Insurance Company, General Star Indemnity Company, and Mississippi Insurance Guaranty Association. |
| Court | Mississippi Supreme Court |
Richard G. Noble, Frank O. Crosthwait, Jr., Crosthwait Terney & Noble, Indianola; Jerold Oshinsky, Rhonda D. Orin, Robert S. Berezin, Michael T. Sharkey, Washington, DC, for Appellant.
Richard M. Edmonson, Edmonson Biggs Mozingo & Holbrook, Jackson; Gary R. Selvin, Larson & Burnham, Oakland, CA; W. Scott Welch, III, Arthur D. Spratlin, Jr., Butler Snow O'Mara Stevens & Cannada, Jackson; Clifford K. Bailey, III, Wise Carter Child & Caraway, Jackson; William C. Morison-Knox, Thomas Holden, Sonnenhein Nath & Rosenthal, San Francisco, CA; Herman M. Hollensed, Jr., Bryan Nelson Randolph & Weathers, Hattiesburg, M. James Chaney, Jr., Teller Martin Chaney & Hassell, Vicksburg, Julie E. Chaffin, Thomas W. Tardy III, Forman Perry Watkins & Krutz, Jackson; Gary Khutorsky, Robert Klein, Stephens Lynn Klein & McNicholas, Miami, FL; Glen F. Beckham, Upshaw Williams Biggers Page & Kruger, Greenwood; William C. Brabec, Luther T. Munford, Phelps Dunbar Firm, Jackson; Robert H. Pedersen, Watkins & Eager, Jackson; Roy D. Campbell III, Campbell Delong Hagwood & Wade, Greenville, for Appellee.
Before PRATHER, P.J., and JAMES L. ROBERTS, Jr. and MILLS, JJ.
I. INTRODUCTION
Appellant Delta Pride Catfish, Inc. (hereinafter Delta Pride), was sued in three separate class actions for price fixing. Delta Pride then sued for a declaratory judgment that its primary comprehensive general liability insurer, its umbrella carriers, and its excess carriers had a duty to defend and/or indemnify Delta Pride with regard to the underlying price-fixing suits. The appellees/insurance companies sued for summary judgment that they had no duty to defend and/or indemnify Delta Pride. The chancellor granted summary judgment in favor of the appellees and dismissed Delta Pride's suit for declaratory judgment.
The facts are not in dispute. The main issue in this case is a matter of contract interpretation: whether the price-fixing suits fall under the comprehensive general liability policy's coverage for "advertising injury", given that the policy defines "advertising injury" as "injury arising out of an offense committed during the policy period occurring in the course of the named insured's advertising activities, if such injury arises out of ... unfair competition?"
This Court holds that the chancellor correctly found that no coverage existed because Delta Pride's price-fixing activities were separate from its advertising activities and did not constitute unfair competition within the meaning of the "advertising injury" clause of the policy at issue. In addition, the judgment of the trial court was in accord with other jurisdictions that have considered similar contracts in similar cases. Moreover, as a matter of public policy, this contract can not be interpreted to allow Delta Pride insurance coverage for its intentional, illegal activities. For these reasons, the judgment of the chancellor denying coverage to Delta Pride is affirmed.
II. STATEMENT OF THE CASE
On March 30, 1994, Delta Pride filed a complaint in the Sunflower County Chancery Court against its primary comprehensive general liability insurer, Home Insurance Company (hereinafter Home), and its excess carriers: Chicago Insurance Company; Constitution State Insurance Company; Federal Insurance Company; Fireman's Fund Insurance Company; First State Insurance Company; General Star Indemnity Company; International Insurance Company; Safety National Casualty Corporation; Scottsdale Insurance Company; and, Mississippi Insurance Guaranty Association, which was apparently a party due to the insolvency of excess carrier Integrity Insurance Company.
Delta Pride alleged that it been sued for price fixing in three class actions: 1) In re: Catfish Antitrust Litigation, No. 2:92CVO73-D-O (N.D.Miss (hereinafter Mississippi Catfish Action); 2) Earl Hollingshead, et al. v. Delta Pride Catfish, et al., No. CV-92-1711 (Ala. Cir. Ct., Mobile County) (hereinafter Alabama Catfish Action); and, 3) Catfish Products Case, No. 2793 (Cal. Sup.Ct., San Francisco County) (hereinafter California Catfish Action). The complaint further alleged that Home had a duty to defend Delta Pride in these suits pursuant to a clause in the policy that covered "advertising injury." The policy definition of "advertising injury" was "injury arising out of an offense committed during the policy period occurring in the course of the named insured's advertising activities, if such injury arises out of ... unfair competition." Delta Pride also contended that umbrella carrier Safety National owed a duty to pay "ultimate net loss" (including indemnifying Delta Pride and paying its legal fees) in excess of the Home policy. Finally, Delta Pride asserted that the aforementioned excess carriers also owed similar duties.
Based on these allegations, Delta Pride sought a declaratory judgment for these insurance companies to pay the legal fees incurred as a result of the class action suits or furnish Delta Pride with a defense to the suits, and to indemnify Delta Pride for liability arising from the suits. On September 22, 1994, Home moved for summary judgment and alleged that the underlying actions against Delta Pride did not trigger a duty to defend under the "advertising injury" provisions of Home's policies. The excess carriers also moved for summary judgment. On October 31, 1994, Delta Pride filed a cross-motion for partial summary judgment on the duty to defend. On November 1, 1994, Delta Pride moved for sanctions against Home and alleged that Home had not complied with a discovery order.
On December 29, 1994, the chancellor granted the defendants' motion for summary judgment and dismissed Delta Pride's motion for sanctions as moot. Delta Pride appeals from that judgment and raises the following issues for consideration by this Court:
A. Whether the Chancery Court of Sunflower County erred in deciding that, under Mississippi law, the underlying actions asserted against Delta Pride Catfish, Inc. were not covered under the advertising injury provisions of Delta Pride's insurance policies and accordingly, in granting summary dismissing the action?
B. Whether the Chancery Court of Sunflower County erred in refusing to grant partial summary judgment on the duty to defend in favor of Delta Pride Catfish, Inc.?
II. LEGAL ANALYSIS
The standard of review when a trial court issues a summary judgment is as follows:
We review de novo the record on appeal from a grant of a motion for summary judgment. In Brown v. Credit Center, Inc., 444 So.2d 358, 362 (Miss.1983), we interpreted Rule 56 and the standards that the trial courts should use in considering a motion for summary judgment. We explained that
The trial court must review carefully all of the evidentiary matters before it-- admissions in pleadings, answers to interrogatories, depositions, affidavits, etc. The evidence must be viewed in the light most favorable to the party against whom the motion has been made. If in this view the moving party is entitled to judgment as a matter of law, summary judgment should forthwith be entered in his favor. Otherwise the motion should be denied.
Gulf Guaranty Life Insurance Co. v. Duett, 671 So.2d 1305, 1307 (Miss.1996) (quoting Northern Elec. Co. v. Phillips, 660 So.2d 1278, 1281 (Miss.1995)).
The policies at issue contained the following provisions:
II. PERSONAL INJURY AND ADVERTISING INJURY LIABILITY COVERAGE
(A) The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of personal injury or advertising injury to which this insurance applies, sustained by any person or organization and arising out of the conduct of the named insured's business, within the policy territory, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such injury, even if any of the allegations of the suit are groundless, false or fraudulent, and may make such investigation and settlement of any claim or suit as it deems expedient, but the company shall not be obligated to pay any claim or judgment or to defend any suit after the applicable limit of the company's liability has been exhausted by payment of judgments or settlements.
* * * * * *
(D) Additional Definitions
"Advertising Injury" means injury arising out of an offense committed during the policy period occurring in the course of the named insured's advertising activities, if such injury arises out of libel, slander, defamation, violation of right of privacy, piracy, unfair competition, or infringement of copyright, title or slogan.
Whether a liability insurance company has a duty to defend depends upon the language of the policy. "The traditional test" for whether an insurer has a duty to defend under the policy language "is that the obligation of a liability insurer is to be determined by the allegations of the complaint or declaration [in the underlying action]." State Farm Mutual Automobile Ins. Co. v. Taylor, 233 So.2d 805, 808 (Miss.1970).
The underlying suits allege that Delta Pride met with its competitors during the 1980's, set minimum prices for catfish products, and adhered to those minimum prices. The only allegation in the underlying suits that can remotely be construed as relating to "advertising" is the following allegation made by the plaintiffs in the Mississippi Catfish Action 1:
When one or more of the plaintiffs inquired of the defendants...
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