Farmers Ins. Exch. v. Sheffield

• Court: U.S. District Court — Northern District of Mississippi
• Writing for the Court: Sharion Aycock UNITED STATES DISTRIC JUDGE
• Decision Date: 05 September 2017
• Docket Number: CIVIL ACTION NO.: 1:16-CV-134-SA-RP
• Citation: Farmers Ins. Exch. v. Sheffield, CIVIL ACTION NO.: 1:16-CV-134-SA-RP (N.D. Miss. Sep 05, 2017)
• Parties: FARMERS INSURANCE EXCHANGE PLAINTIFF v. RICKY SHEFFIELD and BECKY WINTER DEFENDANTS

FARMERS INSURANCE EXCHANGE PLAINTIFF v. RICKY SHEFFIELD and BECKY WINTER DEFENDANTS

CIVIL ACTION NO.: 1:16-CV-134-SA-RP

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF MISSISSIPPI ABERDEEN DIVISION

September 5, 2017

MEMORANDUM OPINION

Plaintiff filed this declaratory judgment action on July 28, 2016. Plaintiff has since filed its Motion for Summary Judgment [31]. Defendant Sheffield has responded [36], and Plaintiff replied [38]. Defendant Becky Winter did not respond to the Motion.

Factual and Procedural Background

This is an action for declaratory judgment filed by Farmers Insurance Exchange (Farmers). Farmers moves the Court to determine whether coverage exists under Carlos Fowler's homeowners' policy covers claims made by the Estate of Crystal Orick against the Estate of Carlos Fowler in a lawsuit filed in the Circuit Court of Lee County on September 1, 2011. Defendant Ricky Sheffield is the father of Crystal Orick and is the representative of the wrongful death estate of Crystal Orick.

The underlying state court cause of action alleges that on May 12, 2011, Fowler, an elderly man, shot and killed Crystal Orick, who was employed as Fowler's nonmedical, in-home caretaker. After shooting Orick, Fowler did not attempt to call 911 but rather fatally shot himself. Police and forensics reports indicate that, among other substances, Meprobamate,¹ Benzodiazepines,² Carisoprodol,³ and Hydrocodone⁴ were all present in Fowler's body at thetime of his death. The underlying Complaint alleges wrongful death liability based on an intentional tort cause of action, as well as negligence. As to the negligence claim, Orick's Estate alleges that underlying defendants failed to exercise their duty of reasonable care, and that they knew or should have known that the environment in which Orick was exposed was unsafe. Further, Orick's Estate alleges that the underlying defendants were grossly negligent in failing to monitor Fowler's actions, and in failing to remove all weapons and ammunition from his home.

Summary Judgment Standard

Summary judgment is warranted under Rule 56(a) of the Federal Rules of Civil Procedure when the evidence reveals there is no genuine dispute regarding any material fact and that the moving party is entitled to judgment as a matter of law. The rule "mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a sufficient showing to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986).

Conclusory allegations, speculation, unsubstantiated assertions, and legalistic arguments are not an adequate substitute for specific facts demonstrating a genuine issue for trial. TIG Ins. Co. v. Sedgwick James of Wash., 276 F.3d 754, 759 (5th Cir. 2002). "A party asserting that a fact cannot be or is genuinely disputed must support the assertion by citing to particular parts of materials in the record . . . or showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." FED. R. CIV. P. 56(c)(1). The court is only obligated to consider cited materials but may consider other materials in the record. Id. at 56(c)(3). The court must resolve factualcontroversies in favor of the nonmovant "but only when there is an actual controversy, that is, when both parties have submitted evidence of contradictory facts." Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994). When such contradictory facts exist, the court may "not make credibility determinations or weigh the evidence." Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150, 120 S. Ct. 2097, 147 L. Ed. 2d 105 (2000).

In Mississippi, "the interpretation of an insurance policy is a question of law, not one of fact." Corban v. United Services Auto. Ass'n., 20 So. 3d 601, 609 (Miss. 2009) (quoting Noxubee Co. Sch. Dist. v. United Nat'l Ins. Co., 883 So. 2d 1159, 1165 (Miss. 2004)). Insurance policies are contracts, and as such, must be enforced according to their written provisions. Id. (citing Noxubee Co., 883 So. 2d at 1166. When parties to a contract make mutual promises, they are entitled to the benefit of that bargain and insurance companies must therefore be able to "rely on their statements of coverage, exclusions, disclaimers, definitions, and other provisions." Id. As such, the court relies upon familiar rules of construction to discern their meaning. Progressive Gulf Ins. Co. v. We Care Day Care Center, Inc., 953 So. 2d 250, 253 (Miss. Ct. App. 2006).

The policy is to be considered as a whole, giving weight to all relevant portions and, whenever possible, giving "operable effect to every provision in order to reach a reasonable overall result." Id. (citing J & W Foods Corp. v. State Farm Mut. Auto. Ins. Co., 723 So. 2d 550, 552 (Miss. 1998). While ambiguities in an insurance contract are to be construed against the insurer, a clear and unambiguous contract will be enforced as written. Id. In reviewing a policy, terms should be understood in their "plain, ordinary, and popular sense rather than in a philosophical or scientific sense." Blackledge v. Omega Ins. Co., 740 So. 2d 295, 298 (Miss. 1999).

Analysis and Discussion

Plaintiff filed its Motion for Summary Judgment, in which they argue that there is no duty to provide coverage, including a duty to indemnify or defend the Fowler Estate for several reasons. First Plaintiff argues that Orick's claims against Fowler do not allege an "occurrence" which would trigger coverage. Second, Plaintiff argues that Orick's claims of intentional actions are excluded by the intentional act exclusion of the policy. Third, Plaintiff argues that they owe no duty to indemnify or defend the Fowler Estate because its representatives failed to comply with the notice provisions set forth in the insurance policy.

"[T]he burden of proving coverage rests with the insured." Architex Ass'n, Inc. v. Scottsdale Ins. Co., 27 So. 3d 1148, 1157 (Miss. 2010).⁵ Farmers has two distinct obligations to its insured—(l) a duty to indemnify its insured for covered claims and (2) a duty to furnish a legal defense to certain claims. Mimmit v. Allstate County Mut. Ins. Co., 928 So. 2d 203, 207 (Miss. Ct. App. 2006). "Mississippi has adopted the 'allegations of the complaint' rule (sometimes referred to as the eight-corners test) to determine whether an insurer has a duty to defend," pursuant to which the court reviews the allegations in the underlying complaint to see whether it states a claim that is within or arguably within the scope of the coverage provided by the insurance policy. Ingalls Shipbuilding v. Federal Ins. Co., 410 F.3d 214, 225 (5th Cir. 2005). In so doing, the court compares the words of the complaint with the words of the policy, looking "not to the particular legal theories" pursued by the plaintiffs, "but to the allegedly tortious conduct underlying" the suit. Id. (citations omitted). See also United States Fidelity & Guarn.Co. v. Omnibank, 812 So. 2d 196, 200 (Miss. 2002). "If the complaint states a claim that is within or arguably within the scope of coverage provided by the policy, then the insurer has a duty to defend." QBE Ins. Corp. v. Brown & Mitchell, Inc., 591 F.3d 439, 443 (5th Cir. 2009) (applying Mississippi law) (quotation omitted).

The duty to indemnify, however, arises only if the facts actually established in the underlying suit amount to a covered claim. Estate of Bradley ex rel. Sample v. Royal Surplus Lines Ins., 647 F.3d 524, 531 (5th Cir. 2011) (applying Mississippi law). An insurer may have a duty to defend but, eventually, no duty to indemnify. Moeller v. American Guar. and Liability Ins. Co., 707 So. 2d 1062, 1069 (Miss. 1996). In contrast, "if there is no duty to defend, there can be no duty to indemnify." Evanston Ins. Co. v. Neshoba Cnty. Fair Ass'n, Inc., 442 F. Supp. 2d 344, 345 n.1 (S.D. Miss. 2006).

Plaintiff argues that the policy does not provide coverage for Orick's bodily injury because they do not constitute an "occurrence" under the policy. The applicable policy provides that an "'[o]ccurrence' means an accident, including continuous or repeated exposure to substantially the same general harmful conditions. . . ." Defendant Sheffield counters that the ongoing presence of the loaded gun in the home, even though Fowler was ill and heavily medicated, constitutes repeated exposure to harmful conditions. Furthermore, Defendant Sheffield argues that given Fowler's mental state, his actions cannot possibly constitute intentional acts, and that the medication negated the intent required to shoot Orick intentionally.

The Mississippi Supreme Court has held that "an accident by its very nature produces unexpected and unintended results. It follows that bodily injury or property damage, expected or intended from the standpoint of the insured, cannot be the result of an accident." Omnibank, 812 So. 2d at 200. Furthermore, there is coverage unless the "chain of events leading to the injuriescomplained of were set in motion and followed a course consciously devised and controlled by [the insured] without the unexpected intervention of any third person or extrinsic force." Architex Ass'n, Inc., 27 So. 3d at 1153-54 (emphasis omitted) (quoting OmniBank, 812 So. 2d at 200). "[E]ven if an insured acts in a negligent manner, that action must still be accidental and unintended in order to implicate policy coverage" under this definition of an "occurrence." Id. at 1158. Therefore, "a claim resulting from intentional conduct which causes foreseeable harm is not covered," id., and this definition of an "occurrence" does not encompass "negligent actions that are intentionally caused by the insured." Id. at 1159; see also, Allstate Ins. Co. v. Moulton, 464...