Fulton v. Miss. Farm Bureau Cas. Ins. Co.
| Decision Date | 10 January 2013 |
| Docket Number | No. 2009–CT–01529–SCT.,2009–CT–01529–SCT. |
| Citation | 105 So.3d 284 |
| Parties | Robert Michael FULTON v. MISSISSIPPI FARM BUREAU CASUALTY INSURANCE COMPANY. |
| Court | Mississippi Supreme Court |
OPINION TEXT STARTS HERE
O. Stephen Montagnet, III, W. Thomas McCraney, III, Ridgeland, attorneys for appellant.
Michael Wayne Baxter, Walker Reece Gibson, Ridgeland, attorneys for appellee.
EN BANC.
ON WRIT OF CERTIORARI
¶ 1. After Mississippi Farm Bureau Casualty Insurance Co. (“Farm Bureau”) delayed payment of Robert Michael Fulton's uninsured-motorist benefits, Fulton sued Farm Bureau. The jury found Farm Bureau negligent for failing to timely investigate and pay Fulton's claim, awarding Fulton $10,000 in extracontractual damages. The jury did not find that Farm Bureau acted grossly negligent, reckless, or in bad faith and awarded no punitive damages.
¶ 2. Following the jury's verdict, Fulton filed a post-judgment motion to amend, seeking $120,773 in attorney's fees and expenses. The circuit court denied the motion, analyzing it under Mississippi Rule of Civil Procedure 59(e) and finding that Fulton had not shown reason to amend as this Court requires.1 Fulton appealed the denial of his motion, arguing that attorney's fees were collateral to the final judgment and outside the scope of Rule 59(e). The Court of Appeals agreed and reversed the circuit court, holding that—because attorney's fees are “collateral” to the final judgment and outside the scope of Rule 59(e)—the court at least should have considered awarding them.
¶ 3. We find that the Court of Appeals erred in classifying attorney's fees as “collateral.” Fulton had no post-judgment right to attorney's fees because the jury did not award punitive damages, and neither a statutory nor a contractual provision authorizes such fees. The circuit court—properly applying a Rule 59(e) analysis—did not abuse its discretion in denying Fulton's motion. Therefore, we reverse the Court of Appeals and reinstate and affirm the circuit court's decision.
¶ 4. Robert Michael Fulton was a spectator at the Little Yazoo Dirt Race Track when an uninsured and intoxicated race-car driver, Lofton Eugene Pigg Jr., lost control of his race car and drove into the spectator section. Pigg struck and injured Fulton.
¶ 5. Six months after the accident, Fulton submitted a claim for uninsured-motorist benefits to Farm Bureau. Two months later, Fulton sued Farm Bureau, 2 claiming it had breached its contractual duty to pay insurance proceeds; delayed payment of insurance proceeds in bad faith; and negligently failed to timely investigate, process, and pay Fulton's claims. Fulton pleaded actual economic damages, including attorney's fees, as an element of damages resulting from Farm Bureau's delay in investigating and paying the claim.
¶ 6. When Fulton filed suit, Farm Bureau was investigating Fulton's claim. Farm Bureau ultimately paid Fulton $25,502.50 of his $50,500 in total available uninsured-motorist benefits. The jury found that Farm Bureau neither had breached the insurance contract nor acted in bad faith, and it awarded Fulton no punitive damages. However, the jury awarded Fulton the remainder of his uninsured-motorist policy benefits and—because Farm Bureau had delayed in investigating and paying Fulton's claim—the jury awarded Fulton $10,000 in extracontractual damages. Neither party appealed the extracontractual damages or the denial of punitive damages.
¶ 7. Post-trial, Fulton filed a motion seeking $120,773 in attorney's fees, costs, expenses, and interest. He argued that attorney's fees were judgment-derivative and collateral to the jury's verdict. The astute circuit judge denied the motion, stating:
This Court, after considering the motion, records and pleadings, finds that Plaintiff filed a timely Rule 59(e) motion to amend judgment[,] but the Plaintiff's motion failed to show one of the three requirements set forth by the Mississippi Supreme Court in Brooks v. Robertson [ Roberts ], 882 So.2d 229 (Miss.2004), which states:
“[I]n order to succeed on a Rule 59(e) motion, the movant must show (i) an intervening change in controlling law, (ii) availability of new evidence not previously available, or (iii) need to correct a clear error of law to prevent manifest injustice.”
The Court therefore finds the Plaintiff's Motion to Amend Judgment to Award Attorneys Fees and Expenses, Costs and Interest is hereby DENIED.
¶ 8. Fulton appealed, alleging the circuit court erred in applying Rule 59(e). The Court of Appeals agreed, reversed, and remanded, holding that the circuit court should have considered attorney's fees because they lie outside the scope of Rule 59(e).3 Farm Bureau filed, and the Court of Appeals denied, a motion to reconsider. Farm Bureau timely petitioned this Court for certiorari.
¶ 9. The issue before this Court is whether Mississippi Rule of Civil Procedure 59(e) governs Fulton's motion to amend for attorney's fees. We hold it does. Our review is therefore limited to abuse of discretion.4 A judge may award attorney's fees collaterally only if statutorily or contractually authorized, or if punitive damages are also awarded.5
¶ 10. In this case, neither a statute nor a contract authorized attorney's fees, and the jury did not award punitive damages. Therefore, attorney's fees are not judgment-derivative and a postjudgment request for such fees falls within the scope of Rule 59(e). We find that the circuit court properly analyzed Fulton's motion.
I. The circuit court did not abuse its discretion in denying Fulton's motion to amend for attorney's fees.
¶ 11. Rule 59(e) permits a party to file a motion to amend or alter a judgment.6 The United States Supreme Court—construing an identical rule—“has held Rule 59(e) embraces motions urging ‘reconsideration of matters properly encompassed in a decision on the merits.’ ” 7 This Court, has held that “in order to succeed on a Rule 59(e) motion, the movant must show (i) an intervening change in controlling law, (ii) availability of new evidence not previously available, or (iii) need to correct a clear error of law to prevent manifest injustice.” 8
¶ 12. As a result of Farm Bureau's delay in payment and investigation of his claim—essentially, a negligence claim—Fulton pleaded actual economic damages, including attorney's fees. The jury found that Farm Bureau was negligent in investigating and paying Fulton's claim and awarded Fulton $10,000 in extracontractual damages. Fulton did not appeal the jury's award of extracontractual damages.
¶ 13. Post-judgment, Fulton filed a motion to amend, seeking attorney's fees. Recognizing that, in asking for attorney's fees, Fulton was essentially seeking additional “extracontractual” damages, the trial judge considered Fulton's motion under Rule 59(e), found that Fulton failed to show reason to amend, and denied the motion. This was not error.
¶ 14. Fulton argues, and the Court of Appeals agreed, that attorney's fees are a collateral matter outside the scope of Rule 59(e). Attorney's fees, however, are not merely a procedural matter separate from the substantive merits of an action. The right to attorney's fees is substantive law.
¶ 15. Although, as explained below, circumstances may exist in which attorney's fees would be collateral, this is not one of those circumstances. Without an independent right to attorney's fees, a post-judgment motion to amend for attorney's fees falls under Rule 59(e). And under Rule 59(e), certain requirements must be met. Fulton failed to meet those requirements. The circuit court did not abuse its discretion in denying Fulton's motion.
¶ 16. Mississippi has long followed the American rule, meaning “[a]bsent some statutory authority or contractual provision,attorneys' fees cannot be awarded unless punitive damages are also proper.” 9 If independent grounds for attorney's fees exist, a trial judge may award such fees collaterally.10 But if the jury does not award punitive damages, “attorneys' fees are clearly not to be awarded by the trial judge.” 11
¶ 17. Neither the Mississippi uninsured motorists statutory scheme nor any other Mississippi statute authorizes attorney's fees in this action. Fulton and Farm Bureau's contract does not authorize attorney's fees. And the jury did not award punitive damages. Therefore, Fulton had no post-judgment right to such fees.
¶ 18. Both Fulton and the Court of Appeals erroneously relied on this Court's statement in Bruce v. Bruce: “motions for reassessment of attorneys fees lie outside Rule 59(e), because they are ‘collateral’ and do not seek a change in the judgment but ‘merely what is due because of the judgment.’ ” 12 This statement is inapplicable here because, in Bruce—and in the other cases cited by Fulton—either a statute or established precedent allowed the award of attorney's fees.13
¶ 19. In this case, no independent grounds support Fulton's post-judgment request for attorney's fees. The circuit court properly recognized that it lacked independent grounds to award such fees and properly analyzed Fulton's motion under Rule 59(e). It did not abuse its discretion in denying the motion.
¶ 20. Fulton asserts that, like punitive damages, extracontractual damages independently support attorney's fees. But extracontractual damages serve a different role than punitive damages in insurance actions. When an insurer denies a claim without an arguable basis, but the jury does not award punitive damages, extracontractual damages may provide an intermediate form of relief.14 And in determining whether this intermediate relief is warranted, this Court has noted that mere negligence, without bad faith, “is not such an independent tort that would support extracontractual...
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