Griffin v. Ware

• Citation: 457 So.2d 936
• Decision Date: 10 October 1984
• Docket Number: No. 55092,55092
• Parties: William A. GRIFFIN and Irene C. Griffin v. Joe C. WARE and Mike Wootton, a Partnership, d/b/a Ware & Wootton, General Adjusters.
• Court: United States State Supreme Court of Mississippi

Page 936

457 So.2d 936

50 A.L.R.4th 891

William A. GRIFFIN and Irene C. Griffin v. Joe C. WARE and Mike Wootton, a Partnership, d/b/a Ware &amp Wootton, General Adjusters.

No. 55092.

Supreme Court of Mississippi.

Oct. 10, 1984.

W.E. Gore, Jr., Harry Kelley, Jackson, for appellants.

Michael S. Allred, David A. Barfield, Satterfield & Allred, Jackson, for appellees.

Before WALKER, P.J., ROBERTSON and SULLIVAN, JJ., and SUGG, Retired Supreme Court Justice.

SUGG, Retired Supreme Court Justice, for the Court: ¹

The question on this appeal is whether adjusters employed by an insurer, who were not parties to the agreement for insurance, are subject to an implied duty of good faith and fair dealing to the insured. We answer the question in the negative and affirm the judgment of the trial court.

Appellees were employed by the National Flood Insurance Program (hereafter Program) as adjusters to investigate a claim for damages to a home formerly owned by appellants under a flood insurance policy issued by the Program. Appellants settled with the Program on December 1, 1982, for $2,876.90.

After obtaining the settlement appellants sued appellees in the Circuit Court of the First Judicial District of Hinds County. Appellants charged that they formerly owned a home in Jackson, Mississippi, and had a flood insurance policy with the Program on or about May 1979, and at all times material thereafter.

Appellants also alleged:

1. The structure and foundation of their home was damaged by an underground flow of water which came about during a fifteen inch rain in April of 1979 which preceded the April flood of 1979, at which time the ditch next to their residence had "gotten out of its banks and came within approximately 2" of coming into the residence."

2. Appellants discovered damage in the spring of 1981, jacked up the foundation, and inserted wooden blocks in an effort to realign the floors and sills of their home.

3. In 1982, appellants again noticed that a door in the house was misaligned and difficult to close. Appellants again jacked up the house and inserted more shims and blocks.

4. As a result of the continued settling of the foundation appellants notified Robinson & Julienne Insurance Agency, agents for the National Flood Insurance Program, about the problem and were advised that an adjuster would examine the house.

5. Appellees were employed to adjust appellants' claim. According to Exhibit "2" annexed to the bill of complaint, appellees were assigned the responsibility of adjusting the claim on May 5, 1982, and sent Jack A. Cameron, a certified structural engineer, to inspect the premises in May 1982. Cameron made a report to appellees on May 10, 1982, a copy of the report being annexed as Exhibit "1" to the complaint.

6. Appellees wrote the Program on May 19, 1982, enclosed a copy of the Cameron report, and recommended that the claim be denied.

7. Appellants were able to get their claim reconsidered and settled with the Program based on the report of another adjuster.

8. Appellants charge that appellees acted in bad faith and, "deliberately, maliciously and willfully stated that the damage was caused by Yazoo clay" when appellees should have known that the damage was not caused by Yazoo clay but by the sub-surface flow of water.

Appellees filed a motion to dismiss and for a judgment on the pleadings under Rule 12(b)(6), or in the alternative, for a summary judgment under Rule 56. Appellees alleged in their motion: (1) the complaint fails to state a claim or cause of action against the defendants upon which relief can be granted; (2) Defendants were employed by National Flood Insurance Program to investigate the claim of the plaintiffs and were at all times the known agents of a disclosed principal and at all times the defendants represented themselves to the plaintiffs to be such agents of a disclosed principal; (3) the complaint alleges various causes of action sounding in breach of contract and plaintiffs never had any contract with these defendants; (4) there was no privity of contract between plaintiffs and defendants and defendants owed no contractual or fiducial duties to the plaintiffs and are not therefore liable to the plaintiffs; (5) the plaintiffs contract was with National Flood Insurance program and any cause of action plaintiffs may have for breach of such contract or an independent tort arising out of the breach of such contract is a cause of action against National Flood Insurance Program and not against the defendants who were at all times the known agents of a disclosed principal and as such have no liability for the acts or omissions of the principal.

Attached to the motion was the following affidavit of Joe C. Ware:

1. I am Joe C. Ware, one of the partners of Ware and Wootton, General Adjusters, and as such I have full authority to make this affidavit on behalf of said partnership and in my own behalf.

2. On or about May 4, 1982, Ware and Wootton, General Adjusters was Flood Insurance Program to investigate a claim of flood damages at 224 North Sunset Terrace, Jackson, Mississippi, the former home of William Griffin and Irene C. Griffin.

3. I conducted the investigation and at all times represented myself and Ware and Wootton, General Adjusters, to be the agents of National Flood Insurance Program.

4. Neither Ware and Wootton, General Adjusters, nor I ever contracted with the plaintiffs to do anything. Ware and Wootton, General Adjusters and my only obligation was to our principal, National Flood Insurance Program.

5. All of Ware and Wootton, General Adjusters and my actions were taken on behalf of our disclosed principal, National Flood Insurance Program.

The Circuit Court, Honorable Charles G. Barbour presiding, entered summary judgment for appellees. The 12(b)(6) motion of appellees was treated as one for summary judgment and the court considered matters outside the pleadings which were presented to it. The court found that appellees were entitled to a judgment as a matter of law and no genuine issue of material fact existed. Rule 12 provides in part as follows:

(b) How Presented. Every defense, in law or fact, to a claim for relief in any pleading, whether a claim, counterclaim, cross-claim, or third-party claim, shall be asserted in the responsive pleading thereto if one is required, except that the following defenses may at the option of the pleader be made by motion:

(6) Failure to state a claim upon which relief can be granted,

... If, on a motion to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56; ...

The trial court properly treated the motion as a motion for summary judgment under Rule 56 and was authorized to consider the affidavit of Ware in passing on the motion. Appellants could have filed a counter affidavit, but instead of doing so elected to stand on their complaint. This put the question in this case squarely before the trial judge.

The gravamen of the action against appellees was that they made false reports to their principal and thereby committed a tort against appellants. Stated differently, appellants charge appellees with a tort because appellees breached an implied duty of good faith and fair dealing which they owed appellants.

The only Mississippi case we find dealing with the liability of an adjuster to an insured is Progressive Casualty Insurance Company v. Keys, 317 So.2d 396 (Miss.1975). Keys filed suit against Progressive Casualty Insurance Company, General Adjustment Bureau, Inc., and Chesley Price, individually and as agent of the insurance company and General Adjustment Bureau. Keys alleged he had a policy of insurance with Progressive which provided collision coverage on his vehicle. He had a collision which totally demolished his vehicle and it became necessary to employ an attorney to secure a settlement with Progressive. General Adjustment was employed by Progressive to adjust the claim on the policy on which the suit was based and Price was the agent of General Adjustment.

After many months of negotiations Price made a firm offer of settlement which was accepted by Keys' attorney on behalf of Keys. Keys charged General Adjustment and Price, while acting as agent for Progressive, with "willful and wanton breach of contract in that after said offer was made and accepted, they withdrew the offer and breached the contract."

Keys also charged that Progressive, "by and through its agents has continuously delayed, harassed, embarrassed and flatly refused to make a settlement of the claim and that the defendant's actions in refusing to pay Plaintiff his money in accordance with the terms of his policy were deliberate and malicious."

Keys sought actual...