Guidant Mut. Ins. v. Indemnity Ins.

• Decision Date: 25 June 2009
• Docket Number: No. 2006-CA-01472-SCT.,No. 2007-CA-01593-SCT.,2007-CA-01593-SCT.,2006-CA-01472-SCT.
• Citation: 13 So.3d 1270
• Parties: GUIDANT MUTUAL INSURANCE COMPANY v. INDEMNITY INSURANCE COMPANY OF NORTH AMERICA.
• Court: Mississippi Supreme Court

13 So.3d 1270

GUIDANT MUTUAL INSURANCE COMPANY v. INDEMNITY INSURANCE COMPANY OF NORTH AMERICA.

No. 2007-CA-01593-SCT.

No. 2006-CA-01472-SCT.

Supreme Court of Mississippi.

June 25, 2009.

Dion Jeffery Shanley, Oxford, H. Scot Spragins, attorneys for appellant.

Leann W. Nealey, Robert A. Miller, Jackson, attorneys for appellee.

Before CARLSON, P.J., LAMAR and CHANDLER, JJ.

CARLSON, Presiding Justice, for the Court.

¶ 1. Today's case presents issues concerning priority of coverage, costs of defense, and contribution between insurers after a vehicular accident in which two individuals were seriously injured when their vehicle collided with a vehicle owned and operated by a volunteer fireman en route to the scene of a fire. Aggrieved by the trial court's entry of final judgment on these issues, one insurer has appealed and one insurer has cross-appealed. In the end, we reverse the final judgment entered by the Circuit Court of Marshall County and remand this case for further proceedings consistent with this opinion.

FACTS AND PROCEDURAL HISTORY

¶ 2. On November 22, 1994, James Hingle, a volunteer fireman with the Slayden Mt. Pleasant Volunteer Fire Department in Marshall County, was dispatched to the scene of a fire in the county. En route to the fire scene, while driving his personal vehicle, Hingle collided with a vehicle occupied by Sam and Ruby Anderson, causing the Andersons to suffer serious injuries. As a result of this accident, on November 15, 1995, the Andersons filed two separate lawsuits in the Circuit Court of Marshall County. One lawsuit named only Hingle and alleged that his negligence in the operation of his vehicle proximately caused the vehicular accident and the resulting injuries and damages, which the Anderson alleged to be in the amount of $4,150,000 ("Hingle lawsuit"). The other lawsuit sought identical damages and, after amendment, named as defendants Marshall County, the Slayden Mt. Pleasant Fire Department, and the Marshall County Board of Supervisors ("Marshall County lawsuit"). In the Marshall County lawsuit, the Andersons asserted, inter alia, that the defendants were liable for Hingle's negligence inasmuch as Hingle was their employee, agent, servant, or representative, who was, at the time of the accident, driving his personal vehicle to the scene of a fire in the performance of his duties as a member of a volunteer fire department in Marshall County.¹

¶ 3. At the time of the accident, the following insurance coverages were in force: (1) Guidant Mutual Insurance Company, f/k/a Preferred Risk Mutual Insurance Company, (Guidant) insured Hingle's vehicle under a personal automobile liability policy with a $250,000-per-person/$500,000-per-accident limit; (2) Guidant also had issued to Hingle a personal umbrella protection policy with a $1,000,000 limit; (3) Indemnity Insurance Company of North America (INA) had issued to Marshall County (also covering Slayden Mt. Pleasant Fire Department) a business automobile liability policy with limits of $300,000; and (4) Titan Indemnity Company separately insured the Marshall County Board of Supervisors with a business automobile liability policy with limits of $300,000. Both the INA policy and the Titan policy provided coverage as to nonowned automobiles.

¶ 4. While the two lawsuits were pending, a dispute arose among the insurance companies as to which company should defend the litigation and which policy or policies should be considered as providing primary coverage and excess coverage. On June 19, 1998, INA filed a declaratory judgment action against Guidant and Titan in the Circuit Court of Marshall County. In that action, INA sought to have the circuit court determine that Guidant had a duty to defend all the defendants in the Hingle and Marshall County lawsuits; that INA had no duty to defend any of the defendants; that Titan and INA had coverage on an excess basis only; and that both of Guidant's policies afforded primary coverage for all defendants.²

¶ 5. In due course, INA filed a motion for summary judgment in the declaratory judgment action; however, the trial court held INA's motion in abeyance pending a final determination on the merits of the underlying lawsuit in the Marshall County case. Following that ruling, INA provided counsel to defend Marshall County and the fire department.

¶ 6. On August 26, 2003, the trial court granted Titan's Motion for Summary Judgment on the basis that James Hingle was not an employee of Marshall County; thus the trial court found there was no legal or factual basis for Titan, the insurer of the Marshall County Board of Supervisors, to be required to extend any liability coverage, defense, or indemnification for claims arising from the November 1994 automobile accident. Accordingly, the trial court dismissed all claims against Titan in the declaratory judgment action filed by INA.

¶ 7. Guidant eventually entered into settlement negotiations with the Andersons as to all their claims. On February 21, 2003, Guidant sent a letter to INA notifying the company of a settlement offer and providing INA with the opportunity to contribute its $300,000 coverage under INA's policy toward the proposed settlement offer. INA responded that until Guidant was willing to discuss reimbursement of INA's legal costs, INA was not willing to discuss a settlement contribution. In October 2003, prior to trial in the Hingle and Marshall County lawsuits, Guidant settled with the Andersons as to all their claims for the sum of $750,000. INA refused to participate in the Anderson settlement. Guidant allocated $300,000 from the personal automobile liability policy³ and $450,000 from the umbrella policy for the total payment of $750,000.

¶ 8. Thereafter, Guidant filed a motion for summary judgment against INA in the declaratory judgment action, seeking contribution or reimbursement from INA in the amount of $450,000, the sum Guidant had paid to the Andersons under its umbrella policy. Guidant argued that the umbrella policy was excess to the INA automobile policy issued to Marshall County.

¶ 9. INA responded and likewise filed its own motion for summary judgment, alleging that Guidant was a voluntary payor; thus, according to INA, it had no duty to defend or to reimburse Guidant. INA also renewed its motion for summary judgment, alleging that Guidant should be required to reimburse INA for attorney's fees and expenses incurred in defending Marshall County and the fire department in the Anderson litigation.

¶ 10. On July 30, 2006, the trial court dismissed both motions for summary judgment with prejudice. The trial court found that Guidant was the primary insurer under both of its policies, and until the $1.5 million limit was exhausted, INA had no obligation to participate in the settlement. The trial court also found that Marshall County and the fire department were insureds of INA; therefore, INA owed them a duty of defense. The trial court additionally found that INA was not entitled to reimbursement from Guidant, and that Guidant was not entitled to contribution from INA for the settlement costs. In November 2006, the trial court sustained INA's Motion for Summary Judgment and clarified that the basis of the July 2006 ruling was Guidant's status as a voluntary payor.

¶ 11. The trial court issued a final judgment in August 2007, which incorporated the 2006 orders, dismissing the declaratory judgment with prejudice.⁴ Guidant filed a notice of appeal and amended notice of appeal. Guidant appealed from the portion of the final judgment denying its request for contribution from INA for settlement costs and the finding that it was a voluntary payor. INA filed a notice of cross-appeal on the issue of the trial court's denial of its request for reimbursement of defense costs while defending Marshall County and the fire department.⁵

DISCUSSION

¶ 12. In today's appeal, the parties raise several issues. For the sake of discussion, we restate the issues as follows: Guidant asks us to consider whether the trial court erred in finding that: (1) Guidant was the primary insurer under both of the policies issued to James Hingle; (2) Guidant was not entitled to contribution from INA for settlement costs; and (3) Guidant was a voluntary payor. On cross-appeal, INA asks us to consider whether the trial court erred in finding that INA was not entitled to reimbursement for the legal expenses incurred by INA in its defense of Marshall County and the volunteer fire department.

¶ 13. This Court employs a de novo standard in reviewing a trial court's grant of summary judgment. Wise v. United Servs. Auto. Ass'n, 861 So.2d 308, 311 (Miss.2003).

The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

Miss. R. Civ. P. 56(c). The trial court must carefully review all evidentiary matters in the light most favorable to the nonmoving party. Wise, 861 So.2d at 311 (citing Brown v. Credit Ctr., Inc., 444 So.2d 358, 362 (Miss.1983)). If in this view, the moving party is entitled to judgment as a matter of law, summary judgment should be granted. Id. (citing Brown, 444 So.2d at 362). In today's case, both parties assert that there are no disputed issues of material fact. Appellate review of purely legal questions also requires a de novo standard of review. Warwick v. Gautier Util. Dist., 738 So.2d 212, 215 (Miss.1999).

I. WHETHER THE TRIAL COURT ERRED IN DETERMINING THAT GUIDANT WAS THE PRIMARY INSURER UNDER BOTH POLICIES ISSUED TO JAMES HINGLE.

A. Guidant's automobile policy

¶ 14. As issuer of James Hingle's personal automobile policy number 003888-283,⁶ Guidant admits that it was a primary insurer; however, Guidant argues that INA was a coprimary insurer, given that INA insured Marshall County and...