Harrison v. Ohio Cas. Ins. Co., Inc., 398CV377WS.

• Decision Date: 15 August 2000
• Docket Number: No. 398CV377WS.,398CV377WS.
• Citation: 199 F.Supp.2d 518
• Court: U.S. District Court — Southern District of Mississippi
• Parties: Neil R. HARRISON and Julia A. Harrison Plaintiffs v. OHIO CASUALTY INSURANCE COMPANY, INC., Great American Insurance Company, and State Automobile Property & Casualty Insurance Company. Defendants

Page 518

199 F.Supp.2d 518

Neil R. HARRISON and Julia A. Harrison Plaintiffs v. OHIO CASUALTY INSURANCE COMPANY, INC., Great American Insurance Company, and State Automobile Property & Casualty Insurance Company. Defendants

No. 398CV377WS.

United States District Court, S.D. Mississippi, Jackson Division.

August 15, 2000.

James W. Nobles, Jr., James W. Nobles, Jr., Attorney, James G. McIntyre, James G. McIntyre, Attorney, Jackson, for Neil R. Harrison, Julia A. Harrison, plaintiffs.

William A. Patterson, Wilkins, Stephens & Tipton, P.A., Jackson, for State Automobile Mutual Insurance Company, State Auto Property and Casualty Insurance Companies, consolidated defendants.

ORDER GRANTING DEFENDANT AMERICAN NATIONAL FIRE INSURANCE'S MOTION FOR SUMMARY JUDGMENT

WINGATE, District JUDGE.

Before the court is defendant American National Fire Insurance's ("American National") motion for summary judgment under Rule 56(b)¹ of the Federal Rules of Civil Procedure. After having reviewed the motion, briefs, authorities and other supporting documentation provided by both parties, this court finds the defendant's arguments well taken and grants the motion.

I. BACKGROUND

This litigation comes pursuant to a jury verdict against the plaintiffs, Julia and Neil Harrison, in the Circuit Court of Madison County, Mississippi. The Harrisons were sued by a Dr. Fred McMillan after they had sold him a home they had built and had lived in for a number of years. The home in question, located at Lot 19, Overlook Pointe, Madison, Mississippi, developed severe foundation problems that subsequently led to cracked walls, improper drainage, and other related problems during the time that the Harrison's owned and lived in it. The problems persisted after the sale to McMillan. McMillan filed several state law causes of action against the plaintiffs, including breach of contract, breach of implied warranty, negligence, fraud, and misrepresentation. The Madison County jury returned a verdict for McMillan on all counts, except for any fraud/misrepresentation allegations and awarded damages to McMillan of $290,066.84.

Almost immediately after the rendering of the jury's verdict, plaintiffs brought causes of action against several insurance companies, including defendant American National (a part of the Great American Insurance Companies). Plaintiffs seek coverage for the jury verdict rendered against them under the several policies that the insurance companies afforded to either plaintiffs directly, or to the "Service Air Heating & Air Conditioning," d/b/a Service Air ("Service Air").

Defendant American National issued an excess or umbrella coverage policy, policy no. UMBO-83-29-95-09 to "named insured," Service Air Heating & Air Conditioning, Inc., et al., on December 20, 1994. The policy covers any "sums in excess of `underlying insurance' or the retained limit that the `insured' becomes legally obligated to pay as damages because of `injury' caused by an `occurrence' to which this policy applies." The policy also states, however, that "[i]f there is no `underlying insurance' obligated to do so, we shall have the right and duty to defend any `suit' against the `Insured' seeking damages because of the `injury,' even if the allegations of the `suit' are groundless, false or fraudulent."

For the purposes of this case, the pertinent "underlying insurance" to which the American National policy refers is a Commercial General Liability Occurrence (GLC) policy issued by the Ohio Casualty Insurance Company ("Ohio Casualty"). The underlying limit of the Ohio Casualty GLC policy is $1,000,000. This court granted summary judgment against the Harrisons and in favor of Ohio Casualty in an earlier order dated March 31, 2000. This court held that the Ohio Casualty GLC policy did not cover plaintiffs for their negligent construction of McMillan's home since, among other reasons, they were not the named "insured" on the policy. The Ohio Casualty GLC policy explicitly named the Service Air company and not the Harrisons as the insured on the declarations page of that policy.

Defendant American National raises three argument for the denial of coverage to the Harrisons: (1) American National argues that the policy limit of Ohio Casualty's GLC policy is not in any way exceeded by the jury verdict rendered in the Madison County litigation between McMillan and the Harrisons; (2) American National also argues that, as in the Ohio Casualty GLC policy, the Service Air company and not the Harrisons are the named insured in the excess coverage policy; (3) Finally, American National also contends that the negligent construction of the house by the Harrisons was not an "occurrence" under the definition of such in the excess coverage policy. As such, argues American National, its policy does not cover the Harrisons for their losses and costs in the Madison County litigation. American National contends that none of the material facts is in dispute and asks this court to interpret the policy provisions of the insurance policy in its favor under its motion for summary judgment.

The plaintiffs, in their response to defendant's motion, seemingly do not contest the fact that the Madison County jury verdict does not trigger the excess policy provision stated in Section I(A)(1) of the American National policy. The Harrisons rely, however, on Section I(A)(2) of the policy, which states that "[i]f there is no `underlying insurance' obligated to do so, [American National] shall have the right and duty to defend any `suit' against the `Insured' seeking damages because of the `injury,' even if the allegations of the `suit' are groundless, false or fraudulent." Plaintiffs argue that since the Ohio Casualty GLC coverage has been denied by Ohio Casualty (a decision upheld by this court), Section I(A)(2) of the American National policy confers a duty on American National to defend or indemnify the Harrisons for the underlying litigation. Plaintiffs also point out to the court that Section III(C) of the American National policy states:

The amount stated on the Declarations as the Retained Limit is the amount of the damages you will pay when the "injury" is covered by this policy and not covered by "underlying insurance."

According to the Declaration page of the American National policy, the Retained Limit is $10,000. In summation, plaintiffs contend that American National, under Section I(A)(2) of the policy establishes a duty by American National to defend and indemnify the plaintiffs, with the plaintiffs merely contributing the retained limit of $10,000.

II. STANDARDS FOR SUMMARY JUDGMENT

When the moving party has challenged the non-movant's case under Rule 56(c), the opposing party must present more than a metaphysical doubt about the material facts in order to preclude the grant of summary judgment. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986). In response to a motion for summary judgment, the non-moving party is required to respond with specific proof demonstrating a triable issue of fact as to each of the elements required for establishment of the claim or claims asserted. Washington v. Armstrong World Indus., 839 F.2d 1121, 1122-23 (5th Cir.1988).

Summary judgment then is mandated in any case where the non-moving party fails to establish the existence of an element essential to the case and on which the non-moving party has the burden of proof. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). Thus, Rule 56(c) further requires that the court enter summary judgment if the evidence favoring the non-moving party is not sufficient for the trier of fact to enter a verdict in the non-moving party's favor. See Anderson, 477 U.S. at 252, 106 S.Ct. at 2512; Exxon Corp. v. Burglin, 4 F.3d 1294, 1297 (5th Cir.1993).

In ruling on a motion for summary judgment, the court is not to make credibility determinations, weigh evidence, or draw from the facts legitimate inferences for the movant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). Rather, "it is the province of the jury to access the probative value of the evidence." Kennett-Murray Corp. v. Bone, 622 F.2d 887, 892 (5th Cir. 1980). Summary judgment is appropriate only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." Hirras v. National R.R. Passenger Corp., 95 F.3d 396, 399 (5th Cir.1996) (quoting Fed. R.Civ.P. 56(c)). It is improper where the court merely believes it is unlikely that the non-moving party will prevail at trial. National Screen Serv. Corp. v. Poster Exchange, Inc., 305 F.2d 647, 651 (5th Cir. 1962). However, the facts that are irrelevant or unnecessary to a decision are "nonmaterial" and do not prevent summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Phillips Oil Co. v. OKC Corp., 812 F.2d 265 (5th Cir.1987).

III. ANALYSIS

Since neither party contends that the material facts presented to the court are in dispute, this court will proceed to assess whether the American National policy provides coverage for the jury verdict rendered against the Harrisons.

A. Section I(A) of The American National Excess Insurance Policy Coverage.

Defendant American National asserts in its motion for summary judgment that Section I(A)(1) of the policy does not provide coverage for the Harrisons since the underlying insurance coverage provided by Ohio Casualty has been denied. Even if the underlying GLC coverage was granted by Ohio Casualty, American National asserts that the underlying limit of $1,000,000 will not be exhausted since the Madison County jury verdict was only for $290,066.84. Plaintiffs do not dispute this position taken...