Hartford Acc. & Indem. Co. v. Foster

Decision Date06 April 1988
Docket NumberNo. 56468,56468
Citation528 So.2d 255
CourtMississippi Supreme Court
PartiesHARTFORD ACCIDENT & INDEMNITY COMPANY, George G. Williamson & Curtis E. Coker v. Mrs. Royce FOSTER, Administratrix of the Estate of Royce Foster, Deceased.

James L. Carroll, Virginia T. Munford, Watkins & Eager, Jerome B. Steen, Edward J. Currie, Jr., Steen, Reynolds, Dalehite & Currie, Joe H. Daniel, Daniel, Coker, Horton & Bell, Jackson, for appellants.

Douglas M. Magee, Mendenhall, for appellees.


HAWKINS, Presiding Justice, for the Court:

Hartford Accident and Indemnity Company, Curtis E. Coker, and George C. Williamson have appealed from a judgment in the circuit court of Simpson County in favor of Mrs. Royce Foster, administratrix of Royce Foster's estate, in the sum of $30,000. This was a suit instituted by Foster in his lifetime against the insurance carrier and his attorneys for bad faith refusal to settle a case within policy limits, and for breach of fiduciary duty owed by the attorneys to him.

This case requires us to address the duties owed by an insurance carrier to its insured when an offer is made to settle a liability claim within the policy limits, and also for the first time in this state, difficult questions pertaining to the duties of lawyers retained by the insurance carrier to represent the insured.

From a careful and meticulous study of this record, we have concluded the circuit court erred in refusing the defense motions to direct a verdict in favor of the defendants, and we therefore reverse the judgment and render judgment here for the appellants.

This holding requires that we affirm the cross-appeal of Foster's estate for pre-judgment interest and on the issue of punitive damages.


Royce Foster owned and operated a family furniture store in Magee under the trade name "Foster Furniture Company." His son-in-law Donald G. Harris worked for him. On August 4, 1976, Harris, while driving a pick-up truck on a country road in Jefferson Davis County, making a furniture delivery, was involved in a motor vehicle accident with James L. Sims, who was driving a Chevrolet automobile. The vehicles were traveling in opposite directions when they collided, and Sims suffered severe injuries to his left arm. Harris is white, was a resident of Simpson County; Sims is black, was a resident of Jefferson Davis County.

On February 2, 1977, Sims filed suit in the circuit court of Simpson County against Foster, his son Royce Foster, II, and Harris, claiming $150,000 actual and $150,000 in punitive damages.

Foster had a liability insurance policy in effect with Hartford Accident & Indemnity Company with a maximum limit of $50,000 per person. 1 James L. Napper, claims manager of Hartford in Mississippi, retained the Jackson law firm of Daniel, Coker, Horton, Bell and Dukes to represent the defendants in the lawsuit. On February 4, 1977, Napper wrote Foster Furniture Company (to the attention of Royce Foster) in Magee as follows:

I wish to advise you that the defense of this suit has been referred to the firm of Daniel, Coker, Horton, Bell & Dukes, Jackson, Mississippi. At some future date, a representative of this firm will be consulting with you on this matter.

(R. 1037)

The letter does not show that a copy was sent to the law firm. The policy manual for Hartford had a form letter to mail to insureds when a lawsuit exceeded policy limits. This form letter contains the following paragraph:

Since the amount of damages demanded is in excess of your policy limits, you may, if you wish, at your own expense, retain personal counsel to further protect your interests. We will be glad to cooperate with whomever you select.

Napper's letter to Foster did not contain this information.

Curtis E. Coker, a senior member of the firm, undertook the defense of the action. Coker in turn retained the services of George C. Williamson, a Mendenhall attorney, to assist in the defense of the case. An answer was filed on behalf of the defendants February 16 denying any negligence on the part of Harris, and affirmatively alleging that Sims, while driving at a high rate of speed, had failed to negotiate the curve, had crossed the center line of the road and side-swiped the truck.

Coker personally inspected the scene of the accident, and interviewed prospective witnesses, including the investigating officers and Harris and Foster. It was the belief and position of Harris and Foster that Harris was not negligent in the collision, but the sole cause of the accident was the negligence of Sims. The vehicles swiped one another on a graveled road. Coker and Williamson concluded there was no liability, and while a jury issue would probably be made, the defendants would win the case.


The trial testimony revealed that Harris was traveling south on a gravel road in Jefferson Davis County approximately two miles from Bassfield. The road was 17-18 feet wide within the shoulders. He was driving a 1976 Ford pick-up truck which had fitted on it a wooden frame or body to transport furniture. He was familiar with the road.

He approached a curve which turned sharply to his left. Foliage of roadside trees encroached upon the West, Harris's, side of the road. He testified he could not see around the curve, and was driving 12-20 miles per hour. He said he first saw Sims's automobile about three and one-half car lengths ahead coming into the curve meeting him, that he immediately applied his brakes, turned his wheels to the right and stopped. He also testified the Sims car was sliding all over the road, and the driver "seemed like" he had lost control. The Sims car struck the back of the pickup.

Sims was driving a 1966 Chevrolet automobile, with his three children in the car. His left arm was out the window, his left hand on top of the car. He testified it looked to him like the pick-up was driving down the middle of the road, and "Didn't look to me like he was trying to do nothing." He said the pick-up was cutting in on him. Sims said that he did not know what happened after the vehicles collided.

Sims had just left the residence of his brother-in-law Arthur Ray Michael, where he had stopped to inquire whether his wife was there. According to him Well, I pulled off and just before I got to that curve, well, I was fixing to get in the curve, I look--I seen the dust coming and I blowed the whistle twice and I got around the curve, I never did see nothing.


Well, when I seen the dust I blowed and then I looked and that's when I seen the truck, but I thought he was going to, you know, going to get over, but he never did get over. I was as far as I could get over.

Harris said he was stopped at the time of the impact, but that the Sims car traveled another two hundred feet.

The left rear hub cap was knocked off the truck, and the wood frame was struck at the rear. As to the automobile, the extreme left side of the windshield was broken, the left frame holding the windshield was bent, and the side of the car at the rear of the left door was bent.

Gary Don Davis, constable, and Gary Jones, the chief deputy sheriff, respectively, of Jefferson Davis County, investigated the accident shortly after it occurred. Sims was still in his car. Jones said he could smell alcohol on Sims's breath. The officers checked the tracks of the vehicles, as well as debris from the pick-up frame in the road, which indicated the point of impact was about a foot and a half over onto the pick-up's side of the road. Davis also said the tracks indicated the rear of the Sims car was sliding at the time the vehicles collided, and that the back of the Harris truck was knocked about another foot and a half further over. Following the collision the two vehicles were about 300 feet apart.

Sims could not read or write, and was intermittently employed by two of his cousins hauling "paperwood." On the day of the accident he had been looking after the children while his wife Winnie worked. That morning he had driven about 30 miles distance to Hattiesburg, attended to some business about his home, and eaten a noon meal with a cousin. He bought a dollar's worth of gas and returned to his home. While back at his house, he said he had asked a neighbor, Lee Morris Knight, to help him scatter some dirt for his driveway. The two of them had a sixteen-ounce can of beer, each, according to Sims. Sims said he only drank about one-half of his. Knight was not called as a witness.

Sims said that over in the afternoon he asked Knight what time it was, who told him it was after four p.m. Sims knew his wife got off from work at 3:30 and he was supposed to pick her up.

He got in his car with the children and drove to Arthur Ray and Annie Pearl Michael's home where he expected to get his wife, but she was not there. He then drove off towards Bassfield. The curve in the road was about 300 yards from the Michael residence.

Harris testified that when the Michaels came to the scene just after the accident, Arthur Ray told him Sims had been drinking.

Michael testified that he and his wife heard the racket from the accident, that he ran from the house to the scene, and then the additional distance necessary to catch the Sims's still moving car. He said the pick-up was in the middle of the road. Michael admitted on cross-examination that he had been convicted of grand larceny.

At his pretrial deposition Harris had said that there were over-hanging bushes or trees just before the collision. At the time of his deposition he did not recall the truck coming in contact with any trees or bushes. At trial he testified the truck may have done so, he just did not recall whether it had or not.

At the conclusion of the trial, there was a jury verdict and judgment rendered for $80,000 in favor of Sims. Hartford, through Coker, offered Sims $50,000, the policy limits, in settlement of the case, which was refused. The...

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