Hartford Acc. & Indem. Co. v. Lockard

• Decision Date: 05 December 1960
• Docket Number: No. 41564,41564
• Citation: 124 So.2d 849,239 Miss. 644
• Court: Mississippi Supreme Court
• Parties: HARTFORD ACCIDENT & INDEMNITY COMPANY v. Jacob T. LOCKARD.

Page 849

124 So.2d 849

239 Miss. 644

HARTFORD ACCIDENT & INDEMNITY COMPANY v. Jacob T. LOCKARD.

No. 41564.

Supreme Court of Mississippi.

Dec. 5, 1960.

P. D. Greaves, Gulfport, for appellant.

Merle F. Palmer, Pascagoula, for appellee.

KYLE, Justice.

The appellee, Jacob T. Lockard, instituted this suit in the Chancery Court of Jackson County against the appellant, Hartford Accident and Indemnity Company, seeking to recover sums of money which the appellee had become legally obligated to pay to third persons as damages because of bodily injuries and property damage caused by accident and arising out of the ownership and use by the appellee of a motor vehicle, for which coverage was claimed under an automobile liability policy issued by the appellant; and from a decree overruling a demurrer to the bill of complaint and awarding to the appellee a money judgment the appellant has prosecuted this appeal.

The bill of complaint in this case was filed by the said Jacob T. Lockard, complainant against the said Hartford Accident and Indemnity Company, defendant, on January 26, 1959. In his bill the complainant alleged that on May 28, 1956, he was the owner of a 1953 Ford F-600 truck, which was being driven by Roosevelt Tanner, an employee of the complainant, north on Highway 59, about one mile south of Vancleave, Mississippi, and was pulling a bobtail log trailer owned by the complainant, when said trailer came loose and ran into a 1952 two-ton Chevrolet truck which was owned and was being driven by Gaston Fairley, who had a passenger, Manson Littlefield, with him in the truck; that the loose trailer struck the truck of Gaston Fairley and damaged same, and that Fairley and Littlefield sustained personal injuries as a result of the collision.

The complainant further alleged that at the time of the accident he carried liability insurance with the defendant, Hartford Accident and Indemnity Company, on said 1953 Ford truck, under Policy No. 20K 117229, issued by the said defendant; that the complainant immediately gave notice of said accident to Moran's Insurance Agency at Ocean Springs, Mississippi, who was the general agent of the defendant herein; and complainant was assured by Moran's Insurance Agency that he was fully covered under the policy and the defendant would take over the investigation and defense of any claims against the complainant as a result of said accident; that the defendant proceeded to investigate the accident, and had the truck of Gaston Fairly taken to a garage in Biloxi, Mississippi, for repairs; that in the meantime the said Gaston Fairley and Manson Littlefield employed an attorney to represent them in actions against the complainant for personal injuries and property damage arising out of said accident; that the said attorney notified the complainant in writing of his representation of Fairley and Littlefield in the matter; that the complainant forwarded said letter to the defendant; and that on July 3, 1956, C. B. Corban, a duly authorized representative of the defendant, wrote the attorney for said Fairley and Littlefield a letter in which the defendant's representative stated: 'We carry Mr. Lockard's insurance and your letter was forwarded on for my attention. I will be in touch with you within the next few days to discuss this matter with you.' The complainant further alleged that the said C. B. Corban contacted both Fairley and Littlefield and assured them that the matter would be settled by the defendant, and the complainant, acting under the assurance that he was fully covered, made no effort to investigate the claims of the said Fairley and Littlefield or negotiate a settlement of said claims. The complainant further alleged that the complainant had no notice from the defendant that he was not fully covered under the liability policy, until September 26, 1956, when the complainant received a letter from Moran's Insurance Agency enclosing a letter which the defendant had written to Moran's Insurance Agency, dated September 24, 1956, in which the defendant denied coverage under said policy. Copies of said letters were attached as exhibits to the bill of complaint and made a part thereof.

The complainant further alleged that a few days after the complainant received the above mentioned letter dated September 24, 1956, in which the defendant denied coverage under said policy, Gaston Fairley and Manson Littlefield filed suits in the Circuit Court of Jackson County against the complainant for personal injuries and property damage, and process was served on the complainant in each of said cases on October 5, 1956, returnable to the November 1956 term of said court; that both suits came within the protection of the policy of insurance issued to the complainant by the defendant, and that it was the duty of the defendant to defend the complainant in both cases or make settlement of same; that notwithstanding such duty to defend said suits, after leaving the complainant in a position of false security for a period of almost four months, the defendant advised the complainant that, although the defendant had the insurance coverage on the truck, there was no coverage on the trailer, and since the trailer had caused the damage and injuries complained of the defendant owed the complainant no duty to settle or defend said suits. The complainant further alleged that the amount demanded by Fairly in the declaration filed by him was $13,609 and the amount demanded by Littlefield in his suit was $15,248.70; that as a result of the defendant's refusal to defend said suits, the complainant was forced to employ an attorney to defend said suits, and that he employed an attorney at Pascagoula to defend said suits and paid him a fee of $500 for his services; that because of the serious injuries involved in the suits filed against the complainant and the prejudicial position in which he had been placed as a result of the defendant's action in failing to notify the complainant promptly that there was no coverage on the trailer and the defendant would not defend said suits, the complainant was compelled to settle the two cases by paying to Fairley the sum of $1,617.50 and to Littlefield the sum of $2,208.70.

The complainant further alleged that 'at the time the insurance policy here in question was issued he was assured and advised by the defendant, acting through its duly authorized agent, that said policy covered his trailers that vould be attached to the trucks under the policy,' and that the letter of Moran's Insurance Agency dated September 26, 1956, was the first notice that he had that the defendant was denying coverage of the accident under the policy; that the complainant had made no effort to investigate the accident, or contact witnesses, or secure medical reports during the four month period which had intervened since the date of the accident; and that the defendant's actions during said four month period, as set forth above, had greatly prejudiced the position of the complainant; and the defendant was estopped to deny coverage of said accident. The complainant attached to his bill of complainant copies of the declarations filed in the two suits mentioned above as exhibits to said bill of complaint.

The complainant prayed that on the final hearing of the cause the court decree that the actions of the defendant, as set forth above, were such as to estop the defendant from denying coverage of said accident under said liability policy, or in the alternative that the court decree that the actions of the defendant constituted negligence, and that damages be awarded to the complainant in such amount as might be shown by the evidence to be due him for money expended by the complainant for the settlement of said claims of Fairley and Littlefield, and that the court grant such other relief as the court might deem proper.

The defendant filed a general demurrer to the bill of complaint, and assigned as ground for demurrer that there was no equity on the face of the bill. The chancellor overruled the demurrer. The defendant then filed its answer to which there was attached a copy of the liability insurance policy sued on, but the answer was later withdrawn and the defendant declined to plead further. A final decree was then entered overruling the defendant's general demurrer and awarding judgment in favor of the complainant for the sum of $4,326.20, together with all costs.

The policy of insurance, upon which the plaintiff's action is based, and which has been made a part of the record on this appeal, provided that the insurer agreed with the insured, 'in consideration of the payment of the premium and in reliance upon the statements in the declarations and subject to the limits of liability, exclusions, conditions and other terms of this policy,' as follows:

'Insuring Agreements

'I. Coverage A--Bodily Injury Liability: To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death at any time resulting therefrom sustained by any person, caused by accident and arising out of the ownership, maintenance or use of the automobile.

* * *

'Coverage C--Property Damage Liability: To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of injury to or destruction of property, including the loss of use thereof, caused by accident and arising out of the ownership, maintenance or use of the automobile.

'II. Defense, Settlement, Supplementary Payments: With respect to such insurance as is afforded by this policy for bodily injury liability and for property damage liability, the company shall:

'(a) defend any suit against the insured alleging such injury, sickness, disease or destruction and seeking damages on account thereof, even if such suit is groundless, false or fraudulent; but the company may make such investigation,...