Hinton v. Pekin Ins. Co.

• Decision Date: 21 February 2019
• Docket Number: NO. 2018-CA-00383-SCT,2018-CA-00383-SCT
• Parties: Marsha R. HINTON and Thomas F. Hinton v. PEKIN INSURANCE COMPANY
• Court: Mississippi Supreme Court

268 So.3d 543

Marsha R. HINTON and Thomas F. Hinton

v.PEKIN INSURANCE COMPANY

NO. 2018-CA-00383-SCT

Supreme Court of Mississippi.

February 21, 2019

Rehearing Denied May 9, 2019

ATTORNEYS FOR APPELLANTS: LAWRENCE E. ABERNATHY, III, LESLIE D. ROUSSELL, Laurel, SAMUEL S. McHARD

ATTORNEY FOR APPELLEE: DORRANCE AULTMAN, Gulfport

EN BANC.

CHAMBERLIN, JUSTICE, FOR THE COURT:

¶1. Timothy Hinton died from injuries sustained in a fall from a tree stand. Timothy's parents, Marsha and Thomas Hinton (the "Hintons"), brought a wrongful-death suit against the manufacturer of the tree stand, C & S Global Imports, Inc. ("C & S"), and against Pekin Insurance Company ("Pekin").

¶2. After filing their third amended complaint, the Hintons filed a motion for partial summary judgment against Pekin. The Hintons claimed that Pekin waived its defenses to coverage or should be estopped from asserting any coverage defenses. Among other arguments, the Hintons maintained that Pekin failed to defend C & S, did not file a declaratory-judgment action and allowed a default judgment against C & S. The Jones County Circuit Court denied the Hintons' motion.

¶3. Pekin then moved for summary judgment. It argued that the insurance policy excluded coverage for tree or deer stands and related equipment. The circuit court granted Pekin's motion and entered a final judgment dismissing Pekin from the suit.

¶4. The Hintons now appeal both of the circuit court's rulings.¹ After review, we affirm the order denying partial summary judgment to the Hintons, the order granting summary judgment to Pekin and the final judgment dismissing Pekin from the suit.

FACTS AND PROCEDURAL HISTORY

Background

¶5. Timothy Hinton died on November 18, 2012. At the time of his fall, Timothy was wearing a fall-arrest system which included a full-body harness, tether and tree strap. Timothy had purchased the tree stand and fall-arrest system from The Sportsman's Guide, Inc. ("TSG"), in 2009. C & S had manufactured the items and marketed them to TSG. Pekin insured C & S at the time of Timothy's injury and death.

The Initial Insurance Policy

¶6. In January 2011, C & S applied for insurance with Pekin. Comprehensive Insurance Services, Inc. ("Comprehensive"), an insurance agency, delivered the commercial insurance application to Pekin. On the application, the box entitled "REMARKS/PROCESSING INSTRUCTIONS" read:

POLICY EXCLUSION: THIS POLICY SHALL NOT IN ANY WAY EXTENT [sic] COVERAGE TO DEER/TREE STANDS OR ANY RELATED EQUIPMENT.

In the box entitled "LOSS HISTORY," the application referenced an "INJURY FROM USE OF TREE STAND" in 2010.

¶7.Based on the application, Pekin issued Businessowners Policy No. 00BU51626-O to C & S for the policy period of January 31, 2011, to January 31, 2012. In the policy, the "Businessowners Form Schedule" listed the "Forms And Endorsements Attached To This Policy." Among these thirty-two entries, the contested exclusion in this appeal was listed: "481T 1078 Amendment of Policy" (the "481T"). The 481T was attached to the policy as the second endorsement. In its entirety, it provided:

                                                                               00-BU51626-0
                                      AMENDMENT OF POLICY
                  This endorsement. [sic] effective 01/31/11
                  forms a part of policy No. 00BU51626-0
                  Issued to C & S Global Imports INC
                  by              PEKIN INSURANCE COMPANY
                

It is agreed that as of the effective date of this endorsement this policy is amended in the following particulars:

EXCLUSION DESIGNATED PRODUCTS

THIS ENDORSEMENT MODIFIES INSURANCE PROVIDED UNDER THE FOLLOWING:

COMMERCIAL GENERAL LIABILITY COVERAGE PART PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART SCHEDULE DESIGNATED PRODUCT(S)

DEER/TREE STANDS & RELATED EQUIPMENT

481T (10-78)

HOME OFFICE

¶8. During the course of the litigation, the Hintons deposed Jeff Cole, the president and chief executive officer of C & S. Cole testified that C & S had stopped selling tree stands and sought an insurance policy with a lower premium that did not insure tree stands. According to Cole, C & S had been insured with First Specialty Insurance, but C & S switched to Pekin and stopped selling tree stands. Cole testified that "when I had insurance with Pekin Insurance, it was not to cover tree stands." He further testified that he "understood" that tree stands were excluded from coverage when C & S switched coverage from First Specialty Insurance to Pekin.

¶9. The Hintons also deposed Jeffery Ott, an agent at Comprehensive. Ott testified that when Cole first approached him for an insurance policy for C & S in 2010, he had to bring in another broker on a referral basis in order to insure the tree stands as a specialty item with First Specialty Insurance. According to Ott, C & S's high premium payments to cover the tree stands was a problem financially for C & S, and Cole approached Ott again to seek a policy that did not cover tree stands. Ott contacted Pekin and set up the policy for C & S. Also, Ott maintained that Cole never asked him to remove the 481T from the Pekin policy.

The Renewal Insurance Policy

¶10. Pekin renewed the businessowners policy for C & S under Policy No. 00BU51626-A for the policy period January 31, 2012, to January 31, 2013. The "BUSINESSOWNERS FORM SCHEDULE" of the renewal policy listed "481T 107 Amendment of Policy" among thirty-three² entries. Aside from an updated policy number, the language of the 481T exclusion, which is the second attached endorsement to the renewal policy, is identical to the 481T exclusion in the initial policy.

The Amending Insurance Policy

¶11. Pekin issued an amending policy for the policy period of July 8, 2012, to January 1, 2013, under Policy No. 00BU51626-A. The amending policy was eleven pages long and reflected an additional premium of $ 28 on the common declarations page. On the bottom of the same page, the amending policy read:

Changes Made to Your Policy:

Forms Added

The "BUSINESSOWNERS FORM SCHEDULE" of the amending policy listed "481T 1078 Amendment of Policy" among thirty-four entries of forms and endorsements "Attached To This Policy." Only two endorsements were actually attached to the amending policy: a disclosure concerning terrorism insurance and an amendment to the policy that named an additional insured. The additional-insured amendment read, in part:

This endorsement modifies insurance provided under the following:

                                   BUSINESSOWNERS LIABILITY COVERAGE FORM
                                                            SCHEDULE
                       Name of person or Organization (Additional Insured)
                       SCHEELS ALL SPORTS INC
                       SCHEELS CORPORATION OFFICE
                

The Filing of the Wrongful-Death Suit

¶12. The Hintons filed the wrongful-death suit on behalf of their son in late 2013. The suit was filed in Jones County Circuit Court.

Pekin's Claim Review

¶13. Several documents, emails and letters in the record pertain to Pekin's review of the Hintons' claim against C & S. They are summarized below:

Feb. 5, 2014 In a letter, TSG demanded indemnity and defense from C & S and Hunter's View, Ltd., a related company to C & S.

Feb. 10 Comprehensive submitted a Notice of Claim to Pekin.

Feb. 11 An email assigned the claim review to Tim Manning, Pekin's litigation manager.

Feb. 11 Mark Morgan, Pekin's Regional Claim Manager, emailed Manning and other Pekin employees. The first email read, "Randy, I am in the process of correcting the opener for this new claim/new suit, but wanted to make you aware of this as soon as possible as well." The second email read:

It turns out this cannot be corrected, rather it will be necessary to do a Create claim to get this opened, as the policy did not include liability coverage at the time of termination, but did at the time of loss. As such, we will leave this claim pending in the opener screens even though it shows "error". [sic] We will delete this claim once the create is in plain, so we will still have something for tracking purposes.

Feb. 11 A typed note appeared on a claim coverage document: "Policy in force on date of loss." On the document in the "ENDORSEMENTS" section, "481 1078" was listed, but the document did not specify which 481 endorsement.³

Undated A typed note appeared at the bottom of the Businessowner's Underwriter Instruction Sheet: "481T not marked here."

Feb. 13 A typed note appeared on a copy of the 481T:

ON 1/23/13. AGENT SENT PEKIN A CANCELL [sic] REQUEST - STATING INSURED WAS GOING OUT OF BUSINESS. I DO NOT SEE THIS AMENDMENT OF POLICY CHANGE REQUEST IN THE UNDERWRITING FILE? ? TM 02/13/2014

Feb. 14 Attorney Dorrance Aultman, who was retained by Peking to represent C & S upon notice of the Hintons' claim, emailed Manning and told him that he had contacted the clerk's office in Laurel, Mississippi and "discovered that there is no process" filed for C & S.

Feb. 15 A typed note attached to a Common Declarations document read,

From underwriting file

There is no 481T-Amendment to policy in the ImageRight file. That endorsement excludes tree stands.

Tim Manning

02/15/2014.

Feb. 15 Manning emailed Aultman and informed him of a "[n]ew development" that the policy was written with a 481T endorsement that excluded coverage for tree stands and related equipment.

Feb. 15 Manning emailed Cole. The email stated, "This confirms our telephone conversation earlier today." Manning informed Cole of the claim and states:

"... the Pekin Policy was written with endorsement 481T (1078) ... which excludes policy coverage for deer/tree stands or any related equipment. In the absence of coverage, the policy has obligation to provide neither a defense nor indemnity to it's [sic] policyholder, C & S Global Imports, Inc. ... Upon notice of claim, Pekin under reservation of rights, pre-emptively [sic] assigned a defense attorney to act in your best interest.... Attorney Aultman has already begun working to defend C & S Global Imports, Inc. Even though we have no duty to provide for your defense and/or indemnity, in order to give you ample time to align defense for this claim, we have

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