Indem. Ins. Co. of N. Am. v. Guidant Mut. Ins. Co.

• Decision Date: 04 October 2012
• Docket Number: No. 2011–CA–00168–SCT.,2011–CA–00168–SCT.
• Citation: 99 So.3d 142
• Parties: INDEMNITY INSURANCE COMPANY OF NORTH AMERICA v. GUIDANT MUTUAL INSURANCE COMPANY.
• Court: Mississippi Supreme Court

99 So.3d 142

INDEMNITY INSURANCE COMPANY OF NORTH AMERICA

v.GUIDANT MUTUAL INSURANCE COMPANY.

No. 2011–CA–00168–SCT.

Supreme Court of Mississippi.

Oct. 4, 2012.

Leann W. Nealey, Robert A. Miller, Ridgeland, attorneys for appellant.

H. Scot Spragins, Josiah Dennis Coleman, Oxford, attorneys for appellee.

Before CARLSON, P.J., RANDOLPH and KITCHENS, JJ.

CARLSON, Presiding Justice, for the Court:

¶ 1. This case has a long history and is before this Court for the second time. In the first appeal, Guidant Mutual Insurance Company (Guidant) appealed from the trial court's ruling, and this Court reversed and remanded. See Guidant Mut. Ins. Co. v. Indem. Ins. Co. of N. Am., 13 So.3d 1270 (Miss.2009) (hereinafter “Guidant I ”). Now, Indemnity Insurance Company of North America (INA) appeals from the trial court's decision on remand. INA claims that the trial court erred in granting summary judgment in favor of Guidant and in denying INA's request for prejudgment interest. We affirm in part, reverse in part, and remand for the trial court's entry of a final judgment consistent with this opinion.

FACTS AND PROCEDURAL HISTORY

¶ 2. On November 22, 1994, while en route to the scene of a fire, volunteer fireman James Hingle collided with a vehicle occupied by Sam and Ruby Anderson. Hingle was driving his personal vehicle at the time of the accident. On November 15, 1995, the Andersons filed suit in the Circuit Court of Marshall County against Hingle, Marshall County, the volunteer fire department, and the Marshall County Board of Supervisors. The Andersons claimed that their injuries and damages amounted to $4,150,000.

¶ 3. At the time of the accident, Hingle had two insurance policies with Guidant ¹—a personal automobile liability policy with limits of $250,000 per person and $500,000 per accident, and an umbrella protection policy with a $1,000,000 limit. Marshall County had a business automobile liability policy with a $300,000 limit through INA, which covered non-owned automobiles and provided coverage to the volunteer fire department.²

¶ 4. A dispute arose regarding which insurance company should defend the litigationand which provided primary coverage. In June 1998, INA filed a declaratory-judgment action against Guidant in the Circuit Court of Marshall County. INA asked for a judgment declaring, inter alia, that Guidant had a duty to defend all the defendants and INA did not have any duty to defend, and that Guidant's policies afforded primary coverage for all defendants, while INA provided excess coverage only. INA moved for summary judgment in the declaratory-judgment action, but the trial court held the motion in abeyance pending a final determination on the merits of the underlying lawsuit. Following that ruling, INA provided defense counsel to Marshall County and the fire department in the Anderson lawsuit. Guidant defended Hingle.

¶ 5. Guidant eventually entered into settlement negotiations with the Andersons. In February 2003, Guidant notified INA of a settlement offer and asked INA to contribute its $300,000 policy limit toward the settlement. INA responded that it would not discuss settlement contribution until Guidant was willing to discuss reimbursement of INA's legal costs. In October 2003, Guidant settled with the Andersons for $750,000. Guidant allocated $300,000 from its personal auto policy and $450,000 from its umbrella policy for the total payment of $750,000.

¶ 6. 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 allocated from its umbrella policy. Guidant asserted that its umbrella policy was excess to the INA auto policy. INA responded that it was not required to reimburse Guidant because Guidant was a voluntary payor. INA also renewed its motion for summary judgment, claiming Guidant should reimburse INA for the costs incurred defending Marshall County and the fire department in the Anderson litigation.

¶ 7. Through a series of orders and, eventually, a final judgment dated August 14, 2007, the trial judge ruled on both summary-judgment motions and dismissed the declaratory-judgment action with prejudice. The trial judge made the following findings: (1) Guidant was the primary insurer under both its policies, and until Guidant exhausted the combined $1.5 million limit from its policies, INA did not have an obligation to participate in the settlement; (2) Marshall County and the fire department were insureds of INA, and INA had a duty to provide a defense to those entities; (3) INA was not entitled to reimbursement of defense costs from Guidant; and (4) Guidant was not entitled to contribution from INA for the settlement, because Guidant was a voluntary payor. Guidant appealed the denial of its request for contribution and the finding that it was a voluntary payor. INA cross-appealed as to the denial of reimbursement of defense costs.

¶ 8. On appeal, this Court found that Hingle's auto policy with Guidant was the primary insurance, but that Hingle's umbrella policy was true excess coverage and it should not be applied until the Guidant personal auto policy and the INA business auto policy had been exhausted. Guidant I, 13 So.3d at 1279. Further, this Court held that Guidant was “entitled to move forward with its claim of contribution,” and INA would be liable for contribution if Guidant could prove that “it was legally liable to settle, and that the amount it paid the injured party or parties was reasonable.” Id. at 1280. Finally, this Court held that “INA should be entitled to all reasonable, necessary expenses incurred in the course of defending the fire department and Marshall County [.]” Id. at 1282. The judgment was reversed and the case was remanded. Id. This Court's opinion was handed down June 25, 2009. Id. at 1270.

¶ 9. On remand, INA filed a motion for defense costs in the amount of $55,846, plus prejudgment interest. Guidant filed a motion for summary judgment seeking contribution from INA in the amount of $300,000. Guidant asserted that it was “undisputed that Guidant was legally liable to settle” and that, in light of the amount of damages claimed by the Andersons, “the settlement amount was reasonable.” INA responded that Guidant's conclusory statements were not sufficient, and that Guidant must actually prove that it was legally liable to settle and that the settlement amount was reasonable. A hearing on the motions was set for October 22, 2010. Four days before the hearing, Guidant filed its rebuttal and presented evidence to support its position. In light of the additional evidence, INA filed a Rule 56(f) motion for a continuance to conduct discovery. The motion was denied and the hearing took place as scheduled.

¶ 10. On January 6, 2011, the trial court entered a final judgment, granting Guidant's motion for summary judgment and requiring INA to reimburse Guidant in the amount of $300,000. The trial court also granted INA's motion for defense costs of $55,846, plus post-judgment interest, but denied INA's request for prejudgment interest. INA instituted this appeal.

DISCUSSION

¶ 11. INA asserts that the trial court erred in granting Guidant's motion for summary judgment on the claim for contribution because genuine questions of material fact exist. Alternatively, INA asserts that reversal is required due to several procedural errors made by the trial court. Finally, INA claims that the trial court abused its discretion by denying INA's request for prejudgment interest. The issues presented by INA have been restated and reordered for purposes of this discussion.

I. Whether the trial court erred by denying INA's Rule 56(f) Motion for Continuance.

¶ 12. Rule 56(f) provides a means by which a party opposing summary judgment can request a continuance to conduct additional discovery:

Should it appear from the affidavits of a party opposing the motion that he cannot for reasons stated present by affidavit facts essential to justify his opposition, the court may refuse the application for judgment or may order a continuance to permit affidavits to be obtained or depositions to be taken or discovery to be had or may make such order as is just.

Miss. R. Civ. P. 56(f). A trial court's grant or denial of a Rule 56(f) motion for continuance is reviewed for abuse of discretion. Stallworth v. Sanford, 921 So.2d 340, 342–43 (Miss.2006) (citing Owens v. Thomae, 759 So.2d 1117, 1120 (Miss.1999)). If sufficient reasons are provided in support of a Rule 56(f) motion for continuance, a trial court “has the discretion to ‘postpone consideration of the motion for summary judgment and order among other things that discovery be completed.’ ” Owens, 759 So.2d at 1120 (quoting Prescott v. Leaf River Forest Prods., Inc., 740 So.2d 301, 306 (Miss.1999)).

¶ 13. To succeed on a Rule 56(f) motion for continuance, the moving party is required to provide specific reasons as to why it cannot oppose the summary-judgment motion without additional discovery and “specifically demonstrate how postponement of a ruling on the motion will enable him, by discovery or other means, to rebut the movant's showing of the absence of a genuine issue of fact.” Owens, 759 So.2d at 1120 (quoting Prescott, 740 So.2d at 307). This Court has advised that “Rule 56(f) is not designed to protect the litigants who are lazy or dilatory and normally the party invoking Rule 56(f) must show what steps have been taken to obtain access to the information allegedly within the possession of the other party.” Id. (quoting Marx v. Truck Renting & Leasing Ass'n, Inc., 520 So.2d 1333, 1344 (Miss.1987)).

¶ 14. The Guidant I opinion was handed down June 25, 2009, remanding this case to the trial court. Guidant I, 13 So.3d at 1282. INA filed its motion to enforce this Court's judgment on April 6, 2010, seeking reimbursement of defense costs. Guidant filed a motion for summary judgment seeking a...