Jenkins v. Ohio Cas. Ins. Co.

Decision Date13 September 2001
Docket NumberNo. 1998-CA-01219-SCT.,1998-CA-01219-SCT.
Citation794 So.2d 228
PartiesTony JENKINS, Individually, and Wife, Anita Jenkins, Individually, and as Next Friend of Shaun Jenkins and Ron Jenkins, Minors, v. The OHIO CASUALTY INSURANCE COMPANY.
CourtMississippi Supreme Court

Richard Benz, Jr., Attorneys for Appellants.

Stuart Robinson, Jr., Chadwick Warren Russell, Jackson, C. Stephen Stack, Jr., Attorneys for Appellee.

EN BANC.

EASLEY, Justice, for the court:

¶ 1. On June 22, 1996, Tony, Anita, Shaun and Ron Jenkins ("the Jenkinses") were involved in a car accident with Douglas Holton ("Holton"). On August 1, 1996, the Jenkinses sued Holton in the Circuit Court of Neshoba County alleging that Holton directly and proximately caused the car crash under a theory of negligence. Holton was insured by the Mississippi Farm Bureau Mutual Insurance Company ("Farm Bureau"). On October 12, 1996, Holton filed his Answer and Affirmative Defenses. The Farm Bureau provided Holton with a legal defense in the circuit court action pursuant to his policy. On or about November 14, 1996, Farm Bureau filed a Complaint for Declaratory Relief in the Chancery Court of Rankin County.

¶ 2. On March 25, 1997, the Jenkinses filed an Amended Complaint to include Ohio Casualty Insurance Company ("Ohio Casualty"), carrier of an uninsured motorist policy held by Tony Jenkins. On September 22, 1997, the Chancery Court of Rankin County granted summary judgment in favor of Farm Bureau. On October 13, 1997, Ohio Casualty paid the Jenkinses under the uninsured motorist insurance policy.

¶ 3. On May 29, 1998, Ohio Casualty filed a Motion for Summary Judgment in the Circuit Court of Neshoba County. The motion alleged that Ohio Casualty had no liability for punitive damages on the ground that there was a legitimate and arguable reason for denying the Jenkinses' claim. In addition, Ohio Casualty claimed that it committed no wilful or malicious wrong and did not act with gross or reckless disregard for the Jenkinses rights.

¶ 4. On June 13, 1998, the Jenkinses filed a Plaintiff's Response to Motion for Summary Judgment. The Circuit Court of Neshoba County granted Ohio Casualty's summary judgment motion on June 26, 1998, and dismissed the Jenkinses' action with prejudice. On July 3, 1998, the Jenkinses filed a notice of appeal to this Court.

FACTS

¶ 5. On June 22, 1996, a vehicle driven by Douglas Holton struck the vehicle occupied by Tony, Anita, Shaun and Ron Jenkins on Highway 19 in Neshoba County, Mississippi. In a deposition, Mrs. Jenkins testified that at approximately 10:00 p.m. on June 22, 1996, the Jenkinses were traveling on Highway 19 returning home after shopping. A car attempted to swerve and force the Jenkinses off the road. At one point the car was behind the Jenkinses vehicle and began ramming the rear of the car. The Jenkinses' car flipped into a ditch. Mr. Jenkins got out of the car, and the driver was pointing a gun at him and told Mrs. Jenkins to get into his car. The driver and Mrs. Jenkins left in his car and drove down the road one or two miles. Then the driver decided to let Mrs. Jenkins go and drove her toward her car.

¶ 6. The August 1, 1996, complaint alleged that Holton's reckless and careless driving directly and proximately caused the collision which was directly and proximately caused by Holton's negligent acts. Specifically, the complaint alleged that Holton negligently and unlawfully failed to keep his vehicle under control, failed to keep a proper lookout and other acts negligently and carelessly caused his vehicle to collide into the rear of the Jenkinses' vehicle. Holton had an insurance policy with Farm Bureau. Tony Jenkins had an uninsured motorist policy with Ohio Casualty.

¶ 7. The Ohio Casualty investigation report, dated July 10, 1996, indicated that Ohio Casualty may be requested to make an uninsured motorist claim, if Farm Bureau denied coverage. Ohio Casualty had paid a $135.00 towing and storage fee and medical fees up to a $1,000.00 individual limit.

¶ 8. On October 12, 1996, Holton filed his Answer and Affirmative Defenses through his attorney. The Farm Bureau provided Holton with a legal defense in the circuit court action pursuant to his policy. In correspondence dated October 23, 1996, Ohio Casualty indicated that there would be no uninsured motorist coverage available under the Jenkinses' policy since Holton had valid and collectible insurance at the time of the accident.

¶ 9. On or about November 14, 1996, Farm Bureau filed a Complaint for Declaratory Relief in the Chancery Court of Rankin County (the county where Holton resided) to determine what coverage, if any, Farm Bureau provided to Holton. Farm Bureau alleged that the insurance policy expressly excluded coverage from liability for injuries and damages resulting from intentional acts of the insured. On November 18, 1996, the Jenkinses' attorney advised Ohio Casualty that Farm Bureau filed a declaratory judgement against Holton. On November 22, 1996, Ohio Casualty informed the Jenkinses' attorney that should the courts determine that Farm Bureau did not have coverage then Ohio Casualty would be willing to open an uninsured motorist claim for the Jenkinses.

¶ 10. On December 2, 1996, the Jenkinses' attorney forwarded a copy of the Farm Bureau's pleadings and informed the company of the Jenkinses' financial hardship. On January 10, 1997, Ohio Casualty informed the Jenkinses' attorney that it denying the uninsured motorist coverage at that time. Ohio Casualty based its denial on the fact that Farm Bureau was defending Holton and counsel for Farm Bureau advised that Holton's coverage was not denied, but that Farm Bureau filed a declaratory judgment to determine its obligations under the policy with Holton.

¶ 11. On March 25, 1997, the Jenkinses filed an Amended Complaint to include Ohio Casualty carrier of an uninsured motorist policy. The insurance policy provided for uninsured motorist benefits in the form of compensatory damages which an "insured" is legally entitled to recover from the owner or operator of an "uninsured motor vehicle" because of "bodily injury" (1) sustained by an "insured"; and (2) caused by an accident. The pertinent portion of the policy states that an "uninsured motor vehicle" means a land motor vehicle or trailer of any type ... (4) to which a bodily injury liability bond or policy applies at the time of the accident but the bonding or insuring company: (a) denies coverage...." The Jenkinses alleged that Ohio Casualty denied uninsured motorist benefits based upon the contention that Farm Bureau had not yet denied coverage to Holton. The Jenkinses alleged bad faith on the part of Ohio Casualty and sought to recover damages. In addition, the Jenkinses demanded on a contractual basis uninsured motorist coverage with policy limits of $40,000.00 plus interest, attorney's fees, and punitive damages plus expenses for wrongful denial of uninsured motorist benefits. On May 15, 1997, Ohio Casualty filed an Answer and Counterclaim.

¶ 12. On August 13, 1997, Farm Bureau filed a Motion for Summary Judgment in the Chancery Court of Rankin County. On September 22, 1997, the Chancery Court of Rankin County granted summary judgment in favor of Farm Bureau. The judgment stated that Farm Bureau had "no duty to pay any sum whatsoever to any person or entity under the terms of the provisions of the subject policy of insurance in connection with or arising out of either the claims asserted by the Jenkinses against Douglas Holton or the events giving rise to such claims." In addition, Farm Bureau had no duty to provide a legal defense to Holton. Affidavits from Farm Bureau representatives stated that Holton was notified that he would no longer be provided coverage for the claim and any legal defense previously provided under a reservation of rights was revoked. On October 13, 1997, Ohio Casualty paid the Jenkinses under the uninsured motorist insurance policy.

¶ 13. On May 29, 1998, Ohio Casualty filed a motion for summary judgment in the Circuit Court of Neshoba County. The motion alleged that Ohio Casualty had no liability for punitive damages on the ground that there was a legitimate and arguable reason for denying the Jenkinses' claim. In addition, Ohio Casualty claimed that it committed no wilful or malicious wrong and did not act with gross or reckless disregard for the Jenkinses' rights.

¶ 14. On June 13, 1998, the Jenkinses filed a plaintiff's response to motion for summary judgment. The Circuit Court of Neshoba County granted Ohio Casualty's summary judgment motion on June 26, 1998, and dismissed the Jenkinses' action with prejudice. On July 3, 1998, the Jenkinses filed a Notice of Appeal to this Court.

DISCUSSION

1. Whether the Trial Court Erred By Granting Summary Judgment for the Appellee, Ohio Casualty Insurance Company?

¶ 15. The Jenkinses contend that the trial court erred in granting summary judgment in favor of Ohio Casualty because there were genuine issues of material fact. The focus of the whole argument as proposed by the Jenkinses in the brief before this Court deals with the issue of bad faith and punitive damages. As the record reflects, Ohio Casualty paid the Jenkinses' uninsured motorist claim within a month of the Chancery Court of Rankin County granting summary judgment to Farm Bureau. Therefore, this Court will address whether summary judgment was proper for the punitive damage claim only.

Standard of Review

¶ 16. This Court applies a de novo standard of review on appeal from a grant of summary judgment by the trial court. Russell v. Orr, 700 So.2d 619, 622 (Miss.1997); Richmond v. Benchmark Constr. Corp., 692 So.2d 60, 61 (Miss.1997); Northern Elec. Co. v. Phillips, 660 So.2d 1278, 1281 (Miss.1995); Rule 56(c) of the Mississippi Rules of Civil Procedure provides that summary judgment shall be granted by a court if "the pleadings, depositions, answers to interrogatories and admissions on file, together...

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