McDonald v. Southeastern Fidelity Ins. Co., 89-CA-0636
| Citation | 606 So.2d 1061 |
| Decision Date | 05 August 1992 |
| Docket Number | No. 89-CA-0636,89-CA-0636 |
| Parties | Gregory McDONALD v. SOUTHEASTERN FIDELITY INSURANCE COMPANY. |
| Court | United States State Supreme Court of Mississippi |
John L. Hunter, David O. McCormick, Cumbest Cumbest Hunter & McCormick Firm, Pascagoula, for appellant.
Thomas R. Harris, O'Riorden Mann Ingram & Dunkle, Sarasota, James B. Galloway, Galloway & Galloway, Gulfport, for appellee.
Before DAN M. LEE, P.J., and ROBERTSON and McRAE, JJ.
This is an appeal from the Jackson County Circuit Court from a grant of summary judgment entered against an insured, Gregory McDonald, in favor of his insurer, Southeastern Fidelity Insurance Company (Southeastern). The only issue in this appeal is whether or not the lower court erred as a matter of law in entering a judgment against McDonald in the amount of $12,319.78, together with costs. Finding that the lower court erred in its application of law, we find merit in McDonald's appeal. Consequently, we reverse the entry of summary and "Final Judgment" in this case and remand the same to the Jackson County Circuit Court for further proceedings.
The facts of this case--what happened, and particularly, when--are crucial to the resolution of the legal question which we address.
On February 26, 1987, Gregory McDonald was driving his jeep vehicle on Highway 26 near the City of Wiggins, Mississippi, when he encountered a Browning Ferris Industries (BFI) garbage truck. Apparently, the BFI truck had been picking up garbage on the north side of the highway, and it proceeded to cross the highway to the south side to pick up more garbage. As the BFI truck came across to the south side of Highway 26, the truck struck McDonald's jeep in McDonald's lane of traffic. McDonald's jeep was a total loss. Additionally, McDonald sustained personal injuries as a result of the accident; however, the record as we find it provides few details regarding the nature and severity of McDonald's personal injuries.
In the event of any payment under this policy, the Company shall be subrogated to all the Insured's rights of recovery therefor against any person or organization and the Insured shall execute and deliver instruments and papers and do whatever else is necessary to secure such rights. The Insured shall do nothing after loss to prejudice such rights.
Approximately three weeks later on May 11, 1987, McDonald filed suit in the Jackson County Circuit Court against BFI and its driver. Significantly, the suit which McDonald filed against BFI sought recovery for his personal injuries only, with no claim or mention of the loss of property. There was very little movement with this litigation until February 12, 1988, when McDonald's attorney, John Hunter, spoke with Carla Smith, a Southeastern representative. Mr. Hunter informed Ms. Smith that his client's lawsuit against BFI addressed personal injuries only and that he would not be representing Southeastern's subrogation interest. After being apprised of this information, Southeastern chose to do nothing. In the meanwhile, McDonald's lawsuit against BFI was set for trial on May 24, 1988. However, on May 9, 1988, McDonald and BFI reached a settlement, and McDonald executed a release of his claim against BFI.
The release executed by McDonald purported to discharge "any and all actions, claims, and causes of action" on account of the automobile accident between McDonald and BFI. In pertinent part, the release provided as follows:
... I, Gregory T. McDonald, do hereby release, acquit, and forever discharge Browning-Ferris Industries of Mississippi, Inc., Samuel Forehand, and their successors, assigns, or corporations whatsoever, having any liability in the premises, from any and all actions, claims, and causes of action, on account of that automobile accident....
This settlement shall operate as and be a complete accord and satisfaction of any and all claims for damages by the undersigned which they may now or hereinafter have on account of or anyway connected with the hereinabove referred to incident. The undersigned parties further agree, and warrant that there have been no assignments of any rights or claims arising out of the incident, to any person or persons not joining in this release and the undersigned agrees that the hereinafter released parties shall forever be free of liability in the premises as if the aforesaid incident had never occurred. It is further understood and agreed that the aforesaid payment shall not in any manner be construed as an admission of liability on the part of any parties named herein but that such payment constitutes solely a compromise settlement and in accord and satisfaction of the disputed claims of the undersigned Gregory T. McDonald in an effort by said parties to purchase their peace. Those released hereby deny all liability in the premises and maintain they were not liable to anyone for anything.
* * * * * *
It is further agreed by Gregory T. McDonald, the undersigned, that he is the sole beneficiary of the settlement funds and that there are no outstanding medical or other accounts due that may have a lien against the payment of this settlement. Gregory T. McDonald further agrees to indemnify and defend the released parties at his cost as a result of any claims made against the released parties on account of this settlement and further states that there are no persons owed any funds and that there have been no assignments made by him against the settlement funds received herein.
When Southeastern learned of McDonald's release of BFI, Southeastern filed suit on June 27, 1988, against their insured, Gregory McDonald, and BFI, jointly and severally, seeking recovery in the amount of $12,319.87, together with interest, attorneys' fees and court costs. Regarding BFI, the complaint alleged that the negligence of BFI's driver was the direct, sole and proximate cause of the damage suffered by its insured, McDonald. Regarding McDonald, Southeastern alleged that its insured had breached the subrogation agreement when he executed a "general release" in favor of BFI. McDonald counterclaimed and alleged that his insurer had breached the covenants of good faith and fair dealing between an insurer and an insured by filing suit against him. BFI filed a Motion To Dismiss itself from the Southeastern suit "pleading" the release executed by McDonald as an absolute and affirmative defense. On January 11, 1989, a hearing was held on BFI's Motion To Dismiss. The trial court, perhaps improvidently, agreed with BFI, and an Order of Dismissal was entered on January 20, 1989. The Order of Dismissal found the release executed by McDonald to be total and complete as to any cause of action against BFI:
This Court is of the opinion that the Release given by the Defendant, Gregory McDonald, to BFI released BFI from any and all claims arising out of the accident between the parties; that the Release is total and complete as to any cause of action against BFI; and that the Defendant, Gregory McDonald, agreed to indemnify BFI for any and all claims made against BFI as a result of the accident including but not limited to property damage.
Southeastern did not pursue an appeal from the Order dismissing BFI from the suit, and BFI's dismissal left only Southeastern, as plaintiff, and McDonald, as defendant.
McDonald first filed a Motion for Summary Judgment on December 22, 1988. In his Motion, McDonald alleged that he released BFI from his personal damages only, not property damage. Five days later, December 27, 1988, Southeastern filed a Motion for Partial Summary Judgment based on the alleged breach of the subrogation clause:
Comes now Southeastern Fidelity Insurance Company, pursuant to M.R.C.P. 56, and moves the Court for Summary Judgment in its favor against the Defendant, Gregory McDonald, on the breach of insurance contract subrogation clause in this cause, and for ground would show that there is no genuine issue as to any material fact with respect to the breach of contract and that Southeastern Fidelity Insurance Company is entitled to a judicial determination as a matter of law that Gregory McDonald breached the insurance contract subrogation clause with respect to his Southeastern Fidelity Insurance Company insurance policy.
A hearing was held on both parties' summary judgment motions on March 15, 1989. After hearing arguments of counsel, the trial judge took the matter under advisement and entered summary judgment in favor of Southeastern, followed by a Final Judgment on May 22, 1989.
First of all, the lower court found that McDonald breached the contract of insurance subrogation clause by releasing BFI from any and all claims, including a claim for property damage. Curiously, the lower court went further and found that Southeastern need not prove negligence by BFI in order to recover from McDonald. Consequently, the lower court held that McDonald was liable to Southeastern in the amount of $12,319.87, together with costs. Therefore, McDonald brings this appeal from the adverse judgment in the court below.
It has long been the rule in this state that a tortious act gives rise to but a single cause of action. Kimball v. Railroad Company, 94 Miss. 396, 48 So. 230 (1909). See Duett v. Pine Mfg. Co., 209 Miss. 830, 843, 48 So.2d 490, 496 (1950) (...
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