McFarland v. Utica Fire Ins. Co.

Decision Date16 December 1992
Docket NumberCiv. A. No. J91-0125(W).
Citation814 F. Supp. 518
PartiesDonna McFARLAND, Plaintiff, v. UTICA FIRE INSURANCE COMPANY OF ONEIDA COUNTY, NEW YORK, and Estes, Parker & Associates, Inc., Defendants.
CourtU.S. District Court — Southern District of Mississippi

Van Douglas Gunter, Jackson, MS, Alfred Lee Felder, McComb, MS, for plaintiff.

Robert A. Miller, Louis B. Lanoux, Jackson, MS, for defendants.

ORDER GRANTING DEFENDANT ESTES' MOTION FOR DISMISSAL, DENYING PLAINTIFF'S MOTION TO RECONSIDER REMAND, DENYING DEFENDANTS' JOINT MOTION FOR SUMMARY JUDGMENT, AND GRANTING DEFENDANTS' JOINT MOTION FOR PARTIAL SUMMARY JUDGMENT AS TO PUNITIVE DAMAGES

WINGATE, District Judge.

The following motions are before this court: defendant Estes' motion for dismissal pursuant to Rule 12(b)(6)1 of the Federal Rules of Civil Procedure; plaintiff's motion to reconsider remand; and defendants' joint motion for summary judgment or, in the alternative, for partial summary judgment as to punitive damages and extra-contractual damages pursuant to Rule 562 of the Federal Rules of Civil Procedure. Defendant Estes' motion to dismiss raises issues which also are raised in the defendants' joint motion for summary judgment. This court retains jurisdiction of this lawsuit by way of diversity jurisdiction, 28 U.S.C. § 1332.3 Therefore, under the doctrine of Erie Railroad Company v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), the law of Mississippi governs in the disposition of this case.

Undisputed Facts

Defendant Utica Fire Insurance Company of Oneida County, New York (hereinafter "Utica"), through its agent in Mississippi, Estes, Parker & Associates (hereinafter "Estes"), issued the property insurance policy, number HO 95-84-88 (hereinafter "policy") to plaintiff Donna McFarland (then Donna F. Adcock, hereinafter "plaintiff") and her then husband, William M. Adcock (hereinafter "Adcock") for their dwelling at 354 Wheatley Street, Jackson, Mississippi. The policy was issued for the time period of June 28, 1990, to June 28, 1991, and provided maximum coverage of $31,000.00 for personal property. According to the "Definitions" section of the policy, insureds under the policy include the person named in the "Declarations" section of the policy (William M. Adcock) and the named insured's spouse (Donna F. Adcock), if a resident of the named insured's household.

Pursuant to the terms of the policy, "personal property by or in the care of an insured" is covered. "Coverage C: Personal Property," Policy, page 3. Exclusions that apply to property coverage, including personal property coverage, are listed on pages 7 and 8 of the policy. Exclusion provision number 11, the intentional loss exclusion provision, reads as follows:

Intentional Acts. We do not pay for loss which results from an act committed by or at the direction of an insured and with the intent to cause a loss.

Policy, page 8. In addition, the "Definitions" section of the policy contains the following language in reference to the term "insured": "each of the above is a separate insured, but this does not increase our limit." Policy, page 1.

Sometime prior to October 18, 1990, plaintiff and William M. Adcock became estranged, and Adcock moved out of their residence at 354 Wheatley Street, Jackson, Mississippi. On October 18, 1990, the plaintiff asked defendant Estes to remove Adcock's name from the policy. However, Estes refused to do so, citing the need for Adcock's independent authorization and/or supporting documentation from plaintiff, (i.e., divorce decree, quit claim deed, warranty deed and a letter from the mortgage company releasing Adcock of his obligations).

A few days later, on October 21, 1990, Adcock went berserk and attacked the plaintiff's residence with a baseball bat, causing damage to plaintiff's real and personal property. After Adcock bragged to the plaintiff about what he had done, the police were called. Adcock assaulted the two officers who responded. In order to subdue Adcock, the Jackson police had to cordon off the neighborhood and call in its SWAT team. McFarland Deposition, p. 34.

After plaintiff ascertained damages to her personal property to total $14,000.00, she applied for coverage under her policy with defendant. On January 10, 1991, defendant Utica denied plaintiff's claim for the damage done to her dwelling and personal property. Letter from James L. Hubbard of Utica Insurance Company to Donna F. Adcock, January 10, 1991. Citing as the basis for its denial the "Intentional Acts" exclusion provision, Utica offered plaintiff the explanation that: "Since homeowners' policies do not provide coverage for the insureds for damage caused by an insured, we cannot make any payment to you." Id. To date, Utica still relies upon this ground to exclude coverage. According to Utica, there is no coverage under its policy with its intentional loss exclusion provision for any damage caused by any insured.

Defendant Estes' Motion for Dismissal

Originally filed in the First Judicial District of the Circuit Court of Hinds County, Mississippi, this action was removed to this court pursuant to 28 U.S.C. § 1441.4 In her complaint, the plaintiff alleged that Utica breached its duty to pay benefits owed to her under an insurance contract and that Estes negligently breached its duty as a known agent of Utica when Estes refused to remove Adcock's name from the policy upon plaintiff's request. By joint petition and notice of removal, the defendants removed this case to this court on March 19, 1991, on grounds of diversity of citizenship and fraudulent joinder of the local agent, Estes, since Estes, a Mississippi business, was non-diverse to the plaintiff. On or about April 22, 1991, plaintiff filed a motion for remand. On June 19, 1991, Magistrate Judge Countiss issued an order denying plaintiff's motion for remand. Subsequently, this court affirmed the Magistrate Judge's Order after plaintiff filed an appeal. This court reaffirms the Magistrate Judge's order of June 14, 1991, inasmuch as the plaintiff's complaint fails to state a cause of action against Estes, and, thus, defendant Estes' motion for dismissal is granted.

In circumstances where a defendant acts as an agent for a known principal, the general rule of Mississippi law is that the defendant-agent incurs no liability for a breach of duty or contract committed by the principal. Moore v. Interstate Fire Insurance Company, 717 F.Supp. 1193 (S.D.Miss. 1989); Schoonover v. West American Ins. Co., 665 F.Supp. 511 (S.D.Miss.1987); Gray v. United States Fidelity & Guaranty, 646 F.Supp. 27 (S.D.Miss.1986); Columbus v. Reliance Insurance Company, 626 F.Supp. 1147 (S.D.Miss.1986).

An agent can incur independent liability if the agent engages in independent conduct which rises to the level of gross negligence, malice or reckless disregard for the rights of the plaintiff. Dunn v. State Farm Fire & Casualty Co., 711 F.Supp. 1359, 1361 (N.D.Miss.1987); Bass v. California Life Insurance Company, 581 So.2d 1087, 1090 (Miss.1991), overruling in part Griffin v. Ware, 457 So.2d 936, 940 (Miss.1984).

In order to allege negligence properly against defendant Estes, the plaintiff must allege facts which, if proved, would support a finding that the agent, Estes, had a duty to remove Adcock's name from the policy. Plaintiff cannot satisfy this burden simply by alleging conclusions. She must plead facts which demonstrate actionable negligence. Perry v. Standard Oil Company, 15 F.Supp. 563 (S.D.Miss.1936); Stokes v. Great Southern Lumber Co., 21 F.2d 185 (S.D.Miss.1927); King v. Mississippi Power & Light Company, 244 Miss. 486, 142 So.2d 222 (1962); Horton v. Lincoln County, 116 Miss. 813, 77 So. 796 (1918).

Plaintiff's complaint against Estes is deficient. The complaint against Estes alleges no duty imposed on Estes under the law which was violated. Plaintiff's complaint would hold Estes liable for failing to remove Adcock's name from the insurance contract, solely on plaintiff's say-so, and without any authority from Adcock. However, an agent has no duty to remove a named insured from a policy at the mere insistence of a co-insured and absent authorization from the named insured. Generally, as to insurance contracts, "a declaration, statement, or demand made by one party only, and not consented to by the other, has no effect." Couch on Insurance 2d (Rev.ed) § 65:17 at 254. "... An insurer cannot materially modify an existing and completed contract of insurance without the consent of the insured; that is, a valid and binding contract of insurance cannot be changed or altered in any material respect, by the insurer or its agent, without the knowledge or consent of the insured." Id. at 255. See Motors Ins. Corp. v. Stanley, 237 Miss. 681, 115 So.2d 678, 683 (1959) (a soliciting and collecting agent for an insurer is without power to modify an insurance contract ...); Travelers Fire Ins. Co. v. Price, 169 Miss. 531, 152 So. 889, 891 (1934) (soliciting and collecting agent of insurance company is without power to modify contract of insurance).

Adcock was a named insured on the policy. Therefore, no material alteration of the policy could have been effected without his consent. Absent Adcock's consent, the agent had neither the authority nor the duty to delete Adcock's name at the request of the plaintiff. Indeed, had Estes removed Adcock's name from the policy at the mere insistence of the plaintiff, the alteration would have been void and of no effect.

Thus, since plaintiff has failed to allege any duty Estes owed to the plaintiff under the circumstances stated in her complaint, plaintiff's negligence claim against Estes fails. Perry v. Standard Oil Company, 15 F.Supp. 563 (S.D.Miss.1936); Stokes v. Great Southern Lumber Co., 21 F.2d 185 (S.D.Miss.1927); King v. Mississippi Power & Light Company, 244 Miss. 486, 142 So.2d 222 (1962); Horton v. Lincoln County, 116 Miss. 813, 77 So. 796 (1918). Therefore, defend...

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