Penn-Star Ins. Co. v. Thompson
| Docket Number | 2022-IA-00106-SCT |
| Decision Date | 29 June 2023 |
| Parties | PENN-STAR INSURANCE COMPANY v. LATONYA J. THOMPSON, STEVEN THOMPSON, CHRISTOPHER S. PARTRIDGE, CAROL PARTRIDGE, AND MURPHY'S WELDING, LLC |
| Court | Mississippi Supreme Court |
DATE OF JUDGMENT: 01/14/2022
BOLIVAR COUNTY CIRCUIT COURT, SECOND JUDICIAL DISTRICT HON LINDA F. COLEMAN, TRIAL JUDGE
TRIAL COURT ATTORNEYS: CHARLES M. MERKEL, JR. EDWARD P. CONNELL JR. JEREMY T. HUTTO, WILLIAM H. CREEL, JR. J. SCOTT ROGERS JOSHUA J. WIENER
ATTORNEYS FOR APPELLANT: JOSHUA J. WIENER, DONNA BROWN JACOBS
ATTORNEYS FOR APPELLEES: CHARLES M. MERKEL, JR. EDWARD P. CONNELL, JR.
BEFORE KING, P.J., MAXWELL AND GRIFFIS, JJ.
¶1. Penn-Star Insurance Company (Penn-Star) appeals the trial court's denial of its motion for summary judgment. Because the commercial general liability policy at issue does not cover the sustained losses, the trial court's order is reversed, judgment is rendered in favor of Penn-Star, and this case is remanded to the trial court for consideration of the remaining issues.
¶2. Murphy's Welding, LLC (Murphy's Welding), is a Bolivar County welding business owned by its managing member, James Allen "Bubba" Murphy (Murphy). Christopher Shane Partridge (Partridge) is a full time employee at Murphy's Welding, and he lives "no more than three hundred yards" from the Murphy's Welding shop.
¶3. Partridge's personal truck[1] had a mechanical issue and was inoperable. As a result, Partridge planned to use the Murphy's Welding truck and trailer to tow his personal truck from his house to the Murphy's Welding shop, where he planned to repair his truck.
¶4. On December 4, 2019, around 7:30 p.m., after his work day had ended, Partridge attempted to load his personal truck onto the Murphy's Welding trailer but was unsuccessful. Partridge then decided to use the Murphy's Welding forklift to tow his truck from his house to the shop. Partridge walked to the shop and drove the forklift back to his house.[2] Partridge and fellow Murphy's Welding employee John Hollings used the forks of the forklift to lift the disabled rear of Partridge's truck. According to Partridge, he positioned the forklift so that the forks were underneath his truck's hitch and then "took a 7/8th bolt and nut and two washers on each end . . . and put it through the hole of the . . . hitch down to the fork of the . . . forklift . . . through the hole . . . on the forklift and put the nut on it and . . . tightened it up." Partridge, operating the forklift in reverse, proceeded to tow his truck backwards down Highway 8 towards the Murphy's Welding shop. As Partridge drove the forklift backwards down Highway 8, Hollings walked along the side of the highway behind the forklift. Because it was dark outside, there were times when Hollings was unable to see the forklift towing Partridge's truck.
¶5. Partridge was traveling east on Highway 8 around 2-3 miles per hour. At approximately 9:00 p.m., just as Partridge reached the shop's driveway, LaTonya J. Thompson's vehicle approached from the opposite direction and struck the passenger side of Partridge's truck. The collision caused the truck to break lose from the forklift and "shoot" across the highway into a ditch.
¶6. LaTonya and her husband, Steven Thompson, filed a complaint and later a first amended complaint in the Bolivar County Circuit Court and alleged that Partridge, as an employee of Murphy's Welding, operated the Murphy's Welding forklift "carelessly, negligently, wrongfully, and unlawfully so as to cause the violent collision, resulting in severe injuries to [them]." The Thompsons claimed that Murphy's Welding "[wa]s liable for the negligent acts of . . . Partridge under the doctrine of respondeat superior" and that Murphy's Welding was independently negligent for "negligently entrusting . . . Partridge to use its forklift in a manner involving an unreasonable risk of harm to others when . . . Murphy knew, or should have known, of such risk[.]" LaTonya sought damages for pain and discomfort, mental and emotional distress, loss of wage earning capacity, property damage, loss of enjoyment of life, inconvenience, permanent impairment, medical expenses, and disability. Steven sought damages for loss of consortium as a result of the injuries to LaTonya.
¶7. At the time of the accident, Murphy's Welding had a commercial general liability policy issued by Penn-Star that covered risks associated with Murphy's Welding business operations. Penn-Star intervened in the action, seeking a declaration that the commercial general liability policy issued to Murphy's Welding did not provide coverage for the Thompsons' claims and that Penn-Star had no duty to defend Murphy's Welding or any other party with regard to the Thompsons' lawsuit.
¶8. Penn-Star moved for summary judgment on the issue of coverage. The trial court found "the injuries sustained by . . . Thompson during Partridge's use of the forklift [we]re covered by Murphy's Welding's [commercial general liability] policy" and denied Penn-Star's motion for summary judgment. Penn-Star timely filed a petition for interlocutory appeal. This Court granted the petition.
¶9. "This Court reviews challenges to summary judgment [rulings] de novo, and we view the evidence in the light most favorable to the non-movant." RGH Enters., Inc. v. Ghafarianpoor, 329 So.3d 447, 449 (Miss. 2021) (alteration in original) (internal quotation marks omitted) (quoting Leal v. Univ. of S. Miss., 296 So.3d 660, 663 (Miss. 2020)). "The interpretation of an insurance policy is a question of law," which we review de novo. Hankins v. Maryland Cas. Co./Zurich Am. Ins. Co., 101 So.3d 645, 652-53 (Miss. 2012) (internal quotation mark omitted) (quoting Corban v. United Servs. Auto. Ass'n, 20 So.3d 601, 609 (Miss. 2009)).
¶10. The insurance policy issued by Penn-Star to Murphy's Welding is a commercial general liability policy.
Commercial general liability policies are designed to protect the insured against losses to third parties arising out of the operation of the insured's business. Consequently, a loss must arise out of the insured's business operations in order to be covered under the policy issued to the insured. Risks incidentally related to the operation of the insured's business will generally fall within coverage. Commercial general liability policies are not, however strictly confined to operations performed on the insured's business premises.
9A Couch on Insurance 3d § 129:2 (3d ed.), Westlaw (database updated June 2023) (footnotes omitted) (citations omitted).
¶11. The commercial general liability policy describes the Murphy's Welding business as "welding/cutting." The policy defines the insured as "[a] limited liability company" and its "members . . ., but only with respect to the conduct of [the] business." "[E]mployees" are also insureds under the policy "but only for acts within the scope of their employment . . . or while performing duties related to the conduct of [the] business."
¶12. The issue before this Court is whether the losses sustained by the Thompsons, when Partridge towed his personal vehicle bolted to the Murphy's Welding forklift backwards down the highway at night after his workday had ended relate to or arise out of the Murphy's Welding business operations. The trial court concluded "that Partridge's use of Murphy's Welding's forklift, although after hours and for his personal benefit, was related to the business operation because his use was exercised [(1)] with the consent of his employer and [(2)] as a fringe benefit."
¶13. Partridge testified that he had Murphy's permission to use the forklift to tow his truck to the shop. Specifically, Partridge stated that when he could not get his truck onto the trailer, he called Murphy and "told [Murphy] what [he] was going to do." Murphy, on the other hand, testified that he did not receive a phone call from Partridge nor did he give Partridge permission to use the forklift to tow his truck to the shop. Even though the issue of permission is disputed, Penn-Star agreed that for purposes of summary judgment, Murphy gave Partridge permission to use the forklift to tow his truck to the shop.
¶14. But even if Partridge had Murphy's permission to use the forklift that night, that permission does not amount to coverage under the policy. Whether Murphy gave permission is immaterial to the relationship of the loss to the business operations because Partridge was not engaged in an activity related to Murphy's Welding. Stated differently, even assuming Partridge had permission to use the forklift to tow his truck to the shop, such permitted activity was not related to Murphy's Welding business operations: welding or cutting. And under the commercial general liability policy, such relationship is required.
¶15. In their brief to this Court, the Thompsons assert that the "actions germane to the dispositive coverage issue" are "Murphy's Welding's management's actions in authorizing a foolish and foreseeably dangerous utilization of company property, an approval based upon employment considerations incidental to the operation of the business." According to the Thompsons, their "primary claim in the instant cause of action" is that Murphy's Welding was independently negligent for "entrusting the forklift to Partridge." But whether the Thompsons' losses arise out of or relate to the Murphy's Welding business operations is irrelevant to the claim of negligent entrustment.[3] On the other hand, Penn-Star's obligation to cover the losses under the commercial general liability policy is entirely dependent on the losses arising out of the business operations.
¶16. Whether Murphy was independently...
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