Progressive Gulf Ins. v. Dickerson & Bowen

• Decision Date: 04 October 2007
• Docket Number: No. 2006-CA-01250-SCT.,2006-CA-01250-SCT.
• Citation: 965 So.2d 1050
• Parties: PROGRESSIVE GULF INSURANCE COMPANY v. DICKERSON AND BOWEN, INC., and Travelers Indemnity Company of Illinois.
• Court: Mississippi Supreme Court

965 So.2d 1050

PROGRESSIVE GULF INSURANCE COMPANY v. DICKERSON AND BOWEN, INC., and Travelers Indemnity Company of Illinois.

No. 2006-CA-01250-SCT.

Supreme Court of Mississippi.

October 4, 2007.

Cecil Maison Heidelberg, Ridgeland, attorney for appellant.

Jennifer W. Yarborough, Jackson, John Stephen Graham, attorneys for appellees.

Before WALLER, P.J., EASLEY and CARLSON, JJ.

EASLEY, Justice, for the Court.

PROCEDURAL HISTORY

¶ 1. This appeal involves litigation between two insurance companies on the issue of indemnification and stems from prior litigation which resulted in a jury verdict and a subsequent settlement. Detailed facts of the prior litigation and the jury's verdict are not before this Court, but the prior litigation will be discussed briefly in the facts to provide insight.¹

¶ 2. On January 13, 1999, in the Circuit Court of Holmes County, Mississippi, Leola Cooper (Cooper) filed a lawsuit against Billy Carey (Carey) for his negligent driving which resulted in her injury. Cooper amended her complaint on December 22, 2000, adding Dickerson & Bowen, Inc. (D & B) as a defendant. On November 22, 2001, Progressive Gulf Insurance Company (Progressive) settled on behalf of Carey, leaving D & B as the sole defendant. D & B went to trial, and the jury rendered a $2.5 million verdict in favor of Cooper. D & B did not appeal the verdict. Travelers Indemnity Company of Illinois (Travelers), D & B's liability insurance carrier, settled with Cooper for $250,000 to satisfy the judgment against D & B.

¶ 3. On November 20, 2003, Travelers filed suit against Progressive alleging that Progressive breached its duty to defend D & B. Travelers demanded indemnification for the settlement Travelers paid to Cooper, $250,000. Travelers moved for summary judgment and Progressive filed a cross-motion, also for summary judgment. The trial court granted Travelers' motion for summary judgment, basing its decision on the jury's finding that D & B was vicariously liable and, thus, insured under Carey's Progressive policy.

¶ 4. On June 28, 2006, a final judgment was entered against Progressive for Travelers' settlement amount of $250,000, plus costs and fees of $49,529.83, for a total of judgment of $299,529.83. Progressive now appeals to this Court.

FACTS

¶ 5. On September 11, 1998, Cooper was injured in an automobile accident when Carey's vehicle, driven by Carey, collided with Cooper's vehicle. On January 13, 1999, Cooper filed suit against Carey and D & B, Carey's alleged employer. Carey was defended by Progressive. On December 22, 2000, D & B was joined as a defendant in Cooper's amended complaint. D & B was defended by Travelers. Prior to trial, and under Carey's commercial vehicle policy held by Progressive, Progressive settled on Carey's behalf, leaving D & B and Cooper as the remaining litigants. Throughout the litigation, D & B maintained in its defense that Carey was an independent contractor, thereby disavowing Progressive's responsibility. The jury returned a verdict against D & B in the amount of $2.5 million. This was announced in special verdict form submitted by D & B's counsel with the following:

1. Was Billy Carey negligent? Yes.

2. If the Answer to No. 1 was "yes," what was his percentage of fault? 10%.

3. Was Dickerson & Bowen negligent? Yes.

4. If the answer to No. 3 was "yes," what was its percentage of fault? 90%.

¶ 6. D & B maintained throughout, and until the jury verdict was rendered against D & B, that Carey was an independent contractor. D & B never made a demand for Progressive to defend it. Before Travelers settled with Cooper, and after reviewing Carey's policy with Progressive, Travelers sent the final judgment against D & B for $2.5 million and Cooper's $450,000 settlement demand to Progressive. At this point, after the trial, Travelers requested that Progressive defend D & B based on its policy with Carey. On June 10, 2002, Progressive refused the request to defend D & B or indemnify Travelers. Travelers then settled the $2.5 million judgment against D & B for $250,000.

DISCUSSION

¶ 7. Progressive contends that the trial court improperly granted summary judgment in favor of Travelers. Progressive asserts that D & B waived any right of defense or indemnity from Progressive as a result of non-compliance with Progressive's policy requirements that were a condition precedent to coverage. Progressive further argues that as a result of D & B's lack of a timely demand to defend or to provide coverage, D & B waived any right to coverage and to indemnification of Travelers for the settlement that Travelers negotiated with Cooper. Progressive had no involvement in the representation of D & B or the settlement of the judgment against D & B.

¶ 8. In reviewing a trial court's ruling on a motion for summary judgment, this Court conducts a de novo review and "examines all the evidentiary matters before us, including admissions in pleadings, answers to interrogatories, depositions, and affidavits." Price v. Purdue Pharma Co., 920 So.2d 479, 483 (Miss.2006) (citing Aetna Cas. & Sur. Co. v. Berry, 669 So.2d 56, 70 (Miss.1996), overruled in part on other grounds, Owens v. Miss. Farm Bureau Cas. Ins. Co., 910 So.2d 1065, 1074 (Miss.2005)). "The evidence must be viewed in the light most favorable to the party against whom the motion has been made." Price, 920 So.2d at 483 (citing Berry, 669 So.2d at 70). "The moving party has the burden of demonstrating that no genuine issue of material fact exists, and the non-moving party must be given the benefit of the doubt concerning the existence of a material fact." Howard v. City of Biloxi, 943 So.2d 751, 754 (Miss. App.2006) (citing City of Jackson v. Sutton, 797 So.2d 977, 979 (Miss.2001)). To avoid summary judgment, the non-movant must set forth specific facts that demonstrate a genuine issue of material fact that merits trial instead of mere unsubstantiated allegations. Richmond v. Benchmark Constr. Corp., 692 So.2d 60, 61 (Miss.1997).

¶ 9. Progressive's policy provided the following pertinent duties in case of an accident or loss as a condition precedent to coverage:

Notice of Accident or Loss

In the event of an accident or loss, report it to us as soon as practicable . . .

Other Duties

Any person claiming coverage under this Policy must:

1. cooperate with and assist us in any matter concerning a claim or lawsuit;

2. provide any sworn or written proof of loss that we require before payment of a loss;

3. provide us with signed or recorded statements under oath as often as we may reasonably require;

4. promptly send us any and all legal papers received relating to any claim of lawsuit;

5. attend hearings and trials as we require;

. . .

9. provide us with written notice of any legal action which such person has undertaken in regard to the accident for which coverage is sought;

10. assume no obligation, make no payment or incur no expense without our consent, except at your own cost; . . .

¶ 10. Carey's policy with Progressive contained a provision that covered vicarious liability for Carey's negligence while driving the insured vehicle. The policy defined an "insured" under number 4 of the policy as: "Any other person or organization, but only with respect to the legal liability of that person or organization for acts or omissions of any person otherwise covered . . . while driving your insured auto."

¶ 11. However, D & B never requested any coverage from Progressive. D & B never made any demand for Progressive to defend it. Instead, D & B was represented and defended by its general liability insurer, Travelers, at all stages of the litigation proceedings. D & B contended that Carey was not an employee of D & B. D & B maintained, at all times, that Carey was an independent contractor. Carey had his own commercial insurance policy with Progressive. Progressive settled Cooper's lawsuit against Carey. Once Carey was released from the litigation, Progressive had no further involvement in the litigation.

¶ 12. D & B did not settle with Cooper, maintaining that Carey was an independent contractor, and therefore, it was not liable to Cooper. Travelers represented D & B through all these proceedings and furnished D & B legal representation. Progressive was not involved in D & B's representation or legal decision to proceed to trial.

¶ 13. D & B made no request to Progressive for coverage until after D & B went to trial and received a jury verdict against D & B. After the verdict was rendered against D & B, Travelers did not appeal the judgment. Instead, Travelers negotiated a settlement on behalf of D & B, and Travelers paid the $250,000 to satisfy the judgment rendered against D & B.

¶ 14. Progressive was not involved in the decision to go to trial, the trial proceedings, or the decision to settle the judgment in lieu of appealing it. Provisions number 9 and 10 of Progressive's policy specifically stated the duty of the insured to:

9. provide us with written notice of any legal action which such person has undertaken in regard to the accident for which coverage is sought; and

10. assume no obligation, make no payment or incur no expense without our consent, except at your own cost.

¶ 15. "Because the insurer must eventually pay whatever sums the insured becomes legally obligated to pay, the insurance carrier has the right to select the attorney retained to defend the claim." Moeller, et al. v. American Guar. and Liab. Ins. Co., 707 So.2d 1062, 1068 (Miss. 1996) (citing Hartford Acc. & Idem. Co. v. Foster, 528 So.2d 255, 263 (Miss.1988)). "Where the language of an insurance contract is clear and unambiguous it is not construed in favor of the insured but is construed as written." Lowery v. Guar. Bank & Trust Co., 592 So.2d 79, 82 (Miss. 1991) (citing State Farm Mut. Auto. Ins. Co. v. Gregg, 526 So.2d 554, 556 (Miss. 1988); Ford v. Lamar Life Ins. Co., 513 So.2d 880 (1987)). This Court has held:

The interpretation of an insurance policy...