Scott v. Transport Indem. Co.
| Decision Date | 02 September 1987 |
| Docket Number | No. 55564,55564 |
| Citation | 513 So.2d 889 |
| Parties | James E. SCOTT v. TRANSPORT INDEMNITY COMPANY. |
| Court | Mississippi Supreme Court |
Roy O. Parker, Tupelo, William C. Walker, Jr., University, for appellant.
Thomas A. Wicker, Holland, Ray & Upchurch, W. Scott Collins, Fred M. Bush, Mitchell, McNutt, Bush, Lagrone & Sams, Tupelo, for appellee.
Before ROY NOBLE LEE, P.J., and ROBERTSON and ANDERSON, JJ.
I.
Once again we are confronted with a case that may well be resolved ultimately in favor of the Defendant. That result becomes quite delayed, for the trial court was too quick on the draw, as it directed a defense verdict in the face of evidence which, if believed, might have formed the legally sufficient undergirding for a judgment for plaintiff. We reverse and remand for further proceedings consistent with what we say below.
II.
James Earl Scott, Plaintiff below and Appellant here, is an adult resident citizen of Booneville, Mississippi. He is a truck driver by occupation. In 1977 he purchased a new Freightliner tractor for which he paid $46,699.21. He also purchased a used 1973 Hobbs trailer for approximately $2500.00. Scott operated as an independent owner-operator until January of 1981, at which time he leased his rig to Leeway Truck Lines out of Oklahoma City, Oklahoma, and began driving for Leeway as an independent contractor.
Upon entering this new relationship, Scott was instructed by Leeway that he must secure liability insurance with some acceptable insurer. One option made available to Scott was obtaining liability and collision insurance coverage under Leeway's fleet policy with Transport Indemnity Company, the Defendant below and Appellee here. Because Leeway's fleet policy with Transport covered numerous vehicles owned and leased by Leeway, the rate was considerably less expensive than any Scott could have obtained acting individually.
Significantly, in obtaining coverage through Leeway's fleet policy with Transport, Scott dealt exclusively with Leeway's insurance coordinator, that is, an individual on Leeway's payroll, not Transport's. It appears, however, that Transport allowed Leeway's insurance representative to deal directly with independent contractor truckers such as Scott. Significantly, the Leeway insurance representative explained to Scott that he should state the amount of insurance he wanted
to mean as the amount of investment that I had in my truck in the case it was destroyed and what it would cost me to go out and buy a new piece of equipment and go right back into the business. The insurance man told me I should insure my vehicle or my business for what I felt it was worth and what it would take to replace it to put me back in business. On that basis I asked for $40,000.00 on the tractor and $5,000.00 on the trailer.
Scott did not receive a copy of the insurance policy. Transport claims the master fleet policy was available through Leeway, but does not contest that each individual driver received only a certificate of insurance which did not include the terms of the policy. Scott says he asked for a copy of the fleet policy, but that such was not forthcoming.
In any event, the master fleet policy, under Part VI, Physical Damage Insurance, Section D, states:
"D. HOW WE WILL PAY FOR LOSSES--THE MOST WE WILL PAY. 1. At our option we may:
a. Pay for, repair or replace damaged or stolen property; or
b. Return the stolen property, at our expense. WE will pay for any damage that results to the auto from the theft.
2. The most we will pay for a loss is the smaller of the following amounts:
a. The actual cash value of the damaged or stolen property at the time of loss.
b. The cost of repairing or replacing the damaged or stolen property with other of like kind or quality." [Emphasis added]
Endorsement Number 7 to the policy reads:
"It is hereby understood and agreed that as respects physical and damage insurance, actual cash value is replaced by stated value throughout the policy wherever it may appear."
Substituting the terms stated value for actual cash value in the policy language quoted above, the operative language of the written policy of insurance would read:
"2. The most we will pay for a loss is the smaller of the following amounts:
a. [The stated value ] of the damage or stolen property at the time of loss.
b. The cost of repairing or replacing damaged or stolen property with other of like kind or quality." [Emphasis added]
Approximately one year after entering the relationship with Leeway and the contractual coverage with Transport Indemnity Scott increased the stated value of his collision coverage to $55,000.00. He cited inflation as the reason that he wanted to increase his coverage. Scott was later told that the increase had been approved and he received a new certificate along with a new increased premium based on this additional coverage. Again, he was not given a copy of the policy itself. At no time prior to his accident in the vehicle did Leeway, Transport or anyone else furnish Scott a copy of the policy, although he requested one on several occasions.
On June 1, 1981, Scott's vehicle was seriously damaged in a single vehicle accident. Transport's independent adjuster and claims handler originally were of the opinion that the tractor was a "total loss". According to the claims handler he always considered the vehicles to be a total loss, but when he referred the claim to Transport's branch claim manager, Charles Lanphear, he received a memo back advising him to:
(1) Check with Mississippi counsel covering stated value in conjunction with ACV when stated value is drastically greater.
(2) Check to see if we have option to repair vehicle even though it is totaled.
(3) Because insured has paid a premium for specified and stated coverage, we may be cornered.
In another memo entitled "Settlement Negotiations" from the claims adjuster, Joe Howard, to his superior, Charles Lanphear, it was noted,
based on our discussion of this claim with the home office on Friday, July 23, 1982, we feel that we should attempt to settle this claim based on the repair figures.
On Tuesday, July 27, 1982, Transport advised Scott that the company desired to repair the unit based on the repair figure. Scott rejected this proposal. Transport's file revealed the following handwritten memo in Howard's handwriting:
Our repair offer refused. Claimant wants (1) copy of policy and (2) written explanation. Claimant has talked with an attorney. Feels that there is a claim for misrepresentation. I think that we had better settle.
Transport then furnished Scott a copy of the insurance policy and the following explanation:
At this time Transport Indemnity Company is exercising the option to pay for repairs to your tractor involved in this loss in the amount of $20,758.55.
In addition, Transport offered to pay rental on a truck for Scott to use while his was being repaired at a cost of $4500.00 even though such rental was not required by the policy. Scott has refused to have the truck repaired, refused to accept the cost of repair and cost of rental in the total amount of $25,258.55. He has steadfastly maintained that should be paid $55,000.00.
On October 26, 1982, Scott commenced this civil action by filing his complaint in the Circuit Court of Lee County, Mississippi, naming Transport as Defendant. Scott claimed that Transport had breached its insurance contract and sought recovery of the benefits due and payable under the policy. In addition, Scott claimed that Transport had acted in bad faith in withholding payment of his claim. Scott further charged Transport with breach of fiduciary duties owed to him and with fraudulent misrepresentations and in the end made demand for $1,000,000 in compensatory damages and $2,000,000 in punitive or exemplary damages. Plaintiff subsequently amended to increased his damage demand to $4,000,000 plus. Scott also claimed prejudgment interest. Transport answered, admitted that it insured the property, i.e. Scott's tractor and trailer, and stated that under the terms of the policy it had the option to repair. Transport claimed that it had fully offered to perform all of its duties owed under the policy and in law.
The case was called for trial in November of 1983. At the end of Scott's evidence, Transport moved for a directed verdict. The Circuit Court held that, under the language of the insurance contract, Transport was entitled at its option to repair Scott's damaged tractor; that Transport elected this option and offered to pay the cost of such repairs plus the rental of a substitute tractor for thirty working days while the repairs were being made; and that this offer fulfilled its contractual obligations under the contract of insurance. Based upon these findings, the court entered judgment in favor of Scott in the sum of $25,258.55 holding said amount to be full satisfaction of all of Scott's legitimate claims under the insurance contract. Beyond this, the Circuit Court granted Transport's direct verdict and dismissed Scott's claims for fraudulent misrepresentation, for bad faith refusal to pay Scott's insurance claim and, accordingly, entered judgment for Transport and against Scott on Scott's claims for compensatory tort damages and punitive or exemplary damages.
Scott now appeals to this Court, claiming entitlement to more, much more, than $25,258.55.
III.
In the present procedural posture of this appeal, under oftstated guidelines, we consider all of the credible and material evidence in the case in the light most favorable to Plaintiff Scott. Beyond this we indulge in Scott's favor all reasonable inferences which may be drawn from the evidence. We may affirm the findings of the Circuit Court only if we are able to conclude from the record that, with respect to the material facts, no hypothetical reasonable juror could have found for Scott. See, e.g., Hickox By and...
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