Smith v. Church Mut. Ins. Co.

• Decision Date: 02 August 2018
• Docket Number: NO. 2016-IA-01060-SCT,2016-IA-01060-SCT
• Citation: 254 So.3d 57
• Parties: Tarinika SMITH, Individually and on Behalf of Kayden Johnson, Deceased, Shelena Austin Prewitt, Natural Mother and Next Friend of Xavier Austin, a Minor, Jakila Martin, a Minor, Marlo Watkins, a Minor, and Helen Yancy, a Minor, Linda Cunningham, General Guardian and Next Friend of Trevin Mays, a Minor, and Jerkisha Mays, a Minor, Christine Magee, Natural Mother and Next Friend of Monshanna Weston, Brenda Woodard, Natural Mother and Next Friend of Brenae Woodard, a Minor, Angela Craft, Natural Mother and Next Friend of Dearyell Craft, a Minor, Kaytana Dillard, Natural Mother and Next Friend of Ronisha Dillard, a Minor, Jermaine Dillard, a Minor, and Quashounta Dillard, a Minor v. CHURCH MUTUAL INSURANCE COMPANY and Adlai Johnson
• Court: Mississippi Supreme Court

254 So.3d 57

Tarinika SMITH, Individually and on Behalf of Kayden Johnson, Deceased, Shelena Austin Prewitt, Natural Mother and Next Friend of Xavier Austin, a Minor, Jakila Martin, a Minor, Marlo Watkins, a Minor, and Helen Yancy, a Minor, Linda Cunningham, General Guardian and Next Friend of Trevin Mays, a Minor, and Jerkisha Mays, a Minor, Christine Magee, Natural Mother and Next Friend of Monshanna Weston, Brenda Woodard, Natural Mother and Next Friend of Brenae Woodard, a Minor, Angela Craft, Natural Mother and Next Friend of Dearyell Craft, a Minor, Kaytana Dillard, Natural Mother and Next Friend of Ronisha Dillard, a Minor, Jermaine Dillard, a Minor, and Quashounta Dillard, a Minor

v.CHURCH MUTUAL INSURANCE COMPANY and Adlai Johnson

NO. 2016-IA-01060-SCT

Supreme Court of Mississippi.

August 2, 2018

Rehearing Denied October 18, 2018

ATTORNEY FOR APPELLANTS: DRAYTON D. BERKLEY

ATTORNEYS FOR APPELLEES: MARGARET ZIMMERMAN SMITH, PAUL NORMAN DAVIS, RIDGELAND,HARDIN CHASE PITTMAN

EN BANC.

RANDOLPH, PRESIDING JUSTICE, FOR THE COURT:

¶ 1. The Marshall County Circuit Court entered an order dismissing Adlai Johnson from the suit for Plaintiffs' failure to timely serve him.¹ Church Mutual Insurance Company ("Church Mutual") then moved to have the trial court declare that Tennessee substantive law controlled the case. After the trial court so declared, Church Mutual moved for summary judgment based on Tennessee law prohibiting direct actions against insurers for uninsured motorist ("UM") claims. The trial court then entered summary judgment in favor of Church Mutual. Plaintiffs seek interlocutory review of all three rulings. We find no error in the dismissal of Johnson for Plaintiffs' failure to serve. We further find no error with the trial court applying Tennessee law to determine whether the contract provided UM coverage to Plaintiffs. However, we find that the trial court erred in applying Tennessee substantive law. We reverse those judgments of the Marshall County Circuit Court and remand for proceedings consistent with this opinion.

STATEMENT OF FACTS AND PROCEDURAL HISTORY

¶ 2. On April 28, 2013, Tarinika Smith and twelve minor children (collectively Plaintiffs) were involved in an automobile accident with a vehicle driven by Adlai Johnson.² Smith was operating a passenger van owned by Mount Vernon Missionary Baptist Church (Mt. Vernon), located in Rossville, Tennessee, which was transporting the children. The accident occurred in Marshall County, Mississippi. At the time of the collision, Smith was pregnant. Plaintiffs and Johnson all are Tennessee residents.

¶ 3. However, Church Mutual's principal place of business is in Wisconsin. Church Mutual issued a Commercial Automobile Policy to Mount Vernon, insuring a fifteen-passenger church van and a twelve-passenger church van. The agent for the policy was located in Brentwood, Tennessee. Although the full policy was not provided by either party, portions of the commercial auto policy, including the Business Automobile Declarations and the Tennessee Uninsured Motorists Coverage Endorsement, were included. The policy limits were $1,000,000 in liability, $5,000 in medical payments, $1,000,000 in uninsured/underinsured motorist coverage, and actual cash value or cost of repair, whichever is less, for both comprehensive and collision damage. Although the Tennessee Uninsured Motorists Coverage Endorsement was provided, the named insured, effective date, authorized representative, and schedule of bodily injury portions were left blank.

¶ 4. The Tennessee Uninsured Motorists Coverage Endorsement reads in pertinent part:

A. Coverage

1. We will pay all sums the "insured" is legally entitled to recover as compensatory damages from the owner or driver of an "uninsured motor vehicle." The damages must result from "bodily injury" sustained by the "insured" or "property damage" caused by an "accident." The owner's or driver's liability for these damages must result from the ownership, maintenance, or use of the "uninsured motor vehicle."

2. With respect to damages resulting from an "accident" with a vehicle described in Paragraph (2) of the definition of "uninsured motor vehicle," we will pay under this coverage only if a. or b. below applies:

a. The limit of any applicable liability bonds or policies have been exhausted by payments of judgments or settlements; or

b. A tentative settlement has been made between the "insured" and the insurer of an owner or operator of a vehicle described in Paragraph (2) of the definition of "uninsured motor vehicle" and we have been given written notice of such tentative settlement as described in Paragraph E.4.b.

That portion of the policy further declares that an "insured" is "anyone ‘occupying’ a covered ‘auto....’ " None of the exclusions listed therein applies.

¶ 5. On June 15, 2015, Plaintiffs filed suit against Johnson and Church Mutual, alleging Johnson caused the accident. Plaintiffs sought damages for various injuries. Plaintiff Smith additionally sought recovery for the wrongful death of her "unborn quick child." On June 16, 2015, Plaintiffs sent to Johnson, via U.S. certified mail, an envelope with the circuit court's process for service on him. It was not until August 11, 2015, however, that Plaintiffs' counsel received notice from the U.S. Postal Service that the envelope had been returned undelivered and marked "unclaimed." As a result, Plaintiffs again attempted service on Johnson in September 2015, but learned in February 2016 that service had failed a second time. And so, on March 14, 2016, Plaintiffs, via a process server, tried to serve Johnson a third time. Plaintiffs' third attempt ultimately was successful, with Johnson being served on March 28, 2016 – 287 days after the filing of Plaintiffs' complaint.

¶ 6. In response to Plaintiffs' suit, Johnson moved to be dismissed on April 29, 2016, citing Plaintiffs' failure to timely serve him within the 120-day period prescribed by Rule 4(h) of the Mississippi Rules of Civil Procedure. Plaintiffs opposed Johnson's motion and argued for an extension of time to serve him properly. Plaintiffs offered a variety of reasons why Johnson was served beyond Rule 4(h)'s 120-day period – specifically, Plaintiffs allocated fault to both their chosen process server and Johnson. Plaintiffs, however, conceded that they were not made aware service had failed through their server until February 2016, which prompted their March 14, 2016, attempt. Following argument on Johnson's motion, the circuit court granted the motion under Rule 4(h) and dismissed Johnson without prejudice.

¶ 7. In June 2016, Church Mutual moved to declare Tennessee substantive law controlled this action. Church Mutual argued that, aside from the location of the accident, Mississippi had no contacts with the parties or subject matter of the action. Therefore, choice-of-law principles required Tennessee law to be applied to the action.³

¶ 8. The circuit court granted Church Mutual's motion and held that Tennessee substantive law would govern all parties' claims and defenses, save for Mississippi's "[R]ules of the [R]oad."⁴ The circuit court specifically held:

This case arises from an automobile accident that occurred in Marshall County, Mississippi on April 28, 2013. The location of the accident was on Highway 72, just south of the Tennessee border. All parties to this action are domiciled or reside in Tennessee, with the exception of Church Mutual Insurance Company, whose principal place of business is in Wisconsin. Church Mutual insured the van driven by Plaintiff Smith. The insurance policy was negotiated in Tennessee and was to be substantially performed in Tennessee.

This Court finds Tennessee law controls plaintiffs' contractual claims against Church Mutual. The place of contracting as well as the place of negotiating the contract was in Tennessee. The insured automobile was principally garaged in Tennessee. This Court finds the place of performance of the contract was substantially in Tennessee. Therefore, under the Restatement (Second) of Conflict of Laws sections 188 and 193, this Court finds Tennessee law controlling.

This Court finds Tennessee law controlling as to plaintiffs' claims of negligence . Tennessee is the common domicile of the plaintiffs and Defendant Johnson. No party to this action is domiciled or resides in Mississippi. Based on the facts presented to the Court, this Court finds Tennessee has the most substantial relationship with the parties involved. While the Court recognizes the place of injury is Mississippi, this Court finds that fact alone is not determinative as to which state's law governs this dispute. SeeMitchell v. Craft , 211 So.2d 509 (Miss. 1968) ; Restatement (Second) of Conflict of Laws § 6. This Court finds Tennessee laws controlling as to tort claims and recovery , and those Tennessee laws are not repugnant to the laws and policies of Mississippi. Regarding any issues involving Mississippi's [R]ules of the [R]oad, this Court finds Mississippi law is controlling. SeeFells v. Bowman , 274 So.2d 109 (Miss. 1979[1973]).

In conclusion, the Court finds Tennessee law to be the proper choice of law as to plaintiffs' claims of negligence and as to any contractual claims against Church Mutual.

(Emphasis added.)

¶ 9. Following the trial court's finding that Tennessee law would apply to Plaintiffs' suit and because Johnson previously had been dismissed from the underlying suit, Church Mutual moved for summary judgment, arguing that Tennessee law did not allow Plaintiffs to bring a direct action against a UM carrier, absent specific circumstances. The circuit court agreed, and on October 24, 2016, dismissed all Plaintiffs' claims against Church Mutual without prejudice.

¶ 10. Plaintiffs sought interlocutory relief from this Court. Specifically, Plaintiffs appealed the circuit court's orders dismissing Johnson from the suit and finding Tennessee substantive law controlling, before granting summary judgment to Church...