Smith v. Safeway Ins. Co.
| Decision Date | 04 August 2020 |
| Docket Number | NO. 2019-CA-01171-COA,2019-CA-01171-COA |
| Citation | 301 So.3d 104 |
| Parties | Carlo J. SMITH, Appellant v. SAFEWAY INSURANCE COMPANY, Appellee |
| Court | Mississippi Court of Appeals |
BEFORE BARNES, C.J., McDONALD AND McCARTY, JJ.
McCARTY, J., FOR THE COURT:
¶1. A driver sued a woman and her daughter in a county court after the daughter rear-ended him in a car wreck. The woman's insurance company denied responsibility to provide coverage for the accident and sought a declaratory judgment in the circuit court against the woman, her daughter, and the other driver. The woman and her daughter never responded to the complaint, and a default judgment was entered against them. The injured driver responded and claimed the insurance company was responsible for covering the accident. Nonetheless, the circuit court found the driver's dispute was moot because the insured and her daughter had essentially confessed that there was no coverage. The circuit court granted a declaratory judgment in favor of the insurance company.
¶2. Because an actual controversy exists between the injured driver and the insured company, we reverse and remand.
FACTS AND PROCEDURAL HISTORY
¶3. Teenaged Madison Brown rear-ended Carlo Smith. Her mother, Altheia Tribble, owned the car the teenager was driving at the time of the accident. Smith sued them both in the County Court of Hinds County.
¶4. Tribble was insured by Safeway Insurance Company. The lawsuit prompted Safeway to file its own complaint to obtain a declaratory judgment against Tribble, Brown, and Smith in the circuit court. Safeway argued that it was not required to provide coverage because Tribble had never listed her daughter as a driver on the original application or any of the renewal forms.
¶5. The mother and daughter failed to answer the complaint. The circuit clerk entered an entry of default against them, which was followed by a default judgment by the circuit court. Although Tribble and her daughter failed to answer the complaint for a declaratory judgment, Smith timely answered and litigated against Safeway for coverage. The heated litigation included dueling motions for summary judgment by both the insurer and the injured driver.
¶6. Subsequently, Safeway sought leave to amend its initial complaint for a declaratory judgment to add two additional parties who were involved in Smith's car accident. The addition of the two parties was the only difference between Safeway's original complaint and its amended complaint. The trial court granted the motion, and Safeway filed its amended complaint.
¶7. Although he had timely answered the original complaint, Smith did not timely answer the amended complaint. As it had done against the mother and daughter, Safeway sought an entry of default. Smith responded by filing a motion to strike Safeway's request for an entry of default, listing what he insisted were "colorable defenses" for his untimeliness. He then filed an answer to the insurer's amended complaint. Nonetheless, the circuit clerk entered a default against Smith. Smith then filed a motion to set aside the entry of default, listing a slew of defenses to support his motion. The circuit court never ruled on his request to set aside the entry of default.
¶8. After a hearing, the circuit court granted Safeway's request for a declaratory judgment. However, it did not rule on any of the arguments presented to it. Instead, the holding focused entirely on the mother and daughter's failure to answer Safeway's complaint. The trial court held that because they failed to answer, the mother and daughter "[e]ssentially ... agreed that there [was] no insurance coverage under Tribble's Safeway policy that covere[d] the actions of Madison Brown."
¶9. In the circuit court's view, this "agreement" terminated the dispute. It specifically ruled that "[s]uch finding makes moot any claim Defendant Carlo Smith may assert in this action."
¶10. The circuit court concluded by declaring that its ruling did not affect Smith's pending county court case against the mother and daughter. It did not address any other issues, motions, or entries of default. The docket reflected that the pending motions for summary judgment as well as other motions were all found moot. Smith appealed.
ANALYSIS
¶11. In this case, the trial court determined that Smith's claims were moot because the mother and daughter did not respond to the request for a declaratory judgment. We apply "a de novo standard of review to questions of law, including a motion for a declaratory judgment." S.C. Ins. Co. v. Keymon , 974 So. 2d 226, 229 (¶9) (Miss. 2008).
¶12. "The doctrine of mootness demands that a case must have an ‘actual controversy’ that existed at the time of trial." Kemper County v. Parks , 281 So. 3d 208, 209 (¶7) (Miss. Ct. App. 2019) (quoting Monaghan v. Blue Bell Inc ., 393 So. 2d 466, 466 (Miss. 1980) ). "Without a live controversy, an appeal will be dismissed as moot." Butler Snow LLP v. Estate of Mayfield , 281 So. 3d 1214, 1218 (¶13) (Miss. Ct. App. 2019).
¶13. Safeway sought a declaratory judgment under Mississippi Rule of Civil Procedure 57. This is permissible because " Rule 57 specifically provides for declaratory judgment to determine questions of contractual validity and interpretation." Wood v. Safeway Ins. Co. , 114 So. 3d 714, 717 n.2 (Miss. 2013). The Rule states in relevant part that "[a]ny person interested under a ... written contract ... may have determined any question of construction or validity arising under the ... contract ... and obtain a declaration of rights, status or other legal relations thereunder." MRCP 57(b)(1).
¶14. Furthermore, the Rule expressly allows a party like Smith to seek a declaratory judgment. Specifically, Rule 57(b)(2) states that "[w]here an insurer has denied or indicated that it may deny that a contract covers a party's claim against an insured, that party may seek a declaratory judgment construing the contract to cover the claim." MRCP 57(b)(2). Because Safeway is denying that its contract covers Smith's claim against the insured, Smith may seek a declaratory judgment "construing the contract to cover the claim" under Rule 57. Id.
¶15. Our jurisprudence confirms Smith has standing to seek a declaratory judgment. In recently interpreting a similar subsection of the rule, this Court examined a dispute where a party claimed a subsequent purchaser for land did not have standing because of lack of privity of contract with prior owners of the property. Putney v. Sanford , 282 So. 3d 627, 631 (¶13) (Miss. Ct. App. 2019). Citing Rule 57, we rejected this argument. Id . at 631-32 (¶¶15-17). Both sides were fighting over title to the same 196 acres of land. Id . at 629 (¶6). The subsequent purchaser was seeking a declaratory judgment to have title fully resolved in his name. Id . Since the subsequent purchaser was "an interested party" under Rule 57, he "[had] standing to assert his claims against the prior owners despite that he was not in privity of contract with them." Id . at 632 (¶17) ; accord Johnson v. Hinds County , 524 So. 2d 947, 954 (Miss. 1988) ().
¶16. This precedent applies the broad language that "[a ]ny person interested" may seek a declaration of rights under a contract. MRCP 57(b)(1) (emphasis added). The same principle must be applied in this case. The trial court ruled the case was moot, determining that there was no live controversy because the mother and her daughter had confessed that Safeway was not required to provide insurance coverage. Yet this ignores the valid claims and defenses of Smith, who is most certainly an "interested party" under the contract, and has a "claim against the insured." MRCP 57(b)(2). Indeed, Safeway properly named Smith as a...
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