Titan Indem. Co. v. Estes

• Decision Date: 05 September 2002
• Docket Number: No. 2001-CA-00884-SCT.,2001-CA-00884-SCT.
• Parties: TITAN INDEMNITY COMPANY v. Terry ESTES, Paula Estes and Brett Estes, Individually, and as Wrongful Death Beneficiaries of Hailey Elizabeth Estes, Deceased.
• Court: Mississippi Supreme Court

825 So.2d 651

TITAN INDEMNITY COMPANY v. Terry ESTES, Paula Estes and Brett Estes, Individually, and as Wrongful Death Beneficiaries of Hailey Elizabeth Estes, Deceased.

No. 2001-CA-00884-SCT.

Supreme Court of Mississippi.

September 5, 2002.

Benjamin E. Griffith, Cleveland, attorney for appellant.

R. Kent Hudson, Bruce M. Kuehnle, Natchez, attorneys for appellees.

Before SMITH, P.J., and CARLSON and GRAVES, JJ.

GRAVES, J., for the Court.

¶ 1. This appeal concerns insurance coverage applicable to a vehicle-fire engine collision which occurred on March 7, 1996, and resulted in the deaths of Hailey Elizabeth Estes and her passenger, Mindy Carlson.

FACTS

¶ 2. At approximately 11:00 p.m. on March 7, 1996, all personnel at Station 2 of the City of Natchez fire department were dispatched to a house fire in the northern part of the city. Captain Bobby Stutzman was driving the fire engine en route to the house fire. Firefighter Henry Floyd was riding shotgun. As the fire engine approached the intersection of Sargent S. Prentiss Drive and Melrose-Montebello Parkway, it was traveling between 55-60 miles per hour. According to all eyewitnesses, including firefighter Henry Floyd, as the fire engine approached the intersection, the traffic control signal facing Captain Stutzman was red. Hailey Estes and Mindy Carlson were crossing the intersection in a 1993 Mazda on a green light. After having been warned twice of the approach of the Estes vehicle by firefighter Henry Floyd, Captain Stutzman finally applied the brakes of the fire engine 30 feet from the point of impact. Hailey Estes and Mindy Carlson were killed as a result of the accident.

¶ 3. A blood test performed on Captain Stutzman revealed the presence of the drugs Ultram, Tranxene, Xanax and Chlorzoxazone. Captain Stutzman was later indicted by the Adams County Grand Jury for felony DUI/negligent homicide, and his employment with the City of Natchez Fire Department was terminated. Captain Stutzman appealed his termination to the Natchez Civil Service Commission and urged as a basis for the appeal that Chief Gary Winborne and all others in the fire department knew that he had a long history of taking pain medication and that on the day of the accident, he had requested that he be relieved of the responsibility of driving the fire engine.

¶ 4. The record reveals that on the morning of March 7, 1996, Captain Stutzman asked his immediate supervisor that a relief driver be called in so that he would not have to drive and operate the fire engine. Chief Winborne was made aware of this request, but refused it stating, "drive or take you're a—home. I am not authorizing overtime."

¶ 5. The City implemented a drug testing policy in October, 1992. This policy specifically provided for the mandatory termination of any employee whose initial positive test result was confirmed by a mandatory second test on the same sample. Captain Stutzman tested positive for the use of opiates on at least two occasions prior to the accident on March 7, 1996. These tests were performed at a time when Winborne was either Interim Chief or Chief of the Natchez Fire Department. Captain Stutzman was able to obtain statements from his physicians explaining that the medications prescribed by them would result in a positive drug screen. In spite of Captain Stutzman's reputation as a drug user and concerns that Captain Stutzman represented a danger to both the public and to other firemen, no limitations were placed on Captain Stutzman's duties.

¶ 6. At the time of the accident, the City had three insurance policies; a business auto policy that provided a maximum limit of liability in the amount of $500,000, a commercial general liability ("CGL") policy that provided a maximum limit of liability in the amount of $500,000, and a public officials policy that provided a maximum limit of liability in the amount of $500,000.

¶ 7. The family of Mindy Carlson was paid $250,000 by the City of Natchez' insurer, Titan Indemnity Company ("Titan"), under the business auto policy.

¶ 8. As a result of Hailey's death, the Estes family filed a wrongful death suit against the City of Natchez, Captain Stutzman and Chief Winborne. Declaratory judgment actions were brought by the City against its insurer, Titan, and by Titan against the City seeking an adjudication with regard to coverage under the three insurance policies. The Estes family claimed that they were entitled to coverage and indemnification under all three policies issued by Titan.

¶ 9. Titan acknowledged its duty to defend and indemnify the City and its employees under the auto policy, subject to its terms, provisions and limits of liability, but asserted that no coverage or potential indemnification was available under the other two policies.

¶ 10. On June 7, 2001, the trial court entered its order denying Titan's motion for summary judgment and granting the Estes family's cross-motion for summary judgment. Thus, a Final Consent Judgment was entered, whereby Titan essentially admitted liability and that $1,250,000 was the highest award possible in the event all three policies applied. The Final Consent Judgment provided that if this Court determined that the trial court erred in finding that all three policies applied, then the judgment would be satisfied by virtue of Titan's payment of the remaining $250,000 available under the auto policy. Hence, the issue presented for resolution by this Court is whether the trial court erred in finding all three insurance policies applied.

STANDARD OF REVIEW

¶ 11. This Court's standard of review for summary judgment is well-settled and is the same standard employed by the trial court under Rule 56(c). This Court conducts a de novo review of orders granting or denying summary judgment and considers all evidentiary matters before it. Aetna Cas. & Sur. Co. v. Berry, 669 So.2d 56, 70 (Miss.1996). Furthermore, motions for summary judgment are to be viewed with a skeptical eye, and if a trial court should err, it is better to err on the side of denying the motion. Id.

DISCUSSION

Business Auto Policy

¶ 12. Under the terms of the business auto policy, the maximum amount of insurance available was $500,000.00. Pursuant to that policy, Titan acknowledged coverage and provided a complete defense for the benefit of the City, Captain Stutzman and Chief Winborne, in accordance with the terms, provisions and limits of liability. However, Titan asserts that the anti-cumulation clause contained in the business auto policy prevents the Estes family from recovering under the CGL policy or the public officials policy. Paragraph IV.B.8 of the business auto policy states:

If this Coverage Form and any other Coverage Form or policy issued to you by us or any company affiliated with us apply to the same "accident," the aggregate maximum limit of insurance under all the Coverage Forms or policies shall not exceed the highest applicable limit of insurance under any one Coverage Form or policy. This condition does not apply to any Coverage Form or policy issued by us or an affiliated company specifically to apply as excess insurance over this Coverage Form.

¶ 13. The Estes family responds that the anti-cumulation clause is inapplicable because both the CGL policy and the public officials policy serve as excess policies. In response, Titan does not address the fact that both the CGL policy and public officials policy contain "excess" language. Titan responds, however, that the CGL policy contains an auto exclusion that precludes recovery in this instance and that the public officials policy contains a bodily injury exclusion that precludes recovery in this instance. The language regarding coverage and exclusions provided for under the CGL policy and the public officials policy are discussed separately below.

¶ 14. The City's Titan CGL policy provides in pertinent part:

CGL Policy

SECTION I—COVERAGES

A. BODILY INJURY AND PROPERTY DAMAGE LIABILITY

* * *

2. Exclusions

This insurance does not apply to:

* * *

g. Bodily injury or property damage arising out of the ownership, maintenance, use or entrustment to others of any aircraft, auto or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and loading or unloading.

This exclusion does not apply to

* * *

(5) Bodily injury or property damage arising out of the operation of any of the equipment listed in paragraph f.(2) or f.(3) of the definition of mobile equipment. (Section VI.9).

SECTION IV—COMMERCIAL GENERAL LIABILITY CONDITIONS

* * *

4. Other Insurance

If other valid and collectible insurance is available to the insured for a loss we cover under Coverages A or B of this Coverage Part, our obligations are limited as follows:

a. Primary Insurance

This insurance is primary except when b. below applies. If this insurance is primary, our obligations are not affected unless any of the other insurance is also primary. Then, we will share with all that other insurance by the method described in c. below.

b. Excess Insurance

This insurance is excess over any of the other insurance, whether primary, excess, contingent or on any other basis:

* * *

(4) If the loss arises out of the maintenance or use of aircraft, autos or watercraft to the extent not subject to Exclusion g. of Coverage A (Section I).

* * *

SECTION VI—DEFINITIONS

* * *

2. "Auto" means a land motor vehicle, trailer or semitrailer designed for travel on public roads, including any attached machinery or equipment. But auto does not include mobile equipment.

* * *

3. "Bodily injury" means bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time.

* * *

9. "Mobile equipment" means any of the following types of land vehicles, including any attached machinery or equipment:

* * *

f. Vehicles not described in a., b., c. or d. above maintained primarily for purposes other than the transportation of persons or cargo.

However,

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