Travelers Indem. Co. v. Forrest Cnty.
| Decision Date | 23 June 2016 |
| Docket Number | CIVIL ACTION NO. 2:14-CV-22-KS-MTP |
| Parties | THE TRAVELERS INDEMNITY COMPANY, et al. PLAINTIFFS v. FORREST COUNTY, et al. DEFENDANTS |
| Court | U.S. District Court — Southern District of Mississippi |
For the reasons below, the Court grants the Motions for Summary Judgment filed by Steadfast Insurance Company [410] and Gemini Insurance Company [414].
This is a liability insurance coverage case arising from a civil rights lawsuit. The Court has previously discussed the case's background. See Travelers v. Forrest County, No. 2:14-CV-22-KS-MTP, 2016 U.S. Dist. LEXIS 18288, at *6-*9 (S.D. Miss. Feb. 16, 2016); Bivens v. Forrest County, No. 2:13-CV-8-KS-MTP, 2015 U.S. Dist. LEXIS 40602, at *3-*10 (S.D. Miss. Mar. 30, 2015). On February 16, 2016, the Court granted [370] motions for judgment on the pleadings filed by Swiss RE International, previously Zurich Specialties London Limited ("ZSLL"), Gemini Insurance Company, and Steadfast Insurance Company. See Travelers, 2016 U.S. Dist. LEXIS 18288 at *31-*32. The Court ruled that the Bivens Plaintiffs1 had not alleged any specific, independentwrongful acts or omissions during the applicable policy periods, and that ZSLL, Gemini, and Steadfast had no duty to defend or indemnify the Bivens Defendants against the Bivens Plaintiffs' claims.
The parties then filed numerous dispositive motions [258, 344, 346, 349, 351, 353, 354, 355, 359, 361, 363, 365], each addressing an insurer's duty to defend and/or indemnify the Bivens Defendants against the claims asserted by the Bivens Plaintiffs in the underlying case. On April 20, 2016, the Bivens Plaintiffs filed a Third Amended Complaint in the underlying case. See Third Amended Complaint, Bivens v. Forrest County, No. 2:13-CV-8-KS-MTP (S.D. Miss. Apr. 20, 2016), ECF No. 307. Anticipating that the parties to the coverage case would need to address the Bivens Plaintiffs' new allegations, the Court denied [401] all pending dispositive motions without prejudice, and set a new motions deadline. Once again, the parties filed numerous dispositive motions [402, 404, 406, 408, 410, 412, 414, 416, 418, 420, 422, 424, 426, 428, 430, 432, 434, 437].
The Bivens Plaintiffs and Defendants filed a Motion for Reconsideration [424] of the Court's order [370] granting the motions for judgment on the pleadings. On June 22, 2016, the Court granted [502] the motion for reconsideration in part and denied it in part. Specifically, the Court granted the motion with respect to its previous ruling that ZSLL had no duty to defend or indemnify the Bivens Defendants in the underlying case, but the Court denied the motion in all other respects. The Court held that theBivens Plaintiffs had alleged specific omissions and/or breaches of duty by the Bivens Defendants during the ZSLL policy periods, but that they had not alleged any specific wrongful acts during the Gemini and Steadfast policy periods.
The Court now considers Steadfast Insurance Company's Motion for Summary Judgment [410] and Gemini Insurance Company's Motion for Summary Judgment [414].
Rule 56 provides that "[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a); see also Sierra Club, Inc. v. Sandy Creek Energy Assocs., L.P., 627 F.3d 134, 138 (5th Cir. 2010). "An issue is material if its resolution could affect the outcome of the action." Sierra Club, Inc., 627 F.3d at 138. "An issue is 'genuine' if the evidence is sufficient for a reasonable jury to return a verdict for the nonmoving party." Cuadra v. Houston Indep. Sch. Dist., 626 F.3d 808, 812 (5th Cir. 2010).
The Court is not permitted to make credibility determinations or weigh the evidence. Deville v. Marcantel, 567 F.3d 156, 164 (5th Cir. 2009). When deciding whether a genuine fact issue exists, "the court must view the facts and the inference to be drawn therefrom in the light most favorable to the nonmoving party." Sierra Club, Inc., 627 F.3d at 138. However, "[c]onclusional allegations and denials, speculation, improbable inferences, unsubstantiated assertions, and legalistic argumentation do not adequately substitute for specific facts showing a genuine issuefor trial." Oliver v. Scott, 276 F.3d 736, 744 (5th Cir. 2002).
Steadfast argues that it has no duty to defend or indemnify the Bivens Defendants against the Bivens Plaintiffs' claims. "Under Mississippi law, an insurer's duties to defend and indemnify its insured are distinct and separable duties requiring the use of different standards." Estate of Bradley v. Royal Surplus Lines Ins. Co., 647 F.3d 524, 529 (5th Cir. 2011). To determine whether an insurance company has a duty to defend its policyholder against suit, the Court looks "at the facts alleged in the complaint, together with the policy." Auto. Ins. Co. of Hartford v. Lipscomb, 75 So. 3d 557, 559 (Miss. 2011). "[A]n insurer's duty to defend is triggered when the allegations of the complaint reasonably bring a claim within the coverage of its policy." Carl E. Woodward, LLC v. Acceptance Indem. Ins. Co., 749 F.3d 395, 398 (5th Cir. 2014) (quoting Baker Donelson Bearman & Caldwell, P.C. v. Muirhead, 920 So. 2d 440, 451 (Miss. 2006)) (punctuation omitted). There is no duty to defend if "the alleged conduct falls outside the policy's coverage," but if the insurer "becomes aware that the true facts, if established, present a claim against the insured which potentially would be covered under the policy, the insurer must provide a defense until it appears that the facts upon which liability is predicated fall outside the policy's coverage." Lipscomb, 75 So. 3d at 559.
"Unlike the duty to defend, which can be determined at the beginning of the lawsuit, an insurer's duty to indemnify generally cannot be ascertained until the completion of the litigation, when liability is established, if at all." Bradley, 647 F.3dat 531. "This is because, unlike the duty to defend, which turns on the pleadings and the policy, the duty to indemnify turns on the actual facts giving rise to liability in the underlying suit, and whether any damages caused by the insured and later proven at trial are covered by the policy." Id. But "if there is no duty to defend, there can be no duty to indemnify." Evanston Ins. Co. v. Neshoba Cnty. Fair Ass'n, 442 F. Supp. 344, 346 n. 1 (S.D. Miss. 2006).
The Court's ultimate goal in applying an insurance policy is to "render a fair reading and interpretation of the policy by examining its express language and applying the ordinary and popular meaning to any undefined terms." Corban v. United Servs. Auto. Ass'n, 20 So. 3d 601, 609 (Miss. 2009). "In Mississippi, insurance policies are contracts, and as such, they are to be enforced according to their provisions." Id.
First, where an insurance policy is plain and unambiguous, a court must construe that instrument, like other contracts, exactly as written. Second, it reads the policy as a whole, thereby giving effect to all provisions. Third, it must read an insurance policy more strongly against the party drafting the policy and most favorably to the policy holder. Fourth, where it deems the terms of an insurance policy ambiguous or doubtful, it must interpret them most favorably to the insured and against the insurer. Fifth, when an insurance policy is subject to two equally reasonable interpretations, a court must adopt the one giving the greater indemnity to the insured. Sixth, where it discerns no practical difficulty in making the language of an insurance policy free from doubt, it must read any doubtful provision against the insurer. Seventh, it must interpret terms of insurance policies, particularly exclusion clauses, favorably to the insured wherever reasonably possible. Finally, although ambiguities of an insurance policy are construed against the insurer, a court must refrain from altering or changing a policy where terms are unambiguous, despite resulting hardship on the insured.
Nationwide Mut. Ins. Co. v. Lake Caroline, Inc., 515 F.3d 414, 419 (5th Cir. 2008); see also Corban, 20 So. 3d at 609; Guidant Mut. Ins. Co. v. Indem. Ins. Co. of N. Am., 13So. 3d 1270, 1281 (Miss. 2009); United States Fid. & Guar. Co. v. Martin, 998 So. 2d 956, 963 (Miss. 2008).
Steadfast Insurance Company issued two Law Enforcement Liability Insurance Policies to the Forrest County Sheriff's Department: Policy No. 3627978-00, effective from November 13, 2002, to November 13, 2003 [410-2]; and Policy No. 3627978-01, effective from November 13, 2003, to November 13, 2004 [410-3]. The policies are identical in relevant part. They generally provide that Steadfast will "pay on behalf of the insured all 'damages' resulting from a 'wrongful act(s)' which arise out of the law enforcement activities," and that "[t]he 'wrongful act(s)' must occur during the policy period . . . ." Steadfast also agreed to defend "any 'claim' or 'suit' against any insured even if the allegations . . . are groundless, false or fraudulent." The policies define a "wrongful act" as "an actual or alleged error, omission, act, neglect or breach of duty by the insured while conducting law enforcement activities which result in . . . '[p]ersonal injury' . . . ." The definition of "personal injury" includes "[f]alse arrest, detention, or imprisonment;" "malicious prosecution;" "mental distress;" and the "[v]iolation of civil rights or discrimination protected under" federal or state law.
Among other things, Steadfast argues that no coverage is available under its policies because the Bivens Plaintiffs alleged no "wrongful acts" during the relevant policy periods. Indeed, the Court already held as much, in its Memorandum Opinion and Order [370] of February 16, 2016. See Travelers, 2016 U.S. Dist. LEXIS 18288 at *30-*31. However, the ...
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