Travelers Prop. Cas. Co. of Am. v. 100 Renaissance, LLC

• Court: Mississippi Supreme Court
• Writing for the Court: GRIFFIS, JUSTICE, FOR THE COURT
• Citation: Travelers Prop. Cas. Co. of Am. v. 100 Renaissance, LLC, 308 So.3d 847 (Miss. 2020)
• Decision Date: 29 October 2020
• Docket Number: NO. 2019-IA-00586-SCT,2019-IA-00586-SCT
• Parties: TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA v. 100 RENAISSANCE, LLC

308 So.3d 847

TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA

v.100 RENAISSANCE, LLC

NO. 2019-IA-00586-SCT

Supreme Court of Mississippi.

October 29, 2020

Rehearing Denied January 14, 2021

ATTORNEY FOR APPELLANT: THOMAS RAY JULIAN, Jackson

ATTORNEYS FOR APPELLEE: JOSEPH E. ROBERTS, JR., Jackson, ANN RUSSELL CHANDLER

EN BANC.

GRIFFIS, JUSTICE, FOR THE COURT:

¶1. This is an interlocutory appeal of a bad-faith failure-to-pay claim. The trial court found that the insurance company waived the attorney-client privilege and was required to produce written communications between its in-house counsel and its claims handler and to produce its in-house counsel for a deposition. We agree and affirm.

FACTS AND PROCEDURAL HISTORY

¶2. On February 12, 2016, an unidentified driver struck a flagpole owned by 100 Renaissance, LLC, causing $2,134 in damage. Renaissance filed a claim with its insurance company, Travelers Property Casualty Company of America. Renaissance sought coverage under its automobile liability-insurance policy, which included uninsured-motorist (UM) coverage. The subject UM policy defined "property damage" as follows:

"Property damage" means injury to or destruction of:

a. A covered "auto";

b. Property contained in the covered "auto" and owned by the Named Insured or, if the Named Insured is an individual, any "family member"; or

c. Property contained in the covered "auto" and owned by anyone else "occupying" the covered "auto".

The UM policy further defined an "uninsured motor vehicle" as one "[t]hat is a hit-and-run vehicle and neither the driver nor owner can be identified. The vehicle must hit an ‘insured’, a covered ‘auto’ or a vehicle an ‘insured’ is ‘occupying’ ...."

¶3. Travelers denied Renaissance's claim. Travelers’ claims handler, Charlene Duncan, determined there was no coverage under the UM policy because the flagpole was not a covered "auto."

¶4. On February 19, 2016, Renaissance's attorney, Rick Wise, sent an email to Duncan that set forth Renaissance's legal arguments as to why coverage should be afforded under Mississippi's UM statute.

Wise cited Mississippi Code Section 83-11-101(2) (Supp. 2019), which stated:

No automobile liability insurance policy or contract shall be issued or delivered after January 1, 1980, unless it contains an endorsement or provisions undertaking to pay the insured all sums which he shall be legally entitled to recover as damages for property damage from the owner or operator of an uninsured motor vehicle ....

The email continued:

I am aware that Travelers’ policy language attempts to limit this legally mandated coverage by narrowly defining the term "property damage" and excluding all forms of property other than an insured's auto and its contents. However, Section MCA 83-11-101(2) contains no such limitation and requires coverage for "all sums" for which the uninsured driver is liable as to "property damage." There is abundant legal precedent for the proposition that this coverage may not be limited or denied by policy provisions that are inconsistent with the statutory requirements.

As you may also be aware, the purpose of UM coverage—and the purpose of the law mandating its inclusion in all policies—is to provide to the insured (100 Renaissance) the same protection that would have been afforded the insured if the negligent driver had possessed legally required minimum auto liability coverage. I'm sure that Travelers would not claim that if this motorist had been an insured under a Travelers auto liability policy, and had run into a person's house, that liability coverage would not apply to the resulting "property damage." The result under UM coverage should be the same.

¶5. Before responding, Duncan sought legal advice from Travelers’ then in-house counsel, Jim Harris. Duncan is not an attorney. Duncan sent a letter, dated March 2, 2016, that again advised Renaissance that its claim was denied under its UM policy because the policy required damage to a covered auto. The letter stated:

Thank you for your email of February 19, 2016. Based on our review of the policy terms and the law, [Travelers] does not afford Underinsured Motorist Property Damage (UMPD) for damage to your company's flagpole.

As the claim was reported, a vehicle damaged a flag pole belonging to Barksdale Management .... The driver left the scene, so no information could be obtained from the at fault driver about insurance or financial responsibility. The accident occurred on February 12, 2016, and was reported to Travelers inquiring whether UMPD coverage on Barksdale's auto policy would pay for the damage.

As we understand the Mississippi auto liability and uninsured motorist insurance statutes, coverage is mandated for vehicles listed or otherwise described in the policy (covered autos) and for owners and their family members, drivers and occupants of those vehicles (insureds). (See Miss. Code. Ann. § 83-11-102(a) ).¹

This insurance plan is carried over to the Mississippi Uninsured Motorists Coverage endorsement in Barksdale's commercial auto policy. Please note the lead-in language to the endorsement on page 1 of 3:

MISSISSIPPI UNINSURED MOTORISTS COVERAGE (CA 21 28 10 13).

For a covered "auto" licensed or principally garaged in, or for "auto dealers operation" conducted in, Mississippi ....

The policy also includes a definition of "property damage" that broadens UMPD coverage so that it applies not just to "covered autos."

F. Additional Definitions

As used in this endorsement:

1. "Property damage" means injury to or destruction of:

a. A covered "auto",

b. Property contained in the covered "auto" and owned by the Named Insured or, if the Named Insured is an individual, any "family member"

c. Property contained in the covered "auto" and owned by someone else "occupying" the covered "auto".

As we discussed previously, the flagpole is not a "covered auto" nor does it come within the expanded definition of "property damage" found in the policy. Therefore, damage to the pole is not eligible for Uninsured Motorist coverage. The damage to the flagpole will need to be filed under your Property Policy.

Please note that there may be other terms, conditions and exclusions in the policy that apply to this claim. Reference to some of those terms, conditions and exclusions in this letter is not intended to waive or estop Travelers from raising other terms, conditions and exclusions that may be applicable. Travelers expressly reserves all of its rights under the policy and neither this letter nor any past or future conduct by Travelers regarding this claim shall modify, limit, estop or waive any of Travelers’ rights.

Respectfully,Charlene DuncanClaim RepresentativeTravelers Property Casualty Company of America

¶6. Renaissance took Duncan's deposition and asked that she explain both the denial letter and the reasons Travelers denied the claim. Duncan testified as follows:

Q: Are – does Travelers educate you or do you – or were you educated independently on the law in the different states with regard to how these three specific states deal with insurance policies?

A: I don't know. I mean, I know how the policy works. I know what the policy states, but as far as the law, I'm not an attorney. I don't know.

....

Q: And you're telling me you received no education on Mississippi law and how it affects coverage?

A: As far as I know. I cannot remember.

Q: Okay. Would you agree with me that it's important to know what the law is that affects coverage when you're – prior to making your determination of coverage?

A: Is it important to know the law for Mississippi in order to make this decision? Is that what you're asking me?

Q: Yeah, ... the reason why is [ Mississippi Code Section] 83-11-101 sets up minimum standards for Uninsured Motorist coverage. In other words, it says: "Your policy has to provide these coverages," okay? So when you're making the determination if this is different than your policy, isn't it important to know that?

A: Okay. I don't even know how to answer, to be honest with you .... But as I stated I'm aware of what our – of what UMPD is and what we cover .... I don't know Mississippi law. I don't know if it differs.

Q: Okay. Well ... [y]ou denied coverage – initially denied coverage prior to talking to an attorney, right?

A: Correct.

Q: Okay. And the reason you did that is you did not know – well you're not a lawyer. And so you looked at the policy and only the policy in making that decision, right?

A. Correct.

....

Q: Okay. Did you know – at the time you were adjusting this case, did you know that Mississippi law, UM law, provided minimum provisions?

A: No.

Q: Okay. Do you not think that was important to know?

A: I don't know.

Q: Well, you're – you've been a claims adjustor for ten years ... you don't know whether it's important to know what the minimum requirements under Mississippi law are?

A: I guess so. I – you know, I don't know.

....

Q: [W]here does it say in what Mr. Wise quoted or in [ Section 83-11-101(2) ] that it was – that UMPD only covered property damage of a covered auto or anything contained therein?

A: I don't know. I mean, I'm not – I don't – I don't know.

Q: [D]oes it say anywhere that property damage coverage under UMPD is limited to covered auto or any property contained therein?

A: Not that I can see, but I don't know.

Q: Okay.

A: I'm not familiar with [the] statute.

Q: I'm going to show you ... a letter dated March 2nd, 2016. And I'm going to ask you if you recognize that?

A: Yeah. I mean, I wrote it. Yeah, I wrote the letter.

Q: Okay. And who assisted you in doing that?

A: No one. I did it myself.

Q: Okay. I'm going to show you ... [Section] 83-11-102 that you cite in there, okay? (Tendering) [Section] 83-11-102, and then you have "a." There's no "a" in [ Section 83-11-102 ]. You're citing to a Mississippi statute, so I guess my question to you is: Where did you come up – where did you find that statute, and what – what does that mean, "83-11-102-a"?

A: I don't know. Maybe it was a typo. I don't know.

....

Q: Okay. Well, where did you

...