UNITED Serv. Auto. Ass'n v. LISANBY, No. 2009-CA-00529-SCT.

• Court: United States State Supreme Court of Mississippi
• Writing for the Court: KITCHENS, Justice, for the Court:
• Citation: 47 So.3d 1172
• Parties: UNITED SERVICES AUTOMOBILE ASSOCIATION (“USAA”) v. Admiral James LISANBY and Wife, Gladys Lisanby.
• Docket Number: No. 2009-CA-00529-SCT.
• Decision Date: 18 November 2010

47 So.3d 1172

UNITED SERVICES AUTOMOBILE ASSOCIATION (“USAA”)
v.
Admiral James LISANBY and Wife, Gladys Lisanby.

No. 2009-CA-00529-SCT.

Supreme Court of Mississippi.

Nov. 18, 2010.

47 So.3d 1173

COPYRIGHT MATERIAL OMITTED.

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Janet G. Arnold, Charles G. Copeland, W. Shan Thompson, James Dennis Boone, Ridgeland, attorneys for appellant.

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Don Barrett, David M. McMullan, Jr., attorneys for appellees.

Before CARLSON, P.J., RANDOLPH and KITCHENS, JJ.

KITCHENS, Justice, for the Court:

¶ 1. This case involves an alleged breach of contract and bad-faith denial of a homeowners' insurance claim following Hurricane Katrina. The jury awarded the plaintiffs more than $900,000 in compensatory damages, but the trial judge directed a verdict in favor of the defendant on the issue of punitive damages. USAA appealed and the Lisanbys cross-appealed. Because the defendant demonstrated an arguable basis for its denial of claims, the trial judge erred in submitting the emotional damages claim to the jury and in awarding attorneys' fees and litigation expenses to the plaintiffs. Accordingly, the plaintiffs' cross-appeal regarding punitive damages and attorneys' fees necessarily must be denied.

Facts

¶ 2. Retired Rear Admiral James Lisanby and his wife, Gladys Lisanby, owned a two-story home and a cottage in Pascagoula, Jackson County, Mississippi. Their property was located roughly one hundred feet from the Mississippi Sound. As Hurricane Katrina approached, the Lisanbys fled their home. When they returned a few days later, they found what remained. The bottom floor of their residence was almost completely gone, and the cottage and garage were no longer present. The second floor of their home sustained substantially less damage than the first floor; unlike the furniture that had been on the first floor, the Lisanbys were able to salvage all of the furniture from the second floor.

¶ 3. United Services Automobile Association (USAA) provided homeowners' insurance for the Lisanbys, with coverage limits of $505,000 for the dwelling, appurtenant structure limits of $50,500, additional coverage for the cottage of $22,000, personal property limits of $378,750, and additional living expense limits of $101,000. The Lisanbys also had $350,000 in flood insurance coverage and were paid the flood policy limits. However, the insurance carrier maintained that the majority of the damage was caused by storm surge, and thus was excluded; therefore, USAA paid only $46,354.21 pursuant to the homeowners' policy.

¶ 4. The Lisanbys filed a complaint in the Jackson County Circuit Court against USAA, alleging breach of contract and bad-faith denial of their claims. They sued for damages for emotional distress, punitive damages, attorneys' fees, and expenses.

¶ 5. After a ten-day trial, the jury returned a unanimous verdict awarding the Lisanbys a total of $909,641 in compensatory damages. The special verdict apportioned the damages as follows: $478,141 in additional wind damage to the house; $50,500 for wind damage to the garage; $197,000 in additional wind damage to the contents of all three buildings; $12,000 in additional living expenses; nothing in lost rent for the cottage; and $86,000 per plaintiff for emotional distress. The trial judge declined to submit the issue of punitive damages to the jury, but awarded the plaintiffs an additional $302,920.44 in attorneys' fees and $211,069.47 in litigation expenses.

Issues

¶ 6. USAA raises numerous points of error on appeal, claiming: (1) the physical facts and photographic evidence demonstrate as a matter of law that storm surge caused the majority of the damages, warranting a directed verdict in USAA's favor, or, in the alternative, requiring a new trial;

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(2) the evidence does not support an award for emotional distress; (3) the trial court erred in granting the Lisanbys' motion for attorneys' fees and expenses; (4) the trial court erred in denying USAA's motions for a change of venue; (5) the trial court abused its discretion in admitting evidence of replacement costs; (6) the trial judge erred in denying USAA's motions for mistrial; or, (7) in the alternative, cumulative errors warrant reversal. The Lisanbys cross-appeal, arguing that the trial court erred by failing to allow the jury to consider punitive damages and in capping attorneys' fees at one-third of the verdict.

Discussion I. The evidence of wind damage was sufficient to support the verdict, and the verdict was not against the overwhelming weight of the evidence.

[1] ¶ 7. USAA argues that the evidence established, as a matter of law, that storm surge, an excluded cause, caused the majority of the damage to the Lisanby home, and thus USAA was entitled to a judgment notwithstanding the verdict. Specifically, USAA argues that, because the second floor remained intact while the first floor was virtually destroyed, the damage to the first floor must have been caused by flooding. In the alternative, USAA argues that it is entitled to a new trial because the overwhelming weight of the evidence points to water damage.

[2] [3] [4] [5] ¶ 8. The standard of review for the denial of a motion for a judgment notwithstanding the verdict (JNOV) is de novo. U.S. Fid. and Guar. Co. of Miss. v. Martin, 998 So.2d 956, 964 (Miss.2008) (citing Adcock v. Miss. Transp. Comm'n, 981 So.2d 942, 948 (Miss.2008)). “A motion for JNOV is a challenge to the legal sufficiency of the evidence, and this Court will affirm the denial of a JNOV if there is substantial evidence to support the verdict.” Id. (quoting Adcock, 981 So.2d at 948). On appeal, we will “consider the evidence in the light most favorable to the appellee, giving that party the benefit of all favorable inferences that may be reasonably drawn from the evidence.” Id. (quoting Spotlite Skating Rink, Inc. v. Barnes, 988 So.2d 364, 368 (Miss.2008)). “In essence, judgments as a matter of law present both the trial court and the appellate court with the same question-whether the evidence, as applied to the elements of a party's case, is either so indisputable, or so deficient, that the necessity of a trier of fact has been obviated.” White v. Stewman, 932 So.2d 27, 32 (Miss.2006).

[6] [7] ¶ 9. The standard of review for the grant or denial of a motion for a new trial is abuse of discretion. White v. Yellow Freight Sys., Inc., 905 So.2d 506, 510 (Miss.2004) (citing Green v. Grant, 641 So.2d 1203, 1207 (Miss.1994)). As with motions for JNOV, we review the evidence in the light most favorable to the nonmoving party and will reverse “only when, upon review of the entire record, we are left with a firm and definite conviction that the verdict, if allowed to stand, would work a miscarriage of justice.” Id. at 510-11 (citing Green, 641 So.2d at 1207-08).

¶ 10. The Lisanbys' key expert witness was Dr. Ralph Sinno, a structural engineer. Dr. Sinno testified that there was “overwhelming” evidence that wind damage had structurally destroyed the Lisanby home long before water reached the first floor. Dr. Sinno explained in his trial testimony that the first floor exterior and interior walls were much weaker than those on the second floor. It was undisputed that hurricane-force winds reached the Lisanby house far in advance of the storm surge of seawater. Dr. Sinno testified that, once these winds breached the first floor, they caused a tunneling effect throughout the house, creating suction and

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pressure from the inside. According to Dr. Sinno, it was this internal pressure, and not the storm surge, that first caused significant damage to the house, especially to the ground floor.

¶ 11. To refute Dr. Sinno's testimony, USAA offered its own engineering expert, Dr. Doug Smith. Dr. Smith opined that storm surge destroyed the garage and cottage and caused the damage to the first floor. It was Dr. Smith's opinion that the force of the wind, alone, never exceeded the design load of the first floor walls; therefore, it was his conclusion that water and not wind had caused the devastating damage.

¶ 12. At trial and on appeal, the parties argued at length about the amount of water that had entered the house. The Lisanbys claim that only two feet of water entered the home, while USAA claims that the storm surge would have resulted in water ten-and-a-half feet deep in the residential structure. Regardless, as the plaintiffs observe in their brief, the amount of water that eventually made its way into the house is irrelevant under Dr. Sinno's theory that wind had severely damaged the house long before flood waters arrived.

¶ 13. USAA relies on Johnson v. City of Pass Christian, 475 So.2d 428 (Miss.1985) and Blossman Gas, Inc. v. Shelter Mutual General Insurance Company, 920 So.2d 422 (Miss.2006), for their position that a verdict contrary to physical and photographic evidence cannot stand. In Johnson, 475 So.2d at 429, the plaintiff sued the city for damages she sustained in a one-car accident. According to the plaintiff and other witnesses, a hole in the road caused her to lose control of the vehicle, but no hole was shown in photographs of the accident scene. Id. at 431. On appeal, this Court affirmed the trial court's grant of a JNOV in favor of the defendant, noting that “where the photographs contradict the plaintiff's tenuous theory of an accident, the plaintiff's theory will not support a jury verdict.” Id.

¶ 14. We find that Johnson is readily distinguishable from the case before us. Unlike the witnesses in Johnson, here the plaintiffs' key expert did not dispute the photographic evidence that showed the state of the house following the storm. Dr. Sinno did not disagree that the first floor of the house received substantially more damage than the second; rather, he testified that, in his expert opinion, wind had structurally destroyed the house before the storm surge arrived. Unlike Johnson, photographic evidence in this case does not contradict witness testimony,...