Zurich American Ins. Co. v. Goodwin

• Decision Date: 26 January 2006
• Docket Number: No. 2003-CA-02439-SCT.,2003-CA-02439-SCT.
• Citation: 920 So.2d 427
• Parties: ZURICH AMERICAN INSURANCE COMPANY v. Barbara G. GOODWIN, Individually; Raphael Goodwin, Jr., Individually; Emma Delores Goodwin, A Minor, by and Through Her Mother and Next Friend, Valerie Hughes; The Estate of Raphael Goodwin, Sr., Barbara G. Goodwin, Administratrix; Robin C. Thrasher; Laura Nauditt; Lizabeth Nutter; Kelly Thrasher, Individually and on Behalf of all Wrongful Death Beneficiaries of Guy Stephen Thrasher; and Roy C. Grafe and Helen Kay Grafe.
• Court: Mississippi Supreme Court

920 So.2d 427

ZURICH AMERICAN INSURANCE COMPANY v. Barbara G. GOODWIN, Individually; Raphael Goodwin, Jr., Individually; Emma Delores Goodwin, A Minor, by and Through Her Mother and Next Friend, Valerie Hughes; The Estate of Raphael Goodwin, Sr., Barbara G. Goodwin, Administratrix; Robin C. Thrasher; Laura Nauditt; Lizabeth Nutter; Kelly Thrasher, Individually and on Behalf of all Wrongful Death Beneficiaries of Guy Stephen Thrasher; and Roy C. Grafe and Helen Kay Grafe.

No. 2003-CA-02439-SCT.

Supreme Court of Mississippi.

January 26, 2006.

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Edward J. Currie, Jr., Brittany Elizabeth Reid, Jackson, attorneys for appellant.

Henry Palmer, William B. Parker, O. Stephen Montagnet, III, Jackson, Grover Clark Monroe, II, attorneys for appellees.

EN BANC.

COBB, Presiding Justice, for the Court.

¶ 1. Zurich American Insurance Company (Zurich) filed this appeal from the Covington County Circuit Court's grant of summary judgment to three sets of plaintiffs involved in a multi-vehicle accident. Zurich, one of many defendants, provides liability insurance to another defendant, West Side Transport, Inc. (West Side). The summary judgment addressed the limit of liability under the Zurich policy, specifically whether Zurich's liability is limited to $1 million due to a "single accident," or $1 million for each vehicle connected to the collision. The circuit court held that Mississippi law controlled, found the insurance policy ambiguous, held that under Mississippi law there were eight accidents rather than one, and that the "per accident" limit of $1 million would apply to each vehicle. We hold that the circuit court erred, because the question of the limit of liability must be determined under Iowa law.

FACTS

¶ 2. On June 20, 2002, road work being done by other defendants caused a backup of traffic on Interstate 20/59 in Lauderdale County, Mississippi. An eighteen-wheel truck, operated by Joseph McCrary, a West Side employee, encountered the backup of traffic, was unable to stop, and collided with eight other vehicles, causing two fatalities, numerous injuries and property damage. The driver of the truck was insured under West Side's Truckers Policy, issued by Zurich, which provided a liability limit of $1 million for any one accident. Subsequently three separate actions were filed in Mississippi state courts, and a federal interpleader action was also filed.¹

¶ 3. The first complaint was by the wrongful death beneficiaries of Raphael Goodwin (Goodwin) in the Lauderdale County Circuit Court. Defendants included Joseph McCrary, the driver of the truck, and West Side, owner of the truck. Next, plaintiffs Kay and Roy Grafe (Grafe) filed a personal injury complaint in the Covington County Circuit Court. A month later, the wrongful death beneficiaries of Stephen Thrasher (Thrasher) filed suit in the Covington County Circuit Court, also naming as defendants all known plaintiffs and defendants, and seeking a declaratory judgment regarding the Zurich insurance policy.

¶ 4. West Side is an Iowa corporation with its principal place of business in Iowa. West Side's insurance policy was negotiated and issued in Iowa by Cottingham and Butler, Inc., which has its principal place of business in Iowa. Zurich is a New York corporation with its principal place of business in Illinois. The main state of operation for West Side's drivers is Iowa, although West Side admits its drivers travel to and from various states to facilitate the corporation's business. The truck was licensed in Iowa. The Zurich policy includes policy extensions for a covered vehicle, when it is away from the state where it is licensed, that will increase the limit of insurance for liability coverage to meet the limit specified by a compulsory or financial responsibility law of the jurisdiction where the covered vehicle is being used. The insurance contract contained no choice of law provision.

¶ 5. In January 2003, Thrasher filed a summary judgment motion against Zurich in which Goodwin and Grafe joined. This motion requested the court find Mississippi law controlled the issue of Zurich's limit of liability, and that the $1 million liability limit applied separately to each plaintiff. Zurich filed a response and cross-motion for summary judgment arguing that Iowa law should apply and, in the alternative, that under either Iowa or Mississippi law all of the plaintiffs' claims arose from a single "accident."

¶ 6. In May 2003, after a hearing on the motion for summary judgment, the circuit court held that Mississippi law controlled, but reserved ruling on the issue of the number of accidents involved, to give the parties additional opportunity to be heard. The order read, in pertinent part:

As to the choice of law question, the Court finds that Mississippi law applies. Because all plaintiffs are Mississippi residents, the accident occurred in Mississippi, and since it was foreseeable to Zurich that its insured would be involved in accidents along Mississippi highways, the Court finds that Mississippi law applies to this declaratory judgment action for reasons of public policy and under the "center of gravity test".

In October 2003, the circuit court entered three substantially identical orders granting summary judgment to the plaintiffs, overruling Zurich's cross-motion for summary judgment, and directing entry of final judgment pursuant to M.R.C.P. 54(b). In these orders the court held:

1) Mississippi law should be applied in the construction of the insurance policy in question by reason of the "center of gravity test" and as a matter of public policy;

2) that the policy is ambiguous with regard to the phrase "accident or loss"; and

3) the Court views the occurrence of June 20, 2002 from the viewpoint of the injured parties, and from such viewpoint there were eight (8) accidents with $1 million coverage for each accident, or stated differently, $1 million in liability coverage per vehicle struck by the Westside Transport, Inc./insured vehicle.

It appears the circuit court's analysis substituted one typical of personal jurisdiction. We have previously cautioned against this error. Choice of law analysis is entirely different from that of minimum contacts. Choice of law does not depend upon minimization of contacts, but rather upon maximization of contacts. Even though a defendant may have availed itself of Mississippi so that personal jurisdiction is proper, it does not necessitate the application of Mississippi law. Zurich appeals from these orders, asking this Court to hold that the circuit court erred in each of its three holdings. We hold the trial court erred in its determination that Mississippi law applied and remand for further proceedings consistent with this opinion.

ANALYSIS

¶ 7. This Court reviews de novo the granting or denying of a summary judgment. Monsanto Co. v. Hall, 912 So.2d 134, 136 (Miss.2005). The burden of demonstrating no genuine issue of fact exists is on the moving party. McCullough v. Cook, 679 So.2d 627, 630 (Miss.1996). If, in this view, there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law, summary judgment should be entered in that party's favor. Monsanto, 912 So.2d at 136. The party opposing the motion must be diligent and may not rest upon allegations or denials in the pleadings but must set forth specific facts showing a genuine issue for trial. Richmond v. Benchmark Constr. Corp., 692 So.2d 60, 61 (Miss.1997).

I. CHOICE OF LAW

¶ 8. Choice of law analysis arises only when there is a true conflict between the laws of two states, each having an interest in the litigation. Boardman v. United Servs. Auto. Ass'n, 470 So.2d 1024, 1038 (Miss.1985). In this case there is a true conflict between the law of Iowa and Mississippi. Under Iowa law the court will determine whether an event was an "accident" by viewing the event from the perspective of the insured. Am. Family Mut. Ins. Co. v. Petersen, 679 N.W.2d 571, 579-81 (Iowa 2004); Farm & City Ins. Co. v. Potter, 330 N.W.2d 263, 265 (Iowa 1983). Under Mississippi law, unless the policy specifically states that it is viewed from the perspective of the insured, it will be viewed from the perspective of the injured. Allstate Ins. Co. v. Moulton, 464 So.2d 507, 510 (Miss.1985); Georgia Cas. Co. v. Alden Mills, 156 Miss. 853, 853, 127 So. 555, 557 (1930).

¶ 9. Choice of law analysis involves a multi-step process. First it must be determined whether the conflicting laws are substantive or procedural. Regardless of the substantive law to be applied, Mississippi courts will apply their own procedural law. Ford v. State Farm Ins. Co., 625 So.2d 792, 793 (Miss.1993). However, few laws are classified as procedural. In addition to the Mississippi Rules of Civil Procedure, and Rules of Evidence, we have only found the definition of "procedural" to include statutes of limitations, awards of attorney's fees and awards of prejudgment interest. Sentinel Indus. Contracting Corp. v. Kimmins Indus. Serv. Corp., 743 So.2d 954, 960 (Miss.1999)(finding awards of attorney's fees and prejudgment interest procedural); Ford, 625 So.2d at 793-794 (finding statutes of limitations procedural). The present case does not deal with any of those; rather it deals with contract construction, and we have held that contract construction is substantive. Boardman, 470 So.2d at 1039. As a result, this appeal is resolved under the Restatement (Second) of Conflict of Laws (Restatement).

¶ 10. In determining which State's law to apply, Mississippi relies on the "center of gravity" doctrine of the Restatement. Mitchell v. Craft, 211 So.2d 509, 510 (Miss.1968). In Mitchell this Court described the center of gravity doctrine:

This doctrine is a rule whereby the court trying the action applies the law of the place which has the most significant relationship to the event and parties or which, because of the...