The trial court erred in granting summary judgment where a genuine issue of material fact exists as to whether Audubon was an agent for a disclosed principal, MWUA. The trial court further erred in granting summary judgment by finding that Audubon exhibited no conduct which would allow the jury to determine that Audubon had committed gross negligence. Likewise, this case is not a “pocketbook dispute” but a liability dispute. Thus, for the reasons stated, the Harrison County Circuit Court’s final judgment is reversed, and this case is remanded to the Circuit Court for the First Judicial District of Harrison County for further proceedings consistent with this opinion.
The background on this case tells an all too familiar story – edited below in the interest of time and space.
On August 29,2005, the newly constructed home of Raul Fonte and Helen Flammer (the Fontes) was reduced to a slab as a result of Hurricane Katrina. This house was located on East Beach Boulevard in Pass Christian. The Fontes maintained three separate insurance policies on their home at the time Katrina struck: (I) a wind-and-hail policy through the Mississippi Windstorm Underwriting Association (MWUA); I (2) a federal flood policy; and (3) a homeowner’s policy written by State Farm Insurance Company. At the time the Fontes’ home was destroyed, Audubon Insurance Company (Audubon) was handling claims for MWUA…
Audubon contracted with independent adjusting firms, in this case FARA Catastrophe Services (FARA), to assist in the adjusting process…
FARA adjusters…investigated and adjusted the Fontes’ claim under their wind-and-hail policy. On February 4, 2006…[the]… final report,… concluded that only the second-story portion of the Fontes’ home was damaged by wind; and that the first floor of the property was destroyed by storm surge and thus was not covered under the Fontes’ wind-and-hail policy with MWUA. Shortly thereafter, AIG Claims Service, acting on Audubon’s behalf, sent a letter to the Fontes stating “payment is being made in the amount of$201,402.21, which is the damage determined to be caused by the peril ofwindstorm ([t]he only peril covered by your policy).”
On or about February 16,2006, payment was sentto the Fontes in the amount of$171 ,402.21 for windstorm damage to their home and carport and $30,000 for windstorm damage to the contents. The Fontes’ wind-and-hail policy had a coverage limit for the dwelling of $400,000
and $30,000 for personal property. The Fontes reteived the policy 1imitof$140,000 under their federal flood policy. The Fontes filed suit against State Farm Fire and Casualty Company,MWUA, Audubon, and Steve Saucier, who was the Fontes’ State Farm Insurance agent, alleging, ii1ter alia, that Saucier did not increase their policy limits as requested when their home went from a construction project to a completed dwelling. The Fontes further alleged that State Farm’s denial of coverage under the Fontes’ homeowners’ policy was arbitrary. After the Fontes filed suit, MWUA tendered the remaining limits of the Fontes’ policy, and the Fontes dismissed all claims against MWUA and Audubon for the recovery of policy limits.
However, the Fontes maintained their claim against Audubon for negligent and arbitrary adjusting tactics, thus reserving their claims for litigation costs, attorney fees, and punitive damages…Audubon filed a motion for summary judgment denying any liability for its handling of the Fontes’ wind claim…The Fontes maintained that Jaywas given a mandate not to pay one hundred percent of any claims along U.S. Highway 90 in the Gulfport, Pascagoula, and Bay St. Lonis area. The corporate representative of Audubon stated during deposition testimony that if such a mandate was given, then it may have been arbitrary.
Following a hearing, the trial court entered an order granting summary judgment in favor of Audubon. From this order, the Fontes appeal to us.
Given the timely discussion of summary judgment, we’ll look there first. Continue reading “What a ballgame! Mississippi Supremes 9-0 for policyholder in first Katrina decision!”