Capital City Ins. Co. v. G. B. "Boots" Smith Corp.
| Docket Number: | 2002-CA-01896-SCT Linked Case(s): 2002-CA-01896-SCT |
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| Supreme Court: | Opinion Link Opinion Date: 10-28-2004 Opinion Author: Easley, J. Holding: Reversed and Remanded |
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| Additional Case Information: |
Topic: Contract - Insurance coverage - Motion to bifurcate trial - M.R.C.P. 42 - M.R.E. 411 - Venue - Section 11-11-7 - Section 11-11-3 - M.R.C.P. 82(c) Judge(s) Concurring: Smith, C.J., Cobb, P.J., Carlson and Dickinson, JJ. Non Participating Judge(s): Diaz, Graves and Randolph, JJ. Concurs in Result Only: Waller, P.J. Procedural History: Jury Trial Nature of the Case: CIVIL - CONTRACT |
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| Trial Court: |
Date of Trial Judgment: 09-20-2002 Appealed from: Jones County Circuit Court Judge: Billy Joe Landrum Disposition: The jury awarded Boots Smith $167,280.63 and awarded Wicker Logging $86,747. The trial court subsequently reduced Wicker Logging’s damage award by $4,271. Case Number: 2000-4-CV1 |
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| Party Name: | Attorney Name: | |||
| Appellant: | Capital City Insurance Company and W. L. Wicker d/b/a Wicker Logging |
BRENT E. SOUTHERN
PATRICK M. TATUM
WILLIAM T. MAY |
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| Appellee: | G. B. "Boots" Smith Corporation | BRETT WOODS ROBINSON CHRISTOPHER BRIAN McDANIEL |
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| Topic: | Contract - Insurance coverage - Motion to bifurcate trial - M.R.C.P. 42 - M.R.E. 411 - Venue - Section 11-11-7 - Section 11-11-3 - M.R.C.P. 82(c) |
| Summary of the Facts: | G.B. “Boots” Smith Corporation was awarded a contract with the Mississippi Department of Transportation for improvements being made to a right of way along Interstate 20. Boots Smith hired a subcontractor, W. L. Wicker d/b/a Wicker Logging, to clear some timber on the right-of-way. Capital City Insurance Company insured Wicker Logging and as part of the terms of the sub-contract with Boots Smith, Wicker Logging had Capital City add Boots Smith as an insured on its general liability policy. Boots Smith filed suit against Wicker Logging and Capital City for damages arising out of the cost of repairs to the ditches. Wicker Logging filed a counter-claim against Boots Smith for services rendered, claiming payment of money owed, and delay costs. Capital City filed a counter-claim and a cross-claim for declaratory judgment regarding the coverage under the insurance policy. The court found that Capital City’s insurance policy provided coverage to both Boots Smith and Wicker Logging. The court entered orders on two directed verdicts. The first directed verdict was in favor of Boots Smith and determined that Wicker Logging was responsible for the damage to the ditches on the right-of-way. Therefore, Wicker Logging and Capital City were liable to Boots Smith for costs associated with the repair of the ditches by Boots Smith. The second directed verdict was in favor of Wicker Logging and determined that Boots Smith owed Wicker Logging the balance of payment pursuant to the contract. The court submitted to the jury the issues of the actual damage amount owed to Boots Smith for the repairs and whether Wicker Logging was entitled to damages for the delays. The jury awarded Boots Smith $167,280.63 for the costs of repairs to the ditches and awarded Wicker Logging $86,747 ($54,000 for 9 days of delays, $28,476 for the unpaid portion of the contract and $4,271 as 15% of the unpaid contract). The court subsequently reduced Wicker Logging’s damage award by $4,271. Boots Smith, Wicker Logging, and Capital City filed post-trial motions. The court granted the motion as to Boots Smith and denied the motions as to Wicker Logging and Capital City. Wicker Logging and Capital City appeal. |
| Summary of Opinion Analysis: | Issue 1: Motion to bifurcate trial Both Wicker Logging and Capital City argue that the court erred by denying a motion to bifurcate the trial, because the trial should have been bifurcated to first determine whether Wicker Logging had any liability before reaching the issues of coverage and damages. During the trial, Boots Smith put on evidence that Wicker Logging was insured without objection. Evidence such as the insurance certificates, showing that Boots Smith was an additional insured under Wicker Logging’s policy, and the insurance policy was admitted into evidence. However, the trial court prior to seating the jury had overruled Capital City’s motion for declaratory judgment and motion to bifurcate the trial. Since the judge already ruled to deny the motion to bifurcate the insurance issues from the liability and damage issues, Capital City was forced to proceed and participate in the trial from the beginning and any insurance issue under that ruling would be before the jury. Considering the facts of this case, the trial court should have bifurcated the trial as a matter of law. M.R.C.P. 42 and M.R.E. 411 both address the issue of potential prejudice and the difficulties when insurance coverage is a factor in a lawsuit. M.R.C.P. 42 concerns the separation or consolidation of trials, and the rule specifically mentions prejudice whereas the comments mention prejudice and the impact of insurance in a case. Pursuant to M.R.C.P. 42 and its comments, the wishes of a party are not controlling, and a trial judge has discretion to bifurcate trials for convenience, avoidance of delays and prejudice and for justice. The comment states that a separate trial may be ordered to avoid prejudice such as when evidence on one issue is heard by a jury and may prejudice a party on another issue. The comment immediately follows with the example of a jury learning that a defendant is insured. In effect, the comment states that, while a single trial would ordinarily be preferable, the jury would be aware that a defendant is insured. Therefore, a separate trial should be ordered to protect against prejudice. The comments place a restriction on the application of this principle to situations where the issues are unrelated. Here, the issue of the amount of damages Boots Smith or Wicker Logging may owe one another is completely unrelated to the issues of whether there is insurance coverage provided by Capital City. As M.R.E. 411 states in part “[e]vidence that a person was or was not insured against liability is not admissible upon the issue of whether he acted negligently or otherwise wrongfully.” Therefore, the case is reversed and remanded on this issue. Issue 2: Venue Wicker Logging and Capital City argue that the court erred in denying their motions for change of venue. W.L. Wicker is a resident of Newton County, Capital City is a foreign corporation from South Carolina, and the damage to the ditches was alleged to have occurred in Scott County. Boots Smith Corporation is domiciled in Jones County. At the time of the filing of this lawsuit in January 2000, section 11-11-7, the venue statute for insurance companies, was in effect. Under that statute, if service of process is upon the state insurance commissioner, venue against any insurance company, foreign or domestic, lies in the county where the loss occurred or where the plaintiff resides. The complaint against Capital City was served upon the insurance commissioner of the State of Mississippi. Thus, according to the insurance statute, venue against the insurance company lies either in the county where the loss occurred or in the county where the plaintiff resides. Because this case involves both an insurance company and a Mississippi resident defendant, the Court must also look to the general venue statute, section 11-11-3. Had the Legislature intended for each statute to have equal footing or equal force then both statutes would have had the mandatory “shall” language or section 11-11-7 would have explicitly stated that it was controlling in suits involving insurance companies, foreign or domestic, either as sole defendants or as co-defendants with other resident defendants. The general venue statute, section 11-11-3, is mandatory, while the insurance company venue statute is permissive. Thus, where there is a resident defendant, the general venue statute shall apply; and where there is no resident defendant, the insurance company venue statute offers the plaintiff other options. In the case of Senatobia Community Hospital v. Orr, 607 So.2d 1224 (Miss. 1992), the Court incorrectly presumed that there was no ranking of the statutes and thus did not discuss the possibility. Therefore, it is overruled. In addition, M.R.C.P. 82(c) does not support a plaintiff establishing venue in his own county of residence when a resident defendant is a party to the suit. Any contrary language in other cases which are in conflict with this opinion are overruled. In this case venue is proper in Newton County where the resident defendant lives, or Scott County where the cause of action occurred. |
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