Cherokee Ins. Co. v. Babin


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Docket Number: 2009-CA-00531-SCT

Supreme Court: Opinion Link
Opinion Date: 06-10-2010
Opinion Author: Kitchens, J.
Holding: Affirmed in part, reversed and remanded in part.

Additional Case Information: Topic: Insurance - Settlement agreement - Waiver of right to appeal - Concurrent causation doctrine
Judge(s) Concurring: Waller, C.J., Carlson and Graves, P.JJ., Dickinson, Randolph, Lamar, Chandler and Pierce, JJ.
Procedural History: Bench Trial
Nature of the Case: CIVIL - INSURANCE

Trial Court: Date of Trial Judgment: 03-24-2009
Appealed from: Copiah County Circuit Court
Judge: Lamar Pickard
Disposition: The trial court granted Babin’s motion to enforce the settlement agreement and entered a final judgment in favor of the plaintiffs.
Case Number: 2005-0365
  Consolidated: Consolidated with 2008-CA-00145-SCT Cherokee Insurance Company v. Sarajean Babin, Individually, for and on Behalf of all Heirs of Britt Rogers and the Estate of Britt Rogers, and Kathy Gustavis; Copiah Circuit Court; LC Case #: 2005-0365; Ruling Date: 12/13/2007; Ruling Judge: Lamar Pickard

  Party Name: Attorney Name:  
Appellant: Cherokee Insurance Company




BENNY M. “MAC” MAY, DAVID C. DUNBAR



 

Appellee: Sarajean Babin, Individually for and on Behalf of all Heirs of Britt Rogers, and the Estate of Britt Rogers and Kathy Gustavis CHUCK McRAE, WILLIAM B. KIRKSEY, JAMES D. SHANNON, JAMIE NICOLE HARDISON-EDWARDS  

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Topic: Insurance - Settlement agreement - Waiver of right to appeal - Concurrent causation doctrine

Summary of the Facts: An automobile accident occurred involving two eighteen-wheelers, a bob-tailed truck, and a passenger automobile. One of the eighteen-wheelers was owned by Three Rivers Trucking, Inc., a Tennessee corporation, and was driven by that company’s employee, Bobby Morris. The other eighteen-wheeler was owned by Safeway Transportation Co., Inc., and was driven by its employee, Jerry Cooper. Britt Rogers was driving the bob truck and died as a result of the accident. Kathy Gustavis was driving her Toyota Camry, the passenger vehicle. She survived the accident but sustained severe physical injuries. Sarajean Babin, individually, and on behalf of the estate and heirs of Rogers, brought suit against Morris, Three Rivers, Gustavis, Safeway, and Cooper. Gustavis filed a cross-claim against Three Rivers and Morris, and later amended her complaint to add Safeway and Cooper as defendants. All claims against Safeway and Cooper eventually were dismissed, as well as Babin’s claim against Gustavis. Therefore, the only claims that remained were Babin’s and Gustavis’s claims against Three Rivers and Morris. In addition to their claims that Three Rivers was liable for Morris’s negligence via respondeat superior, the plaintiffs also alleged that Three Rivers was directly liable for its negligence in hiring, supervising, training, and monitoring its employee, Morris. Babin and Gustavis reached a settlement agreement with Three Rivers, Morris, and Three Rivers’ insurance carrier, Cherokee Insurance Company. The parties agreed to settle for the automobile policy’s $1,000,000 limit, with Babin and Gustavis each receiving agreed percentages. The parties also agreed to litigate the issue of coverage under the GCL policy, capping the coverage limit at $800,000. This agreement was dictated into the record in open court but was not otherwise reduced to writing. Babin and Gustavis amended their complaints, adding Cherokee as a defendant and requesting a declaratory judgment that the GCL policy afforded coverage to Three Rivers for its negligence in the supervision, hiring, employment, training and/or monitoring of Morris. The circuit court ruled in favor of the plaintiffs, finding that their claims against Three Rivers fell outside the GCL policy’s exclusions. After Cherokee appealed the decision, Babin filed a motion in the circuit court to enforce the settlement agreement. The circuit court declined to rule on the motion, believing that jurisdiction was with the appellate courts. The appeal was retained by the Supreme Court, and the plaintiffs filed motions to dismiss. The Court granted the motions, but did not rule on the waiver issue, simply dismissing the appeal without prejudice. Following dismissal of the appeal, the trial court granted Babin’s motion to enforce the settlement agreement and entered a final judgment in favor of the plaintiffs. Cherokee appeals.

Summary of Opinion Analysis: Cherokee argues that it never waived its right to appeal and that the GCL policy excludes the type of claims filed by the plaintiffs against Three Rivers. Babin argues that Cherokee never reserved its right to appeal and that once the circuit court determined coverage existed under the GCL policy, this satisfied a condition precedent requiring Cherokee to pay. However, an agreement not to appeal should be very clear in its terms, and leave no doubt of the intention of the party to cut himself off from the right of appeal. The terms of the settlement agreement were recited into the record by Gustavis’s attorney with all parties present. There is nothing in the attorney’s recitation that clearly expresses a waiver of any party’s right to appeal from the trial court. Thus, Cherokee’s appeal is properly before the Court. With regard to the terms of the policy, Cherokee argues that the policy excludes the plaintiffs’ claims regarding negligent supervision, hiring, employing, training and monitoring and that the language of the exclusion contained in the endorsement remains unambiguous and that the claims against Three Rivers are excluded because they “aris[e] out of the use or entrustment to” Morris of an “auto.” Tennessee law controls the interpretation of the GCL policy. The Tennessee Supreme Court has recognized what it has termed “the concurrent causation doctrine.” Under this doctrine, coverage exists where a nonexcluded cause is a substantial factor in producing the damage or injury, even though an excluded cause may have contributed in some form to the ultimate result and, standing alone, would have properly invoked the exclusion contained in the policy. There could have been two alleged concurrent causes of the accident such that coverage would apply: Morris’s negligence in his operation of the vehicle; and Three Rivers’ negligence in their supervision, hiring, employing, training, and monitoring of Morris. However, the nonexcluded cause must be a substantial factor in producing the damage or injury. There is no language in the judgment indicating that the trial judge found the nonexcluded cause to be “a substantial factor” in causing the accident. Therefore, the case is remanded for further proceedings.


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