Minnesota Life Insurance Co. v. Columbia Casualty Co.
164 So. 3d 954
Miss.2014Background
- Policy: 1997 and 1998 E&O policies issued by Columbia; Ex-Agents insureds under Minnesota Life; ERP endorsement limited coverage; policies are claims-made with notice and cooperation provisions.
- Events: Ex-Agents alerted Minnesota Life to Gulley’s embezzlement in 1997; Ex-Agents resigned from Gulley in 1998 and formed Cornerstone; AIG provided separate coverage after Ex-Agents left Minnesota Life.
- Denials/coverage issues: AIG denied coverage for acts during LPL employment; Columbia denied ERP coverage based on termination and “coverage in force” concerns; Minnesota Life’s defense and cross-claims evolved with settlements and joint defense efforts.
- Procedural posture: Trial court granted summary judgment to Columbia on several issues; Ex-Agents and Minnesota Life appeal; issues include strike of affidavits and coverage/duty to defend.
- Remand: Court reverses on Ex-Agents’ coverage in-force theory; remands for damages and bad-faith/ punitive-damages determinations; Minnesota Life denial affirmed as to defense obligation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court erred in denying strike of evidence. | Ex-Agents/Minnesota Life: denial improper. | Columbia: evidence properly admitted. | No abuse of discretion; strike denied. |
| Whether Columbia owed a duty to defend the Ex-Agents. | Ex-Agents: duty to defend triggered by complaints within policy; ERP applicable. | Columbia: ERP/coverage in force disputed; denial appropriate. | Duty to defend triggered; reversal on ERP interpretation; remand. |
| Whether Minnesota Life was covered under vicarious liability and Columbia breached. | Minnesota Life: vicarious-defense costs covered; denial improper. | Columbia: Minnesota Life not an insured for those claims; no duty to defend. | Minnesota Life not covered as to claims; summary judgment proper. |
Key Cases Cited
- Trustmark Nat’l Bank v. Meador, 81 So.3d 1112 (Miss. 2012) (abuse-of-discretion standard; affidavits on summary judgment)
- Jones v. Baptist Mem’l Hosp. Golden Triangle, Inc., 735 So.2d 993 (Miss. 1999) (distinguishes occurrence vs. claims-made policies)
- U.S. Fid. & Guar. Co. v. Omnibank, 812 So.2d 196 (Miss. 2002) (duty to defend rooted in policy language)
- Delta Pride Catfish, Inc. v. Home Ins. Co., 697 So.2d 400 (Miss. 1997) (scope of insurer’s defense obligations)
- Baker Donelson Bearman & Caldwell, P.C. v. Muirhead, 920 So.2d 440 (Miss. 2006) (duty to defend; bad-faith considerations)
- Moeller v. Am. Guar. & Liab. Ins. Co., 707 So.2d 1062 (Miss. 1996) (interpretation of policy; reliance on counsel)
- Jenkins v. Ohio Cas. Ins. Co., 794 So.2d 228 (Miss. 2001) (bad-faith standard; arguable basis for denial)
- Southwest Mississippi Electric Power Association v. Harragill, 254 Miss. 460, 182 So.2d 220 (Miss. 1966) (indemnity/payment under compulsion; voluntary payments rule)
- Hopton Building Maintenance, Inc. v. United Parcel Service, Inc., 559 So.2d 1012 (Miss. 1990) (indemnity; requirement of payment under compulsion)
- R.K. v. J.K., 946 So.2d 764 (Miss. 2007) (double recovery; no double recovery permitted)
- Cont’l Cas. Co. v. Hester, 360 So.2d 695 (Miss. 1978) (deference to policy language and overall construction)