Southern Healthcare Services, Inc. v. Lloyd's of London, 110 So. 3d 735

Southern Healthcare purchased Lloyd’s policy covering Southern Healthcare, Daleson, and Medforce with a $250,000 per-claim deductible that includes defense costs.
Insureds believed the new Lloyd’s policy was nearly identical to the prior operator’s policy, but learned of a $250,000 deductible and claimed the Fox-Everett agent failed to inform them and did not provide a policy copy promptly.
Five lawsuits were filed against the insureds in 2003–2004; Lloyd’s through Caronia issued reservation of rights letters stating coverage would not apply until the deductible was paid.
The first named insured, Southern Healthcare, was obligated to pay the deductible; Daleson and Medforce initially paid defense fees but later filed for bankruptcy in 2005, while Lloyd’s continued defense under a reservation of rights.
Lloyd’s moved for summary judgment; the Court of Appeals’ remand led to further proceedings, Judge Pigott reinstated the summary judgments, and the insureds now challenge those rulings on appeal.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the deductible terms are clear and enforceable.	Insureds contend the deductible was not properly disclosed.	Policy language, endorsements, and declarations clearly impose a $250,000 per-claim deductible including defense costs.	Yes, the deductible is clear and enforceable.
Whether Lloyd’s and Caronia fulfilled their duties under the contract despite the deductible.	Lloyd’s breached by conditioning coverage on prepayment of the deductible.	Defense duties arise and defense costs are included in the deductible; payment is triggered by exhaustion of the deductible.	Yes, they fulfilled contractual duties.
Whether the insurers’ handling of defense costs and prepayment requirement breached fiduciary duties.	Insurers breached good faith by requiring prepayment before providing defense.	Deductible structure governs timing; defense involvement permitted and costs fall within deductible.	No substantive breach of fiduciary duties.
Whether Lloyd’s counterclaim and the resulting judgment were proper.	Counterclaim may be improper if insureds were discharged by breach.	No breach shown; deductibles apply; insurers properly sought reimbursement.	Yes, summary judgment on the counterclaim was proper.

Kilhullen v. Kan. City S. Ry., 8 So.3d 168 (Miss. 2010) (de novo standard for summary judgment; contract interpretation applicable to policy terms)
Baker Donelson Bearman & Caldwell, P.C. v. Muirhead, 920 So.2d 440 (Miss. 2006) (insurer’s duty to defend derives from policy; deductibles affect defense timing)
Moeller v. American Guar. & Liab. Ins. Co., 707 So.2d 1062 (Miss. 1996) (insurer's duty to defend tied to policy; fiduciary duties discussed)
Hartford Accident & Indem. Co. v. Foster, 528 So.2d 255 (Miss. 1988) (duty to settle within policy terms; evaluation must be honest and reasonable)
M.A.S. v. Mississippi Dep’t of Human Servs., 842 So.2d 527 (Miss. 2003) (Rule 60(b) standards; relief not to relitigate cases)