UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 01-60386
Summary Calendar
NEIL R. HARRISON; JULIA A. HARRISON
Plaintiffs-Appellants,
versus
OHIO CASUALTY INSURANCE COMPANY;
GREAT AMERICAN INSURANCE COMPANY;
CHANDLER-SAMPSON INSURANCE COMPANY, INC.;
AMERICAN NATIONAL FIRE INSURANCE COMPANY
Defendants-Appellees.
NEIL R. HARRISON; JULIA A. HARRISON
Plaintiffs-Appellants,
versus
CHANDLER-SAMPSON INSURANCE COMPANY, INC.;
STATE AUTOMOBILE INSURANCE COMPANY;
STATE AUTO PROPERTY AND
CASUALTY INSURANCE COMPANIES
Defendants-Appellees.
Appeal from the United States District Court
For the Southern District of Mississippi
(Consol. Nos. 3:98-CV-377 & 3:98-CV-493)
January 4, 2002
Before DeMOSS, PARKER and DENNIS, Circuit Judges.
PER CURIAM:*
Plaintiffs-Appellants Neil R. Harrison and Julia A. Harrison
contest the district court’s granting summary judgment on their
claims against Defendants Ohio Casualty Insurance Company and
State Automobile Mutual Insurance Company and State Auto Property
and Casualty Insurance Companies (together, “State Auto”), and
its dismissing their claims against Chandler-Sampson Insurance
Company, Inc. We affirm.
BACKGROUND
The Harrisons sold a house they manufactured to Fred L.
McMillian, who then turned around and sued the Harrisons for
breach of contract, negligence, fraud, and misrepresentation,
among other bases, alleging that the Harrisons sold him a
defective home. McMillian succeeded in his suit, which he
brought in Mississippi state court. The Harrisons then brought
the instant action against the above-named insurers, arguing that
the Harrisons’ policy with each mandated reimbursement for the
judgment McMillian sustained against them. The suit was removed
to federal district court in accordance with that court’s
diversity jurisdiction. The district court denied the Harrisons’
motion to remand, agreeing that Chandler-Sampson, which like the
Harrisons is domiciled in Mississippi, had been fraudulently
*
Pursuant to 5TH CIR. R. 47.5, the Court has determined that this
opinion should not be published and is not precedent except under
the limited circumstances set forth in 5TH CIR. R. 47.5.4.
-2-
joined to defeat diversity of citizenship. The court then
granted Chandler-Sampson’s motion to dismiss for failure to state
a claim and later granted Ohio Casualty’s and State Auto’s
motions for summary judgment. The Harrisons made a timely
appeal.
DISCUSSION
Each action taken by the district court insofar as this
appeal is concerned is reviewed de novo. See Bejil v. Ethicon,
Inc., 269 F.3d 477, 479 (5th Cir. 2001)(reviewing de novo the
district court’s grant of summary judgment); Stripling v. Jordan
Prod. Co., L.L.C., 234 F.3d 863, 868 (5th Cir. 2000)(reviewing de
novo the district court’s order of dismissal for failure to state
a claim); Johnson v. Heublein, Inc., 227 F.3d 236, 240 (5th Cir.
2000)(reviewing de novo the district court’s determination of its
jurisdiction).
The Harrisons contend that Chandler-Sampson is responsible
for its own conduct, and that the company is not shielded from
liability as an agent of Ohio Casualty. The Harrisons make much
of this point because Chandler-Sampson’s joinder would destroy
diversity and thus require remand to Mississippi state court. It
is true that an agent generally is responsible for its own
conduct. See RESTATEMENT (SECOND) OF AGENCY § 343 (1958)(“An agent
who does an act otherwise a tort is not relieved from liability
by the fact that he acted at the command of the principal. . .
-3-
.”). In Mississippi, however, “insurance agents and adjusters .
. . are not liable for ordinary negligence in performing their
duties on behalf of insurers.” Jenkins v. Farmington Casualty
Co., 979 F. Supp. 454, 457 (S.D. Miss. 1997). Although
Mississippi law does provide that agents and adjustors can “incur
independent liability when their conduct constitutes gross
negligence, malice, or reckless disregard for the rights of
others,” see id. (internal quotations omitted), the Harrisons do
not suggest that in this case Chandler-Sampson has committed any
conduct of the sort. We therefore affirm the district court’s
order of dismissal.
We also affirm the district court’s granting Ohio Casualty’s
motion for summary judgment. The Harrisons argue that the policy
obtained by Service Air Heating & Air Conditioning Company
(Service Air), a company in which the Harrisons are officers,
directors, and sharholders, requires that Ohio Casualty defend
and indemnify the Service Air employees and agents against any
claim stemming from that company’s business. That much is
apparently true, but we agree with the district court that the
Harrisons were not insureds under Service Air’s policy when they
sold their house to McMillian. The term “insured” under that
policy covers the negligence of officers and directors only to
the extent such persons are acting in their capacity as agents of
the company. The jury’s findings regarding the Harrisons’
-4-
liability to McMillian, however, have nothing to do with the
Harrisons’ duties or work for Service Air. The jury found the
Harrisons liable for breach of contract and of the implied
warranty of merchantability and for negligence, but not for
anything having to do with the Harrisions’ securing a subcontract
for Service Air. Ohio Casualty, therefore, is not contractually
required to indemnify the Harrisons’ for McMillian’s claims
against them.
Finally, we affirm the district court’s granting State
Auto’s motion for summary judgment. The Harrisons lived in the
subject house for over two years before they sold it to
McMillian. During that occupancy, the Harrisons maintained
homeowners insurance with State Auto. That policy, however,
merely protected the Harrisons against liability to the extent
they were living in the house, and even then specifically
excluded coverage for cracking in the house’s foundation, which
is what McMillian was complaining of in the underlying suit.
CONCLUSION
The judgment of the district court is affirmed in all
respects.
-5-