Bell v. Certain Underwriters at Lloyd's London

IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI

NO. 2014-CA-01477-COA

EMMA BELL AND JOHN BELL APPELLANTS

v.

CERTAIN UNDERWRITERS AT LLOYD’S APPELLEES
LONDON, SUBSCRIBING TO POLICY
NUMBER - TCN034699, SOUTHGROUP
INSURANCE AND FINANCIAL SERVICES, LLC
AND TAPCO UNDERWRITERS, INC.

DATE OF JUDGMENT: 09/11/2014
TRIAL JUDGE: HON. LAMAR PICKARD
COURT FROM WHICH APPEALED: CLAIBORNE COUNTY CIRCUIT COURT
ATTORNEYS FOR APPELLANTS: ALTON EARL PETERSON
LARRY STAMPS
ATTORNEYS FOR APPELLEES: JASON BROOKS PURVIS
DAVID A. BARFIELD
LARA A. COLEMAN
NATURE OF THE CASE: CIVIL - TORTS - OTHER THAN PERSONAL
INJURY AND PROPERTY DAMAGE
TRIAL COURT DISPOSITION: GRANTED APPELLEES’ MOTIONS FOR
SUMMARY JUDGMENT
DISPOSITION: AFFIRMED - 08/23/2016
MOTION FOR REHEARING FILED:
MANDATE ISSUED:

BEFORE GRIFFIS, P.J., ISHEE AND WILSON, JJ.

WILSON, J., FOR THE COURT:

¶1. Emma Bell (“Emma”) and her husband, John Bell (“John”), filed suit against Certain

Underwriters at Lloyd’s London (“Underwriters”), TAPCO Underwriters Inc. (“TAPCO”),

and SouthGroup Insurance and Financial Services (“SouthGroup”) after Underwriters denied

Emma’s claim for property damage related to the collapse of a barn on her land in Port
Gibson. Underwriters denied the claim because it concluded that Emma’s insurance policy

covered only a smaller building on the property and not the barn. Emma disagrees and

alleges that Underwriters denied her claim in bad faith. She also alleges that, if the barn is

not covered, then the defendants negligently or fraudulently misrepresented that it was or

negligently failed to obtain coverage for it. The circuit court ruled that the plain language

of the policy covered only the smaller building, not the barn, and that this would have been

apparent to the Bells had they ever read the policy. Accordingly, the court granted summary

judgment in favor of all defendants. For the reasons explained below, we agree and affirm.

FACTS AND PROCEDURAL HISTORY

¶2. In April 2011, Emma purchased a property in Port Gibson on which two buildings

were located: (1) a wood-framed barn that measured approximately 6,000 to 8,000 square

feet, and (2) about three feet away from the barn, a metal building that measured

approximately 900 to 1,100 square feet. The barn did not have plumbing or electricity,

whereas the metal building did. John subsequently rented the metal building to a woman

who used it as a yoga or exercise studio.

¶3. In August 2011, John called Lem Montgomery at SouthGroup about obtaining

insurance for the property. Montgomery prepared an application for Emma, and she signed

it, although the Bells testified that neither of them read the application. Emma’s application

sought coverage for one building, a 900 square foot “ALL STEEL” building. The

application represented that the building would be used as an “EXERCISE CENTER-YOGA,

PILATES, ETC.” The application further stated that the building was built in 1966 and that

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plumbing, wiring, and heating systems were installed at a later date.

¶4. SouthGroup obtained insurance for the Bells from TAPCO under a policy issued by

Underwriters. In relevant part, the policy defines the “Covered Property” as “the building

or structure described in the Declarations.” The Declarations identify a “ONE STORY

STEEL BUILDING” to be used as a “YOGA/PILATES STUDIO.” The property was

insured at a replacement cost of $75,000. The Bells testified that they did not read the policy.

¶5. In May 2012, the barn collapsed during high winds, and Emma made a claim under

her policy. Underwriters sent a third-party adjuster to the site within days. The adjuster

documented that the barn appeared to be a total loss and estimated that its replacement cost

would be in excess of $150,000; however, the adjuster also noted that another building on

the premises—the yoga studio—was still standing, appeared to be around 900 square feet,

was “not attached to” the barn, and appeared to be about fifty years old. The adjuster

suggested that this seemed to match the description of the insured building.

¶6. Underwriters also retained a forensic engineer, Charles Rutter, to review the claim and

investigate the cause of the collapse. Rutter visited the site on June 13, 2012. He noted that

the barn was built around 1948. He also noted that the metal building was located thirty-

three inches from the barn’s foundation. A door on the metal building lined up with a door

on the collapsed barn; however, there was “[n]o evidence of fasteners or framing . . . to

indicate that the metal building and barn were connected.” Rutter therefore concluded that

the metal building was “an independent structure” and “was not part of the collapsed

structure.” On October 4, 2012, Underwriters denied Emma’s claim on the ground that the

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policy covered only the smaller metal building, not the barn.

¶7. Montgomery subsequently asked Underwriters to reconsider its decision denying

coverage. In a March 2013 email, Montgomery stated that John had requested a policy

covering both the barn and the yoga studio, which John maintained were connected and a

single building. Montgomery stated that John told him that the combined building was

“around 9000 square feet” and that the 900 square feet reflected in the application was a typo

by Montgomery. Montgomery also stated that, based on his prior experience with John, he

did not believe that John would have insured the yoga studio alone for $75,000.

¶8. In response to Montgomery’s request, Underwriters reopened its investigation of the

claim, and on April 5, 2013, their attorney requested that Emma submit to an “examination

under oath” (“EUO”) in accordance with the terms of the policy. On April 16, 2013, the

Bells filed suit against Underwriters, TAPCO, and SouthGroup in the Circuit Court of

Claiborne County. Their complaint asserted claims for fraud, tortious breach of contract, bad

faith, and negligence. Through their attorney, the Bells rejected Underwriters’ request for

an EUO and stated that Emma would agree to a deposition instead.

¶9. In her deposition, Emma testified that there were “[t]wo separate buildings” on her

property—“a big one [(the barn)] and a little one [(the steel building)]”—and that the two

buildings were “not connected.” The county tax assessor’s records also identified two

separate buildings on the property. Emma knew little else about the buildings or the

insurance policy. She testified that John called Montgomery about coverage and that she

signed the application but never read it or her policy.

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¶10. In his deposition, John claimed that the barn and yoga studio constituted a single

building and that a door of the metal building was connected by an enclosed, unfinished

walkway to a facing door of the barn. John testified that he removed all of the debris from

the walkway after the barn collapsed, although he left the debris from the barn where it fell.

John also testified that he did not tell Montgomery anything about the square footage of the

buildings because he “didn’t even know.” He testified that he did not mention 900 square

feet or 9,000 square feet or any other number to Montgomery.

¶11. On July 1, 2014, Underwriters and TAPCO filed a motion for summary judgment,

arguing, inter alia, that the barn was not covered by the policy; that the Bells were charged

with knowledge of the contents of the application and policy; that there was no evidence that

the defendants failed to investigate the claim properly; and that the Bells’ claims were barred

because of Emma’s refusal to submit to an EUO. Underwriters and TAPCO requested that

the court enter summary judgment in favor of all defendants (including SouthGroup) on all

claims or, alternatively, enter summary judgment as to the claims against them.

¶12. By order entered on August 29, 2014, the circuit court ruled that the “[d]efendants

[were] entitled to judgment as a matter of law” and granted Underwriters’/TAPCO’s motion

for summary judgment. The court’s order did not specify whether it applied to the Bells’

claims against SouthGroup. On September 8, 2014, the circuit court entered a “Rule 54(b)

Final Judgment” based on its prior summary judgment ruling. The judgment stated, “Final

Judgment pursuant to Rule 54(b) of the Mississippi Rules of Civil Procedure should be and

hereby is entered.” The court’s apparent intent was to certify final judgment as to all claims

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against Underwriters and TAPCO, but the record contains no Rule 54(b) determination or

other explanation of the reason for doing so. Finally, on September 17, 2014, the circuit

court entered an order “clarifying” its prior order granting summary judgment and ruling that

all defendants, including SouthGroup, were entitled to summary judgment on all claims. The

court explained that Emma had an obligation to read her policy and application; that the

policy clearly covered only the smaller steel building and not the barn; and, therefore, that

it would have been unreasonable to rely on any representations to the contrary. The Bells

filed a notice of appeal on October 14, 2014.

DISCUSSION

¶13. On appeal, the Bells argue that genuine issues of fact exist as to whether the barn was

covered by Emma’s policy and whether Underwriters conducted an adequate investigation,

and they contend that Emma’s failure to read her application and policy does not defeat their

claims. Underwriters and TAPCO respond that the Bells failed to file a timely notice of

appeal, that summary judgment was proper, and that the Bells’ claims also could have been

dismissed based on Emma’s refusal to submit to an EUO.1 SouthGroup also argues that the

Bells’ failure to comply with the circuit court’s pretrial orders is an alternative ground for

affirmance. For the reasons that follow, we conclude that the Bells’ appeal was timely and

that the circuit court correctly entered summary judgment in favor of all defendants. Because

we affirm the circuit court for essentially the reasons stated in its final order on summary

judgment, we do not address the defendants’ alternative arguments for affirmance.

1
See Taylor v. Fireman’s Fund Ins., 306 So. 2d 638, 644-45 (Miss. 1974); U.S. Fid.
& Guar. Co. v. Wigginton, 964 F.2d 487, 490 (5th Cir. 1992).

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 I. The Bells Filed a Timely Notice of Appeal

¶14. Underwriters’/TAPCO’s argument that the Bells’ notice of appeal was not timely is

twofold. First, with respect to the circuit court’s entry of summary judgment on the Bells’

claims against them, they argue that the Bells were required to file a notice of appeal within

thirty days of the circuit court’s “Rule 54(b) Final Judgment.” However, the circuit court’s

purported “Final Judgment” did not satisfy the requirements of Rule 54(b) and so was not,

in fact, a final and appealable judgment. In particular, the circuit court did not make “an

expressed determination that there was no just reason for delay.” M.R.C.P. 54(b); Anderson

v. Britton & Koontz Bank N.A., 55 So. 3d 1130, 1132 (¶7) (Miss. Ct. App. 2011); Jennings

v. McCelleis, 987 So. 2d 1041, 1042 (¶7) (Miss. Ct. App. 2008). Nor does the record provide

any other explanation as to the reasons for the court’s entry of final judgment under Rule

54(b). Therefore, although the time for taking an appeal begins to run on the date of a proper

certification of a final judgment under Rule 54(b), see Calvert v. Griggs, 992 So. 2d 627,

631-32 (¶10) (Miss. 2008), the purported Rule 54(b) judgment in this case was not properly

certified and, therefore, did not trigger the thirty-day period for an appeal.

¶15. Underwriters and TAPCO also argue that the Bells’ notice of appeal was filed more

than thirty days after the circuit court “entered” final judgment as to all defendants.

However, Underwriters and TAPCO have confused the date on which the judgment was

signed with the date on which it was entered. “Except as [otherwise] provided . . . the notice

of appeal . . . shall be filed with the trial court clerk within 30 days after the date of entry of

the judgment or order appealed from.” M.R.A.P. 4(a) (emphasis added). “The date of entry

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of judgment is the date the judgment is entered in the general docket of the clerk of court.”

Id., cmt.; see M.R.C.P. 58 & 79(a); Smith v. Parkerson Lumber Inc., 890 So. 2d 832, 834-36

(¶¶12-19) (Miss. 2003). Here, the final judgment was signed on September 11, 2014, but it

was not entered on the docket until September 17, and the Bells then filed a timely notice of

appeal on October 14. Accordingly, we have jurisdiction of the appeal.

II. The Circuit Court Properly Granted Summary Judgment

¶16. We review the circuit court’s grant of summary judgment de novo. Hayne v. The

Doctors Co., 145 So. 3d 1175, 1180 (¶10) (Miss. 2014). Summary “judgment . . . shall be

rendered forthwith if the pleadings, depositions, answers to interrogatories and admissions

on file, together with the affidavits, if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to a judgment as a matter of law.”

M.R.C.P. 56(c). The evidence must be viewed in the light most favorable to the non-moving

party, Forbes v. Gen. Motors Corp., 993 So. 2d 822, 824 (¶7) (Miss. 2008), but a non-

moving “party may not rest upon the mere allegations or denials of his pleadings, but his

response, by affidavits or as otherwise provided in this rule, must set forth specific facts

showing that there is a genuine issue for trial.” M.R.C.P. 56(e). This case primarily involves

the proper interpretation of an insurance policy, which is a question of law also subject to de

novo review. Hayne, 145 So. 3d at 1180 (¶10).

¶17. “The language and provisions of insurance policies are viewed as contracts and are

subject to the same rules of interpretation as other contracts.” Id. at (¶12). “The analysis

must begin with the language of the policy, which ‘either affords coverage or not, based upon

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application of the policy language to the facts presented.’” Id. (quoting Hankins v. Md. Cas.

Co./Zurich Am. Ins., 101 So. 3d 645, 653 (¶18) (Miss. 2012)). “Because insurance policies

are creatures of contract, if the language is clear and unambiguous, then the language of the

policy must be interpreted as written.” Id.

¶18. In this case, the circuit court correctly concluded that the plain language of the policy

covered only the smaller steel building, not the barn. The Bells point to nothing in their

policy that suggests otherwise. The policy and application2 consistently describe a 900

square foot all steel building, with electricity and plumbing, to be used as a yoga or exercise

studio. The barn was several times that size, had a wood frame, lacked electricity and

plumbing, and indisputably was never used as a yoga or exercise studio. The application and

policy both permitted the listing of multiple buildings, but neither identified the barn. Even

Emma, the owner of the property and the policy, recognized that the smaller steel building

and the barn were separate buildings, as did the county tax assessor. John insists that these

two very different structures were actually a single, integrated building because they were

connected by a covered walkway. But the mere fact that there is a walkway between two

buildings does not make them one building. Nor can John’s subjective belief in the

buildings’ oneness overcome the plain language of the policy, which inescapably describes

the smaller steel building, not the barn. The circuit court correctly concluded that there was

2
Under Mississippi law, “the application attached to or giving rise to an insurance
policy is a part of the insurance contract, and the policy should be construed together with
the application.” Provident Life & Acc. Ins. v. Goel, 274 F.3d 984, 993 (5th Cir. 2001)
(alteration omitted) (quoting Keith A. Rowley, Contract Construction and Interpretation:
From the “Four Corners” to Parol Evidence (And Everything in Between), 69 Miss. L.J.
73, 181 (1999)).

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no coverage under the policy.

¶19. The circuit court also correctly concluded that the Bells’ claims for negligence and

fraud were precluded by their failure to read the policy. “[The Supreme] Court has held as

a matter of law that an insured is charged with the knowledge of the terms of the policy upon

which he or she relies for protection.” Robichaux v. Nationwide Mut. Fire Ins., 81 So. 3d

1030, 1041 (¶31) (Miss. 2011) (quoting Mladineo v. Schmidt, 52 So. 3d 1154, 1161 (¶26)

(Miss. 2010)). This is known as the “duty to read” or “imputed knowledge” doctrine, and

it is “firmly rooted in Mississippi precedent.” Mladineo, 52 So. 3d at 1162 (¶26). Here, as

discussed above, “the [Bells] could have ascertained that [the] policy did not cover [the barn]

by simply reading their policy.” Robichaux, 81 So. 3d at 1041 (¶31). Accordingly, the Bells

“are imputed with knowledge” that Emma’s policy did not cover the barn. Id. It follows that

their negligence claim fails as a matter of law because “the proximate cause of their damage”

was their own failure to “execute[] their duty to read the policy,” not Montgomery’s alleged

negligence in procuring it. Mladineo, 52 So. 3d at 1164 (¶38). Likewise, any claim for

fraudulent or negligent misrepresentation fails as a matter of law because the Bells could not

have reasonably relied on an assurance of coverage “that directly contradicted the plain

language of the policy they had in their possession.” Id. at 1166 (¶47).3

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In arguing that they should not be bound by the plain language of Emma’s policy,
the Bells rely on cases such as Home Ins. Co. of New York v. Thornhill, 165 Miss. 787, 144
So. 861, 862 (1932), and Pongetti v. First Cont’l Life & Accidental Co., 688 F. Supp. 245,
247 (N.D. Miss. 1988). However, the issue addressed in those cases was whether the insurer
could void the policy because of material misrepresentations in the policy application. When
the insurer raises such a defense, the insured may attempt to prove that she provided the
insurer with accurate information, which the insurer’s agent transcribed incorrectly. In this
case, Underwriters does not seek to void the policy based on any alleged misrepresentation;

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¶20. Finally, we note that the defendants were entitled to summary judgment as to any bad

faith claim because “[a]n insured seeking to recover on a claim of bad faith must first

establish the existence of coverage on the underlying claim.” Stubbs v. Miss. Farm Bureau

Cas. Ins., 825 So. 2d 8, 13 (¶18) (Miss. 2002); see Essinger v. Liberty Mut. Fire Ins., 529

F.3d 264, 271 (5th Cir. 2008); Jeffrey Jackson & Jason Childress, Mississippi Insurance Law

and Practice §§ 13:2 & 13:3 (2015).4 Because no claim was owed under the policy, there

can be no bad-faith denial of the claim.

CONCLUSION

¶21. The circuit court properly granted summary judgment to all defendants because the

plain language of Emma’s policy did not provide coverage for the barn. Therefore, we

affirm.

¶22. THE JUDGMENT OF THE CIRCUIT COURT OF CLAIBORNE COUNTY IS
AFFIRMED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE
APPELLANTS.

LEE, C.J., IRVING AND GRIFFIS, P.JJ., BARNES, ISHEE, CARLTON, FAIR
AND GREENLEE, JJ., CONCUR. JAMES, J., DISSENTS WITHOUT SEPARATE
WRITTEN OPINION.

rather, it seeks to enforce the policy according to its plain language. This situation is
governed by the duty-to-read cases discussed in the text.
4
The treatise notes a possible exception to this rule if an insurer denies a claim
without articulating an arguable basis for the denial but subsequent investigation reveals
facts that negate coverage. See Jackson & Childress, supra, §§ 13:3 n.4 & 13:7. Here,
however, the claim was properly denied because of information apparent when the claim
was denied, i.e., the plain language of the policy did not cover the barn.

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