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Williams v. Liberty Mutual Fire Insurance Co.

United States District Court, S.D. Mississippi, Northern Division

January 30, 2014



CARLTON W. REEVES, District Judge.

Before the Court is the motion for summary judgment filed by Defendant Liberty Mutual Fire Insurance Company ("Liberty Mutual"), Docket No. 78. The Plaintiffs filed a response, to which the Defendant has submitted a rebuttal. Having carefully considered the record of this case, relevant statutory and case law, and being otherwise fully advised in the premises, for the reasons discussed below, the Court concludes that summary judgment should be GRANTED.

I. Factual and Procedural History

On March 29, 2012, Plaintiff Destiny Williams was involved in an automobile accident with James McGee who was insured by Allstate. See Dep. of Destiny Williams, Exhibit A, Docket No. 81-1, at 34, 55 (hereinafter "Pl.'s Dep."). Although police were called to the scene, a police report of the collision was not prepared because it occurred on private property. The parties agree that the accident was the result of McGee's negligence. At the time of the accident, Williams had uninsured motorist (UIM) coverage under her mother's (Debbie Williams) policy of insurance with Liberty Mutual. Williams' UIM coverage totaled $25, 000. See Docket No. 1-1.

The day the accident occurred, Plaintiffs reported the incident to Liberty Mutual. Pl.'s Dep. at 45. Plaintiffs filed suit against McGee in April 2012. See Docket No. 77-10. Two months later, on June 5, 2012, Plaintiffs' counsel contacted Liberty Mutual informing them that Allstate was accepting responsibility and that a UIM claim with Liberty Mutual may need to be filed, as Allstate's $25, 000 bodily injury limit may have been insufficient coverage.[1] Liberty Mutual's Claims Log, Exhibit L, Docket No. 77-12, at 6 (hereinafter " Claims Log "). Additionally, Plaintiffs' counsel provided Liberty Mutual with contact information for Williams as well as the contact information for Allstate's adjuster. Id. On June 6, 2012, the bodily injury claim was assigned to Liberty Mutual's claims adjuster, Chris Lafoy, who contacted Plaintiffs' counsel to obtain information on the claim. Id. at 5. The following day, Liberty Mutual obtained from Williams and her counsel information regarding the accident and Williams' medical treatment. Id. at 3. Subsequently, on June 22, 2012, Liberty Mutual's Subrogation Department issued a letter to Plaintiffs, requesting "a copy of the police report or any information on [McGee] or [Allstate]" because the unit intended to "pursue the at fault party." Id. at 9.

On July 2, 2013, Lafoy contacted Plaintiffs' counsel requesting a statement from Williams, pictures of Williams' vehicle and information regarding negotiation with McGee and Allstate. Id. at 3. Lafoy contacted Plaintiffs' counsel again on July 20 and July 30, 2012, in order to obtain the same information but Plaintiffs' counsel never satisfied Liberty Mutual's requests. Id. at 2-3. On July 31, however, Plaintiffs' counsel informed Lafoy that he would honor the adjuster's previous requests. Id. at 2. Counsel also informed him that Allstate had offered policy limits of $25, 000 for the bodily injury claim. Id. at 2. Later that day, Plaintiffs' counsel sent an email to Lafoy informing him that there was no accident report and provided the contact information for Williams and Allstate's counsel so that Lafoy could obtain a copy of Allstate's declaration page. Id.; Docket No. 81-7, at 1.

On August 1, 2012, Plaintiffs' counsel sent an email to Lafoy advising him again that he had not pictures. Id. The email also demanded UIM policy limits, reminded Liberty Mutual of its duty to deal in good faith with its insured, and threatened to sue if Liberty Mutual did not cooperate. Id.; Docket No. 81-7, at 2.[2] On August 6, 2012, Lafoy called Allstate's counsel, who informed Lafoy that Williams' medical expenses were about $17, 000 to $18, 000, that Allstate had accepted liability at 100% and offered Williams policy limits of $25, 000. Claims Log, at 1.[3] Thereafter, Plaintiffs' counsel sent another email to Lafoy stating that Plaintiffs had provided all their information and demanded the policy limits once again. Docket No. 81-7, at 4. In addition, the email indicated that Plaintiffs previously requested Liberty Mutual to settle with Allstate for its policy limits and that Liberty Mutual failed to respond.[4] Id. (stating that "[Liberty Mutual has]... not responded to [Plaintiffs'] request to settle with [Allstate] for its policy limits...."). Counsel also asserted that Liberty Mutual's actions constituted "text book bad faith." Id.

That same day, Liberty Mutual issued a letter to Plaintiffs and their counsel reminding them that Liberty Mutual's duty is to provide coverage only when there is full compliance of specific provisions under its policy. Claims Log, at 7. The provisions referred to in the letter states:

A. We must be notified promptly of how, when and where the accident or loss happened. Notice should also include the names and addresses of any injured persons and any of the witnesses.
B. A person seeking coverage must:
1. Cooperate with us in the investigation, settlement, or defense of any claim or suit.

Id. The letter warned Plaintiffs that they should cooperate immediately or forfeit coverage on the bodily injury claim. Id.

On August 9, 2012, Plaintiffs' counsel fulfilled his promise and filed the present suit against Liberty Mutual for its alleged "breach of the implied covenant of good faith and fair dealing in the handling, investigation and evaluation of Plaintiffs' [uninsured motorist] claim." See Pl. Compl., Docket No. 1, at 4.

The day after Plaintiffs filed suit, they entered into a settlement agreement with Allstate-unbeknownst to Liberty Mutual-and, in consideration of the payment of Allstate's bodily injury policy limits of $25, 000, Plaintiffs released Allstate from all liability.[5] Docket No. 77-14, Allstate Release. Plaintiffs' Complaint alleges that Williams is entitled to receive payment of UIM benefits under its insurance policy with Liberty Mutual. Pl. Compl., Docket No. 1, at 3. In ...

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