United States District Court, N.D. Mississippi, Aberdeen Division
RICHARD COURTNEY, Special Needs, Trust for Adrianna Slaughter, AND SHEILA IVY Plaintiffs,
STATE FARM FIRE AND CASUALTY COMPANY, Defendant.
MEMORANDUM OPINION AND ORDER
DEBRA M. BROWN, District Judge.
This lawsuit arises from an insurance coverage dispute involving a homeowner's policy issued by Defendant State Farm Fire and Casualty Company ("State Farm") to Plaintiffs Richard Courtney and Sheila Ivy. Plaintiffs reported a fire loss claim on the insured property, and State Farm denied coverage based on the loss occurring after the policy was cancelled and after the policy would have otherwise expired. Plaintiffs filed suit against State Farm for breach of the policy in the Circuit Court of Lee County, Mississippi. State Farm removed the case to this Court, and filed the instant motion for summary judgment on grounds that Plaintiffs cannot prove the policy was effective at the time of the fire loss. Plaintiffs filed a counter motion for partial summary judgment as to coverage owed to Courtney, and assert that coverage exists because State Farm failed to properly cancel the policy. For the reasons below, the Court finds that summary judgment is not proper at this time.
I. Factual Background and Procedural History
Richard Courtney is the sole trustee for the special needs trust for Sheila Ivy's minor child, Adrianna Slaughter. Courtney Dep. [35-4] at 2. On July 20, 2009, Plaintiffs obtained a homeowner's insurance policy from State Farm covering property located at 2601 Pemberton Avenue, Tupelo, Mississippi ("Property"). The policy was effective from July 20, 2009, to July 20, 2010. Plaintiffs renewed the policy for one year, extending coverage through July 20, 2011. Ivy is the insured on the policy, and Courtney is the loss payee. See Renewal Certificate [35-1] at 1-4. Plaintiffs procured the homeowner's policy through State Farm Agent Tillmon Calvert. Doc. [35-2] at 8.
On February 4, 2011, five months before the policy's expiration date, State Farm claims it mailed separate letters to Plaintiffs notifying them that the policy would be cancelled on March 9, 2011. See Docs. [35-7][35-8]. It is undisputed that Courtney received the notice letter; however, the parties dispute whether State Farm mailed a letter to Ivy because she claims to have never received it. The letter allegedly sent to Ivy indicates that State Farm enclosed a check for the amount of unearned insurance premium and explained that the policy was being cancelled because the Property was "no longer owner occupied." Doc. [35-8] at 1. No explanation was provided in the letter sent to Courtney.
Leigh Leverette, a trust administrator in Courtney's office, contacted Ivy to find out whether she had received a notice from State Farm and whether she knew why the policy was being cancelled. Docs. [35-6][35-7]. Ivy told Leverette she did not receive a letter and did not know the reason for cancellation. Doc. [35-6]; Leverette Dep. [35-5] at 24-26. Leverette then contacted Calvert's office. After learning the reason for cancellation, Leverette advised State Farm that the Property was not vacant. She believed State Farm would re-inspect the Property and correct the cancellation. Plaintiffs did not follow-up on the cancellation notice, request reinstatement or renewal of the policy, or make any payments for insurance coverage during 2011. Doc. [35-2] at 11-12.
On February 1, 2012, the Property was damaged by fire. Ivy tried to contact State Farm Agent Calvert to report the claim but did not get a response. Ivy then contacted Courtney's office and advised that there was fire loss on the Property. A staff member in Courtney's office contacted State Farm to report the claim and was advised that there was no coverage on the Property because the policy had been cancelled.
On January 10, 2013, Plaintiffs filed a complaint in the Circuit Court of Lee County, Mississippi, against State Farm for breach of the insurance policy and for grossly negligent conduct. State Court Compl. . Plaintiffs sought actual damages, punitive damages, extra-contractual damages, attorneys' fees, and costs. On February 20, 2013, State Farm removed the action to this Court based on diversity of citizenship. On July 8, 2013, the parties filed a joint motion to dismiss the claims for punitive damages, extra-contractual damages, and attorneys' fees. Mot. . The joint motion was granted, and those claims were dismissed. Order . On November 15, 2013, State Farm filed the instant motion for summary judgment. Plaintiffs responded to the motion and included a counter motion for partial summary judgment in their response.
A. Standard of Review
Rule 56(a) of the Federal Rules of Civil Procedure provides that summary judgment should be granted if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. See Coury v. Moss, 529 F.3d 579, 584 (5th Cir. 2008). When evaluating whether summary judgment is appropriate, a court must construe the facts and evidence in the light most favorable to the nonmoving party. Ford, Bacon & Davis, LLC v. Travelers Ins. Co., 635 F.3d 734, 736 (5th Cir. 2011) (citing Holt v. State Farm Fire & Cas. Co., 627 F.3d 188, 191 (5th Cir. 2010)). A material fact issue exists if a jury could reasonably find for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). After the party seeking summary judgment meets its burden, the nonmoving party must "come forward with specific facts showing a genuine factual issue for trial." Harris ex rel. Harris v. Pontotoc Cnty. Sch. Dist., 635 F.3d 685, 690 (5th Cir. 2011). The nonmoving party cannot rely on metaphysical doubt, conclusive allegations, or unsubstantiated assertions but rather must show that there is an actual controversy warranting trial. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (internal citations omitted).
B. Applicable Law
Subject matter jurisdiction in this case is based on diversity of citizenship; therefore, the Court will apply the substantive law of the forum state, Mississippi. Boyett v. Redland Ins. Co., 741 F.3d 604, 607 (5th Cir. 2014) (citations omitted). "[T]o determine state law, federal courts look to final decisions of the highest court of the state. When there is no ruling by the state's highest court, it is the duty of the federal court to determine... what the highest court of the state would decide." Transcon. Gas Pipe Line Corp. v. Trans. Ins. Co., 953 F.2d 985, 988 (5th Cir. 1992) (citations omitted). See James v. State Farm Mut. Auto. Ins. Co., 743 F.3d 65, 69 (5th Cir. 2014) (courts must look ...