United States District Court, S.D. Mississippi, Northern (Jackson) Division
MESA UNDERWRITERS SPECIALTY INSURANCE COMPANY f/k/a MONTPELIER U.S. INSURANCE COMPANY Plaintiff,
LJA COMMERICIAL SOLUTIONS, LLC;, RENT CITY, INC.; and INDIVIDUALS And XYZ ENTITIES Defendants. and LJA COMMERICIAL SOLUTIONS, LLC Counter-Plaintiff,
MESA UNDERWRITERS SPECIALTY INSURANCE COMPANY f/k/a MONTPELIER U.S. INSURANCE COMPANY Counter-Defendant.
MEMORANDUM OPINION AND ORDER
CARLTON W. REEVES, District Judge.
Before the Court are Plaintiff/Counter-Defendant Mesa Underwriters Specialty Insurance Company's ("MUSIC") motions for summary judgment [ See Docket Nos. 65, 100, 103]. These motions have been fully briefed by the parties, and the Court, having considered the parties' submissions, finds and concludes as follows.
In May 2012, Defendant Rent City, Inc. ("Rent City") contracted LJA Commercial Solutions d/b/a No Drip Roofing Company ("LJA") to remove its existing roofing system, redeck its building facility and install a new roof. MUSIC's Memo in Supp. of Mot. Summ. Judg., Docket No. 67 at 2. On June 15, 2012, a thunderstorm barreled in while LJA was working on the roof. The thunderstorm lasted for a period of 45 minutes to one hour. At the time that the storm commenced, LJA had already removed all of the old roof from Rent City's building and a portion of the building was left uncovered. Docket No. 97, Smith Dep., at 30. LJA did not equip itself with tarping or any protective roofing material to cover the interior of the building from the pouring rain;thus, the interior of Rent City's facility, including the merchandise, equipment and other fixtures contained therein, was exposed to rain shower and sustained significant damage as a result.
LJA had commercial general liability (CGL) coverage under a policy issued by MUSIC. On January 10, 2013, in anticipation of litigation between Rent City and LJA, MUSIC sent a reservation of rights letter informing LJA that it would not defend or indemnify LJA if an investigation revealed that the water damage to Rent City's facility was not within its coverage. See Docket No. 100, at Exhibit A. That same day, MUSIC filed the present declaratory action in this Court, seeking a declaratory judgment that there is no coverage under its policy for the subject incident, and that MUSIC therefore has no duty to defend or indemnify LJA. Docket No. 1, MUSIC's Compl. at 15. MUSIC also named Rent City as a Defendant in this action.
Thereafter, on July 11, 2013, LJA filed its counterclaim against MUSIC, alleging claims for breach of contract, breach of duty of fair dealing and good faith (e.g., bad faith), negligence and gross negligence, misrepresentation and fraud, failure to reasonably investigate, waiver and estoppel, statutory violations, fraudulent concealment, damages, including punitive damages and its own claim for declaratory relief. See Docket No. 29. Rent City and Pauline Holcombe also filed counterclaims against MUSIC. Docket No. 12. In the counterclaim, among many other things, they alleged that "none of the circumstances triggering the exclusion for Roofing Operations (Open Roof)' in the MUSIC policy exists under these facts or were the proximate or efficient causes or contributory causes of Rent City's damages and losses." Id. at 12. Rent City also filed a cross-claim against LJA alleging damages to the building, loss business, and business interruption as a result of the incident. Id. at 9-14, 16. In the cross-claim, Holcombe alledged she incurred personal injuries resulting in some medical care charges and loss of wages. Id.
MUSIC subsequently filed a motion to partially dismiss LJA's counterclaims, as well as three motions for summary judgment denying any liability as to LJA's counterclaims or any duty to defend LJA for claims brought by Rent City and one of its owners, Pauline Holcombe.
I. Legal Standard
Motions for summary judgment should be granted only 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." Fed.R.Civ.P. 56(c). An issue is genuine "if the evidence supporting its resolution in favor of the party opposing summary judgment, together with an inference in such party's favor that the evidence allows would be sufficient to support a verdict in favor of the party." Amant v. Benoit, 806 F.2d 1294, 1297 (5th Cir. 1987) (citation omitted).
The ultimate responsibility to assess the probative value of the evidence lies with a jury, and therefore, a court must not weigh evidence. Provident Life & Acc. Ins. Co. v. Goel, 274 F.3d 984, 991 (5th Cir. 2001). In order to avoid such a determination, a court views submitted evidence in the light most favorable to the party opposing summary judgment. Stewart v. Murphy, 174 F.3d 530, 533 (5th Cir. 1999). But, "[t]he interpretation of an insurance policy language is a question of law." Lewis v. Allstate Ins. Co., 730 So.2d 65, 68 (Miss. 1998) (quotation marks and citation omitted). Where the relevant facts are not in dispute and the critical questions turn purely on legal rights and relationships, summary judgment is appropriately considered. Canal Ins. Co. v. Owens, No. 4:10-CV-009, 2011 WL 4833045, at *2 (S.D.Miss. Oct. 12, 2011).
The Court must follow state law for rules governing contract interpretations. F.D.I.C. v. Firemen's Ins. Co. of Newark, NJ, 109 F.3d 1084, 1087 (5th Cir. 1997). Under Mississippi law, an insurance policy is a contract that must be interpreted according to its terms. Foreman v. Continental Casualty Co., 770 F.2d 487, 489 (5th Cir.1985). "The construction of an insurance contract is limited to an examination of the written terms' of the policy itself." Nationwide Mut. Ins. Co. v. Yelverton, 417 F.Supp.2d 817, 820 (S.D.Miss. 2006) (citing Employers Mut. Casualty Co. v. Nosser, 250 Miss. 542, 553 (1964)). "The policy either affords coverage or not, based upon application of the policy language to the facts presented." Architex Ass'n v. Scottsdale Ins. Co., 27 So.3d 1148, 1156 (Miss. 2010).
"The policy itself is the sole manifestation of the parties' intent, and no extrinsic evidence is permitted absent a finding by a court that the language is ambiguous and cannot be understood from a reading of the policy as a whole." Id. (citing Cherry v. Anthony, Gibbs, Sage, 501 So.2d 416, 419 (Miss. 1987)). "If an insurance contract is clear and unambiguous, the language therein must be given its plain meaning." Id. (citing Gulf Nat'l Bank v. United States Fire Ins. Co., 713 F.2d 1106, 1109 (5th Cir. 1983)). See also Guidant Mut. Ins. Co. v. Indem. Ins. Co. of N. Am., 13 So.3d 1270, 1281 (Miss. 2009) ("where the words of an insurance policy are plain and unambiguous the court will afford them their plain, ordinary meaning and will apply them as written.") (quotation marks and citation omitted). If ambiguities exist in the insurance contract, "then the intention of the ...