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James Allen Insurance Brokers v. First Financial Bank

Supreme Court of Mississippi

April 18, 2019

JAMES ALLEN INSURANCE BROKERS AND CERTAIN UNDERWRITERS AT LLOYD'S, LONDON, SUBSCRIBING TO CERTIFICATE NO. FRO-100944
v.
FIRST FINANCIAL BANK

          DATE OF JUDGMENT: 02/07/2018

          SIMPSON COUNTY CIRCUIT COURT. HON. EDDIE H. BOWEN JUDGE.

          TRIAL COURT ATTORNEYS: JAMIE DEON TRAVIS BENJAMIN E. GRIFFITH DAVID A. BARFIELD CHRISTOPHER ALBERT D'AMOUR BENJAMIN BLUE MORGAN L. WESLEY BROADHEAD JOHN LEONARD WALKER, JR. KEVIN BRIAN BASS LARA A. COLEMAN EUGENE COURSEY TULLOS CHAD J. HAMMONS STEPHANIE JANE BENTLEY G. ROBERT PARROTT, II

          ATTORNEYS FOR APPELLANTS: CHRISTOPHER ALBERT D'AMOUR BENJAMIN E. GRIFFITH LAURA FORD ROSE G. ROBERT PARROTT, II LAUREN ELIZABETH WARD

          ATTORNEY FOR APPELLEE: CHAD J. HAMMONS

          BEFORE KING, P.J., COLEMAN AND BEAM, JJ.

          BEAM, JUSTICE.

         ¶1. James Allen Insurance Brokers (JAIB) and Certain Underwriters at Lloyd's, London, Subscribing to Certificate No. FRO-100944 (Lloyd's) petitioned this Court for interlocutory review of the Simpson County Circuit Court's order granting partial summary judgment in favor of First Financial Bank (FFB). The trial court held that FFB is entitled to insurance proceeds from a fire loss that occurred at Luther and Freda Feazell's poultry farm, because JAIB and Lloyd's failed to comply with Mississippi law requiring notice of cancellation of property insurance. We affirm the trial court's grant of partial summary judgment in favor of FFB.

         FACTS

         ¶2. The Feazells have used Insurance Associates of Magee (IAM) as their local insurance agent to procure insurance coverage on their chicken farm and equipment since 2006. They also are indebted to FFB under promissory notes for loans first issued in 2006 in relation to the farm. The loans are secured by, among other things, four poultry houses on the Feazells' farm, valued at $231, 750, $231, 750, $150, 000, and $150, 000.

         ¶3. In December 2013, the Feazells, through IAM, requested that a new insurance policy be issued with Lloyd's with an effective date of December 13, 2013. The Feazells needed a new underwriter because their prior carrier would not renew coverage.

         ¶4. On December 11, 2013, IAM obtained a quote from JAIB on a policy to be issued by Lloyd's. The quote included a letter entitled "Non-Admitted Farm Quote Binding Terms: This Quote is Valid for 7 days." The letter quoted a premium of $7, 429.34. The terms provided that a "binder"[1] would issue with an effective date from December 13, 2013, to December 13, 2014.

         ¶5. The letter contained the following:

To issue the policy, we will need all of the following items in our office within 10 days of the binding effective date. Your binding authority is a maximum of 10 days after the effective date. If all items are not received, we will cancel the policy flat with no coverage afforded at anytime and all premium, less the policy fee will be returned.

         ¶6. One of the items stated, "Total premium payment must be received in our office within 10 days of agent's written request to bind coverage in order to retain requested effective date." The original due date for the total premium was December 23, 2013.

         ¶7. To obtain the total premium payment funds, the Feazells entered into a finance agreement with Insurance Premium Financing Solutions (Imperial PFS). Under this agreement, the Feazells would provide $2, 383.80 of the $7, 479.33 premium payment, while Imperial PFS would provide the remaining $5, 095.53. IAM received Imperial PFS's portion of the total premium payment on December 16, 2013.

         ¶8. FFB provided the remaining portion of the premium to IAM using funds from the Feazells' escrow accounts. FFB's check containing its portion of the premium payment was dated December 18, 2013, and IAM allegedly received it on December 26, 2013. According to JAIB and Lloyd's, despite possessing the funds to pay the full premium, IAM did not send payment or inform JAIB that it had the funds.

         ¶9. On December 20, 2013, JAIB informed IAM, via email, that the Feazells' premium payment had not been received. The email stated that JAIB would "consider the premium to be on time if received by Friday, Dec. 27[, 2013.]"

         ¶10. On December 27, 2013, again via email, JAIB informed IAM that the premium payment had not been received. This email provided a final payment-deadline extension, stating that the "full payment must be on" the desk of Elizabeth Hauser, JAIB's employee, by January 2, 2014, or the effective date would be reset to the date the premium payment was paid with "no coverage offered in the interim." According to JAIB, the additional deadline offered to IAM was a courtesy and was not required of JAIB.

         ¶11. FFB claims IAM transmitted full payment of the premium to JAIB on December 30, 2013, in the amount of $7, 429.33. But JAIB disputes this.

         ¶12. JAIB claims no proof exists that the premium was transmitted by IAM on December 30, only that the premium payment check bore the date December 30, 2013. JAIB claims that it had not received the total premium payment by January 2, 2014, which resulted in a failure to satisfy an express condition of the written terms required to bind coverage for the requested effective date of December 13, 2013.

         ¶13. On January 5, 2014, three days after the final premium payment deadline, the Feazells' poultry farm caught fire. All four of the chicken houses used to secure FFB's loan to the Feazells were either destroyed or rendered inoperable. According to FFB, due to the extensive fire damage, the ...


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