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Shelter Mutual Insurance Co. v. Double J Timber Co., Inc.

United States District Court, N.D. Mississippi, Aberdeen Division

May 16, 2019

SHELTER MUTUAL INSURANCE COMPANY PLAINTIFF
v.
DOUBLE J TIMBER COMPANY, INC.; et al. DEFENDANTS

          OPINION GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

         Presently before the Court are the Plaintiffs and the Defendant Double J Timber's competing motions for summary judgment [Doc. Nos. 43, 48] in this declaratory judgment action. Upon due consideration, the Court finds that the Plaintiffs motion should be granted and the Defendant's motion should be denied.

         I. Factual and Procedural Background

         The Plaintiff filed its Complaint for Declaratory Relief on March 18, 2018, requesting that the Court determine whether the Plaintiff owes a duty to indemnify and/or defend the Defendants Double J Timber Company, Inc. and Terry Johnson against claims pending versus them in a state court wrongful death action. See Compl. [Doc. 1].

         At issue is a general liability policy the Plaintiff issued to Double J Timber with a relevant policy limit of $1, 000, 000, and whether that Policy's "Employee" exclusion acts to preclude coverage for defense and indemnity of the wrongful death action. See Policy, Doc. 1-1. The Policy, which the court finds is unambiguous and which both parties agree was in force and that, in the absence of any applicable exclusions, applies to the claims pending against Defendants Double J Timber and Terry Johnson in state court, provides in relevant part that the Plaintiff will both defend Double J Timber in any suit seeking damages because of bodily injury and will indemnify Double J Timber and pay any sums that Double J Timber becomes legally obligated to pay as a result of such a suit unless a policy exclusion applies. See Policy, Doc. 1-1. The Plaintiff argues that the Policy's "Employer's Liability" exclusion applies because it excludes coverage for "bodily injury" to an "employee" of the insured arising out of and in the course of employment by the insured or during the performance of duties related to the conduct of the insured's business. See Id. Accordingly, the key determination the Court must make is whether the decedent Jerry Johnson was an employee of Double J Timber on June 1, 2017. Further, the Court must determine if the Defendant Terry Johnson was an employee of Double J Timber on that date given the policy's exclusion of employees as "Insureds" for the purposes of bodily injury that occurs to co-employees while that employee is performing duties related to the conduct of the subject Insured's business. Id.

         The Plaintiffs in the state court wrongful death action allege that on June 1, 2017, Defendant Terry Johnson was operating a skidder while performing logging/timber-cutting operations for the Defendant Double J Timber Company in Choctaw County, Mississippi, when he negligently caused the skidder to overrun Jerry Lee Johnson, the decedent in the state court action, resulting in Jerry's death. The subject state court wrongful death action followed and the Plaintiff in the case sub judice now requests that the Court rule on the question of whether the decedent Jerry Johnson and the Defendant Terry Johnson were employees or independent contractors of Double J Timber on June 1, 2017. If they were employees and either working in the course and scope of their employment or performing duties related to the conduct of Double J Timber's business, the Employee exclusion contained within the Policy will preclude coverage for defense and indemnity of the wrongful death action. The parties agree that this determination is decisive in this action and both the Plaintiff and the Defendant Double J Timber have filed motions for summary judgment.

         II. Summary Judgment Standard

         This Court grants summary judgment "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Weaver v. CCA Indus., Inc., 529 F.3d 335, 339 (5th Cir. 2008). The rule "mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a sufficient showing to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp., 477 U.S. at 322.

         The party moving for summary judgment bears the initial responsibility of informing the Court of the basis for its motion and identifying those portions of the record it believes demonstrate the absence of a genuine dispute of material fact. Id. at 323. Under Rule 56(a), the burden then shifts to the nonmovant to "go beyond the pleadings and by ... affidavits, or by the 'depositions, answers to interrogatories, and admissions on file,' designate 'specific facts showing that there is a genuine issue for trial.'" Id. at 324; Little fleld v. Forney Indep. Sch Dist., 268 F.3d 275, 282 (5th Cir. 2001); Willis v. Roche Biomedical Labs., Inc., 61 F.3d 313, 315 (5th Cir. 1995). When the parties dispute the facts, the Court must view the facts and draw reasonable inferences in the light most favorable to the non-moving party. Scott v. Harris, 550 U.S. 372, 378, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007) (internal citations omitted). "However, a nonmovant may not overcome the summary judgment standard with conclusional allegations, unsupported assertions, or presentation of only a scintilla of evidence." McClure v. Boles, 490 Fed.Appx. 666, 667 (5th Cir. 2012) (per curiam) (citing Hathaway v. Bazany, 507 F.3d 312, 319 (5th Cir. 2007)).

         III. Analysis and Discussion

         The Plaintiff argues that summary judgment in its favor is warranted because Terry and Jerry Johnson were employees, and not independent contractors, of Double J Timber on the date of the fatal accident. The Defendants argue the opposite, asserting that the Johnsons were acting as independent contractors for Double J Timber on the relevant date.

         A. Employee versus Independent Contractor Status

         The Court notes at the outset that in this diversity action, the Erie doctrine applies and thus the determination of the Johnsons' status as employees or independent contractors on the date of the accident is guided by Mississippi state law. Erie R. Co. v. Tompkins, 304 U.S. 64, 78-80 (1938); Centennial Ins. Co. v. Ryder Truck Rental, Inc., 149 F.3d 378, 382 (5th Cir. 1998).

         Under Mississippi law, a servant or employee is "a person employed by a master to perform service in his affairs whose physical conduct in the performance of the service is controlled or is subject to the right to control by the master." Richardson v. APAC-Mississippi, Inc., 631 So.2d 143, 148 (Miss. 1994). An independent contractor is defined as "a person who contracts with another to do something for him but who is not controlled by the other nor subject to the other's right to control with respect to his physical conduct in the performance of the undertaking." Id. In short, the difference between a master-servant relationship and an independent-contractor relationship is that an employer in a master-servant relationship has control of, or the right to control, the employee in the details of the work. Hill v. City of Horn Lake, 160 So.3d 671, 676 (Miss. 2015); Miller v. R.B. Wall Oil Co., Inc., 970 So.2d 127, 132 (Miss. 2007); Stewart v. Lofton Timber Co., LLC, 943 So.2d 729, 734 (Miss. 2006).

         The distinction between an employee and an independent contractor is a difficult one to make and has been described by the Mississippi Supreme Court as "elusive." Richardson, 631 So.2d at 148 (citation omitted). However, the Mississippi Supreme Court has provided factors to consider when ...


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