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Union Insurance Co. v. East Main Package Store, Inc.

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

September 23, 2019




         Union Insurance Company filed its Complaint [1] on May 23, 2018, seeking a declaratory judgment against the Defendants on two issues: insurance coverage and entitlement to defense and indemnity under an insurance policy. This insurance dispute stems from a state court Dram Shop action filed by Jason Tackett and Regina Lynn Tackett against East Main Package Store, Inc. See Exhibit to Complaint [1-2]. Presently before the Court is Union’s Motion for Judgment on the Pleadings [18]. No. responses were filed, and the issues are ripe for review.

         Factual and Procedural Background

         Larry Mills entered East Main Package Store on January 2, 2015, to purchase alcohol. Allegedly, Mills was visibly intoxicated at the time he purchased the alcohol from the store employees. After making his purchase, Mills exited the store and remained outside by the entrance. Later, James Taylor arrived at the store driving a 2006 Hummer. Taylor left his vehicle running and unlocked while inside the store. Mills allegedly entered Taylor’s vehicle and drove away from the liquor store. After driving for approximately one mile, Mills collided with a vehicle carrying Jason Tackett, Jackie Tackett, and their minor child. Members of the Tackett family sustained severe injuries in the crash.

         The Tacketts filed a civil case in the Circuit Court of Lee County, Mississippi, against East Main Package Store, Inc., claiming that East Main Package Store violated state law when they sold alcohol to a visibly intoxicated person, Mills. See Cause No. CV2017-001428. That state court case gave rise to the dispute currently before this Court. In the state court case, East Main Package Store asked Union, its insurance policy holder, to provide legal defense and indemnity in that proceeding. Believing that East Main is not entitled to defense or indemnity, Union filed this Complaint for Declaratory Judgment [1] asking the Court to declare that the insurance policy does not cover the accident, and that Union does not have a duty to defend or indemnify East Main Package Store. East Main Package Store filed an Answer, Counter-Complaint against Union, and a Third-Party Complaint [12] against its insurance agent Renasant Insurance, Inc. In the Counter-Complaint [12], East Main Package Store claims that Union has, in bad faith and without justifiable cause, refused to defend and indemnify it. Further, the Third-Party Complaint [12] against Renasant Insurance claims that Renasant was entrusted with procuring comprehensive liability insurance coverage but was negligent by failing to do the same. East Main Package Company claims that Renasant’s failures resulted in its exposure to liability in the state court case. Union filed a Motion for Judgment on the Pleadings [18] on March 4, 2019, requesting that the Court enter an order declaring that East Main Package Store is not entitled to coverage or indemnity. Neither of the Defendants filed a response.

         Standard of Review

         Rule 12(c) provides that “[a]fter the pleadings are closed-but early enough not to delay trial-a party may move for judgment on the pleadings.” Fed.R.Civ.P. 12(c). “The central issue is whether, in the light most favorable to the plaintiff, the complaint states a valid claim for relief.” Doe v. MySpace, Inc., 528 F.3d 413, 418 (5th Cir. 2008) (quoting Hughes v. Tobacco Institute, Inc., 278 F.3d 417, 420 (5th Cir. 2012)). To survive a motion for a judgment on the pleadings, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.

         Analysis and Discussion

         The central question is whether the insurance policy covers the accident. Union argues that the policy is unambiguous on its face and excludes coverage for accidents involving alcohol. Union adds that as a result, East Main Package Store is not entitled to the defense and indemnity it requested.

         “Insurance policies are contracts and they are to be enforced according to their provisions.” Corban v. United Services Auto. Ass’n, 20 So.3d 601, 609 (Miss. 2009) (citations omitted). When parties to a contract make mutual promises (barring some defense or condition which excuses performance), they are entitled to the benefit of their bargain. Id. To determine whether the Defendants are entitled to coverage, defense, and indemnity, the Court looks to the terms of the insurance policy. See Facilities, Inc. v. Rogers-Usry Chevrolet, Inc., 908 So.2d 107, 111 (Miss. 2005) (stating that “legal intent should first be sought in an objective reading of the words employed in the contract”); citing Cooper v. Crabb, 587 So.2d 236, 241 (Miss. 1991). The substantive contract law of [Mississippi] includes the following concepts of interpretation:

If a contract is clear and unambiguous, then it must be interpreted as written . . . . If a contract contains ambiguous or unclear language, then ambiguities must be resolved in favor of the non-drafting party. Ambiguities exist when a policy can be logically interpreted in two or more ways, where one logical interpretation provides for coverage. However, ambiguities do not exist simply because two parties disagree over the interpretation of a policy. Exclusions and limitations on coverage are also construed in favor of the insured. Language in exclusionary clauses must be “clear and unmistakable, ” as those clauses are strictly interpreted.

Corban, 20 So.3d at 609; citing United States Fid. & Guar. Co. v. Martin, 998 So.2d 956, 963 (Miss. 2008). Thus, the Court looks to the explicit language of the insurance policy between East Main Package Store and Union Insurance Company.

         i. Interpretation of the Insurance Policy

         Coverage of general bodily injury and property damage liability falls under the “COMMERCIAL GENERAL LIABILITY COVERAGE ...

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