Employers Mutual Casualty Company v. West et al
MEMORANDUM OPINION re 148 Orders on Motions for Summary Judgment. Signed by District Judge Sharion Aycock on 7/21/2017. (adm)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF MISSISSIPPI
EMPLOYERS MUTUAL CASUALTY COMPANY
CIVIL ACTION NO.: 1:16CV4-SA-DAS
BRYTNI WEST, et al.
Plaintiff filed this Declaratory Judgment Action on January 15, 2016. Plaintiff has since
filed two motions for summary judgment. The Court finds as follows:
Factual and Procedural Background
This matter arises from twelve separate complaints and twelve separate cross-complaints
from twelve separate underlying civil actions filed in the Circuit Court of Oktibbeha County,
Mississippi. All but two actions have been compromised or settled in the underlying state court
suit. Employers Mutual Casualty Company (EMC) filed two motions for summary judgment.
The first motion seeks a declaration as to whether EMC must provide coverage for claims made
by Brytni West and Dustin Carley against the insureds, Jason Littrell and Littrell Construction,
Inc (Littrell).1 The second motion for summary judgment seeks a declaration as to whether EMC
must provide coverage to Littrell for claims made by D.L. Acton Construction Company
(“DLA”) in its ancillary cross complaints filed in the underlying actions.2 DLA has responded to
EMC policy numbers 3D6-41-97-08, 3D6-41-97-09, 4D1-69-89-10 and 4X1-69-89-10, with effective dates of
coverage from November 1, 2007 through November 1, 2008; November 1, 2008 to January 19, 2009; September
17, 2009 through September 17, 2010; and August 31, 2009 through August 31, 2010 are the subject of this suit.
DLA made direct claims of negligence and breach of warranty and contract, as well as derivative claims for
indemnity as to claims made by West and Carley for bodily injury or property damage. After the motions for
summary judgment were filed, several parties settled certain claims, including DLA’s direct claims against Littrell
and DLA’s claims for indemnity for “property damages” as defined by the policy. Pursuant to stipulation ,
DLA’s claims ancillary to the West Complaint regarding “bodily injury” remain. Additionally, Pursuant to Federal
both motions, arguing that EMC should provide coverage to Littrell as to the underlying Carley
and West complaints as well as their own underlying complaint. However, the Defendant
insureds, Jason Littrell and Littrell Construction, Inc. have not responded.
The West Complaint and the Carley Complaint both allege that separate Defendants,
DLA and Bragan Properties, through their various entities, constructed multifamily dwellings
that were “defective, inadequate, and negligent [in] design and construction.” These dwellings
comprised of three story apartment buildings with outdoor wooden decks on the front and rear of
the dwellings. The complaints allege that Littrell, who served as subcontractor for DLA, built the
decks with “undeniable knowledge” that college students would be residing in the properties, and
that the decks would be natural gathering spots. However, the complaints allege that these decks
were attached to the building structure using only nails, “instead of the more common and safer
alternative of bolts.” Further, West alleges that “the decks were nailed only to press board or
[oriented strand board], and not to a solid piece of wood,” and that no flashing was installed,
which purportedly allowed water to damage what West claims to be the “already structurally
weak deck and its attachment to the building.” The Carley Complaint alleges that the property
owners and managers had actual notice of the unstable nature of the decks.
The West Complaint alleges that the “gradual, but continual weakening finally hit a
breaking point on or about November 22, 2014,” when the deck collapsed, causing everyone
standing on the deck to free-fall before crashing down on the broken deck onto cars parked
below. Regarding injuries sustained in the fall, West and Carley made claims against Littrell for
negligence, breach of warranty, misrepresentation, fraud, and fraudulent concealment, products
liability, and wanton, gross and/or intentional conduct.
Rule of Civil Procedure Rule 41(a)(1)(A)(ii), complaints made by Carley against DLA have been settled and
DLA’s underlying cross-complaint arises out of the same facts that are the subject of the
West and Carley lawsuit. DLA makes claims ancillary to the West Complaint for
indemnification to the extent that those claims relate to “bodily injury.”
Summary Judgment Standard
Summary judgment is warranted under Rule 56(a) of the Federal Rules of Civil
Procedure when the evidence reveals there is no genuine dispute regarding any material fact and
that the moving party is entitled to judgment as a matter of law. 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. v. Catrett, 477
U.S. 317, 322, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986).
Conclusory allegations, speculation, unsubstantiated assertions, and legalistic arguments
are not an adequate substitute for specific facts demonstrating a genuine issue for trial. TIG Ins.
Co. v. Sedgwick James of Wash., 276 F.3d 754, 759 (5th Cir. 2002). “A party asserting that a fact
cannot be or is genuinely disputed must support the assertion by citing to particular parts of
materials in the record ... or showing that the materials cited do not establish the absence or
presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to
support the fact .” FED. R. CIV.P. 56(c)(1). The court is only obligated to consider cited materials
but may consider other materials in the record. Id. at 56(c)(3). The court must resolve factual
controversies in favor of the nonmovant “but only when there is an actual controversy, that is,
when both parties have submitted evidence of contradictory facts.” Little v. Liquid Air Corp., 37
F.3d 1069, 1075 (5th Cir. 1994). When such contradictory facts exist, the court may “not make
credibility determinations or weigh the evidence.” Reeves v. Sanderson Plumbing Prods., Inc.,
530 U.S. 133, 150, 120 S. Ct. 2097, 147 L. Ed. 2d 105 (2000).
Analysis and Discussion
EMC filed their first Motion for Summary Judgment in which they argue that there is no
duty to provide coverage, including a duty to defend or indemnify, for those matters alleged in
the West and Carley complaints. First, EMC argues that although the West and Carley
complaints do allege damages because of “bodily injury” as that term is defined in EMC’s
Policy, the Policy would not be triggered because the “bodily injury” did not occur within the
Policy period. Second, EMC argues that West and Carley do not seek damages because of
“property damage” as that term is defined in the Policy. Third, EMC argues that the Complaints
do not claim “bodily injury” or “property damage” caused by an “occurrence” as that term is
defined. Finally, EMC argues that the Complaints do not make a claim for “personal and
advertising injury,” as defined under Coverage Part B of the Policy, and they do not make a
viable claim under Coverage Part C of the Policy regarding Medical Payments coverage. As
EMC’s third argument, whether the accident constituted an “occurrence” under the Policy, is
dispositive in this matter, EMC’s remaining arguments need not be addressed.
EMC has two distinct obligations to its insured—(l) a duty to indemnify its insured for
covered claims and (2) a duty to furnish a legal defense to certain claims. Mimmit v. Allstate
County Mut. Ins. Co., 928 So. 2d 203, 207 (Miss. Ct. App. 2006). Furthermore, “the burden of
proving coverage rests with the insured.” Architex Ass’n, Inc. v. Scottsdale Ins. Co., 27 So. 3d
1148, 1157 (Miss. 2010). EMC argues that the Policy does not provide coverage for either
“Mississippi3 has adopted the ‘allegations of the complaint’ rule (sometimes referred to
as the eight-corners test) to determine whether an insurer has a duty to defend,” pursuant to
which the court reviews the allegations in the underlying complaint to see whether it states a
claim that is within or arguably within the scope of the coverage provided by the insurance
policy. Ingalls Shipbuilding v. Federal Ins. Co., 410 F.3d 214, 225 (5th Cir. 2005). In so doing,
the court compares the words of the complaint with the words of the policy, looking “not to the
particular legal theories” pursued by the plaintiffs, “but to the allegedly tortious conduct
underlying” the suit. Id. (citations omitted). See also United States Fidelity & Guarn. Co. v.
Omnibank, 812 So. 2d 196, 200 (Miss. 2002). “If the complaint states a claim that is within or
arguably within the scope of coverage provided by the policy, then the insurer has a duty to
defend.” QBE Ins. Corp. v. Brown & Mitchell, Inc., 591 F.3d 439, 443 (5th Cir. 2009) (applying
Mississippi law) (quotation omitted).
The duty to indemnify, however, arises only if the facts actually established in the
underlying suit amount to a covered claim. Estate of Bradley ex rel. Sample v. Royal Surplus
Lines Ins., 647 F.3d 524, 531 (5th Cir. 2011) (applying Mississippi law). An insurer may have a
duty to defend but, eventually, no duty to indemnify. Moeller v. American Guar. and Liability
Ins. Co., 707 So. 2d 1062, 1069 (Miss. 1996). In contrast, “if there is no duty to defend, there can
be no duty to indemnify.” Evanston Ins. Co. v. Neshoba Cnty. Fair Ass’n, Inc., 442 F. Supp. 2d
344, 345 n.1 (S.D. Miss. 2006).
The Declaratory Judgment Act does not extend the subject matter jurisdiction of the court beyond the limits
delineated in Article III of the United States Constitution. Skelly Oil Company v. Phillips Petroleum Company, 339
U.S. 667, 671, 70 S. Ct. 876, 94 L. Ed. 1194 (1950); see also Okpalobi v. Foster, 244 F.3d 405, 434 (5th Cir. 2001)
(en banc) (“[T]he Declaratory Judgment Act does not itself grant federal jurisdiction”). Therefore, as this Court’s
jurisdiction is based on diversity under 28 U.S.C. § 1332, Mississippi Law will be applied.
In the case at bar, the terms of the EMC Policy require coverage for sums that the insured
“becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to
which this insurance applies.” The Policy states that the insurance applies to “bodily injury” and
“property damage” only if the bodily injury or property damage is caused by an “occurrence.”
“Occurrence” is defined as “an accident, including continuous or repeated exposure to
substantially the same general harmful conditions.”
The “Mississippi Supreme Court has found that the use of the term ‘accident’ in a CGL
policy to define ‘occurrence’ is ‘sufficiently unambiguous for [the court] to hold that the term
accident refers to [the insured’s action] and not whatever unintended damages flowed from that
act.’” W.R. Berkley Corp. v. Rea’s Country Lane Const., Inc., 140 So. 3d 437, 443 (Miss. Ct.
App. 2013); quoting Allstate Ins. v. Moulton, 464 So. 2d 507, 510 (Miss. 1985). The Court has
further held that “an accident by its very nature produces unexpected and unintended results. It
follows that bodily injury or property damage, expected or intended from the standpoint of the
insured, cannot be the result of an accident. Omnibank, 812 So. 2d at 200. In further elaboration,
the Mississippi Supreme Court has held that there is coverage unless the “chain of events leading
to the injuries complained of were set in motion and followed a course consciously devised and
controlled by [the insured] without the unexpected intervention of any third person or extrinsic
force.” Architex Ass’n, Inc., 27 So. 3d at 1153–54 (emphasis omitted) (quoting OmniBank, 812
So. 2d at 200 (Miss. 2002).
EMC argues that because Littrell is alleged to have performed certain activities
consciously and deliberately, his actions do not constitute an accident or occurrence. Further,
EMC argues that the likely (and actual) result of these actions, being the failure and collapse of
the deck, was well within Littrell’s foresight and anticipation. Therefore, according to EMC, the
deck collapse was or should have been expected to occur, negating coverage. See Architex Ass’n,
Inc., 27 So. 3d at 1150 (“[o]nly when ‘property damage’ is proximately caused by an accident
(an inadvertent act) does an ‘occurrence,’ as defined by the policy, trigger coverage”).
Conversely, DLA heavily relies on EMJ Corp. v. Hudson Specialty Ins. Co., 833 F.3d
544 (5th Cir. 2016) for the proposition that an intentional act taken without the intention of
causing the complained of injury may be found as an occurrence. That case involved a general
contractor, EMJ Corporation, who accepted the completed work of their subcontractor, Contract
Steel. The insurers filed suit in district court seeking declaratory relief after an inspector fell from
a faultily-installed ladder. In the underlying state suit at bar, the state court judge ruled that under
Mississippi law, once a contractor accepts the work of a subcontractor, liability for injuries
related to the work accepted shifts to the party accepting the work. Therefore, the only remaining
defendant in the underlying suit was EMJ, the general contractor. Accordingly, the pertinent
underlying act was the general contractor’s acceptance of the subcontractor’s work. The district
court, and later the Fifth Circuit, held that EMJ did not intentionally devise or control a course of
action leading to the damages incurred by merely accepting work negligently performed by a
The EMJ case and the case at bar are not analogous. This declaratory action concerns
coverage for the subcontractor’s alleged negligence and his purported intentional acts,
specifically. Therefore, the actions of Littrell, as the subcontractor, remain pivotal to Court’s
inquiry—unlike EMJ, where the Court examined the general contractor’s actions and coverage
under the general contractor’s policy.
In his deposition, Jason Littrell testified that the method he used to fasten the deck, using
nails secured into oriented strand board, would not be an appropriate method of fastening a deck
used for live loads. Furthermore, he testified that he knew people would use the decks.
Therefore, given Littrell’s contemporaneous knowledge of his failure, it cannot be said that his
actions constitute an accident. “While the notion of a ‘failure’ or ‘omission’ intuitively may seem
less intentional than an overtly affirmative act, logic does not bear this out.” Acceptance Ins. Co.
v. Powe Timber Co., 403 F. Supp. 2d 552, 556 (S.D. Miss. 2005), aff’d, 219 F. App’x 349 (5th
For these reasons, the Court concludes that the claims in the underlying lawsuits do not
involve injury caused by an “occurrence” and hence do not create the potential for insurance
coverage under the subject policies. The Court finds EMC’s arguments that the West and Carley
Complaints do not claim “bodily injury” or “property damage” caused by an “occurrence” as that
term is defined in the Policy to be well taken. Accordingly, based on the allegations in the
underlying actions, there is no duty to defend or indemnify under the policies for these claims.
Finally, DLA’s indemnity claims are derivative of the underlying West complaint. Similarly,
such claims do not involve damages caused by injury or damage caused by an “occurrence” as
that term is defined in EMC’s Policy.
As there are no remaining questions of material fact, EMC’s Motions for Summary
Judgment are GRANTED. Neither the West and Carley Complaints nor the DLA CrossComplaint claim injury or damage caused by an “occurrence” as that term is defined in the
Policy. Accordingly, there is no duty to defend or indemnify under the policies for these claims.
As all other claims in this matter have been disposed, this case is CLOSED.
SO ORDERED this the 21st day of June, 2017.
/s/ Sharion Aycock
UNITED STATES DISTRICT JUDGE
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