Ochello v. Liberty Mutual Fire Insurance Company
Filing
65
ORDER granting Defendant's 55 Sealed Motion for Summary Judgment and 63 Supplemental Motion for Summary Judgment. Plaintiff's complaint is dismissed with prejudice. A separate Judgment shall be entered. Signed by District Judge Keith Starrett on May 6, 2011 (dsl)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
HATTIESBURG DIVISION
LOUIS J. OCEHLLO
PLAINTIFF
VERSUS
CIVIL ACTION NO. 2:10cv171KS-MTP
LIBERTY MUTUAL FIRE INSURANCE COMPANY
DEFENDANT
MEMORANDUM OPINION AND ORDER
This matter is before the court on a Motion for Summary Judgment [#55] and a
Supplemental Motion for Summary Judgment [#63] filed on behalf of the defendant,
Liberty Mutual Fire Insurance Company (“Liberty”). The court, having reviewed the
motion, the response, the briefs of counsel, the pleadings and exhibits on file and being
advised in the premises, finds that the motion for summary judgment is well taken and
should be granted. The court specifically finds as follows:
BACKGROUND
This is a lawsuit for uninsured,/underinsured motorist benefits under an
automobile insurance policy, No. A02-251-107898-f0 ("the Policy"), issued to Plaintiff
Ochello by Liberty. Ochello’s claim for uninsured/underinsured motorist benefits arises
from two automobile accidents which occurred on September 23, 2005, and April 18,
2006. Both accidents involved vehicles under the subject Policy issued to Ochello.
Ochello seeks unspecified compensatory and punitive damages by asserting claims of
breach of contract and bad faith.
Specifically, Liberty received a report of the September 23, 2005 accident on
September 27, 2005. The State of Mississippi Uniform Crash Report (UCR) completed
by the Hattiesburg Police Department states that a contributing circumstance was an
improper lane change by Ms. Sharon Coleman, the driver of the other vehicle involved
in the accident. The UCR noted that there was “no“apparent improper driving” with
regard to Ochello. The officer completing the UCR noted therein that there was “no
proof of insurance” for Ms. Coleman. Liberty's adjuster interviewed Ochello on or
around September 27, 2005, and Ochello told the adjuster the other driver had no
insurance. On December 2, 2005, counsel for Ochello informed Liberty that Ochello
had been “seriously injured in an automobile collision with an uninsured driver.”
The Mississippi Highway Patrol worked the April 18, 2006 accident. The State
Trooper noted that there was “no apparent improper driving” by Ochello but cited
Joshua Raines, the other driver for “improper passing/overtaking.” The UCR noted that
Raines was insured by Farm Bureau and provided the policy number.
Shortly thereafter, Ochello obtained counsel to represent him with regard to this
accident as well. Ochello’s counsel contacted Raines on May 23, 2006, requesting
information regarding his insurance. On June 16, 2006, Ochello’s counsel wrote Trevor
Hightower, Claims Representative for Mississippi Farm Bureau regarding the claim
against Farm Bureau's insured, Raines. Counsel advised Hightower that Ochello had
ruptured a disc and that Raines was at fault. Ochello’s counsel concluded by stating,
"Please advise me if your client has coverage limits under $100,000 so I can notify Mr.
Ochello's underinsured carrier. " This letter was sent two days after Ochello’s doctor
advised that, "[Mr. Ochello] may need a two level ACDF.” ACDF is an abbreviation for
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anterior cervical discectomy and fusion.
On June 21, 2006, Farm Bureau responded by requesting copies of Ochello's
medical records and stating, "After receiving these bills, if it appears that our limits are
insufficient, I will promptly inform you of those limits. I realize the importance of notifying
your client’s carrier in the case of an underinsured claim." After four months passed
and Ochello’s counsel still had not sent them, Farm Bureau, on October 20, 2006, sent
a letter to his counsel asking for, among other things, “an update on his injuries.”
Ochello’s counsel finally sent the requested records on June 22, 2007.
Prior to sending the demand to Farm Bureau. medical records, Ochello made
demand on Farm Bureau for $178,424.82, which began negotiations between Plaintiff
and Farm Bureau. Subsequently, Farm Bureau tendered policy limits of $25,000 for
injuries allegedly sustained by Ochello as a result of the 2006 accident. On February
19, 2008, without prior notification to or consent from Liberty, Ochello executed a Final
Release and Settlement of Claim of the tortfeasors in exchange for the policy limits of
$25,000. Only after Ochello had executed the release did his counsel advise Liberty of
a potential settlement with Farm Bureau. However, counsel's letter is misleading
because it asks Liberty to "Please advise as to your position thereon and if we can
accept the same releasing the insured." However, the release was signed on February
19, 2008, well over three months prior to the letter from Ochello’s counsel.
Ochello originally filed his Complaint in this matter on April 17, 2009 in the Circuit
Court of Lamar County, Mississippi. However, due to his failure to timely serve process,
the 2009 Complaint was dismissed without prejudice. Ochello filed suit again on May
17, 2010, in the Lamar County Circuit Court. Liberty removed the action to this court on
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July 9, 2010. The parties have participated in discovery and Liberty has filed the
present motion seeking summary judgment.
STANDARD OF REVIEW
The Federal Rules of Civil Procedure, Rule 56(c) authorizes summary judgment
where "the pleadings, the discovery and disclosure materials on file, and any affidavits,
show that there is no genuine issue as to any material fact and that the movant is
entitled to judgment as a matter of law." FRCP 56(c); and see Celotex Corporation v.
Catrett, 477 U.S. 317, 322, 91 L.Ed.2d 265, 106 S.Ct. 2548 (1986). The existence of a
material question of fact is itself a question of law that the district court is bound to
consider before granting summary judgment. John v. State of La. (Bd. of T. for State C.
& U.), 757 F.2d 698, 712 (5th Cir. 1985).
A Judge's function at the summary judgment stage is not himself to weigh the
evidence and determine the truth of the matter, but to determine whether there is a
genuine issue for trial. There is no issue for trial unless there is sufficient evidence
favoring the non-moving party for a jury to return a verdict for that party. If the evidence
is merely colorable, or is not significantly probative, summary judgment is appropriate.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 91 L.Ed.2d 202, 106 S.Ct. 2505 (1986).
Although Rule 56 is peculiarly adapted to the disposition of legal questions, it is
not limited to that role. Professional Managers, Inc. v. Fawer, Brian, Hardy & Zatzkis,
799 F.2d 218, 222 (5th Cir. 1986). "The mere existence of a disputed factual issue,
therefore, does not foreclose summary judgment. The dispute must be genuine, and
the facts must be material." Id. "With regard to 'materiality', only those disputes over
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facts that might affect the outcome of the lawsuit under the governing substantive law
will preclude summary judgment." Phillips Oil Company v. OKC Corporation, 812 F.2d
265, 272 (5th Cir. 1987). Where "the summary judgment evidence establishes that one
of the essential elements of the plaintiff's cause of action does not exist as a matter of
law, . . . all other contested issues of fact are rendered immaterial. See Celotex, 477
U.S. at 323, 106 S.Ct at 2552." Topalian v. Ehrman, 954 F.2d 1125, 1138 (5th Cir.
1992). In making its determinations of fact on a motion for summary judgment, the
Court must view the evidence submitted by the parties in a light most favorable to the
non-moving party. McPherson v. Rankin, 736 F.2d 175, 178 (5th Cir. 1984).
The moving party has the duty to demonstrate the lack of a genuine issue of
material fact and the appropriateness of judgment as a matter of law to prevail on his
motion. Union Planters Nat. Leasing v. Woods, 687 F.2d 117 (5th Cir. 1982). The
movant accomplishes this by informing the court of the basis of its motion, and by
identifying portions of the record which highlight the absence of genuine factual issues.
Topalian, 954 F.2d at 1131.
"Rule 56 contemplates a shifting burden: the nonmovant is under no obligation
to respond unless the movant discharges [its] initial burden of demonstrating
[entitlement to summary judgment]." John, 757 F.2d at 708. "Summary judgment
cannot be supported solely on the ground that [plaintiff] failed to respond to defendants'
motion for summary judgment," even in light of a Local Rule of the court mandating
such for failure to respond to an opposed motion. Id. at 709.
However, once a properly supported motion for summary judgment is presented,
the nonmoving party must rebut with "significant probative" evidence. Ferguson v.
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National Broadcasting Co., Inc., 584 F.2d 111, 114 (5th Cir. 1978). In other words, "the
nonmoving litigant is required to bring forward 'significant probative evidence'
demonstrating the existence of a triable issue of fact." In Re Municipal Bond Reporting
Antitrust Lit. , 672 F.2d 436, 440 (5th Cir. 1982). To defend against a proper summary
judgment motion, one may not rely on mere denial of material facts nor on unsworn
allegations in the pleadings or arguments and assertions in briefs or legal memoranda.
The nonmoving party's response, by affidavit or otherwise, must set forth specific facts
showing that there is a genuine issue for trial. Rule 56(e), Fed.R.Civ.P. See also,
Union Planters Nat. Leasing v. Woods, 687 F.2d at 119.
While generally "’[t]he burden to discover a genuine issue of fact is not on [the]
court,’ (Topalian 954 F.2d at 1137), ‘Rule 56 does not distinguish between documents
merely filed and those singled out by counsel for special attention-the court must
consider both before granting a summary judgment.’" John, 757 F.2d at 712 (quoting
Keiser v. Coliseum Properties, Inc., 614 F.2d 406, 410 (5th Cir. 1980)).
In Mississippi, “a cause of action against an insurer for uninsured motorist
benefits is an action sounding in contract.” See Fid. & Guar. Ins. Underwriters, Inc, v,
Sullivan, 2005 U.S. Dist. LEXIS 2527, at *6 (N. D. Miss. Jan. 17, 2006). A three year
statute of limitations applies to actions for breach of written contract. See id; see also
Madison v, Geico General Ins. Co., No. 2009 CA-01723-COA, 2010 Miss. App. LEXIS
663 at *4 (Miss. Ct. App. Dec. 14, 2010); Mitchell v. Progressive Ins. Co., 965 So.2d
579, 583 (Miss. 2007). In the context o f uninsured/underinsured motorist coverage,
"the statute of limitations accrues and begins running when the insured claimant knew
or reasonably should have known that the alleged tortfeasor was an uninsured
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motorist." Sullivan, 2005 U.S. Dist. LEXIS 2527, at *6. Further, the Mississippi
Supreme Court has held that the statute of limitations for an underinsured motorist claim
“begins to run when it can be reasonably known that the damages suffered exceed the
limits of insurance available to the alleged tortfeasor." See Madison, 2010 Miss. App.
LEXIS 663, at * 5, (citing Jackson v. State Farm Mut. Auto. Ins. Co., 880 So.2d 336, 343
(Miss. 2004)); see also Bolden v. Brooks, 138 Fed. Appx. 601, 604 (5th Cir. 2005).
ANALYSIS
With respect to the September 23, 2005 accident, it is undisputed that Ochello
was aware of the fact that the other driver was uninsured shortly following the accident.
Ochello acknowledged as mush in a recorded interview with a Liberty adjuster just days
after the accident and then his counsel indicated the same in a letter to Liberty some
three months later, on December 2, 2005. Thus, Ochello’s cause of action likely
accrued on September 23 or 27, 2005 but certainly by his counsel’s December 2, 2005
letter. His first suit was filed on April 17, 2009, months beyond the expiration of the
three year period of limitations. Hence, Ochello’s claims relating to the 2005 accident
are barred, unless tolled as hereinafter discussed.
With regard to Ochello’s April 18, 2006 accident, once again suit was originally
filed on April 17, 2009, but was dismissed for failure to serve process. Under
Mississippi law, the filing of suit tolls the statute of limitations for 120 days. See Owens
v. Mai, 891 So.2d. 220, 223 (Miss. 2005). The statute of limitations will begin to run
after 120 days if the defendant has not been served with process. See id. However,
approximately nine months expired between the expiration of I20 days and the filng of
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the second complaint on May 17, 2010. Based on these calculations, if Ochello knew or
reasonably should have known on or before January 16, 2007, that his alleged
damages exceeded the $25,000 limit under the Farm Bureau policy, Ochello’s claim
relating to the April 18, 2006 accident would also be time-barred.
The court finds that Ochello unquestionably knew or reasonably should have
known that he had an underinsured motorist claim against Liberty months prior to
January 16, 2007. Ochello’s counsel contacted Farm Bureau's insured barely one
month after the accident, on May 23, 2006. Additionally, counsel's letter to Farm
Bureau dated June 16, 2006, acknowledged the potential underinsured motorist claim
against Liberty. That letter clearly indicates that he knew, as of June 16, 2006, that any
coverage less than $100,000 could result in an underinsured motorist claim.
Further, although Ochello did not make a formal demand against Farm Bureau
in excess of the Farm Bureau policy limits until nearly one year later, on June 13, 2007,
the medical records he submitted to Farm Bureau were almost entirely (except for two
pages) dated prior to January 16, 2007. Thus, the plaintiff reasonably should have
known long prior to January 16, 2007 that he had a possible underinsured motorist
claim against Liberty arising out the 2006 accident. Thus, once again, unless the
limitations period was tolled, this claim is also time-barred.
Ochello claims that, indeed, the limitation periods related to his claims, if not
tolled, were certainly extended by actions of Liberty, or in his specific words,
“reopened.” Ochello argues that this “reopening” of the limitations period occurred
when Liberty sent a letter to Ochello, probably in late 2009, and another letter to
Ochello’s counsel on January 18, 2010. These letters stated that Ochello may have
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been entitled to additional payments under its “New Vehicle Replacement Coverage”
provision of the subject policy. Each of the letters invited Ochello to make a claim under
the Collision provisions of the policy.
The New Vehicle endorsement was part of Ochello’s Collision Coverage and
applied if certain conditions were met regarding the price paid for the destroyed vehicle
and the replacement cost of the new vehicle. Ochello had acquired the New Vehicle
Endorsement coverage for his 2005 Volkswagen Passet. Following the 2005 accident,
Ochello purchased a 2006 Nissan Maxima. Only after Ochello replaced the 2005
Volkswagen Passet with the 2006 Nissan Maxima was the New Vehicle Endorsement
triggered because of the difference in prices of the two vehicles.
Upon purchase of his Nissan Maxima, Ochello could have supplemented his
claim for property damage to trigger this coverage. He did not, but because of a later
audit conducted by Liberty, it recognized that coverage may have been triggered by the
addition of the Maxima to his Policy. Thereafter, Liberty contacted Ochello about the
coverage. On February 22, 2010, Ochello’s counsel did make a formal claim on behalf
of Ochello for this replacement cost coverage. On May 14, 2010, Liberty made an
additional payment to Ochello in the amount of $5,840.19. Thus, Ochello contends that
Liberty, “[b]y offering the Plaintiff the opportunity for additional payments under this
policy, and by making said payment, Liberty Mutual either extended or reopened the
statute of limitations on Plaintiff’s claim.” As an aside, the court notes that the 2006
accident involved another vehicle and thus has no relation to the payment made under
this coverage.
In support of his contention, Ochello relies upon a single case which Liberty
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contends is inapposite, Parchman v. Amwood Products, Inc., 988 So. 2d 346 (Miss.
2008). Parchman involved the timeliness of a petition to controvert a workers’
compensation claim. See id. at 348. The court held that the plaintiff’s petition to
controvert was not time-barred because the employer’s continued payment of the
plaintiff’s salary “constituted payments made in lieu of workers’ compensation benefits,
and that these payments, in the place of workers’ compensation benefits, tolled the
two-year statute of limitations.” See id. at 351. The Mississippi Supreme Court carved
out a narrow exception limited to the workers’ compensation context. It appears that the
rationale for the tolling is that a worker had nothing to controvert since he was receiving
workers’ compensation indemnity payments. This case has no application under the
facts of this case.
The law in this case is straightforward. The statute of limitations for uninsured
claims accrues and begins running when the insured claimant knew or reasonably
should have known that the alleged tortfeasor was an uninsured motorist. The statute
of limitations for an underinsured motorist claim begins to run when it can be reasonably
known that the damages suffered exceed the limits of insurance available to the alleged
tortfeasor Ochello, and his counsel, knew, or reasonably should have known, when
each of these events occurred relative to the two accidents. Thus,
uninsured/underinsured claims arising out of either the 2005 or the 2006 accident are
time-barred and the limitations period for neither was extended, tolled or “reopened” by
the subsequent payment by Liberty in 2010.
IT IS THEREFORE ORDERED AND ADJUDGED that the Motion for Summary
Judgment [#55] and the Supplemental Motion for Summary Judgment [#63] filed on
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behalf of the defendant, Liberty Mutual Fire Insurance Company are granted and the
plaintiff’s Complaint is dismissed with prejudice. A separate judgment shall be entered
herein in accordance with Rule 58, Federal Rules of Civil Procedure.
SO ORDERED AND ADJUDGED this the 6th day of May, 2011.
s/Keith Starrett
UNITED STATES DISTRICT JUDGE
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