Nationwide Mutual Insurance Company v. Evanston Insurance Company et al

Filing 104

MEMORANDUM OPINION AND ORDER Granting Markel Corporation's 63 Motion for Summary Judgment. Signed by District Judge Halil S. Ozerden on October 31, 2014. (NM)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
NORTHERN DIVISION
NATIONWIDE MUTUAL
INSURANCE COMPANY
v.
EVANSTON INSURANCE
COMPANY, MARKEL
CORPORATION, ABC
INDIVIDUALS, and XYZ ENTITIES

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PLAINTIFF
CIVIL NO. 3:13cv196-HSO-RHW
DEFENDANTS

MEMORANDUM OPINION AND ORDER GRANTING MARKEL
CORPORATION’S MOTION FOR SUMMARY JUDGMENT
BEFORE THE COURT is Defendant Markel Corporation’s Motion for
Summary Judgment [63]. Plaintiff Nationwide Mutual Insurance Company has
filed a Response [84], and Markel Corporation has filed a Rebuttal [96]. Having
considered the parties’ submissions, the record, and relevant legal authorities, the
Court is of the opinion that Markel Corporation’s Motion for Summary Judgment
[63] should be granted and Nationwide Mutual Insurance Company’s claims against
Markel Corporation should be dismissed with prejudice.
I. BACKGROUND
The Court has more fully set out the factual and procedural history of this
case in its previous Memorandum Opinion and Order [103] addressing the motions
for summary judgment filed by Defendant/Counterclaim Plaintiff Evanston
Insurance Company (“Evanston”) and Plaintiff/Counterclaim Defendant Nationwide
Mutual Insurance Company (“Nationwide”). A brief summary of that background

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will aid in resolving the Motion [63] filed by Defendant Markel Corporation
(“Markel”).
Evanston insured The Pines Apartments located in Jackson, Mississippi (“the
Pines”) pursuant to policy number CMP1004830 for the policy year running from
September 21, 2010, through September 21, 2011 (“Evanston Policy”). Evanston
Policy [67-2, 2 of 68]. Nationwide insured B&B Management Group, LLC (“B&B”),
the company which managed the Pines, during the policy year from June 12, 2010,
through June 12, 2011, pursuant to policy number ACP GLO 5604405554
(“Nationwide Policy”). The Nationwide Policy included an Additional Insured
Endorsement [70-3, 29 of 72] naming the Pines as an additional insured.
On May 27, 2011, Jane Doe (the “Underlying Plaintiff”) sued B&B and the
Pines in the Circuit Court of Hinds County, Mississippi (the “Underlying
Litigation”). The Underlying Plaintiff advanced negligence and premises liability
claims stemming from injuries she suffered while a tenant at the Pines. Compl. 3-4
[73-11] (“the Underlying Complaint”). According to Vicki Abel, a senior claims
manager employed by Markel and assigned to investigate the Underlying Litigation
for Evanston, Nationwide took the position that Evanston owed primary coverage to
both the Pines and B&B, but Evanston later concluded that it owed primary
coverage only to B&B while Nationwide owed primary coverage to the Pines. Aff. of
Vicki Abel ¶ 9, 18 [66-7]. At a mediation conducted on March 28, 2013, Evanston
and Nationwide settled the Underlying Litigation. In doing so, the two insurers

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each paid $525,000.00 for a total of $1,050,000.00 subject to a Non-Waiver
Agreement [70-7]. Mediation Settlement Agreement 1 [66-19].
Nationwide subsequently sued Evanston and Markel. The operative pleading
in this case is the First Amended Complaint, filed on April 29, 2013. First Am.
Compl. 1 [11]. Nationwide alleges that it did not owe a duty to defend or indemnify
the Pines or B&B under the circumstances alleged in the Underlying Litigation. Id.
at ¶¶ 17-20. Nationwide claims that it was forced against its will to provide
indemnity to protect B&B. Id. at ¶¶ 6-11, 37-38. Nationwide requests a declaration
that the Evanston Policy afforded primary coverage to both the Pines and B&B in
the Underlying Litigation. Id. at ¶¶ 25-35. Nationwide advances a claim for
“wrongful breach” of the Evanston Policy stemming from the coverage Nationwide
claims “Evanston and Markel” owed to B&B. Id. at ¶¶ 37-41. Nationwide also
seeks indemnity and/or contribution from Evanston and Markel related to the
$525,000.00 payment Nationwide made to settle the Underlying Lawsuit. Id. at ¶¶
43-47.
Markel now moves for summary judgment arguing that it is undisputed there
was no contract between Markel and either B&B or the Pines such that Markel
cannot be liable to Nationwide for wrongful breach of contract.1 Nationwide
responds that Evanston and Markel breached “their duty” as B&B’s primary
insurer by insisting that Nationwide contribute to the settlement of the Underlying
In its Memorandum Opinion and Order [103] addressing Evanston and Nationwide’s crossmotions for summary judgment, the Court concluded that Nationwide’s request for a declaratory
judgment and Nationwide’s “indemnity and/or contribution” claim fail as a matter of law. That
conclusion applies with equal force to Nationwide’s claims against Markel such that the Court need
not address those claims here.
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Litigation without first exhausting “Evanston/Markel[’s] . . . limits . . . .” Mem. in
Supp. of Resp. in Opp’n to Markel’s Mot. for Summ. J. 17-18 [85]. Nationwide also
contends that Markel, as an agent or adjuster, can be independently liable to
Nationwide if Markel’s conduct “constitutes gross negligence, malice, or reckless
disregard for the rights of the insured.” Id. at 20-22.
II. DISCUSSION
A.

Legal Standard
Summary judgment is appropriate “if the movant shows that there is no

genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(a). To rebut a properly supported motion for
summary judgment, the opposing party must show, with “significant probative
evidence,” that there exists a genuine issue of material fact. Hamilton v. Segue
Software, Inc., 232 F.3d 473, 477 (5th Cir. 2000). “‘If the evidence is merely
colorable, or is not significantly probative,’ summary judgment is appropriate.”
Cutting Underwater Technologies USA, Inc. v. Eni U.S. Operating Co., 671 F.3d
512, 517 (5th Cir. 2012) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986)).
“There is no material fact issue unless the evidence is such that a reasonable
jury could return a verdict for the nonmoving party.” RSR Corp. v. Int’l Ins. Co.,
612 F.3d 851, 858 (5th Cir. 2010). “A fact is ‘material’ if its resolution in favor of
one party might affect the outcome of the lawsuit under governing law[, and an]
issue is ‘genuine’ if the evidence is sufficient for a reasonable jury to return a verdict

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for the nonmoving party.” Hamilton, 232 F.3d at 477 (citing Anderson, 477 U.S. at
248). “[M]ere conclusory allegations are not competent summary judgment
evidence, and such allegations are insufficient, therefore, to defeat a motion for
summary judgment.” Eason v. Thaler, 73 F.3d 1322, 1325 (5th Cir. 1996). “[T]he
party opposing summary judgment is required to identify specific evidence in the
record and to articulate precisely how this evidence supports his claim.” RSR Corp.,
612 F.3d at 858.
B.

Analysis
To the extent that Nationwide asserts a claim for wrongful breach of contract

against Markel, Nationwide’s claim cannot survive summary judgment. Under
Mississippi law, an essential element of any breach of contract claim is the
“existence of a valid and binding contract . . . .” Bus. Commc’ns, Inc. v. Banks, 90
So. 3d 1221, 1224 (Miss. 2012) (citation omitted). It is undisputed that Markel did
not have a contract with either B&B, the Pines, or Nationwide. See Nationwide’s
Resp. to Evanston Interrog. No. 2 (“Nationwide does not contend that Markel . . .
issued any contract of insurance at issue in this litigation.”) [65-1]. The record
evidence reflects that Markel was simply acting as an agent for Evanston, and this
fact was disclosed on multiple occasions. See, e.g., Aff. of Vicki Abel ¶¶ 3-4 (Markel .
. . provides claim services to various insurance companies, including Evanston . . .
.”) [66-7]; Abel Correspondence to Suedkamp dated March 26, 2013 (“Markel . . . as
claims service manager for Evanston . . . has received the attached demand from a
principal of [t]he Pines . . . .”) [86-6]; Non-Waiver Agreement 2 (Markel executed as

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Evanston’s “Agent with Authority”) [70-7]. There being no contract between Markel
and B&B, the Pines, or Nationwide, Nationwide cannot maintain a claim for breach
of contract against Markel stemming from the rights of B&B.
Nationwide appears to posit that even if Markel is considered to be an agent
of a disclosed principal, Markel may still be liable if Markel acted with gross
negligence, malice, or reckless disregard for the rights of the insured, but this
theory is not enough to avoid summary judgment based upon the record in this case.
“[I]n Mississippi, an agent for a disclosed principal is not liable for the torts of the
principal.” Estate of Gibson ex rel. Gibson v. Magnolia Healthcare, Inc., 91 So. 3d
616, 624 (Miss. 2012) (internal marks and citation omitted). “[A]gents for a
disclosed principal . . . incur no individual liability[] absent fraud or other
equivalent conduct.” Gray v. Edgewater Landing, Inc., 541 So. 2d 1044, 1047 (Miss.
1989) (citation omitted). In the context of this case, an insurance adjuster “can only
incur independent liability when [its] conduct constitutes gross negligence, malice,
or reckless disregard for the rights of the insured.” Bass v. California Life Ins. Co.,
581 So. 2d 1087, 1090 (Miss. 1991) (citations omitted). The record does not support
a finding that Markel’s conduct rises to the level of creating independent liability.
It also cannot be disputed that Nationwide was not “the insured” with respect to the
claims services performed by Markel. Nationwide offers no evidence that it received
an assignment of rights from B&B such that Nationwide could be considered as
stepping into the shoes of “the insured” for the purposes of supporting this type of
claim against Markel.

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Aside from this problem, Nationwide relies upon conclusory allegations in the
First Amended Complaint rather than record evidence to support this theory of
liability against Markel. Mere allegations will not preclude summary judgment.
Williams v. CSX Transp., Inc., 925 F. Supp. 447, 449 (S.D. Miss. 1996) aff’d, 139
F.3d 899 (5th Cir. 1998) (“Barebones allegations are insufficient to withstand
summary judgment . . . .”). Nationwide has not produced sufficient evidence to
create a question of fact as to Markel’s liability to Nationwide or any other party on
the basis that Markel acted with gross negligence, malice, or reckless disregard.
Markel is entitled to judgment as a matter of law.
III. CONCLUSION
For the foregoing reasons, the Court concludes that Markel is entitled to
judgment as a matter of law as to Nationwide’s claims.
IT IS, THEREFORE, ORDERED AND ADJUDGED that Defendant
Markel Corporation’s Motion for Summary Judgment [63] is GRANTED and
Plaintiff Nationwide Mutual Insurance Company’s Claims against Markel are
DISMISSED WITH PREJUDICE.
SO ORDERED AND ADJUDGED, this the 31st day of October, 2014.

s/ Halil Suleyman Ozerden
HALIL SULEYMAN OZERDEN
UNITED STATES DISTRICT JUDGE

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