Edward Lafferty v. Nicholas T. Vaughn, Tyler A. Veazey, State Farm Mutual Automobile Insurance Company And Mississippi Farm Bureau Casualty Insurance Company ( 2021 )

STATE OF LOUISIANA
COURT OF APPEAL
FIRST CIRCUIT
No. 2021 CA 0084
101-11 11811XW. y 1DtA 611
VERSUS
NICHOLAS T. VAUGHN, TYLER A. VEAZEY, STATE FARM MUTUAL
AUTOMOBILE INSURANCE COMPANY AND MISSISSIPPI FARM
BUREAU CASUALTY INSURANCE COMPANY
Judgment Rendered.
M(, 2 0 2021
Appealed from the 22nd Judicial District Court
In and for the Parish of Washington
State of Louisiana
Case No. 111598
The Honorable William J. Knight, Judge Presiding
G. Brice Jones Counsel for Plaintiff/Appellant
Paul D. Hesse Edward Lafferty
L. Jason Cuccia
Slidell, Louisiana
Dan Richard Dorsey Counsel for Defendant/ Appellee
Patricia P. Barattini Mississippi Farm Bureau Casualty
Covington, Louisiana Insurance Company
BEFORE: GUIDRY, McCLENDON, AND LANIER, JJ. , r
S 5
P) c L c,1C,, {' ,
LANIER, J.
This matter is before us on appeal by plaintiff, Edward Lafferty, from the
district court's summary judgment, dismissing his claims against defendant,
Mississippi Farm Bureau Casualty Insurance Company (" Mississippi Farm
Bureau"), with prejudice. For the reasons that follow, we affirm.
FACTS AND PROCEDURAL BACKGROUND
This case arises out of vehicular collision that occurred on January 20, 2017,
in Pearl River County, Mississippi, when Mr. Lafferty was operating a vehicle,
owned by The Estate of Edward T. Lafferty Revocable Trust, westbound on
Highway 26. At the same time, Nicholas T. Vaughn was operating a vehicle,
owned by Edward Friedlander] and insured by State Farm Mutual Automobile
Insurance Company (" State Farm"), south on the exit off r-amp of I-59, preparing to
turn west onto Highway 26. Mr. Vaughn failed to yield the right of way to Mr.
Lafferty and struck the Lafferty vehicle in the right passenger door.
According to the record, Mr. Lafferty' s counsel advised Mississippi Farm
Bureau, Mr. Lafferty' s underinsured/ uninsured (" UM") insurer, that he represented
Mr. Lafferty in connection with a possible UM claim resulting from the accident.
In response thereto, counsel for Mississippi Farm Bureau informed Mr. Lafferty' s
counsel that if they " settle[ d] with another person or insurer without [ Mississippi
Farm Bureau' s] express written consent, then additional coverage, including
uninsured motorist coverage, may be excluded."
Mr. Lafferty filed suit on January 11, 2018, seeking to recover damages for
his injuries, naming, among others, Mississippi Farm Bureau. On February 2,
2018, Mississippi Farm Bureau was advised of a possible settlement with State
Farm. On February 20, 2018, Mississippi Farm Bureau filed an answer, generally
1 Although the owner of the vehicle Mr. Vaughn was operating is identified in the petition as
Tyler A. Veazey, it is clear from the record that the true owner of the vehicle is Edward
Friedlander.
N
denying Mr. Lafferty' s allegations and asserting that the Mississippi Farm Bureau
policy in question was issued in favor of The Edward T. Lafferty Irrevocable Trust
in Mississippi and that Mississippi law governed all claims concerning the policy.
Thereafter, on February 27, 2018, Mr. Lafferty' s counsel provided
Mississippi Farm Bureau with additional information indicating that Mr. Lafferty
had settled his claim directly the with the State Farm adjustor, but that executed
affidavits of no other insurance were needed before the release and settlement
agreement could be finalized. On March 2, 2018, Mr. Lafferty's counsel provided
a copy of an affidavit of no other insurance executed on March 1, 2018, by Mr.
Friedlander. However, according to the record, Mississippi Farm Bureau had no
notice that a settlement agreement was finalized until after Mr. Lafferty provided
answers to written discovery in January 2019, which prompted counsel for
Mississippi Farm Bureau to inquire with the Washington Parish Clerk of Court' s
office as to whether there had been a dismissal filed. It was at this time that
counsel for Mississippi Farm Bureau learned that a " Motion and Order of Partial
Dismissal" was filed and signed on January 11, 2019, dismissing Mr. Vaughn, Mr.
Veazey, Mr. Friedlander, and State Farm.2 Moreover, according to the record, Mr.
Lafferty executed the release on May 4, 2018, discharging Mr. Vaughn, Mr.
Friedlander and his estate, and State Farm ( hereinafter collectively referred to as
State Farm"), for the policy limits of $100, 000. 00. 3
On July 29, 2019, Mississippi Farm Bureau filed a motion for leave to
amend its answer to assert a defense based on the consent -to -settle exclusion of the
policy. Leave was granted by the district court on July 29, 2019, and Mississippi
2
According to the record, there was an identical prior " Motion and Order of Partial Dismissal"
signed by the district court on June 11, 2018, and filed into the record on June 8, 2018. However,
Mississippi Farm Bureau asserts it only discovered this earlier dismissal on review of the trial
record, which was prompted by the appeal that is now before us.
3 Mississippi Farm Bureau asserts that although Mr. Lafferty had provided it with a copy of the
unexecuted release with its written discovery responses, it has never received a copy of the
executed release from Mr. Lafferty.
3
Farm Bureau filed its supplemental and amended answer. In response thereto, Mr.
Lafferty advised the district court that he opposed the motion for leave and
requested that a hearing be set. The matter proceeded to hearing on September 20,
2019, at which time the district court heard argument from counsel and, adopting
its previous order signed on July 29, 2019, ordered that Mississippi Farm Bureau
be allowed to file its supplemental and amended answer. A judgment was signed
accordingly on October 16, 2019.
In response to Mr. Lafferty's claims, Mississippi Farm Bureau filed a motion
for summary judgment asserting that there was no genuine issue as to any material
fact in dispute and that Mississippi Farm Bureau was entitled to summary
judgment as a matter of law because the policy in question does not provide UM
coverage for Mr. Lafferty' s claims. Mississippi Farm Bureau argued that Mr.
Lafferty failed to comply with the terms of the policy by failing to request or
obtain the express written agreement of Mississippi Farm Bureau prior to settling.
Mr. Lafferty opposed the motion for summary judgment, arguing that there
were genuine issues of material fact remaining that precluded summary judgment
in this case. Although Mr. Lafferty did not dispute that Mississippi law should be
applied to the insurance contract in question, he argued that under Mississippi
jurisprudence, a valid consent -to -settle clause can be waived by the inaction of an
UM insurer. He maintained that Mississippi Farm Bureau' s conduct in this case
constituted an implied waiver of the enforcement of the consent -to -settle clause.
Following a hearing on the motion for summary judgment, the district court
signed a judgment on June 30, 2020, granting summary judgment in favor of
Mississippi Farm Bureau and dismissing, with prejudice, all claims filed by Mr.
Lafferty against Mississippi Farm Bureau. This appeal by Mr. Lafferty followed,
wherein the following specifications of error were assigned for our review:
M
I. The [ district] court did not apply the correct legal standard
under Mississippi jurisprudence as to an uninsured/ underinsured
motorist insurance carrier' s obligations to maintain and enforce a
consent -to -settle clause.
2. The [ district] court abused its discretion in granting a summary
judgment where disputed material facts existed regarding whether
Mississippi Farm Bureau' s acts and omission constituted waiver of its
consent -to -settle clause found within its policy.
3. The [ district] court abused its discretion in permitting
Mississippi Farm Bureau to amend its answer to include new
affirmative insurance policy defense almost 18 months after its
original answer.
AMENDMENT OF ANSWER
Mr. Lafferty argues on appeal that the district court erred in allowing
Mississippi Farm Bureau to amend its answer " considering the lengthy delay filled
with conduct completely inconsistent with the very defense they wished to
supplement their answer with." He further asserts that Mississippi Farm Bureau
failed to comply with the procedural requirements to file an amended answer.
Citing Wallace v. Hanover Ins. Co. of New York, 164 So. 2d 111 ( La. App.
1 Cir. 1964), Mr. Lafferty argues that Mississippi Farm Bureau failed to comply
with the notice requirement of La. Code Civ. P. art. 1155 when it presented an ex
parte motion and order for leave to file its supplemental and amended answer,
rather than service by the sheriff in accordance with La. Code Civ. P. art. 1314.
Mr. Lafferty further asserts that the rule and contradictory hearing were only set
after his counsel filed a motion to set for hearing, noting the objection to the
motion.
After an answer has been filed, the authorization of the filing of an
amending petition or answer is within the discretion of the district judge. La Code
Civ. P. arts. 1151 and 1155; Barringer v. Robertson, 2015- 0698 ( La. App. 1 Cir.
12/ 2/ 15), 216 So. 3d 919, 926, writ denied, 2016- 0010 ( La. 2/ 26/ 16), 187 So. 3d
1004. Thus, a district court's ruling granting an amendment to the pleadings will
5
not be disturbed on appeal unless an abuse of discretion has occurred that indicates
a possibility of resulting injustice. Plant Performance Services, LLC v.
Harrison, 2017- 1286 ( La. App. 1 Cir. 4/ 6/ 18), 249 So. 3d 1, 9. Amendments
should be permitted if: (
1) the movant is acting in good faith; ( 2) the amendment is
not being used as a delaying tactic; ( 3) the opponent will not be unduly prejudiced;
and ( 4) the trial will not be unduly delayed. Id. Good faith is a reasonable belief
that the facts alleged in the proposed amendment are true. Barringer, 216 So. 3d at
926.
Whether Mississippi Farm Bureau's pleading entitled " Supplemental and
Amended Answer" met the requirements of the Code of Civil Procedure hinges on
whether the revision made in the pleading constitutes an " amendment" or
supplement." A supplemental pleading differs from an amended pleading in that
an amended pleading involves matters that occurred before the original complaint
was filed, which were either overlooked by the pleader or were unknown to him at
the time, while a supplemental pleading covers issues or causes of action that have
arisen since the filing of the original petition, which relate to the issues or actions
contained in the original petition. Harris v. Union Nat. Fire Ins. Co., 2014- 1603
La. App. 1 Cir. 6/ 18/ 15), 175 So. 3d 1008, 1012. Under La. Code of Civ. P. art.
1151, "[ a] defendant may amend his answer once without leave of court at any
time within ten days after it has been served. Otherwise, the ... answer may be
amended only by leave of court or by written consent of the adverse party." La.
Code Civ. P. art. 1151. On July 29, 2019, the district court signed an order that
Mississippi Farm Bureau was " allowed to file the First Supplemental and
Amended Answer." Thus, it appears that the requirements of Article 1151 were
satisfied.
However, under La. Code of Civ. P. art. 1155, a pleading may be
supplemented " on motion of a party, upon reasonable notice and upon such terms
0
as are just." La. Code Civ. P. art. 1155. Thus, if the supplemental and amended
answer constituted a supplement to the answer, we must look to the specific facts
and circumstances of this case to determine whether the procedural requirements of
Article 1155 were met and whether the district court abused its discretion in
allowing Mississippi Farm Bureau to file same. See Harris, 175 So. 3d at 1012-
1013; see also, Wallace, 164 So. 2d at 119- 120.
The circumstances of this case are unique. Although it is clear that counsel
for Mississippi Farm Bureau did not request that a hearing be set on its motion for
leave to file the supplemental and amending answer, shortly after the motion was
filed, counsel for Mr. Lafferty notified the district court of his intent to oppose said
motion and requested that the matter be set for hearing. According to the record,
the parties appeared before the district court on September 20, 2019, to address
several matters, including the motion for leave to file the supplemental and
amended answer. After hearing from the parties and considering the motions and
memoranda filed in the matter, the district court ordered that the previous order,
which was signed on July 29, 2019, and allowed Mississippi Farm Bureau to file
its supplemental and amended answer, be adopted. A judgment in accordance with
the court' s findings was signed on October 16, 2019.
Based on our review of the record, we can see no prejudice to the rights of
Mr. Lafferty by the action of the district court in allowing Mississippi Farm Bureau
to file its " First Supplemental and Amended Answer." Although the procedure
utilized in this case was unusual, Mr. Lafferty' s opposition to Mississippi Farm
Bureau' s motion for leave of court to amend was heard by the district court before
the October 16, 2019 judgment was signed by the district court. Accordingly, we
find no abuse of discretion by the district court in granting Mississippi Farm
Bureau' s motion for leave of court to amend and supplement its answer.
7
SUMMARY JUDGMENT
A motion for summary judgment is a procedural device used to avoid a full-
scale trial when there is no genuine issue of material fact. Georgia- Pacific
Consumer Operations, LLC v. City of Baton Rouge, 2017- 1553 ( La. App. 1
Cir. 7/ 18/ 18), 255 So.3d 16, 21, writ denied, 2018- 1397 ( La. 12/ 3/ 18), 257 So. 3d
194. The Code of Civil Procedure places the burden of proof on the party filing a
motion for summary judgment. La. C. C. P. art. 966( D)( 1). The mover can meet its
burden by filing supporting documentary evidence consisting of pleadings,
memoranda, affidavits, depositions, answers to interrogatories, certified medical
records, written stipulations, and admissions with its motion for summary
judgment. La. C. C. P. art. 966( A)(4). Because the applicable substantive law
determines materiality, whether a particular fact in dispute is material must be
viewed in light of the substantive law applicable to the case. Bryant v. Premium
Food Concepts, Inc., 2016- 0770 ( La. App. 1 Cir. 4/ 26/ 17), 220 So. 3d 79, 82, writ
denied, 2017- 0873 ( La. 9/ 29/ 17), 227 So. 3d 288.
Once the mover properly establishes the material facts by its supporting
documents, the mover does not have to negate all of the essential elements of the
adverse party' s claims, actions, or defenses if he will not bear the burden of proof
at trial. La. C. C. P. art. 966( D)( 1); Horrell v. Alltmont, 2019- 0945 ( La. App. 1
Cir. 7/ 31/ 20), 309 So. 3d 754, 758. The moving party must only point out to the
court the absence of factual support for one or more elements essential to the
adverse party' s claim, action, or defense. La. C. C. P. art. 966( D)( 1); Celotex Corp.
v. Catrett, 477 U.S. 317, 332, 106 S. Ct. 2548, 2557, 91 L.Ed. 2d 265 ( 1986);
Mercadel v. State Through Department of Public Safety and Corrections,
2018- 0415 ( La. App. 1 Cir. 5/ 15/ 19), 2019 WL 2234404, at * 5- 6 ( unpublished).
The burden then shifts to the non-moving party to produce factual support,
through the use of proper documentary evidence attached to its opposition, which
H1.
establishes the existence of a genuine issue of material fact or that the mover is not
entitled to judgment as a matter of law. La. C. C. P. art. 966( D)( 1); see also La.
C. C. P. art. 966, comments -2015, comment 0). If the non-moving party fails to
produce sufficient factual support in its opposition which proves the existence of a
genuine issue of material fact, Article 966( D)( 1) mandates the granting of the
motion for summary judgment. Babin v. Winn- Dixie Louisiana, Inc., 2000- 0078
La. 6/ 30/ 00), 764 So. 2d 37, 40.
In reviewing the trial court's decision on a motion for summary judgment,
this court applies a de novo standard of review using the same criteria applied by
the trial courts to determine whether summary judgment is appropriate. Jackson
v. Wise, 2017- 1062 ( La. App. 1 Cir. 4/ 13/ 18), 249 So. 3d 845, 850, writ denied,
2018- 0785 ( La. 9/ 21/ 18), 252 So. 3d 914. Factual inferences reasonably drawn
from the evidence must be construed in favor of the party opposing a motion for
summary judgment, and all doubt must be resolved in the opponent' s favor.
Thompson v. Center for Pediatric and Adolescent Medicine, L.L.C., 2017-
1088 ( La. App. 1 Cir. 3/ 15/ 18), 244 So. 3d 441, 445, writ denied, 2018- 0583 ( La.
6/ 1/ 18), 243 So. 3d 1062.
As the mover, Mississippi Farm Bureau had the burden of proof on summary
judgment; however, because Mississippi Farm Bureau would not bear the burden
of proof at trial, Mississippi Farm Bureau was only required to point out to the
district court the absence of factual support for one or more elements of Mr.
Lafferty' s claim. See La. Code Civ. P. art. 966( D)( 1). Citing Mississippi law and
its own policy language, Mississippi Farm Bureau pointed out that it does not
provide UM coverage to any insured who settles the bodily injury or property
damage claim without its express written agreement.
As provided for by Mississippi law, an " uninsured motor vehicle" can be
defined as either a " motor vehicle as to which there is no bodily injury liability
9
insurance" or an " insured motor vehicle, when the liability insurer of such vehicle
has provided limits of bodily injury liability for its insured which are less than the
limits applicable to the injured person provided under his uninsured motorist
coverage." Miss. Code Ann., § 83- 11- 103( c)( i) and ( iii). In the instant case, the
parties agree that for the purposes of the motion for summary judgment, Mr.
Lafferty met the definition of an insured under the Mississippi Farm Bureau policy
and that the vehicle Mr. Vaughn was driving met the definition of an underinsured
vehicle. Moreover, there is no dispute concerning the existence of the consent -to -
settle clause in the Mississippi Farm Bureau policy. Thus, the remaining questions
before this court are whether Mr. Lafferty obtained Mississippi Farm Bureau's
consent prior to the settlement with State Farm or whether Mississippi Farm
Bureau' s actions constituted an implied waiver of the enforcement of the consent -
to -settle clause.
The Mississippi Supreme Court has noted that insurance policies are
contracts, and as such, they are to be enforced according to their provisions.
United States Fidelity & Guar. Co. v. Knight, 882 So. 2d 85, 92 ( Miss. 2004).
Speaking further to the relationship between insurance companies and their
insured, the Knight court concluded:
Insurance companies and their insureds have a different relationship
than most contracting parties. For instance, both share the same
agent. And other than speaking to and through the common agent,
they seldom communicate.
Certainly, insurance policies are to be enforced according to
their provisions. And insurance companies must be able to rely on
their statements of coverage, exclusions, disclaimers, definitions, and
other provisions, in order to receive the benefit of their bargain, and to
ensure that rates have been properly calculated. A rate calculated in
reliance on an exclusion will, in most instances, be incorrect where
courts invalidate the exclusion.
But where the policy grants discretion
to the insurance company, it must be exercised reasonably.
Today, we reaffirm and expand this Court' s previous holding in
United States Fidelity and Guaranty Co. v. Hillman, 367 So. 2d 914Miss. 1979), where we held that " where the uninsured motorist
10
statutes grant an insurer the right of subrogation and a provision in the
policy precludes settlement with an uninsured motorist without the
consent of the insurer, the provision of the policy is valid and will be
upheld." Id. at 921.
Id. at 92- 93.
The consent -to -settle clause in the Mississippi Farm Bureau policy provides
as follows:
PART C - UNINSURED MOTORIST COVERAGE
INSURING AGREEMENT
A. We will pay compensatory damages which any insured is
legally entitled to recover from the owner or operator of an uninsured
motor vehicle because of:
1. Bodily injury sustained by any insured and caused by
an auto accident, but only if the Declarations indicate that Uninsured
Motorist Coverage for bodily injury applies; and
2. Property damage caused by an auto accident, but only if
the Declarations indicates that Uninsured Motorist Coverage for
property damage applies.
EXCLUSIONS
A. We do not provide Uninsured Motorist Coverage for bodily
injury or property damage sustained by any insured:
1.If any insured or their legal representative settles the
bodily injury or property damage claim without our expressed
written agreement.
In support of the motion for summary judgment, Mississippi Farm Bureau
submitted Mr. Lafferty' s answers to interrogatories; Mr. Lafferty's deposition; and
two affidavits by Stacy N. Crosby, District Claims Manager for Mississippi Farm
Bureau, one of which was fact based and one that certified the policy attached to
the affidavit as a true and correct copy of the policy in question. Mr. Lafferty
attached the following in support of his opposition to Mississippi Farm Bureau's
motion for summary judgment: the affidavit of Linda Deogracias, a legal assistant
assigned to Mr. Lafferty' s file, with attached emails regarding the purported
11
settlement between Mr. Lafferty, Mr. Vaughn, Mr. Friedlander and his estate, and
State Farm; a copy of the petition for damages that Mr. Lafferty filed in this
matter; a copy of Mississippi Farm Bureau's original answer; and a copy of the
notice of deposition of Mr. Lafferty, to be taken on March 14, 2018.
In granting Mississippi Farm Bureau's motion for summary judgment, the
district court offered the following:
Well, I candidly don't like the result, but unfortunately, I think
it is the result under the Mississippi precedence [ sic]. I think without
the express written consent of the company that the exclusion does
apply.
I want the waiver argument to carry today because I frankly
don't feel like it's a fair result, but I just can't get in my mind a genuine
issue of material fact, so motion for summary judgment is granted.
Citing Murriel v. Alfa Ins. Co., 697 So. 2d 370 ( Miss. 1997), overruled on
other grounds by United States Fid. & Guar. Co. v. Knight, 882 So.2d 85 ( Miss.
2004), Mr. Lafferty argues on appeal that Mississippi Farm Bureau's acts and
omissions constituted a waiver of the consent -to -settle clause in its policy. In
Murriel, the plaintiff sought a waiver of the UM insurer' s subrogation rights prior
to accepting the limits of the tortfeasor's policy. The Mississippi Supreme Court
held that the UM insurer had notice of plaintiffs request for waiver of subrogation
rights, concluding as follows:
While the validity of written consent provisions is not in
dispute here, we recognize the potential for misuse of these provisions
evidenced today. Insurers cannot hold hostage coverage that an
insured has paid for and is so entitled to receive. We hold that an
insurer may waive any right to invoke the consent defense when the
insurer does not respond within a reasonable time to an insured' s
request for consent.
Murriel, 697 So. 2d at 372. While the Court recognized that written consent -to -
settle clauses " are certainly essential for the protection of the insurer's subrogation
rights," the UM insurer's action failed to " give a reasonable response to a request
for such consent." Id. Thus, it seems clear that Murriel only comes into play when
12
the insured has made a request for the UM insurer' s consent and the insurer fails to
reasonably respond to a request for such consent. As is discussed more fully
below, we believe that Mr. Lafferty failed to bring forth sufficient evidence that he
would be able to show that he requested consent to settle from Mississippi Farm
Bureau in the instant case.
Mississippi Farm Bureau argues that the facts of this case are more clearly
aligned with Hillman, supra. In Hillman, the insured sustained injuries when a
truck driven by an uninsured motorist collided with his vehicle. Without the
knowledge of his insurer, the insured executed a release of the uninsured motorist.
The policy in question stated that the UM coverage did not apply " to bodily injury
to an Insured with respect to which such insured ... shall, without written consent
of [the insurer], make any settlement with any person or organization who may be
legally liable therefor." Hillman, 367 So. 2d at 916. The Hillman court held that
since the insured had violated an unambiguous provision of the policy and had, in
releasing the UM motorist, foreclosed the insurer's subrogation rights guaranteed
by Mississippi' s UM statutes, recovery from the insured must be denied, noting as
follows:
It is undisputed that the insurer not only did not consent to, but
had no part in the settlement between [ the insured] and [ the UM
motorist] or in the execution of the release by [ the insured] and that
the insurer knew nothing of either. ...
The clear and unambiguous provisions of the insurance
contract, the subrogation right vested in the insurer by statute, under
principles announced and adhered to by this Court for many years,
require that recovery against the insurer under the circumstances of
this case be denied.
Id. at 922.
The validity of similar clauses contained within a policy of insurance has
been recognized and upheld in Mississippi. See Walker v. Allstate Ins. Co., 193
F. 3d 516 ( 5th Cir. 1999); Thompson v. Aetna Ins. Co., 245 So. 2d 206 ( Miss.
13
1971); Twin States Ins. Co. v. Bush, 183 So. 2d 891 ( Miss. 1966); Chandler v.
State Farm Mut. Auto. Ins. Co., 200 Miss. 702, 28 So. 2d 571 ( 1947). Designed
to protect the right of subrogation of the insurer and premised upon Miss. Code
Ann., § 83- 11- 107, 4 these policy provisions allow the insurer to seek recovery from
the uninsured tortfeasor those sums that the insurer was required to pay because of
the uninsured' s negligence. Smith v. Safeco Ins. Co. of America, 704 F. Supp.
111, 113 ( S. D. Miss. 1988), affd, 863 F. 2d 403 ( 5th Cir. 1989).
After a de novo review of the evidence submitted for the purpose of the
motion for summary judgment, we first find that Mississippi Farm Bureau, as the
moving party, met its initial burden to point out the absence of factual support for
one or more of the essential elements of Mr. Lafferty's claim— that its policy
language clearly does not allow for UM coverage to any insured who settles the
bodily injury or property damage claim without its express written agreement. Mr.
Lafferty then failed to come forward with evidence establishing that there is a
genuine issue of material fact that either he obtained Mississippi Farm Bureau' s
written consent prior to settling with State Farm, or that Mississippi Farm Bureau's
actions constituted an implied waiver of the enforcement of the consent -to -settle
clause.
The clear and unambiguous provisions of the policy in question requires the
conclusion that Mr. Lafferty has waived any right to UM coverage in this case by
failing to obtain the written consent of Mississippi Farm Bureau prior to settling
his claims with State Farm. Mr. Lafferty seeks to avoid the plain language of the
policy by arguing that Mississippi Farm Bureau's knowledge that he was in the
4 Mississippi Code Annotated, § 83- 11- 107 provides, in pertinent part:
An insurer paying a claim under the endorsement or provisions required
by Section 83- 11- 101 or Section 83- 11- 102 shall be subrogated to the rights of the
insured to whom such claim was paid against the person causing such injury,
death, or damage to the extent that payment was made, including the proceeds
recoverable from the assets of the insolvent insurer.
14
process of settling his claim with State Farm constitutes a waiver of the
applicability of the consent -to -settle clause in the policy. We reject this assertion.
In his affidavit, Mr. Crosby attested to the following regarding Mississippi
Farm Bureau' s knowledge of Mr. Lafferty's purported settlement with State Farm:
8. After plaintiffs Petition for Damages was filed, on February
2, 2018 plaintiffs attorney advised that defendant liability insurer
State Farm might be paying their $ 100, 000 policy limits, followed by
additional information provided on February 27, 2018 that plaintiff
had settled directly with the State Farm adjuster so she would not have
to hire counsel, that a declarations page, settlement check and release
had been provided by State Farm to plaintiffs counsel but executed
affidavits of no other insurance were needed and the release would not
be executed until such time that affidavits were executed by the driver
and the owner of the uninsured/underinsured vehicle, followed by
plaintiffs counsel on March 2, 2018 providing a copy of an affidavit
executed on March 1, 2018 by the at -fault vehicle owner....
9. Mississippi Farm Bureau Casualty Insurance Company had
no notice that the settlement agreement was finalized between
plaintiff Edward Lafferty with the defendant driver ... and owner ...
of the other uninsured/underinsured vehicle involved in the accident
sued upon and/ or with defendant State Farm Mutual Automobile
Insurance Company as their liability insurer until on or about January
15, 2019 when plaintiff provided his Answers to Interrogatories,
particularly Answer to Interrogatory Number 25, and Mississippi
Farm Bureau inquired and was advised by the Washington Parish
Clerk's office that plaintiffs Motion and Order for Partial Dismissal ...
was filed and signed on January 11, 2019.
10. At no time during the claims process and at no time during
the course of this litigation since the filing of plaintiffs Petition for
Damages on January 11, 2018, did either the plaintiff, any legal
representative of plaintiff or any attorney representing plaintiff ever
contact any representative of Mississippi Farm Bureau Casualty
Company or their attorney to request expressed written agreement to
settle and/ or obtain expressed written agreement to settle his claims
While it is true that in February 2018, Mississippi Farm Bureau was notified
of a possible settlement with State Farm, and in March 2018, one of the necessary
affidavits of no insurance was forwarded to counsel for Mississippi Farm Bureau,
the remaining documents needed for the completed release and settlement were
never provided. In fact, it was only through its own investigation that Mississippi
Farm Bureau even learned of the dismissal concerning State Farm that was filed on
15
January 11, 2019. Moreover, the earlier dismissal dated June 11, 2018, was only
discovered once the appeal record was prepared. There is absolutely no evidence
of a request by Mr. Lafferty, or his counsel, for the written consent of Mississippi
Farm Bureau prior to either of the dismissals being executed.
It is undisputed that not only did Mississippi Farm Bureau not consent to the
settlement, but it had no part in the settlement between Mr. Lafferty and State
Farm or in the execution of the release by Mr. Lafferty. See Hillman, 367 So. 2d at
922. Mr. Lafferty failed to abide by the terms of his policy. Because Mississippi
Farm Bureau never consented to the settlement, Mr. Lafferty is precluded from
pursuing any recovery under the UM provisions of the Mississippi Farm Bureau
policy.
CONCLUSION
For the above and foregoing reasons, we affirm the June 30, 2020 judgment
of the district court, granting summary judgment in favor of defendant, Mississippi
Farm Bureau Casualty Insurance Company, and dismissing, with prejudice, all
claims filed by plaintiff, Edward Lafferty, against Mississippi Farm Bureau
Casualty Insurance Company. We assess all costs of this appeal against
plaintiff/appellant, Edward Lafferty.
AFFIRMED.
16
STATE OF LOUISIANA
COURT OF APPEAL
FIRST CIRCUIT
2021 CA 0084
EDWARD LAFFERTY
VERSUS
NICHOLAS T. VAUGHN, TYLER A. VEAZEY, STATE FARM MUTUAL
AUTOMOBILE INSURANCE COMPANY AND MISSISSIPPI FARM BUREAU
CASUALTY INSURANCE COMPANY
McClendon, 7., concurs.
3
The facts of this case are troublesome and seem inconsistent with the notion of
fair play. Nevertheless, I am constrained to find the majority's conclusion to be legally
correct. The language of the contract in this case clearly required written consent to
settle. However, as recognized in Murriel v. Alfa Ins. Co., 697 So. 2d 370 ( Miss.
1997), overruled on other grounds by United States Fid. & Guar. Co v Knight, 882
So. 2d 85 ( Miss. 2004), the consent -to -settle clause is subject to waiver under certain
circumstances.
In this case, Mississippi Farm Bureau was advised on February 27, 2018 by
plaintiffs counsel that a possible settlement had been reached, subject only to receipt
of an affidavit of no other insurance. On March 2, 2018, counsel provided the affidavit
of no other insurance to Mississippi Farm Bureau. Therefore, it is clear that Mississippi
Farm Bureau was aware that plaintiff was in the process of executing a settlement of
the claim with the underlying carrier. The release was not signed until May 4, 2018,
allowing more than sixty days for Mississippi Farm Bureau to raise an objection to the
settlement and/ or take appropriate action to protect its subrogation rights.
Plaintiff argues that based on these facts and applying Murriel, the consent -to -
settle clause was waived. In Murriel, 697 So. 2d 370, Mississippi recognized that when
an insurance contract contains a consent -to -settle and said consent is requested, the
clause may be waived by action or inaction on the part of the insurer. However,
because there was no explicit request for consent in the case before us, I agree with
the majority that Murriel is distinguishable. Therefore, I cannot say that the consent -
to -settle clause was waived by Mississippi Farm Bureau's inaction regarding the pending
settlement. Accordingly, I respectfully concur.