Jack Hoover v. United Services Automobile Association ( 2011 )


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  •                    IN THE SUPREME COURT OF MISSISSIPPI
    NO. 2011-CA-01486-SCT
    DR. JACK HOOVER AND MARGARET ANN
    HOOVER
    v.
    UNITED SERVICES AUTOMOBILE
    ASSOCIATION
    DATE OF JUDGMENT:                         08/31/2011
    TRIAL JUDGE:                              HON. FRANK G. VOLLOR
    COURT FROM WHICH APPEALED:                JACKSON COUNTY CIRCUIT COURT
    ATTORNEYS FOR APPELLANTS:                 DAVID NEIL HARRIS, JR.
    CLYDE H. GUNN, III
    CHRISTOPHER COLLINS VAN CLEAVE
    WILLIAM CORBAN GUNN
    ATTORNEYS FOR APPELLEE:                   CHARLES PATRICK COPELAND
    CHARLES G. COPELAND
    REBECCA SUZANNE BLUNDEN
    NATURE OF THE CASE:                       CIVIL - INSURANCE
    DISPOSITION:                              ON DIRECT APPEAL: AFFIRMED IN PART,
    REVERSED IN PART, AND REMANDED.
    ON CROSS-APPEAL: AFFIRMED -
    11/07/2013
    MOTION FOR REHEARING FILED:
    MANDATE ISSUED:
    EN BANC.
    RANDOLPH, PRESIDING JUSTICE, FOR THE COURT:
    ¶1.   This case arises out of an alleged breach of contract and bad-faith denial of Dr. Jack
    and Margaret Hoover’s homeowner’s insurance claim against United Services Automobile
    Association (“USAA”) following Hurricane Katrina (“Katrina”). The trial judge granted
    USAA’s motion for directed verdict as to the Hoovers’ claims for: (1) the unpaid portion of
    losses; (2) mental anguish and emotional distress; and (3) punitive damages. The trial court
    further determined that there were issues of fact for the jury as to whether the Hoovers’ roof
    structure was damaged, and as to the Hoovers’ claim for additional living expenses (“ALE”).
    The jury found for the Hoovers and returned a verdict of $81,342.97 in compensatory
    damages. The Hoovers appealed and USAA cross-appealed.
    FACTS
    ¶2.    The Hoovers presented evidence that they incurred $240,917.56 in costs to repair their
    property for losses inflicted by Katrina and $1,342.97 for ALE. The Hoovers also claimed
    an “additional $80,000 in future cost to replace . . . [the] roof structure.” 1 USAA provided
    homeowners’ insurance for the Hoovers.2 USAA posited that the majority of the Hoovers’
    loss occurred on the lower floor of the home and was the result of excluded storm surge.
    USAA limited the “covered loss” to $56,748.17 and made payments totaling that amount
    over time. USAA denied that the Hoovers’ roof structure needed to be replaced and that
    coverage extended to ALE.
    1
    At various points, we will refer to the “roof structure.” This is not to be confused
    with roof shingles. USAA paid to reshingle the roof on both the dwelling and the cabana.
    The “roof structure” refers to the actual roof framing of the dwelling, which USAA denied
    was damaged by Katrina.
    2
    The pertinent coverage limits were $264,000 for the dwelling, $26,400 for other
    structures (10% of limit of liability for dwelling), and $52,800 for loss of use.
    2
    ¶3.    On August 11, 2008, the Hoovers filed a complaint against USAA in the Circuit Court
    of Jackson County alleging, inter alia, breach of contract and tortious bad-faith breach of
    contract. USAA filed its “Answer and Defenses[,]” and raised, as its seventh affirmative
    defense, that the “damages for which Plaintiffs seek recovery were either caused or
    contributed to by excluded water damage as defined in the policy.”
    ¶4.    A four-day jury trial was held before the Honorable Frank Vollor. Following the close
    of the Hoovers’ case-in-chief, USAA moved for a directed verdict on all claims. The trial
    court granted USAA’s motion as to the Hoovers’ claims for mental anguish and emotional
    distress.
    ¶5.    At the close of all evidence, the trial court ruled that “the only evidence present [was]
    that the damage to the lower part of the floor was done by the storm surge[,]” and, thus, did
    not allow that issue to go to the jury. However, the trial court determined that whether the
    roof structure was damaged was “still in dispute[,]” and “allow[ed] that [issue] to go to the
    jury[,]” along with the ALE claim. The jury awarded the Hoovers $81,342.97 in
    compensatory damages.3 Thereafter, the trial court denied the Hoovers’ claim for punitive
    damages. Final judgment was entered on September 2, 2011.
    ISSUES
    ¶6.    On appeal, the Hoovers raise the following issues, restated as follows:
    3
    The verdict was comprised of $80,000 to repair the damaged roof and $1,324.97 in
    ALE.
    3
    I.     Whether the trial judge erred by granting directed verdict in favor of
    USAA regarding the contractual damages in the amount of
    $240,917.56.
    II.    Whether the trial judge erred by granting directed verdict in favor of
    USAA regarding the Hoovers’ mental-anguish and emotional-distress
    claims.
    III.   Whether the trial judge erred by granting a directed verdict in favor of
    USAA regarding the Hoovers’ punitive-damages claims.
    ¶7.   On cross-appeal, USAA raises the following issues:
    IV.    Whether the trial judge failed to properly apply the Daubert standards
    to Dr. Ralph Sinno’s testimony that the Hoovers’ roof structure was
    damaged.
    V.     Whether the trial judge erred in allowing Sinno to testify as to the cost
    of replacing the roof structure.
    ANALYSIS
    I.     Whether the trial judge erred by granting directed verdict in favor of
    USAA regarding the contractual damages in the amount of
    $240,917.56.
    ¶8.   The standard of review for the trial court’s grant or denial of a motion for directed
    verdict is de novo. Braswell v. Stinnett, 
    99 So. 3d 175
    , 177-78 (Miss. 2012) (citing
    Thompson v. Nguyen, 
    86 So. 3d 232
    , 236 (Miss. 2012)).
    ¶9.   In Corban v. United Services Automobile Association, 
    20 So. 3d 601
    , 619 (Miss.
    2009), this Court unanimously held that:
    [w]ith respect to the “all-risk” coverage of “Coverage A-Dwelling” and
    “Coverage B-Other Structures,” the Corbans are required to prove a “direct,
    physical loss to property described.” Thereafter, USAA assumes the burden to
    prove, by a preponderance of the evidence, that the causes of the losses are
    excluded by the policy, in this case, “[flood] damage.” USAA is obliged to
    indemnify the Corbans for all losses under “Coverage A-Dwelling” and
    “Coverage B-Other Structures” which USAA cannot establish, by a
    4
    preponderance of the evidence, to have been caused or concurrently
    contributed to by “[flood] damage.”
    (Emphasis added.) In the case sub judice, several facts are uncontradicted. The Hoovers had
    a USAA “all-risk” homeowners’ policy that was in effect at the time of Katrina.4 The proof
    presented by the Hoovers is that they suffered $240,917.56 in “direct physical loss” to their
    dwelling and other structures as a result of Katrina. The Hoovers satisfied the burden
    required by Corban.5 The Hoovers were entitled to payment for those losses, unless USAA
    could “prove, by a preponderance of the evidence, that the causes of the losses are excluded
    by the policy, in this case, ‘flood damage.’” 
    Id. ¶10. Nevertheless,
    at the close of all evidence, the trial court granted a directed verdict for
    USAA as to the unpaid portion of the Hoovers’ dwelling losses. The trial court stated, in
    pertinent part,
    the proof is overwhelming that the lower part [of the house] was involved in
    a surge. There’s nothing to contradict that. So the Court finds that the evidence
    – that’s the only evidence present, that the damage to the lower part of the
    floor was done by the storm surge, saltwater surge, which I understand a lot of
    the testimony comes from Dr. Hoover himself . . . . The court thinks the
    plaintiff should have had to put on something to show it was other than surge.
    (Emphasis added.)
    4
    The pertinent language of the Hoovers’ USAA homeowners’ policy is identical to
    the USAA policy considered by this Court in Corban.
    5
    In its brief, USAA acknowledged that the Hoovers had met their burden under
    Corban.
    5
    ¶11.   USAA acknowledges the standard set forth in Corban but argues that it met its burden
    of proof “through documents, its own investigation, and the cross examination of [Dr.
    Hoover] that the lower part of the house was damaged by storm surge flooding, not wind.”
    USAA contends that, “at that point, the burden shifted back to the Hoovers to put on some
    proof to create an issue of fact,” and the Hoovers failed to meet the burden to put on
    contradictory evidence.
    ¶12.   In support of its argument that the burden shifted back to the Hoovers, USAA cites
    Bayle v. Allstate Insurance Co., 
    615 F.3d 350
    (5th Cir. 2010). In Bayle, a Katrina case, the
    Fifth Circuit held that if the insurer “make[s] out a prima facie case that the cause of the
    uncompensated or under-compensated damage was excluded from coverage[,]” then “the
    burden shifts to the insured to present evidence demonstrating there remains a material issue
    of fact.” 
    Id. at 359.
    USAA’s reliance on Bayle is unavailing, as that case applied Louisiana
    law. 
    Id. USAA cites
    no authority under Mississippi law for the proposition that the burden
    of proof shifts back to the insured.
    ¶13.   In Broussard v. State Farm Fire & Casualty Co., 
    523 F.3d 618
    , 627 (5th Cir. 2008),
    the same court noted that “[t]he Mississippi Supreme Court has not explicitly addressed the
    ‘shifting back’ theory when considering an ‘open peril’ policy.” 6 In Broussard, State Farm
    argued, inter alia, that “under the dwelling coverage, once it advance[d] evidence to establish
    6
    See Eric M. Holmes, Appleman on Insurance § 192.09 (2d ed. 2008) (“‘Open peril’
    coverage is . . . typical of coverage for dwellings and other structures on insured property .
    . . .”).
    6
    its affirmative policy exclusion defenses, the burden shifts back to the Broussards to prove
    that there is an exclusion to the defenses or to segregate covered from non-covered
    damages.” 
    Id. at 626.
    State Farm’s argument mirrored the one advanced by USAA in this
    case. After a thorough examination of Mississippi caselaw, the Broussard court rejected
    State Farm’s “shifting back theory” as the rule in Missisissippi. 
    Id. at 627.
    Appleman on
    Insurance refers to Broussard as “[t]he signature case on allocation of burden of proof for
    hurricane damages.” Eric M. Holmes, Appleman on Insurance § 192.09 (2d ed. 2008).
    ¶14.   In Grace v. Lititz Mutual Insurance Co., 
    257 So. 2d 217
    , 219, 224-25 (Miss. 1972)
    (citing Commercial Union Insurance Co. v. Byrne, 
    248 So. 2d 777
    , 781 (Miss. 1971)), this
    Court stated, “[t]he rule is well established in this state that where the question presented to
    the jury was whether the loss was due to windstorm or water, the entire question of proximate
    cause is treated as one of fact independent of the explicit application of any rule of law.”
    (Emphasis added.) Broussard interpreted “State Farm’s ‘shifting back’ theory . . . to be the
    sort of ‘rule of law’ which would operate in many cases to take the issue of causation away
    from the jury.” 
    Broussard, 523 F.3d at 627
    . The Broussard court stated, “the ultimate
    allocation of wind and water damages under the Broussard’s dwelling coverage is a question
    of fact for the jury.” 
    Id. This statement
    is consistent with this Court’s holding in Corban that
    the issue of whether the damage was caused by wind or excluded storm surge is “a question
    of fact for the jury.” 
    Corban, 20 So. 3d at 619
    .
    ¶15.   The trial court’s finding that the Hoovers “should have put on something to show that
    it was other than surge” was erroneous and in conflict with this Court’s prior decisions,
    7
    including Corban. USAA bears the burden to prove, by a preponderance of the evidence, that
    the loss was caused by, or concurrently contributed to, by an excluded peril. This issue of
    fact is one for the jury, and the burden of proof does not shift to the Hoovers.7 Therefore, the
    trial court erred in granting a directed verdict as to the Hoover’s unpaid damages.
    II.    Whether the trial judge erred by granting directed verdict in favor of
    USAA regarding the Hoovers’ mental-anguish and emotional-distress
    claims.
    ¶16.   “[I]nsurers have a duty ‘to perform a prompt and adequate investigation and make a
    reasonable, good faith decision based on that investigation[,]” and failure to perform this duty
    may render the insurer liable for extracontractual damages. Broussard, 
    523 F.3d 627-28
    (quoting Liberty Mut. Ins. Co. v. McKneely, 
    862 So. 2d 530
    , 535 (Miss. 2003)). However,
    “[e]xtracontractual damages, such as awards for emotional distress and [mental anguish] . .
    . are not warranted where the insurer can demonstrate ‘an arguable, good-faith basis for
    denial of a claim.’” United Serv. Auto. Ass’n v. Lisanby, 
    47 So. 3d 1172
    , 1178 (Miss. 2010)
    (quoting United Am. Ins. Co. v. Merrill, 
    978 So. 2d 613
    , 627)). The “‘plaintiff bears a heavy
    7
    The dissent articulates a scholarly analysis of federal procedure, yet the “tennis
    match” scenario it advances is not the law in this case. Contrary to the dissent’s contention
    that we conflate the burdens of production and persuasion, Corban addressed both. The
    insured bears the burden of producing evidence to make out a prima facie case of a “direct,
    physical loss to property described.” 
    Corban, 20 So. 3d at 619
    . The insured also bears the
    burden of persuasion on this issue. The insurer bears the burden to produce evidence to
    support its affirmative defense “that the causes of the losses are excluded by the policy.” 
    Id. The insurer
    also bears the burden of persuasion on its affirmative defense. These are the
    respective burdens under Corban and its progeny which create an issue of fact for the jury.
    8
    burden’ of proving that the denial of an insurance claim was in bad faith.” 
    Id. (quoting Windmon
    v. Marshall, 
    926 So. 2d 867
    , 872 (Miss. 2006)).
    The plaintiff's burden in proving a claim for bad faith refusal goes beyond
    proving mere negligence in performing the investigation. The level of
    negligence in conducting the investigation must be such that a proper
    investigation by the insurer would easily adduce evidence showing its defenses
    to be without merit.
    
    Lisanby, 47 So. 3d at 1178
    (quoting 
    Windmon, 926 So. 2d at 872
    ).
    ¶17.   Citing Lisanby, the trial court granted USAA’s motion for directed verdict on the
    issue of mental anguish and emotional distress because “[USAA] had an arguable reason for
    the denial of the claim.” The Hoovers argue that the trial court erred in granting directed
    verdict because “[USAA] failed to present any evidence that any investigation was conducted
    regarding the losses USAA alleged were excluded from coverage.”
    ¶18.   On September 23, 2005, insurance adjuster Michael Long inspected the Hoovers’
    home. According to Long’s report, “the dwelling sustained approximately 4 f[ee]t of water
    inside due to storm surge.” Long’s “estimate include[d] repairs only to damages [he] was
    clearly able to determine were due to wind.” Long determined that the roofs on the dwelling
    and cabana needed to be replaced, along with fencing and the back-yard playhouse. Long
    also included interior water damage to the ceilings in his estimate. However, Long did not
    include damage to the pool liner “as it was not clear if wind caused the damage.” Long did
    not establish a reserve for ALE.
    ¶19.   On September 24, 2005, USAA hired an engineering firm, SEA, Ltd., to inspect the
    Hoovers’ home. USAA’s request to SEA stated, in pertinent part, “[p]lease inspect and offer
    9
    a professional opinion regarding causation, i.e., wind vs. flood surge. We need to know if
    direct physical loss by wind contributed to the destruction and/or damage to the building. If
    yes, please identify the related building damage.” On October 2, 2005, SEA engineer Richard
    Schimizze conducted an inspection and submitted a detailed report to USAA.8 SEA opined
    that
    about 3 [feet] of floodwater had inundated the home. All material damage
    located below the first-floor ceiling in the home was the result of the
    floodwater and was clearly not related to the high winds. All damage to the
    roofs of both structures was directly caused by the high winds of the storm.
    Water damage at or above the first-floor ceiling in the home was indirectly
    caused by the high winds that penetrated the enclosure and allowed rainwater
    to enter the upper portions of the structure . . . . [T]he pool damage was caused
    by the large volume of floodwater produced by the hurricane surge.
    ¶20.   Thereafter, Dr. Hoover presented USAA with additional information pertinent to the
    cause of his loss that he requested USAA consider. Inter alia, Hoover sent USAA a weather
    report from AccuWeather and the report of Dr. Ralph Sinno, which opined that the Hoovers’
    roof structure was damaged by wind, and he continued to seek payment for ALE. On each
    occasion, USAA forwarded the information to SEA and requested an updated report. SEA
    issued new reports which affirmed its initial opinion as to Hoovers’ damage and disputed Dr.
    Sinno’s opinion that the roof structure had been damaged.
    ¶21.   The record supports the trial court’s finding that USAA had an “arguable basis” for
    denying a portion of the Hoovers’ damages. USAA relied on the investigation of its adjusters
    8
    The SEA report is dated January 25, 2006. However, the report indicates that its
    findings were communicated verbally to Long on October 10, 2005, and to “Bill McNamara
    of USAA” on October 11, 2005.
    10
    and the reports of SEA in denying certain aspects of the claim which were deemed excluded.
    As such, the trial court did not err in granting a directed verdict on this issue.
    III.   Whether the trial judge erred by granting a directed verdict in favor of
    USAA regarding the Hoovers’ punitive-damages claims.
    ¶22.   In order to recover punitive damages, the Hoovers “must show that [USAA] denied
    the claim (1) without an arguable or legitimate basis, either in fact or law, and (2) with malice
    or gross negligence in disregard of the insured’s rights.” 
    Broussard, 523 F.3d at 628
    (quoting U.S. Fid. & Guar. Co. v. Wigginton, 
    964 F.2d 487
    , 492 (5th Cir. 1992)). The trial
    court found that USAA had an “arguable basis” for denying part of the Hoovers’ claim. We
    can discern no error by the trial court in granting a directed for USAA on the issue of
    punitive damages.
    Cross-appeal
    IV.    Whether the trial judge failed to properly apply the Daubert standards
    to Dr. Ralph Sinno’s testimony that the Hoovers’ roof structure was
    damaged.
    ¶23.   This Court has stated:
    [T]he admission of expert testimony is within the sound discretion of the trial
    judge . . . . Therefore, the decision of a trial judge will stand unless we
    conclude that the discretion was arbitrary and clearly erroneous, amounting to
    an abuse of discretion. Mississippi law requires the trial court to ensure that
    proposed [expert] testimony satisfies Rule 702 . . . . In McLemore, this Court
    adopted the Daubert/Kumho Tire rule as the standard for admissibility of
    expert witness testimony.
    Rebelwood Apartments RP, LP v. English, 
    48 So. 3d 483
    , 494 (Miss. 2010) (citing Miss.
    Transp. Comm'n v. McLemore, 
    863 So. 2d 31
    , 34 (Miss. 2003); Kumho Tire Co., Ltd. v.
    11
    Carmichael, 
    526 U.S. 137
    , 
    119 S. Ct. 1167
    , 
    143 L. Ed. 2d 238
    (1999); Daubert v. Merrell
    Dow Pharms., Inc., 
    509 U.S. 579
    , 
    113 S. Ct. 2786
    , 
    125 L. Ed. 2d 469
    (1993))
    ¶24.   Rule 702 provides:
    [i]f scientific, technical, or other specialized knowledge will assist the trier of
    fact to understand the evidence or to determine a fact in issue, a witness
    qualified as an expert by knowledge, skill, experience, training, or education,
    may testify thereto in the form of an opinion or otherwise, if (1) the testimony
    is based upon sufficient facts or data, (2) the testimony is the product of
    reliable principles and methods, and (3) the witness has applied the principles
    and methods reliably to the facts of the case.
    Miss. R. Evid. 702 (emphasis added).
    ¶25.   “[A]n expert’s qualification and reliability of testimony are separate questions.”
    
    Rebelwood, 48 So. 3d at 494
    (citing Bullock v. Lott, 
    964 So. 2d 1119
    , 1129 (Miss. 2007)).
    On this issue, USAA’s argument to the trial court and this Court revolves around the
    “reliability” of Dr. Sinno’s testimony, and not his qualifications.9 USAA challenged Dr.
    Sinno’s testimony because he “[had] not done a technical structural inspection of [the]
    house.” Thus, USAA argues that Dr. Sinno’s testimony failed to meet the requirement of
    Rule 702 in that it was not “based upon sufficient facts or data” and he did not “apply the
    principles and methods reliably to the facts of the case.” Miss. R. Evid. 702.
    ¶26.   Dr. Sinno’s testimony reveals that he did not inspect the Hoovers’ home before
    issuing his report that the roof structure had been damaged and would require replacement.
    9
    The trial judge found Dr. Sinno was “eminently qualified” to testify. Dr. Sinno has
    had a lengthy career in the field, including being a professor of engineering for twenty-four
    years. He is a fellow with the American Society of Civil Engineering and has spent years
    researching, testing, and writing on “wind loading.”
    12
    But, his testimony clearly exemplifies the basis of his knowledge and subsequent opinion.
    Dr. Sinno had spent years researching “wind loading,” and in 2005 was the first “in the
    world” to duplicate hurricane wind in the laboratory and study its effect on structures. He
    testified, “everything I am going to talk about today is actually test results, test products, not
    theory . . . .” Dr. Sinno possessed the information regarding wind velocities that the Hoover
    home would have encountered, and based on his research regarding wind loading on
    structures, he was qualified to give his opinion on the effects that winds would have had on
    the Hoovers’ roof structure. Moreover, USAA cross-examined Dr. Sinno regarding his
    methods, his findings, and the fact that he had never inspected the home prior to writing his
    report. USAA also countered Dr. Sinno’s testimony with that of its own expert.
    ¶27.   Although Dr. Sinno did not inspect the Hoover home prior to issuing his report, he did
    inspect it prior to testifying at trial. He testified that the findings of his inspection supported
    the conclusion of his report. Because his report was not admitted as evidence, USAA can
    only claim that his testimony at trial was not based on sufficient facts or data. The fact that
    Dr. Sinno did inspect the house prior to testifying negates USAA’s argument that his
    testimony lacked a sufficient basis because he failed to inspect. Therefore, the trial court did
    not abuse its discretion in allowing Dr. Sinno’s testimony on this issue.
    V.      Whether the trial judge erred in allowing Sinno to testify as to the cost
    of replacing the roof structure.
    ¶28.   On this issue, USAA challenges both Dr. Sinno’s qualifications and reliability. First,
    USAA argues that Dr. Sinno is not an expert on the cost to repair residential roofs. On voir
    13
    dire, Dr. Sinno testified that, as an engineering professor, he taught classes in which
    curriculum included construction-cost estimation, itemizing costing and other kinds of
    costing, inter alia. His qualifications as a structural engineer were properly presented to the
    trial court. The trial judge did not abuse his discretion by allowing Dr. Sinno to provide
    expert testimony as to the cost to replace the roof structure.
    ¶29.   Second, USAA argues that Dr. Sinno did not have a reliable basis based on the facts
    of the case to form his opinion as to the cost to replace the roof. Specifically, USAA argues
    that Dr. Sinno “fail[ed] to include essential facts” such as “board feet of lumber, pounds of
    nails, man hours,” etc. Dr. Sinno testified that he used a cost-plus estimate based on known
    values to arrive at his calculations. He assessed that it would cost $40 per square foot to
    replace the roof, and multiplied this by the total square footage of the house. Although this
    was not the method USAA suggests he should have used, Dr. Sinno nonetheless used an
    accepted method for estimating the cost to repair the roof. Moreover, USAA cross-examined
    Dr. Sinno about this method of determining cost. The trial court did not abuse its discretion
    in concluding that Dr. Sinno was qualified to provide expert testimony as to the cost to repair
    the Hoovers’ roof, and that his method was based on sufficient facts to meet the requirements
    or Rule 702.
    CONCLUSION
    ¶30.   Based on this analysis, the trial court applied an incorrect legal standard and
    improperly shifted the burden of proof to the Hoovers. We reverse the trial court’s grant of
    a directed verdict as to the unpaid damages, and remand the case for a jury to determine
    14
    whether USAA proved by a preponderance of the evidence that the unpaid loss was caused
    by excluded storm surge. The trial court did not err in directing a verdict for USAA as to the
    Hoovers’ claims for mental anguish, emotional distress, and punitive damages. Therefore,
    on direct appeal, we affirm in part, reverse in part, and remand. The trial court did not err in
    admitting the expert testimony of Dr. Sinno as to whether the roof structure was damaged or
    the cost to repair such damage. Therefore, on cross-appeal, we affirm.
    ¶31. ON DIRECT APPEAL: AFFIRMED IN PART, REVERSED IN PART, AND
    REMANDED. ON CROSS-APPEAL: AFFIRMED.
    LAMAR, KITCHENS, CHANDLER, PIERCE AND KING, JJ., CONCUR.
    DICKINSON, P.J., DISSENTS WITH SEPARATE WRITTEN OPINION JOINED BY
    COLEMAN, J. COLEMAN, J., DISSENTS WITH SEPARATE WRITTEN OPINION
    JOINED BY DICKINSON, P.J. WALLER, C.J., NOT PARTICIPATING.
    DICKINSON, PRESIDING JUSTICE, DISSENTING:
    ¶32.   The majority incorrectly concludes that the trial judge “improperly shifted the burden
    of proof to the Hoovers.” This did not happen. To say that the “burden of proof” never
    leaves the party asserting a claim or defense is not to say that the defending party never has
    a burden.
    ¶33.   The burden of proof is actually divided into two burdens or parts: The burden to
    produce evidence, and the burden to persuade. The trial of an issue – whether a claim or
    defense – proceeds in three stages. In stage one, the party asserting a claim or defense has
    the burden of producing enough credible evidence to establish a prima facie case for the
    claim or defense.
    15
    ¶34.   Once this burden – which never moves from the party asserting the claim or defense
    – is met, the trial of the issue moves to stage two, in which the defending party has the
    burden of producing evidence sufficient to create a jury issue. When a defending party fails
    to meet this burden – that is, fails to produce evidence sufficient to create a jury issue – the
    party asserting the claim or defense is entitled to a directed verdict on the claim or defense.
    ¶35.   Finally, during stage three, the party asserting the claim or defense has the burden of
    persuading the jury that the evidence supports the claim or defense by the applicable
    standard, whether preponderance of the evidence, clear and convincing evidence, or beyond
    a reasonable doubt.
    ¶36.   USAA asserted a defense, claiming that a policy exclusion applied. During stage one,
    it certainly produced sufficient evidence to support the defense. During stage two, the
    Hoovers not only failed to produce evidence sufficient to create a jury issue as to USAA’s
    defense, they failed to produce any evidence at all. Therefore, the issue never made it to
    stage three.
    ¶37.   The trial judge, who clearly recognized that USAA had the burden of proof correctly
    observed that – because USAA had produced sufficient, competent, credible evidence to
    support its policy exclusion – it had, as a matter of law, met its burden of proof, absent some
    contrary proof from the Hoovers. The trial judge’s position is perfectly supported by the
    Fifth Circuit’s opinion in Bayle v. Allstate Insurance Co.10
    10
    Bayle v. Allstate Ins. Co., 
    615 F.3d 350
    , 359 (5th Cir. 2010).
    16
    ¶38.   Had the Hoovers met their burden of production – that is, had they come forward with
    contrary proof – a jury issue would have been created, and the issue would have been
    submitted to the jury for decision. But the burden of persuasion still would have been on
    USAA. The majority forgets that USAA always had the burden of producing proof sufficient
    to establish a prima facie case, and it confuses the Hoovers’ burden of producing evidence
    in order to create a jury issue, with USAA’s burden of persuasion.
    ¶39.   Justice Coleman’s opinion – that the Hoovers’ failure to produce any contrary
    evidence properly resulted in a directed verdict on the issue – is exactly correct, under the
    facts of this case. But I wish to point out that there may be cases where the evidence
    supporting an exclusion presented by the insurance company is so thin and lacking in
    credibility that a trial judge would be justified in submitting its credibility to the jury, even
    in the absence of contrary evidence. Stated another way, a policyholder may demonstrate
    that a jury question has been created in two ways: (1) by producing contrary evidence, or (2)
    by persuading the trial judge that the jury should be allowed to decide whether the insurance
    company’s uncontradicted evidence is so lacking in credibility that it ought to be rejected.
    In either case, the burden to produce evidence establishing a prima facie case, and the burden
    of persuasion remains always with an insurance company as to its affirmative defenses.
    COLEMAN, J., JOINS THIS OPINION.
    COLEMAN, JUSTICE, DISSENTING:
    ¶40.   Burden of proof is a broad phrase, and its meaning encompasses at least two subsets
    – the burden of persuasion and the burden of production. The majority’s analysis and result
    17
    would be correct were the issue in the case the burden of persuasion – which never left
    USAA as to its affirmative defense. However, the burden of production did indeed move to
    the plaintiff once USAA produced competent evidence supporting its affirmative defense.
    Because I believe the majority wrongly conflates the two different burdens in a way that
    leads to an incorrect result and statement of the law, I respectfully dissent.
    ¶41.   There exist at least two categories of burdens of proof, “the device to compel evidence
    and the device to deal with uncertainty,” and until the end of the nineteenth century courts
    indeed referred to both with the single phrase “burden of proof.” See 21B Charles Alan
    Wright & Arthur R. Miller, Federal Practice & Procedure, Evidence § 5122 (2d ed. 1987).11
    However, in later decades various terms emerged for them as it became clear that distinction
    between the two indeed had a difference. 
    Id. “One burden
    is that of producing evidence,
    satisfactory to the judge, of a particular fact in issue. The second is the burden of persuading
    the trier of fact that the alleged fact is true.” McCormick on Evidence § 336 (Kenneth S.
    Broun, et al., eds., 7th ed. 2013).
    11
    We often cite with approval Wright and Miller’s encyclopedic work on federal civil
    procedure. See Indemnity Ins. Co. of North America v. Guidant Mut. Ins. Co., 
    99 So. 3d 142
    , 154 (¶ 34) (Miss. 2012) (citing Wright and Miller for the proposition that oral testimony
    may be admitted at a hearing on a motion for summary judgment); Jackson Public Sch.
    Dist. v. Head, 
    67 So. 3d 761
    , 767 (¶ 23) (Miss. 2011) (citing Wright and Miller to support
    holding that, in the context of a motion to dismiss for want of prosecution, any prejudice
    resulting from the delay must be weighed against the preference for a decision on the
    merits); see also Calvert v. Griggs, 
    992 So. 2d 627
    , 631-632 (¶ 10) (Miss. 2008). Finding
    a paucity of cases from our own state’s jurisprudence explaining the difference, I now turn
    to their thorough treatment of the history and practical effects of burdens of proof and
    presumptions.
    18
    ¶42.   We ascribe standards of proof to the burden of persuasion, e.g., beyond a reasonable
    doubt and by a preponderance of the evidence, because in doing so courts and legislatures
    can match the difficulty of the burden to the importance of any public policies that might be
    affected. 21B Fed. Prac. & Proc., Evid. § 5122 (2d ed. 1987). The standards of proof reflect
    that one party – usually the plaintiff but the defendant in most affirmative defenses – must
    persuade the trier of fact of the truth of disputed facts to the assigned degree. 
    Id. ¶43. The
    burden of production, on the other hand, differs significantly in nature. It “refers
    to the obligation of the party to produce enough evidence at trial to justify sending the case
    to the jury.” 
    Id. “The party
    who fails to satisfy [the burden of production] will be sanctioned
    by the court’s entry of a directed verdict in favor of her opponent.” Id.; see also McCormick
    on Evidence § 336 (Kenneth S. Broun, et al., eds., 7th ed. 2013) (“The burden of producing
    evidence is a critical mechanism in a jury trial, as it empowers the judge to decide the case
    without jury consideration when a party fails to sustain the burden.”). Wright and Miller list
    the following distinctions between the burdens of persuasion and production:
    • The burden of production is in the hands of the judge; the jury enforces the
    burden of persuasion.
    • The sanction for failure to carry the burden of production is a directed
    verdict for the adversary; the sanction for failure to carry the burden of
    persuasion is a jury verdict for the opposing party.
    • The judge must instruct the jury on the burden of persuasion; the jury never
    need hear about the burden of production.
    • The burden of production can arise each time the party with the production
    burden rests which may be several times during the trial; the burden of
    19
    persuasion comes into play only once—when the case is submitted to the
    jury.
    • Since it can only arise once, it is sometimes said that the burden of
    persuasion never shifts. On the other hand, writers suppose that the burden
    of production can shift back and forth as the parties take turns introducing
    evidence. . . .
    • Finally, the two burdens of proof are related in that the burden of production
    normally falls on the party with the burden of persuasion. On the other
    hand, unless the burden of production is satisfied, the burden of persuasion
    will never arise because the judge will take the case from the jury.
    21B Fed. Prac. & Proc., Evid. § 5122 (2d ed. 1987) (citations omitted).
    ¶44.   “It is recognized that as to any given issue the burden of persuasion and the burden
    of production of evidence generally both fall on the same party at the beginning of trial, that
    the burden of persuasion does not thereafter shift, but that the burden of production may shift
    back and forth as each side produces evidence, takes advantage of presumptions or the like.”
    Simpson v. Home Petroleum Corp., 
    770 F.2d 499
    , 503 (5th Cir. 1985). “[I]t is everywhere
    agreed that the other burden, i.e., the burden of producing evidence . . . , may and often does
    shift back and forth between the parties like a tennis ball in play . . . .” 
    Id. (quoting Ray,
    Texas Law of Evidence § 46 (3rd ed. 1980)).
    ¶45.   As noted above, not many Mississippi cases discuss the distinction between the
    burdens of production and persuasion, but our courts have not left the tablet wholly blank.
    We have, for example, used the two phrases in a manner consistent with the above discussion
    in cases involving will contests. In Clardy v. National Bank of Commerce of Mississippi,
    
    555 So. 2d 64
    (Miss. 1989), we wrote:
    20
    Once the proponent has shouldered his burden of production such that he has
    made out a prima facie case, the burden of production shifts to the contestants.
    What is critical for present purposes is that the burden of persuading the trier
    of fact on the issues of due execution and testamentary capacity rests on
    proponent throughout and never shifts to the contestants.
    
    Id. at 66.
    The idea of having two types of burden of proof – one which shifts and the other
    which cannot – is not wholly new to Mississippi law.12
    ¶46.   Turning to the case sub judice, I agree with the majority’s analysis as applied to the
    burden of persuasion, but I disagree that the burden of production does not shift. In holding
    that Mississippi prohibits burden-shifting, the majority relies upon the following language
    from Corban v. United Services Automobile Association, 
    20 So. 3d 601
    (Miss. 2009):
    This Court finds that with respect to the “all-risk” coverage of “Coverage
    A-Dwelling” and “Coverage B-Other Structures,” the Corbans are required to
    prove a “direct, physical loss to property described.” Thereafter, USAA
    assumes the burden to prove, by a preponderance of the evidence, that the
    causes of the losses are excluded by the policy, in this case, “[flood] damage.”
    USAA is obliged to indemnify the Corbans for all losses under “Coverage
    A-Dwelling” and “Coverage B-Other Structures” which USAA cannot
    establish, by a preponderance of the evidence, to have been caused or
    concurrently contributed to by “[flood] damage.”
    
    Id. at 619
    (¶ 51). It is clear that the Corban Court, in writing about the burden of proving
    facts by a “preponderance of the evidence” referred to what has come to be known over the
    past century or more as the burden of persuasion, discussed above. Standards of proof do not
    apply to the burden of production. 21B Fed. Prac. & Proc., Evid. § 5122 (2d ed. 1987).
    12
    Accordingly, elucidating the distinctions is not a mere scholarly pursuit based only
    on federal civil procedure, but it is a more full explication of something that already exists,
    obscured in the background though it may be, in our state’s jurisprudence and must be fully
    understood to reach the correct holding in the case sub judice.
    21
    ¶47.   With respect, the majority again misses the importance of the distinction when it
    refuses to find persuasive the Fifth Circuit’s opinion in Bayle v. Allstate Insurance Co., 
    615 F.3d 350
    (5th Cir. 2010). Clearly, when the Bayle Court wrote that the burden shifted to the
    insured “to present evidence demonstrating there remain[s] a material issue of fact,” 
    Id. at 359
    (emphasis added), it wrote of the burden of producing evidence and not the burden of
    persuading the finder of fact.
    ¶48.   The majority incorrectly writes that the argument of State Farm in Broussard v. State
    Farm Fire and Casualty Co., 
    523 F.3d 618
    (5th Cir. 2008), mirrored that of USAA here.
    In Broussard, the trial court granted a directed verdict against State Farm, and State Farm
    argued that it had produced evidence that created an issue of fact. 
    Id. at 625.
    State Farm was
    not arguing that it had met its burden of production and that the plaintiffs had failed to
    produce evidence creating an issue of fact, which is USAA’s argument in the instant case.
    In any event, when making its Erie guess regarding the correct burdens of proof, the
    Broussard Court relied on “the rule that causation is a fact question for the jury.”
    
    Broussard, 523 F.3d at 627
    . Accordingly, the Broussard Court concerned itself primarily
    with the burden of persuasion. The jury never concerns itself with the burden of production.
    21B Fed. Prac. & Proc., Evid. § 5122 (2d ed. 1987).
    ¶49.   When the trial judge stated his understanding that “the plaintiff should have to had to
    put on something to show it was other than surge,” he was not incorrectly reassigning the
    burden of persuasion. He did not say he would require the plaintiffs to convince the jury by
    a preponderance of the evidence that conflicting evidence showed the damage was caused
    22
    by something other than surge. Rather, he was correctly observing that when the insurer
    provided credible proof of causation, the burden of production of evidence moved to the
    plaintiff to create an issue of fact. DeLaughter v. Womack, 
    250 Miss. 190
    , 211-212, 
    164 So. 2d
    762, 771 (1964) (after plaintiff made out prima facie case of negligence, defendants were
    required to produce evidence to the contrary), overruled on other grounds by Hall v. Hilbun,
    
    466 So. 2d 856
    , 866 (Miss. 1985); see also McCormick on Evidence § 336 (Kenneth S.
    Broun, et al., eds., 7th ed. 2013) (“Clearly, the principal significance of the burden of
    persuasion is limited to those cases in which the trier of fact is actually in doubt [as to the
    truth of a disputed fact issue]”). Because the plaintiff failed to produce competent, contrary
    evidence, there existed no disputed facts as to which the trier of fact needed to be persuaded
    by a preponderance of the evidence. The trial court correctly analyzed that the plaintiffs had
    not done so, that no issues of material fact existed for the jury, and entered judgment in favor
    of the insurer as required by law.
    ¶50.   Although I agree with the majority’s analysis of the other issues raised by the
    appellants, pursuant to the above analysis I would affirm the trial court. Accordingly, I
    dissent.
    DICKINSON, P.J., JOINS THIS OPINION.
    23