Coogan v. Nationwide Prop. & Cas. Ins. Co.

376 So.3d 422

Cheryl COOGAN and Craig Coogan, Appellants

v.NATIONWIDE PROPERTY AND CASUALTY INSURANCE COMPANY, Appellee

NO. 2022-CA-01063-COA

Court of Appeals of Mississippi.

12/12/2023

HANCOCK COUNTY CIRCUIT COURT, HON. LAWRENCE PAUL BOURGEOIS JR., JUDGE

ATTORNEY FOR APPELLANTS: EDWARD D. MARKLE

ATTORNEY FOR APPELLEE: THOMAS LYNN CARPENTER JR., Gulfport

BEFORE BARNES, C.J., GREENLEE AND EMFINGER, JJ.

EMFINGER, J., FOR THE COURT:

¶1. Cheryl and Craig Coogan (mother and son) appeal from the order of the Hancock County Circuit Court granting Nationwide’s motion for partial summary judgment as to their claims for bad faith and punitive damages arising from damages they allege occurred while their vehicle, insured by Nationwide, was in the possession of a thief.

FACTS AND PROCEDURAL HISTORY

¶2. On August 11, 2021, Craig Coogan gave a statement to Revell Dixon of Nationwide Property and Casualty Insurance Company describing events that occurred on July 14 and 15, 2021. On July 14, Craig was at a grocery store in Bay Saint Louis, around 9 p.m., when he encountered a stranger who asked him for a ride to the Hollywood casino. With Craig driving his 2007 Toyota Tacoma truck, they went to the Hollywood casino, and Craig watched the unidentified stranger gamble for a while. Then, at the stranger’s request, they went to the Golden Nugget casino in Biloxi. Craig could not provide an explanation, but at some point the stranger ended up with his track keys, credit card, and cell phone. According to Craig, at some point during the early morning hours of July 15, while making "a scene" trying to get his keys back from the stranger, he was removed from the Golden Nugget. Because they would not let Craig back in the casino, he stayed by his truck until around 10 or 11 a.m., at which point he walked to a store to get some water. Upon his return, he discovered that his truck, along with his cell phone and credit card, were gone. Craig called his mother Cheryl and told her what had happened.

¶3. Cheryl called the Biloxi Police Department to report the theft. At some point, she called Craig’s phone, which was still in the truck. The person who answered said he would leave the truck at the Walmart in Pass Christian. Cheryl went to the Walmart, but the truck was not there. She continued to exchange text messages with the person, asking that he return the truck and its contents. The truck was recovered later that night, around 10 p.m., by the Long Beach Police Department.

¶4. Cheryl notified Nationwide, her insurance carrier, of the theft. The Coogans, at some point, filed a claim for damages to the truck as a result of the theft.¹ After the truck was recovered, it was taken, at Nationwide’s expense, to Copart in New Orleans, an online car-auction company. While there on July 23, 2021, photos were taken, showing damage to the vehicle. Those photos were provided to Rick Peterson, the claims examiner assigned to the Coogans’ claim. As part of their investigation of the claim, Nationwide representatives also spoke with Craig and Cheryl concerning the condition of the truck before and after the theft.

¶5. Nationwide denied the claim based partly on Peterson’s opinion that oxidized rust appeared in the photos of the damaged area of the truck, which Peterson said could not have developed only eight days after the theft. That opinion was reinforced by the interviews of Craig and Cheryl, who both acknowledged that the truck had some pre-existing damage.

¶6. Both Craig and Cheryl admitted that there was prior damage to the passenger side and rear quarter panel, but both contended that the damage was not as bad as what existed after the theft. They claimed the damage to the area below the headlight on the driver’s side was the result of the theft. However, Craig told Revell Dixon that he had caused damage to that area a couple of months earlier when he was turning and hit a "metal concrete thing" at a gas station. Cheryl admitted only that the driver’s side headlight was broken and replaced before the theft. As to damage to a side mirror, Craig admitted that he had caused the damage to the passenger side mirror by hitting a mailbox or somebody’s garbage that "was sticking out of the freaking aisleway. I had to get to work on time, I left." Cheryl argued that because of his mental issues, Craig’s statements were not accurate. Nationwide concluded that the damage claimed by the Coogans preexisted the theft.²

¶7. The Coogans filed a complaint on September 30, 2021, a little over two months after the theft, for contractual and punitive damages against Nationwide. Nationwide filed a motion for partial summary judgment as to the bad faith and punitive damages claims and for a determination that the Coogans’ deductible for their contractual claim was $2,000. In its motion for summary judgment, Nationwide asserted first that it had an arguable basis for its position that the Coogans had failed to show that the damage to the covered vehicle was the result of the theft. In support of its position, Nationwide attached, among other items, photos of the truck, Craig’s deposition, transcript of Craig’s recorded statement, and Peterson’s affidavit. Second, Nationwide argued that the Coogans had produced no summary judgment proof that it had "committed a wilful or malicious wrong, or acted with gross and reckless disregard for the insured’s rights."

¶8. The Coogans countered by arguing that Nationwide had no legitimate basis on which to deny their claim. The Coogans contend that issues of fact were present because the parties’ versions of the events are at odds, citing Cook v. Children’s Medical Group P.A., 756 So. 2d 734, 739 (¶15) (Miss. 1999).³ While Nationwide contended that there was damage to the Coogan’s vehicle before the theft, the Coogans maintained that the damages for which they sought recovery occurred during the time the vehicle was under the thief’s control. According to Peterson’s affidavit, "Cheryl Coogan told [Peterson] that the damage to the front grill and side mirrors were preexisting" and that "there were areas of damage on the track that were present before the theft, but they were larger now." During discovery, Cheryl denied making some of those statements but admitted that there were some areas of damage to the truck, but she claimed they were just larger after the theft.

¶9. The Coogans also argued that regardless of when or how the damages occurred, they are covered by their Nationwide policy. They argued before the trial court and here on appeal, that

if the damages occurred during the time the vehicle was under the thief’s control, which it did, it is covered under the Comprehensive section of the policy. If the damages occurred as a result of a prior collision, as alleged by Nationwide, the claim is payable under the Collision section of the policy.

The Coogans also argued that the policy has no exclusion for pre-existing damage. As a result, the Coogans contended that Nationwide’s failure to pay their claim amounted to an intentional tort deserving of punitive damages.

¶10. After briefing and oral arguments, the circuit court granted Nationwide’s motion and dismissed the Coogans’ bad faith and punitive damage claims. When the Coogans’ trial counsel advised the circuit court that he intended to file an interlocutory appeal from the judgment, the circuit court stayed the case pending resolution of the Coogans’ punitive damages and bad faith claims by this Court. The circuit court entered an agreed amended order that its "judgment was a final judgment on the issue of [the Coogans’] bad faith/punitive damage claims and actions and expressly determine[d] that there [was] no just reason for delay and expressly direct[ed] that there be an entry of final judgment on said issues in accordance with M.R.C.P. 54(b)."

STANDARD OF REVIEW

[1] ¶11. In Holloway v. National Fire & Marine Insurance Co., 360 So. 3d 671, 674-75 (¶¶8-9) (Miss. Ct. App. 2023), we stated:

We review the grant of a motion for summary judgment de novo, viewing the evidence in the light most favorable to the non-movant. Karpinsky v. Am. Nat. Ins., 109 So. 3d 84, 88 (¶9) (Miss. 2013). The movant is entitled to summary judgment if the record evidence "show[s] that there is no genuine issue as to any material fact and that the[movant] is entitled to judgment as a matter of law." Id. at (¶10) (quoting M.R.C.P. 56(c)). The non-movant "may not rest upon the mere allegations or denials of his pleadings, but his response, by affidavits or as otherwise provided in [Rule 56], must set forth specific facts showing that there is a genuine issue for trial." Id. (quoting M.R.C.P. 56(e)). In other words, "the non-movant cannot just sit back and remain silent, but he must rebut by producing significant probative evidence showing that there are indeed genuine issues for trial." McMichael v. Nu-Way Steel & Supply Inc., 563 So. 2d 1371, 1375 (Miss. 1990) (quoting Newell v. Hinton, 556 So. 2d 1037, 1041 (Miss. 1990)).

"In order to pursue a claim for bad faith denial of coverage in Mississippi, the insured bears a heavy burden to prove that its insurer lacked any arguable or legitimate basis to deny such coverage and that the ‘insurer committed a wilful or malicious wrong, or acted with gross and reckless disregard for the insured’s rights.’" Mut. Assur. Inc. v. Banks, 113 F. Supp. 2d 1020, 1023 (S.D. Miss. 2000) (quoting State Farm Mut. Auto. Ins. Co. v. Grimes, 722 So. 2d 637, 641 (¶12) (Miss. 1998)). Whether there is an arguable basis for denying coverage is a question of law to be decided by the court. Murphree v. Fed. Ins. Co., 707 So. 2d 523, 530 (Miss. 1997).

(Emphasis added). "Partial summary judgment is also permissible under our rules, utilizing the same criteria for a grant or denial of a summary judgment and the same standard of review on appeal." Holcomb Dunbar Watts, Best, Masters and Golmon P.A. v. 400 South Lamar Oxford Mad Hatter Partners LLC, 335 So. 3d 568, 572 (¶7) (Miss. 2022...