Jerome Holloway v. National Fire & Marine Insurance Company

IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI

NO. 2021-CA-01066-COA

JEROME HOLLOWAY APPELLANT

v.

NATIONAL FIRE & MARINE INSURANCE APPELLEE
COMPANY

DATE OF JUDGMENT: 09/07/2021
TRIAL JUDGE: HON. DALE HARKEY
COURT FROM WHICH APPEALED: JACKSON COUNTY CIRCUIT COURT
ATTORNEYS FOR APPELLANT: MARSHALL JACKSON GOFF
ROGEN K. CHHABRA
ATTORNEYS FOR APPELLEE: BENJAMIN LYLE ROBINSON
AMANDA LEIGH ORR
NATURE OF THE CASE: CIVIL - INSURANCE
DISPOSITION: AFFIRMED - 05/09/2023
MOTION FOR REHEARING FILED:

BEFORE WILSON, P.J., McDONALD AND LAWRENCE, JJ.

WILSON, P.J., FOR THE COURT:

¶1. Jerome Holloway was involved in an automobile wreck while driving a Dodge Ram

3500 pickup truck owned by his employer, Port City Connection LLC (Port City). At the

time of the wreck, Holloway was on a personal trip with his then-girlfriend, Jacqueline Ward,

and was not acting within the scope of his employment. Ward was injured in the wreck and

sued Holloway for negligence. Holloway asserted that Ward’s claims against him were

covered by an insurance policy that National Fire & Marine Insurance Company (National

Fire) had issued to Cassius Williams d/b/a Uncle Mervin’s Transport (Williams). Port City

was an independent contractor for Williams, and the Dodge Ram had been used to provide
transportation services on behalf of Williams. National Fire agreed to defend Holloway

under a reservation of rights. In addition, National Fire ultimately funded a settlement and

secured a release of all claims against Holloway. Nonetheless, Holloway sued National Fire,

alleging that it had reserved its rights in “bad faith” and caused him emotional distress. The

circuit court granted summary judgment in favor of National Fire, holding that there were no

genuine issues of material fact and that National Fire had a legitimate basis for reserving its

rights. We find no error and affirm.

FACTS AND PROCEDURAL HISTORY

¶2. On May 20, 2016, Holloway and Ward drove from Mobile, Alabama, to Jackson,

Mississippi, to attend Ward’s nephew’s high school graduation. Holloway drove a Dodge

Ram 3500 pickup truck owned by his employer, Port City. However, Holloway was not

acting within the scope of his employment and did not perform any work for Port City on the

trip. In his deposition, Holloway testified that Port City’s owner, Sidney Thomas, gave him

permission to use the truck for the personal trip.1 After a post-graduation dinner, Holloway

and Ward left Jackson to return to Mobile. Around 3:42 a.m. on May 21, as Holloway and

Ward were exiting Interstate 10 in Moss Point, Mississippi, their truck collided with an

eighteen-wheeler owned and operated by Retif Oil & Fuel LLC (Retif Oil). Ward was

injured in the wreck. In 2019, Ward filed a personal injury suit in the Jackson County Circuit

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In response to an interrogatory to Port City, Thomas disputed Holloway’s claim.
Thomas stated that he “ha[d] no idea what . . . Holloway was doing in the [truck]” and that
Holloway “was apparently using the [truck] for some unauthorized personal purpose.”

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Court. In her amended complaint, Ward named Holloway, Port City, Retif Oil, Williams, and

National Fire as defendants.

¶3. At the time of the wreck, Williams was in the business of transporting automobiles.

Williams had an “Independent Contractor Service Agreement” with Port City under which

Port City’s drivers would use the Dodge Ram to transport automobiles on Williams’s behalf

on an as-needed basis. An insurance policy issued to Williams by National Fire (the Policy)

covered Port City and its employees while the Dodge Ram was “being used exclusively in

[Williams’s] business.” As relevant in this case, the Policy also covered:

Anyone else while using with your permission a covered “auto” you own, hire
or borrow except:
(1) The owner or anyone else from whom you hire or borrow a covered
“private passenger type auto.”

The policy defined a “private passenger type auto” to “include[] an ‘auto’ of the pickup or

van type if not used for business purposes.” In her amended complaint, Ward sought a

declaratory judgment that the Policy provided liability coverage for Holloway in connection

with Ward’s claims.

¶4. National Fire filed an answer disputing coverage but sent Holloway a reservation-of-

rights letter, “agree[ing] to defend [Holloway] . . . under a full and complete reservation of

rights under [the] Policy.” National Fire stated that it appeared Holloway did not have

Williams’s permission to drive the Dodge Ram on his personal trip to Jackson. National Fire

maintained that if Holloway did not obtain Williams’s permission to use the truck, then he

was not a “permissive user” and was not covered under the Policy. National Fire also filed

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a cross-claim against Holloway, seeking a declaratory judgment that the Policy did not

provide coverage for Ward’s claims against him.

¶5. Holloway filed an answer to National Fire’s cross-claim and a counterclaim against

National Fire. Holloway maintained that he was insured under the Policy as a “permissive

user” because he had Port City’s (i.e., Sidney Thomas’s) permission to use the truck.

Holloway asserted claims against National Fire for “bad faith” failure to concede coverage

and intentional infliction of emotional distress (IIED).

¶6. Despite the existence of a coverage dispute, National Fire ultimately settled Ward’s

claims and secured a full and complete release of all claims against Holloway, Port City, and

Williams. National Fire then filed a motion for summary judgment on Holloway’s claims

for bad faith and IIED. The circuit court granted National Fire’s motion for summary

judgment, holding that there was no genuine issue of material fact and that “National Fire

had a legitimate basis to reserve its rights.” Holloway appealed.

¶7. On appeal, Holloway argues that the circuit court erred by granting National Fire’s

motion for summary judgment and by not granting him leave to take additional depositions.

ANALYSIS

¶8. 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]

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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)).

¶9. “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). Of course, in the present case, National Fire never actually denied

coverage. Rather, National Fire defended Holloway subject to a reservation of rights and

ultimately paid a settlement that secured a complete release of all claims against him.

¶10. Arguably, National Fire was entitled to summary judgment on Holloway’s bad faith

claim for the simple reason that it never denied coverage but instead reserved its rights and

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sought a judicial determination of coverage. In Banks, the district court held that the insurer

was entitled to summary judgment on the insured’s bad faith claim because the insurer

provided a defense under a reservation of rights and simultaneously filed a declaratory

judgment action to determine coverage. Banks, 113 F. Supp. 2d at 1024 (Gex, J.) (applying

Mississippi law). The court held that the bad faith claim failed as a matter of law because

there was “simply no evidence indicating that [the insurer] ha[d] denied coverage.” Id.2 The

same reasoning applies in this case.

¶11. But in any event, the circuit court properly granted National Fire’s motion for

summary judgment because National Fire had at least an arguable or legitimate basis under

the Policy for questioning coverage and defending Holloway under a reservation of rights.

There is no dispute that the Dodge Ram was not being used in Williams’s business at the

time of the underlying wreck. Rather, Holloway and Ward took the truck on a personal trip.

Therefore, Holloway was covered under the Policy only if he was a “permissive user” of the

truck. Moreover, the Policy’s plain language indicates that a driver is a permissive user of

a covered auto only if he has obtained Williams’s permission to use the vehicle. Holloway

2
Accord Mesa Underwriters Specialty Ins. v. LJA Com. Sols. LLC, No. 3:13-cv-29-
CWR-FKB, 2015 WL 1457537, at *5-6 (S.D. Miss. Mar. 30, 2015) (Reeves, J.), aff’d, 633
F. App’x 253 (5th Cir. 2016); Accident Ins. v. Classic Bldg. Designs LLC, No. 2:11-cv-33-
KS-MTP, 2011 WL 1813268, at *4-5 (S.D. Miss. May 6, 2011) (Starrett, J.); see also
Moeller v. Am. Guar. & Liab. Ins., 707 So. 2d 1062, 1069 (Miss. 1996) (stating that an
insurer “[u]nquestionably . . . has a right to offer the insured a defense” under a reservation
of rights); Emps. Mut. Cas. Co. v. Tompkins, 490 So. 2d 897, 905 (Miss. 1986) (holding that
an insurer “act[ed] in good faith” by filing a declaratory judgment action to determine
coverage under an uninsured motorist policy).

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never obtained Williams’s permission to use the truck, but Holloway argues that the Policy

covered him because he obtained Port City’s (i.e., Thomas’s) permission to use the truck.

Holloway argues that because Port City owned the truck, only Port City could give him

permission to take it on a personal trip. We disagree. Certainly, Port City could give

Holloway permission to take the truck on a personal trip. But that does not answer the

question whether Port City’s permission made Holloway a permissive user under the

Policy—which was issued to Williams, not Port City. The Policy’s plain language indicates

that permission for purposes of coverage under the Policy had to come from Williams, not

Port City. Thus, at the very least, National Fire had an arguable or legitimate basis for

reserving its rights.3 Therefore, National Fire was entitled to summary judgment on

Holloway’s bad faith claim.4

¶12. For the same reason, Holloway’s IIED claim also fails. “The standard for [IIED] in

Mississippi is very high: a defendant’s conduct must be wanton and wilful and such that it

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National Fire also argues that it had an arguable and legitimate basis for reserving
its rights because the Policy’s permissive user coverage does not apply to a “private
passenger type auto” such as the Dodge Ram truck. See supra ¶3. However, because we
have already identified one arguable and legitimate basis for National Fire’s reservation of
rights, we need not address this issue.
4
See Wise v. United Servs. Auto Ass’n, 861 So. 2d 308, 319-20 (¶31) (Miss. 2003)
(holding that the insured “did not have a valid bad faith claim” and that the insurer was
entitled to summary judgment because it “had a legitimate and arguable basis in law for
denying” coverage); Liberty Ins. v. Tutor, 309 So. 3d 493, 507-08 (¶50) (Miss. Ct. App.
2019) (“The claimant bears the burden of demonstrating that the insurer had no arguable
reason for denying the claim.” (citing Caldwell v. Alfa Ins., 686 So. 2d 1092, 1097 (Miss.
1996))).

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would evoke outrage or revulsion.” Croft v. Grand Casino Tunica Inc., 910 So. 2d 66, 75

(¶31) (Miss. Ct. App. 2005) (quotation marks and brackets omitted) (quoting Hatley v. Hilton

Hotels Corp., 308 F.3d 473, 476 (5th Cir. 2002)). The plaintiff must show that the

defendant’s conduct was “so outrageous in character, and so extreme in degree, as to go

beyond all possible bounds of decency, and to be regarded as atrocious, and utterly

intolerable in a civilized community.” Id. (quoting Brown v. Inter-City Fed. Bank, 738 So.

2d 262, 264 (¶9) (Miss. Ct. App. 1999)). Here, National Fire had an arguable and legitimate

basis for defending Holloway under a reservation of rights. Therefore, National Fire was

entitled to summary judgment on Holloway’s IIED claim as well. Id. at (¶32) (holding casino

was entitled to summary judgment on IIED claim stemming from the plaintiff’s arrest

because the casino had probable cause to initiate criminal charges).5

¶13. Finally, Holloway argues that the circuit court erred by not granting him leave to take

additional depositions. Holloway took the deposition of the adjuster who signed National

Fire’s reservation-of-rights letter, but after National Fire moved for summary judgment,

Holloway filed a motion for leave to take the depositions of two additional adjusters who

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The circuit court held that National Fire was entitled to summary judgment on
Holloway’s IIED claim because “National Fire was legally entitled to question coverage and
asserts its reservation of rights” and because the claim was barred by a one-year statute of
limitations, Miss. Code Ann. § 15-1-35 (Rev. 2019). Subsequently, the Mississippi Supreme
Court overruled prior precedent and held that IIED claims are subject to a three-year statute
of limitations. See GEICO Cas. Co. v. Stapleton, 315 So. 3d 464, 468 (¶¶12-14) (Miss.
2021). Nonetheless, because Holloway’s IIED claim fails on the merits, we may affirm the
circuit court notwithstanding the change in the law related to the statute of limitations.

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played some role in handling his claim. However, Holloway did not specifically request a

continuance under Mississippi Rule of Civil Procedure 56(f). In addition, although the

docket reflects that Holloway noticed his motion for a hearing, the record does not include

a transcript of that hearing or any on-the-record ruling on Holloway’s motion.

¶14. In general, “[i]t is the responsibility of the movant to obtain a ruling from the court

on motions filed by him, and failure to do so constitutes a waiver of the same.” Ridgway

Lane & Assocs. Inc. v. Watson, 189 So. 3d 626, 630 n.4 (Miss. 2016) (quotation marks

omitted) (quoting Anderson v. McRae’s Inc., 931 So. 2d 674, 678 (¶10) (Miss. Ct. App.

2006)). Therefore, Holloway waived this issue by failing to obtain a ruling on his motion.

¶15. Regardless of any waiver, additional discovery was unnecessary because it would not

have impacted National Fire’s right to summary judgment. For the reasons discussed above,

National Fire had—at the very least—an arguable and legitimate basis for defending

Holloway subject to a reservation of rights. National Fire was entitled to summary judgment

for that reason alone. Therefore, any disputed facts that additional depositions might have

revealed would not have been material facts under Rule 56.6 Accordingly, Holloway was

not entitled to additional discovery, and this issue is without merit. Cf. Holifield v. City

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See Shaw v. Burchfield, 481 So. 2d 247, 252 (Miss. 1985) (“The presence of fact
issues in the record does not per se entitle a party to avoid summary judgment. The court
must be convinced that the factual issue is a material one, one that matters in an outcome
determinative sense. . . . [W]e have kept ever before us that basic tenet of Rule 56 theology
that the existence of a hundred contested issues of fact will not thwart summary judgment
where there is no genuine dispute regarding the material issues of fact.”).

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Salvage Inc., 230 So. 3d 736, 741 (¶14) (Miss. Ct. App. 2017) (holding that the circuit court

did not err by denying a continuance under Rule 56(f) because the plaintiffs failed to identify

any facts that additional discovery might have uncovered that would not have defeated the

defendant’s motion for summary judgment).

CONCLUSION

¶16. The circuit court properly granted National Fire’s motion for summary judgment.

¶17. AFFIRMED.

BARNES, C.J., CARLTON, P.J., GREENLEE, McDONALD, LAWRENCE,
McCARTY, SMITH AND EMFINGER, JJ., CONCUR. WESTBROOKS, J.,
CONCURS IN RESULT ONLY WITHOUT SEPARATE WRITTEN OPINION.

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