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Poindexter v. Southern United Fire Insurance Company2/27/2003
damages which may be recovered). As her insurer, Southern United is contractually obligated to indemnify Fields for liabilities incurred which are covered under their insurance agreement.
. As is its prerogative, Southern United disputed the amount of actual property damage sustained by Poindexter and took the position that it is not responsible for the towing and storage charges or the loss of use, thus denying coverage for these claims. Consequently, as is his statutorily-prescribed prerogative, Poindexter joined Southern United as a defendant pursuant to M.R.C.P. 57(b)(2), which provides in pertinent part as follows:
Where an insurer has denied or indicated that it may deny that a contract covers a party's claim against an insured, that party may seek a declaratory judgment construing the contract to cover the claim.
The Comment following Rule 57 states, in pertinent part:
Rule 57 (b) was amended in 2000 to authorize an injured party, where an insurer has indicated that it may deny coverage of the injured party's claim, to seek a declaratory judgment establishing coverage. The traditional rule in Mississippi barred any type of direct action by an injured party against an insurer. (citations omitted). The amendment modifies the traditional rule in the interest of judicial economy by allowing a direct action for the limited purpose of a declaratory judgment.
Allowing the injured party to seek a declaration that the injured party's claim is covered by the defendant's policy may reduce litigation costs. First, it may avoid unnecessary litigation when the policy is the only asset that might satisfy the injured party's claim, because a determination of non-coverage would avoid the need of trial of the claim against the insured. In addition, if the injured party brings the claim for declaratory judgment together with the claim against the insured, the rule may allow all of the issues growing out of an incident to be resolved in a single judgment.
. Southern United offered to settle this claim with Poindexter for less than the damages he incurred; thereby essentially asserting that coverage did not exist for his additional damages. Following the procedure outlined in Rule 57(b), Poindexter sought a declaratory judgment to determine the coverage issue. In my opinion, this procedure is sound and promotes the economical resolution of cases. Southern United has asserted in its brief that, if its insured is found negligent, and coverage is found to exist for these additional damages, then it will make Poindexter whole up to the limits of its policy with Fields. If it can be determined, prior to a lengthy jury trial, that coverage does in fact exist for these damages, then this determination should be made. It may cause Southern United to revisit settlement and thereby, in conformity with the hopes of the commentators to Rule 57(b), avoid unnecessary litigation and waste of judicial resources.
. In my opinion, the semantic argument urged by Southern United and accepted by the trial court and the majority of this Court confuses the issue. It focuses on a distorted linguistic variation of what Southern United is actually asserting. Southern United is not merely arguing over "the extent, amount and character of damages which Poindexter is claiming," rather, it is asserting that, regardless of how much it cost Poindexter to store his vehicle or how much he was inconvenienced by not having the use of his vehicle, it is not responsible for that damage because it is not a covered loss. In my opinion, that assertion is the very purpose for which Rule 57(b) was amended, and Poindexter's declaratory judgment action should be allowed to proceed.<
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