Summary
The Mississippi Supreme Court held that the parties did not clearly waive Cherokee Insurance Company's right to appeal by entering into a settlement agreement that reserved litigation of coverage under a commercial general liability policy. Applying Tennessee law, the court concluded that coverage could exist under the concurrent causation doctrine if Three Rivers Trucking's alleged negligent supervision, hiring, training, or monitoring of its employee was a substantial factor in causing the accident. The court affirmed in part, reversed in part, and remanded for further findings.
Topics
Practice areas
Questions Presented
- Whether the settlement agreement clearly waived Cherokee's right to appeal the circuit court's coverage determination.
- Whether the commercial general liability policy's automobile exclusion barred the plaintiffs' direct negligence claims against Three Rivers.
- Whether the circuit court made the required finding that any nonexcluded negligence by Three Rivers was a substantial factor in causing the accident.
Holdings
- The settlement agreement did not waive Cherokee's right to appeal because an agreement not to appeal must be clear and leave no doubt that the party intended to surrender that right.
- The automobile exclusion did not necessarily bar the claims because, under Tennessee's concurrent-causation doctrine, coverage may exist when a nonexcluded cause is a substantial factor in producing the injury even though an excluded cause also contributed.
- The coverage judgment had to be reversed because the judgment did not indicate that the circuit court found Three Rivers' allegedly nonexcluded negligence to be a substantial factor in causing the accident.
Key quotations
“However, an agreement not to appeal “should be very clear in its terms, and leave no doubt of the intention of the party to cut himself off from the right of appeal.”” (¶10)
“Under this doctrine, coverage exists “where a nonexcluded cause is a substantial factor in producing the damage or injury, even though an excluded cause may have contributed in some form to the ultimate result and, standing alone, would have properly invoked the exclusion contained in the policy.”” (¶14)
Factual background
On July 21, 2005, an automobile accident in Copiah County, Mississippi, involved two eighteen-wheelers, a bob-tailed truck driven by Britt Rogers, and a passenger automobile driven by Kathy Gustavis. Rogers died and Gustavis suffered severe injuries. Three Rivers Trucking and its employee Bobby Morris were insured under both a commercial automobile policy and a commercial general liability policy issued by Cherokee. The parties settled claims under the automobile policy and agreed to litigate whether the general liability policy provided additional coverage for claims that Three Rivers negligently supervised, hired, employed, trained, or monitored Morris.
Procedural history
After the automobile accident, Babin and Gustavis sued the truck driver and trucking company. The parties settled the automobile-policy claims and agreed to litigate coverage under the commercial general liability policy. The circuit court found coverage, Cherokee appealed, and the Mississippi Supreme Court previously dismissed an appeal without prejudice after the plaintiffs asserted that Cherokee had waived its appellate rights. The circuit court then enforced the settlement and entered final judgment for the plaintiffs; Cherokee appealed again. The Supreme Court affirmed the portion of the judgment rejecting waiver, reversed the coverage judgment, and remanded.
Remand instructions
The circuit court must determine whether Three Rivers was negligent in supervising, hiring, employing, training, or monitoring Morris and whether that negligence was a substantial factor in causing the accident. If either element is absent, the court must enter judgment for Cherokee; if both are established, the court must enter judgment for the plaintiffs in an amount consistent with the settlement agreement.