Case Name: John P. WILSON and Velma R. Wilson v. GIORDANO INSURANCE AGENCY, INC.
Court: Mississippi Supreme Court
Jurisdiction: Mississippi
Decision Date: 1985-06-05
Citations: 475 So. 2d 414
Docket Number: No. 54676
Parties: John P. WILSON and Velma R. Wilson v. GIORDANO INSURANCE AGENCY, INC.
Judges: PATTERSON, C.J., WALKER, P.J., and HAWKINS, PRATHER, SULLIVAN and ANDERSON, JJ., concur.
Reporter: Southern Reporter, Second Series
Volume: 475
Pages: 414–421

Head Matter:
John P. WILSON and Velma R. Wilson v. GIORDANO INSURANCE AGENCY, INC.
No. 54676.
Supreme Court of Mississippi.
June 5, 1985.
As Modified on Denial of Rehearing Sept. 18, 1985.
Walker W. Jones, III, David W. Mockbee, Michael Wallace, Jones, Mockbee & Bass, Jackson, for appellant.
Michael S. Allred, Michael Farrell, David L. Ayers, Satterfield & Allred, Jackson, for appellees.

Opinion:
ROY NOBLE LEE, Presiding Justice,
for the Court:
On July 21, 1980, Bailey Mortgage Company [Bailey] brought suit in the names of John P. Wilson and Velma R. Wilson, husband and wife, in the Circuit Court of Rankin County, Mississippi, against Giordano Insurance Agency, Inc. [Giordano] seeking the sum of thirty-five thousand dollars ($35,000) damage to the Wilsons' home. The lower court, Honorable Charles Barber, special judge, presiding, heard and sustained affirmative defenses of Giordano in a bifurcated trial and entered judgment for Giordano.
Bailey has appealed to this Court and contends (1) there was a material question of fact as to whether Bailey was a joint tortfeasor; (2) the lower court's determination of a material issue of fact amounted to entry of summary judgment; and (3) Bailey Mortgage Company was not in fact a joint tortfeasor.
Giordano pleaded affirmatively and contended (1) that Bailey was a joint tortfeasor because its negligence contributed to cancellation of a flood insurance policy; (2) a joint tortfeasor cannot settle with the injured party and seek contribution from another joint tortfeasor; and (3) Bailey could not use the Mississippi assignment statute as a vehicle to circumvent Mississippi law which prohibits one joint tortfeasor from seeking contribution from another.
Shortly prior to April 1, 1977, the Wil-sons, with the help of Bailey Mortgage Company, applied for a Veterans' Administration loan to obtain financing for the purchase of a home in Flowood, Mississippi. The loan was handled and closed through Mississippi Valley Title Insurance Company.
On April 1, Bailey sent a speedletter to Mississippi Valley Title informing that company the Wilson loan required flood insurance. On the same day, Bailey sent to Mississippi Valley Title a memo stating "Per our conversation, please delete the requirement for flood insurance on the [Wilson] loan." Subsequently, flood insur- anee was obtained and cancelled, more than once, apparently with somebody having proper authority being unable to make a correct decision thereon. Loan closing documents and insurance forms were executed by Mississippi Valley Title, Bailey Company, and Giordano. Documents from Mississippi Valley Title to Bailey indicated flood insurance was required prior to the loan.
On May 26, 1977, Bailey sent a speedlet-ter to Mississippi Valley Title again stating, "Please send flood insurance policy back. There is no flood insurance required on this loan." On June 13, 1977, Mississippi Valley Title prepared a closing form which deleted the flood insurance policy. The Wilsons' flood insurance policy had been previously issued by Giordano and, on June 21, Bailey sent to Giordano a speedletter stating, "Enclosed is the flood policy and binder for the above referenced number. Flood insurance is not required on this loan, so we are returning the policy for cancellation."
The policy returned by Bailey was dated as having been purchased April 6, 1977. The premium for the policy was eighty-eight dollars ($88.00), which had been paid and receipted on March 31, 1977. The HUD Disclosure/Settlement Statement dated May 26, 1977, shows a payment to Gior-dano of $88.00 for flood insurance and a deposit with Bailey for one month's flood insurance of $7.33. Both amounts were calculated as part of the total closing costs and the VA Certificate of Loan disbursement dated May 26, 1977, stated a total of $96.33.
The Bailey Company instructed Giordano to cancel the flood insurance which was accomplished without the Wilsons' knowledge, although John Wilson's name was signed to the cancellation dated April 16, 1977. The Wilsons received no refund of the premiums paid pursuant to the cancellation.
During the period April 13 through 16, 1979, (the 1979 Easter Flood) the Wilsons' home was flooded resulting in extensive damage. The flood insurance policy which the Wilsons thought was in effect amounted to thirty-five thousand dollars ($35,000). They immediately made contact for the insurance proceeds and, alas, to the consternation of many people, there was no flood insurance' in effect, since Giordano had can-celled same when the loan was closed at the request of the Bailey Company.
Bailey, obviously recognizing its vulnerability, negotiated an agreement with the Wilsons whereby the Bailey Company agreed to pay flood damages not to exceed $35,000, the amount of the cancelled flood insurance policy. Thereupon, the Wilsons agreed to release and discharge Bailey and its representatives of all claims and damages to the Wilsons' home in the April, 1979, flood as a result of the cancellation of, and failure to maintain, flood insurance coverage on the home. The Wilsons further assigned and transferred to Bailey all claims, causes of action, rights and damages which they may have had against Giordano as a result of their terminating the flood insurance policy. Subsequently, the present suit was filed by Bailey in the name of the Wilsons, for damages against Giordano.
The threshold question is whether or not the lower court erred in proceeding to hear the affirmative defenses of Giordano that Bailey was a joint tortfeasor and was estopped from suing Giordano, a tort-feasor, and whether or not the lower court should have impaneled a jury to hear that question.
Bailey filed suit under the Mississippi assignment statute, Mississippi Code Annotated § 11-7-3 (1972), in the name of the Wilsons, who were simply nominal parties and with no interest in the outcome of the litigation. The real party in interest was the Bailey Company. Mississippi Code Annotated § 11-7-7 (1972) provides the following:
Any chose in action . may be sold or assigned the same as any property . Such transfer . shall be valid and binding upon all persons thereafter dealing with such cause of action . and said suit may be prosecuted to final judgment in the name of the party who instituted the same: Provided, that such sale shall not be used or commented on by the opposite party to the court or jury on the trial of said cause. (Emphasis added)
Thus, it may be readily seen that, in the event Giordano was put to trial on the declaration and answer (with affirmative defenses) it would not be possible for it to show the connection of the Bailey Company with the claim, resulting in a rank injustice to Giordano. However, Mississippi Code Annotated § 11-7-59 (1972) provides in part:
But if matter which heretofore could constitute a plea be set up in the answer in such a manner as to be clearly distinct and readily separable and go to the entire present cause of action, it may, on motion of either or any of the parties, be separately heard and disposed of before the principal trial of the cause, in the discretion of the court; and the said motion shall by itself, without further formalities or any specifications of grounds, operate (1) to set the said manner of plea for argument upon its sufficiency in law, and if held sufficient in law (2)to put in issue upon its facts, and no replication shall be necessary. (Emphasis added)
Following the above statute, the lower court proceeded to hear Giordano's motion to dismiss the suit on its affirmative defenses. Uncontradicted in the record are the following facts evidenced by documents in the Bailey Company's files:
(1) The loan was closed on May 26, 1977, with flood insurance.
(2) The closing documents revealed flood insurance.
(3) The closing attorney collected premiums for flood insurance and forwarded them to Bailey Mortgage Company for escrow.
(4) Bailey asked Mississippi Valley Title Company to return the flood policy with the explanation that none was required.
(5) Bailey's copies of closing documents demonstrate that flood insurance had been whited out.
(6) Memorandum of the Bailey Company to Giordano June 20, 1977, stating "Enclosed is the flood policy and binder for the above referenced number. Flood insurance is not required on this loan, so we are returning the policy for cancellation."
(7) Giordano did not become involved, as to liability, until June 20, 1977, when it received the memorandum, although its cancellation is dated June 13, 1977.
We have carefully reviewed the record, particularly as to the Bailey Company's fault and find it so overwhelming that, if the facts had been submitted to a jury, the lower court would have been bound to enter a directed verdict for Giordano. In Christopher v. Brown, 211 Miss. 322, 51 So.2d 579 (1951), this Court discussed and interpreted § 11-7-59. There, although two separate issues were submitted to one jury, which was not possible in the case sub judice, the Court discussed the above section and its applicability and said:
The above enactment was the legislative response to a wide-spread demand for the expediting of trials in the circuit court. To that end, it requires that all defenses shall be stated in the answer. Pleas in abatement are specifically mentioned. Provision is made for those cases wherein some particular defense is clearly distinct, readily separable and goes to the entire cause of the action, as then stated. In such event, any of the parties may move for a separate hearing thereon. In granting or refusing such motion, the trial judge exercises judicial discretion.
The efficacy of this legislation is apparent. In this cause, the issues were, in fact, twofold only: (1) Whether or not Brown owed the debt; and (2) Whether or not he was about to remove his automobile out of the state.... In such a case, the trial of the attachment issue by one jury, and, following that a trial of the merits by another jury would be expensive and time consuming. Undoubtedly the legislature proposed to prevent such undue expense, loss of time and delay. They expressly vested discretion in the trial judge to determine when, and in what cases, separate hearings may be had. To that extent, in trials in the circuit court, Chapter 230, Laws 1948, Section 1475.5, Code 1942, Annotated, has supplanted Sections 2713 and 2716, Code 1942.
211 Miss. at 328-329, 51 So.2d at 582.
This Court is of the opinion that the lower court did not err, or abuse its discretion, in hearing the motion to dismiss on the affirmative defenses filed by Giordano.
We are not persuaded by the contention of appellant that, assuming arguendo, the Bailey Company and Giordano were tort-feasors, they were not joint tortfeasors. The law is well settled in Mississippi as to what constitutes joint tortfeasors. In D. W. Jones, Inc. v. Collier, 372 So.2d 288 (Miss.1979), the Court said:
The appellees knew, or by the exercise of reasonable care should have known, of appellant's catfish operations, the toxic effect of the application of agricultural poison on the fish and that all the appel-lees were, or had been, making the applications of poison. Following the rule announced in [Masonite Corp. v.] Burnham [164 Miss. 840, 146 So. 292] and Westerfield [v. Shell Petroleum Corp., 161 Miss. 833, 138 So. 561], those facts constitute an implied concert of action which resulted in pollution of the ponds, contamination of the catfish and damage to appellant.
Turning to the modern trend where joint and several liability may exist, notwithstanding lack of concerted action on the part of the tort-feasors, and enlarging upon the principle stated in Westerfield v. Shell Petroleum Corporation, supra, we hold that the separate, concurrent and successive negligent acts of the appellees which combined to proximately produce the single, indivisible injury to appellant's property (pollution of its ponds and contamination of its catfish) rendered appellees jointly and severally liable.
372 So.2d at 294. See also State ex rel. Richardson v. Edgeworth, 214 So.2d 579 (Miss.1968); and Hutto v. Kremer, 222 Miss. 374, 76 So.2d 204 (1954), where the Court said:
[T]he legal principle applicable to the facts of this case is stated at Section 85 of Cooley on Torts (4th Ed.) as follows: "All who actively participate in any manner in the commission of a tort, or who command, direct, advise, encourage, aid or abet its commission are jointly and severally liable therefor."
222 Miss. at 283, 76 So.2d at 208. See also Granquist v. Crystal Springs Lumber Co., 190 Miss. 572, 1 So.2d 216 (1941).
The lower court made the following finding on the dismissal motion:
It is the opinion of this Court that the assignment from the plaintiffs to Bailey Mortgage Company was valid. However, since this Court has found that Bailey Mortgage Company is a joint tort-feasor, Bailey Mortgage Company is es-topped from pursuing this action against Giordano Insurance Agency.
We are of the opinion that there was no reversible error in the trial below and that the judgment of the lower court should be, and is, affirmed.
AFFIRMED.
PATTERSON, C.J., WALKER, P.J., and HAWKINS, PRATHER, SULLIVAN and ANDERSON, JJ., concur.
ROBERTSON and DAN M. LEE, JJ., dissent.
. An officer of Bailey, who testified at the trial, stated the author of the memo was no longer employed and that Bailey had no explanation why it returned the policy for cancellation.
. For the purpose of the affirmative defenses Giordano admitted its position as a joint tort-feasor.