Case Name: LEADER NATIONAL INSURANCE COMPANY v. Terry LINDSEY and Kim Coker
Court: Mississippi Supreme Court
Jurisdiction: Mississippi
Decision Date: 1985-07-24
Citations: 477 So. 2d 1323
Docket Number: Nos. 54756, 55095
Parties: LEADER NATIONAL INSURANCE COMPANY v. Terry LINDSEY and Kim Coker.
Judges: PATTERSON, C.J., and DAN M. LEE, ROBERTSON, SULLIVAN and ANDERSON, JJ., concur.
Reporter: Southern Reporter, Second Series
Volume: 477
Pages: 1323–1335

Head Matter:
LEADER NATIONAL INSURANCE COMPANY v. Terry LINDSEY and Kim Coker.
Nos. 54756, 55095.
Supreme Court of Mississippi.
July 24, 1985.
C. Denton Gibbes, Eugene M. Harlow, Gibbes, Graves, Mullins, Bullock & Ferris, Laurel, for appellant.
Thomas Tucker Buchanan, Billie J. Graham, Buchanan & Graham, Laurel, for ap-pellees.

Opinion:
PRATHER, Justice,
for the Court:
This appeal addresses the question of which party has the burden of pleading and proving a matter in avoidance of liability in a garnishment suit. Stated differently, the question is whether the judgment creditor in an automobile negligence suit may prevail in a garnishment action against the judgment debtor's automobile liability carrier without affirmatively pleading and proving compliance with the conditions precedent to recovery under the policy.
Terry Lindsey and Kim Coker hold final judgments against Frank C. Yarbrough, defendant, secured in a prior tort suit. In the consolidated case before us, Lindsey and Coker seek to collect these judgments against Yarbrough's liability insurance carrier, Leader National Insurance company, garnishee, who denied coverage for lack of notice to it of the filing of suit against their insured Yarbrough. From the rendering of judgment against it, Leader National appeals, arid Lindsey and Coker cross-appeal.
Leader National's assignments of error are summarized as:
(1)The trial court's refusal of a directed verdict and peremptory instruction for ap-pellee's failure to affirmatively plead and prove compliance with the notice provisions of the policy of the insured, Yarbrough;
(2) The jury verdict was not supported by the credible evidence and the law; and
(3) The trial court's granting appellee's instructions No. 5 and No. 9.
Appellees Lindsey and Coker cross-appeal assigning as error:
(1) The trial court erred in failing to grant a peremptory instruction in favor of the appellees due to the failure of appellant Leader National to affirmatively plead noncompliance with the notice provisions contained in the policy of the insured;
(2) The trial court erred in granting appellant's motion for a new trial and entering judgment for appellee Coker in the amount of $10,000 rather than $20,000.
I.
On December 4, 1981, appellees Terry Lindsey and Kim Coker were involved in an automobile collision with Frank C. Yar-brough. At the time of the accident, Yar-brough was covered by a basic automobile liability and physical damage insurance policy issued by the appellant, Leader National Insurance Company. On June 28, 1982 appellees Lindsey and Coker recovered judgments by default against the insured Yarbrough in the amounts of $10,000 and $20,000 respectively plus costs.
Upon nonpayment of the default judgment, appellees Lindsey and Coker filed suggestions for garnishment against Leader National. The allegations of the appel-lees' pleadings followed strictly the aver-ments of Miss.Code Ann. § 11-35-1 (1972) in its statutory language without an assertion that the insured had complied with the condition precedent to suit of giving notice to the garnishee insurance company before the former negligence suit against Yar-brough was filed.
Leader National filed its answer to the writ of garnishment denying indebtedness, using also the general statutory language. No affirmative defenses were set forth in the answer.
Appellees filed a contest of the answer asserting that the appellant's answer was incorrect because of information regarding Yarbrough's policy of insurance. Responding to a request for admissions, Leader National admitted Frank Yarbrough to be its insured on the vehicle and date of the accident in question.
After a pretrial conference was held on October 28, 1982 and the ease was set for trial, the garnishee insurance company filed on November 4, 1982, a motion for leave to amend and asserted the affirmative defense of lack of notice to it by its insured Yarbrough of the filing of the former negligence suit. Finding the motion to be untimely, the trial court denied the motion to amend, and the case proceeded to trial.
II.
At trial, the plaintiffs/appellees direct case consisted of general exhibits (1) the policy of insurance issued to Yarbrough by Leader National, (2) default judgments obtained by Lindsey and Coker, and (3) admissions of the garnishee that Yarbrough was its insured on the date and vehicle involved in this accident. Both plaintiffs/appellees testified of receiving a letter from Leader National's insurance adjuster after their suit was filed which they took to their own attorney. Their attorney advised them not to have any dealings with the insurance company or the defendant Yarbrough.
At the conclusion of plaintiffs/appellees suit, Leader National moved for a directed verdict for plaintiffs' failure to plead and prove as a part of their prima facie case compliance with the notice conditions of the policy. The insurance contended that, not only notice of the claim, but also notice of the filing of suit was a condition precedent to recovery under the policy.
The trial court overruled the motion for a directed verdict, and in so doing, held that the burden of pleading and proving an affirmative defense was upon the defendant garnishee/appellant Leader National Insurance Company. The court had previously denied the garnishee's affirmative defense amendment request, but nevertheless, proceeded to permit the insurance company to introduce proof of its sought amendment. Therefore, the insurance company received the benefit of the amendment, and the jury heard the insurance company's proof in avoidance of its liability under the policy, and also was instructed as to the law on this theory of the insurance company's defense. In effect, therefore the amendment was allowed.
This proof showed unequivocally that the insurance company was noticed of the pending claim of Lindsey and Coker at least by April 7, 1982. The proof was disputed as to the notice of the filing of suit as opposed to the notice of the claim.
The trial court ordered a remittitur of $10,000.00 on Coker's judgment in view of the limitation of liability in the policy of $20,000.00 per accident. Coker was a passenger in Lindsey's vehicle.
III.
The case brings into focus the question of whether pleading in strict compliance with the garnishment statute, Miss.Code Ann. § 11-35-1 et seq., is sufficient, or whether the Mississippi Rules of Civil Procedure, Rule 8(c), Affirmative Defenses, requires supplemental pleading to the statutory requirement to give notice of affirmative defenses.
The question of applicability of the Mississippi Rules of Civil Procedure to an action for garnishment was settled in First Mississippi National Bank v. KLH Industries Inc., 457 So.2d 1333 (Miss.1984) which held:
[T]he procedural rules whereby a party seeks to enforce, or resist the enforcement of, the remedy of garnishment is that provided by our garnishment statutes, Miss.Code Ann. § 11-35-1 to -61 (1972) supplemented only by so much of the Mississippi Rules of Civil Procedure as may be found not inconsistent with those statutes.
457 So.2d at 1338. Universal Computer Services, Inc. v. Lyall, 464 So.2d 69 (Miss.1985) (as to applicability of rules to attachment statutes).
General requirements of pleading of the garnishee in a garnishment action are set forth by statute.
Miss. Code Ann. § 11-35-25 provides as follows:
Every person duly summoned as a garnishee shall answer on oath as to the following particulars, viz:
First. — Whether he be indebted to the defendant or were [sic] so indebted at the time of the service of the writ on him, or have [sic] at any time since been so indebted; and, if so indebted, in what sum, whether due or not, and when due or to become due, and how the debt is evidenced, and what interest it bears.
Second. — What effects of the defendant he has or had at the time of the service of the writ on him, or has had since, in his possession or under his control.
Third. — Whether he knows or believes that any other person is indebted to the defendant; and, if so, whom, and in what amount, and where he resides.
Fourth. — Whether he knows or believes that any other person has effects of the defendant in his possession or under his control; and, if so, whom, and where he resides.
Miss.Code Ann. § 11-35-45 provides as follows:
If the plaintiff believe [sic] that the answer of the garnishee is untrue, or that it is not a full discovery as to the debt due by the garnishee, or as to the property in his possession belonging to the defendant, he shall, at the term when the answer is filed, unless the court grant further time, contest the same, in writing, specifying in what particular he believes the answer to be incorrect. Thereupon, the court shall try the issue at once, unless cause be shown for a continuance, as to the truth of the answer, and shall render judgment upon the facts found, when in plaintiff's favor, as if they had been admitted by the answer, but if the answer be found correct, the garnishee shall have judgment for costs against the plaintiff.
In the case sub judice, Leader National as garnishee filed its answer to the writ of garnishment in accordance with the statute, denying generally all allegations of the plaintiffs/appellees complaint, and affirmatively raising the nonjoinder of Yarbrough as a necessary party. No avoidance by way of lack of notice of filing of suit by its insured was raised.
At trial, the garnishee relied upon the policy of insurance between Leader National and the insured judgment debtor, which contains the following provisions regarding notice of accident and suit:
4. Insured's Duties in the Event of Occurrence, Claim or Suit
(a) In the event of an occurrence, written notice containing particulars sufficient to identify the insured and also reasonably obtainable information with respect to the time, place and circumstances thereof, and the names and addresses of the injured and of available witnesses, shall be given by or for the insured to the company or any of its authorized agents as soon as practicable.
(b) If claim is made or suit is brought against the insured, the insured shall immediately forward to the company every demand, notice, summons or other process received by him or his representative.
*
5. Action Against Company
No action shall lie against the company unless, as a condition precedent thereto, there shall have been full compliance with all of the terms of this policy, nor until the amount of the insured's obligation to pay shall have been finally determined either by judgment against the insured after actual trial or by written agreement of the insured, the claimant and the company.
On appeal, Leader National relies upon Mississippi Rules of Civil Procedure 9(c) which provides as follows:
(c)Conditions Precedent. In pleading the performance or occurrence of condi tions precedent, it is sufficient to aver generally that all conditions precedent have been performed or have occurred. A denial of performance or occurrence shall be made specifically and with particularity.
Leader National's position is that the plaintiff/appellees should have alleged and proved that the condition precedent, notice of suit, was given by the insured. It is noted, however, that Leader National attempted by untimely amendment to affirmatively plead lack of notice, a position contrary to their argument here.
On the other hand, the plaintiff/appellees rely upon Rule 8(a) providing:
(a) Claims for Relief. A pleading which sets forth a claim for relief, whether an original claim, counterclaim, cross-claim, or third-party claim, shall contain
(1) a short and plain statement of the claim showing that the pleader is entitled to relief, and
(2) a demand for judgment for the relief to which he deems himself entitled. Relief in the alternative or of several different types may be demanded.
Stanton and Associates v. Bryant Construction Company, 464 So.2d 499 (Miss.1985) has interpreted the limited role of pleading under our new rules to be of a simple, concise, and direct manner. MRCP 8(e). Citing Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957), Bryant held that a claim should not be dismissed "unless it appears beyond doubt that the plaintiff can prove no set of facts in support his claim which would entitle him to relief".
What must be pled by a judgment condition in his initial pleading — the suggestion for garnishment — is set forth by statute. Miss.Code Ann. § 11-35-1 et seq. The method of pleading prescribed is simple and consistent with what is required in Rule 8(a), MRCP. By analogy, the construction we have given Rule 8(a) in Bryant obtains when the legal sufficiency of a suggestion for garnishment is tested.
On the other hand, the requirement that conditions precedent be pled found in MRCP 9(c) is foreign to our statutory garnishment procedures. As such it may not be enforced in a garnishment action. First Mississippi Natural Bank v. KLH Industries, Inc., 457 So.2d 1333, 1338 (Miss.1984).
This Court holds that the appellees here alleged that appellant had an insurance policy with the judgment debtor in full force and effect at the time of the auto accident, and this allegation is sufficient in substance to allege fulfillment of all conditions precedent to recovery under the policy. The trial court's ruling in respect to the motion for directed verdict was proper.
IY.
The appellant raises the issue of sufficiency of proof of notice of suit. This testimony was conflicting. However, the proof that supported notice to the insurance company by Yarbrough was as follows: (1) The secretary of the local insurance agent testified that Yarbrough came to her office on April 7, 1982 and told her that "[h]e thought he was being sued." (2) In response to that conversation with Yar-brough, the secretary telephoned a Judy Owens with Leader National and advised her of the conversation. (3) On the same date a confirmation letter was written by the secretary to Judy Owens with Leader National, notifying the insurance carrier of the "claim''. (4) The secretary testified that she related to a Mr. Jack Oliver, a company representative, that Yarbrough said that he was being sued. Later, in quoting from her prior deposition, the secretary read that Mr. Oliver "did not talk to me directly, but he stated the fact that they had in their files where — it says — I had put them on notice."
In opposition to this proof, however, Mr. Oliver denied any notice of a lawsuit, although admitting notice of the claim. After receiving notice of the claim on April 7, 1982, Oliver secured an insurance adjuster on April 16, 1982 to investigate the claim. On April 29, 1982, the adjuster reported in writing to Mr. Oliver that he could not locate Coker and Lindsey at the addresses given him. In part his letter states "No listing was found for the claimant. Per our telephone discussion with Mrs. Owens, she advised U.S.F. & G. was subrogat-ing...."
On May 13, 1982, Mr. Oliver wrote the adjuster and told him to close his file if he had not located the claimants. Testimony of Randolph Ramsey, Jr., claims investigator, established that Leader National had actual knowledge on May 3,1982, some one month before default judgment was obtained, that the appellees were claiming injuries as a result of the accident with the insured.
Proof in the case sub judice was sufficient to show actual knowledge on the part of Leader National and its agents of both the accident and the existence of a lawsuit sufficient to enable the insurance company to take the necessary steps to protect itself from legal liability. Monarch Ins. Co. of Ohio v. Cook, 336 So.2d 738 (Miss.1976). Although disputed evidence was presented, the issue was for the jury as factfinder to resolve. Mills v. Nichols, 467 So.2d 924 (Miss.1985); Barkley v. Miller Transporters, Inc., 450 So.2d 416 (Miss.1984).
This record does not answer the question of whether the attorney for Lindsey/Coker contacted the insurance adjuster after his clients received letters from him. The record only shows that he advised his client not to contact the adjuster. This Court does not address the attorney's responsibility under these circumstances to act in good faith with the opposing party or the insurer.
Under the facts of this case, actual knowledge of the filing of suit under disputed facts was present, and the jury was the factfinder which resolved that issue in favor of Lindsey and Coker. This Court finds no error in this assignment.
V.
Appellant's last assignment addresses two instructions granted by the trial court. No authority was presented in support of this assignment, and the issue therefore need not be addressed. Ramseur v. State, 368 So.2d 842, 844 (Miss.1979). Nonetheless, this Court has examined the challenged instructions and find no impropriety or error in the instructions, and therefore, no merit to this assignment.
Finding no reversible error, this Court affirms the trial court on direct appeal.
VI.
CROSS-APPEAL
Lindsey and Coker, cross-appellants, assert two errors on cross-appeal. Only one of the assignments needs addressing.
Did the trial court err in granting the appellant's motion for a new trial and, upon trial, entering judgment for appellee Kim Coker in the amount of $10,000.00?
Under the terms of the insurance policy, appellant's liability was expressly limited to $20,000.00 per accident. The trial court accordingly granted appellant's motion for a new trial unless appellee Kim Coker agreed to accept a remittitur of $10,-000.00 from the jury verdict of $20,000.00. This ruling was proper as it is well settled that, absent bad faith, the liability of an insuror is limited by the terms of the contract. See e.g. Old Sec. Cas. Ins. Co. v. Clemmer, 455 So.2d 781 (Miss.1984).
This assignment is without merit.
DIRECT APPEAL AFFIRMED, CROSS-APPEAL AFFIRMED.
PATTERSON, C.J., and DAN M. LEE, ROBERTSON, SULLIVAN and ANDERSON, JJ., concur.
WALKER and ROY NOBLE LEE, P.JJ., and HAWKINS, J., dissent.