Opinion ID: 1619960
Heading Depth: 2
Heading Rank: 3

Heading: whether the trial court erred in refusing to award ina reimbursement for costs attributable to the defense of marshall county and the slayden mt. pleasant volunteer fire department.

Text: ¶ 31. In its cross-appeal, INA contends that Guidant had a duty to defend Marshall County and the Slayden Mt. Pleasant Volunteer Fire Department because Guidant's policy insured Hingle and any other person or organization legally responsible for acts or omissions of Hingle. Furthermore, the Guidant policy stated that Guidant will defend any suit seeking damages for personal injury or property damage.... Moreover, INA contends that it properly demanded Guidant provide a defense to the fire department and Marshall County via correspondence as early as February 8, 1996. This demand letter, from an INA liability specialist to a claims supervisor at Guidant, stated: [W]e believe the Preferred Risk (now Guidant) polices provide primary coverage to all of the defendants in Anderson v. Marshall County, et al. ... and that [Guidant] should be defending this lawsuit. We, therefore, demand that [Guidant] immediately assume the defense of the defendants in this lawsuit. Subsequent correspondence between the two companies and counsel for the two companies reiterated INA's position that Guidant had a duty to defend both Marshall County and the volunteer fire department. ¶ 32. Guidant counters that INA had a contractual duty to defend its insureds under the policy issued by INA to the volunteer fire department and Marshall County. INA, however, points to the following statement from its policy, [W]e have no duty to defend `suits' for `bodily injury' or `property damage' ... not covered by this Coverage Form. INA maintains that, since it was an excess carrier, it had no such duty to defend under the policy. ¶ 33. INA cites two cases applying Mississippi law in support of the reimbursement of defense costs by primary carriers to secondary carriers. In State Farm Mutual Automobile Insurance Company v. Commercial Union Insurance Company, 394 So.2d 890, 894 (Miss.1981), this Court held that the primary insurer had a clear duty to defend, and because it failed to do so, the secondary carrier was entitled to all reasonable and necessary expenses in fulfilling the primary insurer's obligations. In applying the holding from State Farm, the United States District Court for the Southern District of Mississippi likewise found that the primary insurer for the owner of the vehicle owed reimbursement for reasonable and necessary expenses to the secondary carrier, the insurer of the driver involved in the accident. State Farm Auto. Ins. Co. v. Universal Underwriters Ins. Co., 601 F.Supp. 286, 289-91 (S.D.Miss.1984). ¶ 34. As previously stated, under Mississippi law, when the words of an insurance policy are plain and unambiguous, the court will afford them their plain, ordinary meaning and will apply them as written. Progressive Gulf Ins. Co. v. Dickerson & Bowen, Inc., 965 So.2d 1050, 1054 (Miss. 2007) (citing Paul Revere Life Ins. Co. v. Prince, 375 So.2d 417, 418 (Miss.1979)). [T]he obligation of a liability insurance company under a policy provision requiring it to defend an action brought against the insured by a third party is to be determined by the allegations of the complaint in such action. S. Farm Bureau Cas. Ins. Co. v. Logan, 238 Miss. 580, 589, 119 So.2d 268, 271 (1960). Furthermore, this Court has held that the obligation to defend is a contractual right as set out in the policy, separate and distinct from the issue of coverage. Travelers Indem. Co. v. East, 240 So.2d 277, 279-280 (Miss.1970). In East, this Court stated, [t]he defense clause in the policy is considered to be a contractual right of the insured, for which he paid a premium, irrespective of other insurance and irrespective of primary or excess coverage. Id. at 80 (quoting Logan, 238 Miss. at 588, 119 So.2d at 271 (1960)). St. Paul Fire & Marine Ins. Co. v. Thompson, 150 Mont. 182, 433 P.2d 795 (1967); Simmons v. Jeffords, 260 F.Supp. 641 (D.C.Pa.1966); Nat'l Cas. Co. v. Ins. Co. of N. Am., 230 F.Supp. 617 (D.C.Ohio 1964); 7A Appleman Insurance Law and Practice § 4685 (1962); Am. Employers Ins. Co. v. Goble Aircraft Specialties, 205 Misc. 1066, 131 N.Y.S.2d 393 (N.Y.Sup. 1954); Am. Cas. Co. of Reading, Pa. v. Howard, 187 F.2d 322 (4th Cir.1951). ¶ 35. Because Guidant's policy indicated that it insured any organization legally responsible for acts or omissions of Hingle (i.e., the volunteer fire department), and because the theory of the underlying complaint was that the volunteer fire department was legally responsible for the acts or omissions of Hingle in the course of his duties as a fireman, Guidant had a duty to defend the fire department and the county. INA should be entitled to all reasonable, necessary expenses incurred in the course of defending the fire department and Marshall County, but only those expenses incurred after demand was made on Guidant to provide a defense. ¶ 36. The record contains two affidavits from INA's retained counsel. One affidavit reveals that INA expended $26,764.12 in fees and expenses to John S. Hill of Mitchell, McNutt & Sams. The other affidavit states that INA expended $30,983.74 in fees and expenses to Susan L. Steffey of Watkins & Eager, PLLC. However, we find the record lacking inasmuch as these affidavits do not include any itemization of fees or costs, nor do they include any dates. Thus, this Court must remand this issue to the trial court, consistent with this opinion, for a determination of what reasonable, necessary defense costs were incurred in the course of INA's defense of the volunteer fire department and Marshall County following the February 8, 1996, demand letter.