Opinion ID: 865021
Heading Depth: 2
Heading Rank: 1

Heading: whether the assumption reinsurance

Text: AGREEMENTS BETWEEN MS CASUALTY AND AMERICAN RELIABLE AND LEGION CONSTITUTED A NOVATION WHICH RELEASED MS CASUALTY AND AMERICAN RELIABLE FROM LIABILITY UNDER THE WORKERS’ COMPENSATION POLICIES. ¶17. We first address the issue of whether novation was accomplished by substituting Legion for MS Casualty and American Reliable in the insurance policies. “[A] novation may occur where the debt remains the same, but a new debtor is substituted. In such event, the original debtor is acquitted, his obligation is extinguished, and the creditor contends himself with the obligation of the second debtor.” Greenwood Leflore Hospital Com. v. Turner, 213 Miss. 200, 56 So.2d 496, 497 (1952); Adams v. Power, 48 Miss. 450 (1873). The parties must intend novation for novation to be accomplished. Morgan v. Jackson Ready-Mix Concrete, 247 Miss. 863, 157 So.2d 772, 780 (1963). ¶18. Also, the creditor must assent to the novation. Greenwood Leflore Hospital, 56 So.2d at 498. In First American National Bank of Iuka v. Alcorn, Inc., 361 So.2d 481, 487-88 (Miss. 1978), this Court held that assent may be implied. We stated: The rule is also established that the release of one debtor and the substitution of another may be implied from the circumstances absent an express substitution. American Blakeslee Mfg. Co. v. Martin & Son, 128 Miss. 302, 91 So. 6 (Miss. 1922). However, this requires substantial proof that the 8 creditor impliedly accepted the new debtor in the place of the old and it must not appear that the creditor intended to hold both new and old debtor for the obligation. This determination is factual and necessary to an implied novation and release of the old debtor. American Blakeslee, supra. Id. ¶19. Since no parties signed novation agreements, there is not express agreement. However, we agree with the chancellor and believe that novation was accomplished through implied assent. Legion agreed to be liable for any claims under the policies. MS Casualty and American Reliable transferred all of their reserves set aside to pay claims under the policies to Legion. All premiums were thereafter paid to Legion instead of MS Casualty and American Reliable. Therefore, in accordance with Greenwood Leflore Hospital, the debt remained the same, but Legion was substituted for MS Casualty and American Reliable. Additionally, in accordance with Morgan, the parties obviously intended novation. The policyholders began paying their premiums to Legion after Legion sent the policyholders notice in the form of assumption certificates. None of the policyholders protested; but instead, they paid their premiums to Legion, which continued to pay all current claims that MS Casualty and American Reliable had previously been paying. Through their actions, the parties no doubt intended for Legion to be liable for any claims. ¶20. However, MIGA contends that, in accordance with First American National Bank, the policyholders did not impliedly accept novation because the language of the assumption certificates is vague. Further, MIGA argues that the injured claimants also had vested rights according to Mississippi’s workers’ compensation laws. MIGA therefore argues that not 9 only did the policyholders not impliedly assent to novation, but the claimants’ assent was required as well. The chancellor disagreed. In his final judgment entered on June 8, 2005, the chancellor stated, inter alia: 5. The assumption reinsurance agreements, whether a novation is required or not, were a novation. The certificates of assumption sent by Legion to the policyholders specifically stated: The effect of this agreement on you is that Legion Insurance Company is now the insurer of your policy and is responsible for paying all claims due under your policy. In the Court’s opinion, the above language was clear as this transaction does not deal with claimants who may be very ignorant of what these things mean, but instead with businessmen who are the actual insureds. The actual claimants have absolutely nothing to do with who provides these insurance policies. The Court finds that the insured (sic) accepted by not canceling the insurance or voicing any concerns after they received the notices. The insureds made payments directly to Legion and filed claims with Legion. We agree with the chancellor. The language of the certificates was clear; therefore, implied consent from the policyholders can be assumed. Additionally, MIGA contends that the claimants have vested workers’ compensation rights, but there is no citation to statutory authority or case law to prove its point. We have previously addressed a party’s failure to support argument with citation to authority: This Court routinely holds an appellants's failure to cite to any legal authority to support [an] argument will procedurally bar that issue from being considered on appeal. Carter v. Miss. Dep't of Corr., 860 So.2d 1187, 1193 (Miss. 2003) (citing McClain v. State, 625 So.2d 774, 781 (Miss. 1993)). Because [the appellant] failed to support this allegation of error with any legal authority, we find [the appellant] is procedurally barred from having this Court consider this issue on appeal. 10 In re Adoption of a Minor Child, 931 So.2d 566, 578 (Miss. 2006). We find that the policyholders are the only parties who needed to assent to novation. Thus, assent can be implied and novation occurred.