IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI
NO. 2018-CA-01390-COA
DEANNA RUDD APPELLANT
v.
STATE FARM FIRE AND CASUALTY APPELLEE COMPANY
DATE OF JUDGMENT: 09/11/2018 TRIAL JUDGE: HON. ROBERT P. KREBS COURT FROM WHICH APPEALED: JACKSON COUNTY CIRCUIT COURT ATTORNEYS FOR APPELLANT: DOUGLAS LAMONT TYNES JR. COURTNEY PARKER WILSON ATTORNEYS FOR APPELLEE: H. BENJAMIN MULLEN MICHAEL RILEY MOORE NATURE OF THE CASE: CIVIL - INSURANCE DISPOSITION: AFFIRMED - 05/05/2020 MOTION FOR REHEARING FILED: MANDATE ISSUED:
BEFORE J. WILSON, P.J., GREENLEE AND LAWRENCE, JJ.
LAWRENCE, J., FOR THE COURT:
¶1. Following a car accident, Deanna Rudd filed suit against her insurance company, State
Farm Fire and Casualty Company (State Farm), claiming that she was entitled to
underinsured motorist (UIM) benefits. Rudd also asserted claims for breach of fiduciary
duty, negligence/gross negligence in claim handling, and bad faith. She sought extra-
contractual and punitive damages. State Farm filed a motion for partial summary judgment
on the issues of bad faith and extra contractual and punitive damages. The Jackson County
Circuit Court granted State Farm’s motion, and Rudd appealed. Finding no genuine issues
of material fact, we affirm the circuit court’s judgment. FACTS
¶2. On July 27, 2010, Rudd was driving southbound in the left lane on Market Street in
Pascagoula, Mississippi.1 At the same time, Chrisma Houston was also driving southbound
in the right lane on Market Street.2 Houston merged left and struck Rudd’s vehicle. Both
vehicles were traveling between twenty-five and thirty miles per hour. An ambulance arrived
shortly after the collision. During her initial emergency-medical-technician (EMT)
interview, Rudd said she injured her back, neck, and left hip in the accident.
¶3. At the time of the accident, Houston was insured through Allstate and had $25,000
in liability coverage. Rudd was insured through State Farm and had $100,000 of
uninsured/underinsured motorist coverage and $10,000 in medical pay coverage (Med Pay).
State Farm’s records shows that, about a month before the accident, Rudd’s husband
requested that Rudd be removed from the policy because they were pursuing a divorce.
Rudd’s husband died on July 14, 2010, roughly two weeks before the accident. Based on
Rudd’s husband’s request to remove Rudd from the policy, State Farm initially determined
that coverage for Rudd was questionable. On July 30, 2010, Rudd spoke with a State Farm
agent and stated that she wanted to “handle everything” through Allstate—Houston’s
insurance carrier. On August 4, 2010, Rudd told a State Farm agent that she would contact
Allstate to determine whether a claim had been submitted.
1 Rudd had one passenger in her vehicle. 2 Houston had one passenger in her vehicle.
2 ¶4. On August 3, 2010, State Farm sent Rudd a letter detailing her Med Pay coverage,
which included reasonable and necessary medical expenses up to $10,000 per person. On
September 1, 2010, State Farm confirmed that Allstate accepted liability for the accident and
was handling damages owed to Rudd. By September 7, 2010, State Farm had collected
information that Rudd had made previous claims on other insurance policies for injuries she
suffered in falls, sudden impacts, and other car wrecks. The records spanned from 1992 to
2008 and included the following:
a. August 12, 1992—Rudd was in an automobile accident, suffering neck and right shoulder pain. Dr. John McCloskey treated her injuries.
b. April 8, 1994—Rudd was in an automobile accident, resulting in neck, left shoulder, and left jaw pain. She went physical therapy after that accident and was treated by Dr. McCloskey.
c. July 3, 1998—Rudd was in an automobile accident, resulting in neck pain. She was transported to the Singing River Hospital Emergency Room after the accident. She was primarily treated by Dr. McCloskey.
d. April 28, 2000—Rudd fell and injured her coccyx. She reported the injury to Dr. McCloskey.
e. August 8, 2001—Rudd was in an automobile accident, resulting in neck, back, and right shoulder pain. She was transported to the Singing River Hospital Emergency Room after the accident. She was primarily treated by Dr. McCloskey.
f. December 8, 2001—Rudd ran into a glass door at McRae’s. She complained to Dr. McCloskey of left shoulder and wrist pain.
g. 2008—Rudd was treated at Bienville Orthopedics for a possible fractured wrist.
h. May 24, 2008—Rudd was nearly hit by a bus at work, resulting in
3 injury to her back and neck. She was transported to the clinic at the Chevron Refinery before her husband took her to the emergency room in Mobile, Alabama. Dr. McCloskey treated her injuries.
State Farm obtained records showing that Rudd required significant medical treatment as a
result of these injuries, including physical therapy and pharmaceutical drugs. On September
28, 2010, State Farm confirmed to Allstate that it was paying up to $10,000 for Rudd’s Med
Pay coverage.
¶5. On December 17, 2010, State Farm determined that Rudd had exhausted her Med Pay
coverage. On July 28, 2011, State Farm sent Rudd’s husband3 a letter notifying him that
State Farm intended to pursue collection from the responsible parties. State Farm’s letter
also notified Rudd that any lawsuit must be brought within the statutory time period.
Between August 1, 2011, and August 15, 2012, State Farm continued handling Rudd’s claim
and communicating with Allstate. On November 5, 2012, State Farm agent Valarie Salter,
received a call from Allstate and learned that Rudd had at least $42,000.00 in medical bills.
On November 7, 2012, Allstate sent a letter asking State Farm to waive its subrogation
interest. On December 17, 2012, State Farm notified Allstate that it agreed to waive its
subrogation claim for payments made under the Med Pay portion of its policy.
¶6. On December 27, 2012, State Farm claim representative Ann McClendon reviewed
all of Rudd’s medical records to determine how much UM/UIM exposure was present. On
3 Rudd’s husband was deceased, but he was still listed as the policy holder. Because neither Rudd nor her husband lived at the address where they lived while married, the letter was returned as undeliverable.
4 January 11, 2013, Rudd called McClendon and left a voicemail stating that she was ready to
settle her bodily injury claim. A few days later, Rudd left a voicemail with another State
Farm representative, inquiring about the status of her claim. That representative informed
Rudd that McClendon was still evaluating her claim.
¶7. On January 31, 2013, McClendon sent Rudd a letter stating that State Farm had “re-
evaluated [her] claim, including the additional information provided, and determined the
value remains within the available limits of the responsible party.” As a result, State Farm
determined that Rudd was not entitled to payment under UM/UIM Coverage. McClendon
also reminded Rudd of the statute of limitations. According to State Farm’s records,
McClendon determined that Rudd was ineligible for UM/UIM coverage because of a seven-
month gap in her treatment, she was receiving disability benefits, and she was being treated
for pre-existing injuries at the time of the accident. McClendon also noted that, between
Allstate and State Farm, Rudd had received a total of $35,000. McClendon further
determined that this sum covered all of Rudd’s medical bills that were attributable to the July
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IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI
NO. 2018-CA-01390-COA
DEANNA RUDD APPELLANT
v.
STATE FARM FIRE AND CASUALTY APPELLEE COMPANY
DATE OF JUDGMENT: 09/11/2018 TRIAL JUDGE: HON. ROBERT P. KREBS COURT FROM WHICH APPEALED: JACKSON COUNTY CIRCUIT COURT ATTORNEYS FOR APPELLANT: DOUGLAS LAMONT TYNES JR. COURTNEY PARKER WILSON ATTORNEYS FOR APPELLEE: H. BENJAMIN MULLEN MICHAEL RILEY MOORE NATURE OF THE CASE: CIVIL - INSURANCE DISPOSITION: AFFIRMED - 05/05/2020 MOTION FOR REHEARING FILED: MANDATE ISSUED:
BEFORE J. WILSON, P.J., GREENLEE AND LAWRENCE, JJ.
LAWRENCE, J., FOR THE COURT:
¶1. Following a car accident, Deanna Rudd filed suit against her insurance company, State
Farm Fire and Casualty Company (State Farm), claiming that she was entitled to
underinsured motorist (UIM) benefits. Rudd also asserted claims for breach of fiduciary
duty, negligence/gross negligence in claim handling, and bad faith. She sought extra-
contractual and punitive damages. State Farm filed a motion for partial summary judgment
on the issues of bad faith and extra contractual and punitive damages. The Jackson County
Circuit Court granted State Farm’s motion, and Rudd appealed. Finding no genuine issues
of material fact, we affirm the circuit court’s judgment. FACTS
¶2. On July 27, 2010, Rudd was driving southbound in the left lane on Market Street in
Pascagoula, Mississippi.1 At the same time, Chrisma Houston was also driving southbound
in the right lane on Market Street.2 Houston merged left and struck Rudd’s vehicle. Both
vehicles were traveling between twenty-five and thirty miles per hour. An ambulance arrived
shortly after the collision. During her initial emergency-medical-technician (EMT)
interview, Rudd said she injured her back, neck, and left hip in the accident.
¶3. At the time of the accident, Houston was insured through Allstate and had $25,000
in liability coverage. Rudd was insured through State Farm and had $100,000 of
uninsured/underinsured motorist coverage and $10,000 in medical pay coverage (Med Pay).
State Farm’s records shows that, about a month before the accident, Rudd’s husband
requested that Rudd be removed from the policy because they were pursuing a divorce.
Rudd’s husband died on July 14, 2010, roughly two weeks before the accident. Based on
Rudd’s husband’s request to remove Rudd from the policy, State Farm initially determined
that coverage for Rudd was questionable. On July 30, 2010, Rudd spoke with a State Farm
agent and stated that she wanted to “handle everything” through Allstate—Houston’s
insurance carrier. On August 4, 2010, Rudd told a State Farm agent that she would contact
Allstate to determine whether a claim had been submitted.
1 Rudd had one passenger in her vehicle. 2 Houston had one passenger in her vehicle.
2 ¶4. On August 3, 2010, State Farm sent Rudd a letter detailing her Med Pay coverage,
which included reasonable and necessary medical expenses up to $10,000 per person. On
September 1, 2010, State Farm confirmed that Allstate accepted liability for the accident and
was handling damages owed to Rudd. By September 7, 2010, State Farm had collected
information that Rudd had made previous claims on other insurance policies for injuries she
suffered in falls, sudden impacts, and other car wrecks. The records spanned from 1992 to
2008 and included the following:
a. August 12, 1992—Rudd was in an automobile accident, suffering neck and right shoulder pain. Dr. John McCloskey treated her injuries.
b. April 8, 1994—Rudd was in an automobile accident, resulting in neck, left shoulder, and left jaw pain. She went physical therapy after that accident and was treated by Dr. McCloskey.
c. July 3, 1998—Rudd was in an automobile accident, resulting in neck pain. She was transported to the Singing River Hospital Emergency Room after the accident. She was primarily treated by Dr. McCloskey.
d. April 28, 2000—Rudd fell and injured her coccyx. She reported the injury to Dr. McCloskey.
e. August 8, 2001—Rudd was in an automobile accident, resulting in neck, back, and right shoulder pain. She was transported to the Singing River Hospital Emergency Room after the accident. She was primarily treated by Dr. McCloskey.
f. December 8, 2001—Rudd ran into a glass door at McRae’s. She complained to Dr. McCloskey of left shoulder and wrist pain.
g. 2008—Rudd was treated at Bienville Orthopedics for a possible fractured wrist.
h. May 24, 2008—Rudd was nearly hit by a bus at work, resulting in
3 injury to her back and neck. She was transported to the clinic at the Chevron Refinery before her husband took her to the emergency room in Mobile, Alabama. Dr. McCloskey treated her injuries.
State Farm obtained records showing that Rudd required significant medical treatment as a
result of these injuries, including physical therapy and pharmaceutical drugs. On September
28, 2010, State Farm confirmed to Allstate that it was paying up to $10,000 for Rudd’s Med
Pay coverage.
¶5. On December 17, 2010, State Farm determined that Rudd had exhausted her Med Pay
coverage. On July 28, 2011, State Farm sent Rudd’s husband3 a letter notifying him that
State Farm intended to pursue collection from the responsible parties. State Farm’s letter
also notified Rudd that any lawsuit must be brought within the statutory time period.
Between August 1, 2011, and August 15, 2012, State Farm continued handling Rudd’s claim
and communicating with Allstate. On November 5, 2012, State Farm agent Valarie Salter,
received a call from Allstate and learned that Rudd had at least $42,000.00 in medical bills.
On November 7, 2012, Allstate sent a letter asking State Farm to waive its subrogation
interest. On December 17, 2012, State Farm notified Allstate that it agreed to waive its
subrogation claim for payments made under the Med Pay portion of its policy.
¶6. On December 27, 2012, State Farm claim representative Ann McClendon reviewed
all of Rudd’s medical records to determine how much UM/UIM exposure was present. On
3 Rudd’s husband was deceased, but he was still listed as the policy holder. Because neither Rudd nor her husband lived at the address where they lived while married, the letter was returned as undeliverable.
4 January 11, 2013, Rudd called McClendon and left a voicemail stating that she was ready to
settle her bodily injury claim. A few days later, Rudd left a voicemail with another State
Farm representative, inquiring about the status of her claim. That representative informed
Rudd that McClendon was still evaluating her claim.
¶7. On January 31, 2013, McClendon sent Rudd a letter stating that State Farm had “re-
evaluated [her] claim, including the additional information provided, and determined the
value remains within the available limits of the responsible party.” As a result, State Farm
determined that Rudd was not entitled to payment under UM/UIM Coverage. McClendon
also reminded Rudd of the statute of limitations. According to State Farm’s records,
McClendon determined that Rudd was ineligible for UM/UIM coverage because of a seven-
month gap in her treatment, she was receiving disability benefits, and she was being treated
for pre-existing injuries at the time of the accident. McClendon also noted that, between
Allstate and State Farm, Rudd had received a total of $35,000. McClendon further
determined that this sum covered all of Rudd’s medical bills that were attributable to the July
2010 accident. Rudd did not respond to the letter.
¶8. On March 13, 2013, State Farm closed Rudd’s file pending any future response from
Rudd. Rudd contacted McClendon on May 9, 2013, to discuss her claim. McClendon
offered to contact Allstate to retrieve Rudd’s medical records, but Rudd claimed she could
retrieve them faster. McClendon informed Rudd that she may need prior records, including
workers’ compensation records. McClendon explained multiple times that she did not mind
5 handling everything, but Rudd proceeded anyway.
¶9. On May 21, 2013, Rudd called McClendon to tell her she had the medical records
from Allstate and that she would fax them. On June 11, 2013, Rudd called McClendon to
discuss her claim. McClendon stated that she received a large amount of medical records
from Rudd on May 27 and that she would review the records and get back to Rudd.
McClendon also noted that Rudd was still receiving medical treatment and had additional
records to send.
¶10. On July 10, 2013, State Farm wrote Rudd stating that they received her claim but had
been unable to reach her by phone. McClendon observed that some of the bills and records
submitted by Rudd did not appear to be related to her claim. On July 15, 2013, McClendon
called Rudd to discuss her claim. Rudd revealed that prior to the accident, she was treated
for fibromyalgia by Dr. Thomas Yearwood. She further revealed that she had previously
undergone surgeries to her shoulder and both knees, she had two workers’ compensation
claims, and she was on Medicare and Medicaid. McClendon informed Rudd that she was
ordering records from Dr. William Evans, Dr. Yearwood, Dr. John McCloskey, and Dr. Chris
Wiggins for the five years prior to the accident. McClendon also told Rudd that the records
would not arrive and would not be reviewed by July 27, 2013, which was when the statute-
of-limitations period was set to run. McClendon explained that if Rudd did not file suit to
protect against a statute-of-limitations defense, then there would be nothing more State Farm
could do. Following their conversation, McClendon sent Rudd a follow-up letter, again
6 reminding her that her claim was subject to a three-year statute of limitations.
¶11. On July 22, 2013, Rudd called State Farm and left a message for McClendon
informing McClendon that Rudd was sending her over 200 pages of medical records. Two
days later, Rudd and McClendon spoke on the phone, and McClendon told Rudd that she still
had not received the records Rudd mailed to her. Rudd stated that she would fax the records
to McClendon. McClendon “stressed and stressed” that the statute of limitations was set to
run on July 27, 2013, and that McClendon would not receive or be able to review all of the
past medical records by that time.
¶12. On July 25, 2013, Rudd called McClendon to discuss the status of her claim.
McClendon stated that she had received Rudd’s fax but reiterated that she could not
guarantee she would have an opportunity to fully review the records or resolve the claim
before the statute-of-limitations period expired. Rudd filed her complaint the following day.
On August 26, 2013, McClendon received a call from Rudd regarding the status of Rudd’s
claim. Rudd stated that she sent McClendon all medical records on July 24 or 25. At the
time, McClendon was under the impression that Rudd intended to send even more records.
McClendon told Rudd that she would review them and call her back upon completion. Rudd
called McClendon the next day to ask about the status of her claim. McClendon stated that
she still had not received the records from Singing River Hospital that she requested on July
15. Rudd thought that those records had been sent to State Farm on July 24, and McClendon
advised that she would check the large volume of records provided that day to determine
7 whether they were present.
¶13. In an injury evaluation prepared on August 27, 2013, McClendon described how
Rudd’s injuries pre-dated the July 2010 accident and that she had been complaining of the
same pain in her neck, back, shoulders, hips, thighs, arms, legs, and buttocks since 1999.
McClendon determined that the treatment on the date of the loss and approximately two
months after should be related to the accident. However, after that initial two-month period
of treatment, Rudd waited seven months before seeking further treatment. McClendon
further observed that the number of radiology studies ordered by Dr. McCloskey seemed
excessive, especially in light of the fact that all the results were unremarkable. In addition,
Rudd had been diagnosed with fibromyalgia. As recent as 2009, Rudd’s physicians observed
that she was in constant pain and suffered from a number of physical and psychological
issues. McClendon observed that the symptoms reported during this period mirrored the
symptoms Rudd reported after the July 2010 accident.
¶14. McClendon called Rudd to tell her that she had reviewed all the available records and
that she was sending her report to management for a decision as to the claim. McClendon
also noted that she still had not received the Singing River Hospital medical records she
requested on July 15. Based on the records before her, McClendon determined that only
$13,531.50 in medical bills were related to the July 2010 accident that had aggravated Rudd’s
pre-existing conditions. McClendon then observed that Allstate paid Rudd $25,000 in
liability coverage and $1,886.28 for property damage, and State Farm paid her $10,000 under
8 her Med Pay coverage for her related medical expenses.
¶15. On September 20, 2013, McClendon called Rudd and explained that she had finally
been able to review all of Rudd’s medical records. McClendon explained that she believed
that Rudd had already been compensated for all of her injuries related to the July 2010
accident. She offered Rudd $1,000 to resolve the claim, but Rudd rejected the offer. Rudd
also informed McClendon that she had filed suit on July 26. Rudd said that she did not have
an attorney but that she would retain one. When McClendon spoke with the circuit clerk, he
stated that suit had been filed, but the circuit court did not have any record that summons was
served on State Farm. McClendon called Rudd to inform her that her attorney needed to
serve State Farm with a copy of her complaint.
¶16. On November 4, 2013, McClendon sent Rudd an advance of $1,000 in an effort to
resolve her claim. On November 12, 2013, Rudd filed her amended complaint, alleging that
State Farm dealt with her in bad faith on the basis that State Farm improperly denied her
UIM claim. As a result, Rudd sought extra-contractual and punitive damages. State Farm
filed a motion for partial summary judgment on Rudd’s bad faith claim. The circuit court
granted State Farm’s motion and certified the judgment under Mississippi Rule of Civil
Procedure 54(b).4 Aggrieved, Rudd appeals.
STANDARD OF REVIEW
4 Rudd initially filed a petition for an interlocutory appeal. On January 10, 2019, the Mississippi Supreme Court entered an en banc order finding that the appeal should be treated as a timely appeal from a final judgment.
9 ¶17. We review a trial court’s grant or denial of summary judgment de novo. Miss. Dep’t
of Revenue v. Hotel & Rest. Supply, 192 So. 3d 942, 945 (¶5) (Miss. 2016). A party is
entitled to summary judgment if the record shows that there is no genuine issue of material
fact and that the party is entitled to a judgment as a matter of law. M.R.C.P. 56(c). We
review the summary judgment record in the light most favorable to the nonmoving party.
Thomas v. Chevron U.S.A. Inc., 212 So. 3d 58, 60 (¶7) (Miss. 2017). However, the
nonmoving party “may not rest upon the mere allegations or denials of his pleadings, but his
response, by affidavits or as otherwise provided in [Mississippi Rule of Civil Procedure 56],
must set forth specific facts showing that there is a genuine issue for trial.” M.R.C.P. 56(e).
“To withstand summary judgment, the party opposing the motion must present sufficient
proof to establish each element of each claim.” Sharrieff v. DBA Auto. Two LLC, 242 So.
3d 944, 947 (¶9) (Miss. Ct. App. 2018).
ANALYSIS
¶18. Rudd argues on appeal that the circuit court erred in finding no genuine issue of
material fact existed regarding her bad-faith claim.5 The Mississippi Supreme Court has
stated that punitive damages “are recoverable where the breach results from an intentional
5 In her complaint, Rudd sought both extra-contractual damages and punitive damages. The circuit court granted partial summary judgment on both issues. We recognize that “[t]o award extra-contractual damages, [a] jury [must find] that the mental anguish and emotional distress of the plaintiffs was ‘an independent and intentional tort separate from the breach of contract.’” Universal Life Ins. Co. v. Veasley, 610 So. 2d 290, 295 (Miss. 1992). Rudd did not raise this issue on appeal.
10 wrong, insult, or abuse as well as from such gross negligence as constitutes an independent
tort.” Caldwell v. Alfa Ins. Co., 686 So. 2d 1092, 1095 (Miss. 1996) (quoting Blue Cross &
Blue Shield v. Maas, 516 So. 2d 495, 496 (Miss. 1987)). “To recover punitive damages from
an insurer for ‘bad faith’, the insured must prove by a preponderance of evidence that the
insurer acted with (1) malice, or (2) gross negligence or reckless disregard for the rights of
others.” Id. (citing Veasley, 610 So. 2d at 293). Further, “[t]he insurer’s only obligation is
to perform a prompt and adequate investigation of the claim and to deal with the claimant in
good faith.” Liberty Mut. Ins. Co. v. McKneely, 862 So. 2d 530, 535 (Miss. 2003).
¶19. In her motion for partial summary judgment, Rudd attached State Farm’s activity log,
which we thoroughly detailed in the facts above. State Farm’s records show that it began
investigating Rudd’s claim as soon as it was reported. State Farm continued communication
with both Rudd and Allstate agents throughout the entire claims process, paying Rudd’s
medical bills until her Med Pay coverage was exhausted. Additionally, State Farm agents
made diligent efforts to maintain communication with Rudd, update her on her claim, and
assist her in her claim. Agents also repeatedly notified Rudd of the impending statute of
limitations. When State Farm sought to obtain other necessary medical records, Rudd
insisted that she would retrieve them because she could get them faster. Even so, State Farm
continued its efforts to retrieve necessary medical records and inform Rudd of the records
it had not yet received. Accordingly, we find the claim-activity log demonstrates State
Farm’s prompt and adequate investigation of Rudd’s claim for UIM benefits.
11 ¶20. In denying her claim, State Farm determined that many of Rudd’s injuries predated
the 2010 accident, and, after two months of initial treatment following the accident, Rudd
waited seven months before seeking further treatment. After review of the record, we find
the circuit court correctly held that there was no genuine issue of material fact that State
Farm acted maliciously, was grossly negligent, or acted in reckless disregard in handling her
claim. Although Rudd may dispute State Farm’s assessment of the value of her claim, that
dispute in and of itself cannot serve as a basis for a bad faith/punitive damages cause of
action. State Farm Mut. Auto. Ins. Co. v. Roberts, 379 So. 2d 321, 322 (Miss. 1980) (A
legitimate “pocketbook” dispute cannot support a claim for bad faith or punitive damages.).
Therefore, we affirm the circuit court’s grant of summary judgment.
¶21. AFFIRMED.
BARNES, C.J., CARLTON AND J. WILSON, P.JJ., GREENLEE, WESTBROOKS, TINDELL, McDONALD, McCARTY AND C. WILSON, JJ., CONCUR.