John E. Winters v. Eric Feng;

Court of Appeals of Mississippi·Decided November 10, 2020·No. NO. 2019-CA-01098-COA·Published

Opinion

IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI NO. 2019-CA-01098-COA

JOHN E. WINTERS APPELLANT v. ERIC FENG APPELLEE

DATE OF JUDGMENT: 06/27/2019 TRIAL JUDGE: HON. WINSTON L. KIDD COURT FROM WHICH APPEALED: HINDS COUNTY CIRCUIT COURT, FIRST JUDICIAL DISTRICT

ATTORNEYS FOR APPELLANT: RICHARD R. GRINDSTAFF BRYCE CHRISTIAN KUNZ

ATTORNEYS FOR APPELLEE: JOE S. DEATON III RICHARD JASON CANTERBURY

NATURE OF THE CASE: CIVIL - INSURANCE DISPOSITION: AFFIRMED - 11/10/2020 MOTION FOR REHEARING FILED: MANDATE ISSUED:

EN BANC.

McDONALD, J., FOR THE COURT:

¶1. This appeal arises from the Hinds County Circuit Court’s judgment affirming the Hinds County County Court’s grant of summary judgment for Feng in a lease dispute and an award to him of attorney’s fees. John E. Winters and Eric Feng entered into a commercial property lease agreement, which, among other things, required Feng to provide Winters with a liability and property insurance policy that listed Winters as an additional insured. Feng provided Winters with a Certificate of Liability Insurance (Certificate) with the insurance coverage listed. Winters thought that the Certificate was insufficient and terminated the lease agreement. When Feng did not vacate the leased premises, Winters filed a complaint for

unlawful detainer against Feng in the Hinds County County Court based on Feng’s failure to comply with the insurance requirements. Feng moved for summary judgment, which the county court granted after finding that Feng’s Certificate provided sufficient proof of insurance. The county court also awarded Feng attorney’s fees. Winters appealed to the First Judicial District of the Hinds County Circuit Court, which affirmed the county court’s judgment. Winters now appeals from the circuit court’s judgment. After a review of the record and the parties’ briefs, we find that the circuit court did not err in affirming the county court’s order granting Feng’s motion of summary judgment and awarding attorney’s fees.

Statement of the Facts and Procedural History

¶2. On August 28, 2015, Winters and Feng entered into a written lease agreement by which Feng leased from Winters certain commercial property located in Lowndes County, Mississippi. Although the lease agreement at issue began on September 1, 2015, the parties had had prior leasing agreements for the same property since 1994. Paragraph 9 of the lease agreement required Feng to secure commercial umbrella insurance in the amount of $1.5 million and property insurance:

(9) LESSEE shall provide and keep in force at its own expense during the term of this Lease, or during any option period a commercial umbrella liability insurance policy. The insurance coverage to be provided by the LESSEE shall contain a limit of not less than ONE MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($1,500,000.00) with an insurance company that has, at minimum, an A+ Am Best Insurance Rating naming the LESSOR as the insured. The coverage limit shall be adjusted every FIVE (5)

YEARS, as per inflation rate. The LESSEE will provide annually to LESSOR a certified copy of the commercial umbrella liability policy or upon each renewal policy period.

LESSOR shall have no obligation to provide any of the insurance required by this Lease, but LESSOR shall be shown as an additional insured on all policies of insurance required by this Lease.

The LESSEE will provide at its own expense full coverage insurance for the existing building and improvements in the demised premises along with full coverage for other buildings and improvements that may later be placed thereon by LESSEE with policy coverages for full replacement cost, naming the LESSOR as the insured. The LESSEE will provide annually to LESSOR a certified copy of the insurance policy or upon each renewal policy period.

The LESSOR agrees, upon settling any insurance claims that are covered by insurance, to have all damages to building(s) or other improvements repaired or reconstructed should the building(s) or any improvements be destroyed.

¶3. Shortly after the lease agreement was executed, Feng subleased the commercial property to Arby’s Restaurant Group Inc. (Arby’s), which insured all of its fast-food restaurants under one global insurance policy, including both umbrella commercial liability and property coverage. Several months later, on or about December 7, 2015, Winters realized that he had not been provided with any policies and requested that Feng provide him with proof of insurance. To do this, Feng contacted Arby’s, which, according to both Arby’s representatives and Feng, provided Winters with both the Certificate and the insurance policy.

¶4. The Certificate provided commercial umbrella liability coverage of $25,000,000, property coverage of $1,000,000, and listed Winters as an additional insured. Melissa Nuss, “Vice President of Lease Agreements, Risk & Administrative Services of Arby’s Restaurant Group, Inc.,” confirmed this coverage by affidavit. According to Nuss, the insurance policy was effective on August 31, 2015.

¶5. According to an email dated January 8, 2016, from Niikol Young (Arby’s supervisor

of lease administration), Winters received a copy of the policy and a Certificate, which stated:

Our insurance carrier is going to schedule Mr. Winters as an additional insured via endorsement on our liability policy. The endorsement is an addition to the policy he has already received and is a 1 page document that will list him as an additional ensured. Please find out exactly how Mr. Winters wants to be listed so we can advise our carrier accordingly and they can complete the document. On the Master Lease his name reads John Everette Winters, please confirm this is how the endorsement should read.

But because Winters wanted both himself and his wife (who was not a party to the lease agreement) to be listed as insureds, the parties could not agree on the language of the endorsement.

¶6. Although Feng provided the Certificate to Winters, Winters requested that Feng obtain additional insurance coverage for the property. But Feng refused to do so because he believed the Arby’s insurance policy was sufficient.

¶7. On February 25, 2016, Winters sent Feng and Arby’s an email stating that he purchased an insurance policy through State Farm for the property and requested reimbursement:

Per Mr. Feng’s email instructions,[1] I am mailing the attached billing statement for prompt full reimbursement payment to me for the annual premium of $6,959.00 for securing insurance for the above captioned leased property. As you will see, the coverage is good and the premium is quite competitive. The premium is $2,000.00 - $3,000.00 less than quotes I received from other agents. Enclosed, herewith, is a copy of the State Farm Insurance Binder Receipt. Kindly refer to Paragraph (9); Paragraph (18) and Paragraph (36) of the Lease Agreement as this will also serve as my “Thirty (30) Days” written notice. Thank you for your cooperation.

1

This prior email is not in the record. But during Feng’s deposition, he referenced that he sent Winters an email concerning the reimbursement.

In the email, Winters referred to the previously mentioned paragraph 9 as well as paragraphs 18 and 36 of the lease agreement. Paragraph 18 read:

(18) The occurrence of any of the following shall be an event of default hereunder. (a) Should LESSEE default in paying any installment or rental hereunder and such default continues for THIRTY (30) days after written notice of such default from LESSOR; (b) Should LESSEE default in paying any other sum to be paid by LESSEE hereunder and fail to pay the same within THIRTY (30) days after written notice of such default from LESSOR; or (c)

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