Timothy Mooneyham v. Progressive Gulf Insurance Company
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IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI
NO. 2004-CA-01516-COA
TIMOTHY MOONEYHAM
APPELLANT
v.
PROGRESSIVE GULF INSURANCE COMPANY AND
PROGRESSIVE CASUALTY INSURANCE COMPANY
DATE OF JUDGMENT:
TRIAL JUDGE:
COURT FROM WHICH APPEALED:
ATTORNEY FOR APPELLANT:
ATTORNEYS FOR APPELLEE:
NATURE OF THE CASE:
TRIAL COURT DISPOSITION:
DISPOSITION:
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
APPELLEES
7/21/2004
HON. SHARION R. AYCOCK
LEE COUNTY CIRCUIT COURT
WILLIAM C. WALKER, JR.
DANIELLE DAIGLE IRELAND
DAVID KEENER PHARR
ROY D. CAMPBELL, III
MARGARET OERTLING CUPPLES
H. RICHMOND CULP, III
CIVIL - INSURANCE
GRANTED A DIRECTED VERDICT IN FAVOR
OF PROGRESSIVE (APPELLEE)
AFFIRMED: 09/06/2005
BEFORE LEE, P.J., GRIFFIS AND ISHEE, JJ.
GRIFFIS, J., FOR THE COURT:
¶1.
Timothy Mooneyham (“Mooneyham”) appeals the decision of the trial court granting Progressive
Gulf Insurance Company and Progressive Casualty Insurance Company’s (“Progressive”) motion for
directed verdict. On appeal, Mooneyham asserts that the trial judge erred in granting the directed verdict.
We find no error and affirm.
FACTS
¶2.
On March 22, 2002, Mooneyham was rear ended by a Progressive insured. Fault was not
disputed.
¶3.
On March 29, 2002, Progressive’s “quick response” adjuster, David Malone (Malone), met with
Mooneyham and his then girlfriend Teresa Ralph (“Ralph”).1 Malone and Mooneyham agreed to settle
Mooneyham’s claim for property damage arising out of the accident for $206. This settlement is not
disputed. Malone also offered to settle Mooneyham’s personal injury claim. This settlement offer was
disputed at trial. According to Progressive, the original offer was $500 for pain and suffering, up to $2,500
for past medical expenses, and up to $2,500 for future medical expenses. Ralph testified that the original
offer was $500 for pain and suffering and all medical bills for up to three years. Mooneyham testified that
the original offer was $500 for pain and suffering and all medical bills relating to the accident forever.
Regardless of the dispute and conflicting testimony, Mooneyham rejected the offer.
¶4.
Subsequently, Mooneyham hired attorney Richard Schwartz to represent him. Because
Mooneyham had hired an attorney, his file was assigned to another Progressive adjuster, Bill Estes
(“Estes”). On April 15, 2002, Estes wrote a letter to Schwartz and offered to settle Mooneyham’s
personal injury claim for $500 plus medical expenses accrued through April 19, 2002, which amounted
to approximately $1,900. However, according to testimony, Schwartz never informed Mooneyham or
Ralph of Estes’ offer. Mooneyham and Ralph apparently learned of the offer for the first time at trial.
¶5.
On April 18, 2002, Mooneyham contacted Estes and informed him that he was no longer
represented by an attorney and expressed his desire to settle his personal injury claim with Progressive.
Estes confirmed that Mooneyham was no longer represented by Schwartz, who had declined to continue
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Mooneyham and Ralph were married by the time of trial in this matter.
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the representation after his own investigation revealed that the case involved a “very low impact” accident.
¶6.
On April 22, 2002, Estes contacted Mooneyham in an effort to settle his claim. Estes testified that
he conveyed an offer to Mooneyham of “$500 only and no medicals.” According to Estes, Mooneyham
then handed the phone to Ralph, and Estes explained to her that the offer was “only for $500 and not the
medicals.” However, Ralph testified that there was no mention of medical bills in her conversation with
Estes. According to both Estes and Ralph, Mooneyham took the phone back from Ralph and accepted
Estes’ settlement offer.2 Estes then informed Mooneyham that he would have to sign a release before
Progressive would issue a settlement check. Mooneyham testified that he received the release and signed
it without reading it or having it read to him, and thereafter received a settlement check from Progressive
for $500. The release made clear that Mooneyham would be paid a total of only $500 for his claim.
¶7.
On September 4, 2002, Mooneyham filed a complaint against Progressive alleging fraud and bad
faith. At trial, Mooneyham abandoned his bad faith claim. At the close of Mooneyham’s case-in-chief,
Progressive moved for a directed verdict. The trial court granted Progressive’s motion, and Mooneyham
now appeals to this Court.
STANDARD OF REVIEW
¶8.
On appeal, we conduct a de novo standard of review of motions for directed verdict. Munford,
Inc. v. Fleming, 597 So. 2d 1282, 1284 (Miss. 1992). When deciding whether the granting of a motion
for directed verdict was proper by the lower court, this Court considers the evidence in the light most
favorable to the non-moving party and gives that party the benefit of all favorable inferences that may be
2
At trial, Mooneyham testified that he does not remember talking to Estes at all before
accepting the $500 settlement offer.
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reasonably drawn from the evidence presented at trial. Id. If the favorable inferences have been
reasonably drawn in favor of the non-moving party so as to create a question of fact from which reasonable
minds could differ, then the motion for directed verdict should not be granted and the matter should be
given to the jury. Id.
ANALYSIS
¶9.
Mooneyham’s sole claim at trial was that Progressive engaged in fraud in the settlement of his
personal injury claim. A plaintiff must prove the elements of fraud by clear and convincing evidence.
Harrison v. McMillan, 828 So. 2d 756, 767 (¶38) (Miss. 2002). In order to withstand Progressive’s
motion for directed verdict, Mooneyham must show by clear and convincing evidence the following
elements of fraud:
(1) a representation;
(2) its falsity;
(3) its materiality;
(4) the speaker’s knowledge of its falsity or ignorance of the truth;
(5) his intent that it should be acted on by the hearer and in the manner reasonably
contemplated;
(6) the hearer’s ignorance of its falsity;
(7) his reliance on its truth;
(8) his right to rely thereon; and
(9) his consequent and proximate injury.
Bank of Shaw v. Posey, 573 So. 2d 1355, 1362 (Miss. 1990).
¶10.
Mooneyham argues that Progressive made an actionable representation.
He claims that
Progressive promised to pay him $500 plus some medicals. However, there is no evidence in the record
that such representation was made.
¶11.
The record indicates that Malone initially offered to pay either up to $2,500 in past medical
expenses and up to $2,500 in future medical expenses (Progressive’s testimony) or all of Mooneyham’s
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medical bills for three years (Ralph’s testimony); or all of Mooneyham’s medical bills forever
(Mooneyham’s testimony). Regardless, Mooneyham rejected this initial offer. A rejected offer cannot
constitute an enforceable promise. When an offer has been rejected, it ceases to exist. See Harris v.
Mickel, 15 F.3d 428, 431 (5th Cir. 1994); 1 Williston on Contracts § 5:3 (4th ed.) 1999.
¶12.
Estes made a subsequent offer to Mooneyham’s then-attorney Schwartz to pay medical bills
incurred through April 19, 2002, but this offer was never accepted nor was it ever known to Mooneyham.
¶13.
While the testimony regarding Estes’ April 22, 2002 telephone conversation with Mooneyham and
Ralph is conflicting, the record shows that no one testified that Estes promised to pay $500 plus some
medicals, which is what Mooneyham contends in his brief to this Court. Estes testified that the April 22nd
offer was for $500 and no medicals; Ralph testified that there was no mention of medical expenses during
the conversation; and Mooneyham testified that he did not remember the April 22nd conversation at all.
¶14.
The records shows that Mooneyham signed a release before receiving a settlement check from
Progressive. The release entitled “Full Release of all Claims and Demands” specifically stated:
I, Timothy Mooneyham, a single male, only, for and in consideration of the sum of five
hundred dollars and 00/100 ($500.00), the receipt of whichis hereby acknowledged, does
(do) hereby for myself (ourselves), my (our) heirs, executors, administrators, successors
and assigns and any and all other persons, firms, employers, corporations, associations,
or partnerships release, acquit and forever discharge Terry Brown and Barbara D. Brown
of and from any and all claims, actions, causes of actions, demands, rights, damages, costs,
property damage, loss of wages, expenses, hospital, medical and nursing expenses,
accrued or unaccrued claims for loss of consortium, loss of support or affection, loss of
society and companionship on account of or in any way growing out of, any and all known
and unknown personal injuries and damages resulting from an automobile accident which
occurred on or about March 22, 2002, at or near Pontotoc, Mississippi.
The release clearly states that Mooneyham was to receive only $500. It also makes clear that “any and
all claims for expenses, hospital, medical and nursing expenses” are discharged.
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¶15.
Mooneyham also argues that Progressive failed to disclose that he would have to pay any and all
medical expenses out of the $500. An omission constitutes fraud only if the speaker owed the hearer a
duty of disclosure. See Strong v. First Family Fin. Servs., Inc., 202 F. Supp. 2d 536, 540 (S.D. Miss.
2002) (“since silence, in the absence of a duty to speak, is not actionable, plaintiffs’ claims for
misrepresentation by omission are dependent on the existence of a duty of disclosure”). The duty to
disclose arises when one party has information that the other party is entitled to know because of a fiduciary
or other similar relation of trust and confidence between them. Smith v. Tower Loan of Miss., Inc., 216
F.R.D. 338, 358 (S.D. Miss. 2003) (quoting Chiarella v. U.S., 445 U.S. 222, 228 (1980)). A fiduciary
relationship may arise where there appears “on the one side an overmastering influence or, on the other,
weakness, dependence, or trust, justifiably reposed.” Langston v. Bigelow, 820 So. 2d 752, 756 (¶9)
(Miss. Ct. App. 2002) (quoting Lowery v. Guar. Bank and Trust Co., 592 So. 2d 79, 83 (Miss. 1991)).
Mississippi law is clear that no such relationship exists between a liability insurer and a third-party liability
claimant such as Mooneyham. See General Motors Acceptance Corp. v. Baymon, 732 So. 2d 262
(Miss. 1999). Thus, no fiduciary or other special relationship existed between Mooneyham and
Progressive.
¶16.
In support of his argument that Progressive owed him a duty of disclosure, Mooneyham relies on
Guastella v. Wardell, 198 So. 2d 227 (Miss. 1967). In Guastella, the supreme court held that “[a] party
to a business transaction . . . is under a duty to disclose to the other party, before the transaction is
consummated, information which will correct previous representations made to the other party which are
untrue or misleading.” Guastella, 198 So. 2d at 230. Mooneyham asserts that Progressive had a duty
to explain that the April 22, 2002 offer specifically excluded any payment of medical expenses in order to
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“correct” Progressive’s initial offer to pay what Mooneyham alleges was $500 plus all medicalbills forever.
However, Mooneyham’s reliance on Guastella is misplaced.
¶17.
In Welsh v. Mounger, 883 So. 2d 46, 49 (¶13) (Miss. 2004), the supreme court held that
Guastella applies “only where [the defendant] misrepresented the facts at the outset and had a duty of
disclosure to correct that affirmative falsehood.” Mooneyham does not dispute that Progressive’s original
offer, made by Malone, was made in good faith with a then present intent to pay Mooneyham the offered
settlement for medical bills. Therefore, no misrepresentation occurred at the outset and thus no duty to
correct any affirmative falsehood arose under Guastella.
¶18.
Based on our review, we find that Mooneyham failed to prove fraud, specifically a
misrepresentation, by clear and convincing evidence. Therefore, the trial court’s decision to grant a motion
for directed verdict in favor of Progressive should be affirmed.
¶19. THE JUDGMENT OF THE CIRCUIT COURT OF LEE COUNTY IS AFFIRMED. ALL
COSTS OF THIS APPEAL ARE ASSESSED TO THE APPELLANT.
KING, C.J., BRIDGES AND LEE, P.JJ., IRVING, MYERS, CHANDLER AND ISHEE,
JJ., CONCUR. BARNES, J., NOT PARTICIPATING.
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