Professional Documents
Culture Documents
PLAINTIFFS
DEFENDANTS
insureds and the plaintiffs to pay ordinary . . . and customary charges for repairs.
(Id. at 7 (14)).
The Complaint states that there are national collision repair estimating
databases that provide specifications regarding parts, labor, and costs for the types
of repairs that are performed by automobile repair shops such as the plaintiffs. The
Complaint asserts that these databases are accepted within the automobile repair
industry as standard and authoritative, and that the defendant insurance
companies have acknowledged that those databases are acceptable throughout the
industry. (Id. at 7-8 (15-21)). However, the plaintiffs contend, the defendants
have nevertheless refused to reimburse the plaintiffs for certain repairs, even
though the plaintiffs based their estimates on those same databases. The
Complaint alleges that the defendants have failed and/or intentionally refused to
compensate plaintiffs for selected necessary, ordinary and customary repairs and
materials used, and have done so despite the fact that all costs and procedures are
standard and necessary pursuant to the industry-accepted estimating systems.
(Id. at 9 (24)).
The plaintiffs further allege that the defendants have engaged in a course of
conduct designed to harass, annoy, and manipulate the plaintiffs business and
business practices; they have interfered with the plaintiffs contracts with their
customers; they have made defamatory and slanderous statements about the
plaintiffs businesses; and they have otherwise injured the plaintiffs good will and
caused loss of economic opportunities. (Id. at 10-11 (33-36)).
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LEGAL STANDARD
Summary judgment is appropriate when, viewing the evidence in the light
most favorable to the nonmoving party, no genuine issue of material fact exists, and
the moving party is entitled to judgment as a matter of law. See Celotex Corp. v.
Catrett, 477 U.S. 317, 322-24 (1986); see also Fed. R. Civ. P. 56(c). A party seeking
summary judgment bears the initial burden of identifying those portions of the
pleadings and discovery on file, together with any affidavits, which it believes
demonstrate the absence of a genuine issue of material fact. Celotex, 477 U.S. at
325. Once the movant carries its burden, the burden shifts to the non-movant to
show that summary judgment should not be granted. Id. at 324-25. The
non-moving party may not rest upon mere allegations or denials in its pleadings,
but must set forth specific facts showing the existence of a genuine issue for trial.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256-57 (1986). This requires the
party opposing summary judgment to identify specific evidence in the record and to
articulate the precise manner in which that evidence supports his or her claim.
Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998) (citing Forsyth v.
Barr, 19 F.3d 1527, 1537 (5th Cir. 1994), cert. denied, 513 U.S. 871 (1994)). Rule
56 does not impose upon the district court a duty to sift through the record in search
of evidence to support a partys opposition to summary judgment. Id. (quoting
Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 915-16 & n. 7 (5th Cir. 1992), cert.
denied, 506 U.S. 832 (1992)).
DISCUSSION
As an initial matter, the Court notes that each defendant has moved for
summary judgment on all of the plaintiffs claims. The defendants arguments in
support of their Motions for Summary Judgment are substantially similar; likewise,
the plaintiffs responses to the respective Motions for Summary Judgment are
identical in many respects. Accordingly, the Court will address many of the claims
without distinguishing between the defendants. Where necessary, the Court will
distinguish between the parties arguments and the evidence submitted in support
of their pleadings.3
I. Breach of the Covenant of Good Faith and Fair Dealing
Count One of the Complaint alleges that the defendants have breached the
implied covenant of good faith and fair dealing. The plaintiffs assert that the
Additionally, for the sake of brevity, where the briefs are substantially the
same, the Court will cite only to one defendants brief, or one of the plaintiffs
responses, as representative of the arguments on an issue, instead of listing
citations to multiple briefs that contain the same substantive information.
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defendants are subject to the covenant by virtue of their special relationship with
the plaintiffs. (2d Am. Compl. 12 (40)). Specifically, they claim that the
defendants have devised hybrid instruments called agreements (and other
nomenclature) which allow them to force upon the plaintiffs all of the indicia of a
contract, but which do not provide the plaintiffs with the protections of a contract.
(Id. at 11 (38)). They claim that [w]here these agreements are deemed by the
court to be contracts, they are ill-gotten and oppressive. (Id. at 11-12 (39)). The
defendants have moved for summary judgment on the basis that there is no
contractual relationship between the plaintiffs and the insurance companies.
The implied covenant of good faith and fair dealing holds that neither party
will do anything which injures the right of the other to receive the benefits of the
agreement. Cothern v. Vickers, Inc., 759 So. 2d 1241, 1248 (Miss. 2000). This
covenant is contained in all contracts. See Cenac v. Murry, 609 So. 2d 1257, 1272
(Miss. 1992) (citations omitted). However, under Mississippi law, the implied
covenant operates only when there is already an existing contract. James v.
Chase Manhattan Bank, 173 F. Supp. 2d 544, 551 (N.D. Miss. 2001) (citing Cothern,
759 So. 2d at 1248). Thus, to state a claim for a breach of the implied covenant, the
plaintiffs must demonstrate the existence of a contract with the defendants.
The plaintiffs have admitted that there is no express or written contract
between them and the defendant insurance companies.4 Instead, they argue that
their business relationship with the defendants creates an implied or quasicontractual relationship. (See Pl. Mem. in Supp. of Resp. to Progressive Mot. for
Partial Summ. J. 4, ECF No. 248).
An implied contract is one that arises from the conduct of the parties, and a
quasi-contract rests on the equitable principle that a person shall not be allowed to
enrich himself at the expense of another. Franklin v. Franklin ex rel. Phillips, 858
So. 2d 110, 120 (Miss. 2003). In this context, the plaintiffs claim that when they
enter into a repair order contract with a customer, and the insurance company
approves of that repair order contract, an implied or quasi-contract is created
between the plaintiffs and the insurance company. They assert that the insurance
companys approval creates a relationship that gives rise to the full rights and
responsibilities of a contract created by law. (See Pl. Mem. in Supp. of Resp. to
Progressive Mot. for Partial Summ. J. 5, ECF No. 248). However, the plaintiffs
have cited no legal authority in support of this argument. They do not point to any
evidence in the record that would support a finding of an implied or quasi-contract
on the basis of the insurance companies approval of the repair contracts.5 The
no such contracts. (See Pls. Resp. to Progressives 1st Set of Requests for
Admissions 3, Affirm. of Brabec in Supp. of Progressive Mot. for Partial Summ. J.
Ex. A,, ECF No. 199-1; Pl. Resp. to Direct General 1st Request for Admissions 3,
Direct General Mot. for Summ. J. Ex. A, ECF No. 445-1; Pl. Resp. to Direct General
1st Set of Interrogatories, Interr. No. 6, Direct General Mot. for Summ. J. Ex. G,
ECF No. 445-7; Rule 30(b)(6) Dep. 151:20152:6, GEICO Mot. for Summ. J. Ex. 1,
ECF No. 479-1).
5
The plaintiffs arguments on this issue focus on their contention that the
Mitchell Database System is the accepted standard in the industry. However, the
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plaintiffs do not cite to any case (and the Court is not aware of any case) in which
an insurance companys approval of an automobile repair contract, or similar
contract, creates a quasi or implied contract between the insurer and the repair
shop, or any other similar insurance context in which a such a contract has been
implied.
Moreover, there are express contracts between the plaintiffs and their
customers that govern the repairs the plaintiffs are to perform. (See Rule 30(b)(6)
Dep. 159:10-19, GEICO Mot. for Summ. J. Ex. 1, ECF No. 479-1; Daniel Mosley
Dep. 178:1-8, GEICO Mot. for Summ. J. Ex. 2, ECF No. 479-2) (confirming that the
plaintiffs contracts for vehicle repairs are between the plaintiffs and their
customers). [N]o quasi-or implied-in-law contract can come into existence with
respect to a given subject matter where there exists an express contract with
respect to that subject matter. Richard Goettle, Inc. v. Tenn. Valley Auth., 600 F.
Supp. 7, 11 (N.D. Miss. 1984) (citation omitted). The plaintiffs have not explained
how the Court may create an implied contract regarding payment for repairs that
were completed pursuant to an existing contract between the plaintiffs and their
customer that expressly governed those repairs.6
forth above, the plaintiffs have admitted that there is no express or written contract
between them and any of the defendant insurance companies, and they have not
provided a legal basis on which the Court may find an implied or quasi-contract.
Thus, the defendants are also entitled to summary judgment on the plaintiffs
breach of contract claim, to the extent one is alleged.
II. Unjust Enrichment
Count 7 of the plaintiffs Complaint alleges unjust enrichment. The plaintiffs
assert that by failing to make full payments for the repairs completed by the
plaintiff repair shops, the defendants have obtained or retained money that, in
equity and good conscience, rightfully belongs to plaintiffs and wrongfully enriches
the defendants. (2d Am. Compl. 17 (61), ECF No. 25).
The doctrine of unjust enrichment is based on a promise, implied in law,
that one will pay a person what he is entitled to according to equity and good
conscience. 1704 21st Ave., Ltd. v. City of Gulfport, 988 So. 2d 412, 416 (Miss. Ct.
App. 2008). To prevent unjust enrichment, the law creates a quasi-contract based
upon the equitable principle that a person shall not be allowed to enrich himself
unjustly at the expense of another. Id.; Koval v. Koval, 576 So. 2d 134, 137 (Miss.
1991) (citation omitted). Unjust enrichment is only available where there is no
legal contract. Powell v. Campbell, 912 So. 2d 978, 982 (14) (Miss. 2005).
Additionally, this Court has recognized that unjust enrichment is considered to be a
remedy, rather than an independent theory of recovery. See Cole v. Chevron USA,
Inc., 554 F. Supp. 2d 655, 671 (S.D. Miss. 2007) (citing Coleman v. Conseco, Inc.,
-11-
238 F. Supp. 2d 804, 813 (S.D. Miss. 2002)); see also Estate of Johnson v. Adkins,
513 So. 2d 922, 926 (Miss. 1987).
The plaintiffs allegations regarding unjust enrichment are based on their
theory that they have implied or quasi-contracts with the defendant insurance
companies. In response to the Motions for Summary Judgment, the plaintiffs set
forth the same arguments about implied and quasi-contracts that they assert in
support of their claim of breach of the covenant of good faith and fair dealing. (Pl.
Mem. in Supp. of Resp. to GEICO Mot. for Summ. J. 22-24, ECF No. 579). As set
forth above, the plaintiffs have not established that they have an implied contract
with the defendants, and do not provide a legal basis on which the Court could
determine that a quasi-contract exists.
Additionally, the plaintiffs assert that if the defendant[s] have not paid
Plaintiff[s] a reasonable amount for services to the insured, then defendant[s] have
been unjustly enriched. (Id. at 25). However, they cite no authority for that
conclusion. The plaintiffs do not cite any case in which a court has held that an
insurance company was unjustly enriched because it failed to pay in full the charges
incurred by an insured at a repair shop (or any analogous context), and the Court is
not aware of one.
Finally, the plaintiffs also argue that the determination of damages under a
contract is a fact question for the jury. (Id. at 24-25). That may be true, but as set
forth above, the plaintiffs do not have a contract with the defendants, and the Court
will not reach the question of damages where the plaintiffs do not have a legally
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viable claim. The plaintiffs have not demonstrated a legal basis on which the Court
could impose the doctrine of unjust enrichment. Summary judgment will be
granted in favor of the defendants on this claim.
III. Conversion and Constructive Trust
Count 6 of the Complaint states a claim of constructive trust and
conversion. (2d Am. Compl. 16 (53-56), ECF No. 25). The Complaint alleges
that the defendants are wrongfully holding in their possession funds that belong to
the plaintiffs in constructive trust. Plaintiffs assert that, [o]n information and
belief, a pool of funds garnered from premiums paid by plaintiffs customers and
the consuming public exists within the possession and control of the defendants.
(Id. (54)). They allege that these funds are held for the purpose of paying
legitimate repair charges incurred by insureds, and because the defendants have
failed to pay for such charges on behalf of the plaintiffs customers, those funds
rightfully belong to the plaintiffs. Count 6 further alleges that the defendants
actions amount to a conversion of plaintiffs monies, which creates a constructive
trust for the benefit of the plaintiffs, and that therefore they are entitled to a
judgment in quantum meruit or restitution for the wrongfully withheld funds. (Id.
(56)).
Conversion is an intentional tort recognized by Mississippi law, while a
constructive trust is an equitable remedy imposed where necessary to prevent
unjust enrichment. They are not one and the same claim.
Conversion
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insurance companies.7 The plaintiffs do not claim that they were ever in possession
of the funds. They point to no evidence that they are the true owners of the funds,
which is essential to a claim of conversion under Mississippi law. The only
argument the plaintiffs put forth regarding their ownership or interest in the funds
is that Plaintiffs have a claim of ownership to the funds specifically set aside for
those repairs as much as does the Defendant. (Pl. Mem. in Supp. of Resp. to
Progressive Mot. for Partial Summ. J., 10-11, ECF No. 248). However, the plaintiffs
offer no legal support for this conclusion. As the plaintiffs have not presented any
evidence of ownership of the allegedly converted funds, or cited any statutory or
case law on which the Court could find that they had an ownership interest, the
defendants are entitled to summary judgment on this claim. See Courtney, 884 So.
2d at 773 (10) (dismissing conversion claims with respect to property that plaintiff
did not own, stating, [T]here is no conversion until the title of the lawful owner
is made known and resisted or the purchaser exercises dominion over the property
by use, sale, or otherwise.) (citation omitted) (emphasis in original).
Constructive Trust
A constructive trust is a fiction of equity created for the purpose of
preventing unjust enrichment by one who holds legal title to property which, under
principles of justice and fairness, rightfully belongs to another. McNeil v. Hester,
753 So. 2d 1057, 1064 (Miss. 2000) (citations omitted). The Mississippi Supreme
Court has defined a constructive trust as:
one that arises by operation of law against one who, by
fraud, actual or constructive, by duress or abuse of
confidence, by commission of wrong, or by any form of
unconscionable conduct, artifice, concealment, or
questionable means, or who in any way against equity
and good conscience, either has obtained or holds the
legal right to property which he ought not, in equity and
good conscience, hold and enjoy.
Id. (citing Saulsberry v. Saulsberry, 78 So. 2d 758, 760 (1955) (additional citations
omitted)).
In order for a court to create a constructive trust, the facts must show
substantial overreaching or fraud, and the proof must be clear and convincing. Id.
(citing Planters Bank & Trust Co. v. Sklar, 555 So. 2d 1024, 1034 (Miss. 1990)); In
re Estate of Horrigan, 757 So. 2d 165, 170 (Miss. 1999). The Mississippi Supreme
Court has also stated that [i]t is necessary only to establish such conduct and bad
faith as would shock the conscience of the court. Griffin v. Armana, 687 So. 2d
1188, 1195 (Miss. 1996) (citation omitted).
Additionally, this Court has recognized that, in order to impose a
constructive trust, the Mississippi Supreme Court has generally required that a
confidential relationship be present and abuse of that confidence must have
occurred. Eisenberg v. Grand Bank for Sav., FSB, 207 F. Supp. 2d 553, 557-58 (S.D.
-16-
Miss. 2002), affd, 70 F. Appx 765 (5th Cir. 2003); see also Cole, 554 F. Supp. 2d at
672 ([I]n order to impose a constructive trust under Mississippi law, a court must
find abuse of a confidential relationship resulting in unjust enrichment.). While
any transaction may provide an appropriate setting for creating a constructive
trust, a confidential relationship is a necessary element. Cole, 554 F. Supp. 2d at
672 (quoting Alvarez v. Coleman, 642 So.2d 361, 367 (Miss. 1994) and Braddock
Law Firm, PLLC v. Becnel, 949 So. 2d 38, 48 (Miss. Ct. App. 2006) (internal
quotations and punctuation omitted)).
In this case, the plaintiffs claim that they are entitled to a constructive trust
is premised on their conversion claim. Their Complaint alleges: These actions by
defendants amount to a conversion of plaintiffs monies, which creates a
constructive trust for the benefit of the plaintiffs. (2d Am. Compl. 16 (56), ECF
No. 25). As set forth above, the plaintiffs conversion claim fails as a matter of law.
Accordingly, a constructive trust will not be created as a remedy for conversion.
Additionally, the plaintiffs allegations of unjust enrichment are also dismissed, as
discussed above. The plaintiffs have not alleged that they were in a confidential
relationship with the defendants, and they have not set forth clear and convincing
evidence of substantial overreaching or fraud on the part of the defendants.
Accordingly, the defendants are entitled to summary judgment on the plaintiffs
claim that they are entitled to a constructive trust.
IV. Section 83-11-501 of the Mississippi Code
Count 4 of the Complaint alleges that the defendants have violated Miss.
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Rather, the court noted that it assumed, for purposes of the motion, that
such an action could be maintained.
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Likewise, this Court concludes the defendant insurance companies have not
violated 83-11-501 because they have not required that their insureds repairs be
made at particular shops. As the Christmon court noted, the first principle of
statutory application and interpretation is that when the language of a statute is
unambiguous, the Court must apply the statute according to its plain meaning.
Christmon, 82 F. Supp. 2d at 615 (citing Harrison County Sch. Dist. v. Long Beach
Sch. Dist., 700 So. 2d 286, 288-89 (Miss. 1997)). Here, [t]here is nothing about the
language of 83-11-501 that is ambiguous. Id.
The plain meaning of the language of this statute prohibits an insurance
company from conditioning its payment for repairs on the particular repair shop
that performs the work. It provides that [n]o insurer may require as a condition of
payment of a claim that repairs to a damaged vehicle . . . must be made by a
particular contractor or motor vehicle repair shop. Miss. Code. Ann. 83-11-501.
In this case, the plaintiffs allege that the defendant insurance companies have
refused to pay for certain repairs. But they have not presented evidence that the
defendants refused to pay claims because the repairs were performed by the
plaintiff repair shops in particular, instead of by some other repair shop, which is
what is prohibited by 83-11-501. The plaintiffs point to their depositions, for
example, in which they testified that Progressive refused to pay for necessary
repairs for customers vehicles, but this does not prove that Progressives refusal to
pay was because it conditioned payment on the repairs being made by a particular
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defendants have placed the plaintiffs in the untenable position of either (1)
acquiescing to the defendants dictates that the plaintiffs not adhere to the . . .
processes . . . outlined in the databases, which could cause diminution in value of
those vehicles, or (2) repairing their customers vehicles in accordance to the
industry databases without full compensation by the defendants. (Id. at 12-13
(43)). Therefore, the Complaint alleges, the defendants have improperly inserted
themselves into the plaintiffs business relationships with the insureds, their
customers. (Id. at 13 (44)).
Despite the manner in which these claims are stated in the Complaint, the
tort of interference with a contract is a different cause of action than the tort of
interference with business relations. See Cenac, 609 So. 2d at 1268. Interference
with a contract occurs where a wrongdoer intentionally and improperly interferes
with the performance of a contract between another and a third person by inducing
or otherwise causing the third person not to perform the contract. Id. (quoting
Liston v. Home Ins. Co., 659 F. Supp. 276, 280 (S.D. Miss. 1986)). To properly state
a claim of this tort, the plaintiff must prove the existence of a valid and enforceable
contract between it and another party. Id. at 1269 (citing Mid-Continent Tel. Corp.
v. Home Tel. Co., 319 F. Supp. 1176, 1199-1200 (N.D. Miss. 1970)). See also Par
Indus., Inc. v. Target Container Co., 708 So. 2d 44, 48 (Miss. 1998) (citation
omitted). The defendant who is alleged to have tortiously interfered with the
contract must be a non-party to that contract. Cenac, 609 So. 2d at 1269 (citing
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Liston, 659 F. Supp. at 280). In addition, the plaintiff must prove that the contract
would have been performed but for the alleged interference. Par Indus., 708 So. 2d
at 48.
The tort of interference with business relations is also known as interference
with prospective business advantage, which is alleged as a separate claim in the
plaintiffs Complaint.10 (See Count 3, 2d Am. Compl. 13 (45-47), ECF No. 25).
Tortious interference with business relations occurs when a person unlawfully
diverts prospective customers away from ones business. Par Indus., 708 So. 2d at
48 (citing Cenac, 609 So. 2d at 1268-69). A cause of action exists where one
engages in some act with a malicious intent to interfere and injure the business of
another, and injury does in fact result. Id. The remedy for this tort is damages,
and the plaintiff must show (1) a loss, and (2) that defendants conduct caused the
loss. Id.
Under Mississippi law, the elements that a plaintiff must demonstrate to
prove tortious interference with a contract are the same as tortious interference
with business relations. They are:
(1) that the acts were intentional and willful;
10
The Complaint alleges the same underlying facts to support the claims of
tortious interference with business relations and interference with prospective
business advantage. (See 2d Am. Compl. 13 (46), ECF No. 25). The plaintiffs do
not distinguish between these claims in response to the Motions for Summary
Judgment. Because these claims are the same under Mississippi law, and the
parties have treated them as such in their briefing, the Court will address them
together herein as tortious interference with business relations.
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because of some action by Direct General. As the plaintiffs have not presented any
evidence that could be submitted to a jury with respect to these allegations,
summary judgment will be granted in favor of Direct General on the plaintiffs
claims of tortious interference with a contract, tortious interference with business
relations, and interference with prospective business advantage.
GEICO
Defendant GEICO moves for summary judgment on the grounds that the
plaintiffs have not produced any admissible evidence that it harmed any of
plaintiffs existing contracts or interfered with any prospective customers. GEICO
further asserts that the plaintiffs do not have any evidence that it engaged in any
intentional act to cause damage to the plaintiffs businesses, or that the plaintiffs
suffered any actual damage or loss as a result of an action by GEICO.
In response to GEICOs Motion for Summary Judgment, the plaintiffs put
forth the same, near-verbatim recitation of the Complaint that they asserted in
response to Direct Generals Motion for Summary Judgment. The plaintiffs also
make the non-specific statement that GEICO employees made various statements
to the plaintiffs customers, but cite to nothing in the record as evidence that these
statements were made. They do not point to any contract that GEICO caused not to
be performed, or even any specific customer that GEICO attempted to dissuade
from having repair work completed by the plaintiffs.
The plaintiffs do assert, however, that the GEICO defendants undertake a
scheme whereby they . . . attempt to get their insureds to take their vehicles to a
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network (or ARX) shop. (Pl. Mem. in Supp. of Resp. to GEICO Mot. for Summ. J.
14, ECF No. 579).11 They claim that GEICO attempts to convince its policyholder to
allow the network or ARx shop to repair his or her vehicle in a sales pitch which
involves mis-information and slander against the insureds preferred shop. (Id. at
14-15). As evidence of this scheme, the plaintiffs assert: This process is adduced
from the testimony of Geicos 30(b)(6) deponent, Kevin Rustick, which is attached
as an exhibit to their response. (Id. at 15).
The Court has reviewed Mr. Rusticks testimony submitted by the plaintiffs,
but it does not establish that GEICO could be liable for tortious interference with
business relations. Mr. Rusticks testimony consisted largely of the following:
A. [O]ur position is the same. If you go to Clinton Body
Shop . . . sure, we work with them on a regular basis. If
you have an ARX appointment at our shop where it was
already explained to you, we would not explain the
benefits of the ARX program? Of . . . course we would.
But if the customer says, I want to go somewhere else, . . .
we have no issue with that. In fact, we welcome . . .
...
If the customer says they want to go to another facility,
we welcome that going to another facility, yes.
Q. [ ] But prior to the . . . customer making that election,
do you tell them possible benefits from being at the
network shop?
....
If were referring to the ARX setting, then, yes. If prior to
a customer explaining to us that they have a preference of
11
GEICO has explained in briefing that its referral program is called the
Auto Repair Xpress Program (also known as ARx).
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Supp. 2d at 615-16 (finding that Allstates referral program, under which certain
repair shops were pre-approved and Allstate recommended those shops to its
policyholders, did not amount to tortious interference with business relations
because the plaintiff had no evidence that program was calculated or intended to
cause damage to his business).
Moreover, in order to prove the tort of interference with business relations,
the plaintiffs must show that actual damage and loss resulted from the defendants
conduct. The plaintiffs assert that the Geico defendants knew or should have
known that such representations . . . would lead the hearer to believe the
statements to be true . . . and take actions based on such relation; to wit, taking
their vehicles to other shops. (Pl. Mem. in Supp. of Resp. to GEICO Mot. for
Summ. J. 15, ECF No. 579). This is merely a repetition of an allegation set forth in
the plaintiffs Complaint, and is the type of unsupported conclusion that is
insufficient to overcome summary judgment. The plaintiffs do not point to any
actual evidence that they incurred damage or economic loss as a result of GEICOs
ARx program.12
12
The plaintiffs do not point to this particular testimony, but in reviewing the
evidence submitted by GEICO in support of summary judgment, the Court noted
that Plaintiff Daniel Mosley testified about a customer named Ms. Suarez who
was a GEICO policyholder and took her vehicle to a different repair shop. Mr.
Mosley testified that he believe[d] that her decision was a result of what GEICO
told her regarding a warranty and guarantee of repairs. (D. Mosley Dep. 155:23156:5, GEICO Mot. for Summ. J. Ex. 2, ECF No. 479-2). However, Mr. Mosley also
stated that he did not know all of the specifics of Ms. Suarezs conversation with
GEICO, or whether that was all of it in terms of why she opted to take her vehicle
elsewhere. (Id. at 154:18-155:22). There is no evidence that the plaintiffs had a
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contract with Ms. Suarez to support a tortious interference with a contract claim.
Moreover, Mr. Mosleys testimony regarding what Ms. Suarez may have told him is
inadmissible hearsay, and it does not establish that GEICO took action without
justifiable cause for an unlawful purpose of causing harm to the plaintiffs. See
Fowler v. Smith, 68 F.3d 124, 126 (5th Cir. 1995) (Evidence on summary judgment
may be considered to the extent not based on hearsay.) (citations omitted).
13
have their vehicles repaired at the plaintiffs body shop, and the sixth opted not to
have his vehicle repaired at all, but instead chose to trade in his vehicle.
(Progressive Mem. in Supp. of Mot. for Summ. J. 5-6, ECF No. 452). In support of
their Motion, Progressive has submitted information from its claim files with
respect to these individuals, as well as deposition testimony regarding their vehicle
repairs. (See Progressive Stmt. of Undisputed Facts in Supp. of Mot. for Summ. J.
Exs. J, ECF No. 537-4; Ex. K, ECF No. 537-5; Ex. L, ECF No. 463-12; Ex. M, ECF
No. 463-13; Ex. N, ECF No. 463-14; Ex. O, ECF No. 537-6; Ex. P, ECF No. 537-7;
Ex. Q, ECF No. 537-8; Ex. R, ECF No. 537-9).
In response to Progressives Motion, the plaintiffs, again, do not address the
specific elements of the alleged torts. Instead, they make a generalized argument
regarding defamation and tortious interference with business relations, and they
assert that the issue of whether Progressive acted with malice, and the question of
damages, are properly submitted to a jury. The plaintiffs do not submit any
contracts that they allege were not performed because of Progressives interference.
The plaintiffs do not respond directly to Progressives assertions and evidence
regarding the six individuals identified during discovery. However, the plaintiffs
submit deposition testimony of John Mosley and Daniel Mosley in reference to their
defamation claim, which includes some testimony regarding those individuals. For
example, John Mosley testified that customer Keith Hammitt had brought his
vehicle to one of the plaintiff repair shops, but he became aggravated when
Progressive tried to get him to take his car to a network shop. (Pl. Mem. in Supp. of
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Resp. to Progressive Mot. for Summ. J. 8, ECF No. 582). Mr. Hammitt eventually
decided to trade in his vehicle instead of having it repaired. (Id.). The plaintiffs do
not submit any documentation with respect to Mr. Hammitt, so it is not clear
whether the plaintiffs had a contract with him. As the plaintiffs have not
demonstrated that an existing contract was not performed, they cannot base a claim
of tortious interference with a contract on this testimony. Moreover, Mr. Mosleys
testimony regarding what Mr. Hammitt said about his conversations with
Progressive is hearsay. Hearsay evidence is not sufficient to overcome summary
judgment. See Fowler v. Smith, 68 F.3d 124, 126 (5th Cir. 1995) (inadmissible
hearsay evidence may not be considered on summary judgment). Finally, this
testimony does not demonstrate that Progressive acted with an unlawful purpose to
harm the plaintiffs business.
Four of the other customers identified in Progressives Motion are referenced
in the remaining deposition testimony submitted by the plaintiffs. (See Pl. Mem. in
Supp. of Resp. to Progressive Mot. For Summ J. 8-11, ECF No. 582) (discussing
customers Fred Cessna, Kendrick Ray, Elizabeth Flynn, and Rebecca Webster).
This testimony does not establish that Progressive caused any contracts between
those individuals and the plaintiffs not to be performed; instead, it confirms that
those individuals all had their cars repaired by the plaintiffs. Accordingly, the
plaintiffs testimony with respect to those customers does not establish tortious
interference with a contract or tortious interference with business relations. The
last customer identified in Progressives Motion for Summary Judgment is Candace
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Walton. The plaintiffs do not reference Ms. Walton in their response, and they do
not refute Progressives evidence that they repaired Ms. Waltons vehicle.
Accordingly, to the extent the plaintiffs claims are based on Progessives alleged
interference with Ms. Walton, they are unsupported.14
Finally, the plaintiffs point to the script that Progressive representatives
are instructed to use in communications with policyholders regarding auto repairs.
They assert that this script raises a fact question for the jury on the issue
whether Progressives statements to potential customers is an interference. (Pl.
Mem. in Supp. of Resp. to Progressive Mot. For Summ at 12).15 The Court has
reviewed what appears to be the script the plaintiffs reference, as well as other
14
The Court also notes that the plaintiffs have attached an exhibit to their
response to Progressives Motion for Summary Judgment that is titled in the record
simply as depo excerpts. (Pl. Mem. in Supp. of Resp. to Progressive Mot. for
Summ. J. Ex. 4, ECF No. 582-4). This is a 53-page document that consists of
various pages taken from what appear to be multiple depositions. There is no cover
page or anything in the document that identifies or distinguishes between
depositions. It is not referenced in the plaintiffs arguments regarding tortious
interference with business relations, but it does include some testimony regarding
an individual named Mike Strahan, who told one of the plaintiffs that they would
prefer to keep the cars away from Clinton Body Shop. (See id. at 12). The Court
has not found that the plaintiffs brief identifies Mike Strahan, and no other
evidence is presented with respect to his statements. Thus, it appears that this
testimony is inadmissible hearsay, and as the plaintiffs make no reference to it, the
Court will not address it further.
15
The plaintiffs do not attach the script to their response; nor do they point
to an exhibit number where it is located in the record. The plaintiffs assert that
Progressives Rule 30(b)(6) designee outlined the script in his deposition
testimony, but they do not attach the deposition to their response. The Court has
reviewed the portions of Progressives 30(b)(6) deposition that are in the record, but
does not find that the testimony could support the plaintiffs claims of tortious
interference. (See Excerpts from Andreoli Dep., ECF No. 537).
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economic or pecuniary value. Id. at 632 (citation omitted). There are certain
statements considered to be actionable per se under Mississippi law, which do not
require proof of special harm. Such statements include, inter alia, [w]ords
imputing a want of integrity or capacity, whether mental or pecuniary, in the
conduct of a profession, trade or business. Id. (citing W.T. Farley, Inc. v. Bufkin,
132 So. 86, 87 (Miss. 1931)).
The defendants have moved for summary judgment on the grounds that the
plaintiffs have failed to establish the requisite elements of this tort. The parties
arguments with respect to the defamation claim differ in certain respects, and
therefore the Court will address this claim against each defendant individually.
Direct General
Direct General argues that the plaintiffs have not put forth any admissible
evidence that Direct General made false, defamatory statements about the
plaintiffs, and therefore it is entitled to summary judgment on this claim. In
response to Direct Generals Motion, the plaintiffs submit what is basically a
recitation of their defamation claim as it is stated in their Complaint. This includes
the same generalized assertions about unnamed Direct General employees who
allegedly made statements to the plaintiffs customers regarding the repair time at
the plaintiff repair shops, the lack of a guarantee of their work, and the possibility
of running out of insurance-covered rental time. Again, the plaintiffs do not provide
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16
not proved that it made any false, defamatory statements about the plaintiffs.
GEICO points out that the plaintiffs have not put forth any evidence regarding any
statements made by GEICO prior to the filing of their Complaint. (GEICO Mem. in
Supp. of Mot. for Summ. J. 15, ECF No. 480). GEICO submits John Mosleys
deposition testimony, in which he admitted as much. (J. Mosley Dep. 16:10-16,
GEICO Mot. For Summ. J. Ex. 3, ECF No. 479-3). GEICO also asserts that the only
evidence the plaintiffs have submitted with respect to this claim are statements
made well after this lawsuit was filed by an individual named Dicky Robertson.
GEICO maintains that Mr. Robertson is not a GEICO employee, and that his
statements are not attributable to GEICO.
In response to GEICOs Motion for Summary Judgment, the plaintiffs argue
that GEICOs defamatory statements against the Plaintiffs business are
actionable per se, and that the [a]ssessment of damages is a fact question for the
jury. (Pl. Mem. in Supp. of Resp. to GEICO Mot. for Summ. J. 18, ECF No. 579).
As evidence of GEICOs alleged defamation, the plaintiffs submit statements from
Geicos employee Dicky Robertson. (Id.). These statements consist of what
appears to be a printed page from a social media website (e.g., Facebook)
maintained by Dicky Robertson. The page includes the following statements, which
are attributed to Mr. Robertson:
Clinton Body Shop uses their personal relationships with
our Savior to advertise for business. NEVER TRUST THE
MAN THAT USES GOD TO GET MONEY BECAUSE
MOST OF THE TIME MONEY IS HIS GOD.
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Ex. I, ECF No. 579-9). This testimony does not identify any specific statement by
GEICO, and is at most general hearsay regarding what the plaintiffs customers
said, and is not admissible. Finally, the plaintiffs also point to the deposition
testimony of GEICOs Rule 30(b)(6) designee, Kevin Rustick, to argue that GEICO
cannot demonstrate that the plaintiff repair shops take longer to repair vehicles
than GEICOs network shops. However, GEICOs ability to demonstrate a
difference in the repair times is irrelevant because the plaintiffs have not proven
that GEICO made any statements regarding the length of time that the plaintiffs
take to repair vehicles.
The plaintiffs have not established the elements of defamation with respect
to GEICO. Accordingly, GEICO is entitled to summary judgment on this claim.
Progressive
Progressive has moved for summary judgment on the basis that the plaintiffs
have failed to establish the elements of defamation under Mississippi law.
Progressive points out that while the plaintiffs have testified in their depositions
about statements they allege were made by Progressive, this testimony is not
admissible to prove defamation.
In response, the plaintiffs argue that Progressives defamatory statements
are actionable per se, and that the question of damages is for a jury to determine.
They assert that John Mosley and Daniel Mosley . . . testified exhaustively about
defamatory statements made about their businesses by employees of Defendant
Progressive. (Pl. Mem. in Supp. of Resp. to Progressive Mot. for Summ. J. 7, ECF
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No. 582). The plaintiffs include several pages of quoted deposition testimony in
their brief, but the Court finds that none of this testimony establishes the tort of
defamation. The testimony consists of John Mosleys and Daniel Mosleys
statements about what their customers told them about statements made by
Progressive. For example, John Mosley testified that customer Keith Hammitt was
told by a Progressive employee that the plaintiffs would take too long to repair his
car; that customer Fred Cessna told Mosley that Progressive told Mr. Cessna that
the plaintiff repair shops were not in Progressives network; and that other
unnamed customers have told Mosley that Progressive told them that Clinton Body
Shop may take longer or may charge you more, and that We dont guarantee
their work. (Id. at 8-9).
These statements, and the other testimony submitted by the plaintiffs about
what their customers told them, are hearsay. The plaintiffs have not submitted any
affidavit or deposition testimony by these (or other) customers, who could have
provided sworn, admissible evidence regarding what Progressive may have stated
to them about the plaintiffs. Again, the Court cannot rely on hearsay testimony to
determine that the plaintiffs have established that Progressive has made false,
defamatory statements, or to defeat a summary judgment motion under Rule 56.
Finally, the plaintiffs also assert that Progressive has no evidence that the plaintiff
repair shops take longer to complete repairs than Progressives network shops. This
is irrelevant because the plaintiffs have not proven that Progressive made any
statements about the length of repair time at the plaintiff repair shops.
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The plaintiffs have not put forth admissible evidence to establish the tort of
defamation. Accordingly, Progressive is entitled to summary judgment on this
claim. See Hardy Bros. Body Shop v. State Farm Mut. Auto. Ins. Co., 848 F. Supp.
1276, 1289 (S.D. Miss. 1994) (where affidavits submitted by the plaintiffs showed
that State Farms customers were not dissuaded from dealing with the plaintiffs
repair shop, evidence did not establish that the plaintiffs were injured in their
trade, business or profession, and defamation claim failed).
VII. Business Oppression
Count 8 of the Complaint alleges a claim of business oppression. The
plaintiffs assert that the defendants have willfully and maliciously caused
irreparable financial, emotional, and other damages to the plaintiffs . . .
individually and as a business. (2d Am. Compl. 17-18 (62), ECF No. 25). As the
defendants point out in their summary judgment motions, there is no cause of
action for business oppression under Mississippi law. The plaintiffs have failed to
point to any authority to show that this claim is legally cognizable. Accordingly,
summary judgment will be granted on this claim.
VIII. Emotional Distress Claims
Count 9 of the Complaint alleges claims of intentional and negligent
infliction of emotional distress. The Complaint states that the defendants extreme
and outrageous acts have emotionally harmed the plaintiffs. (2d Am. Compl. 18
(63), ECF No. 25). The parties briefing has confirmed that these claims were
brought by the individual plaintiffs, not the repair shops, and the plaintiffs have
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harm to him personally. The plaintiffs allegations in this lawsuit are based on the
defendants refusal to pay claims related to automobile repairs, in what is
essentially an extended business dispute. This is not the type of conduct that would
permit a jury to conclude that the defendants actions are so outrageous and
extreme as to be intolerable in a civilized society. Accordingly, summary
judgment will be granted on this claim.
Negligent Infliction of Emotional Distress
In order to succeed on a claim of negligent infliction of emotional distress,
Plaintiff John Mosley must prove the usual elements of duty, breach, causation
and damages, as well as some sort of physical manifestation of injury or
demonstrable harm, whether it be physical or mental, and that harm must have
been reasonably foreseeable to the defendant. Stewart v. GMAC Mortgage, LLC,
No. 2:10-CV-00149-DCB, 2011 WL 1296887, at *10 (S.D. Miss. Mar. 31, 2011)
(quoting Fouche v. Shapiro & Massey LLP, 575 F. Supp. 2d 776, 788-89 (S.D. Miss.
2008); Am. Bankers Ins. Co. of Fla. v. Wells, 819 So. 2d 1196, 1208 (Miss. 2001)).
Defendants argue that they do not owe a duty to Mosley, and that Mosley has not
demonstrated the type of harm required to succeed on this claim.
In response, Plaintiff Mosley does not address the issue of duty, or any of the
remaining required elements of a negligence claim. He simply argues that he has
established through medical expert records of Dr. Wheat, his personal physician
named as an expert herein, that the actions of the Defendants have elevated his
blood pressure. (Pl. Mem. in Supp. of Resp. to GEICO Mot. for Summ. J. 29, ECF
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No. 579).17 He cites his own deposition testimony that he has had problems with
[his] blood pressure and he does not sleep much at night for worrying about all
this mess. (Id.)
Given that Mosley has not addressed the issue at all, he has failed to
demonstrate that any of the defendants owed him any duty, which is the first
element of a negligence claim. Of course, it follows that Mosley has also failed to
demonstrate a breach of any duty.18 Mosley has failed to establish the elements of
negligent infliction of emotional distress, and summary judgment will be granted on
this claim.
IX. Quasi-Estoppel
Finally, Count 10 of the Complaint asserts a claim of quasi-estoppel. The
17
However, Mosley does not submit Dr. Wheats records or expert report as
evidence in response to the summary judgment motions. The Court has considered
Dr. Wheats report, deposition testimony, and records that were submitted by the
defendants, and those that were filed in connection with the defendants motions to
exclude Dr. Wheats testimony. (See, e.g., ECF No. 434, ECF No. 436-1, ECF No.
445-4, ECF No. 445-5, ECF No. 465-3).
18
Moreover, even if Mosley had established that the elements of duty, breach,
and causation, it is doubtful that he could put forth substantial proof of emotional
harm, which is required to recover for negligent infliction of emotional distress.
Evans, 36 So. 3d at 476 (53). Mosleys physician noted he has had some elevation
in his blood pressure, but Mosley was never medicated or treated for elevated blood
pressure. (Wheat Dep. 63:9-10, 83:3-9, Progressive Aff. in Supp. of Mot. to Exclude,
ECF No. 436-1). Other than that, the only harm Mosley has alleged is that he does
not sleep much. Mississippi courts have consistently held that sleeplessness is
insufficient to support a claim for emotional distress. See Evans, 36 So. 3d at 476
(53) (citing Ill. Cent. R.R. Co. v. Hawkins, 830 So. 2d 1162, 1175 (27) (Miss.
2002); Wilson v. General Motors Acceptance Corp., 883 So. 2d 56, 65 (28) (Miss.
2004)).
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plaintiffs allege that when it has been to their advantage to do so, the defendants
have relied on the national databases, but at other times have refused to
compensate the plaintiffs according to those same databases. The Complaint seeks
to have the defendants estopped from denying the applicability and reasonableness
of the procedures and costs set forth in the industry databases. (2d Am. Compl. 19
(68), ECF No. 25).
The defendants have moved for summary judgment on this claim on the
grounds that quasi-estoppel is an affirmative defense, and not a cause of action,
under Mississippi law. In response, the plaintiffs simply argue that the defendants
arguments are based on improper analysis, but offer no authority for their
argument that quasi-estoppel is an affirmative claim. (See Pl. Mem. in Supp. of
Resp. to Progressive Mot. for Partial Summ. J. 13-14, ECF No. 248).
Quasi-estoppel is not recognized as an independent, affirmative claim under
Mississippi law. See T.C.B. Constr. Co., Inc. v. W.C. Fore Trucking, Inc., 134 So. 3d
752, 764 (Miss. Ct. App. 2012) (Quasi-estoppel is not an independent claim that
must be pled . . . Rather, quasi-estoppel is an affirmative defense.) (citations
omitted). While [t]ypically, it is the defendant who affirmatively pleads
quasi-estoppel to show the plaintiffs claim is based on an inconsistent position, the
Mississippi Court of Appeals has noted that a plaintiff . . . may also assert
quasi-estoppel in response to the defendants answer. Id. (citation omitted). This
Court has noted that the Mississippi Supreme Court has described equitable
estoppel as a shield and not a sword. Evergreen Lumber & Truss, Inc. v.
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General Insurance Company, and the Motion [479] for Summary Judgment filed by
Defendant GEICO Insurance Company are GRANTED.
SO ORDERED AND ADJUDGED this the 16th day of December, 2014.
s/
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