Why are some Mississippi courts considered judicial hellholes? Witness the trial of the breach-of-contract dispute between local insurance businessman Carroll Hood and his HICO versus St. Paul Insurance. HICO remained profitable after they agreed to reduced commissions and raised rates for selling St. Paul insurance (and there’s no indication why they thought St. Paul didn’t have the right to raise rates), but then turned around and sued St. Paul for “tortious breach of contract.” Though the contract required disputes to be litigated in Texas, the court permitted the case to go to trial, permitted the plaintiffs to add a new theory of liability in the middle of trial without warning, permitted $1.2 million damages to be awarded for “mental distress” over a contract dispute between sophisticated businessmen, and then allowed a jury to award $75 million in punitive damages–thirty times the already-inflated compensatory damages. (The jury actually wrote $75,000,000,000 on their verdict form, but the judge decided that this was a confusion over how many zeroes were in a million.) St. Paul also complained that the judge encouraged the jury’s bias against out-of-state companies. The Mississippi Supreme Court threw out the verdict on the easiest of grounds: the Mississippi court never had jurisdiction over the case because of the explicit forum selection clause in the contract being sued on. (AP, “Miss. Supreme Court Overturns $80 Million Breach of Contract Verdict”, Insurance Journal, Nov. 22; Jimmie Gates, “Justices toss out $77.5M jury award”, Clarion-Ledger, Nov. 25; Titan Indemnity Co. v. Hood opinion).

Another sign of hope: on September 9, in Gallagher Bassett Services, Inc. v. Jeffcoat, the Mississippi Supreme Court threw out a $3.5 million verdict against an insurance adjuster that negligently failed to pay an uninsured motorist claim (with a policy limit of $10,000) for all of ten months. If this trend continues, Mississippians might find that insurance companies can more affordably offer insurance.

Filed under: insurance, Mississippi, procedure