Allstate v. Melton

On Aug. 22, Jackson Mayor Frank Melton admitted to Lauderdale County Circuit Court Judge Robert Bailey that he had lied for more than two years about sending a debunked Mississippi Bureau of Narcotics memo to Washington-based Clarion-Ledger reporter Ana Radelat, falsehoods first reported by the Jackson Free Press in July. Plaintiffs in Robert Pierce v. Frank Melton claim the memo prematurely ended the careers of Pierce and Jimmy Saxton, both former pilots at MBN. Incensed, Bailey quickly entered an order three days later striking Melton's pleadings and rendering default judgment for the plaintiffs.

Melton has essentially lost the case, but his attorneys have argued that Melton can transfer responsibility for paying the damages to the state. Mississippi law demands that the government employer be responsible for individuals causing damage so long as they are determined to be acting within the scope of their duties. Melton's attorneys have argued that Melton was only doing his job as MBN director when he faxed the memo to the reporter.

The Allstate Insurance Co. seems to have doubts about the validity of this argument, however, and is looking to crawl out from under any financial obligation to cover Melton's losses. Melton holds several liability policies under Allstate: a Mississippi homeowner's policy covering Melton and his wife in Tyler, Texas, Dr. Ellen G. Melton, a Texas homeowner's policy—both with liability coverage extending up to $300,000—and a personal umbrella policy in Mississippi worth $1,000. All policies could arguably give him some coverage of any damages he may pay.

On Nov. 3, Allstate representatives requested of Judge Bailey a declaratory judgment as to the obligations of Melton's insurance policies in connection to the lawsuit. Shortly stated, Allstate wants the judge to tell both plaintiffs and defendants in Pierce v. Melton to look elsewhere for damage money.

The complaint, Allstate v. Frank Melton, called Melton's "persistent refusal to correct his false interrogatory responses" a "willful and knowing provision of false information to the insurance company." The company then deemed Melton's false statements and "concealment of truth" to be "a breach of all three insurance contracts and, therefore, Defendant Melton has no liability coverage under any of the three policies issued by Allstate."

Jackson attorney Brent Southern, who is not associated with the case, said the insurance company may indeed have a case if the language in Melton's policy is as specific as Allstate indicates.

"Nobody ever reads everything in their policy. It's a lot of information to wade through, and it never really becomes a factor until there's a problem," Southern said.

In a closely related lawsuit filed in March 2005 in the midst of Melton's run for office, Pierce and Saxon are also suing The Clarion-Ledger and its corporate owner, Gannett, as well as reporter Radelat and Metro Editor Grace Simmons, who edited coverage of the campaign.


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