UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT
No. 00-60533
AMERICAN FIRE & INDEMNITY COMPANY,
Plaintiff-Counter Defendant-Appellee,
versus
SCOTTSDALE INSURANCE COMPANY,
Defendant-Counter Claimant-Appellant.
Appeal from the United States District Court for the Northern District of Mississippi (1:98-CV-258-S-D)
June 18, 2001
Before GARWOOD, HALL,1 and BARKSDALE, Circuit Judges.
PER CURIAM:2
At issue is which insurance policy covers a wrongful death
claim against the insured for a single-vehicle accident allegedly
caused by the insured’s negligence and resulting in the death of
his wife: the personal automobile insurance policy, with an
uninsured motorist endorsement, issued by American Fire & Indemnity
Company, or the personal umbrella liability policy issued by
1 Circuit Judge of the Ninth Circuit, sitting by designation. 2 Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. Scottsdale Insurance Company. Because we conclude that the
insured’s vehicle is not an uninsured motor vehicle under
Mississippi law, we AFFIRM.
I.
Dorothy V. Taylor died as a result of injuries sustained in a
one-vehicle accident while a passenger in a vehicle owned and
operated by her husband, Calvin E. Taylor. Her wrongful death
beneficiaries sued Taylor, claiming his negligence caused the
death.
At the time of the accident, Taylor’s vehicle was covered by
two insurance policies: a personal automobile policy issued by
American Fire and a personal umbrella liability policy issued by
Scottsdale. The American Fire policy provided liability coverage
with bodily injury limits of $250,000 per person and $500,000 per
occurrence, which satisfied Scottsdale’s basic underlying policy
requirements for issuing its umbrella policy.
However, the American Fire policy excluded liability coverage
“for bodily injury to [the insured] or any family member”.
(Emphasis added.) The parties agree that, because the decedent was
within the policy definition of “family member”, the American Fire
policy does not provide coverage for her injuries.
The American Fire policy also provided uninsured motorist
coverage, pursuant to the Mississippi Uninsured Motorist Act, see
MISS. CODE ANN. §§ 83-11-101 et seq., with per person bodily injury
2 limits of $250,000. Because three vehicles were listed in the
policy, American Fire concedes that the stacked coverage was
$750,000 per person. See United States Fidelity & Guar. Co. v.
Ferguson, 698 So. 2d 77, 79 (Miss. 1997) (“stacking is so firmly
imbedded in Mississippi uninsured motorist law that it has become
a positive gloss upon the Uninsured Motorist Act” (internal
quotation marks and citation omitted)).
As noted, Taylor’s vehicle was also covered by a personal
umbrella liability policy issued by Scottsdale, with limits of $1
million per accident. Scottsdale’s policy provides “[e]xcess
insurance over and above the amounts provided for in basic
policies” (excess coverage provision) and covers “[d]amages, in
excess of $1,000, arising out of claims ... which are either
excluded or not covered under ... basic policies” (gap-filling
provision). (Emphasis added.)
Although the insurers disputed coverage, they settled with the
decedent’s beneficiaries and reserved the right to litigate between
themselves the liability for the claim. American Fire brought a
declaratory judgment action, and Scottsdale counterclaimed; each
sought an adjudication that the other was liable. On cross-motions
for judgment on the pleadings, and by a thorough and well-reasoned
opinion, the district court concluded Scottsdale was liable under
its gap-filling provision.
3 II.
A judgment on the pleadings is reviewed de novo. E.g., Harris
v. Philip Morris Inc., 232 F.3d 456, 458 (5th Cir. 2000). And, the
interpretation of an insurance policy is a question of law. E.g.,
Lewis v. Allstate Ins. Co., 730 So. 2d 65, 68 (Miss. 1998).
Unambiguous policies are enforced, of course, according to their
written terms. E.g., Sennett v. United States Fidelity & Guar.
Co., 757 So. 2d 206, 212 (Miss. 2000). On the other hand,
ambiguous provisions that limit or exclude coverage are construed
in favor of the insured. E.g., Lewis, 730 So. 2d at 68. Based
upon two provisions in its policy, Scottsdale asserts it is not
liable.
First, in its exclusions section, the Scottsdale policy states
it will not “drop down to assume the obligations of any basic
policy if any basic policy is not collectible for any reason,
including but not limited to the insolvency of the company by whom
the basic policy was issued” (drop down provision). (Emphasis
added.) According to Scottsdale, its policy does not drop down to
assume American Fire’s basic policy obligations because, pursuant
to American Fire’s family member exclusion, the basic policy is not
collectible.
Second, the Scottsdale policy states that, if, other than the
basic policies, there is any other collectible insurance covering
the claim, then that other insurance pays first, and Scottsdale’s
4 policy is in excess of it. According to Scottsdale, American
Fire’s uninsured motorist coverage is such “other collectible
insurance” which must first be exhausted.
American Fire responds: the claim is excluded under its
policy; Scottsdale’s $1 million liability limit exceeds American
Fire’s $750,000 uninsured coverage; therefore, Taylor’s vehicle is
not “uninsured” under Mississippi law; accordingly, the claim is
not covered by American Fire’s uninsured motorist endorsement; and,
as a result, the claim is covered under the gap-filling provision
of the Scottsdale policy. In addition, American Fire contends:
interpreting Scottsdale’s drop down provision, as Scottsdale
suggests, would completely vitiate the gap-filling coverage of its
policy; and, even if American Fire’s uninsured coverage applies,
because it does not cover the same property, risk, and interest as
Scottsdale’s liability coverage, it cannot be considered “other
collectible insurance”.
Obviously, in order for American Fire’s uninsured coverage to
apply, Taylor’s vehicle must be an “uninsured motor vehicle” as
defined by the Mississippi Uninsured Motorist Act. Wickline v.
United States Fidelity & Guar. Co., 530 So. 2d 708, 712 (Miss.
1988) (citing MISS. CODE ANN. § 83-11-103(c)). Only two of the five
definitions in MISS. CODE ANN. § 83-11-103(c) bear on this issue.
First, as defined by subpart (c)(ii), an uninsured vehicle is
“[a] motor vehicle as to which there is [bodily injury liability]
5 insurance in existence, but the insurance company writing the same
has legally denied coverage thereunder”. Again, and as the parties
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UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT
No. 00-60533
AMERICAN FIRE & INDEMNITY COMPANY,
Plaintiff-Counter Defendant-Appellee,
versus
SCOTTSDALE INSURANCE COMPANY,
Defendant-Counter Claimant-Appellant.
Appeal from the United States District Court for the Northern District of Mississippi (1:98-CV-258-S-D)
June 18, 2001
Before GARWOOD, HALL,1 and BARKSDALE, Circuit Judges.
PER CURIAM:2
At issue is which insurance policy covers a wrongful death
claim against the insured for a single-vehicle accident allegedly
caused by the insured’s negligence and resulting in the death of
his wife: the personal automobile insurance policy, with an
uninsured motorist endorsement, issued by American Fire & Indemnity
Company, or the personal umbrella liability policy issued by
1 Circuit Judge of the Ninth Circuit, sitting by designation. 2 Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. Scottsdale Insurance Company. Because we conclude that the
insured’s vehicle is not an uninsured motor vehicle under
Mississippi law, we AFFIRM.
I.
Dorothy V. Taylor died as a result of injuries sustained in a
one-vehicle accident while a passenger in a vehicle owned and
operated by her husband, Calvin E. Taylor. Her wrongful death
beneficiaries sued Taylor, claiming his negligence caused the
death.
At the time of the accident, Taylor’s vehicle was covered by
two insurance policies: a personal automobile policy issued by
American Fire and a personal umbrella liability policy issued by
Scottsdale. The American Fire policy provided liability coverage
with bodily injury limits of $250,000 per person and $500,000 per
occurrence, which satisfied Scottsdale’s basic underlying policy
requirements for issuing its umbrella policy.
However, the American Fire policy excluded liability coverage
“for bodily injury to [the insured] or any family member”.
(Emphasis added.) The parties agree that, because the decedent was
within the policy definition of “family member”, the American Fire
policy does not provide coverage for her injuries.
The American Fire policy also provided uninsured motorist
coverage, pursuant to the Mississippi Uninsured Motorist Act, see
MISS. CODE ANN. §§ 83-11-101 et seq., with per person bodily injury
2 limits of $250,000. Because three vehicles were listed in the
policy, American Fire concedes that the stacked coverage was
$750,000 per person. See United States Fidelity & Guar. Co. v.
Ferguson, 698 So. 2d 77, 79 (Miss. 1997) (“stacking is so firmly
imbedded in Mississippi uninsured motorist law that it has become
a positive gloss upon the Uninsured Motorist Act” (internal
quotation marks and citation omitted)).
As noted, Taylor’s vehicle was also covered by a personal
umbrella liability policy issued by Scottsdale, with limits of $1
million per accident. Scottsdale’s policy provides “[e]xcess
insurance over and above the amounts provided for in basic
policies” (excess coverage provision) and covers “[d]amages, in
excess of $1,000, arising out of claims ... which are either
excluded or not covered under ... basic policies” (gap-filling
provision). (Emphasis added.)
Although the insurers disputed coverage, they settled with the
decedent’s beneficiaries and reserved the right to litigate between
themselves the liability for the claim. American Fire brought a
declaratory judgment action, and Scottsdale counterclaimed; each
sought an adjudication that the other was liable. On cross-motions
for judgment on the pleadings, and by a thorough and well-reasoned
opinion, the district court concluded Scottsdale was liable under
its gap-filling provision.
3 II.
A judgment on the pleadings is reviewed de novo. E.g., Harris
v. Philip Morris Inc., 232 F.3d 456, 458 (5th Cir. 2000). And, the
interpretation of an insurance policy is a question of law. E.g.,
Lewis v. Allstate Ins. Co., 730 So. 2d 65, 68 (Miss. 1998).
Unambiguous policies are enforced, of course, according to their
written terms. E.g., Sennett v. United States Fidelity & Guar.
Co., 757 So. 2d 206, 212 (Miss. 2000). On the other hand,
ambiguous provisions that limit or exclude coverage are construed
in favor of the insured. E.g., Lewis, 730 So. 2d at 68. Based
upon two provisions in its policy, Scottsdale asserts it is not
liable.
First, in its exclusions section, the Scottsdale policy states
it will not “drop down to assume the obligations of any basic
policy if any basic policy is not collectible for any reason,
including but not limited to the insolvency of the company by whom
the basic policy was issued” (drop down provision). (Emphasis
added.) According to Scottsdale, its policy does not drop down to
assume American Fire’s basic policy obligations because, pursuant
to American Fire’s family member exclusion, the basic policy is not
collectible.
Second, the Scottsdale policy states that, if, other than the
basic policies, there is any other collectible insurance covering
the claim, then that other insurance pays first, and Scottsdale’s
4 policy is in excess of it. According to Scottsdale, American
Fire’s uninsured motorist coverage is such “other collectible
insurance” which must first be exhausted.
American Fire responds: the claim is excluded under its
policy; Scottsdale’s $1 million liability limit exceeds American
Fire’s $750,000 uninsured coverage; therefore, Taylor’s vehicle is
not “uninsured” under Mississippi law; accordingly, the claim is
not covered by American Fire’s uninsured motorist endorsement; and,
as a result, the claim is covered under the gap-filling provision
of the Scottsdale policy. In addition, American Fire contends:
interpreting Scottsdale’s drop down provision, as Scottsdale
suggests, would completely vitiate the gap-filling coverage of its
policy; and, even if American Fire’s uninsured coverage applies,
because it does not cover the same property, risk, and interest as
Scottsdale’s liability coverage, it cannot be considered “other
collectible insurance”.
Obviously, in order for American Fire’s uninsured coverage to
apply, Taylor’s vehicle must be an “uninsured motor vehicle” as
defined by the Mississippi Uninsured Motorist Act. Wickline v.
United States Fidelity & Guar. Co., 530 So. 2d 708, 712 (Miss.
1988) (citing MISS. CODE ANN. § 83-11-103(c)). Only two of the five
definitions in MISS. CODE ANN. § 83-11-103(c) bear on this issue.
First, as defined by subpart (c)(ii), an uninsured vehicle is
“[a] motor vehicle as to which there is [bodily injury liability]
5 insurance in existence, but the insurance company writing the same
has legally denied coverage thereunder”. Again, and as the parties
concede, American Fire’s policy provides liability insurance, but
coverage under that policy has been properly denied pursuant to its
family member exclusion. See Thompson v. Mississippi Farm Bureau
Mut. Ins. Co., 602 So. 2d 855, 857 (Miss. 1992) (upholding family
exclusion clause). As a result, Scottsdale’s gap-filling provision
comes into play, and, thus, Taylor’s vehicle is not uninsured.
The second possible basis for concluding Taylor’s vehicle is
uninsured is found in subpart (c)(iii)’s definition of an uninsured
motor vehicle: “when the liability insurer of such vehicle [(here,
Scottsdale)] has provided limits of bodily injury liability for its
insured which are less than the limits applicable to the injured
person [(here, the decedent)] provided under his uninsured motorist
coverage [(here, provided by American Fire)]”. (Emphasis added.)
Accordingly, to determine whether Taylor’s vehicle is uninsured
under this definition, we must compare the applicable policy
limits. Dixie Ins. Co. v. State Farm Mut. Auto. Ins. Co., 614 So.
2d 918, 920 (Miss. 1992). As noted, the Scottsdale policy affords
liability coverage of $1 million, whereas American Fire’s aggregate
uninsured coverage totals $750,000. Because Scottsdale’s coverage
is not less than American Fire’s uninsured coverage, Taylor’s
vehicle is not uninsured under the definition in subpart (c)(iii).
6 Scottsdale’s drop down provision does not apply. Again, that
provision excluded assuming a basic-policy-obligation if the policy
is “not collectible for any reason”. (Emphasis added.) If “not
collectible”, as employed in that provision, is interpreted to mean
excluded or not covered, as Scottsdale suggests, this would nullify
Scottsdale’s gap-filling provision (payment of certain damages for
claims excluded or not covered under basic policy). It goes
without saying that, whenever possible, operative effect must be
given to every provision of an insurance policy. J & W Foods Corp.
v. State Farm Mut. Auto. Ins. Co., 723 So. 2d 550, 552 (Miss.
1998); see also Mission Nat’l Ins. Co. v. Duke Transp. Co., 792
F.2d 550, 553 (5th Cir. 1986) (distinguishing between “collectible”
and “covered”). (Because Taylor’s vehicle is not uninsured, we
need not reach Scottsdale’s contention that American Fire’s
uninsured motorist coverage is “other collectible insurance”.)
Moreover, the purpose of uninsured motorist laws is to protect
persons injured as a result of the negligence of financially
irresponsible drivers. Rampy v. State Farm Mut. Auto. Ins. Co.,
278 So. 2d 428, 432 (Miss. 1973). This purpose would not be served
because, by purchasing both a personal automobile policy and a
personal umbrella liability policy, Taylor was anything but
financially irresponsible.
7 In sum, Taylor’s vehicle is not an uninsured motor vehicle.
Therefore, the claim is covered not by American Fire’s uninsured
motorist endorsement but by Scottsdale’s gap-filling provision.
III.
For the foregoing reasons, the judgment is
AFFIRMED.