Viking Insurance Company of Wisconsin v. Mississippi Farm Bureau Casualty Insurance Company

• Court: Mississippi Supreme Court
• Decided: September 9, 2021
• Docket: 2020-CA-00836-SCT
• Status: Published

Opinion

IN THE SUPREME COURT OF MISSISSIPPI

NO. 2020-CA-00836-SCT

VIKING INSURANCE COMPANY OF WISCONSIN

v.

MISSISSIPPI FARM BUREAU CASUALTY INSURANCE COMPANY

DATE OF JUDGMENT: 07/09/2020 TRIAL JUDGE: HON. JOHN R. WHITE TRIAL COURT ATTORNEYS: GOODLOE TANKERSLEY LEWIS JAMES E. WELCH, JR. WILLIAM E. WHITFIELD, III COURT FROM WHICH APPEALED: LEE COUNTY CIRCUIT COURT ATTORNEYS FOR APPELLANT: WILLIAM E. WHITFIELD, III JAMES E. WELCH, JR. ATTORNEY FOR APPELLEE: GOODLOE TANKERSLEY LEWIS NATURE OF THE CASE: CIVIL - INSURANCE DISPOSITION: REVERSED AND RENDERED - 09/09/2021 MOTION FOR REHEARING FILED: MANDATE ISSUED:

BEFORE KITCHENS, P.J., BEAM AND ISHEE, JJ.

ISHEE, JUSTICE, FOR THE COURT:

¶1. Viking Insurance Company appeals a grant of summary judgment by the Lee County

Circuit Court. The circuit court adjudged that stacking uninsured-motorist coverages in a

Viking policy should be separated for purposes of the State Farm Mutual Auto Insurance

Co. v. Kuehling, 475 So. 2d 1159, 1163 (Miss. 1985), offset. Viking covered the insured

through a single policy covering both the vehicle involved in the accident and an uninvolved

vehicle while Mississippi Farm Bureau Casualty Insurance Company covered the insured through a single policy covering two uninvolved vehicles. The circuit court applied the

offset first to Viking’s coverage of the involved vehicle and then allocated the remainder

between Viking’s and Farm Bureau’s coverages of uninvolved vehicles.

¶2. A motion for summary judgment is appropriately granted when there is no genuine

issue of material fact and the movant is entitled to judgment as a matter of law. Miss. R. Civ.

P. 56(c). As the parties agree regarding the facts of this case, our only consideration is

whether or not Farm Bureau was entitled to judgment as a matter of law. We review

questions of law de novo. Miss. Sand Sols., LLC v. Otis, 312 So. 3d 349, 353 (Miss. 2020)

(quoting Morley v. Jackson Redev. Auth., 874 So. 2d 973, 975 (Miss. 2004)). Having

considered the parties’ arguments and the laws of our state, we find that the circuit court

erred. Viking was the primary insurer, so it was entitled to an offset against its entire

stacking policy amount first. It was error to apply a pro rata offset in this case. Accordingly,

we reverse and render.

FACTS

¶3. On October 28, 2019, Farm Bureau filed a complaint for declaratory relief in the

Circuit Court of Lee County.1 Farm Bureau’s complaint arose from a March 27, 2019

automobile accident involving Cameron Conwill. At the time of the accident, Conwill was

covered under two automobile-insurance policies, one issued by Farm Bureau to Daniel

Westmoreland and Penny Westmoreland, Conwill’s biological mother, and one issued by

Viking to Eddie Conwill, Conwill’s biological father. The Farm Bureau policy provided

1 Initially, Farm Bureau named Cameron Conwill and Viking. However, Farm Bureau subsequently dismissed the claims and complaint against Conwill without prejudice.

2 uninsured motorist (UM) coverage limits of $25,000 per person for a Ford F-150 and a

Toyota Corolla for a policy total of $50,000. The Viking policy provided UM coverage

limits of $25,000 per person for a Kawasaki motorcycle and a Harley-Davidson motorcycle

for a policy total of $50,000. At the time of the accident, Conwill had combined UM

coverage of $100,000.

¶4. The accident occurred when Conwill, while operating the Kawasaki motorcycle,

collied with a Nissan Altima, injuring himself. The Altima driver was insured with liability

coverage limits of $50,000 per person by Allstate Insurance Company. Allstate tendered the

policy limits to Conwill. Conwill then demanded UM benefits from Farm Bureau and

Viking.

¶5. Farm Bureau tendered $33,333.33 to Conwill and filed this suit, claiming that 2/3 of

the liability insurer payment to Conwill ought to be offset against Farm Bureau’s UM

obligations to Conwill because it provided two of the three uninvolved-vehicle coverages to

Conwill. Viking replied and counterclaimed that all of the liability-insurer payment to

Conwill ought to be offset against all of Viking’s UM obligations first because the vehicle

involved in the accident was covered under Viking’s policy, making Viking the primary

insurer.

¶6. On competing motions for summary judgment, the circuit court ruled in favor of Farm

Bureau. The court held that Viking was entitled to “the first $25,000 in liability offset

against its $25,000 in UM coverage on the Kawasaki” Conwill was driving at the time of the

accident. The remaining $25,000 in liability offset was to be “pro-rated between Farm

3 Bureau and Viking in proportion to each insurers’ portion of the remaining $75,000 in UM

coverage, with 1/3 of the offset assigned to Viking and deducted from its remaining UM limit

of $25,000 and 2/3 of the offset assigned to Farm Bureau and deducted from its UM limit of

$50,000.” Aggrieved, Viking appealed.

DISCUSSION

1. Uninsured-Motorist Insurance in Mississippi

A. Underinsured Coverage and Aggregation

¶7. Uninsured-motorist (UM) insurance coverage is regulated in this state by Mississippi

Code Sections 83-11-101 through -111 (Rev. 2011). Unless an insured rejects a provision

in writing, insurers are barred from issuing automobile liability-insurance policies in this

State without including UM coverage. Miss. Code Ann. § 83-11-101 (Rev. 2011). This

coverage must undertake “to pay the insured all sums which he shall be legally entitled to

recover” both as damages for bodily injury or death and for property damage “from the

owner or operator of an uninsured motor vehicle[.]” Miss. Code Ann. § 83-11-101(1), (2)

(Rev. 2011).

¶8. Mississippi UM coverage also includes underinsured motorists. Our code defines an

“uninsured motor vehicle,” inter alia, as “[a]n insured motor vehicle, when the liability

insurer of such vehicle has provided limits of bodily injury liability for its insured which are

less than the limits applicable to the injured person provided under his uninsured motorist

coverage[.]” Miss. Code Ann. § 83-11-103(c)(iii) (Rev. 2011). Underinsured-motorist

4 coverage can be claimed when an injured insured’s UM coverage is greater than the injuring

party’s liability coverage. Id.

¶9. UM coverage amounts are affected by aggregation or stacking. If multiple vehicles

are covered under the same policy, each of those vehicle coverages can be stacked so that if

an insured is injured driving one vehicle on the policy, the coverages of the other vehicles

on the policy increase the overall UM coverage. U.S. Fid. & Guar. Co. v. Ferguson, 698

So. 2d 77, 79 (Miss. 1997).2 For purposes of invoking underinsured coverage then, one

compares the injuring party’s liability coverage with the aggregate of all of the injured

insured’s UM coverages. Aggregation is limited though by whether an individual is the

named insured (or household resident) or if an individual is merely a permissive user of the

involved vehicle. See Meyers v. Am. States Ins. Co., 914 So. 2d 669, 674–76 (Miss. 2005).

¶10. In the underinsured realm though, offsets also arise. When the injuring party’s

liability coverage does compensate the injured insured, the UM coverage provider can offset

the amount of the liability payment against its UM obligations to the injured insured.

Kuehling, 475 So. 2d at 1163. This offset is the subject of the dispute in today’s case.

¶11. One final wrinkle concludes our exploration of UM coverage. It is possible for an

injured insured to be covered under multiple policies, some of which provide coverage for

the vehicle involved in the accident, some of which do not. An injured insured may

aggregate these policies and recover the total sums due under these policies. Harthcock v.

2 But “[a]n insured in an automobile liability policy that covers four (4) or more vehicles may elect to purchase . . . single-limit, nonstacking uninsured motorist insurance coverage covering all vehicles listed in the policy[.]” Miss. Code Ann. § 83-11-102(1) (Rev. 2011).

5 State Farm Mut. Auto. Ins. Co., 248 So. 2d 456, 461–62 (Miss. 1971). When multiple

policies are involved, “the insurer for the owner of the vehicle involved in the accident is the

primary insurer.” U.S. Fid. & Guar. Co. v. John Deere Ins. Co., 830 So. 2d 1145, 1148

(Miss. 2002) (citing State Farm Mut. Auto. Ins. Co. v. Universal Underwriters Ins. Co., 797

So. 2d 981, 983 (Miss. 2001); Travelers Indem. Co. v. Chappell, 246 So. 2d 498, 505 (Miss.

1971)). This primacy establishes which uninsured-motorist policy “is first in the paying line

of uninsured motorist benefits[.]” Id. (citing State Farm Mut. Auto. Ins. Co. v. Universal

Underwriters Ins. Co., 601 F. Supp. 289–90 (S.D. Miss. 2001).

B. Reasoning Undergirding UM Jurisprudence

¶12. We note that UM coverage’s only purpose is to give injured insureds means of

obtaining recompense for damages sustained. Harthcock, 248 So. 2d at 459. This differs

from liability insurance, which is meant to indemnify an injuring insured, not an

injured insured. Id. Because UM functions to give injured insured the means to receive

what they would be legally entitled to collect from an injuring party, this Court has said that

UM provisions ought to be “construed from the perspective of the injured insured[.]”

Hodges v. Canal Ins. Co., 223 So. 2d 630, 633–34 (Miss. 1969).

¶13. Thus, the perspective of the injured insured occupies a crucial role in our UM

jurisprudence. Atlanta Cas. Co. v. Payne, 603 So. 2d 343, 346 (Miss. 1992) (citing State

Farm Mut. Auto. Ins. Co. v. Nester, 459 So. 2d 787, 790 (Miss. 1984), (abrogated on other

grounds by Burns v. Burns, 518 So. 2d 1205 (Miss. 1988)); Harthcock, 248 So. 2d at 456;

Hodges, 223 So. 2d at 633–34. As we have said, “uninsured motorists coverage is designed

6 for the benefit of insured and not insurers.” Payne, 603 So. 2d at 346-47 (internal quotation

mark omitted) (quoting Couch on Insurance § 45:624 (2d ed.)). This policy has guided our

decisions throughout the year and directs our determination today.

II. This Case

¶14. Viking argues that it is the primary uninsured-motorist carrier because its policy

insured the owner of the motorcycle involved in the accident. As its policy is the first to bear

responsibility for paying for damages sustained by the injured insured, Viking argues its

policy in its entirety should be offset first by the injuring party’s liability insurance. Farm

Bureau counters that the articulation of primacy policies and not coverages in John Deere

was erroneous. Farm Bureau argues that the John Deere UM primacy rule is premised on

liability-coverage jurisprudence, not UM-coverage jurisprudence. It proposes that a primary-

coverage framework in UM contexts makes more sense. Neither party disputes that whatever

is held to be primary is offset first, with any remaining offset applied to the residual.

¶15. When determining which insurer is the primary insurer, this Court has consistently

referred to which policy covers the owner of the vehicle involved, not individual coverages.

John Deere Ins. Co., 830 So. 2d at 1146 (citing Universal Underwriters Ins. Co., 797 So.

2d at 983; Chappell, 246 So. 2d at 505); Dixie Ins. Co. v. State Farm Mut. Auto. Ins. Co.,

614 So. 2d 918, 922–23 (Miss. 1992). To amend precedent in Mississippi, “[i]t is not enough

to merely diagnose error . . . under our stare decisis jurisprudence, that error must also

perpetuate wrong.” Reeves v. Gunn, 307 So. 3d 436, 439 (Miss. 2020) (citing Payton v.

State, 266 So. 3d 630, 638 (Miss. 2019)). Even conceding that Farm Bureau is correct in

7 assessing the John Deere primacy rule as relying on liability-coverage jurisprudence rather

than UM-coverage jurisprudence, Farm Bureau fails in its argument that the John Deere

primacy rule perpetuates wrong.

¶16. Both parties propose competing arguments that their approach is more sensible or

more reliable for insurance companies. However, in the UM context, our concern is not with

companies but with the injured insured. Payne, 603 So. 2d at 346-47 (quoting Couch on

Insurance § 45:624). We are not convinced that a change in our precedent is necessary to

the further the interests of an injured insured. Or that doing so would be in an injured

insured’s interests at all. Farm Bureau argues that its method of pro rata distribution based

on non-primary coverage ensures that every policy the injured insured holds will pay out in

some way. This though is not a compelling reason to change our precedent, nor does it

appear to be a compelling concern for the injured insured in this case who has not involved

himself in this litigation at all. It also is not an argument that our precedent perpetuates

wrong.

¶17. Concluding that Farm Bureau has failed to demonstrate that the John Deere primacy

rule perpetuates wrong, we apply our precedent. A primary insurer, adjudged as such by its

policy covering the owner of the involved vehicle, is first responsible for payment under its

entire policy and so is first to have its responsibility under its entire policy offset. John

Deere Ins. Co., 830 So. 2d at 1146 (citing Universal Underwriters Ins. Co., 797 So. 2d at

983; Chappell, 246 So. 2d at 505).

CONCLUSION

8 ¶18. We reverse the circuit court’s grant of summary judgment to Farm Bureau, and we

render judgment in favor of Viking.

¶19. REVERSED AND RENDERED.

KITCHENS AND KING, P.JJ., COLEMAN, MAXWELL, BEAM, CHAMBERLIN AND GRIFFIS, JJ., CONCUR. RANDOLPH, C.J., NOT PARTICIPATING.