Nationwide Mut. Ins. Co. v. Garriga

• Citation: 636 So.2d 658
• Decision Date: 31 March 1994
• Docket Number: No. 90-CA-0493,90-CA-0493
• Parties: NATIONWIDE MUTUAL INSURANCE COMPANY v. Guy Arthur GARRIGA.
• Court: United States State Supreme Court of Mississippi

Page 658

636 So.2d 658

31 A.L.R.5th 797

NATIONWIDE MUTUAL INSURANCE COMPANY v. Guy Arthur GARRIGA.

No. 90-CA-0493.

Supreme Court of Mississippi.

March 31, 1994.

Rodney D. Robinson, Billy W. Hood, Allen Cobb & Hood, Gulfport, for appellant.

Gail D. Nicholson, Nicholson & Nicholson, Chester D. Nicholson, Gulfport, for appellee.

C. Victor Welsh, III, Crymes G. Pittman, Pittman, Germany, Roberts & Welsh, Jackson, for amicus curiae.

En Banc.

ON PETITION FOR REHEARING

BANKS, Justice, for the Court:

On Petition for Rehearing, the former opinions of this Court are withdrawn and this opinion substituted therefor.

We have previously observed that our uninsured motorist statutes do not permit insurance contracts which would enable the carrier to contract for less than the minimum coverage. Today we squarely address the question, "What is the minimum?" Our answer is that the minimum is that amount of coverage that the insured elects up to the amount of liability coverage purchased. Accordingly, we overrule In re Koestler: Casualty Reciprocal Exchange v. Federal Insurance Company, 608 So.2d 1258 (Miss.1992), and affirm the judgment of the circuit court disallowing a worker's compensation payment offset, which would reduce the uninsured motorist exposure below that contracted for by the insured pursuant to the provisions of Mississippi Code Annotated, Section 83-11-101(2) (1972).

I.

Guy Arthur Garriga filed a complaint against Benjamin LeRoy Walker, Sr., in the Circuit Court of Harrison County on May 26, 1987. The complaint sought damages for personal injuries suffered in a January 21, 1986, automobile accident. On February 1, 1989, Garriga amended the complaint to include Nationwide Mutual Insurance Company (hereinafter Nationwide), his uninsured motorist carrier, as a party-defendant. United States Fidelity and Guaranty Company (hereinafter USF & G) intervened in the action seeking to protect its subrogation lien and recover workers' compensation benefits being paid to Garriga as a result of the accident.

A settlement was reached between Walker, USF & G, and Garriga. Walker agreed to pay the limits of his liability insurance coverage ($10,000). USF & G agreed to waive any potential subrogation claim to the proceeds of the liability and uninsured motorist policies in exchange for no further workers' compensation claims. At that point, USF & G had paid Garriga $25,198.68 in medical and indemnity compensation. USF & G and Walker were dismissed from the lawsuit.

Nationwide, the uninsured motorist carrier, tendered and Garriga accepted $15,000, representing the limit of what Nationwide contended was owed under the underinsured motorist coverage, after applying the workers' compensation reduction provision. Nationwide and Garriga entered a joint stipulation of facts regarding the lawsuit, and submitted the issue of validity of the workers' compensation offset issue on cross-motions for summary judgment.

The Circuit Court sustained Garriga's cross-motion for summary judgment holding that Garriga was entitled to recover full policy limits less that offset by liability insurance benefits paid by Walker, the tortfeasor, and entered judgment in favor of Garriga in the amount of $25,000. Feeling aggrieved, Nationwide appealed to this Court.

II.

At the time of the accident on January 21, 1986, Garriga was working for the Gulfport City Police Department. While proceeding to a burglary scene, Garriga was involved in an automobile accident with Benjamin LeRoy Walker, Sr., and Peter J. Marchetto. The negligence of Walker was the proximate contributing cause of the accident.

Garriga had automobile insurance with Nationwide including two separate liability policies insuring two vehicles in his household. The policies provided uninsured motorist coverage for Garriga in the sum of $25,000 for each policy or an aggregate coverage of $50,000. Under the policies, Nationwide agreed to pay Garriga all sums up to $50,000 which Garriga may be legally entitled to recover as damages from an operator or owner of an uninsured automobile for bodily injury.

As a result of the accident with Walker, Garriga suffered a ruptured disk which resulted in a 25 percent permanent disability. According to his physician, Garriga cannot return to active duty as a patrol officer, but can perform light duty. At the time of the filing of these pleadings, Garriga had incurred medical expenses of $16,810.95.

At the time of the accident Walker was covered by a liability insurance policy up to $10,000. The Gulfport City Police Department had rejected uninsured motorist coverage, but provided workers' compensation insurance to its employees through USF & G. Garriga filed a workers' compensation claim against the police department, and had been paid a total of $25,198.68 at the time of filing. Of that total, $16,810.95 represented medical payments and $8,387.74 in lost wages.

This action was originally filed by Garriga against Walker and Nationwide. USF & G intervened to protect its subrogation lien for amounts paid to Garriga in workers' compensation benefits. Walker, through his insurance company, voluntarily paid the $10,000 limit of his policy. In exchange for Garriga's agreement not to pursue additional claims against the workers' compensation carrier, USF & G agreed to waive its subrogation interests to the proceeds being paid by Walker and waive any subrogation interests it might have had to the proceeds being paid by Nationwide under its underinsured motorist coverage.

Nationwide voluntarily tendered to Garriga $15,000 of the aggregate policy limits of $50,000 provided through Garriga's uninsured insurance coverage. Nationwide contends that $15,000 is the total coverage available, as Garriga has already received $25,000 through workers' compensation and $10,000 from Walker. Garriga has received a total of $50,000 from the three entities.

The Nationwide policy uninsured motorist endorsement provided the following limitation of liability:

Uninsured Motorist Coverage does not apply to an Insured:

. . . . .

(5) so as to inure directly or indirectly to the benefit of any workman's compensation or disability benefits carrier or any person or organizations qualifying as a self-insurer under any workman's compensation or disability benefits law or any similar law;

Additionally, the policy contained an endorsement which provided:

B. The Limits of Liability condition is deleted and replaced with the following:

. . . . .

(9) Any amount paid and the present value of all amounts payable on account of such bodily injury under any workers' compensation law, disability benefits law or any similar law shall be applied in reduction of the amount of damages which the insured may be entitled to recover under this endorsement.

Nationwide moved for summary judgment, arguing that no questions of fact existed, only one question of law. Garriga filed a cross motion. The question put by the motions was whether under Mississippi law, an insurer can contractually limit, credit or offset the amount of workers' compensation benefits received by its insured to the extent such uninsured motorist coverage exceeds the statutory minimum required. Included in the stipulations was a statement that Nationwide would agree to pay Garriga the additional $25,000, if the circuit court found in Garriga's favor and the Mississippi Supreme Court affirmed that decision.

The parties stipulated that Garriga's damages reached $50,000. Nationwide argues that it is only limiting Garriga from receiving a windfall. The reduction clause, however, is so broad, that even if Garriga had $100,000 in damages his insurance liability would only pay the policy limit minus workers' compensation payments. Under the reduction clause Nationwide will always reduce the $50,000 policy limit if workers' compensation has been paid, no matter the ultimate damages suffered. In fact, if Garriga had received $50,000 in workers' compensation, this clause would act to deny him any recovery, even the $10,000 statutory minimum.

The trial judge ruled that the reduction clause for workers' compensation benefits received contained within the insurance policy was ambiguous and unclear when read with the declaration page, and that it was unenforceable as a matter of law. The trial judge held that Garriga was entitled to recover the full policy limits offset by the liability insurance benefits paid by the tortfeasor.

III.

"This Court conducts a de novo review of the record on appeal from a grant of a motion for summary judgment." Pace v. Financial Security Life of Mississippi, 608 So.2d 1135, 1138 (Miss.1992); Short v. Columbus Rubber and Gasket Co., 535 So.2d 61, 63 (Miss.1988). In Pace, this Court reiterated the initial standard to be used in considering a motion for summary judgment:

The trial court must review carefully all of the evidentiary matters before it--admissions in pleadings, answers to interrogatories, depositions, affidavits, etc. The evidence must be viewed in the light most favorable to the party against whom the motion has been made. If in this view the moving party is entitled to judgment as a matter of law, summary judgment should forthwith be entered in his favor. Otherwise the motion should be denied.

Pace, 608 So.2d at 1138 (quoting Brown v. Credit Center, Inc., 444 So.2d 358, 362 (Miss.1983)) (emphasis added). See also, Lovett v. Anderson, 573 So.2d 758, 760 (Miss.1990).

IV.

We start with the basic principles involved in analyzing contracts between individuals and insurance companies. This state's law recognizes the general rule that provisions of an insurance contract are to be construed strongly against the drafter. Williams v. Life Insurance Company of Georgia, 367 So.2d 922, 925 (Miss.1979). Any ambiguities in an insurance contract must be construed against the insurer and in favor of the insured and a finding of coverage. Government Employees Insurance Company v. Brown, 446 So.2d 1002,...