Bradley v. Viking Ins. Co. of Wis.

• Decision Date: 06 January 2023
• Docket Number: 21-60907
• Parties: DeMarkus BRADLEY, individually and on behalf of all others similarly situated; Angela Hawkins, Plaintiffs—Appellants/Cross-Appellees, v. VIKING INSURANCE COMPANY OF WISCONSIN, Defendant—Appellee/Cross-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

56 F.4th 1011

DeMarkus BRADLEY, individually and on behalf of all others similarly situated; Angela Hawkins, Plaintiffs—Appellants/Cross-Appellees,

v.VIKING INSURANCE COMPANY OF WISCONSIN, Defendant—Appellee/Cross-Appellant.

No. 21-60907

United States Court of Appeals, Fifth Circuit.

FILED January 6, 2023

Brent Hazzard, Richard Schwartz & Associates, P.A., Jackson, MS, Ronald Earl Stutzman, Jr., Esq., Attorney, Stutzman Law Firm, P.L.LC., Flowood, MS, for Plaintiffs-Appellants/Cross-Appellees.

William E. Whitfield, III, Esq., Attorney, James E. Welch, Jr., Esq., Copeland, Cook, Taylor & Bush, P.A., Gulfport, MS, for Defendant-Appellee/Cross-Appellant.

Before Jones, Southwick, and Ho, Circuit Judges.¹

Leslie H. Southwick, Circuit Judge.

Two significant questions of Mississippi insurance law are posed in this appeal of a denial of coverage for an automobile accident. One is whether uninsured motorist coverage can be denied simply because the driver, who was the son of the insured, was not listed on the policy? We answer that question "no." The other is whether the policy can be voided because the insured committed a material misrepresentation by failing in her application for insurance to name, as required, those of driving age who lived in her household? We answer that question "yes" and AFFIRM.

FACTUAL AND PROCEDURAL BACKGROUND

In March 2016, Angela Hawkins, DeMarkus Bradley's mother, applied for an automobile insurance policy with Viking Insurance. The application required that certain other potential drivers be named:

I understand that I must report to the Company all persons of legal driving age or older who live with me temporarily or permanently, including all children at college. I understand that I must report all persons who are regular operators of any vehicle to be insured, regardless of where they reside.

The policy relevantly defined "regular operator" as a person old enough to drive who resides in the insured's home.

The application emphasized the importance of accuracy. One place it did so was to declare that Viking relied on the answers:

We [Viking] rely upon you to provide us with accurate information. This policy, your application (which is made a part of this policy as if attached), and your Declarations Page include all the agreements between you and us relating to this insurance. If you have made any misrepresentations in your application or when subsequently asked, this policy may not provide any coverage.

Further, the policy defined "misrepresentation" relatively broadly as

providing information to us that is known by you to be false, misleading or fraudulent. This could be presented to us during the application for coverage, or during the policy period. It must affect either the eligibility for coverage and/or the premium that is charged. Concealing information relevant to the application, or maintenance of coverage, is also misrepresentation.

Finally, the policy stipulated that "[i]f you misrepresent any fact or condition that affects whether a risk is eligible or contributes to a loss, we reserve the right to rescind the policy and/or deny coverage."

At the time of Hawkins' March 2016 insurance application, Bradley lived with Hawkins, was a resident of her household, and was of legal driving age.² Thus, Bradley was a regular operator of the Hawkins vehicles. Hawkins, though, failed to disclose Bradley on her insurance application as a regular operator. For policy renewals between March 2016 and the accident in April 2018, Hawkins never added Bradley to her policy.

In April 2018, Bradley was operating Hawkins' vehicle when he was struck by an uninsured motorist. After the accident, Bradley submitted a claim for uninsured motorist (UM) insurance. Hawkins' policy contained UM coverage³ and stated that Viking

will pay damages for bodily injury which an insured person is legally entitled to recover from the owner or operator of an uninsured motor vehicle. The bodily injury must be caused by a car accident and result from the ownership, upkeep or use of an uninsured motor vehicle.

An "insured person" under the Policy includes "a relative" of the named insured and "any other person occupying [the] insured car with the permission of" the named insured. Bradley therefore qualified as an insured person. However, the policy stated that UM coverage was unavailable when an unlisted regular driver is operating the vehicle:

This [UM] coverage does not apply to bodily injury sustained by an insured person described by any of the following.

...

(8) While your insured car is being operated by a regular operator who was not reported to us. The regular operator must be reported on the original application for insurance or otherwise disclosed to us and listed on your Declarations Page before the car accident.

Viking denied Bradley's claim because it found that Bradley was a regular operator of Hawkins' vehicle but had not been disclosed. Hawkins admitted that Bradley was a driver living in her household who had not been disclosed. Viking subsequently force-placed Bradley on the policy.

In October 2020, Bradley and Hawkins sued Viking, seeking damages for a wrongful denial of benefits. Bradley and Hawkins asserted that excluding drivers not listed on the policy violated Mississippi's statutorily prescribed UM coverage requirements.

After discovery, both parties moved for summary judgment. The district court concluded that Viking's unnamed driver exclusion was without effect. Bradley v. Viking Ins. Co. of Wis. , 570 F. Supp. 3d 389, 394 (S.D. Miss. 2021). Bradley, "as a resident member of Hawkins' household and as a person operating the vehicle with her permission, was an ‘insured’ for UM purposes and was not excluded from coverage by" the policy's unnamed driver exclusion. Id.

Nonetheless, the district court denied coverage because Hawkins had failed to disclose in her initial application or in any renewal that Bradley was a regular operator of the insured vehicle. Id. at 399. Those failures constituted misrepresentations. Id. at 396. Under the policy, Viking could deny coverage if the insured "misrepresent[s] any fact or condition that affects whether a risk is eligible or contributes to a loss" and defined "misrepresentation" as information that is "known by you to be false ... [and] affect[s] either the eligibility for coverage and/or the premium that is charged." Id. at 397 (quotation marks omitted). Hawkins' misrepresentation, the court found, affected the premium charged, and Viking therefore had the right to deny Bradley's UM claim. Id. The court granted Viking's motion for summary judgment. Id. Both parties appealed.

DISCUSSION

We review the grant of summary judgment de novo. Nationwide Mut. Ins. Co. v. Baptist , 762 F.3d 447, 449 (5th Cir. 2014). "When, as here, cross-motions for summary judgment have been ruled upon," this court examines "each party's motion independently." Balfour Beatty Constr. L.L.C. v. Liberty Mut. Fire Ins. Co. , 968 F.3d 504, 509 (5th Cir. 2020) (quotation marks and citation omitted). Summary judgment is proper when "there is no genuine dispute as to any material fact." FED. R. CIV. P. 56(a). In reviewing the record, "the court must draw all reasonable inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh the evidence." Reeves v. Sanderson Plumbing Prods., Inc. , 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000).

We address two issues. The first is the subject of Viking's cross-appeal — does its unnamed driver exclusion violate public policy? The second is appellants' issue — did Viking properly deny coverage based on misrepresentation?

I. Unnamed driver exclusion

Mississippi's UM statutes are set forth in Mississippi Code Sections 83-11-101 through 83-11-111. Section 83-11-101 requires that all automobile insurance policies provide an "insured" with coverage of damages caused by "the owner or operator of an uninsured motor vehicle," unless a form rejecting all UM coverage is signed by the insured. Miss. Code Ann. §§ 83-11-101(1), (2), (4).⁴ "Insured," for purposes of UM coverage, includes

the named insured and, while resident of the same household, the spouse of any such named insured and relatives of either, while in a motor vehicle or otherwise, and any person who uses, with the consent, expressed or implied, of the named insured, the motor vehicle to which the policy applies, and a guest in such motor vehicle to which the policy applies, or the personal representative of any of the above.

Id. § 83-11-103(b). It is undisputed that Bradley, as a resident relative of Hawkins, is an "insured" under this provision. Our initial question is whether an insurer can limit this mandatory UM coverage through policy language. Viking on cross-appeal insists that it can.

The Mississippi Supreme Court has not decided whether unnamed driver exclusions violate the state's statutory UM scheme. It has addressed other exclusions, though. Most helpful is an opinion from that court addressing a "named driver exclusion" in a policy which precluded coverage if the insured's husband were driving her car. Atlanta Cas. Co. v. Payne , 603 So. 2d 343, 344–45 (Miss. 1992). There, the husband of the insured was driving when the vehicle collided with an uninsured motorist; the insurer denied benefits. Id. The court stated that Mississippi's UM statute "commands that the injured party shall be able to recover from the UM carrier ‘all sums which he shall be legally entitled to recover as damages for bodily injury or death from the owner or operator of an uninsured motor vehicle.’ " Id. at 346 (quoting § 83-11-101 ). It summarized that "the overwhelming number of [UM exclusions] that this Court has considered have been found to be void and against public policy," and the named driver exclusion was no exception. Id. at 347.

Since the Mississippi Supreme Court voids policy language that excludes a specific individual from UM coverage, we have little doubt it would void a more...