Ford v. State Farm Ins. Co.

• Decision Date: 07 October 1993
• Docket Number: No. 90-CA-0980,90-CA-0980
• Citation: 625 So.2d 792
• Parties: Dianne and Tommy FORD v. STATE FARM INSURANCE COMPANY.
• Court: Mississippi Supreme Court

Page 792

625 So.2d 792

Dianne and Tommy FORD v. STATE FARM INSURANCE COMPANY.

No. 90-CA-0980.

Supreme Court of Mississippi.

Oct. 7, 1993.

Paul Snow, Paul Snow & Associates, Jackson, for appellant.

Steen Reynolds Dalehite & Currie, Mildred M. Morris, Jackson, for appellee.

Before PRATHER, P.J., and SULLIVAN and JAMES L. ROBERTS, Jr., JJ.

PRATHER, Presiding Justice, for the Court:

I. INTRODUCTION

In this case, the plaintiffs-appellants, Dianne and Tommy Ford, appeal from the dismissal with prejudice of their tort action against the defendant-appellee, State Farm Insurance Company (hereinafter State Farm). The Fords' case was dismissed through Hinds County Circuit Court's grant of State Farm's Motions for Judgment on the Pleadings and Summary Judgment. The Fords assert the following errors:

(1) The court erroneously found the Louisiana Direct Action Statute inapplicable in Mississippi and should not have dismissed Fords' case with prejudice.

(2) The court erroneously denied Ford uninsured motorist coverage and should have granted Fords' Cross-Motion for Summary Judgment.

II. FACTS

On February 16, 1987, Ashley Husers, a Louisiana resident, backed into a vehicle driven by Dianne Ford, a Louisiana resident, owned by Tommy and Dianne Ford, and while on the premises of a service station located in Eunice, Louisiana. At the time of the accident, Husers was covered under a $100,000 liability insurance policy issued by State Farm Mutual Automobile Insurance Company and an umbrella policy with limits of $2,000,000. The Fords were insured by the same company (State Farm) under a $100,000 liability policy which provided uninsured motorist coverage in the amount of $10,000. Also, $100,000 of uninsured motorist coverage was potentially available to the Fords from a State Farm policy issued on another one of the Fords' cars. All of the insurance policies were issued in Louisiana.

As a result of the accident, Diane Ford and her husband, Tommy Ford, filed suit in Louisiana on March 28, 1989, against Husers and State Farm. Because Louisiana had a one-year statute of limitations period on tort actions, the Fords' case was dismissed. ¹ Thereafter, the Fords filed this suit in the First Judicial District of Hinds County against Husers and State Farm. Fords' complaint alleged that Husers was negligent in causing the automobile accident and also alleged that the Louisiana Direct Action Statute, which allowed actions to be brought against insurance companies directly, was applicable. The complaint also argued that in the event Ford did not recover under the Direct Action Statute, alternatively they were entitled to uninsured motorist coverage from the Fords' own State Farm insurance policies.

On August 14, 1989, State Farm filed a Motion for Summary Judgment asserting that the Louisiana Direct Action Statute was inapplicable in Mississippi. On October 11, 1989, the Circuit Court dismissed with prejudice the Fords' claim under the Direct Action Statute. However, the trial court specifically reserved his ruling as to the merits of any claim against State Farm as to the Fords' uninsured motorist carrier. On August 7, 1990, State Farm filed another Motion for Summary Judgment asserting that since Husers had liability insurance in the amount of $2,100,000 and that since the Fords' combined uninsured motorist coverage was less than the combined liability limits of Husers's policies, the Fords' claim should be dismissed. On August 22, 1990, the Fords responded asserting that Dianne was entitled to uninsured motorist coverage in the amount of $110,000 and filed a Cross-Motion for Summary Judgment for that amount. Finally, on August 27, 1990, the trial court granted State Farm's Motion for Summary Judgment and denied the Fords' Cross-Motion for Summary Judgment. State Farm was dismissed with prejudice. The Fords thereafter brought this appeal.

III. ANALYSIS

Issue A. Did the court erroneously find the Louisiana Direct Action Statute inapplicable in Mississippi and erroneously dismiss the Fords' case with prejudice.

The question posed requires this Court to determine first whether the Louisiana Direct Action Statute addresses procedural or substantive law. Some basic considerations need review. First, Mississippi applies its own procedural law to actions filed in the courts of this state. Lee v. Swain Bldg. Materials Co., 529 So.2d 188, 190 (Miss.1988). See also, Cook v. State Farm Mutual Ins. Co., 241 Miss. 371, 128 So.2d 363 (1961), cert. denied 368 U.S. 898, 82 S.Ct. 176, 7 L.Ed.2d 94 (1961); Wright v. Jacobs, 228 Miss. 641 89 So.2d 708 (1956). ² Thus, Mississippi's six (6) year statute of limitations for tort actions, Miss.Code Sec. 15-1-49 (1972) ³, applies to a Mississippi lawsuit even though the tort occurred in Louisiana. Swain Bldg. Materials Co., 529 So.2d at 190.

Secondly, to determine whether to apply the substantive law of Mississippi or the substantive law of Louisiana to this case, this Court applies the "center of gravity" test enumerated in Boardman v. United Services Auto. Ass'n, 470 So.2d 1024 (Miss.1985). The "center of gravity" test focuses on the contacts between the parties and the forum. In Boardman, this Court stated:

In 1968, this state's choice of law rules were modified to embrace the "center of gravity" concept. Mitchell v. Craft, 211 So.2d 509, 512 (Miss.1968); Craig v. Columbus Compress & Warehouse Co., 210 So.2d 645, 649 (Miss.1968). In cases where a question is presented as to whether the substantive rules of decision should be our own or those of some other state, Mitchell and Craig committed us to a determination of which state has the most substantial contacts with the parties and the subject of the action.

Embracing the Restatement (Second) of Conflicts of Laws, Sec. 6, Mitchell enumerated a number of factors relevant to a choice of law determination. These include: (1) the needs of the interstate and international systems; (2) the relevant policies of the forum; (3) the relevant policies of other interested states and the relevant interest of those states in the determination of a particular issue; (4) the protection of justified expectations; (5) the basic policies underlying the particular field of law; (6) certainty, predictability, and uniformity of results; (7) ease and determination in application of law to be applied.

Id. at 1031.

In the instant case, all of the factors discussed above point towards the application of Louisiana substantive law. Both parties involved in the accident were Louisiana residents, the accident occurred in Louisiana, and the contracts of insurance were written in Louisiana.

Ford brings this case under the Louisiana Direct Action Statute, La.Rev.Stat.Ann. Sec. 22:655 (1989). ⁴ In order for this statute to apply in Mississippi, this Court must determine it to be the substantive, and not procedural, law of Louisiana. The Fords maintain that the Louisiana direct action statute is substantive Louisiana law and must be applied by this Court under the Boardman "center of gravity" test.

The Louisiana Supreme Court at one time considered its direct action statute to be substantive law, see West v. Monroe Bakery, 217 La. 189, 191, 46 So.2d 122, 123 (1950), but has since effectively overruled this decision. See Home Ins. Co. v. Highway Ins. Underwriters, 222 La. 540, 548, 62 So.2d 828, 831 (1952). This Court, however, has unambiguously held Louisiana's direct action statute to be procedural in nature.

In Cook v. State Farm Mutual Ins. Co., 241 Miss. 371, 128 So.2d 363 (1961), cert. denied 368 U.S. 898, 82 S.Ct. 176, 7 L.Ed.2d 94 (1961), this Court ruled that the direct action statute was procedural and remedial in nature and thus not applicable to a Mississippi contract of insurance:

We now therefore reaffirm the case of McArthur v. Maryland Casualty Company, [184 Miss. 663, 186 So. 305] [1939] and hold that insofar as this State is concerned the law of Louisiana, Act No. 55, Laws of 1930, is procedural and remedial and the law of the forum, that is to say, Mississippi, will be applied.

Cook, 241 Miss. at 380, 128 So.2d at 368.

This Court again found the direct action statute to be procedural in Goodin v. Gulf Coast Oil Company, 241 Miss. 862, 133 So.2d 623, 624 (1961) and in McNeal v. Administrator of the Estate of McNeal, 254 So.2d 521, 524-25 (Miss.1971). In Goodin, this Court ruled that a direct action could not be brought against an insurance company in Mississippi, even when the accident occurred in Louisiana:

It was claimed that the laws of Louisiana permitted a direct suit against the insurer, and that, therefore, suit could be brought in Mississippi directly against the insurance companies. This matter has been before this Court and was definitely settled in the case of Cook v. State Farm Mutual Insurance Co.

The action of the lower court in dismissing the case insofar as the two insurance companies were concerned was correct.

Goodin, 241 Miss. at 865, 133 So.2d at 624. In McNeal, this Court affirmed Cook and stated:

The argument of the appellants in the instant case that we should follow the Louisiana law in the trial of this case is not well taken for two reasons. First, it may be said as a general rule in conflicts of law cases that foreign laws will not be given effect when to do so would be contrary to the settled policy of the forum.

McNeal, 254 So.2d at 524.

The U.S. Court of Appeals for the Fifth Circuit has also found Louisiana's direct action statute to be procedural in nature. Pearson v. Globe Indemnity Co., 311 F.2d 517, 518 (5th Cir.1962) ("Mississippi's law and policy are clear; the Louisiana Direct Action Statute does not operate extra-territorially in Mississippi."); Moore v. United Services Automobile Ass'n, 808 F.2d 1147, 1154 (5th Cir.1987) ("The right to maintain a direct action against an insurer.... is considered a remedial right and is, therefore, governed by the law of the forum.... Such an action is clearly barred by...