Koestler for Ben. of Koestler, In re

Decision Date31 August 1992
Docket NumberNo. 89-CA-0140,89-CA-0140
Citation608 So.2d 1258
PartiesIn re Judy Hanna KOESTLER, Personal Representative of William D. Koestler, Deceased, for the Benefit of Judy Hanna KOESTLER, Stephanie Dawn Koestler, Scott Downing Koestler, and Christopher Kyle Koestler, Wrongful Death Beneficiaries, and Judy Hanna Koestler, Executrix of the Last Will and Testament of William D. Koestler. CASUALTY RECIPROCAL EXCHANGE v. FEDERAL INSURANCE COMPANY.
CourtMississippi Supreme Court

Philip Mansour, Sr., Mansour & Mansour, Greenville, for appellant.

Stephen L. Thomas, Andrew N. Alexander, III, Lake Tindall, Hunger & Thackston, Greenville, for appellee.

Richard T. Phillips, Smith Phillips & Mitchell, Batesville, for amicus curiae.


ROBERTSON, Justice, for the Court:


This appeal in which insured seeks to stack uninsured motorist ("UM") liability insurance coverages presents a new twist. Today's insured had two policies providing in the aggregate five UM coverages, each with limits of liability well in excess of the statutory minimum. The question is whether our positive law of stacking permits enforcement of a clearly worded policy provision that denies stacking of coverages in excess of the statutory minimum.

The Circuit Court answered in the affirmative. Because our law respects freedom of contract, over and above its positively commanded mandatory minimums, we reverse.



On May 25, 1986, Anthony Raiford (sometimes "UM Raiford"), a totally uninsured motorist, was driving in an easterly direction on the Arcola-Wayside Road in Washington County, Mississippi. Raiford crossed the center line and struck head on a 1984 Chrysler Fifth Avenue driven by William D. Koestler, age 53. As a direct and proximate result of Raiford's negligence, Koestler received severe and ultimately fatal personal injuries.

Koestler left surviving him a widow, Judy Hanna Koestler, and three children, an emancipated daughter, Stephanie Dawn Koestler, and two minor sons, Scott Downing Koestler and Christopher Kyle Koestler.

Prior to May 25, 1986, William D. Koestler had purchased from Casualty Reciprocal Exchange ("CRE"), a non-resident insurance company authorized to do business in Mississippi, two "Personal Auto Policies," including coverages for bodily injuries to and wrongful death of himself where caused by an uninsured motorist. Koestler owned five automobiles. Three were insured in one of the policies, the other two in the other, each in the amount of $250,000.00 per person injured or killed. Each provided in the event of multiple coverages CRE's liability "shall not exceed the highest applicable limit of liability under any one policy," i.e., $250,000.00. Koestler had paid a separate premium for each of these five coverages. Without dispute, each coverage was in full force and effect on the date of Koestler's death, and, independent of each other, each afforded coverage for wrongful death damages caused by UM Raiford, subject to its legally enforceable limits of liability.

Koestler had as well, prior to May 25, 1986, purchased from Federal Insurance Company ("Federal"), another foreign insurance company authorized to do business in Mississippi, a "Personal Excess Liability" policy providing excess coverage of $1,000,000.00 bodily injury or wrongful death caused by an uninsured motorist. Under the terms of this excess policy, Federal agreed to pay all damages sustained as a result of the negligent act of an uninsured motorist, over and above and in addition to the amounts Koestler recovered under any other applicable UM coverages, up to $1,000,000.00.


On August 14, 1987, Judy Hanna Koestler, acting as the personal representative of William D. Koestler, deceased, pursuant to Miss.Code Ann. Sec. 11-7-13 (1972) (as amended), filed her complaint in the Circuit Court of Washington County, Mississippi, naming CRE and Federal as Defendants. Executrix Koestler charged, first, that under the law of this state the five UM coverages CRE had provided her deceased husband should be stacked, affording a potential coverage of $1,250,000.00. She then claimed that this did not begin to cover all wrongful death damages caused by UM Raiford, by reason of which she demanded in addition the $1,000,000.00 of coverage Federal had afforded in its excess UM policy.

Throughout the pre-trial process, Executrix Koestler insisted that her wrongful death damages exceeded $2,250,000.00. CRE and Federal conceded the fact of damages, but in a far more modest sum. In pre-trial discovery, Executrix Koestler disclosed her intention to call as an expert witness an economist who would offer an opinion that the net cash value alone of Koestler's life on the date of his death was $2,016,899.00. CRE at all times insisted that the limit of its aggregate liability was $250,000.00, citing the unambiguous provision in each policy that, in the event of multiple UM coverages or multiple UM policies, CRE's aggregate liability would "not exceed" $250,000.00, the limit for each separate coverage.

On September 12, 1988, Executrix Koestler's case against CRE and Federal went to trial. During a recess, the parties entered into settlement negotiations and soon announced to the Court in chambers a settlement of the wrongful death claim, the essence of which was that the two defendant UM insurers would pay to Executrix Koestler $1,100,000.00, and thus limit their exposure, reserving the right to litigate among themselves their respective ultimate liabilities for this settlement sum, all of which would turn on the stacking issue. Specifically, the Circuit Court reported the settlement terms included:

(1) Each of the Defendants would pay $550,000 to the Koestlers;

(2) A judgment would be entered in favor of the Koestlers in the amount of $1,100,000 against the Defendants, and the Defendants would file cross-claims against each other for the purpose of ... [litigating] the limit of liability issue....

In due course, CRE and Federal filed their cross-claims against each other. CRE claimed--as it had throughout--it owed only the first $250,000.00, the limits of coverage on one UM policy, in consequence of which Federal was responsible for all settlement sums over and above $250,000.00, some $850,000.00, to be exact. CRE thus demanded that Federal cough up $300,000.00, over and above the $550,000.00 Federal had paid to Executrix Koestler.

Conversely, Federal took the position Executrix Koestler had been taking all along, that is, that the five CRE UM coverages could and should be stacked, in consequence of which CRE afforded coverage for $1,250,000.00, and since that sum exceeded the settlement amount of $1,100,000.00, CRE should reimburse Federal for the entire $550,000.00 Federal had contributed to the settlement.

The Circuit Court, on January 18, 1989, entered a judgment resolving all issues in favor of Federal and against CRE. In summary, the Circuit Court stated:

... [T]he fact that CRE has a limitation provision in its policy which may be said to be clear and unambiguous is entirely irrelevant. What does matter, and it is the only thing that matters, is that Koestler was charged and paid separate premiums for each endorsement of uninsured motorist coverage in the amount of $250,000 for five vehicles covered by the two policies. Pursuant to the terms of the uninsured motorist statute, CRE is obligated to pay Koestler's heirs all sums which they were entitled to recover from the uninsured motorist as damages for the death of Koestler, whatever that amount might be up to the coverage paid for, $1,250,000.00.

The Court then entered judgment on Federal's cross-claim in the amount of $550,000.00 against CRE and dismissed CRE's cross-claim against Federal with prejudice.

CRE now appeals to this Court.


Negligently driving uninsured motorists are a plague upon society. They inflict severe losses and at random, losses not in the least less severe that they are less noticed--by the media and legislators--than drunk driving death and damage. Different states have responded to the uninsured motorist menace in different ways. This state's initial response was enactment of the Uninsured Motorist Act of 1966. See Miss.Laws, ch. 524 (1966), originally codified as Miss.Code Ann. Sec. 8285-51, et seq. (1942). That act has been amended and is presently codified as Miss.Code Ann. Sec. 83-11-101, et seq. (1972). The statute's modest remedy has been demonstrably imperfect from the beginning, its required coverage being but the minimum amount required under the Mississippi Motor Vehicle Safety Responsibility Act, so that at the time Koestler bought his coverages, the UM act required only that:

No automobile liability insurance policy or contract shall be issued or delivered ..., unless it contains an endorsement or provision undertaking to pay the insured 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, within limits which shall be no less than those set forth in the Mississippi Motor Vehicle Safety Responsibility Law....

Those minimum limits at the time were $10,000.00 for damages or losses to any one person and an aggregate of $20,000.00 for all damages or losses caused in a single accident. Miss.Code Ann. Sec. 63-15-11 (1987).

It has for years been a fact of life that many of our citizens and families own more than one automobile, and so we quickly began to find that persons injured by uninsured motorists held multiple minimum UM coverages, each of which by its terms afforded protection for the injuries inflicted by the uninsured motorist. See Cossitt v. Nationwide Mutual Insurance Co., 551 So.2d 879, 884 (Miss.1989). In the wake of the woeful inadequacy of the statutory minimum coverage, the question gradually arose whether the insured could recover on each of the insurance contracts he held--somewhat as in the case of life insurance or health...

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17 cases
  • Medders v. U.S. Fidelity and Guar. Co.
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    • August 5, 1993
    ... ... We noted that fact in In re Koestler, 608 So.2d 1258, 1264 (Miss.1992) ... To be sure, our stacking cases routinely take note of the ... ...
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1 books & journal articles
  • Stacking Un/Underinsured Motorist Coverages
    • United States
    • James Publishing Practical Law Books Insurance Settlements - Volume 2 Specific types of cases
    • May 19, 2012
    ...premium for UM/UIM coverage is charged for each vehicle listed. In re: Koestler: Casualty Recip. Exchange v. Federal Insurance Co., 608 So. 2d 1258 (Miss. 1992); Harrison v. Allstate Insurance Co., 662 So. 2d 1092 (Miss. 1995); Land v. USF&G Co., 78 F.3d 187 (5th Cir. 1996)[Miss.]. §3532 Pe......

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