Leitch v. Mississippi Ins. Guar. Ass'n

Decision Date08 February 2010
Docket NumberNo. 2007-CT-01263-SCT.,2007-CT-01263-SCT.
PartiesWilliam J. LEITCH, Jr. v. MISSISSIPPI INSURANCE GUARANTY ASSOCIATION.
CourtMississippi Supreme Court

Sara B. Russo, Clarksdale, attorney for appellant.

Clifford C. Whitney, III, Vicksburg, attorney for appellee.

EN BANC.

ON WRIT OF CERTIORARI

DICKINSON, Justice, for the Court.

¶ 1. We are today presented the following issue of first impression: Whether under Mississippi law, the amount payable by the Mississippi Insurance Guaranty Association ("MIGA") must be reduced by amounts recovered under a claimant's uninsured motorist coverage. The trial court held in the affirmative. We agree.

BACKGROUND AND PROCEEDINGS

¶ 2. William Leitch was involved in a traffic accident with a truck owned by H-G & F Co., Inc., and driven by Jack L. Dillard, an employee of H-G & F. At the time of the accident, the truck was insured by Reliance Insurance Company, which has since been declared an insolvent insurer within the meaning of Section 83-23-109 of the Mississippi Code. See Miss.Code Ann. § 83-23-109 (Rev.1999).

¶ 3. Leitch initially filed suit against Dillard and H-G & F, and later added his uninsured motorist ("UM") carrier, State Farm Mutual Automobile Insurance Company. Leitch sought his UM policy's limit of $300,000 from State Farm. Leitch and State Farm reached a settlement agreement for the amount of $300,000, and Leitch continued to maintain his claims against H-G & F and Dillard.

¶ 4. Leitch filed a declaratory judgment action against the Mississippi Insurance Guaranty Association ("MIGA"), seeking a ruling that any award received from his own uninsured motorist coverage did not reduce MIGA's obligation.

¶ 5. MIGA moved for summary judgment, arguing that—pursuant to Mississippi Code Section 83-23-123—MIGA's obligation must be reduced by State Farm's payment of UM benefits, and since State Farm's payment of $300,000 was equal to MIGA's entire statutory limit of $300,000, MIGA had no further obligation. The trial court agreed, and granted MIGA's motion for summary judgment. Leitch appealed, and the Court of Appeals affirmed. Leitch filed a petition for writ of certiorari, which we granted in order to address our prior opinion in Mississippi Insurance Guaranty Association v. Cole ex rel. Dillon, 954 So.2d 407 (Miss.2007).

ANALYSIS

¶ 6. On appeal, this Court:

employs a de novo standard of review in reviewing a lower court's grant of summary judgment motion. Summary judgment is appropriate if the evidence before the Court—admissions in the pleadings, answers to interrogatories, depositions, affidavits, etc.—shows there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. This Court does not try issues on a Rule 56 motion, but only determines whether there are issues to be tried. In reaching this determination, the Court examines affidavits and other evidence to determine whether a triable issue exists, rather than the purpose of resolving that issue.

Miss. Gaming Comm'n v. Treasured Arts, 699 So.2d 936, 938 (Miss.1997) (internal citations omitted).

¶ 7. According to Mississippi Code Section 83-23-103, "[t]he purpose of [MIGA] is to provide a mechanism for the payment of covered claims under certain insurance policies to avoid excessive delay in payment and to avoid financial loss to claimants or policyholders because of the insolvency of an insurer. . . ." Miss.Code Ann. § 83-23-103 (Rev.1999). Furthermore, Mississippi Code Section 83-23-107 requires that the MIGA statute "shall be liberally construed to effect the purpose under § 83-23-103. . . ." Miss.Code Ann. § 83-23-107 (Rev.1999). Accordingly, this Court has held:

The Mississippi Insurance Guaranty Association Law was enacted to protect policy holders of certain kinds of insurance in the event of their insurer's insolvency. MIGA is a statutorily-created unincorporated association consisting of insurance companies doing business in Mississippi. Each solvent insurer doing business in this state is assessed a pro rata share of amounts paid on behalf of insolvent insurers. MIGA is prohibited by statute from paying anything other than a covered claim, and the statute further requires that all other sources of insurance must be exhausted before looking to MIGA for any coverage.

Miss. Ins. Guar. Ass'n v. Byars, 614 So.2d 959, 963 (Miss.1993) (internal citations omitted).

¶ 8. The matter before us today is controlled by the following statutory provision:

Any person having a claim against an insurer under any provision in an insurance policy other than a policy of an insolvent insurer, which is also a covered claim, shall be required to exhaust first his right under such policy. Any amount payable on a covered claim under this article shall be reduced by the amount of any recovery under such insurance policy.

Miss.Code Ann. § 83-23-123(1) (Rev.1999). In applying the statute, we first must determine whether Leitch had "a claim against an insurer under any provision in an insurance policy other than a policy of an insolvent insurer. . . ." If so, we then must determine whether that claim was also "a covered claim," that is to say, a claim covered by the MIGA statutes.

¶ 9. As already stated, Leitch was covered by a State Farm insurance policy which included uninsured motorist coverage. There is no assertion that State Farm is "an insolvent insurer." Thus, we see no logical argument distinguishing Leitch's claim against State Farm from the statutory language: "a claim against an insurer under any provision in an insurance policy other than a policy of an insolvent insurer. . . ." Id.

¶ 10. We next must determine whether Leitch's claim against State Farm was also a "covered claim," a term defined by statute as follows:

an unpaid claim, including one of unearned premiums, which arises out of and is within the coverage and not in excess of the applicable limits of an insurance policy to which this article applies issued by an insurer, if such insurer becomes an insolvent insurer and (1) the claimant or insured is a resident of this state at the time of the insured event, provided that for entities other than an individual, the residence of a claimant or insured is the state in which its principal place of business is located at the time of the insured event; or (2) the property from which the claim arises is permanently located in this state. "Covered claim" shall not include any amount awarded as punitive or exemplary damages; or sought as a return of premium under any retrospective rating plan; or due any reinsurer, insurer, insurance pool, or underwriting association, as subrogation recoveries or otherwise and shall preclude recovery thereof from the insured of any insolvent carrier to the extent of the policy limits.

Miss.Code Ann. § 83-23-109(f) (Rev.1999).

¶ 11. The very basis of Leitch's suit against MIGA is his assertion that his claim is a "covered claim," that is, that it is covered by the MIGA statutes. As recited in the facts above, at the time of the accident, the H-G & F truck was insured by Reliance Insurance Company, which has since been declared an insolvent insurer within the meaning of Section 83-23-109 of the Mississippi Code. Thus, we find Leitch's claim is unquestionably a "covered claim," that is, a claim against MIGA.

¶ 12. Because Leitch has a claim against his uninsured motorist carrier, State Farm, and a "covered claim"—as that term is defined in the MIGA statuteswe must apply the following mandatory statutory language: "Any amount payable on a covered claim under this article shall be reduced by the amount of any recovery under such insurance policy." Miss.Code Ann. § 83-23-123(1) (Rev.1999). In restating the statutory language and inserting the appropriate nomenclature, the statute reads: "Any amount payable [by MIGA] shall be reduced by the amount of any recovery [from State Farm]." Miss. Code Ann. § 83-23-123(1) (Rev.1999).

¶ 13. Leitch cites our decision in Mississippi Insurance Guaranty Association v. Cole ex rel. Dillon, 954 So.2d 407, 414 (Miss.2007), for the proposition that his settlement with State Farm should not diminish MIGA's coverage or obligation to pay. In Cole, the plaintiff brought a medical-malpractice action against her treating physician, her physician's practice group, and the community hospital where she was treated. Id. The plaintiff settled with the physician and the practice group. After the suit had been filed, the hospital's insurer became insolvent. Id. MIGA defended the hospital and filed a motion for summary judgment arguing that a joint tortfeasor's solvent insurance coverage had to be exhausted before it had any responsibility to pay. Id. Thus, under MIGA's analysis of the statute, the settlement between the plaintiff, the physician, and the practice group—which was in excess of MIGA's $300,000 statutory maximum obligation— relieved MIGA of any responsibility to pay. Id.

¶ 14. We held that the plaintiff's claims against the doctor and the practice group were not "covered claims" as contemplated by the statute, because their insurance carrier remained solvent. Therefore "these defendants never had an insolvent insurer and thus failed to satisfy the definition of `covered claim.'" Id. at 413. The Court then reasoned that, because these were not "covered claims," the plaintiff was not required to exhaust her remedies through these policies pursuant to Mississippi Code Section 83-23-123(1), nor would any recovery from those policies reduce MIGA's obligation. Id. at 413-414.

¶ 15. Although our result in Cole was correct, our reasoning requires clarification. Our analysis should have focused on determining whether the plaintiff's "covered claim" (as defined in the MIGA statutes) was the same claim as the plaintiff's claim against each of the other insured defendants. For MIGA to have a statutory obligation and authority to pay, any "claim" against a solvent insurer that is the same as the ...

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