McDaniel v. Shaklee US, Inc.

• Decision Date: 31 October 2001
• Docket Number: No. 2000-CA-01427-SCT.,2000-CA-01427-SCT.
• Parties: Drucilla L. ("Dru") McDANIEL v. SHAKLEE U.S., INC.; Kenneth F. Jackson; and Transamerica Insurance Group.
• Court: Mississippi Supreme Court

807 So.2d 393

Drucilla L. ("Dru") McDANIEL v. SHAKLEE U.S., INC.; Kenneth F. Jackson; and Transamerica Insurance Group.

No. 2000-CA-01427-SCT.

Supreme Court of Mississippi.

October 31, 2001.

Rehearing Denied February 21, 2002.

Roger M. Tubbs, Tupelo, Paul N. Jenkins, Jr., Attorneys for Appellant.

David B. McLaurin, Tupelo, William C. Reeves, Ridgeland, Attorneys for Appellees.

EN BANC.

DIAZ, J., for the court.

¶ 1. On December 21, 1995, Drucilla L. McDaniel (McDaniel) filed suit in the Lee County Circuit Court against Kenneth Jackson (Jackson); Shaklee U.S., Inc.(Shaklee); Transamerica Insurance Group (TIG); and ABC Insurance Company (an unknown entity which may or may not have been partially responsible). The complaint alleged that McDaniel suffered property damage, as well as bodily injury, in a collision occurring as a result of Jackson's negligent driving. The details and extent of McDaniel's injuries are irrelevant to the matter presently before this Court. The suit also claims that Shaklee and TIG are liable for damages as the uninsured motorist insurance carriers for McDaniel. Both sides filed motions for summary judgment. The circuit court granted Shaklee's motion for summary judgment. McDaniel moved for an interlocutory appeal, which was denied. McDaniel now appeals the award of summary judgment and raises the issue of whether she may "stack" the uninsured/underinsured coverage contained in Shaklee's fleet policy.

FACTS

¶ 2. On December 22, 1994, McDaniel and Jackson were involved in an accident when Jackson's car swerved into a lane of oncoming traffic and collided with McDaniel's vehicle. As previously stated, the circumstances and events surrounding the accident that is the basis for this suit are immaterial to the question before this Court today. The relationship between the parties is what is truly germane.

¶ 3. At the time of the accident, Jackson had $25,000 in liability insurance. The limits of this policy were offered to McDaniel and accepted. However, McDaniel's injuries and resultant damages total considerably more than $25,000.

¶ 4. The day of the accident, McDaniel was driving an automobile which is a part of a fleet of vehicles owned by Shaklee. Shaklee is self-insured for claims up to $500,000 and, in addition, purchased a comprehensive policy from TIG. As an incentive to its distributors, Shaklee loans out automobiles from its fleet to its independent distributors who qualify as "Sales Leaders" under the "Bonus Car" program. McDaniel qualified as a Sales Leader. Under the Bonus Car program, McDaniel paid Shaklee $352.49 per month for the car, as well as $75.60 for comprehensive insurance, medical payments, and uninsured/underinsured motorist coverage (UM) of $10,000 per person/$20,000 per accident. In turn, Shaklee paid TIG a single premium covering all insurance on its entire fleet of vehicles. Thus, there is only one policy, covering all the automobiles rather then individual policies for each car in the program.

¶ 5. In her suit, McDaniel asserted that she should be able to "stack," or aggregate, the UM coverage of all of the vehicles in Shaklee's fleet, a total of 1758 vehicles (although not all carry UM coverage because, unlike Mississippi, some states do not require it). Motions for summary judgment were filed, and the trial judge granted the motion in favor of Shaklee. McDaniel now appeals.

STANDARD OF REVIEW

¶ 6. When reviewing the granting or the denying of summary judgment, we use the same standard employed by the trial court. We conduct de novo review of orders granting or denying summary judgment and look at all 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. Lumberman's Underwriting Alliance v. City of Rosedale, 727 So.2d 710, 712-13 (Miss.1998). If any triable issues of material fact exist, the lower court's decision to grant summary judgment will be reversed. Brown v. Credit Ctr., Inc., 444 So.2d 358, 362 (Miss.1983).

DISCUSSION

I. WHETHER McDANIEL MAY STACK THE UNINSURED/UNDERINSURED COVERAGE CONTAINED IN SHAKLEE'S FLEET POLICY.

¶ 7. This question has been the topic of considerable litigation as of late and has been a thorn in the sides of many an attorney, client, and judge, including those on this bench, for years. There is no shortage of caselaw dealing with the matter. The difficulty stems from the apparent contradictions and ambiguities within the caselaw. Furthermore, even those cases that seem to establish a bright line rule are so fact specific that anytime one minor detail or fact changes, the case loses much of its instructiveness. Hopefully, by using the principles and guidelines set forth in earlier cases, we may now be able to establish some hard and fast rules as to when stacking is permitted and when it is not.

¶ 8. At the heart of UM stacking claims is the Mississippi Uninsured Motorist Act, which provides in part:

(1) No automobile liability insurance policy or contract shall be issued ... unless it contains an endorsement or provisions 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 ...

Miss.Code Ann. § 83-11-101 (1999) (Emphasis added). The UM Act defines an "uninsured motor vehicle" as one whose "liability insurer ... has provided limits of bodily injury liability for its insured which are less than the limits applicable to the injured person provided under his uninsured motorist coverage." Miss.Code Ann. § 83-11-103 (1999). We have held that the statutes should be liberally construed, due in part to their remedial nature. Stevens v. USF & G Co., 345 So.2d 1041, 1043 (Miss.1977). As such, and in advancement of the public interest, the concept of stacking, or aggregating policies, as a viable method of ensuring complete recovery, began to gain favor. See Harthcock v. State Farm Mut. Auto. Ins. Co., 248 So.2d 456 (Miss.1971)

(holding that a plaintiff could stack multiple policies in order to fully recover). Over the years, the concept continued to expand, and this Court allowed stacking in a wider variety of cases.

¶ 9. Under Brown v. Maryland Cas. Co., 521 So.2d 854 (Miss.1987), the plaintiff, a permissible user, was allowed to stack the uninsured motorist policies for all three cars belonging to the named insured. Id. Expanding upon the ideas set out in Brown, this Court, in Wickline v. USF & G Co., 530 So.2d 708 (Miss.1988), discouraged the practice of distinguishing between classes of insured (i.e. Class I = named insured and Class II = passengers and permissive users). In so holding, this Court ruled that "a guest passenger injured by an uninsured motorist is entitled to stack the UM coverage of all vehicles insured by the policy which insures the host vehicle." Paige Craig, Automobile Insurance-Uninsured Motorists-Public Policy Demands that Anti-Stacking Provisions Be Held Void as Against Public Policy, 67 Miss. L.J. 585, 592 (1997) (citing Wickline, 530 So.2d at 715). The Wickline philosophies were carried over into the realm of commercial policies in Cossitt v. Nationwide Mut. Ins. Co., 551 So.2d 879 (Miss.1989), in which this Court held that no distinctions should be made between personal and commercial policies. Id. The broad language led to a Borden's, Inc., employee being permitted to stack the uninsured motorist coverage of all 7,000 Borden's vehicles. Preferred Risk Ins. Co. v. Ins. Co. of N. Am., 824 F.Supp. 614 (S.D.Miss.1993).

¶ 10. In reaction to these cases, insurance companies began writing their policies and premium schemes in a manner to disallow stacking. This Court, in USF & G Co. v. Ferguson, 698 So.2d 77 (Miss. 1997), responded that "[w]e now affirmatively declare that the public policy of this State mandates stacking of UM coverage for every vehicle covered under a policy, regardless of the number or amount of the premium(s) paid for UM coverage." Id. We continued, "we will allow stacking of uninsured motorist coverage for all cars covered under insurance policies for UM coverage." Id. at 82. An observer writing on the subject noted:

The opinion in Ferguson evidences the supreme court's intolerance of the insurance industry, as a whole, rewriting its policies to circumvent the court's decisions. The opinion also indicates the desire of the court to fulfill the intent of the UM statute by giving the insured every possible opportunity to recover the full amount of his damages when injured by an uninsured or underinsured motorist. Thus, with the invalidation of anti-stacking provisions in Mississippi, courts will mandate stacking of coverage of multiple vehicles under one policy to the extent of the insured's damages.

Craig, supra, 67 Miss. L.J. at 598. As the writer correctly pointed out, this Court interprets the UM Act as a positive method in allowing injured parties full recovery.¹

¶ 11. We now turn to the case sub judice. Since the matter concerns the granting of a motion for summary judgment, we should first look to the arguments in support of the motion, keeping in mind the applicable standard of review. Brown, 444 So.2d at 362.

¶ 12. As was previously stated, the problem arising in most stacking suits is the subtle differences that seem to make earlier decisions less instructive, and the present situation is no different. Shaklee argues that the subtle differences in this case do not allow stacking of all of its UM policies. First, Shaklee contends that the policy is clear and unambiguous, and only covers the car McDaniel was driving. It argues that under the TIG policy, McDaniel is a Class I insured as to her vehicle only and is not even a Class II insured as to the...