Old Sec. Cas Ins. Co. v. Clemmer, 54272

• Decision Date: 05 September 1984
• Docket Number: No. 54272,54272
• Citation: 455 So.2d 781
• Parties: OLD SECURITY CASUALTY INSURANCE COMPANY, a/k/a American Continental Insurance Company v. Cora CLEMMER and Hubert Clemmer.
• Court: Mississippi Supreme Court

Page 781

455 So.2d 781

OLD SECURITY CASUALTY INSURANCE COMPANY, a/k/a American Continental Insurance Company v. Cora CLEMMER and Hubert Clemmer.

No. 54272.

Supreme Court of Mississippi.

Sept. 5, 1984.

Charles M. Merkel, Merkel & Cocke, Clarksdale, for appellant.

Robert L. Williams, Hernando, for appellees.

Before PATTERSON, C.J., and DAN M. LEE and PRATHER, JJ.

PRATHER, Justice, for the Court:

This action by Cora and Hubert Clemmer seeks to recover liability insurance proceeds for compensatory, punitive, and property damages awarded to the Clemmers against the insured of Old Security Casualty Insurance Company in a previous tort action. To collect the judgment, a writ of garnishment was issued by the Circuit Court of DeSoto County against the insurance company as garnishee. Old Security Casualty Insurance Company appeals from the circuit court judgment asserting that the policy limit for one person with bodily injury was exceeded.

I.

On July 27, 1977 Cora Clemmer was driving an automobile in a northerly direction on U.S. Highway 61 in DeSoto County, Mississippi, following Hubert Clemmer, her husband, who was operating another vehicle. Ezekial Curry was traveling in a southerly direction on the same highway and sideswiped Hubert Clemmer's vehicle and crossed the centerline and struck Cora Clemmer's car in her lane of traffic. Hubert Clemmer sustained no personal injury.

Curry carried liability insurance coverage with Old Security Casualty Insurance Company which provided bodily injury limits of coverage of $10,000.00 for each person per occurrence, and bodily injury limits of $20,000.00 for two or more persons as the result of any one occurrence. The policy also provided property damage coverage up to a limit of $5,000.00 per occurrence.

Cora and Hubert Clemmer filed a tort action against Ezekial Curry. Mrs. Clemmer sought compensatory and punitive damages. Mr. Clemmer sued for property damage to the vehicle driven by his wife and punitive damages for loss of consortium. The jury awarded Mrs. Clemmer $20,000.00 compensatory damages, Hubert Clemmer $10,000.00 property damage, but no damages for loss of consortium. The plaintiffs collectively were awarded punitive damages in the amount of $50,000.00. Neither the defendant nor his insurer appealed.

After the judgment became final, the Clemmers filed a suggestion for writ of garnishment against Old Security as garnishee, which suit was contested and is the subject of this appeal. The trial judge awarded the Clemmers the full amount of $25,000.00 from the limits of all coverages of the policy, including the $20,000.00 "per occurrence" limit for bodily injury and $5,000.00 "per occurrence" property limit. Old Security paid into court $13,800.00 for which it acknowledged liability, but contested the additional award of $10,000.00 for the "per occurrence" bodily injury coverage.

The appellant admits in its brief that the jury verdict to Hubert Clemmer of $10,000.00 would entitle Hubert Clemmer to a judgment against the garnishee defendant in the full amount of the property damage limit of $5,000.00, less any prepaid portion. Likewise, Cora Clemmer is entitled to a judgment against the garnishee defendant for the full amount of the bodily injury limit of $10,000.00 per person, less any prepaid portion by Old Security.

II.

The question addressed here is whether an award of punitive damages to a second person (the husband) invokes the "per occurrence" limit for all damages arising from bodily injuries to "two or more persons as a result of any one occurrence?"

The pertinent provisions of the Old Security Casualty Insurance Company policy in question are as follows:

Coverage A Bodily Injury Liability: Coverage B- Property Damage Liability: To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of: bodily injury, sickness or disease, including death resulting therefrom, hereinafter called "bodily injury," sustained by any person; injury to or destruction of property, including loss of use thereof, hereinafter called "property damage"; arising out of the ownership, maintenance or use of the owned automobile or any non-owned automobile....

The policy further provided a definition for the limits of the company's liability as follows:

Limits of Liability: The limits of bodily injury liability stated in the declarations as applicable to "each person" is the limit of the company's liability for all damages including damages for care and loss of services, arising out of bodily injury sustained by one person as the result of any one occurrence; the limit of such liability stated in the declarations as applicable to "each occurrence" is, subject to the above provision respecting each person, the total limit of the company's liability for all such damages arising out of bodily injury sustained by two or more persons as the result of any one occurrence. (Emphasis added).

The limit of property damage liability stated in the declarations as applicable to "each occurrence" is the total limit of the company's liability for all damages arising out of injury to or destruction of all property of one or more persons or organizations, including the loss of use thereof, as the result of any one occurrence.

Under the express policy language, the limit of Old Security's liability for "bodily injury" sustained by any one person is $10,000.00. If two or more persons suffer bodily injury, the per occurrence clause of the policy limits Old Security's aggregate bodily injury liability to $20,000.00. That clause never comes into play, however, until there are at least two claimants who have sustained bodily injury. Here there is only one such claimant, Cora Clemmer.

Hubert Clemmer never even made a claim for personal or bodily injuries. His claims for property and punitive damages were successful, while his claim for loss of consortium was denied. For purposes of the insurance policy construction question presented here, Hubert Clemmer's personal injury claim is $0.00. Resort to the $10,000.00 of the bodily injury per occurrence coverage, remaining after Cora Clemmer's claim is honored, may not be had.

Hubert Clemmer's property damage claim resulted in a judgment in his favor in the original trial of $10,000.00. Under the per occurrence property damage coverage, Old Security is liable to Hubert Clemmer for $5,000.00 and $5,000.00 only, a point Old Security concedes.

In executing his order against Old Security, the trial judge relied solely on the holding of this Court in Anthony v. Frith, 394 So.2d 867 (Miss.1981). In Frith this Court held that the awarding of punitive damages against a liability insurance company was not against public policy.

We reaffirm our holding in Frith that an insurance company's liability "for all damages arising from bodily injury" includes punitive damages. However, the extent or limit of that liability for punitive damage is governed by the agreement of the parties as reflected by the actual language in the policy of insurance.

The policy language with which we are here concerned states the extent of liability for all damages because of bodily injury to one person, Mrs. Clemmer, to be $10,000.00; this limit is exhausted. The policy language states that the extent of liability for all property damage per occurrence for Mr. Clemmer to be $5,000.00; this limit is exhausted.

Nevertheless, the trial judge awarded a judgment against the liability insurance company of $25,000.00 representing the full property damage limit of $5,000.00 and the full per occurrence limit for bodily injury of $20,000.00, notwithstanding the fact that only one of the plaintiffs sustained personal injury. For the reasons explained above, so much of the judgment against Old Security as...