Owens v. Mississippi Farm Bureau Cas. Ins.

Citation910 So.2d 1065
Decision Date15 September 2005
Docket NumberNo. 2003-CA-00953-SCT.,2003-CA-00953-SCT.
PartiesLinda OWENS v. MISSISSIPPI FARM BUREAU CASUALTY INSURANCE COMPANY, Mississippi Farm Bureau Mutual Insurance Company and Farmers Insurance Exchange.
CourtUnited States State Supreme Court of Mississippi

Philip B. Terney, attorney for appellant.

Gerald H. Jacks, Kathy R. Clark, Steven Cavitt Cookston, Marc A. Biggers, Greenwood, attorneys for appellees.


DICKINSON, Justice, for the Court.

¶ 1. This case involves a Mississippi automobile accident and a guest passenger's claim for benefits under the uninsured motorist provisions of two insurance policies, the driver's insurance policy written in Tennessee, and the guest passenger's own policy written in Mississippi. The issues presented are (1) whether Tennessee or Mississippi law will apply to the claim under the Tennessee policy, and (2) whether the guest passenger's insurance agent provided sufficient information and advice concerning uninsured motorist coverage.


¶ 2. On May 24, 1998, Linda Owens was injured in an automobile accident in Mississippi while riding as a guest passenger in a vehicle owned and driven by Tennessee resident Ruth Saed. The accident was caused by the negligence of Hubert Branch. Mrs. Owens suffered extensive injuries and incurred medical bills in the range of $90,000.

¶ 3. At the time of the accident, Branch had $20,071 in liability coverage and therefore was an under insured/uninsured motorist. Saed's automobile insurance policy was written in Tennessee by Farmers Insurance Exchange, and provided $100,000 of uninsured/under insured motorists coverage, and $5,000 in medical coverage, for the named insured and guest passengers.

¶ 4. Mrs. Owens was an insured under an automobile policy purchased by her husband, Ralph, from Mississippi Farm Bureau Casualty Insurance Company. The Farm Bureau policy covered five vehicles, and included $300,000 of bodily injury liability coverage, $50,000 in UM coverage, and $15,000 in medical coverage, for each of the five insured vehicles. Thus, under her own policy, Mrs. Owens had $250,000 in UM coverage and $75,000 in medical coverage. Additionally, Mrs. Owens was covered by a Farm Bureau umbrella policy issued to Mr. Owens. Although the umbrella policy provided $2 Million in liability coverage, it had no UM coverage because of a waiver signed by Mr. Owens.

¶ 5. Branch's liability carrier paid its policy limits of $20,071. Three months after the accident, Mrs. Owens notified Farm Bureau of the accident and requested assistance with her medical bills. Farm Bureau began making medical payments and continued to do so for a year, at which time the medical bills totaled more than $60,000. Farm Bureau continued to make medical payments under its UM coverage, in addition to $1,288 in disability payments due under the policy.

¶ 6. On August 18, 2000, Mrs. Owens's attorney notified Farm Bureau that Mrs. Owens was ready to settle her UM claim. Upon determining that Mrs. Owens's claim would "arguably" exceed its policy limits, Farm Bureau tendered the balance of its UM coverage in the amount of $232,088.23. The check was returned to Farm Bureau by Mrs. Owens's counsel, who informed Farm Bureau that his "client was not ready to receive those funds. . . ." The funds were thereafter paid by Farm Bureau and received by Mrs. Owens with agreement of her counsel.

¶ 7. In the meantime, Mrs. Owens had pursued a claim for UM benefits from Farmers, asserting that she was entitled to UM benefits because she was a guest passenger in its insured's vehicle at the time of the accident. Mrs. Owens admits that Farmers timely paid its $5,000 medical benefit, but claims that Farmers ignored her claim for UM benefits for months, thereby acting in bad faith. Farmers ultimately paid Owens all of its available UM policy limits of $79,929.00.1

¶ 8. On November 20, 2000, Linda Owens sued Farmers and Farm Bureau, alleging that both Farm Bureau and Farmers negligently and in bad faith failed to investigate, evaluate and pay her claim within a reasonable time and that Farm Bureau's agent had failed to adequately explain UM coverage to her husband, which resulted in her economic loss because she was not insured with the maximum UM coverage available.

¶ 9. Trial commenced, and at the conclusion of Owens's case, Farmers moved for a directed verdict, asserting that, under Tennessee law, Owens had not established that she was entitled to UM coverage. The circuit judge agreed, concluding that Tennessee law applied to Owens's claim against Farmers, and that Farmers was entitled to a directed a verdict.

¶ 10. The case was submitted to the jury on Mrs. Owens's two claims against Farm Bureau. The jury returned a verdict in favor of Farm Bureau on both issues, and judgment was entered accordingly. Mrs. Owens now appeals both the directed verdict and the jury verdict to this Court.

I. Directed Verdict in Favor of Farmers

¶ 11. This Court reviews directed verdicts de novo. Skrmetta v. Bayview Yacht Club, Inc. 806 So.2d 1120, 1124 (Miss.2002) (citing Morgan v. Greenwaldt, 786 So.2d 1037, 1041 (Miss.2001)).

¶ 12. We begin by observing that Mrs. Owens advances no argument or resistence to Farmers' position that, under Tennessee law, no UM benefits would be payable. Rather, she asserts that Mississippi law should apply and that she should have been allowed to present her bad faith claim under Mississippi law to the jury.

¶ 13. Similarly, Farmers makes no argument and presents no authority which leads us to believe that it would take the position that should this case be decided under Mississippi law, Mrs. Owens should have been allowed to present her case to the jury. Thus, we are grateful that the parties' respective positions do not require us to analyze the consequences of liability under the law of each state, but only require us to analyze which law is applicable.

¶ 14. Thus, these respective positions leave us with but one issue to address as to Farmers, that is, whether Tennessee or Mississippi law applies. If Tennessee law applies, we must affirm the directed verdict in favor of Farmers. If Mississippi law applies, we must reverse and remand for a new trial.

Boardman v. U.S.A.A.

¶ 15. In 1985, this Court responded to a Supreme Court Rule 462 certification from the United States Court of Appeals for the Fifth Circuit concerning the choice of laws to be applied in a case involving a UM claim. In Boardman v. United Services Auto. Ass'n, 470 So.2d 1024 (Miss.1985), USAA issued an automobile liability insurance policy to Henry Boardman, a resident of Nebraska. Id. at 1028. The policy covered three automobiles all principally garaged in Nebraska. Id. Henry's son, Joseph, who was an insured under the USAA policy, traveled from Nebraska to Mississippi to attend Mississippi State University, and to work for his uncle in Gulfport. Id. While in Gulfport, and not in one of the vehicles insured under Henry's policy, Joseph was involved in an automobile accident with an uninsured motorist. Id. at 1029. Henry's USAA policy contained an exclusion for "bodily injury to an insured while occupying an automobile (other than an insured automobile) owned by the named insured or a relative. . . ." Id. Thus, because Joseph was in an owned vehicle not insured by USAA when he was injured by an uninsured motorist, USAA asserted that its exclusion applied and no benefits were payable. Id. Joseph, on the other hand, asserted that Mississippi law should be applied and that such exclusions are prohibited. Id. See Lowery v. State Farm Mut. Auto. Ins. Co., 285 So.2d 767, 777-78 (Miss.1973).

¶ 16. This Court analyzed the facts under Sections 6, 188, and 193, Restatement (Second) of Conflicts of Laws (1971), and held that Nebraska law should be applied. The Section 6 analysis, also called the modified Craig-Mitchell3 center of gravity test, was "superficially easy." 470 So.2d at 1032. The Court pointed out that

The contract in question was made and entered into in the state of Nebraska. Henry Boardman at the time was a resident of Nebraska and at all times relevant hereto all insureds under the contract have been residents of Nebraska. The policy covered three automobiles each of which . . . was "principally garaged in Nebraska." The principal location of the risks insured against was in Nebraska. Mississippi's contacts with this contract and the parties are fortuitous, arising from the fact that Joseph Boardman took a summer job in Gulfpot. All of this suggests that Nebraska law should apply.


¶ 17. In discussing Section 188, which the Court found "narrows the focus of § 6" in general contract actions, the Court looked at such factors as the place of contracting, negotiating, and performing the contract, the location of the subject matter, and the domicile of the parties. The Section 188 analysis was consistent with the Section 6 analysis. Finally, in discussing Section 193, which was specifically held to be "applicable in this state," the Court focused on the "principal location of the risk." All of these factors led the Boardman Court to hold that Nebraska law would apply. Id. at 1033.

¶ 18. Mrs. Owens distinguishes Boardman from the facts of her case by pointing out that she was a Mississippi resident, whereas Joseph Boardman was a resident of Nebraska. She claims that her residency, together with Mississippi's "strong public policy in favor of full uninsured motorist coverage" are the most important factors for us to consider in deciding which state's laws to apply in this case.

Public policy

¶ 19. Mrs. Owens submits that this Court has recognized a strong public policy in Mississippi favoring full UM coverage in United States Fidelity & Guaranty Co. v. Ferguson, 698 So.2d 77 (Miss.1997) and McDaniel v. Shaklee, U.S. Inc., 807 So.2d 393 (Miss.2001). However, contrary to Mrs. Owens's...

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