Rampy v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 14 May 1973
• Docket Number: No. 47127,47127
• Citation: 278 So.2d 428
• Parties: Whitson RAMPY et al. v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY.
• Court: Mississippi Supreme Court

Page 428

278 So.2d 428

Whitson RAMPY et al. v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY.

No. 47127.

Supreme Court of Mississippi.

May 14, 1973.

Rehearing Denied June 5, 1973.

Charles C. Finch, D. Briggs Smith, Jr., M. Collins Bailey, Richard T. Phillips, Batesville, for appellants.

Wise, Carter, Child, Steen & Caraway, William M. Dalehite, Jr., Jackson, Murray L. Williams, Water Valley, for appellee.

RODGERS, Presiding Justice.

This action originated as a suit in contract against the appellee, State Farm Mutual Automobile Insurance Company, to enforce the provisions of an uninsured motorist policy issued to the driver of an automobile in which appellants' decedent was killed. The trial was conducted before the Circuit Court of the Second Judicial District for Yalobusha County, Mississippi. At the conclusion of appellants' presentation of their case, the court granted State Farm's motion for a directed verdict based upon appellants' failure to give State Farm notice of a prior tort action prosecuted in Federal District Court in Tennessee against the uninsured tort-feasor.

The accident in question occurred in Shelby County, Tennessee, on July 13, 1968. On that date, Doris Rampy, a resident of Water Valley, Mississippi, was a guest passenger in an automobile operated by Dianne Wooten, also of Water Valley. The Wooten vehicle was exiting from Interstate Highway 240 in Memphis, Tennessee, when an automobile operated by a Tennessee resident, William Alvin Diffee, collided with the rear of the Wooten automobile. A few hours after the accident, Miss Rampy died in a Memphis hospital of injuries sustained in the accident.

On July 1, 1969, the heirs of Doris Rampy, appellants herein, filed a wrongful death action against William Alvin Diffee in United States District Court for the Western District of Tennessee, Western Division. As a result of this tort action, appellants were awarded a forty thousand dollar ($40,000.00) judgment against Diffee. In attempting to execute this judgment, it became apparent that Diffee carried no liability insurance and was otherwise impecunious.

Subsequent to prosecution instituted by the State of Tennessee, Diffee pled guilty to a charge of involuntary manslaughter and was sentenced to eleven (11) months and twenty-nine (29) days in the Shelby County, Tennessee penal farm. Considering the admissions made in Diffee's deposition as well as the other testimony presented in the record, there is ample evidence to show that Diffee's negligence was the proximate cause of the automobile accident which caused Doris Rampy's death.

On March 2, 1970, appellants filed this action in the Circuit Court of Yalobusha County, Mississippi, in an effort to recover under the terms of an uninsured motorist policy issued to Joe Dean Wooten, the owner of the vehicle in which Miss Rampy sustained her fatal injuries. At the conclusion of appellants' case, State Farm moved for a directed verdict, alleging that appellants had failed to give notice to State Farm of the institution of the Tennessee tort action, and that due to the expiration of the Tennessee one-year statute of limitations on tort actions, State Farm had lost its rights of subrogation. In granting appellee's motion for a directed verdict, the circuit judge stated:

'The insurance contract pertinent to this action coupled with the provisions of Section 8285-53 and Section 8285-54 of the Mississippi Code of 1942, Recompiled, provides that notice to the insurer shall be given in any action, as defined therein, in order that the said insurer shall have the opportunity to protect its rights by attempting to join in a defense of such action and the ultimate rights of subrogation.'

In their appeal to this Court, appellants argue that the lower court committed reversible error in granting appellee's motion for a directed verdict. Appellants also contend that the trial court erred in applying the Tennessee tort statute of limitations to a Mississippi contract action, and in holding that appellants' failure to serve a copy of the summons on the insurance company in the Tennessee case was a bar to the present contract action.

The issues raised in this appeal with regard to the lower court's interpretation of the notice and subrogation provisions of the Uninsured Motor Vehicle Act (Mississippi Code 1942 Annotated Section 8285-51 et seq. (Supp.1972)) are matters of first impression for this Court. After diligent consideration of the issues presented in this case, we are of the opinion that the trial court was in error in sustaining appellee's motion for a directed verdict. We, therefore, reverse the judgment of the trial court for the reasons hereafter shown.

The two Code sections on which the appellee bases its grounds for a directed verdict are in the following language:

'In the event the owner or operator of the uninsured vehicle causing injury or death is known and action is brought against said owner or operator by the named insured as defined by said policy, then a copy of the process served upon the owner or operator shall also be served by the circuit clerk mailing, registered mail, a copy of the process to the insurance company issuing the policy providing the uninsured motorist coverage as prescribed by law.

If the owner or operator of any motor vehicle which causes bodily injury to the insured be unknown, the insured, or someone on his behalf, or in the event of a death claim, someone on behalf of the party having such claim, in order for the insured to recover under the endorsement, shall report the accident as required by Section 8285-04, Mississippi Code of 1942, Recompiled.' § 8285-53, Miss.Code 1942 Ann. (Supp.1972.)

and

'An insurer paying a claim under the endorsement or provisions required by Section 1 (§ 8285-51) shall be subrogated to the rights of the insured to whom such claim was paid against the person causing such injury, death or damage, to the extent that payment was made; including the proceeds recoverable from the assets of the insolvent insurer; provided, that the bringing of an action against the unknown owner or operator or the conclusion of such an action, shall not constitute a bar to the insured, if the identity of the owner or operator who caused the injury or damages complained of becomes known, provided, that in any action brought against such owner or operator, the insurance company that has previously made payment as a result of the policyholder's claim against such owner or operator shall be mailed a copy of the summons issued for the defendant or defendants, and that any recovery against such owner or operator shall be paid to the insurance company to the extent that such insurance company paid the named insured in the action brought against such owner or operator, except that such insurance company shall pay its proportionate part of any reasonable costs and expense incurred in connection therewith, including reasonable attorney's fees.' § 8285-54, Miss.Code, 1942 Ann. (Supp.1972).

I.

In order to more fully understand the reasoning adopted by this Court with regard to the interpretation of Mississippi's Uninsured Motor Vehicles Act, it is appropriate to recall the history and purposes of uninsured motorist coverage in general. Uninsured motorist coverage or 'family protection insurance', as it is sometimes called, came into existence in 1956 at the behest of insurance companies in an effort on the part of the automobile insurance industry to alleviate some of the problems associated with the rapidly increasing number of uninsured vehicles. In effect, the uninsured motorist policy idea was adopted by the insurance industry as an alternative to publicly administered judgment-funds and compulsory insurance programs. Genesis of Uninsured Motorist Coverage, 32 Atl.L.J. 341 (1968). See J. Donaldson, Uninsured Motorist Coverage, 36 Ins.Coun.J. 397 (1969); D. Fairgrave and K. Forney, Uninsured Motorist Coverage, 31 Ins.Coun.J. 665 (1964).

In any case, many states, including Mississippi, now require that all automobile liability policies issued in the state include an uninsured motorist endorsement; thus, Mississippi Code 1942 Annotated Section 8285-51 (Supp.1972) states:

'No automobile liability insurance policy or contract shall be issued or delivered after January 1, 1967, 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 Act, as amended, under provisions approved by the Commissioner of Insurance. Provided, however, that the coverage required herein shall not be applicable where any insured named in the policy shall reject the coverage in writing and provided further, that, unless the named insured requests such coverage in writing, such coverage need not be provided in any renewal policy where the named insured had rejected the coverage in connection with a policy previously issued to him by the same insurer.' § 8285-51, Miss.Code 1942 Ann. (Supp.1972).

In interpreting similar, if not identical statutes, the vast majority of jurisdictions have stated that the purpose of such uninsured motorist laws is to provide protection to innocent insured motorists and passengers injured as a result of the negligence of financially irresponsible drivers. A fine pronouncement of the policy considerations underlying uninsured motorist legislation is as follows:

'A provision, drawn by the insurer to comply with the statutory requirement of uninsured motorist coverage, must be construed in light of the purpose and policy of the statute. Such a provision, drawn in pursuance of a statutorily declared public policy, is enacted for the benefit of injured persons traveling on the public highways. Its purpose is to give the same...