Title: Lowery v. State Farm Mutual Automobile Ins. Co.

State: mississippi

Issuer: Mississippi Supreme Court

Document:

285 So. 2d 767 (1973) James W. LOWERY, a minor, by and through James L. Lowery, Father and Next Friend v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY. No. 47303. Supreme Court of Mississippi. November 26, 1973. Rehearing Denied January 14, 1974. Liston & Upshaw, J.E. Ellis, Jr., Winona, for appellant. Wise, Carter, Child, Steen & Caraway, William M. Dalehite, Jr., Jackson, for appellee *768 RODGERS, Presiding Justice. This case came to this Court from the Circuit Court of Montgomery County, Mississippi. Appellant James W. (Daniel) Lowery, a minor, filed suit against State Farm Mutual Automobile Insurance Company, a nonresident insurance company. The suit was based upon the terms of an insurance policy issued by the defendant insurance company to the plaintiff's father, James L. Lowery, providing insurance upon his son, a member of his family. The policy contained an agreement by which the insurer agreed to provide insurance coverage under what is known as the uninsured motorist clause. The clause in this policy is in the following language: The appellant contended in the trial court and contends here that the insurance company was and is indebted to him for injuries sustained as a result of an accident in which he was injured by an uninsured motorist. The appellant was at the time alleged to have been riding and operating, in a careful and prudent manner, a Honda motor bike on U.S. Highway 51, and through no fault of his own, he was struck by a 1963 Ford being driven by Joe Palmertree. It is said that as a result of said accident, the plaintiff, James W. Lowery, was sorely hurt and seriously injured in his left leg and body; that his injury required medical expenses in the sum of fourteen hundred dollars ($1,400.00); and that he will incur future expenses because of the injuries inflicted on the plaintiff by Joe Palmertree, who was an uninsured motorist under the terms and meaning of the policy. The plaintiff contended that since he lives in the household of his father, he is insured under the terms of the policy against injury resulting from the negligent acts of an uninsured motorist. The case was tried upon a stipulated statement of facts and a copy of the insurance policy. The parties stipulated the following agreement: *769 This case was submitted to the trial judge on a question of law. The trial judge ruled in favor of the insurance company, holding that the terms of the policy did not cover the alleged injury. The issue here is: Does the insurance policy cover an insured owner of an automobile and the members of his family who are injured while riding in or on another motor vehicle not mentioned in the insurance policy? The insurance policy here involved listed only the family automobile as the "owned motor vehicle" within the meaning of that term as defined in the policy. The policy contains the following: The automobile described in the declaration as a "Described Automobile" is "Plym 69 4 DR 7835." The policy also contains the following clause: Assuming, as we must, since appellee agrees that James W. Lowery, the appellant, was covered under the terms of the policy, as being a member of named insured's household, the issue resolves itself into two questions of law: Was the accident in which appellant was injured such an accident as was contemplated by the terms of the policy, and if so, do the terms of the policy violate the mandatory requirements of Sections 8285-51 and 8285-52, Mississippi Code 1942 Annotated (Supp. 1972) [Mississippi Code 1972 Annotated § 83-11-101 and § 83-11-103]? In the outset, it is apparent under the terms of the policy that the owned motor vehicle described in the policy must have been an automobile; moreover, it must have been either the automobile listed in the declarations of the policy or (1) a temporary substitute automobile or (2) a newly-acquired automobile. Finally, the automobile must be owned by the named insured or his spouse, if living in the same household. It is obvious from the facts as concluded by the appellant that the appellant was clearly within the terms of the exclusionary provision of the policy. He was riding a motorcycle which he owned, and this motor vehicle was not an "owned motor vehicle" as set out in the declaration of the motor vehicle insured. This then brings us to the question of law as to whether or not the terms of the instant policy conflict with the Mississippi statutes requiring all automobile liability insurance policies to contain an uninsured motorist provision. There are two sections of the Mississippi Uninsured Motor Vehicle Act that are relevant to the issue here involved. They are Sections 8285-51[1] and 8285-52[2], Mississippi *770 Code 1942 Annotated (Supp. 1972) [Mississippi Code 1972 Annotated § 83-11-101 and § 83-11-103]. Before discussing the cases relevant to the issue, the general public policy considerations must be set out. The most recent pronouncement of this Court on the policy of the Uninsured Motorist Act comes from Rampy v. State Farm Mutual Automobile Insurance Co., 278 So. 2d 428 (Miss. 1973): This statement of policy is in line with numerous decisions in other states as well as the policy as stated by the text writers. It is this policy as well as the wording of the statutes that must be measured against the exclusionary clause in the present case. As the court stated in Travelers Indemnity Company v. Powell, 206 So. 2d 244 (Fla. App. 1968): *771 In discussing the relevant cases in other jurisdictions, the following approach will be used. The cases supporting the appellant's position will be discussed first, since this appears to be supported by the greater weight of authority, followed by the decisions supporting the position of the appellee, State Farm. Although the uninsured motorist acts of all the states are very similar, there are some variations in the wording that affect the applicability of the various cases. The similarities and differences of the statutes will be pointed out when it is necessary. The critical language for purposes of the present case is found in Section 8285-52 [§ 83-11-103], supra, in the definition of "insured": The most persuasive cases come from states with similar statutory definitions. The Virginia uninsured motorist statutes define "insured" exactly as the Mississippi act. The Supreme Court of Appeals of Virginia was called upon to interpret this provision in Allstate Insurance Company v. Meeks, 207 Va. 897, 153 S.E.2d 222 (1967). A similar factual situation was involved in the case of Gulf American Fire and Casualty Company v. McNeal, 222 Ga. 454, 154 S.E.2d 411 (1967). There the court held that although the plaintiffs were hit by an uninsured motorist while riding in a car not covered under their policy, they could still recover. The Georgia Code, § 56-407A(b), defines "insured" exactly as the Mississippi Code. The court held that this language created two classes of "insureds": In the California case of Aetna Insurance Company v. Hurst, 2 Cal. App.3d, 1067, 83 Cal. Rptr. 156 (1969), the facts were very close to the present case. The husband sued the wife's insurer pursuant to the uninsured motorist provision in her *772 policy. The husband was riding his uninsured motorcycle at the time of the accident and the wife's policy only covered her car. An exclusion in the policy made it inapplicable to injuries incurred by an insured while occupying an automobile owned by an insured but not covered by the policy. Section 11580.2 of the California Code defined "insured" in two classes like the Mississippi Code: The insurance company advanced one of the same arguments used by State Farm in the present case. The court answered in the following manner: Accord, Lopez v. State Farm Fire and Casualty Company, 250 Cal. App. 2d 210, 58 Cal. Rptr. 243 (1967). The Supreme Court of South Carolina recently ruled on this issue in Hogan v. Home Insurance Company, 194 S.E.2d 890 (S.C. 1973). The court was presented with the question of whether or not an exclusionary clause in a policy may be applied so as to legally exclude uninsured motorist coverage to an insured while occupying an uninsured automobile owned by the named insured or a member of the same household. The precise issue was whether or not the exclusionary clause was in conflict with the uninsured motorist statute. The South Carolina statute was very similar to the Mississippi Act and the definition of "insured" was identical. See South Carolina Motor Vehicle Safety Responsibility Act, Section 46-750.31(2), Code Supplement. The court found that the language of the Code was plain and unambiguous: Speaking of the statutory definition of "insured", the court said: The court concluded that the policy exclusion was void since it imposed a limitation upon coverage provided by the statute. Although the Florida statute does not define insured as does the Mississippi *773 Code, the cases from that jurisdiction are still persuasive. The appellee, State Farm, cited the case of National Union Indemnity Co. v. Hodges, 238 So. 2d 673 (Fla. 1970) as authority for the validity of the exclusionary clause in the present case. This case was a decision by the Third District Court of Appeals of Florida and does in fact support appellee's position. However, this decision was quashed by the Florida Supreme Court in Hodges v. National Union Indemnity Company, 249 So. 2d 679 (Fla. 1971). The court held that the exclusion was void because it was too uncertain and ambiguous. Since the Hodges case, the Florida Supreme Court has ruled on a case very close to the facts at hand in Mullis v. State Farm Mutual Automobile Insurance Co., 252 So. 2d 229 (Fla. 1971). The son was injured by an uninsured motorist while riding a Honda motorcycle owned by his mother and not covered by the insurance policy covering the parents' car. The son, by his father, sued the insurer pursuant to the uninsured motorist provision in the policy. Although the Florida statute does not define "insured", the policy contained a definition of insured similar to the Mississippi Code. The policy also contained the exact exclusion as is involved in the present case, which excludes from coverage an insured while occupying a land motor vehicle owned by named insured or any resident of the same household, if the vehicle is not specifically covered by the policy. The litigants admitted that the exclusion applied and would prevent coverage. The issue was whether or not this exclusion violated the public policy of Florida as manifested by F.S. Section 627.0851, F.S.A. The court concluded that the exclusion was void because it was contrary to the above cited statute. The court stated: The court cited with approval a statement in Travelers Indemnity Co. v. Powell, 206 So. 2d 244 (Fla.App. 1968) involving a similar exclusionary clause. The court said: Another case with the same facts is Doxtater v. State Farm Mutual Automobile Ins. Co., 8 Ill. App.3d 547, 290 N.E.2d 284 (1972). Mr. Doxtater had an insurance policy on his automobile with an uninsured motorist provision. His son was injured in a collision between the motorcycle which he was operating and an uninsured motorist. A claim was filed against his father's insurer pursuant to the uninsured motorist provision. The insurance company denied coverage based on an exclusion in the policy identical to the exclusion in the present case. The issue before the Illinois Appellate Court was whether or not the exclusion conflicted with the state uninsured motorist provisions. The Illinois statute is similar to the Mississippi statute, except for the definition of "insured", which is absent from the Illinois version. Based on a prior State Supreme Court decision, the court held the exclusion was void. The Supreme Court of Nevada was presented with the same issue in State Farm Mutual Automobile Ins. Co. v. Hinkel, 488 P.2d 1151 (Nev. 1971). Again, the son was injured while riding an uninsured motorcycle and sued on the basis of the uninsured motorist provision of his father's policy covering the family automobile. The policy contained the same exclusion as in this case and the insurance company denied liability on the basis of it. The court held: The insurance company argued in that case that public policy should not permit an owner of two or more vehicles to pay for insurance on only one of them and recover damages incurred while operating one of the others. The Nevada Court answered: In the case of State Farm Mutual Automobile Ins. Co. v. Robertson, 295 N.E.2d 626 (Ind. 1973), the Indiana Court of Appeals faced the same issue. Mr. Robertson had automobile insurance with uninsured motorist coverage. His son was killed while riding an owned, but uninsured motorcycle, and a claim was filed against the policy. State Farm denied coverage pursuant to the same exclusion as in the present case. The Indiana statute was similar to the Mississippi statute, except it did not contain a definition of "insured". The court held that the exclusion was void and violative of the public policy of the state. The court quoted from the federal case of Vantine v. Aetna Casualty & Surety Company, 335 F. Supp. 1296 (D.C.N.C.Ind. 1971): The Supreme Court of Washington faced this issue in Touchette v. Northwestern Mutual Insurance Co., 80 Wash. 2d 327, 494 P.2d 479 (1972). The plaintiff, while driving a vehicle not described in his parents' policy of insurance, collided with an uninsured motorist. The insurance company denied coverage based on an exclusion *775 similar to the one in the present case. The plaintiff claimed that the public policy of the state overrode the exclusionary language so as to cover a relative of the named insured's residing with them even though driving an automobile not specifically described in their policy. The court stated that the weight of modern authority supports plaintiff's position and agreed that the exclusionary provision was void. The appellee in the present case, State Farm, relies in part on Rushing v. Allstate Insurance Company, 216 So. 2d 875 (La. App. 1968) to support the validity of the exclusionary clause. The clause in the Louisiana case was similar to the one here, and the court did in fact hold that it prevented coverage on a set of facts similar to the present case. However, the most recent pronouncement of the Court of Appeals of Louisiana on this issue reaches a contrary result. In the case of Elledge v. Warren, 263 So. 2d 912 (La. 1972) the facts were the same as the case at hand. In a well-reasoned opinion, the court held that the exclusionary clause was void and allowed recovery by the son against the insurance policy on his parents' car, even though he was riding an owned, but inunsured motorcycle at the time of the accident. The court stated: Professor Alan Widiss, in his treatise on uninsured motorist coverage, discusses the validity of the same exclusionary clause: Although the greater weight of authority supports the appellant's position here, there are several cases which hold such exclusionary clauses valid. Professor Widiss characterizes those decisions as follows: The appellee, State Farm, cites the case of Barton v. American Family Mutual Ins. Co., 485 S.W.2d 628 (Mo. App. 1972). The facts there were similar to the present case. The son was killed while riding an uninsured motorcycle and a claim was filed against the parents' policy. The insurance company denied coverage on the basis of an exclusionary clause similar to the one in the instant case. The lower court ruled that the son came within the exclusion and recovery was denied. This was affirmed on appeal. However, the issues were not the same as the present case. The validity of the exclusionary clause in light of the state statute was not in issue. Appellant's contentions on appeal were that the exclusionary clause never effectively became part of the policy and the terms of the uninsured motorist endorsement were ambiguous and should be construed in favor of the insured. Furthermore, the Missouri uninsured motorist statute, § 379.203 R.S. Mo., does not define "insured" in two classes as does the Mississippi statute. The case of Shipley v. American Standard Insurance Co. of Wisconsin, 183 Neb. 109, 158 N.W.2d 238 (1968) is similar to the Barton case. The injury was incurred on an uninsured motorcycle and a claim was made against a policy issued on a car. The court held that the exclusionary clause precluded recovery. Again, the validity of the statute in light of public policy was not in issue. Also, the Nebraska statutes do not define "insured" as does the Mississippi Code. Another case relied upon by the appellee is Owens v. Allied Mutual Insurance Company, 15 Ariz. App. 181, 487 P.2d 402 (1971). The claimant owned two automobiles. The wreck occurred in the one not covered by the policy. Suit was initiated against the policy pursuant to the uninsured motorist provision. The insurance company denied coverage based upon an exclusion in the policy. The issue was whether or not the exclusion violated the policy of the statute. The court cited Rushing v. Allstate Insurance Company, 216 So. 2d 875 (La. App. 1968); National Union Indemnity Co. v. Hodges, 238 So. 2d 673 (Fla. 1970), and McElyea v. Safeway Insurance Co., 131 Ill. App.2d 452, 266 N.E.2d 146 (1970) as the basis for their decision, and said: Subsequent cases have eroded the basis for the Arizona court's decision. The Rushing case was decided by a Louisiana Appellate Court in 1968. In 1972, a Louisiana Appellate Court reached the opposite result on the same issue in the case of Elledge v. Warren, 263 So. 2d 912 (La. 1972) as discussed previously. The Hodges decision was quashed by the Florida Supreme Court at 249 So. 2d 679 (Fla. 1971), and Mullis v. State Farm Mutual Automobile Insurance Co., 252 So. 2d 229 (Fla. 1971) effectively overruled the prior Florida decisions upholding the validity of such exclusionary clauses. Finally, the McElyea decision was *777 effectively overruled by Doxtater v. State Farm Mutual Automobile Ins. Co., 8 Ill. App.3d 547, 290 N.E.2d 284 (1972) also discussed previously. Furthermore, the Arizona statute does not define "insured" as does the Mississippi statute. In Stagg v. Travelers Insurance Co., 486 S.W.2d 399 (Tex. 1972) the Court of Civil Appeals held that an exclusionary clause did not violate the public policy of Texas. The claimant was injured while riding in an owned, but uninsured car, and sued the insurer of his other car. The precise issue was whether or not the exclusion violated the Texas Uninsured Motorist Statute. The exclusion read: The Court held that this exclusion was valid as a proper restriction on coverage. Two factors should be noted regarding this case. First, the Texas statute does not define "insured" in two classes as the Mississippi statute. Second, the court relies in part on appellate court decisions in Louisiana in 1965 and Florida in 1966. As was pointed out previously, subsequent cases have eroded the validity of those earlier decisions. The Stagg decision was concurred with by another Texas Civil Appeals Court in Garcia v. Southern Farm Bureau Casualty Ins. Co., 490 S.W.2d 616 (Tex. 1973). The most recent state Supreme Court decision upholding the validity of such exclusionary clauses was handed down by the Arkansas Supreme Court in May of 1973. The case was Holcomb v. Farmers Insurance Exchange, 495 S.W.2d 155 (Ark. 1973). In that case, the husband owned a Ford and the wife owned a Plymouth. They both had separate liability insurance policies. The husband had uninsured motorist coverage on his Ford, but the wife had rejected such coverage on her car. They were both riding in the wife's car and were injured by an uninsured motorist. A claim was filed pursuant to the husband's policy. The insurance company denied coverage based on an exclusionary clause similar to the clause in the present case. The issue was whether or not the clause was contrary to public policy under Ark.Stat.Ann. § 66-4003 (Repl. 1966). The above cited statute does not define "insured" in two classes as does the Mississippi statute. The court cited Owens v. Allied Mutual Ins. Co., 15 Ariz. App. 181, 487 P.2d 402 (1971); McElyea v. Safeway Ins. Co., 131 Ill. App.2d 452, 266 N.E.2d 146 (1970), and Shipley v. American Standard Ins. Co. of Wisconsin, 183 Neb. 109, 158 N.W.2d 238 (1968) as authority for the validity of the exclusion. As pointed out previously, McElyea was overruled by Doxtater, supra. We have previously discussed the weaknesses of the Owens and Shipley cases. In short, the cases relied upon by the Arkansas court in reaching their decision are not good authority. The court held that the Meeks and Hurst decisions declaring such exclusions void were inapplicable because the Virginia and California statutes define "insured" in two classes and require coverage for the first class "while in a motor vehicle or otherwise." Since the Arkansas statute does not define "insured" in that manner, the court said the cases are distinguishable. It should be noted here that the Mississippi statute defines "insured" exactly as the Virginia and California statutes. The great weight of authority supports the appellant's contention that the exclusionary clause in the present case violates the public policy of this state as manifested by the Mississippi Uninsured Motorist Act. We are impelled, therefore, to reverse the *778 judgment of the trial court. The parties have agreed that the appellant's injury would justify an award of five thousand dollars ($5,000.00); therefore, judgment will be entered here for that sum in favor of appellant, James W. (Daniel) Lowery, against the appellee. Reversed and rendered. INZER, ROBERTSON, WALKER and BROOM, JJ., concur. [1] 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. [Miss.Code 1942 Annotated (Supp. 1972) § 8285-51; Miss.Code 1972 Ann. § 83-11-101]. [2] As used herein, the term "bodily injury" shall include death resulting therefrom; the term "insured" means the named insured and, while resident of the same household, the spouse of any such named insured, and relatives of either, while in a motor vehicle or otherwise, and any person who uses, with the consent, expressed or implied, of the named insured, the motor vehicle to which the policy applies, and a guest in such motor vehicle to which the policy applies, or the personal representative of any of the above; and the term "uninsured motor vehicle" means a motor vehicle as to which there is (1) no bodily injury liability insurance or bodily injury liability insurance with limits less than the amounts specified in Section 1 [§ 8285-51], but it will be considered uninsured only for that amount between the limit carried and the limit required in Section 1 [§ 8285-51], (2) there is such insurance in existence but the insurance company writing the same has legally denied coverage thereunder, or is unable, because of being insolvent at the time of, or becoming insolvent during the twelve (12) months following, the accident, to make payment with respect to the legal liability of its insured within the limits specified in said Section 1 [§ 8285-51], or (3) there is no bond or deposit of cash or securities in lieu of such bodily injury and property damage liability insurance or other compliance with the State Financial Responsibility Law. Provided, however, no vehicle shall be considered uninsured that is owned by the United States Government and against which a claim may be made under the Federal Tort Claims Act as amended. A motor vehicle shall be deemed to be uninsured if the owner or operator thereof be unknown; provided, that in order for the insured to recover under the endorsement where the owner or operator of any motor vehicle which causes bodily injury to the insured is unknown, actual physical contact must have occurred between the motor vehicle owned or operated by such unknown person and the person or property of the insured. The definition of the term "insured" given in this paragraph shall apply only to the uninsured motorist portion of the policy. [Miss.Code 1942 Ann. (Supp. 1972) § 8285-52; Miss.Code 1972 Ann. § 83-11-103].