IN THE SUPREME COURT OF MISSISSIPPI
NO. 2014-IA-00913-SCT
SAFEWAY INSURANCE COMPANY

v. TIFFANY DUKES, ROBERT LEE HUDSON, TAWANDA L. WHITE, AS MOTHER AND NEX T FRIEND OF JEFFREY L. PIGGS, A MINOR CHILD

DATE OF JUDGMENT: 06/17/2014 TRIAL JUDGE: HON. RICHARD A. SMITH TRIAL COURT ATTORNEY: LAW RENCE JOHN TUCKER, JR. COURT FROM W HICH APPEALED: W A SHINGTON COUNTY CIRCUIT COURT ATTORNEYS FOR APPELLANT: JEREMY TRISTAN HUTTO W I LLIAM H. CREEL, JR. JOSEPH W ALTER GILL ATTORNEY FOR APPELLEES: ADRIENNE LEIGH HINTON NATURE OF THE CASE: CIVIL - INSURANCE DISPOSITION: REVERSED AND RENDERED - 12/10/2015 MOTION FOR REHEARING FILED: MANDATE ISSUED:

BEFORE RANDOLPH, P.J., KING AND COLEMAN, JJ. COLEMAN, JUSTICE, FOR THE COURT: ¶1. Saf

eway Insurance issued Tif f any Dukes an autom o bile insurance p olicy on her car. Dukes’s boy f

riend, Robert Hudson, not nam ed on the policy , was driving Dukes’s car when he was involved in an accident that injured Jef f rey Piggs

. D u k e s sought coverage f or the accident under her p olicy , but S af e way disputed coverage, claim ing the policy was void due

t o D u k e s ’s f

ailure to list Hudson as a regular, f requent d river on her a

pplication f

o rinsurance. T h e t r i a l c ourt granted Saf eway partial sum m ary judgm ent because Dukes and Hudson r ef

used to cooperate with Saf e way ’s investigation; however, the trial cou r t a lso
f ound that Saf

e way was responsible, under Lyons v. D irect General , 138 So. 3d 887 (Miss. 2014), to provide $25,000 o f liability coverage, e ven though Hudson wa s n o t listed as a regular, f requent driver on the policy

. Following t h e trial court’s denial of a m otion f or reconsideration, Saf

eway appealed, via petition f

or interlocutory appeal, to the Court. W e reverse and render sum m ary judgm ent in Saf

eway Insurance’s f

a vor. Factual Background and Procedural History ¶2. Dukes a p p l i e d f

o r c a r i n s u r a n ce w i th Saf e way in March 2012. The application provided: “Applicant warrants that all regular, f requ e n t d r i v e r s
. . . are listed below

. . . .” Dukes listed only h erself and signed the a pplication warranting that there we r e no other “regular, f

requent drivers.” Saf

eway issued a policy

to Dukes. In June 2012, Hudson was driving Duke s ’s car, with her perm ission, when he hit f o ur-y ear-old Jef

f ery Piggs. Dukes

w a s in the c ar also when the accident occurred. Piggs s u f f ered injuries, and t hrough his

m other, Piggs sued Hudson. ¶3. Dukes f

iled a claim with Saf

eway and, on the claim f

orm , she indicated t hat Hudson

was a regular driver o f her c a r
. S a f e w ay def ended H udson under a r eservation of rights. Saf eway f iled an intervening t hird-party com p laint f or declaratory judgm ent against Dukes,
H u dson, and Piggs’s m other, Tawanda W hite. Neither Dukes n or Hudson responde d t o Saf eway ’s com

plaint; theref

ore, the trial court entered a docket entry of def ault against them

. Saf eway then f iled a m otion f

or sum m ary

judgm ent.

2¶4. In the m otion f or sum m ary judgm ent, Saf eway asserted that Dukes had m ade a f alse representation on her application because s he did not list Hudson as a regular driver. Such action or inaction, according to S af eway , m ade Dukes’s policy void due to the f alse warranty and m aterial m isrepresentation. Saf eway m aintained that, h ad Dukes listed Hudson on the application, it would h ave i ssued the policy with a m uch h i g h e r p r e mi um (213 percent hi g h e r )

. Saf

eway also took issue with Dukes’s and Hudson’s ref usal to cooperate with its investigation and d e f

e n s e
. Saf

eway asked t he trial court to g rant sum m ary j udgm ent declaring the policy

void ab initio. ¶5. The trial court issued an order granting in p art a n d deny ing in part Saf eway ’s m otion
f or sum m ary judgm e nt. 1 The trial court f ound that Dukes a nd H udson had f a iled to c ooperate with Saf eway and that D ukes’s f

ailure t o list Hudson o n the application was a f a lse warranty and/or m a terial m isrepresentation. However, the trial court held that, under L yons , Saf eway was required to provide $25,000 of liability coverage. The trial court wrote: Under the dictates a nd rationale of Lyons , the a t t e m pted exclusion of driver Robert Hudson, even f

or breach of the policy due to f ailure to cooperate and/or m isrepresentations is n ot perm itted. Even if Hudson h ad been listed a s a excluded driver and with t he insured’s p erm ission, drove the vehicle and was involved in an accident, the exclusion would not a nd does not apply to the f irst $25,000.00 of

liability coverage. As to any am ounts over and above the $25,000.00 m inim um c overage am o unt, this court f

inds there is n o g enuine issue of m aterial f act t hat Dukes m ade a f alse warranty and a m is r e presentation as to f requent drivers. T hese were m aterial to the contract. Further, Dukes f ailed to cooperate with Saf eway
. The f alse warranty , m isrepresentation and f ailure to cooperate precludes coverage

1 A p p aren tly th ere w as a h earin g o n th e m o tio n f o r su m m ary j u d g me n t , b u t th e tran scrip t is n o t in th e reco rd

. S ee O rd e r, ref

e ren cin g h earin g o n F eb ru ary 1 8 , 2 0 1 4

. 3under the p olicy a s a m atter of law, above the m inim um statutory coverage am ount of

$25,000.00.
S a f e w ay f iled a m otion f

or reconsideration, which the trial court denied. 2 Then, Saf e w a y f iled a petition f

or interlocutory

appeal, which the Court granted on July 29, 2014.
Discussion ¶6. A trial court’s d isposal of a m otion f or sum m ary judgm ent is r eviewed de novo. Strait

v. McPhail , 145 So. 3d 6 64, 6 68 (¶10) ( Miss. 2014) (citations o m i tted). T h e g r a n t of

sum m ary judgm ent is proper “ i f t h e p leadings, depositions, answers to interrogatories and adm issions on f

ile, together w ith t he af

f idavits, if any , show that there is n o genuine issue of

m aterial f act and that the m o ving party is entitled to a judgm ent as a m a t t er of l aw.” Miss. R. Civ. P. 56(c). A. Whether the policy is void under Lyons v. Direct General . ¶7. Saf

eway asserts that the trial court erroneously relied on Lyons v. Direct General , 138
So. 3d 887, and that Lyons does not control t he instant case. W e agree. In Lyons , the Court held that the m andatory i n s u r a n c e r e q u i r em e n t of Mississippi Code Section 6 3-15-4 “pertains
to vehicles, n ot o wners or operators.” Lyons , 1 39 S o. 3d at 890 ( ¶17). T hus, “every vehicle

o p e r a t e d w i t h i n t his State m

ust have the statutorily required m inim um -coverage r e q

u i r e m e n t s . . . [ and a] liability policy that purports to exclude that coverage f or certain drivers f

ails to

com ply with the statutory m andate.” Id. Saf eway argues t hat, while Lyons h eld that nam eddriver exclusions a re void up to the m inim u m c overage r equirem e nts, Lyons d id n ot abolish

2 A p p aren t ly th e trial co u rt h eld a h ea r i n g o n th e m o tio n to r eco n s id er, b u t th e tran scrip t is n o t in th e reco rd

. S ee O rd e r, ref

e ren cin g h earin g o n Ju n e 2 , 2 0 1 4

. 4an insurer’s “com m on law right to void an insurance policy due t o m aterial

misrepresentation/f

alse warranty

. ” Distinguishing Lyons f rom the instant case, S a f e w a y writes: Saf

eway resp e c t f

u l l y subm its that the trial court was incorrect because Saf eway is not seeking t o e n f o r ce an exclusion to deny coverage, such as in Lyons

. Rather, Saf

eway is requesting that t h e s u bject policy be held void ab initio which w ould invalidate the policy a s if it never existed in the f irst place because it was o btained through m aterially f alse and m isleading inf

orm ation and there w a s n e v e r any m eeting of the m inds. Contrary to the trial court’s im p lication, this i s n ot a distinction without a dif f erenc e
. “ [ T ] he contractual d e f e nses of rescission and exclusion are distinct,” and “[ t]hey m ust be analy zed pursuant to separate princip l e s
. ” X L Specialty Ins. Co. v. Level Global Investors, L.P. , 874 F. Supp. 2d 263, 280 (S.D.N.Y. 2012).
An insurer’s right t o void a policy ab initio f or f raud/m a terial m isrepresentations in the application relates to the f orm ation of the contract itself , i .e. w hether there was ever an actual m e eting of the m inds where one par t y o b t a i n e d t

h e c o n t r a c t t h rough f alse warranties or m isrepresentations. This is a c om pletely dif

f erent issue. In the context of a nam e d d river exclusion, there is no actual m isrepresentation because the insured has identif i e d t h e “excluded” driver, w hich is dif f erent t han a ref

usal to disclose the driver to the insurance com

p a ny f rom the inception of the policy which prohibits t he insurer f rom properly assessing the risk and determ ining t he prem ium t o charge bef ore agreeing to issue t he policy

. The two issues a r e com pletely s e parate such t hat Lyons , which does n ot even m ention policy rescission, cannot logica l l y control the present case. Saf eway m aintains that if t he trial court’s application of Lyons is c o rrect, t hen there will be

a f inancial incentive to f

raudulently conceal the existence o f other drivers, a nd there will be no consequences f

or that m a terial m isrepresentation. ¶8. First, af

ter L yons handed down, the Legislature am ended the s tatute at issue, ef f ective July 1, 2015. Section 63-15-3(j) now p rovides that “[ l]iability insurance required under this paragraph (j) m ay contain exclusions and lim i tations on coverage as long as the exclusions

5and lim itations language or f orm has been f

iled with and approved by the C om m issioner of
Insurance.” Miss. Code Ann. § 63-15-3(j) (Supp. 2015). Thus, Lyons h as been overruled by
statute. ¶9. Second, w e very recently and thoroughly addressed the sam e issue i n our opinion in
Katrice Jones-Sm ith v. S afeway I nsurance Com

pany, 174 So. 3d 240 (Miss. 2015). In the

m ajority , Justice Dickinson wrote that, in L yons , the Court h eld that “the nam ed-driver exclusion violated Mississippi’s s t a t utorily im posed m inim

um -liability -insurance law” because Section 63-15-4(2)(a) required the insurance to issue an insurance card as proof that the policy provided the vehicle with the statutory m inim um coverage. Id. a t 2 42 ( ¶6). The
Jones-Sm ith court explained that in Lyon s , Direct General h ad i ssued an i nsurance card, which represented that the policy provided the statutory m inim um coverage; theref

ore, the

nam ed-driver exclusion was unenf orceable. Id

. Justice Dickinson explained the distinction
f rom the Jones-Sm ith case– as applicable to the instant case– as f ollows:
O u r an aly sis i n L

yo n s , w h ich a s s u m ed a v alid i n su ran ce p o licy h ad b een issu ed , p ro h ib i ted th e in su ran ce co m p an y f ro m ex clu d in g statu to rily -req u ired co v erag e, b u t it created n o d u t y to issu e a p o licy

. It d id n o m o re t h an ad d ress an in v alid ex clu sio n w ith in a v alid in su r an ce p o licy

. B y co n trast, th e q u estio n i n th is ca s e i s n o t w h eth e r th e term s o f M ich elle’s p o licy w ith S

a f ew a y co vered th e a ccid

en t, b u t w h eth er th e p o licy, itself, w a s vo id a b le.
Id. at 242 (¶7) (em

phasis added). Again, Justice D ickinson reit e r a t e d that Lyons is not applicable to Jones-Sm ith , because in Jones-Sm i th , the policy w as void. ¶10. Consistent with the holding in Jones-Sm ith , we hold that the t ri a l c o u r t c o r r e c t l y f ound “there is no genuine issue of m ate rial f act that D ukes m ade a f

alse warranty and a
6m isrepresentation as to f requent drivers”; however, the t r i al c ourt erred when it applied Lyons

. The present case i s analogous to Jones-Sm ith b ecause the question i s whether the
p o l i c y i t s elf is voidable, not w hether the term s of t he p olicy covered the accident. a s w a s discussed in Lyons

. Dukes’s s tatem ent warranting that there were no other regular, f requent drivers is not literally true, thereby m aking her policy voidable. “[ A]ny warranty t hat is not literally true will invalidate the policy .” 3 Jones-Sm ith , 174 S o. 3d at 245 (¶¶17-18). As the
Court explained in Jones-Sm ith , Lyons “did no m ore than a ddress a n i n v a l i d exclusion within a valid i nsurance policy [

. ]” Jones-Sm ith , 174 So. 3d at 242 (¶7) (em phasis added). Since D ukes’s insurance policy i s void, it f ollows that Lyons h as n o application to the present case because there is not a valid insurance policy

. B. Whether the policy is void based on Dukes’s refusal to cooperate. ¶11. Saf

eway also c laim s that it should be ab l e t o v o i d coverage based on D ukes’s and Hudson ’ s r e f

u s a l to cooperate; however, because the f irst issue is d ispositive, we see no

reason to address the issue o f whether the policy is void due to Dukes’s and Hudson’s ref usal to cooperate with Saf

eway ’s investigation.

Conclusion ¶12. W e hold that t he t r i a l c o u r t incorrectly applied the holding in Lyons to the present

case, since Dukes’s policy was void due t o her warranting that there were no other regular,

3 Because i t is a warranty and not a m isrepresentation, the m ateriality of Dukes’s f ailure to disclose Hudson is not an issue. See Jones-Sm i th , 174 So. 3d at 245 (¶¶17-18).

7f

requent drivers of her car when Hudson actually was a regular, f

requent driver o f her car. The portion of the trial court’s judgm ent deny ing Saf e way ’ s m otion f

or sum m ary j udgm ent is reversed, and sum m a ry judgm ent is rendered in f avor of Saf eway
. ¶13. REVERSED AND RENDERED

. W A L L E R , C .J., D ICKINSON AND RANDOLPH, P.JJ., L A M A R , K I T C H E N S , PIERCE AND KING, JJ., CONCUR.

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