# FILED

Novemb er 14, 1997 Cecil Crowson, Jr . App ellate C ou rt Clerk IN THE COURT OF AP PEALS OF

TENNESSEE WESTERN SECTION AT JACKSON

MISSISSIPPI FARM BUREAU ) MUTUAL INSURANCE COMPANY, ) ) Plaintiff/Appellee, ) Shelby Law No. 63735 T.D. ) vs. ) ) Appeal No. 02A01-9607-CV-00151 LATONIA SCR

UGGS JO NES and ) THOMAS JONE S, ) ) Defend ants/ Appe

llants. )

APPEAL FROM THE CI RCUIT COURT OF SHEL BY COUNTY AT MEMPHIS, TENNESSEE

THE HONORABLE G

EORGE H. BROWN, JR., JUDGE

For the Plaintiff/Appellee : For the D efenda nts/Appellants : Melanie M. Shuttlew orth Phil Zerilla, Jr. Memphis, Tennessee Memphis, Tennessee

AFFIRMED

HOL LY KI RBY LI LL ARD , J.

CONCUR:

AL AN E . HI GHE RS, J

. DAV ID R. F ARM ER, J.OPINION

In this case, an insurance company sought declaratory judgment on the issue of whether the language in the insu

rance p olicy aut

omatically incre ased the

policy’s c overage

lim its to those required by Tennessee’s Financial Responsibility Law, absent certification of the policy. The trial court ruled that it

did not. We

affirm. Appellee Mississippi Farm Bureau Mutual Insurance Company (“MFB”) issued an insurance policy to Brenda

Boyd (“Boy d”), a Mi ssissippi r esident. The policy provided liability coverage up to $10,000 per person and $20,000 per accident, co mplying with Mississippi’s requirements for minimu m coverage. See Miss. Code A nn. § 63-1 5-43 (2) (b)(197 2). The p olicy also provided , in pertine nt part: 6. Financial Responsibility Laws - Cover age A and

B. If this policy is one that is certifi ed follow ing an ac cident as pr oof of financial responsibility for future accide nts under Mississippi Code Annotated, Section 63-15-43, and amend ments thereto, and under like provisions of the Motor Veh icleFinancial Responsibility Law of an y State or Province , such insu rance a s is affor

ded by thispolicy sha

ll comply withthe provisions of such la w to the extent of the coverage and minimum limits of liability required, provided, however, that this policy will not c onform to any require ments by any other sta

te or pro vidence

[sic] asto the types and/or amounts of coverage other than “bodily injury” and “property damage” liability. In 1993, Boyd had an automobile accident in Tennessee involving Appellan ts Latonia Scruggs Jones and Thomas Jones (“Joneses” ). The Jo neses sub sequentl y filed a claim for personal injuries arising out of the accide nt. The Tennessee Financial Responsibility Law of 1977, Tennessee Code Annotated §§ 55-12- 101 et. seq., requires policy limits of $25,000 per person and $50,000 per accident a fter 1989. Tenn. Co de Ann. § 55- 12-102(1 2)(C)(i i) (1993) . Prior to th e accid ent, howe ver, MFB ha

d not c ertifie d the policy as proof of

financi al resp onsibility. To determine the policy limits for the Tennessee accide nt, MFB filed a

complain

t in Circuit

Court in Te

nnessee for dec larator

y judgment . MFB asked the trial cou rt to determine the question of whether the above-quoted language in the policy operated to automatically increase the liability limits to those required by the Fin ancial Responsibility Law. Both parties moved for summary judgment. The trial court granted summary judgment for MFB and denied the Joneses’ motion for summary judgment. From this decision the Joneses now appeal.2

The issue on appea l is whethe

r langua ge in the MFB policy increa sed the po licy’s lia bility limits to comply w ith those required by the Financial Responsibility Law, despite the fact that MFB had not certified the policy as proof of financial re sponsibility. A trial court should grant a motion for summary judgment when the movant demonstrates that there are no genuine issues of material fa ct andthat the moving party is entitled to ajudgment

as a matter

of law. T enn. R. Civ. P. 56.03. Su mmary judg ment is only appr opriate when the facts and the legal conclusions drawn from the facts reasona bly permit only one conclusion. Carvell v. Bo ttoms , 900 S.W.2d 23, 26 (Tenn. 1995). Since only questions of law are involved, there is n o presumption of corr

ectness regarding a trial court's grant of summary judgment. Id. Therefore, our review of the tri al court ’s grant of summar

y judgment

is de novo on the re cord bef ore this Court. Id. In Tenn essee, a motorist who is involved in an automobile accident resulting in a dea th , personal injury, or property damage in excess of four hundred dollars must file an accident report withthe Commissionerof Safety. Tenn. Code Ann. § 55-12-104(a) (1993). W hen the commissioner receives such a report, if he receives notice of a claim filed against the motorist and determines that the c laimant’ s chance

of winning

a judgmen

t are re asonably

possible, he then r

equiresa secur

ity deposit from the motorist to cover the possible judgment. Id. § 55-12-1 05(a) ( 1993). If the motori st fails to provide

a secur ity deposit , t he commissioner revokes the motorist’s driver’s license and registrations. Id. If the mot orist is a nonresident, the commissioner revokes his privilege to drive in the state. Id. A security deposit is not required, however, if the motorist “had in effect at the time of the accide nt, an automobile liability policy or bond with respect to the vehicle involved in the accident,” unless the vehicle was being driven without the owner’s express or implied permission. Tenn. Code Ann. § 55-12-106( 1) (Supp. 1997). In order to qualify, the policy must meet the following require ments: (a) No policy

or bond sh all be effec tive under § 55-12-106, unless issued by an insurance company or surety company licensed to do business in this state . . . and unless suc

h policy or

bond provides security not le ss than the amounts sp ecified

in § 55-12-102. Id. § 55-12-107(a) (1993). Section 55-12-10 2 requir

es, as one option for any period after Dece mber 31, 1989, “[a] split-limit policy with a limit of not less than twenty-five thousand dollars ($25,000)3

for bodi ly inj ury to or death of one (1) person, not less than fifty thousand dollars ($50,000) f or bodily injury to or death of two (2) or more persons i n any one (1) accident, and not less than ten thousand dollars ($10,000) for damage to property in any one (1) acciden t .” Id. § 55-12- 102(12)(C)(ii). Finally, a motorist

m ay pro vide proof of financial responsibility by “filing with the commissioner

the written c ertific ate of a ny insura nce car rier duly authoriz ed to do bu siness in th is st ate, certifying that there is in effect a motor vehicle liability policy for the be nefit of the p erso n
re quired to furnish proof of financial responsibility.” Tenn. Code Ann. § 55-12-12 0 (1993). A nonresident

can file such a ce rtifica te from a carrier licensed to do business in the state in which the motorist’ s vehicle

is registe red, so lo ng as the c arrier meets two

require ments: (1) The insurance carrier shall execute a power of attorney autho rizing the commissioner

to acce pt servic e on its be

half of notice or proce ss in any action arising out of a motor vehicle accident in this state; and (2) The insurance carrier shall agr ee in writing that such policies shall be deemed to conform with the laws of this state re lating to th

e terms of motor veh

icle liability policies issued therein. Id. § 55-12-121 (1993). The pertinent statutes are discussed in McManus v. State Farm Mutual Auto. Ins. C o. , 225 Tenn. 106, 463 S.W.2d 702 (1971). In McManus , the plaintiff filed for declaratory judgment against the defendant

insuranc e compan

y, asser ting that a n exclusi on clause

in the policy was void

as being in conflict with the Financial Responsibility Law. Id. at 107-09, 463 S.W.2d at 703. The plaintiff noted that his policy was on file with and had been approv ed by the Commissioner of Insurance and Banking, and asserted that the Financial Responsibility Law was therefore applicable. Id. at 108-09, 463 S.W.2d at 703. In discussin g the histo

ry of the Financia l Responsib ility Law, the Courtnoted tha

t the legis lature chose to require pub lic liability in surance only afte r a first accide nt, as opposed to requiring public liability insurance of everyone in the state. Id. at 109, 463 S.W.2d at 703. After discussing the Financial Responsibility Law, the Court found:

In keeping with the inte

nt of the L

egislatur e that the sanction s of this sta

tute apply only after

an acci dent, then the requirements that an insurance policy conform to this statute . . . would app ly only to in surance policies i ssued and

certifi ed to the Commissioner of Safet

y as proof of financial res ponsi bility i n accord with the statute. Id. at 111, 463 S.W.2d at 704. In McManus , the plaintiff had not certified his insurance policy as4

proof of financial responsibility. The Court explained: The only language in the policy in regard to financial responsibility laws is as follows: When certifi ed as pro of of fut ure fina ncial re sponsibility under any motor vehicle financial respo nsibility la w and whil e such pr

oof is required during the policy period, this policy shall comply with such law if applicable * * *. The above language

of this policy is a negation of any argument it has been certified as proof of financial responsibility. Id. at 112, 463 S.W.2d at 704. The Court concluded by noting that “[t]he fact the insurance policy in question is on file and approved by the Commissioner of the Insurance and Banking . . . does not make the policy a ‘certified policy’ under our financial responsibility law.” Id. at 112, 463 S.W.2d at 705. These issues arealso addressed in Holt v. StateFarm Mutual Auto. Ins. Co. , 486 S.W.2d 734 (Tenn. 1972). In Holt , the plaintiff insurance company sought declaratory judgment regarding its liability on two insurance policies. Id. at 734-35. At issue were the exclusion clauses, which provided that the r

elative o f an insur

ed who liv ed in the s ame house hold as the

insu red wa s not covered for bodily injuries under the policies. The defendant argued that the exclusion clauses we re void because they violated the Financial Responsibility Law. Id. at 735. Th e Court disagreed, finding that the Financial Responsibility Law was inapplicable under the fac ts of the case. The parties stipulated that the polici es had b een in effect at the time of the accide nt and that, after the accide nt, the insurance company had filed pa pers with th e commissioner attesting that the car involved in the accident

had been covered by insurance at the time the accident occurred. Id. at 736. The Court found:

The requirements of T.C.A. Section 59-1223 apply only to policies procured and certified to the Commissioner of Safety as proof of financi al respo nsibility

after an accident by the owner or operator who a t the time of the accide nt car ried no liability insurance on the automobile. Id. Pursuant

to McManus and Holt , it is clea r that the MFB policy limits do not ha ve to comp ly withthose set

forth in the Financial Responsibility Law. The pertinent statutes indicate that the need for proof of financial responsibility comes into effect only after a motorist has had an accident. See Tenn. Code Ann. § § 55-12 -104 to -1 05; McManus , 225 Tenn. at 109, 463 S.W.2d at 703. In essence, the law a

llows a mot

orist a “first bite at the apple” before requiring that he carry insurance5

or meet any particular

insurance coverage require ments. The language in the MFB policy mandates

no different result. Indeed, the language in the MFB policy is similar to that at issue in McManus

. See McManus , 225 Tenn . at 112, 4 63 S.W.2d a t 704. The

policy pr ovides tha

t it will com

ply with the financial responsibility law of another state only if it “is certified following an accident as proof of financial responsibility for future accide

nts” (emp hasis added). As far as the rec ord indic ates, this was Boyd’s first accident in Tennessee, and the policy had not been certified as proof of financ ial responsibility. Therefore, the plain language of the policy indica tes that its coverage limits need not conform to those required

under Tennessee’s Financial Responsibility Law. Ballard v. N orth Am. Life & Cas. Co. , 667 S.W.2d 79, 82-83 (Tenn. App. 1983) (absent ambiguity, courts a re to interpret insurance policies according to the plain meaning of the language used). The Joneses a

rgue tha t Winecoff v. Nationwide Mutual Ins. Co. , 223 Tenn. 267, 444 S.W.2d 84 (1969) , requir

es a diff erent r esult. In Winecoff

, the Court interpreted certain policy provisions to require coverage limits in line with thos e required by the Financial Responsibility Law. Id. at 271, 274-76, 444 S.W.2d at 85, 87-88. A key provision provided the following: ‘When certified as proof of financial responsibility for the future under the provi s ions of any m otor ve hicle financial responsibility law, such insurance as is afforded by this Policy unde

r Covera ges C(1) a

nd C(2) sh all comply

withthe provisions of such law to the extent of the coverage required by such law.’ Id. at 271, 44 4 S.W.2d a

t 86. This provision is similar to the language discussed above. However, the policy in Winecoff

contained two additional provisions. The first provided: ‘This policy doe s not compl y with motor

ists’ fin anci al responsibility laws of your state unless there is a premium charge shown

for Coverages C(1) and C(2) in Item 5.’ Id. at 271, 444 S.W.2d at 85. The second provided: ‘The limits of

the Company’s liability under Coverages C(1) and C(2) shall comp ly withthe limits of

liability require d by any applicable motor vehicle financial responsibility law.’ I d. Each policy showed premium charges for Covera ges C(1) and C(2) in Item 5, and the Cour t concluded

that the in surance

company h ad agre ed to comp ly with the Ten nessee Financial Responsib ility Law and

the coverage limits contained therein. Id. at 274-76, 444 S.W.2d at 87-88. Unlike the policy in Winecoff , the MFB policy in this case contains no provision for premium charges for any added coverage necessar y to comply with any state’s financial responsibility law and in no way pur

ports to c omply with s uch a law unless MFB f

ir st certif ies t he policy for future6

accide nts. The decision

of the tri al court

is affirme d. Costs on a

ppeal ar e assess ed again st

Appellan ts, for which execution may issue if necessary.

HOLLY KIRBY LILLARD, J.
CONCUR:

ALAN E. HIGHERS, J.

DAVID R. FARMER, J.