### IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

No. 06-60498

NATIONAL UNION FIRE INSURANCE COMPANY Plaintiff-Appellant v. MISSISSIPPI INSURANCE GUARANTY ASSOCIATION Defendant-Appellee

Appeal from the United States District Court for the Southern District of Mississippi USDC No. 3:04-CV-340
Before REAVLEY, BARKSDALE, and PRADO, Circuit Judges. PER CURIAM: This diversity action involves an important and determinative question of Mississippi law for which there is no controlling Mississippi Supreme Court precedent. Accordingly, that unresolved question is certified to the Supreme Court of Mississippi. CERTIFICATION FROM THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT TO THE SUPREME COURT OF MISSISSIPPI. PURSUANT TO RULE 20 OF THE MISSISSIPPI RULES OF APPELLATE PROCEDURE. TO THE SUPREME COURT OF MISSISSIPPI AND THE HONORABLE JUSTICES THEREOF: United States Court of Appeals Fifth Circuit 

### F I L E D October 31, 2007 Charles R. Fulbruge III ClerkNo. 06-60498

2 I. STYLE OF THE CASE The style ofthe case in which this certification is made is National Union Fire InsuranceCompanyv. Mississippi InsuranceGuarantyAssociation, No. 06- 60498 in the United States Court ofAppealsfor the Fifth Circuit, on appeal from the United States District Court for the Southern District of Mississippi. Federal jurisdiction is based on diversity of citizenship. II. STATEMENT OF FACTS National Union Fire Insurance Company (NUFIC) seeks a determination ofthe obligations ofthe Mississippi Insurance Guaranty Association (MIGA) for
a claim against an insured. NUFIC asks us to decide whether Mississippi’s exhaustion statute requires a solvent-carrier’s policy, containing an “otherinsurance” clause, to pay ahead of MIGA’s statutory coverage of an insolventcarrier’s primary policy. Drs. Orr and Mettetal were sued for medical malpractice by Kathleen Wright. The action was covered by two insurance policies: one issued by Pennsylvania Hospital Indemnity Company (PHICO); one, by NUFIC. The PHICO policy provided primary coverage. The NUFIC policy provides coverage, but contains the above-referenced “other-insurance” clause:

A loss covered under this policy may also be covered under another policy you have. If it is, [NUFIC’s] policy will apply only in excess of such other coverage no matter how such other coverage is described. This clause will not apply to coverage which is expressly stated to apply in excess of this specific policy. Subsequent to Wright’s medical-malpractice action’s being filed, PHICO
was declared insolvent. This occurred after PHICO reac hed an agreement to settle Wright’s claim against Dr. Mettetal. MIGA immediately undertook review ofWright’s action against Dr. Orr and provided a defense. That action has beenNo. 06-60498

3 settled, and the only issues remaining are those in the present declaratoryjudgment action involving MIGA and NUFIC. NUFIC filed this action to determine whether MIGA or NUFIC was primarily responsiblefor providing indemnity and a defense for Dr. Orr. NUFIC maintains: because PHICO provided primary coverage, the “other-insurance” clause in the NUFIC policy makes it an excess-insurance provider; and Mississippi’s exhaustion statute does not require NUFIC to pay until the limits of the primary policy have been satisfied. MIGA filed a counter-claim for declaratory relief and an ancillary award for the costs and expenses incurred by MIGA in defending Dr. Orr. Upon crossmotions for summary judgment, the district court granted MIGA’s motion and denied NUFIC’s, holding: under Mississippi Code Annotated § 83-23-123, NUFIC’s policy must be exhausted before MIGA can be called upon to make payment. In so holding, however, the district court noted this is an unsettled point ofstate lawwhich required the court to make an “Erie guess” on how the Mississippi Supreme Court would interpret its own law. See Branch-Hines v. Hebert, 939 F.2d 1311, 1320 (5th Cir. 1991). The exhaustion requirement in the above-referenced section provides: “Any person having a claim against an insurer under any provision in an insurance policy other than a policy of an insolvent insurer, which is also a covered claim, shall be required to exhaust first his right under such a policy”. MISS

. CODE A NN

. § 83-23-123. Although MIGA concedes “true excess” insurance cannot be made to drop down and provide primary coverage, it maintains: NUFIC’s policy is not true excess, but rather true primary, insurance with a boilerplate “other-insurance” clause; and, therefore, the exhaustion requirement obligates NUFIC to pay first-dollar coverage on Wright’s claim against Dr. Orr. Conversely, NUFIC asserts: the clear language of its policy states it is excessNo. 06-60498

4 coverage; and, as a result, MIGA (standing in PHICO’s shoes) is required to pay first-dollar coverage on the claim. Recently, the Mississippi Supreme Court held MIGA is not entitled to credit for payments to the claimant from solvent insurance covering a joint tortfeasor. Miss. Ins. Guar. Assoc. v. Cole , 954 So. 2d 407 (Miss. 2007). Therefore, Cole resolves one issue for this appeal: whether MIGA’s obligations
were discharged under the exhaustion statute by the settlement paid from solvent polic

ies on behalf of Dr. Mettetal, the alleged joint tortfeasor. The parties concede Cole settles this issue. (After hearing oral argument on both issues, thiscourt required supplemental briefing to address the effect ofColeand to clarify the remaining issue, which is now being certified.) On the other hand, NUFIC and MIGA agree Cole is not directly on point regarding the remaining exhaustion-requirement issue. Indeed, as noted, no case has directly decided the issue. In Caldwell Freight Lines, Inc. v. Lumbermens Mutual Casualty Co., 947 So. 2d 948 (Miss. 2007), the Mississippi Supreme Court interpreted North Carolina’s exhaustion requirement as not requiring an excess carrier to “drop down” and provide first-dollar coverage upon the insolvency of the primary carrier. The excess-carrier provision at issue in Caldwell provided: “[The insurer] will pay only the amount in excess of the sums actually payable under the terms of the ‘underlying insurance’”. I d. at 953 (emphasis omitted). While NUFIC urges this court to read Caldwell as determinative ofthe issue at hand, we cannot do so. First, the excess provision in the Caldwell policy is w orded differently than in NUFIC’s. Indeed, MIGA asserts the provision in Caldwell is “true excess” insurance while NUFIC’s policy contains only an “otherinsurance” clause. Second, the Mississippi Supreme Court was interpreting North Carolina, not Mississippi, law. Although the court stated the law “is notNo. 06-60498

5 materially different from our own”, it is not clear how the Supreme Court of Mississippi would decide the issue being certified. Id. at 952. MIGA asserts Gauze v. Reed, 633 S.E.2d 326 (W.Va. 2006), should guide this court in affirming the district court. In G auze , the West Virginia Supreme Court held an exhaustion requirement identical to that ofMississippi’s requires all other solvent-carrier insurance be exhausted before lo oking to the state’s insurance-guaranty association. I d. at 334. The facts in G auze are nearly identical to this case; indeed, the excess-carrier policy at issue was the exact NUFIC policy at issue here. The case provides no guidance, however, on how the Supreme Court ofMississippi would ruleand thereforedoes not inform our “Erie guess”. As noted, the Mississippi Supreme Court has not addressed whether a policy containing an “other-insurance” clause can be required to drop down and pay first-dollar coverage ahead of MIGA. Therefore, the standard for certification is met. See M ISS

. R

. A PP

. P. 20(a) (certification proper when “no clear controlling precedents in the decisions of the Mississippi Supreme Court” regarding the issue before the court). Furthermore, because a ruling on this issue is determinative of the rights and obligations of Mississippi’s statutorilycreated insurance-guaranty association, the decision is more properly for the courts of Mississippi. Along that line, an action involving a similar issue is pending before the Mississippi Supreme Court: Willi am Leitch v. Mississippi Insurance Guaranty Association, No. 2007-TS-01263. III. QUESTION CERTIFIED We hereby certify the following determinative question of law to the Supreme Court of Mississippi:

Whether a solvent-c

arrier’s insurance policy, which provi des an “other-insurance” clause stating it is in excess to any other primary insurance, must be exhausted under Mississippi Code Annotated § 83-23-No. 06-60498

6 1 23, ahead of MIGA’s statutory coverage o f the insolvent-carrier’s primary policy.
This court disclaims any intention or desire that the Supreme Court of Mississippi confine its reply tothe precise form or scope ofthe question certified. The answer provided by the Supreme Court of Mississippi will determine the remaining issue on appeal here. The record and copies of the parties’ briefs are transmitted herewith. This panel retains cognizance ofthe appeal ofthis case pending response from the Supreme Court of Mississippi, and this court hereby CERTIFIES the question posed above. QUESTION CERTIFIED.