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

Clerk
No. 06-60498

2

I. STYLE OF THE CASE

The style of the case in which this certification is made is National Union

Fire Insurance Company v. Mississippi Insurance Guaranty Association, No. 06-

60498 in the United States Court of Appeals for 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

of the obligations of the 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 reached an agreement to

settle Wright’s claim against Dr. Mettetal. MIGA immediately undertook review

of Wright’s action against Dr. Orr and provided a defense. That action has been
No. 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 responsible for 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 of state law which 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 ANN. § 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 excess
No. 06-60498

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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 policies on behalf of Dr. Mettetal, the alleged joint tortfeasor. The

parties concede Cole settles this issue. (After hearing oral argument on both

issues,this court required supplemental briefing to address the effect of Cole and

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-requirementissue. 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’”. Id. at 953 (emphasis omitted). While

NUFIC urges this court to read Caldwell as determinative of the issue at hand,

we cannot do so. First, the excess provision in the Caldwell policy is worded

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 not
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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 Gauze, the West Virginia Supreme

Court held an exhaustion requirement identical to that of Mississippi’s requires

all other solvent-carrier insurance be exhausted before looking to the state’s

insurance-guaranty association. Id. at 334. The facts in Gauze are nearly

identical to this case; indeed, the excess-carrier policy at issue was the exact

NUFIC policy atissue here. The case provides no guidance, however, on how the

Supreme Court of Mississippi would rule and therefore does notinform 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 MISS. R. APP. 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: William 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-carrier’s insurance policy, which

provides an “other-insurance” clause stating it is in

excess to any other primary insurance, must be

exhausted under Mississippi Code Annotated § 83-23-
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123, ahead of MIGA’s statutory coverage of the

insolvent-carrier’s primary policy.

This court disclaims any intention or desire that the Supreme Court of

Mississippi confine its reply to the precise form or scope of the 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 of the appeal of this case pending response

from the Supreme Court of Mississippi, and this court hereby CERTIFIES the

question posed above.

QUESTION CERTIFIED.