Case Name: UNITED STATES FIDELITY AND GUARANTY COMPANY v. Dorothy FERGUSON
Court: Mississippi Supreme Court
Jurisdiction: Mississippi
Decision Date: 1997-07-31
Citations: 698 So. 2d 77
Docket Number: No. 94-CA-01283-SCT
Parties: UNITED STATES FIDELITY AND GUARANTY COMPANY v. Dorothy FERGUSON.
Judges: Before SULLIVAN, P.J., and McRAE and JAMES L. ROBERTS, Jr., JJ.
Reporter: Southern Reporter, Second Series
Volume: 698
Pages: 77–84

Head Matter:
UNITED STATES FIDELITY AND GUARANTY COMPANY v. Dorothy FERGUSON.
No. 94-CA-01283-SCT.
Supreme Court of Mississippi.
July 31, 1997.
Marc A. Biggers, Lonnie D. Bailey, Up-shaw Williams Biggers Pages & Kruger, Greenwood, for Appellant.
John Booth Farese, Farese Farese & Farese, Ashland, for Appellee.
Before SULLIVAN, P.J., and McRAE and JAMES L. ROBERTS, Jr., JJ.

Opinion:
SULLIVAN, Presiding Justice,
for the Court:
¶ 1. Dorothy Ferguson suffered over $100,-000 in damages while riding as a passenger in a vehicle negligently hit by an underin-sured driver. The negligent driver only had $25,000 in liability insurance coverage. Mrs. Ferguson demanded that her insurance carrier, United States Fidelity and Guaranty Company (USF & G), aggregate her uninsured motorist bodily injury coverage on her three cars. USF & G refused. The Lafayette County Circuit Court granted Mrs. Ferguson's summary judgment motion, finding that she was entitled to the aggregate amount. USF & G appeals to this Court.
STATEMENT OF THE FACTS
¶ 2. On July 18,1993, Dorothy Ferguson, a passenger in her Cadillac Seville, was hit by a vehicle driven by Marzee Sipes. The accident occurred in Pontotoc County. Sipes's vehicle was insured by Allstate with a $25,-000 limit of liability. Allstate paid the $25,-000 limit of Sipes's coverage to the Fergu-sons. However, Mrs. Ferguson suffered more than $100,000 in bodily damages.
¶ 3. At the time of the accident, Dorothy and Reid Ferguson had three vehicles — the Cadillac, a GMC truck, and a Pontiac Fire-bird — insured under one USF & G policy with a $25,000 limit of liability for Uninsured Motorists Bodily Injury (UMBI) on each vehicle with USF & G. On October 11, 1993, Mrs. Ferguson wrote to USF & G demanding the aggregation of the UMBI coverage for the three cars, totaling $75,000. The letter also stated that Mrs. Ferguson would accept the $25,000 from Allstate and $52,000 from USF & G to settle her claims. Based upon their interpretation of In re Koestler, 608 So.2d 1258 (Miss.1992), USF & G maintained that they were not required to stack the three UMBI coverages, because Mrs. Ferguson's policy contained an unambiguous anti-stacking clause, and the total uninsured motorist coverage was greater than the statutory minimum of $10,000 per car. USF & G calculated that it owed Mrs. Ferguson $30,000 in uninsured motorist coverage ($10,-000 per vehicle times 3 vehicles) less the credit offset of Allstate's $25,000 payment, for a total $5,000. USF & G waived its potential subrogation rights against Marzee Sipes, allowing Mrs. Ferguson to release Allstate and Sipes. USF & G paid Mrs. Ferguson $5,000.
¶ 4. Mrs. Ferguson has been insured by USF & G for a number of years. In July, 1991, Mrs. Ferguson insured the Cadillac Seville with USF & G. The premium for $25,000 of UMBI coverage on the Cadillac was $22 per six months, renewable every January 10th and July 10th. In July of 1992, the premium was raised to $45. On January 10, 1993, the Fergusons were charged a single $45 premium to cover two cars with $25,000 in UMBI coverage. However, the policy charged separate premiums for each car for all other types of coverage included in the policy. Within the six month period between January 10 and July 10, 1993, the Ferguson family added a third car to the policy. The Ferguson family paid a separate premium for each car's liability and uninsured motorist property damage, but one premium of $45 for all three ears for $25,000 UMBI coverage.
¶ 5. On February 4, 1994, Mrs. Ferguson filed a complaint for declaratory judgment in Lafayette County Circuit Court. Mrs. Ferguson alleged that USF & G had previously paid stacked uninsured motorist coverage and should not be allowed to unilaterally change its policy without notifying the insured. Even if USF & G was entitled to limit stacking, Mrs. Ferguson claimed that she should receive $45,000, which represents $25,000 for the involved ear, plus $10,000 for each of the two uninvolved cars. With credit set-off from the $25,000 Allstate payment, Mrs. Ferguson claimed that USF & G owed her $20,000.
¶ 6. After discovery, both parties moved for summary judgment. On December 6, 1994, Judge Kenneth Coleman heard oral arguments from both sides. Judge Coleman rendered a bench opinion granting Mrs. Ferguson's motion for summary judgment and denying USF & G's motion. On December 10, 1994, the lower court entered a nunc pro tune order granting Mrs. Ferguson's motion for summary judgment and ordering USF & G to pay Mrs. Ferguson $75,000 with credit for the $5,000 previously paid.
STATEMENT OF THE LAW
I.
WHETHER AN INSURED MAY AGGREGATE UMBI COVERAGE UNDER A POLICY INSURING MULTIPLE VEHICLES BUT FOR WHICH THE INSURED PAID ONLY ONE PREMIUM FOR UMBI COVERAGE?
¶ 7. This Court has endorsed "stacking" or aggregating uninsured motorist coverage of multiple policies since our decision in Harthcock v. State Farm, Mutual Automobile Insurance Co., 248 So.2d 456 (Miss.1971). In fact, stacking is so firmly imbedded in Mississippi uninsured motorist law that it "has become a positive gloss upon the Uninsured Motorist Act." Wickline v. U.S. Fidelity & Guar. Co., 530 So.2d 708, 714 (Miss.1988). However, up until now we have also consistently maintained that insurance companies and their insured are free to contractually limit stacking of uninsured motorist coverage, so long as the policy language is clear and unambiguous and the statutory minimum is upheld. Koestler, 608 So.2d at 1261, partially overruled by Nationwide Mut. Ins. Co. v. Garriga, 636 So.2d 658 (Miss.1994); State Farm Mutual Automobile Insurance Co. v. Kuehling, 475 So.2d 1159, 1162 (Miss.1985); State Farm Mutual Automobile Insurance Co. v. Talley, 329 So.2d 52, 54 (Miss.1976); Talbot v. State Farm Mutual Automobile Insurance Co., 291 So.2d 699, 701 (Miss.1974). "Over and above legally mandated mínimums, the parties have always remained free to agree as they wish. The Act but reinforces the point when it empowers the parties to contract for coverage 'over the minimum requirement.' " Koestler, 608 So.2d at 1263. We still will not interfere with the right of the insurer and insured to contract for the amount of uninsured motorist (UM) coverage that the insured wants to purchase or the amount or number of premiums that the insurer charges for that coverage, so long as the policy meets the minimum statutory requirements.
¶8. In previous cases before this Court, we have allowed aggregation of UM coverage despite anti-stacking clauses based upon ambiguity in the language of the policy or the fact that separate premiums were charged for each car. Insurance companies have responded by rewriting their policy language and altering their premium scheme in order to circumvent our decisions. We now affirmatively declare that the public policy of this State mandates stacking of UM coverage for every vehicle covered under a policy, regardless of the number or amount of the premium(s) paid for UM coverage. We hereby hold that anti-stacking clauses as applied to UM coverage are against public policy, and contracts contrary to public policy are unenforceable. See Hertz Commercial Leasing Division v. Morrison, 567 So.2d 832, 834-35 (Miss.1990).
¶ 9. We point to the language of our earliest stacking ease to show that the intent of our uninsured motorist law is to provide the insured with adequate protection against injury caused by an uninsured motorist:
After a careful consideration of the authorities from other jurisdictions and the requirements of our statute, we hold that the uninsured motorists coverage of each policy of liability insurance is available to the injured insured until all sums which he shall be entitled to recover from the uninsured motorist have been recovered. The coverage is mandatory on the insurer and this undertaking cannot be diminished by a provision in the policy. We find no words in the statute indicating that one policy providing minimum coverage is all the statute requires. The statute requiring the coverage does not say how much uninsured motorists coverage shall be provided for each accident or each vehicle or each uninsured motorist. It requires each policy to provide the minimum coverage....
Harthcock, 248 So.2d at 461-62. More recently, this Court reiterated its positive stand in favor of stacking:
Stacking is firmly imbedded in our uninsured motorist law. The sort of stacking sought here, i.e., stacking multiple coverages within a single policy, has been mandated. As with other types of stacking, the rationale offered is that multiple premiums are paid and multiple (stacked) coverages should be available. However, what is important is the fact that stacking has become a positive gloss upon our Uninsured Motorist Act.
Uninsured motorist coverage is designed to provide innocent injured motorists a means to recover all sums to which they are entitled from an uninsured motorist. The statute is to be liberally construed so as to achieve compensation.
Unlike other jurisdictions, such as Alabama, Minnesota and Montana, which have legislatively mandated that stacking is contrary to public policy, stacking is retained in Mississippi as a "positive gloss" of our UM statute.
Harris v. Magee, 573 So.2d at 658-55 (Miss.1990) (citations omitted).
¶ 10. To say that an insured may contract with his insurance company to limit stacking is disingenuous. Insurance contracts essentially are contracts of adhesion. The insured has only two choices in "negotiating" the terms of his policy — he may accept the terms offered by his insurance company, or he may reject them and go to a different insurance company. When the entire insurance industry writes its policies to preclude stacking of UM coverage, attempting to circumvent ease law and defeat public policy, the insured is denied any choice whatsoever. This Court has previously recognized the need to protect insureds because of their uneven bargaining power in dealing with insurance companies:
It is a matter almost of common knowledge that a very small percentage of policy holders are actually cognizant of the provisions of their policies and many of them are ignorant of the names of the companies issuing the said policies. The policies are prepared by the experts of the companies, they are highly technical in their phraseology, they are complicated and voluminous and in their numerous conditions and stipulations furnishing what may be veritable traps for the unwary. Courts, while zealous to uphold legal contracts, should not sacrifice the spirit to the letter nor should they be slow to aid the confiding and innocent.
Andrew Jackson Life Insurance Co. v. Williams, 566 So.2d 1172, 1188-89 (Miss.1990) (citations omitted).
¶ 11. Mrs. Ferguson paid a premium to cover three ears with UMBI coverage. That she paid only one premium, the same premium charged regardless of the number of cars covered, does not diminish the effect of a premium being paid for UMBI coverage.
Any language attempting to limit an insurer's liability must fail when it deprives the insured of benefits for which a premium was paid.... [Rjecovery cannot be limited by an insurer for benefits for which a premium is paid by an insured, notwithstanding clear and unambiguous language of attempted limitation by the insurer.
Government Employees Insurance Co. v. Brown, 446 So.2d 1002, 1006 (Miss.1984). USF & G cannot deprive Mrs. Ferguson of the benefits under her policy for which a premium was paid, even though a separate premium was not paid for each car covered. The circuit court was correct in finding that Mrs. Ferguson was entitled to recover the full aggregate amount of UMBI coverage under her policy, totaling $75,000, with credit for the $5,000 previously paid.
II.
WHETHER, UNDER THE MISSISSIPPI UNINSURED MOTORIST ACT, MISS. CODE ANN. § 83-11-101, ET SEQ., THE PRACTICE OF AGGREGATION OF UNINSURED MOTORIST COVERAGES VIOLATES THE STATUTORY PROHIBITION OF § 83-11-101(1) AGAINST AN INSURANCE COMPANY AFFORDING UNINSURED MOTORIST COVERAGE IN EXCESS OF THE AMOUNT OF LIABILITY COVERAGE PROVIDED BY THE POLICY?
¶ 12. USF & G contends that Mrs. Ferguson may not aggregate her UMBI coverage to recover benefits in excess of $25,000, because she has only $25,000 in liability coverage. In other words, their argument is that an insured may not carry uninsured motorist coverage in excess of her liability coverage. USF & G points to the language of Miss.Code Ann. § 83-11-101(1) in support of their argument. The pertinent part of the statute reads as follows:
[H]owever, at the option of the insured, the uninsured motorist limits may be increased to limits not to exceed those provided in the policy of bodily injury liability insurance of the insured or such lesser limits as the insured elects to carry over the minimum requirements set forth by this section.
Miss.Code Ann. § 83-11-101(1). We do not interpret this language as preventing an insured from recovering the aggregate of his uninsured motorist coverage where it exceeds the amount of his liability coverage limit. Instead, we have held that the statutory minimum is "that amount of coverage that the insured elects up to the amount of liability coverage purchased." Garriga, 636 So.2d at 659. In other words, § 83-11-101(1) authorizes the insured to demand UM coverage up to the amount of his liability coverage limits. Nothing in the statute precludes an insured and insurer from contractually agreeing to a larger amount of UM coverage. Here, USF & G and the Fergu-sons contracted for $25,000 in UMBI coverage on each of their three ears covered under the policy. Mississippi's statutory scheme does not prevent Mrs. Ferguson from recovering the full $75,000 aggregate amount of her UMBI coverage.
III.
WHETHER USF & G IS ENTITLED TO AN OFFSET CREDIT FOR AMOUNTS PAID BY THE NEGLIGENT UNDERINSURED MOTORIST'S LIABILITY INSURANCE CARRIER?
¶ 13. The circuit court refused to allow USF & G a $25,000 credit for the amount paid by Allstate to Mrs. Ferguson. USF & G contends that the lower court's decision was against this Court's ruling in State Farm Mutual Auto. Insurance Co. v. Kuehling, 475 So.2d 1159 (Miss.1985). In Kuehling, we upheld an offset clause, finding that the uninsured motorist statute does not prohibit an insurance company from offsetting UM benefits by any amount paid by the tortfeasor's carrier. Id. at 1163. "The insurance company is bound to pay only that amount which constitutes the difference between policy limits available under an insured's own policy and that amount received from one underin-sured." Id.
¶ 14. Mrs. Ferguson argues that since she suffered damages in excess of the total of both Sipes's liability coverage and the aggregate of her own UMBI coverage, then USF & G is not entitled to an offset. She asserts that such an offset does not make the victim whole and is therefore against public policy.
¶ 15. In Kuehling, the insured only incurred damages in the amount of $11,382.90, while receiving $10,000 from the tortfeasor's insurance carrier, $5000 in medical benefits from her own insurance company, and another $10,000 from her insurance company for underinsured motorist coverage. Id. at 1160. Based in part upon the fact that Ms. Kuehl-ing had already received $25,000 for only $11,382.90 in proven damages, this Court held that Ms. Kuehling was not entitled to any further recovery from her insurance carrier in the form of uninsured motorist aggregate coverage. Id. at 1163. However, we did not limit the rule in Kuehling to cases in which the amount of proven damages is less than the total amount of coverage available. Id. In fact, we have since applied Kuehling to cases similar to this one in which allowing the offset has prevented the injured insured from receiving full compensation for his injuries. Miller v. Allstate Insurance Co., 631 So.2d 789, 791 (Miss.1994); Dixie Insurance Co. v. State Farm Mutual Auto. Insurance Co., 614 So.2d 918, 922-23 (Miss.1992); Brown v. Maryland Casualty Co., 521 So.2d 854, 857 (Miss.1987).
¶ 16. The purpose of uninsured motorist coverage is to provide protection for the insured to the extent that the underin-sured tortfeasor cannot pay. It is not against public policy to allow an insurance company to maintain an offset clause to recover that portion of damages for which the tortfeasor is insured. The circuit court erred in refusing to allow the offset of $25,000 in this case.
CONCLUSION
¶ 17. Based upon the sound economic benefits of allowing stacking and the lack of bargaining power of the insured, we announce a new public policy against anti-stacking provisions in insurance contracts in this State as applied to UM coverage. We will no longer permit insurance companies to circumvent our decisions and defeat public policy by denying insureds their full aggregate UM coverage for which they pay a premium. Regardless of the number of premiums paid or the amount of the premium(s), we will allow stacking of uninsured motorist coverage for all cars covered under insurance policies for UM coverage. The circuit court properly held that Mrs. Ferguson was entitled to the full aggregate amount of her UMBI coverage from USF & G, totaling $75,000 minus the $5,000 already paid to her. However, the court erred in refusing to allow a $25,000 credit in favor of USF & G for the amount that Mrs. Ferguson recovered from Allstate. We therefore hold that USF & G is responsible for paying Mrs. Ferguson the remaining amount of $45,000.
¶ 18. AFFIRMED IN PART; REVERSED AND RENDERED IN PART.
PRATHER, P.J., and PITTMAN, BANKS, McRAE and JAMES L. ROBERTS, Jr., JJ., concur.
SMITH, J., concurs in result only.
DAN LEE, C.J., specially concurs with separate written opinion.
MILLS, J., not participating.
. The Fergusons also had $2,000 in medical pay coverage. The $52,000 represents the stacked $75,000 minus the $25,000 paid by Allstate plus the $2,000 in med pay.