The case involves an appeal regarding the handling of uninsured motorist (UM) benefits from two commercial automobile liability insurance policies following an accident caused by an uninsured motorist, Thomas Blalack. Albert L. East, IV, and Albert L. East, III, were involved in the accident, with Al sustaining significant injuries requiring multiple surgeries. Al and Bert East owned car dealerships insured by John Deere Insurance Company and United States Fidelity and Guaranty Company (USF&G), respectively. The John Deere policy covered 98 vehicles with a total of $1,960,000 in UM coverage, while the USF&G policy covered 583 vehicles with $14,575,000 in UM coverage, totaling $16,535,000 across both policies.
The central issue on appeal was whether the UM benefits should be pro-rated based on coverage limits or prioritized by policy. The court determined that the insurer of the vehicle involved in the accident (John Deere) was the primary insurer, and the identical 'other insurance' clauses in both policies established the order of payment without conflict. Consequently, the court found that the two policies should not be pro-rated. The Easts filed separate lawsuits against Blalack and both insurers for UM benefits, which were consolidated. The circuit court granted the Easts' motion for partial summary judgment to allow them to stack the UM coverage limits from both policies. The Supreme Court of Mississippi reversed and remanded the circuit court's decision. A motion for rehearing was filed and denied, with the final opinion modified on December 5, 2002.
John Deere filed a cross-motion for summary judgment, arguing that uninsured motorist benefits from its policy and USF&G's policy should be prorated on a co-primary basis for damages incurred by the Easts in an accident. USF&G countered with its own motion, claiming its policy provided excess coverage while John Deere's offered primary coverage. The circuit court favored John Deere, ruling that both policies should share coverage equally to address any judgment made in favor of the Easts. After a jury trial, Bert East was awarded $5,000, and Al East received $500,000, while Ella May East was awarded no damages for loss of consortium. Judgments were entered against both John Deere and USF&G, along with a default judgment against the uninsured motorist, Blalack. USF&G's motion for judgment notwithstanding the verdict was denied, as was the Easts' motion for a new trial or additur. The circuit court later issued an amended judgment, detailing the pro-rata distribution of the jury awards based on the coverage limits of both insurance policies. USF&G appealed the denial of its motion for JNOV, while the Easts sought post-judgment interest at 8% and a 15% statutory penalty. John Deere cross-appealed for the elimination of post-judgment interest or for USF&G to bear that cost. The court's decision on these matters centered on whether it erred in granting John Deere's counter motion for summary judgment and in prorating the damages between the two insurers. The circuit court determined that the 'other insurance' clauses in the policies conflicted, and enforcing them as written would result in no coverage for the plaintiffs. Both policies had identical pro-rata clauses indicating benefits should be prorated based on coverage limits.
In Mississippi, the primary insurer is the one for the owner of the vehicle involved in an accident, as established in precedent cases. Bert, a part owner of the Natchez dealership, was driving a vehicle owned by the dealership at the time of the accident. The Natchez dealership had a commercial automobile liability policy with John Deere, which covered the vehicle in question. Concurrently, USF&G insured the Jackson dealership and Al, but the vehicle involved was not owned by Jackson, meaning USF&G's liability would only arise if damages exceeded John Deere's coverage limits, which they did not.
The 'other insurance' clauses in both policies do not conflict but rather establish a payment priority, with John Deere's policy taking precedence since it covers the vehicle's owner. Legal precedent supports that the insurance policy for the vehicle's owner provides primary coverage. The dissenting opinion by Justice Diaz suggests that the case of Travelers Indem. Co. v. Chappell is distinguishable due to the nature of the policies involved. However, previous rulings have affirmed that the host driver's uninsured motorist insurer is considered primary.
The circuit court's grant of summary judgment to John Deere was found to be a reversible error, leading to the conclusion that USF&G's motion for summary judgment should have been granted. Consequently, the issue of statutory penalties against USF&G is rendered moot, and any post-judgment interest awarded will be the responsibility of John Deere, as USF&G succeeded in their appeal.
Longstanding Mississippi jurisprudence dictates that the insurance policy covering the owner of a vehicle involved in an accident is primary. As a result, the circuit court's judgment favoring John Deere is reversed, and the case is remanded for a new judgment solely against John Deere Insurance Company, with post-judgment interest assessed.
Justice Diaz dissents, arguing against the majority's decision that John Deere is the primary insurer. He highlights the frustration faced by Al and Bert, who pay a substantial amount for uninsured motorist coverage but are caught in a dispute between insurers regarding primary coverage. Diaz suggests that had they purchased coverage from a single insurer, the issue would not have arisen. He references a Florida Supreme Court case, emphasizing that insured individuals should not be delayed by insurer disputes. In his view, in situations where multiple policies exist, liability should be joint and several, with each insurer responsible for its full coverage limit, allowing for subrogation claims later.
The dissent points out that both Al and Bert have identical uninsured motorist policies, which present conflicting clauses. Diaz asserts that these policies should provide co-primary coverage since uninsured motorist policies are designed to cover individuals rather than vehicles. He emphasizes that the insured status of Al and Bert should ensure coverage under both policies regardless of their location or the vehicle in question, maintaining that the intent of the policies is to benefit them as named insureds.
The court has reversed and remanded a case for determining pro rata responsibilities among parties that would each provide primary coverage for a claim, as established in *Allstate Ins. Co. v. Chicago Ins. Co.*, which involved conflicting 'other insurance' clauses in two insurance policies. The ruling stated that such clauses are mutually repugnant and benefits must be prorated according to each policy's limits. In the current case, both John Deere and USF&G would have provided primary coverage independently.
The majority opinion cites *Travelers Indem. Co. v. Chappell*, determining that the insurer of the vehicle involved in an accident is the primary insurer. However, this case differs as it pertains to uninsured motorist policies, which cover individuals rather than vehicles, making it inappropriate to classify either policy as primary or secondary.
The majority also references *Dixie Ins. Co. v. State Farm Mut. Auto. Ins. Co.*, where the host driver's uninsured motorist policy was deemed primary. However, this case has distinct facts, including that both Al and Bert are named insureds under both policies, contrasting with the separate policies in *Dixie*. Additionally, the fault in the present case lies with the driver of an uninsured vehicle, unlike the negligence found in *Dixie*.
Consequently, Al and Bert, as named insureds, are entitled to coverage from both policies. This co-primary coverage is supported by precedents from other jurisdictions and is consistent with Mississippi's approach to prorating damages, as seen in *Allstate*. The opinion concludes that the uninsured motorist policies in this case provide co-primary protection for Al and Bert, and thus the trial court's decision should be affirmed.
