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Wise, et al v. United Services Automobile Association, 861 So. 2d 308 (Miss. 2003) (rehearing denied on December 31, 2003)
The Mississippi Supreme Court has adopted a new standard for determining whether an underinsured motorist (“UIM”) claim exists where the tortfeasor’s policy is a single limit policy and there are multiple persons injured.
On October 11, 1996 Joseph Wise and his wife, Charlene, were struck by a pickup driven by Alfred Larry Aswell and owned by Stephen Bostic. Both Joseph and Charlene suffered severe physical and emotional injuries as a result of this accident. Just prior to the accident, both Aswell and Bostic had been patrons at the former Ramada Inn Coliseum bar, where the gentlemen’s bar tab totaled 19 beers. At the time of the accident, Aswell had been driving Botic’s truck for several months.
Joseph Wise was a named insured on an insurance policy issued by USAA, which insured three (3) separate vehicles with uninsured motorist bodily injury limits of $100,000 per person and $200,000 per accident. Aswell, as a permissive driver, was insured under Bostic’s policy with USF&G;, which provided a single liability limit of $300,000. A single-limit liability policy is exactly as it sounds, there is no “per person” limit applicable, only one limit is available regardless if 1 or 10 persons are injured.
The Wises filed suit against Bostic, Aswell, Aswell’s employer, People’s Security Life Insurance Company, Inc. (the owner of the Ramada Coliseum bar), and JMH Operating Company, Inc. and American General Hospitality, Inc., who were both operators of the bar. The Wises settled their claim against Bostic for the full amount of his $300,000 single liability limit. Claims were also settled against Aswell’s employer for $4,000–although Aswell and his employer had contended Aswell was not acting in the course and scope of his employment at the time the Wises were struck.
The Wises also subsequently settled their claims against the “bar defendants,” which settlement was governed by a confidentiality agreement. In spite of the confidentiality agreement, the Wises informed USAA that the amount of that settlement exceeded USAA’s UIM coverage of $600,000 per accident. The Wises, notwithstanding the settlement, contended that they had not been fully compensated for their injuries and continued to seek the $300,000 in underinsured motorist benefits from USAA ($600,000 per accident limits offset by the tortfeasor’s $300,000 liability limits).
USAA filed a summary judgment motion arguing that: 1) the Wises did not qualify for UIM limits because the tortfeasor’s single liability limit was equal to the “person person” limits available to each insured; and 2) if the Wises had received a settlement amount in excess of USAA’s $600,000 per accident limit, then nothing was due or owing from USAA. Their claim centered around the non-duplication provision under the USAA’s policy, which allows USAA an offset regardless of whether the Wises had been fully compensated for their injuries. The trial court granted summary judgment in favor of USAA, holding there was no UM/UIM coverage available to the Wises.
The Wises appealed on the issue of whether the “per person” limit or the “per accident” limit applied in determining if there was an underinsured motor vehicle where the accident involved multiple claims under one policy. The Wises had argued that summary judgment was improperly granted to USAA on the basis that the tortfeasor vehicle was not underinsured by comparing the liability limit of the tortfeasor’s policy with the “per person” limit of each insured’s UM coverage.
Relying heavily on North Carolina jurisprudence, the Court held that Bostic’s single liability limit of $300,000 was equivalent to the $600,000 “per accident” limit of the Wises’ USAA policy, and therefore, the Wises were entitled to UIM benefits. Therefore, where the tortfeasor’s policy is a single limit policy–not subject to any lesser amount “per person” injured–the determination of whether a UIM claim exists will be made by comparing the single liability limit to the “per accident” limit where more than one person is injured.
After determining that a valid UIM claim existed in favor of the Wises, the Court then looked to USAA’s offset clause, which allowed it to offset its UM payments by any judgments and settlements paid to the insureds. Here, the Wises had admitted to receiving greater than $600,000 through settlements with other parties. Enforcing this broad offset clause, the Court determined that USAA was not liable for any UIM benefits, and that the trial court had not erred in entering summary judgment on the contract claim. Because the Court affirmed summary judgment on the contract claim, the same result was reached on the bad faith claims filed by the insureds against USAA and dismissed by the trial court.