Miss. Ins. Guar. Ass'n. v. Cole
| Docket Number: | 2005-IA-02238-SCT Linked Case(s): 2005-IA-02238-SCT |
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| Supreme Court: | Opinion Link Opinion Date: 03-01-2007 Opinion Author: EASLEY, J. Holding: AFFIRMED AND REMANDED |
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| Additional Case Information: |
Topic: Insurance - Mississippi Insurance Guaranty Act - Exhaustion provision - Section 83-23-123(1) - Covered claim - Section 83-23-109(f) - Immunity of community hospital Judge(s) Concurring: SMITH, C.J., WALLER, P.J., DIAZ, CARLSON, DICKINSON AND RANDOLPH, JJ. Non Participating Judge(s): COBB, P.J., AND GRAVES, J. Procedural History: Summary Judgment Nature of the Case: CIVIL - INSURANCE |
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| Trial Court: |
Date of Trial Judgment: 11-10-2005 Appealed from: PIKE COUNTY CIRCUIT COURT Judge: Michael M. Taylor Disposition: Denied Appellant's Motion for Summary Judgment Case Number: 02-249-A |
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| Consolidated: Consolidated with 2005-IA-02246-SCT Southwest Mississippi Regional Medical Center v. Kyndall Cole, a Minor by and through Wendy Dillon as Next Friend and Natural Mother | ||
| Party Name: | Attorney Name: | |||
| Appellant: | MISSISSIPPI INSURANCE GUARANTY
ASSOCIATION |
CLIFFORD C. WHITNEY, III |
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| Appellee: | KYNDALL COLE, A MINOR, BY AND THROUGH WENDY DILLON AS NEXT FRIEND AND NATURAL MOTHER | T. MACK BRABHAM |
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Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
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| Topic: | Insurance - Mississippi Insurance Guaranty Act - Exhaustion provision - Section 83-23-123(1) - Covered claim - Section 83-23-109(f) - Immunity of community hospital |
| Summary of the Facts: | Wendy Dillon filed suit, individually and on behalf of her minor child, Kyndall Cole, for negligent care and treatment given to Dillon in the course of her pregnancy. Dillon filed suit against Dr. Dawn Sumrall, McComb OB-GYN Associates, and Southwest Mississippi Regional Medical Center. At the time Dillon filed suit, all three defendants had solvent insurance companies. When SMRMC’s insurer, Reciprocal of America, became insolvent, the Mississippi Insurance Guaranty Association assumed the defense of SMRMC. Dillon settled her claim against Sumrall and McComb OB-GYN for an amount in excess of $300,000, but less than the maximum insurance policy limits. As part of the settlement terms, Sumrall and McComb admitted no liability. These two defendants were dismissed from the lawsuit. Dillon filed a second amended complaint, which added MIGA as a defendant, and sought declaratory judgment against MIGA regarding coverage. MIGA and SMRMC filed separate motions for summary judgment. The court denied both motions. MIGA and SMRMC separately petitioned for interlocutory appeal. The Supreme Court granted both petitions. |
| Summary of Opinion Analysis: | Issue 1: Guaranty Act The Guaranty Act is, in part, a mechanism to provide payment of “covered claims” and to avoid delays in payments and financial loss to a claimant or policyholder in the event an insurer becomes insolvent. Section 83-23-123(1) of the Act provides that 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 policy, and any amount payable on a covered claim under this article shall be reduced by the amount of any recovery under such insurance policy. Pursuant to this statute, MIGA argues that any solvent insurance policy covering a claimed injury must be exhausted prior to seeking payment by MIGA and that any insurance proceeds provided to a claimant from a solvent insurance company should be credited against MIGA’s $300,000 statutory limit of liability on any claim. Dillon argues, however, that the Court need not reach the issue of the exhaustion provision of section 83-23-123, because Sumrall’s claim was not a “covered claim” because Sumrall’s insurer was solvent. Section 83-23-109(f) provides that a “covered claim” is an unpaid claim, with a few restrictions, that is issued by an insurer, if such insurer becomes an insolvent insurer and meets condition (1) or (2) of the definition. The clear and unambiguous key to the definition is that a “covered claim,” under the Guaranty Act, relates to circumstances involving a once-solvent insurer that becomes insolvent. The clear and unambiguous reading of the exhaustion provision states that a person who has a covered claim against an insurer under any insurance policy provision must exhaust his other rights under the policy. In addition, any amount paid by MIGA on that covered claim has to be reduced by the amount of recovery from the insurance policy. Applying the statutes to the facts, Dillon’s claim against Sumrall and McComb OBGYN clearly is not a covered claim. Sumrall and McComb OB-GYN’s insurance carrier remained solvent at all times, therefore, these defendants never had an insolvent insurer and thus failed to meet the definition of “covered claim.” Since Dillon’s claim against Sumrall and McComb OB-GYN is not a “covered claim,” she is not required to first exhaust her rights under such policy. Further, any recovery under such insurance policy is not reduced since the claim is not a “covered claim.” Therefore, MIGA cannot offset any of Dillon’s recovery from Sumrall and McComb OB-GYN’s insurance payments. Issue 2: Immunity SMRMC also requested the Court to determine whether it was entitled to immunity as a community hospital. The trial court acknowledged in its order that “SMRMC enjoys limited immunity under the Mississippi Torts Claims Act. Accordingly the liability, if any, of SMRMC for the negligence complained of is capped at $250,000.” Any liability award against MIGA and SMRMC has yet to be determined in the trial court. |
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