United Services Auto. Ass'n v. Stewart
| Docket Number: | 2004-CA-01540-SCT | |
| Supreme Court: | Opinion Link Opinion Date: 06-09-2005 Opinion Author: Carlson, J. Holding: Reversed and Remanded |
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| Additional Case Information: |
Topic: Insurance - Uninsured/Underinsured motorist coverage - Set-off - Made whole rule Judge(s) Concurring: Smith, C.J., Waller and Cobb, P.JJ., Dickinson and Randolph, JJ. Non Participating Judge(s): Diaz and Graves, JJ. Dissenting Author : Easley, J. Procedural History: Summary Judgment Nature of the Case: CIVIL - INSURANCE |
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| Trial Court: |
Date of Trial Judgment: 07-26-2004 Appealed from: Forrest County Chancery Court Judge: Johnny Lee Williams Disposition: Grant of summary judgment in favor of the Plaintiffs. Case Number: 04-0039-GNW |
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| Party Name: | Attorney Name: | |||
| Appellant: | United Services Automobile Association |
GERALD LEE KUCIA |
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| Appellee: | Deborah C. Stewart, Individually and on Behalf of Other Wrongful Death Beneficiaries of Robert Earl Stewart, Jr. | JAY MAX KILPATRICK |
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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 - Uninsured/Underinsured motorist coverage - Set-off - Made whole rule |
| Summary of the Facts: | Robert Stewart was killed while operating his motorcycle in Hattiesburg, Forrest County. In a later-filed complaint, Deborah Stewart, individually and on behalf of other wrongful death beneficiaries of Robert, alleged that Joseph Rowell’s negligent operation of his motor vehicle was the sole proximate cause of the accident and Robert’s death. Prior to his death, Robert had contracted with USAA to provide his automobile insurance. Under this policy, USAA provided insurance coverage for five vehicles for the period from April 14, 2002, to October 14, 2002. Each vehicle had uninsured/underinsured motorists coverage in the amount of $10,000. USAA acknowledged that there was stacked UM/UIM coverage in the total amount of $50,000, but asserted that it was entitled to a set-off in the amount of the liability coverage under the Rowell insurance policy. Rowell was a minor who had coverage under a State Farm Insurance Company policy during the relevant time period, based on his parents’ automobile policy which provided for liability coverage in the maximum amount of $25,000. Deborah filed a Complaint for Declaratory Judgment in the Chancery Court of the First Judicial District of Hinds County, arguing that USAA was not entitled to any “set-off” amount pursuant to the insurance policy purchased by Robert inasmuch as Deborah would not be “made whole” for Robert’s death by the payment of the UM/UIM benefits in the amount of $50,000. Upon timely motion by USAA, Deborah’s case was transferred to the Forrest County Chancery Court. After USAA answered the complaint, Deborah filed a motion for summary judgment. USAA also filed a motion for summary judgment. The court granted Deborah’s motion, and denied USAA’s motion. USAA appeals. |
| Summary of Opinion Analysis: | Based on the stacked UM/UIM coverage available, USAA, pursuant to the policy provisions, tendered to Deborah the amount of $50,000, minus a “set off” of $25,000 based on the liability coverage provided under Rowell’s insurance policy. Deborah refused USAA’s tender of payment, arguing that the $50,000 available in UM/UIM benefits from USAA and the $25,000 available from the at-fault driver did not reflect the true present value of Robert’s lost income. The chancellor held that USAA would typically be entitled to a set-off on most of the UM claims made under its policies but because this was a catastrophic situation involving the death of a gainfully employed 45 year-old male who made approximately $25,000 per year, the set-off asserted by USAA was not enforceable until Deborah, as the insured, was made whole. The “made whole” rule is the general principle that an insurer is not entitled to equitable subrogation until the insured has been fully compensated. In rendering his decision, the chancellor relied on Hare v. State, 733 So. 2d 277 (Miss. 1999) instead of Wise v. United Services Auto. Ass’n, 861 So.2d 308 (Miss. 2003) and its predecessor cases. Hare was a subrogation case. While Hare stands for the proposition that the “made whole” rule may be appropriately applied to certain subrogation cases, Hare did not overrule the long line of UM/UIM cases, many of which were discussed in Wise, which was decided more than four years after Hare. Wise was not a subrogation case, and neither is today’s case. There can be no doubt that Deborah will not be made whole by the $50,000 UM/UIM benefits and the $25,000 liability coverage from the at-fault driver. However, in many UM/UIM cases, it is virtually impossible for the injured insured(s) to be made whole. Therefore, USAA is entitled to a set-off of $25,000, based on the liability coverage provided under the Rowell insurance policy. |
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