Miss. Ins. Guar. Ass'n v. Miss. Workers' Comp. Individual Self-insurer Guar. Ass'n
| Docket Number: | 2010-CA-01615-SCT Linked Case(s): 2010-CA-01615-SCT |
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| Oral Argument: | 12-07-2011 | |
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| Supreme Court: | Opinion Link Opinion Date: 04-19-2012 Opinion Author: Dickinson, P.J. Holding: Reversed and Rendered |
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| Additional Case Information: |
Topic: Insurance - Self-insured employers - Insolvent insurers - Section 83-23-115(a) - Covered claims - Section 83-23-109(f) - Claimant - Section 83-23-109(c) - Unpaid claims - Reimbursement - Novation Judge(s) Concurring: Waller, C.J., Carlson, P.J., Randolph, Lamar, Chandler and King, JJ. Dissenting Author : Pierce, J. Dissent Joined By : Kitchens, J. Procedural History: Summary Judgment Nature of the Case: CIVIL - INSURANCE |
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| Trial Court: |
Date of Trial Judgment: 09-22-2010 Appealed from: Madison County Circuit Court Judge: William E. Chapman, III Disposition: Granted summary judgment to the Appellee. |
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| Party Name: | Attorney Name: | Brief(s) Available: | ||
| Appellant: | Mississippi Insurance Guaranty Association |
JAN F. GADOW
JAMES D. HOLLAND |
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| Appellee: | Mississippi Workers' Compensation Individual Self-insurer Guaranty | A. SPENCER GILBERT, III |
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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 - Self-insured employers - Insolvent insurers - Section 83-23-115(a) - Covered claims - Section 83-23-109(f) - Claimant - Section 83-23-109(c) - Unpaid claims - Reimbursement - Novation |
| Summary of the Facts: | After Bobby Warren was injured on the job, his self-insured employer, B.C. Rogers Poultry, Inc., paid $225,000 in workers’ compensation benefits and then turned the claim over to its excess insurance carrier, Reliance National Indemnity Company. Reliance paid $129,205.73 in benefits but then became insolvent, requiring Rogers again to assume responsibility for the claim. Rogers paid an additional $167,419.53, but then it became insolvent and ceased payments, prompting the Mississippi Workers’ Compensation Self-Insurers Guaranty Association to step in and pay Warren’s claim. After paying benefits exceeding $100,000, SIGA suggested that the Mississippi Insurance Guaranty Association consider stepping into Reliance’s shoes and pay the amount Reliance should have paid, effectively reimbursing SIGA. MIGA refused, so SIGA filed suit. Meanwhile, Warren sued the other driver from the accident for personal injuries and collected more than $4 million from uninsured motorist carriers. SIGA filed a motion for summary judgment, which the trial court granted, holding that the Reliance excess insurance policy was “direct insurance” and that SIGA had a “covered claim.” The trial court also found that SIGA’s claim could not be offset by the amount recovered by Warren under the UM policies. MIGA appeals. |
| Summary of Opinion Analysis: | Under section 83-23-115(a), MIGA is “obligated to the extent of the covered claims existing prior to the determination of insolvency . . . .” The statute further provides that “[i]n no event shall the association be obligated to a policyholder or claimant in an amount in excess of the obligation of the insolvent insurer under the policy from which the claim arises.” Section 83-23-109(f) defines “covered claim” as “an unpaid claim, including one of unearned premiums, which arises out of and is within the coverage and not in excess of the applicable limits of an insurance policy to which this articles applies issued by an insurer, if such insurer becomes an insolvent insurer . . .” Thus, to obligate MIGA to pay SIGA, SIGA must be a claimant or policyholder with an unpaid claim. SIGA argues that its payments to Warren – in satisfaction of its obligation to take over Rogers’s workers’ compensation obligations – are unpaid claims. MIGA, however, argues that SIGA cannot have an “unpaid claim,” because SIGA is not a “claimant” or “policyholder” under the statute. Section 83-23-109(c) defines “claimant” as “any insured making a first-party claim or any person instituting a liability claim . . . .” Here, Rogers was the named insured under the Reliance excess policy – not SIGA. However, SIGA argues that, because it was obligated to step into the shoes of Rogers, it also has a right to reimbursement under Rogers’s policy with Reliance as a claimant or policyholder; and since MIGA is obligated to step into Reliance’s shoes, MIGA should pay SIGA for payments made to Warren. MIGA’s purpose, though, is not achieved by ordering MIGA to reimburse SIGA, because doing so would not prevent financial losses to a claimant or policyholder. SIGA is not seeking money for Rogers (the actual claimant or policyholder); instead, it is seeking reimbursement for complying with its own statutory duties. Rogers – were it not insolvent – would have no right of reimbursement for SIGA’s payments to Warren; so SIGA has no right of reimbursement and no unpaid claim. And no statutory provision allows, or requires, one guaranty association to pay another. SIGA’s claim against MIGA is best characterized as an attempt at novation. Novation may occur where one debtor is substituted by another in a contract, which requires an express agreement or implied assent. Here, no evidence exists – and SIGA does not argue – that Rogers or Reliance expressly or implicitly assented to a novation. Thus, MIGA is entitled to judgment as a matter of law. |
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