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STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. JERRY DAUGHDRILL & HELEN B. DAUGHDRILL

JULY 24, 1985

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
v.
JERRY DAUGHDRILL & HELEN B. DAUGHDRILL



BEFORE PATTERSON, C.J., PRATHER & ROBERTSON, JJ.

PATTERSON, CHIEF JUSTICE, FOR THE COURT:

Mississippi Supreme Court Rule 46 *fn1 authorizes certification of unsettled substantive questions of Mississippi law from certain federal courts when the response will determine the litigation in the federal forum. Such procedure permits this Court to render a definitive opinion and provide a controlling precedent for the federal litigation on questions of substantive Mississippi law. *fn2

The Court of Appeals for the Fifth Circuit certified State Farm Mutual Automobile Ins. Co. v. Daughdrill, 702 F.2d 70 (5th Cir. April 4, 1983) to this Court under Rule 46 of the Mississippi Supreme Court Rules.

 The questions certified are:

 1. Does the Uninsured Motorist Act [Mississippi Code Annotated Sections 83-11-101, et seq. (Supp. 1982)] require that the uninsured motorist coverage provision of an automobile liability policy cover punitive damages that the insured would be legally entitled to collect from the uninsured motorist?

 2. Does the uninsured motorist endorsement of the subject policy require that the insurer pay any punitive damages assessed against the uninsured motorist, not to exceed the aggregated policy limits of coverage?

 The statement of facts prompting the certification follows:

 Helen and Jerry Daughdrill had two automobile policies of insurance issued by State Farm Mutual Automobile Insurance Company insuring their 1979 Aspen automobile. Under the Uninsured Motorist Endorsement of the first policy, the insureds were afforded bodily injury coverage in an amount not to exceed $25,000 per person, or $50,000 per accident, and property damage coverage in an amount not to exceed $5,000 per accident. The Uninsured Motorist Endorsement stated that State Farm would" pay damages for

 bodily injury and property damage an insured is legally entitled to collect from the owner or driver of an uninsured motor vehicle. ". . . While both policies would aggregate, or" stack, "the inclusion of the other policy here is not necessary for a resolution of the issue of coverage.

 On February 14, 1981, in Pascagoula, Mississippi, while driving the vehicle covered by the insurance policies, Helen B. Daughdrill was struck from the rear by an automobile owned and operated by an uninsured motorist, Audie Hacker. As a result of this accident, she suffered personal injuries as well as property damage to her vehicle.

 Subsequent investigation revealed that Audie Hacker (1) was legally intoxicated at the time of the accident and (2) was operating his vehicle without a valid drivers license due to a prior conviction for driving while under the influence of alcohol.

 After this accident, the Daughdrills demanded from State Farm both actual and punitive damages under the Uninsured Motorist Endorsement. State Farm offered to pay $2,000 as actual damages conditional on receiving a full release. That offer was refused by the Daughdrills, State Farm then filed its declaratory judgment action seeking a determination whether either the Uninsured Motorist Act or the subject policy required payment of punitive damages.

 702 F.2d at 70-71.

 The United States District Court for the Southern District of Mississippi rendered its memorandum opinion overruling State Farm's motion for summary judgment holding that under Anthony v. Frith & State Farm Mutual Ins. Co., 394 So.2d 867 (Miss. 1981), and Mississippi Code Annotated Section 83-11-101 (Supp. 1982), punitive damages were compensable under Mississippi's uninsured motorists insurance coverage.

 Meanwhile, Helen Daughdrill had filed a complaint against State Farm in the Circuit Court of Jackson County. On January 27, 1983, that Court entered an order of partial summary judgment in favor of the Daughdrills upon the issue

 of punitive damages, should any" be assessed by a jury against the uninsured motorist, Audie Hacker. "*fn3

 In Anthony v. Frith, supra, upon which the Federal Court relied, this Court decided an automobile liability policy which provided the insurer would pay all sums for which the insured became legally obligated because of injuries sustained by others included punitive damages awarded to a pedestrian who was struck by a vehicle driven by an insured while intoxicated. Additionally it held that an award of punitive damages pursuant to the provisions of a liability insurance policy did not violate the public policy of this state. The decision was based upon our ...


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