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J & W Foods Corp. v. State Farm Mutual Automobile Insurance Co.
May 14, 1998
J & W FOODS CORPORATION AND JERRIE LYNN KELLY HUGHES
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
DATE OF JUDGMENT: 01/24/96 TRIAL JUDGE: HON. JAMES E. GRAVES, JR. COURT FROM WHICH APPEALED: HINDS COUNTY CIRCUIT COURT
The opinion of the court was delivered by: McRAE, Justice
NATURE OF THE CASE: CIVIL - INSURANCE
DISPOSITION REVERSED AND REMANDED
MOTION FOR REHEARING FILED:
¶1. Before this Court is the question of whether the mother of a shareholder in a closely held corporation qualifies as an insured pursuant to an uninsured/underinsured motorist (UM/UIM) provision in an insurance policy where the corporation is the named insured. The record is insufficient to support judgment on the pleadings as granted by the county court and affirmed by the circuit court below. Further, because we take this opportunity to establish guidelines to be followed in interpreting policies like the one in the case sub judice, we reverse and remand.
¶2. The accident giving rise to this cause of action occurred on March 23, 1994, when Julia Kelly was fatally injured while riding in a vehicle being driven by Edna Edwards. Both parties agree that Edwards's negligence caused the accident. Edna Edwards was an underinsured motorist at the time of the collision. Prior to her death, Julia Kelly lived with her daughter and son-in-law, Jerrie Lynn Kelly Hughes and Wayne P. Hughes, at their residence.
¶3. Jerrie and Wayne Hughes own one hundred (100) percent of J & W Foods Corporation, a Subchapter S (closely held) corporation which operates a Dairy Queen store in Jackson, Mississippi. They are the sole officers of the corporation. The Hugheses reside at 2096 Monaco Street in Jackson. J & W Foods is also domiciled at 2096 Monaco Street in Jackson. The Hugheses own a 1991 GMC Pickup truck titled in the corporation's name and insured by State Farm Automobile Insurance Company for Automobile Liability and Uninsured and Underinsured Motorists Bodily Injury Liability Insurance. It is under this policy that Jerrie Hughes made a claim for underinsured motorist coverage based on her mother's death.
¶4. Section III of the policy, Uninsured Motor Vehicle Coverages, states that "We [State Farm] will pay damages for bodily injury an insured is legally entitled to collect from the owner or driver of an uninsured motor vehicle. The bodily injury must be caused by an accident arising out of the operation, maintenance or use of an uninsured motor vehicle." This section also defines an "insured" under the policy:
Who is an Insured - Coverages U and U1 Insured - means the person or persons covered by uninsured motor vehicle coverage.
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