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Lyons v. Direct General Insurance Co.

Supreme Court of Mississippi, En Banc

February 13, 2014

MACHON LYONS
v.
DIRECT GENERAL INSURANCE COMPANY OF MISSISSIPPI

COURT fro WHICH APPEALED: MONROE COUNTY CIRCUIT COURT. DATE OF JUDGMENT: 05/27/2011. TRIAL JUDGE: HON. JAMES LAMAR ROBERTS, JR.

THE JUDGMENT OF THE COURT OF APPEALS IS AFFIRMED. THE JUDGMENT OF THE MONROE COUNTY CIRCUIT COURT IS REVERSED AND THE CASE IS REMANDED.

FOR APPELLANT: LANCE L. STEVENS.

FOR APPELLEE: WALKER REECE GIBSON, MICHAEL WAYNE BAXTER, ANDY LOWRY.

DICKINSON, PRESIDING JUSTICE. LAMAR, KITCHENS, CHANDLER, PIERCE AND KING, JJ., CONCUR. COLEMAN, J., DISSENTS WITH SEPARATE WRITTEN OPINION JOINED BY RANDOLPH, P.J. WALLER, C.J., NOT PARTICIPATING.

OPINION

ON WRIT OF CERTIORARI

NATURE OF THE CASE: CIVIL - INSURANCE

DICKINSON, PRESIDING JUSTICE.

¶1. An insurance company denied an injured passenger's personal-injury claim against the driver because its policy excluded any coverage for the person who was driving, and who was also the tortfeasor. The circuit court granted the insurance company summary judgment. But because - to the extent of statutorily required liability coverage - the policy exclusion violates Mississippi law, we reverse in part.

Page 888

FACTS AND PROCEDURAL HISTORY

¶2. Machon Lyons suffered severe injuries in an single-car automobile accident. The accident occurred when a Chevrolet Lumina operated by Roderick Holliday -- in which Lyons was a passenger -- left the road and collided with a tree. As a result, Lyons obtained a default judgment of $72,500 against Holliday.

¶3. Holliday's mother, Daisy Lang, insured the Chevrolet Lumina through Direct General Insurance Company of Mississippi. Lang's policy included a provision specifically excluding Holliday from any coverage under the policy. Accordingly, Direct denied coverage for the judgment.

¶4. Lyons sought a declaratory judgment, asking the Circuit Court of Monroe County to hold that Lang's policy covered the judgment against Holliday. Lyons acknowledged the policy exclusion, but argued that Lang's policy covered the judgment against Holliday because Mississippi law [1] requires minimum-liability coverage for all permissive drivers, and because Lang's insurance card - provided to Lang by Direct General for use as evidence of coverage - failed to mention any permissive-driver exclusions. This, according to Lyons, created an ambiguity that should be resolved in favor of the injured party.

¶5. The circuit court granted summary judgment in favor of Direct, finding that the policy clearly and specifically excluded coverage of Holliday. Lyons appealed.

¶6. The Mississippi Court of Appeals reversed,[2] finding that Mississippi Code Section 63-15-4(2)(a) requires liability insurance for all vehicles operated in Mississippi and that Mississippi Code Section 63-15-43 requires that the liability insurance policy " [s]hall pay on behalf of the named insured and any other person, as insured, using any such motor vehicle or motor vehicles with the express or implied permission of such named insured. . . ." [3] Accordingly, the court held that an insured's policy must cover all permissive drivers, rendering the named-driver exclusion void up to the minimum coverage limits.[4] Although the Court of Appeals reached the right result, it cited as its authority the incorrect statute, so we granted certiorari.

ANALYSIS

¶7. In its petition for certiorari, Direct argues that the Court of Appeals erred because Section 63-15-43 does not establish the requirements for minimum mandatory liability coverage. Rather, Direct argues that Section 63-15-3(j) provides the minimum requirements for mandatory liability insurance and, because that section lacks any requirement for coverage of all permissive drivers, its named-driver exclusion - which unambiguously excludes Holliday as a covered driver - is valid under Mississippi law.

¶8. Mississippi law requires liability insurance for every motor vehicle operated within the state:

Every motor vehicle operated in this state shall have an insurance card maintained in the motor vehicle as proof of liability insurance that is in compliance with the liability limits required by Section 63-15-3(j). The insured parties shall be ...

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