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Bailey v. Federated Rural Electric Insurance Exchange

United States District Court, N.D. Mississippi, Oxford Division

September 26, 2019

BILL M. BAILEY PLAINTIFF
v.
FEDERATED RURAL ELECTRIC INSURANCE EXCHANGE DEFENDANT

          ORDER

          MICHAEL P. MILLS, UNITED STATES DISTRICT JUDGE

         This cause comes before the court on the competing motions of plaintiff Bill Bailey and defendant Federated Rural Electric Insurance Exchange (“Federated”) for summary judgment, pursuant to Fed.R.Civ.P. 56. The court, having considered the memoranda and submissions of the parties, concludes that defendant’s motion should be granted and that plaintiff’s motion should be denied.

         This is an uninsured motorist case involving an important issue of Mississippi law which, during the pendency of summary judgment briefing, was resolved adversely to plaintiff’s position by the Fifth Circuit. In McGlothin v. State Farm Mut. Ins. Co., 925 F.3d 741, 748 (5th Cir. 2019), the Fifth Circuit held, under facts very similar to those here, that a plaintiff was not entitled to recover UM benefits arising out of an accident in which he was injured by a Biloxi fireman. In so concluding, the Fifth Circuit emphasized that, since the parties stipulated that the fireman had not acted with “reckless disregard” within the meaning of the Mississippi Tort Claims Act (“MTCA”), the plaintiff was not “legally entitled to recover” benefits from the driver or owner of the uninsured vehicle, and, thus, was not entitled to recover uninsured motorist benefits either. See Miss. Code Ann. § 11-46-9(1)(c)(requiring that the plaintiff demonstrate “reckless disregard” in cases involving law enforcement defendants). This ruling is very helpful to defendant in this case since the alleged tortfeasor here, a Lafayette County Sheriff’s Deputy, was found by a Mississippi state court to have not acted with “reckless disregard” so as to subject him (or his employer) to liability under the MTCA. [Defendant’s Exhibit B at 3].

         The factual scenarios in this case and in McGlothin appear to be virtually identical, so much so that plaintiff has conceded that the Fifth Circuit’s opinion defeats his statutory construction argument in this case. [Sur-rebuttal brief at 2]. In spite of this concession, plaintiff has not completely admitted defeat in this case, since he also seeks recovery based upon alleged ambiguities in the specific language of the UM policy in this case. Plaintiff maintains that these arguments survive McGlothin, writing that:

4. McGlothin has nothing to do with the issue of ambiguity of the underlying policy raised by Plaintiff. McGlothin does not address the issue of whether the policy in this case is ambiguous, such that it must be construed against Defendant.
5. As pointed out in Plaintiff’s Memorandum Brief in support of his Motion for Partial Summary Judgment, an insurance policy is ambiguous where it is susceptible to two or more reasonable meanings. Miss. Farm Bureau Cas. Ins. Co. v. Britt, 826 So.2d 1261, 1265 (Miss. 2002). If the policy is ambiguous, it must be construed in favor of the insured and in favor of extending coverage. United States Fid. & Guar. Co. v. Omnibank, 812 So.2d 196, 198 (Miss. 2002) (citing Nationwide Mut. Ins. Co. v. Garriga, 636 So.2d 658, 662 (Miss. 1994)).
6. The policy in this case provides for coverage in this case as follows: “Uninsured motor vehicle” means a land motor vehicle or trailer * * * Owned or operated by a person protected by immunity under the Mississippi Tort Claims Act, if the “insured” has exhausted all administrative remedies under that Act. (Federated Policy, Exhibit “F” at p. 11).
7. However, in another section of the policy, the policy provides that the insured must be “legally entitled to recover” from the owner or driver of an “uninsured motor vehicle” in order to be entitled to coverage.
8. As argued in Plaintiff’s Motion for Partial Summary Judgment, Plaintiff contends these provisions can be harmonized to extend coverage. The provisions clearly implicate coverage when the insured is injured by the negligence of a driver protected from liability for ordinary negligence under the Mississippi Tort Claims Act. However, even if they are not read to provide coverage, the two provisions at least render the policy ambiguous.
9. There would be no reason whatsoever for the policy to define “uninsured motor vehicle” to include an automobile protected by the Mississippi Tort Claims Act unless there was coverage for accidents caused by such immune drivers.
10. Even if McGlothin becomes the law, and the Mississippi Uninsured Motorist Act does not compel coverage, the policy in this case is at least ambiguous in this regard. Because the policy is ambiguous as to whether there is coverage, the policy should be strictly construed against Defendant and in favor of Plaintiff. Based on such a construction, and regardless of the outcome of McGlothin, the Court should deny Defendant’s Motion for Summary Judgment and grant Plaintiff’s Motion for Summary Judgment.

[sur-rebuttal brief at 2-3].

         Plaintiff’s argument is lacking in supportive precedent (outside of generalized principles of contract construction), and, more importantly, it flies in the face of the Fifth Circuit’s reasoning in McGlothin. This is because, in McGlothin, the Fifth Circuit directly refuted plaintiff’s argument that “[t]here would be no reason whatsoever for the policy to define ‘uninsured motor vehicle’ to include an automobile protected by the Mississippi Tort Claims Act unless there was coverage for accidents caused by such immune drivers.” Indeed, the alleged inconsistencies of which plaintiff complains are also found in the UM statutes themselves, and, as discussed below, the Fifth Circuit found in McGlothin that there were, in fact, situations where the allegedly contradictory statutory provisions could each be given effect. Given this finding by the Fifth Circuit, it is unclear why these factual scenarios would not likewise render virtually identical policy provisions internally consistent.

         In issuing its holding in McGlothin, the Fifth Circuit reversed a ruling by Judge Guirola which had found that a 2009 amendment to Mississippi’s UM statute which re-defined an “uninsured motor vehicle” as, inter alia, “a vehicle owned or operated by a person protected by immunity under the MTCA” created a statutory ambiguity which needed to be resolved in favor of the insured. See McGlothin v. State Farm Mut. Ins. Co., 297 F.Supp. 3d 635');">297 F.Supp. 3d 635, 638 (S.D.Miss. 2018), citing Miss. Code. Ann. § 83-11-103(c)(vi). Judge Guirola found that, since the Legislature had amended the UM statute to specifically define an “uninsured motor vehicle” as including one operated by an individual with MTCA immunity, that specific statutory ...


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