Alma McCoy v. South Cent Bell Telph Co ( 1994 )

IN THE SUPREME COURT OF MISSISSIPPI
NO. 94-CT-00355-SCT
ALMA MCCOY, ADMINISTRATRIX OF THE ESTATE OF EARNEST SELBY MCCOY
v.
SOUTH CENTRAL BELL TELEPHONE COMPANY
ON PETITION FOR WRIT OF CERTIORARI
DATE OF JUDGMENT: 3/25/94
TRIAL JUDGE: HON. THOMAS J. GARDNER, III
COURT FROM WHICH APPEALED: PRENTISS COUNTY CIRCUIT COURT
ATTORNEYS FOR APPELLANT: WILLIAM C. WALKER, JR.
RONALD D. MICHAEL
ATTORNEYS FOR APPELLEE: JOHN C. HENEGAN
THOMAS B. ALEXANDER
WILLIAM M. GAGE
NATURE OF THE CASE: CIVIL - INSURANCE
DISPOSITION: AFFIRMED - 11/14/96
MOTION FOR REHEARING FILED: 12/4/96
MANDATE ISSUED: 2/6/97
EN BANC.
SMITH, JUSTICE, FOR THE COURT:
¶1. This matter comes before the Court, en banc, after granting petitioner's application for writ of
certiorari. We are presented with a question of first impression of whether a self-insurer is required to
comply with the uninsured motorist statute. The trial court granted summary judgment after finding
that a self-insured employer was not required to provide uninsured motorist coverage and the Court
of Appeals affirmed. This Court finds that a certificate of self-insurance is not a commercial contract
of insurance subject to the provisions of the Uninsured Motorist Act.
¶2. Petitioner's decedent, Earnest McCoy, was employed by South Central Bell (SCB) and was
driving a vehicle owned by his employer when that vehicle was struck by an uninsured motorist, Paul
Earl Hill. Earnest McCoy died as a result of the collision. SCB operates as a self-insurer pursuant to
Miss. Code Ann. § 63-15-53 and complies with the Mississippi Motor Vehicle Safety Law by
maintaining a certificate of self-insurance pursuant to Miss. Code Ann. § 63-15-37(4).
¶3. SCB paid workers compensation benefits to the McCoy estate but refused to pay uninsured
motorist benefits. The administratrix filed a civil action in the Circuit Court of Prentiss County
seeking damages for the decedent's suffering and punitive damages for the alleged bad faith of SCB in
denying the claim. SCB moved for summary judgment on grounds that it was not required to provide
uninsured motorist coverage due to its compliance with the Mississippi Motor Vehicle Safety
Responsibility Law as a self-insurer. The trial court agreed and dismissed the claim.
¶4. The administratrix appealed and the Court of Appeals unanimously rejected the claim that SCB
was statutorily required to provide uninsured motorist coverage unless it affirmatively declined such
coverage in writing as set forth in the Uninsured Motorist Act. The appellate court held that SCB
was not a commercial insurer to whom the act applied. We agree.
A. The Motor Vehicle Safety Responsibility Act
¶5. Miss Code Ann. § 63-15-53 provides, in relevant part, that "[a]ny person in whose name more
than 25 motor vehicles are licensed may qualify as a self-insurer by obtaining a certificate of self-
insurance." The certificate is issued by the Mississippi Department of Public Safety when it is satisfied
that the applicant possesses the continuing financial ability to pay judgments obtained against it
resulting from the use of the applicant's vehicles. Miss. Code Ann. § 63-15-37(4) provides that proof
of financial responsibility, with respect to the operation of motor vehicles by persons who are not the
owner of the vehicles, may be accomplished by filing a certificate of self-insurance "supplemented by
an agreement by the self-insurer that, with respect to accidents occurring while the certificate is in
force, he will pay the same judgments and in the same amounts that an insurer would have been
obligated to pay under an owner's motor vehicle liability policy if it had issued such a policy to said
self-insurer."
¶6. However, Miss. Code Ann. § 63-15-43(5)(b) provides that such policy shall not insure "any
liability on account of bodily injury to or death of any employee of the insured while engaged in the
employment . . . of the insured . . . if benefits therefor are either payable or required to be provided
under any workmen's compensation law."
B. The Uninsured Motorist Act
¶7. Miss. Code Ann. § 83-11-101(1) provides that any automobile liability insurance policy issued or
delivered after January 1, 1967, must contain "an endorsement or provisions undertaking to pay the
insured all sums which he shall be legally entitled to recover as damages for bodily injury or death
from the owner or operator of an uninsured motor vehicle." This section further provides that the
required coverage shall not be applicable where the named insured rejects such coverage in writing.
¶8. The Court of Appeals correctly found that the uninsured motorist statute applied only to
commercial liability insurance companies and that SCB was not a commercial insurer. There is no
statutory obligation for a self-insurer to provide uninsured motorist coverage to itself, much less
decline such coverage in writing.
C. Other Jurisdictions
¶9. Some jurisdictions have held that self-insurers must provide UM coverage on policy grounds of
public protection or because the state had adopted a compulsory, no-fault insurance statute or both.
South Carolina Elec. and Gas Co. v. Jeter, 343 S.E.2d 47 (S.C. App. 1986); Twyman v. Robinson,
342 S.E.2d 313 (Ga. 1986); Modesta v. Southeastern Pennsylvania Transp. Authority, 469 A.2d
1019 (Pa. 1983); Allstate Insurance Co. v. Shaw, 418 N.E.2d 388 (N.Y. 1980). All of the above
cases involved the provision of UM benefits to non-employees and may be distinguished on that
basis.
¶10. The Petitioner cited only one factually similar case (a telephone company employee injured by
uninsured motorist while driving company car) where the court implied UM coverage as a matter of
law in the minimum amounts specified by the state's UM statute. Anderson v. Northwestern Bell
Telephone Co., 443 N.W.2d 546 (Minn. App. 1989). The Minnesota appellate court implied UM
coverage to a self-insurer based on the state's no-fault insurance act but also acknowledged the
statutory distinction between a certificate of self-insurance and an insurance "policy," which is a
contract between an insurer and its customer. Id. at 549. This case may also be distinguished in that
Mississippi does not have a no-fault, compulsory liability statute which might compel a similar result.
¶11. There is also a line of decisions of foreign courts which have held that self-insured employers are
not required to provide UM coverage to their employees. Florida courts have expressly ruled that
self-insured companies are not required to provide UM coverage to their employees or their lessees.
Diversified Services, Inc. v. Avila, 606 So. 2d 364, 365-66 (Fla. 1992); Lipof v. Florida Power &
Light Co., 558 So. 2d 1067 (Fla. Dist. Ct. App. 1990), aff'd 596 So. 2d 1005 (Fla. 1992). The
Supreme Court of Oklahoma held that one's status as a self-insurer for purposes of financial
responsibility did not require it to provide UM coverage pursuant to that state's UM statute.
McSorley v. Hertz Corp., 885 P.2d 1343 (Okla. 1994). The Oklahoma court found that the "fact that
a self-insurer is financially responsible for its own vehicles or their operators does not transform it
into an insurer as contemplated by the insurance code." Id. at 1350.
¶12. The Supreme Court of Arizona has held that self-insurers are not traditional insurance carriers
required to provided UM coverage and are therefore not required to provide such benefits to their
employees. Mountain States Telephone & Telegraph Co. v. Aetna Cas. & Sur. Co., 568 P.2d 1123
(Ariz. App. 1977). The Supreme Court of Connecticut has held that statutorily-mandated UM
coverage is not an independent source of recovery in addition to workmen's compensation benefits.
Bouley v. City of Norwich, 610 A.2d 1245 (Conn. 1992).
¶13. In a case where an employee was killed while operating his employer's truck, the Supreme Court
of Ohio rejected the argument that mandatory UM coverage should be interpreted so as to apply to
self-insurers. Grange Mut. Cas. Co. v. Refiners Transport and Terminal Corp., 487 N.E.2d 310
(Ohio 1986). The court stated that "[a]lthough public policy may well favor mandatory uninsured
motorist protection for employees of self-insured employers, such a declaration must emanate from
Ohio's General Assembly." Id. at 314.
D. Prior Treatment by this Court
¶14. This Court has previously addressed the interaction of the Motor Vehicle Safety Responsibility
Act and the Uninsured Motorist Act (within the context of minimum amounts of coverage) and found
them to be independent statutes. Spradlin v. State Farm Mut. Auto. Ins. Co., 650 So. 2d 1383
(Miss. 1995). The Court examined the two statutes in terms of whether the applicability of the
minimum amount of coverage set forth in the Motor Vehicle Responsibility Act was conditioned or
restricted by the language of the Uninsured Motorist Act and held that "[t]he UM statute merely uses
the Motor Vehicle Safety Act as a guide to the statutory minimum amount of coverage required." Id.
at 1388.
¶15. Further, this Court has held that, for purposes of sovereign immunity, self-insurance is not a
contract for insurance within the meaning of Miss. Code Ann. § 83-5-5 but is instead a risk-sharing
pool insufficient to waive sovereign immunity as would a policy of general liability insurance.
Morgan v. City of Ruleville, 627 So. 2d 275, 281 (Miss. 1993). This Court has also held that, even
where an employer provides UM coverage, workers' compensation is the exclusive remedy for work-
related injuries against an employer. Medders v. U.S. Fidelity and Guar. Co., 623 So. 2d 979, 984
(Miss. 1993).
¶16. This Court holds that a certificate of self-insurance is not a commercial insurance policy for
purposes of the Uninsured Motorist Act; therefore, the decision of the Court of Appeals is affirmed.
¶17. JUDGMENT AFFIRMED.
LEE, C.J., PITTMAN, BANKS, ROBERTS AND MILLS, JJ., CONCUR. McRAE, J.,
DISSENTS WITH SEPARATE WRITTEN OPINION JOINED BY SULLIVAN, P.J.
PRATHER, P.J., NOT PARTICIPATING.
McRAE, JUSTICE, DISSENTING:
¶18. I disagree with the majority's holding that a certificate of self-insurance is not a commercial
contract of insurance subject to the provisions of the Uninsured Motorist Act. Instead, I would find
that a certificate of self-insurance substitutes for a liability insurance policy and therefore would
include the Uninsured Motorist Act. Because the self-insured entity in this case made no express
provision of uninsured motorist coverage for its employees, statutory minimum coverage should be
imposed as a matter of law. Accordingly, I dissent.
¶19. While this is a case of first impression before this Court, other jurisdictions have considered the
question. One state found no basis for treating a self-insuring entity differently from any other insurer
with regard to its responsibilities under the law. See Anderson v. Northwestern Bell Telephone Co.,
443 N.W.2d 546, 548 (Minn. App. 1989); State Farm Mutual Automobile Insurance Co. v.
Budget Rent-a-Car Systems, 359 N.W.2d 673, 676 (Minn. App. 1984). Another jurisdiction has
implied UM coverage on the part of self-insurers on public protection grounds that "self-insurance is
not a means by which self-insurers may avoid the claims of those individuals for whose protection the
insurance laws have been enacted." Modesta v. Southeastern Pennsylvania Transportation
Authority, 469 A.2d 1019, 1022 (Pa. 1983). Yet another state has found that a certificate of self-
insurance is substantial by equivalent to an insurance policy. Twyman v. Robinson, 342 S.E.2d 313,
315 (Ga. 1986).
¶20. Mississippi's Uninsured Motorist Act provides that automobile liability policies and contracts
issued or delivered after January 1, 1967 shall contain UM coverage unless the named insured has
specifically rejected the coverage by written notice. Miss. Code Ann. § 83-11-101. The statute
further provides that the limits of such coverage shall be no less than those set forth in the Motor
Vehicle Safety Responsibility Law. Miss. Code Ann. § 63-15-43 requires that motor vehicle liability
policies be subject to a limit of not less than $10,000 per person and $20,000 per accident for bodily
injury or death.
¶21. Additionally, the Motor Vehicle Safety Responsibility Law provides that someone in whose
name more than twenty five vehicles are licensed may apply for a certificate of self-insurance
pursuant to Miss. Code Ann. § 63-15-33. This certificate supplies the proof of financial responsibility
required by Miss. Code Ann. § 63-15-11. This alternate method of giving proof of financial
responsibility is authorized by Miss. Code Ann. § 63-15-37, which provides that proof of financial
responsibility, when required, may be given by filing
a certificate of self-insurance as provided in section 63-15-53, supplemented by an agreement
that the self-insurer that, with respect to accidents occurring while the certificate is in force, he
will pay the same judgments and in the same amounts that an insurer would have been
obligated to pay under an owner's motor vehicle liability policy if it had issued such a policy to
said self-insurer.
Miss. Code Ann. § 63-15-37(4)(emphasis added).
¶22. It is reasonable to conclude that the legislature intended self-insurance to serve as substitute for
a liability insurance policy to the extent of statutory policy requirements and we so hold. Because
SCB's certificate of self-insurance does not expressly provide or reject UM coverage, such coverage
must be implied in the minimum amounts required by law. Accordingly, I dissent.
SULLIVAN, P.J., JOINS THIS OPINION.