Uninsured motorists and sovereign immunity

Bad faith denial of insurance claims

Uninsured motorists coverage

On May 31, 2019, the Fifth Circuit Court of Appeals issued its opinion in McGlothin v. State Farm Mutual Insurance Company and addressed the question of whether Mississippi law required State Farm to pay an uninsured motorist claim when the driver of the other vehicle enjoyed immunity under the Mississippi Tort Claims Act (“MTCA”).

The facts in McGlothin.

In February 2016, a fireman with the Biloxi fire department rear-ended McGlothin’s vehicle. The fireman was acting in the course and scope of his employment with the fire department at the time of the accident.

The fireman was not, however, acting in reckless disregard of her safety and well-being. This was significant.

Under the MTCA, “a governmental entity and its employees acting within the course and scope of their employment or duties shall not be liable for any claim . . . arising out of any act or omission of an employee of a governmental entity engaged in the performance or execution of duties or activities relating to police or fire protection unless the employee acted in reckless disregard of the safety and well-being of any person not engaged in criminal activity at the time of injury.” See Miss. Code § 11-46-9(1)(c) (emphasis added).

McGlothin nevertheless took the position that her own uninsured motorist policy with State Farm should pay for her injuries.

Her claim brought into play two potentially conflicting statutes regarding uninsured motorist coverage.

The two uninsured motorist statutes.

Mississippi's tort of menace in civil suits

Insurance statutes

The first statute was Section 83-11-101, which requires automobile insurance companies “to pay the insured all sums which [the insured] shall be legally entitled to recover as damages for bodily injury or death from the owner or operator of an uninsured motor vehicle.”

Next was Section 83-11-103. That statute defines the term “uninsured motor vehicle” as including “a motor vehicle owned or operated by a person protected by immunity under the Mississippi Tort Claims Act.” This part of the definition was added by the Legislature in 2009.

It is also noteworthy that even when immunity is waived under the MTCA, an employee may be joined in an action against a governmental entity in a representative capacity if the act or omission complained of is one for which the governmental entity may be liable, but no employee shall be held personally liable for acts or omissions occurring within the course and scope of the employee’s duties.

McGlothin’s position.

McGlothin contended that although the City was immune under the MTCA (because the fireman had not acted in reckless disregard of her safety), the City’s vehicle was an “uninsured motor vehicle” under Section 83-11-103. Thus, she reasoned, State Farm should pay her claim under her uninsured motorist policy.

State Farm’s position.

To support its denial of coverage, State Farm relied upon the language in Section 83-11-101 that uninsured motorist coverage only applies to sums that the insured “shall be legally entitled to recover as damages for bodily injury or death from the owner or operator of an uninsured motor vehicle.”

Because the fireman and City were immune, State Farm reasoned that McGlothin was not “legally entitled to recover” damages from either of them. Thus, State Farm was not obligated to pay under the uninsured motorist policy.

The district court’s ruling.

Looking at both Sections 83-11-101 and 83-11-103, the district court found them to be in conflict. The court concluded that the latter was more specific and, thus, controlling. As a result, the district court ruled in favor of McGlothin.

The Fifth Circuit reverses.

Placing more emphasis on Section 83-11-101, the Court ruled that because the fireman and City were immune, McGlothin was not “legally entitled to recover” damages from them. Thus, the State Farm policy did not provide uninsured motorist coverage for the accident.

With respect to the question of whether Sections 83-11-101 and 83-11-103 were in conflict, the Fifth Circuit said “no”.

The Court gave as two examples of how the two statutes could be harmonized.

First, if the fireman had been acting in reckless disregard of McGlothin’s safety, then (i) the City’s vehicle would be an uninsured motor vehicle under Section 83-11-103 and (ii) McGlothin would be “legally entitled to recover” her damages from the City.

The second example involved a city employee who was not a fireman or police officer. If that person had caused the accident but had no insurance coverage, although the employee would not personally be liable, the City would be. Thus, McGlothin would have been entitled to uninsured motorist benefits.

Thus, the Fifth Circuit reversed the district court and ruled in favor of State Farm.

Did the Fifth Circuit miss the hint?

As noted above, the Mississippi Legislature amended the definition of “uninsured motor vehicle” in 2009 to include “a motor vehicle owned or operated by a person protected by immunity under the Mississippi Tort Claims Act.” Prior to that, the definition had not changed since 1979. So, why the change?

Let us use the two examples that the Fifth Circuit used – – the fireman that does act in reckless disregard and the city employee who is neither a fireman nor police officer.

The Fifth Circuit says in both examples, McGlothin would have had an uninsured motorist claim under Section 83-11-101 because she would have been “legally entitled to recover” in both situations. In both examples, immunity would have been waived.

That was already the law prior to the 2009 amendment to Section 83-11-103, was it not? Yet, under the Fifth Circuit’s analysis, the 2009 amendment did not change anything. Based on the Court’s ruling, McGlothin’s rights would have been the same both before and after the 2009 amendment.

So, why did the Legislature amend Section 83-11-103 in 2009? What was the change intended to accomplish?

The logical answer is that the Legislature intended to expand U.M. coverage by doing so.

Under the Fifth Circuit analysis, McGlothin could only recover in situations where immunity had been waived. But, the 2009 amendment applies to vehicles owned or operated by a person “protected by immunity.”

In both examples given by the Fifth Circuit, immunity had been waived, so the owner or operator was not “protected by immunity.”

It is my opinion that the 2009 amendment was intended to allow an injured party to recover U.M. benefits when injured by someone who was otherwise “protected by immunity” under the MCTA – – that is, someone for whom immunity had not been waived.

“Under the rules of statutory construction, we are loathe to find any part of a statute meaningless.” Harris v. State, 99 So.3d 169, 173 (Miss. 2012).

That appears to be what the Fifth Circuit did with respect to the 2009 amendment.

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