               IN THE UNITED STATES COURT OF APPEALS

                       FOR THE FIFTH CIRCUIT

                       _____________________

                            No. 95-60601
                          Summary Calendar
                       _____________________


     LYDIA BETH HUGHES PALMISANO, Individually, as Widow, Heir at
     Law and Statutory Beneficiary of Darby John Hughes,
     Deceased, and as Mother of Rebecca Rachelle Hughes,
     Deceased; and as Mother and Natural Guardian and Next Friend
     and duly appointed and acting General Guardian of the Person
     and Estate of Misty Lynn Hughes, a minor, individually, as
     Daughter, Heir at Law and Stuatory Beneficiary of Darby John
     Hughes, Deceased, and as sister, Heir at Law and Statutory
     Beneficiary of Rebecca Rachelle Hughes, Deceased; JENNIFER
     HUGHES HETRICK, Individually, as Daughter, Heir at Law and
     Statutory Beneficiary of Darby John Hughes, Deceased, and as
     Sister, Heir at Law and Statutory Beneficiary of Rebecca
     Rachelle Hughes, Deceased

                          Plaintiffs - Appellants

          v.

     AVIS RENT A CAR SYSTEMS, INC. ET AL

                          Defendants

     AVIS RENT A CAR SYSTEMS, INC.; P.V. HOLDING CORPORATION;
     PATHFINDER INSURANCE COMPANY

                          Defendants - Appellees

_________________________________________________________________

           Appeal from the United States District Court
             for the Southern District of Mississippi
                           (1:94CV303GR)
_________________________________________________________________
                          April 12, 1996
Before KING, SMITH, and BENAVIDES, Circuit Judges.
PER CURIAM:*

     Based on uninsured motorist ("UM") coverage, Lydia Beth

Hughes Palmisano and her two surviving daughters, Misty Lynn

Hughes and Jennifer Hughes Hetrick (collectively, the

"Claimants"), brought a claim against Avis Rent A Car System,

Inc., P.V. Holding Corporation, and Pathfinder Insurance Co.

(collectively "Avis") arising out of an automobile accident

resulting in the death of Darby John Hughes ("Mr. Hughes") and

Rebecca Rachelle Hughes, husband and daughter, respectively, of

Lydia Beth Hughes Palmisano.     The Claimants appeal the district

court's grant of summary judgment in favor of Avis and denial of

the Hugheses' motion to amend their complaint as moot.     We

affirm.



                            I.   BACKGROUND

     On July 2, 1992, Mr. Hughes entered into an agreement with

Avis for the rental of an automobile to drive to Florida from his

home in Mississippi with his wife and three daughters.     In the

rental agreement, Mr. Hughes was presented with four nonexclusive

insurance options--loss damage waiver, personal accident

insurance, personal effects protection, and additional liability

insurance.     The instructions "READ OTHER SIDE" were printed on

the agreement immediately under the heading for each option,


     *
          Pursuant to Local Rule 47.5, the court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in Local Rule
47.5.4.

                                   2
except the second, and detailed terms were printed on the back of

the page.   To indicate his choice with regard to each option, Mr.

Hughes initialed either a box labeled "I ACCEPT" or one labeled

"I DON'T ACCEPT."   The agreement reflects that Mr. Hughes chose

to accept the loss damage waiver but that he rejected personal

accident insurance, personal effects protection, and additional

liability insurance.

     According to the amended complaint filed by the Claimants,

Mr. Hughes and Rebecca Rachelle Hughes were killed on July 3,

1992, while riding in the automobile rented from Avis.   The

accident allegedly occurred as a result of a head-on collision

with an uninsured drunk driver.

     The Claimants filed suit against the driver of the other car

and Avis in the United States District Court for the Southern

District of Mississippi.   The Claimants brought suit against Avis

based on UM coverage because the other driver was an uninsured

motorist. Avis answered and then moved for summary judgment

contending that its agreement with Mr. Hughes was a bailment and

not an insurance agreement.   Holding that Avis was an insurer,

the district court denied Avis's motion.   In addition, the court

found that Avis--as an insurer--was required by Mississippi law

to furnish Mr. Hughes and his family with UM coverage.

     Avis moved for summary judgment once again, this time

contending that it was obligated to pay no more than $20,000 in

UM coverage--the statutory minimum--because Mr. Hughes had

rejected the additional liability insurance offered in the


                                  3
agreement.    The Claimants argued that Avis was obligated to

furnish $ 1,000,000 in UM coverage based on the amount of

additional liability coverage listed as an option in the

agreement.    In addition, the Claimants moved to amend their

complaint to allege that Avis did not give Mr. Hughes an

opportunity to purchase additional liability insurance.       The

district court granted Avis's motion for summary judgment and

denied as moot the Claimants' motion to amend.    The Claimants

appeal from this final order of the district court.



                               II. ANALYSIS

     A.     Summary Judgment

     We review the granting of summary judgment de novo, applying

the same criteria used by the district court in the first

instance.    Norman v. Apache Corp., 19 F.3d 1017, 1021 (5th Cir.

1994); Conkling v. Turner, 18 F.3d 1285, 1295 (5th Cir. 1994).

First, we consult the applicable law to ascertain the material

factual issues.    King v. Chide, 974 F.2d 653, 655-56 (5th Cir.

1992).    We then review the evidence bearing on those issues,

viewing the facts and inferences to be drawn therefrom in the

light most favorable to the nonmoving party.     Lemelle v.

Universal Mfg. Corp., 18 F.3d 1268, 1272 (5th Cir. 1994); FDIC v.

Dawson, 4 F.3d 1303, 1306 (5th Cir. 1993), cert. denied, 114 S.

Ct. 2673 (1994).    Summary judgment is proper "if the pleadings,

depositions, answers to interrogatories, and admissions on file,

together with the affidavits, if any, show that there is no


                                    4
genuine issue as to any material fact and that the moving party

is entitled to judgment as a matter of law."    Fed. R. Civ. P.

56(c).

     It is undisputed that the legal issues in this diversity

case must be decided under Mississippi law.     Exxon Corp. v.

Burglin, 4 F.3d 1294, 1298 (5th Cir. 1993).    The Claimants' cause

of action is based in the Mississippi Uninsured Motorists Act

("MUMA"), Miss. Code Ann. § 83-11-101(1) et seq., which provides,

in pertinent part:

          (1) No automobile liability insurance policy or
     contract shall be issued or delivered after January 1, 1967,
     unless it contains 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,
     within limits which shall be no less than those set forth in
     the Mississippi Motor Vehicle Safety Responsibility Law, as
     amended, under provisions approved by the commissioner of
     insurance; however, at the option of the insured, the
     uninsured motorist limits may be increased to limits not to
     exceed those provided in the policy of bodily injury
     liability insurance of the insured or such lesser limits as
     the insured elects to carry over the minimum requirement set
     forth by this section. The coverage herein required shall
     not be applicable where any insured named in the policy
     shall reject the coverage in writing . . . .

Miss. Code Ann. § 83-11-101 (emphasis added).    The purpose of

MUMA is to provide relief for "innocent insured motorists and

passengers injured as a result of the negligence of financially

irresponsible drivers".   Rampy v. State Farm Mut. Auto Ins. Co.,

278 So. 2d 428, 432 (Miss. 1973).    It is intended "to provide the

same protection to one injured by an uninsured motorist as that

individual would have if injured by a financially responsible

driver."   Lawler v. Government Employees Ins. Co., 569 So. 2d


                                 5
1151, 1153 (Miss. 1990).   "Carriers are commanded by [the]

statute to provide coverage up to the amount of liability

insurance purchased where the insured so desires."     Nationwide

Mut. Ins. Co. v. Garriga, 636 So. 2d 658, 665 (Miss. 1994).     In

order to compensate innocent insured motorists, the statute is to

be liberally construed.    Harris v. Magee, 573 So. 2d 646, 654

(Miss. 1990).

     Under Mississippi law, an insurer has a duty to explain UM

coverage to the insured "in order for the insured to have the

option to increase UM limits not to exceed the limits of the

policy."   Aetna Casualty & Sur. Co. v. Berry, No. 91-CA-00107-

SCT, 1996 WL 64756, *23 (Miss. Feb. 15, 1996).     Although "[a]n

insurer is not necessarily under a duty to recommend that the

insured exercise the option of obtaining UM coverage up to the

limits of the policy," Id., the insurer bears the burden of proof

to show that any rejection of uninsured motorist insurance was a

knowing and informed decision.    Atlanta Casualty Co. v. Payne,

603 So. 2d 343, 348 (Miss. 1992).

     The contested issue in this case is whether Mr. Hughes was

entitled to UM coverage in an amount greater than the minimum

amount of liability insurance prescribed by law.     The district

court determined that, after consciously considering his options,

Mr. Hughes rejected the additional $1,000,000 liability coverage

offered in the rental agreement.2     Nonetheless, pursuant to the

     2
          Mr. Hughes initialed the box marked "I ACCEPT," for the
loss damage waiver, and he initialed the box marked "I DON'T
ACCEPT," for additional liability insurance. The district court

                                  6
Mississippi Motor Vehicle Safety Responsibility Law, despite Mr.

Hughes's rejection of liability insurance, he was insured by Avis

at the minimum level of liability coverage allowed under

Mississippi law--$10,000 per person and $20,000 per occurrence.

Miss. Code Ann. §§ 63-15-31 & 43.    Avis does not deny that

Mississippi's UM coverage scheme was not explained to Mr. Hughes,

and that therefore, he was entitled to UM coverage in addition to

his liability coverage.   However, because Mr. Hughes chose not to

accept the additional liability coverage, Avis argues that his UM

coverage was limited to the $10,000/20,000 statutory minimum.

     Asserting that "high UM coverage is the intent and public

policy of the State," the Claimants contend that Mr. Hughes was

extended UM coverage in the amount of $1,000,000.    The heart of

the Claimants' argument is that, because the insurance agreement

did not contain a separate offer of UM coverage, the UM coverage

limits were merged with the $1,000,000 offer of additional

liability insurance.   They argue that, had Mr. Hughes been

informed of the connection between UM coverage and liability

insurance, he might have opted for the additional liability

insurance offered in the agreement.    Additionally, the Claimants

charge that the agreement itself was ambiguous.3    The district


notes that, "although not controlling in this case, the question
whether [Mr.] Hughes consciously considered his options might
have been a closer one had he made a blanket rejection of all his
options" rather than accepting the loss damage waiver and
rejecting the other three.
     3
          The Claimants argue that the lease agreement was
ambiguous because it included the statement," I will pay for
additional liability insurance if available . . . ." They

                                 7
court found the argument of ambiguity unpersuasive, as do we:

"The clear terms of the contract reflect that the additional

insurance was both offered to Hughes and that he rejected it."4

Moreover, we reject the Claimants' proposed merger of upper UM

coverage limits and liability options.

     The upper limit of UM coverage mandated by MUMA under an

insurance policy is governed by the actual level of liability

insurance provided under that policy--not the amount of liability

insurance that the insured might have chosen.   Miss. Code Ann. §

83-11-101.   Where, for example, an insured has contracted for

liability insurance in the amount of $1,000,000, he may choose to

carry up to $1,000,000 worth of UM coverage.5   Where he has opted


wonder, "How was Mr. Hughes to know if this $1,000,000.00
liability coverage was available or not?"
     4
          The Claimants also charge that Mr. Hughes exercised no
choice at all regarding the insurance options offered in the
lease agreement. They offer the affidavit of Jennifer Hughes
Moyer in support of this contention. Moyer attests that Avis
office personnel "gave my father the contract and showed him
where to initial several items and then where he was to sign,
which he did."
     Under Mississippi law, such extrinsic evidence may not be
considered when the contract is unambiguous, as in the case sub
judice. Sonat Exploration Co. v. Mann, 785 F.2d 1232, 1235 (5th
Cir. 1986) ("Under Mississippi law, . . . . parol evidence may
not be used in the interpretation of an unambiguous contract.");
Foreman v. Continental Casualty Co., 770 F.2d 487, 489 (5th Cir.
1985) (noting that, an insurance contract, "where clear and
unambiguous, must be construed exactly as written"); Weatherford
v. Martin, 418 So. 2d 777, 778 (Miss. 1982).
     5
          It should be noted that the statute does not prohibit
the insured from purchasing UM coverage in an amount greater than
the level of his liability insurance. "From the beginning, the
[Mississippi] legislature provided that the parties were free to
contract for coverage in excess of that mandated and that such
coverage was not governed by the act." Garriga, 636 So. 2d at
664-65 (overruling In re Koestler, 608 So. 2d 1258 (Miss. 1992),

                                 8
for $300,000 worth of liability insurance, he may choose to carry

up to $300,000 worth of UM coverage.    In any event, however, an

insured is guaranteed coverage in an amount no less than the

statutory minimum level of liability insurance.    Miss. Code Ann.

§§ 63-15-31 & 43.   Where the insurance agent has failed to

explain UM coverage to the insured, "damages should not be

awarded in an amount less than the statutory minimum for UM

coverage, $10,000, nor in an amount more than the limits of the

particular policy in question--i.e., no more than [the amount of

UM coverage] the insured could have opted for under the terms of

the policy.   Aetna Casualty & Sur. Co. v. Berry, No. 91-CA-00107-

SCT, 1996 WL 64756, at *23.    In the instant case, for purposes of

the statute, Mr. Hughes could not have opted for UM coverage in

an amount greater than the statutory minimum because he did not

accept liability coverage over the statutory minimum.

     Therefore, we find untenable the Claimants' conclusion that

Mr. Hughes was protected by UM coverage in the amount of

$1,000,000.   We find no support in Mississippi law to justify a

jump from the rule explicitly set forth in MUMA to the one

proposed by the Claimants.    The notion that Mississippi law

reflects a policy preference for "high" UM coverage per se is a

leap of logic not supported by MUMA or Mississippi caselaw.     To

require the insurance carrier to provide UM coverage in an amount

that dwarfs an insured's liability coverage is contrary to the


and holding that insurer cannot reduce, via workers' compensation
offset, amount of UM coverage chosen by insured up to "that
amount equal to the liability amount acquired").

                                  9
clear language of the statute.    Miss. Code Ann. § 83-11-101.     To

provide every innocent insured some level of protection against

injury inflicted by uninsured motorists is the public policy goal

of MUMA.    Rampy, 278 So. 2d at 432.   The amount of UM coverage

required by law is keyed to the amount of liability insurance

purchased because the level of protection mandated is not the

highest conceivable level of protection but rather the amount of

protection that the insured would enjoy "if injured by a

financially responsible driver."      Lawler, 569 So. 2d at 1153

(citations omitted).    There is an inescapable logical symmetry

inherent in extending to an insured in the form of UM coverage

the same amount of protection that he has elected to acquire for

the protection of those who might be injured at his hands.       We

conclude that under Mississippi law the amount of UM coverage

extended to Mr. Hughes through the Avis rental agreement was the

statutory minimum amount of coverage allowed--$20,000 per

accident.

     B.     Motion to Amend

     The decision to grant or deny a motion to amend is entrusted

to the sound discretion of the district court.      Norman v. Apache

Corp., 19 F.3d 1017, 1021 (5th Cir. 1994); Avatar Exploration,

Inc. v. Chevron, U.S.A., Inc., 933 F.2d 314, 320 (5th Cir. 1991).

This discretion, however, is limited by the Federal Rules of

Civil Procedure, which state that "leave shall be freely given

when justice so requires."    Fed. R. Civ. P. 15(a).   We have

stated that the district court's discretion does not permit


                                 10
denial of a motion to amend unless there is a substantial reason

to do so.   Dussouy v. Gulf Coast Inv. Corp., 660 F.2d 594, 598

(Former 5th Cir. 1981).

     Two reasons that we have recognized as valid in the past for

the denial of a motion to amend are untimeliness and futility.

E.g., Avatar Exploration, 933 F.2d at 320-21.   In the instant

case, the district court denied as moot the Claimants' motion to

amend their complaint to allege that Mr. Hughes was not given an

opportunity to purchase additional liability insurance.   The

court found that even if the Claimants were granted leave to

amend their complaint the outcome of the case would not change.

We agree and therefore, under the circumstances of this case we

conclude that it was not error for the district court to deny the

Claimants motion to amend.



                          III. CONCLUSION

     For the foregoing reasons, we AFFIRM the judgment of the

district court.




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