                    IN THE SUPREME COURT OF MISSISSIPPI

                              NO. 2004-CA-01023-SCT

SHELTER MUTUAL INSURANCE COMPANY
AND SHELTER GENERAL INSURANCE
COMPANY

v.

GEORGE DALE, COMMISSIONER OF
INSURANCE, STATE OF MISSISSIPPI, AND
MISSISSIPPI DEPARTMENT OF INSURANCE


DATE OF JUDGMENT:                       04/19/2004
TRIAL JUDGE:                            HON. PATRICIA D. WISE
COURT FROM WHICH APPEALED:              HINDS COUNTY CHANCERY COURT
ATTORNEYS FOR APPELLANTS:               JOHN C. HENEGAN
                                        KAREN LIVINGSTON-WILSON
                                        PATRICK RYAN BECKETT
ATTORNEYS FOR APPELLEES:                PETER W. CLEVELAND
                                        MARY JO WOODS
NATURE OF THE CASE:                     CIVIL - STATE BOARDS AND AGENCIES
DISPOSITION:                            REVERSED AND REMANDED - 10/27/2005
MOTION FOR REHEARING FILED:
MANDATE ISSUED:

       BEFORE COBB, P.J., CARLSON AND DICKINSON, JJ.

       DICKINSON, JUSTICE, FOR THE COURT:

¶1.    This is a dispute over two proposed amendatory endorsements to automobile

insurance policies submitted by two insurance companies for approval by the State

Department of Insurance. The question presented is whether Mississippi law requires

automobile liability policies written in Mississippi to cover punitive damages awarded

against insureds.
                   FACTS AND BACKGROUND PROCEEDINGS

¶2.   On April 12, 2002, Shelter Mutual Insurance Company and Shelter General Insurance

Company (hereinafter collectively referred to as “Shelter”) requested approval by the

Mississippi Department of Insurance (“DOI”) of amendatory endorsements to their

respective Mississippi automobile insurance private passenger policies. The purpose of the

amendments was to exclude “any liability under the policies for damages assessed against

an insured in the form of punitive damages.”

¶3.   Although DOI Commissioner George Dale initially approved both amendatory

endorsements, he reversed his position and withdrew approval. In his March 21, 2003,

order, Commissioner Dale stated:

      The Mississippi Supreme Court has ruled that an automobile liability policy
      which provides the insurer will pay all sums which the insured becomes
      legally obligated includes coverage for punitive damage awards. Anthony v.
      Frith and State Farm Mutual Automobile Insurance Company, 394 So. 2d 867
      (Miss. 1981).

      Based upon the interpretation of Anthony v. Frith of Mississippi’s standard
      liability insurance statute, an Attorney General’s Opinion was issued
      explicitly stating that Mississippi law does not provide for the exclusion of
      punitive damages from insurance policies for automobile liability claims.
      Dale, Oct. 5, 2001, A.G. Op. #01-0660.


      It is the finding of the Commissioner that there is no statutory or legal basis
      to allow an exclusion of punitive damages from a standard automobile liability
      insurance policy. As there is no statutory or legal basis for such an exclusion,
      the Shelter Mutual Filing and Shelter General Filing violate Miss Code Ann.
      § 83-2-11 (11)(a).

¶4.   After requesting a hearing to appeal the withdrawal of approval, Shelter waived the

requirement of a hearing and unsuccessfully appealed to the Chancery Court of the First


                                               2
Judicial District of Hinds County. Affirming the Commissioner’s order in her April 19,

2004, order, Chancellor Patricia D. Wise held:

       The Court finds that the Commissioner’s Order in this case, based upon the
       Attorney General’s well reasoned Opinion and statutory analysis under
       Mississippi Supreme Court case law, was supported by substantial evidence
       and was neither arbitrary nor capricious.
       ...

       [T]he Court concludes that the language of Miss. Code Ann. § 63-15-43(2)(b),
       requiring coverage for “all sums the insured shall become legally obligated to
       pay as damages arising out of the ownership, maintenance or use of such
       motor vehicle,” is broad enough to be read as specifically including coverage
       for punitive damages.

¶5.    It is from this adverse chancery court ruling that Shelter now appeals to this Court.

                                        ANALYSIS

¶6.    While this Court gives deference to the decisions of an administrative agency, we will

not hesitate to reverse an agency’s decision found to be “(1) unsupported by substantial

evidence; (2) arbitrary or capricious; (3) beyond the power of the administrative agency to

make; or (4) in violation of some statutory or constitutional right of the complaining party.”

Am. Federated Life Ins. Co. v. Dale, 701 So.2d 809, 811 (Miss. 1997) (citing Miss.

Comm'n on Envtl. Quality v. Chickasaw County Bd. of Supervisors, 621 So.2d 1211, 1215

(Miss. 1993)).

¶7.    We begin our analysis by pointing out that the issue presented is not whether the

Legislature has the prerogative to require that automobile insurance policies written in

Mississippi cover awards of punitive damages, but rather whether it has actually done so.




                                              3
          Anthony v. Frith

¶8.       Commissioner Dale based his denial of the amendatory endorsements on our holding

in Anthony v. Frith. In that case, State Farm Mutual Automobile Insurance Company

refused to pay a punitive damage award against its insured, despite very general language

in its policy which provided that State Farm would pay “all sums which the insured shall

become legally obligated to pay.” This Court held that, under such policy terms, it was not

against public policy to require State Farm to pay punitive damages. Specifically, this Court

stated:

                 As to there being any public policy in this state against allowing
          recovery for punitive damages in a case as this under the terms of an insurance
          contract as set forth herein, however, we disagree with the trial court and find
          it was not against public policy to require the carrier to pay punitive damages.

Anthony v. Frith, 394 So. 2d 867, 868 (Miss. 1981). This Court did not hold that State

Farm was required by statute to cover punitive damages. Nor did it hold that an insurance

company is prohibited from excluding coverage for punitive damages. Indeed, then-Justice

Hawkins, the author of Anthony v. Frith, was later (as Chief Justice of the Court) to state:

                 In Anthony v. Frith we simply took the view that there is no public
          policy against an insurance policy by its language covering punitive damages.
          As the author of that opinion, I saw grave ethical problems which might
          confront a lawyer during trial defending an insured in the absence of clear
          language in the policy excluding punitive damages. Nothing in Anthony v.
          Frith implied that a liability insurance carrier was required to cover punitive
          damages along with compensatory damages, and in Old Sec. Cas. Ins. Co. v.
          Clemmer, 455 So. 2d 781 (Miss. 1984), we clearly held the policy could
          exclude punitive damages.




                                                 4
James W. Sessums Timber Co. v. McDaniel, 635 So. 2d 875, 883 (Miss. 1994) (Hawkins,

C.J., dissenting) (citation omitted). In Clemmer, cited by Chief Justice Hawkins, this Court

stated:

          We reaffirm our holding in Frith that an insurance company’s liability “for all
          damages arising from bodily injury” includes punitive damages. However,
          the extent or limit of that liability for punitive damages is governed by the
          agreement of the parties as reflected by the actual language in the policy of
          insurance.

455 So. 2d at 783.

¶9.       Clearly, this Court has not previously held that an insurance company is prohibited

from excluding coverage for punitive damages.

          Miss. Code Ann. § 63-15-43(2)(b)

¶10.      At the heart of the decision of the chancery court is the presumption that the language

of Miss. Code Ann. § 63-15-43(2)(b) requires coverage for punitive damages. The key

language of the statute provides:

          (2) Such owner's policy of liability insurance:
                                                ***
          (b) shall pay on behalf of the insured named therein and any other person, as
          insured, using any such motor vehicle or motor vehicles with the express or
          implied permission of such named insured, all sums which the insured shall
          become legally obligated to pay as damages arising out of the ownership,
          maintenance or use of such motor vehicle or motor vehicles within the United
          States of America or the Dominion of Canada, subject to limits exclusive of
          interest and costs, with respect to each such motor vehicle, as follows: ten
          thousand dollars ($10,000.00) because of bodily injury to or death of one (1)
          person in any one (1) accident and, subject to said limit for one (1) person,
          twenty thousand dollars ($20,000.00) because of bodily injury to or death of
          two (2) or more persons in any one (1) accident, and five thousand dollars
          ($5,000.00) because of injury to or destruction of property of others in any
          one (1) accident.



                                                 5
Miss. Code Ann. § 63-15-43(2)(b).1

¶11.   Within the same sentence, the statute requires the insurer to pay “all sums which the

insured shall become legally obligated to pay as damages . . . subject to limits, . . . as

follows: ten thousand dollars ($10,000.00) because of bodily injury to or death of one (1)

person . . , twenty thousand dollars ($20,000.00) because of bodily injury to or death of two

(2) or more persons . . , and five thousand dollars ($5,000.00) because of injury to or

destruction of property. . . .” Other than those placed on bodily injury, death and property,

there are no monetary limitations found within the statute which could reasonably be said

to apply to punitive damages.2 Therefore, either:

       (1) The statute mandates coverage for all kinds of damages (including punitive
       damages), with a specific express limit or cap only for bodily injury, death and
       property damage, and no limit or cap for punitive damages; or

       (2) The statute mandates coverage for all sums (including punitive damages), with
       a specific express limit or cap for bodily injury, death and property damage, and an
       implied, unstated limit or cap for punitive damages; or

       (3) The statute applies only to damages for bodily injury, death and property damage,
       which are the only kinds of damages specifically mentioned in the statute, and has
       no application to punitive damages.



       1
         During its 2005 regular session, the Legislature amended this chapter of the Mississippi
Code to increase the limits to $25,000 for death or injury to one person and $50,000 for death or
injury to two or more persons in one accident. 2005 Miss. Laws ch. 483.
       2
         The dissent states that, properly interpreted, “§ 63-15-43(2)(b) requires that Shelter cover
punitive damages in their automobile liability insurance policies.” The dissent further states, “The
statute specifically allows for the inclusion of punitive damages. . . .” We find no such provisions
within the statute. The dissent also says the Legislature’s “initial purpose” of its 2005 amendment
was “to increase the minimum coverage amounts for motor vehicle liability insurance.” However,
the portion of the quoted language omitted by the dissent clearly specifies that the coverage amounts
referred to are for bodily injury, death and property damage. The Legislature makes no reference
to punitive damages in the statute or in the title of House Bill 722, Laws of 2005.

                                                 6
¶12.   The first interpretation would allow an insurance carrier to limit coverage to $10,000

for bodily injury or death, and $5,000 for property damage, but makes no allowance for

policy limits for other kinds of damages, including punitive damages. Thus, under this

interpretation, despite an insurance carrier’s $10,000 policy limit, the carrier would be

required to pay the full amount of any punitive damage award. For instance, if a jury

awarded $100,000 in actual damages (for bodily injury) and $500,000 in punitive damages,

an insurance carrier with a $10,000/20,000 limit policy would be required to pay its policy

limits of $10,000 in actual damages, together with the full award of $500,000 in punitive

damages. We do not find the language of the statute provides for such a result.

¶13.   The second interpretation requires us to amend the statute to include a limit or cap

for punitive damages. This Court has no power to amend statutes.

¶14.   The third interpretation is true to the wording of the statute and applies to the kinds

of damages specifically named in the statute without implying that other kinds of damages

should have been added to the list.

¶15.   Significantly, the statute relied upon by the Chancery Court, the Insurance

Commissioner, and the Attorney General, has been in place since 1972. Thus, were we to

interpret the statute as the Commissioner and the Attorney General suggest, we would be

required to abandon the position taken by this Court in both McDaniel and Clemmer, since

both cases were decided long after the effective date of the statute.

¶16.   The subject matter of the statute is bodily injury, death and destruction of property.

The statute requires an insurer to pay all sums for those losses, subject to specific limits set



                                               7
by the Legislature, with no mention of “punitive damages” within those limits. Furthermore,

interpreting the language of Miss. Code Ann. § 63-15-43(2)(b) to include unspecified

damages (including punitive damages) would render Miss. Code Ann. § 63-15-43(7) a

nullity, insofar as it specifically allows an insurance company to provide additional coverage

which “shall not be subject to the provisions of this chapter.”

¶17.   This Court has enunciated the now-familiar principle that “where a statute enumerates

and specifies the subject or things upon which it is to operate, it is to be construed as

excluding from its effect all those not expressly mentioned or under a general clause.”

Southwest Drug Co. v. Howard Bros. Pharmacy of Jackson, Inc., 320 So.2d 776, 779

(Miss. 1975) (citing Akers v. Estate of Johnson, 236 So.2d 437 (Miss. 1970)). Since the

statute at issue “enumerates and specifies the subject or things upon which it is to operate,”

that is, it specifically lists bodily injury, death and destruction of property, “it is to be

construed as excluding from its effect all those not expressly mentioned,” that is, punitive

damages.

¶18.   Commissioner Dale asserts that the word “all” in Miss. Code Ann. § 63-15-43(2)(b)

contemplates and, indeed, requires coverage for every kind of damage awarded against an

insured, including punitive damages. The Commissioner’s argument, however, overlooks

the fact that within the same sentence within the statute, the Legislature set specific limits

for very specific kinds of damages.3

       The Attorney General opinion


       3
        The statute specifically refers to damages for bodily injury, death and destruction of
property. It makes no mention of punitive damages. See Miss. Code Ann. § 63-15-43(2)(b).

                                              8
¶19.   Commissioner Dale reversed his initial decision based on an Attorney General

opinion which determined “Mississippi law does not provide that punitive damages can be

excluded from insurance policies for automobile liability claims.” Dale, Oct. 5, 2001, Miss.

A.G. Op.#01-0660, 2001 WL 1513775. The Attorney General based his opinion on State

Farm Mut. Auto. Ins. Co. v. Daughdrill, 474 So. 2d 1048 (Miss. 1985).

¶20.   Even though “Attorney General opinions are not binding, they are certainly useful

in providing guidance to this Court.” In re Assessment of Ad Valorem Taxes on Leasehold

Interest Held by Reed Mfg., Inc. ex rel. Itawamba County Bd. of Sup'rs, 854 So.2d 1066,

1071 (Miss. 2003) (citing City of Durant v. Laws Constr. Co., 721 So.2d 598, 604 (Miss.

1998)).

¶21.   We find that, although the Attorney General correctly interpreted the Daughdrill

decision, he incorrectly applied its holding to the issue presented to him. In Daughdrill, the

United States Court of Appeals for the Fifth Circuit certified to this Court the question of

whether Mississippi law mandated punitive damage coverage for uninsured motorists

policies. Answering in the negative, this Court carefully limited its decision to uninsured

motorists policies by concluding:

       We hasten to state that the issue determined today has no relation to a charge
       of bad faith refusal to pay such a claim by the insurer or to a claim for punitive
       damages under liability coverage other than that of an uninsured motorist. We
       address the narrow issues presented.

Daughdrill, 474 So. 2d at 1054. In answering the certified question, this Court analyzed

statutory and case law for uninsured motorists and the public policy behind punitive

damages. The Daughdrill Court distinguished Anthony, insofar as it held that public policy


                                               9
does not prevent an insurance company’s liability for punitive damages for acts of its

insured. The determination by the Anthony Court that the statute does not prevent punitive

damages is far different from a determination that the statute requires coverage for punitive

damages.

¶22.   We hold that the Attorney General erroneously interpreted this Court’s opinion in

Daughdrill as an indication that this Court would hold that punitive damages are required

by statutory law.    However, the Daughdrill decision, by its very specific language,

addressed only the narrow question presented to it.

                                     CONCLUSION

¶23.   We hold that Mississippi law does not prevent Shelter from excluding coverage for

punitive damages by amendatory endorsement to its automobile liability policies. Both the

Commissioner and the chancellor erred in concluding otherwise.             Accordingly, the

judgment of the Chancery Court of the First Judicial District of Hinds County is reversed,

and this case is remanded to the chancery court with instructions to vacate the Order of the

Commissioner and to remand this action to the State Department of Insurance for action

consistent with this opinion.

¶24.   REVERSED AND REMANDED.

    SMITH, C.J., WALLER AND COBB, P.JJ., CARLSON AND RANDOLPH, JJ.,
CONCUR. EASLEY, J., CONCURS IN PART AND DISSENTS IN PART WITHOUT
SEPARATE WRITTEN OPINION. GRAVES, J., DISSENTS WITH SEPARATE
WRITTEN OPINION, JOINED IN PART BY EASLEY, J. DIAZ, J., NOT
PARTICIPATING.

       GRAVES, JUSTICE, DISSENTING:



                                             10
¶25.   The majority concludes that Mississippi law does not require automobile insurance

companies to cover punitive damages in their liability insurance policies. I respectfully

dissent from this holding.

¶26.   The majority recognizes the Legislature’s power to require that automobile insurance

policies written in Mississippi cover awards of punitive damages. However, the majority

fails to properly analyze the intent of the Legislature when it adopted Miss. Code Ann. § 63-

15-43(2)(b). It is a truism that the legislative intent is the guide in statutory construction.

Bridges v. Barr, 245 Miss. 137, 146 So.2d 544 (1962) (citing Quitman County v. Turner,

196 Miss. 746, 759, 18 So.2d 122 (1944)). Whether the statute is ambiguous or not, the

ultimate goal of this Court in interpreting a statute is to discern and give effect to the

legislative intent. Allred v. Yarborough, 843 So.2d 727, 729 (Miss. 2003) (citing City of

Natchez v. Sullivan, 612 So.2d 1087, 1089 (Miss. 1992)). “It is a general rule in construing

statutes this Court will not only interpret the words used, but will consider the purpose and

policy which the legislature had in view of enacting the law.” State ex rel. Hood v. Madison

County ex rel. Madison County Board of Supervisors, 873 So.2d 85, 88 (Miss. 2004)

(citing Aikerson v. State, 274 So.2d 124, 127 (Miss. 1973)).

¶27.   In House Bill 722 adopted at its 2005 Regular Session, the Legislature has amended

§ 63-15-43. 2005 Miss. Laws ch. 483, § 4. The title to that act states:

       AN ACT TO AMEND SECTIONS 63-15-3, 63-15-11, 63-15-31, AND 63-
       15-43. MISSISSIPPI CODE OF 1972, TO INCREASE THE STATUTORY
       MINIMUM FOR MOTOR VEHICLE LIABILITY INSURANCE
       COVERAGE IN ANY ONE ACCIDENT FROM $10,000.00 TO $25,000.00
       FOR BODILY INJURY TO OR DEATH OF ONE PERSON, FROM
       $20,000.00 TO $50,000.00 FOR BODILY INJURY TO OR DEATH OF


                                              11
       TWO OR MORE PERSONS AND FROM $5,000.00 TO $25,000.00 FOR
       INJURY TO OR DESTRUCTION OF PROPERTY OF OTHERS; TO
       AMEND SECTION MISSISSIPPI CODE OF 1972, TO PROVIDE THAT A
       PORTION OF THE FINES LEVIED IN MUNICIPAL COURT OR ANY OF
       THE COURTS OF THE COUNTY ON PERSONS WHO DO NOT HAVE
       PROOF OF AUTO LIABILITY INSURANCE SHALL BE DEPOSITED IN
       THE GENERAL FUND OF THE MUNICIPALITY OR THE COUNTY;
       AND FOR RELATED PURPOSES.

(Emphasis added). The Legislature immediately identifies its initial purpose in amending

the named statutes - “to increase the minimum coverage amounts for motor vehicle liability

insurance.” However, in its second interpretation of § 63-15-43(2)(b), the majority

misconstrues the statute in such a way as to give the impression that the Legislature

ambiguously drafted the statute as to allow an implied, unstated limit or cap for punitive

damages. In its third attempt to interpret the meaning of the statute, the majority concludes

that the statute applies only to damages for bodily injury, death and property damage, which

are the only kinds of damages specifically mentioned in the statute, disallowing punitive

damages. Both interpretations are inherently incorrect. The statute specifically provides for

the inclusion of punitive damages at defined maximum numerical limits, and the intent of

the Legislature was not to create a definitive listing as to the types of damages encompassed

by the statute, but to specify and enumerate monetary limits associated with various losses.

¶28.    I recognize the principle as stated in Southwest Drug Co. v. Howard Bros.

Pharmacy of Jackson, Inc., 320 So.2d 776, 779 (Miss. 1975) (citing Akers v. Estate of

Johnson, 236 So.2d 437 (Miss. 1970)), that “where a statute enumerates and specifies the

subject or things upon which it is to operate, it is to be construed as excluding from its effect

all those not expressly mentioned or under a general clause.” However, the subject matter


                                               12
of § 63-15-43(2)(b) is not bodily injury, death, and destruction of property. The subject

matter of the statute is the (newly increased) numerical limits as applied to the general and

broad term “damages.” The prepositional phrase “subject to limits”4 refers to the monetary

amounts enumerated and specified in the list and not bodily injury, death, or destruction of

property; it effectively modifies and quantifies the words “all sums” and “damages” not to

affect their general meaning, but to provide a clear indication of numerical liability on behalf

of the insurer. Therefore, all sums for damages (including punitive damages), which an

automobile liability insurer is legally obligated to pay, are limited to the amounts specified

in the statute.

¶29.   Using proper statutory construction and recognizing the intent of the Legislature, I

conclude that, correctly interpreted, § 63-15-43(2)(b) requires that Shelter cover punitive

damages in their automobile liability insurance policies. Therefore, I would affirm the

chancellor’s judgment.

       EASLEY, J., JOINS THIS OPINION IN PART.




       4
        In this phrase, the object of the preposition is the word “limits.” Here, “limits” functions
as a noun, meaning a prescribed maximum or minimum amount, quantity, or number. It does not
mean something that is bound, restrained, or confined. This conclusion is reached by examining the
phrase as a whole, “subject to limits exclusive of interests and costs.” (Emphasis added).

                                                13
