                         IN THE SUPREME COURT OF MISSISSIPPI

                                     NO. 2004-CA-01540-SCT

UNITED SERVICES AUTOMOBILE ASSOCIATION

v.

DEBORAH C. STEWART, INDIVIDUALLY AND ON
BEHALF OF OTHER WRONGFUL DEATH
BENEFICIARIES OF ROBERT EARL STEWART, JR.


DATE OF JUDGMENT:                            07/26/2004
TRIAL JUDGE:                                 HON. JOHNNY LEE WILLIAMS
COURT FROM WHICH APPEALED:                   FORREST COUNTY CHANCERY COURT
ATTORNEY FOR APPELLANT:                      GERALD LEE KUCIA
ATTORNEY FOR APPELLEE:                       JAY MAX KILPATRICK
NATURE OF THE CASE:                          CIVIL - INSURANCE
DISPOSITION:                                 REVERSED AND REMANDED - 06/09/2005
MOTION FOR REHEARING FILED:
MANDATE ISSUED:


        EN BANC.

        CARLSON, JUSTICE, FOR THE COURT:

¶1.     United Services Automobile Association (USAA) appeals to us from the Forrest County

Chancery Court’s grant of summary judgment in favor of its deceased insured’s wrongful death

beneficiaries, thus denying USAA’s request for a set-off based on the liability coverage

provided by a third-party tortfeasor’s insurance carrier.   Finding that the chancellor incorrectly

granted summary judgment in favor of the plaintiffs, we reverse the chancellor’s judgment and

remand this case for further proceedings.
                    FACTS AND PROCEEDINGS IN THE TRIAL COURT

¶2.      On April 20, 2002, Robert Earl Stewart (Robert) was killed while operating his 1999

BMW motorcycle south on Interstate 59 in Hattiesburg, Forrest County, Mississippi.                  In a

later-filed complaint, Deborah C. Stewart, individually and on behalf of other wrongful death

beneficiaries of Robert (hereinafter “Deborah”), alleged that Joseph Rowell’s negligent

operation of his motor vehicle was the sole proximate cause of the accident and Robert’s

death.

¶3.      Prior to his death, Robert had contracted with USAA to provide his automobile

insurance. Under automobile policy number 01341-71-64U-7101-4 (“the policy”), USAA

provided insurance coverage 1 for five vehicles for the period from April 14, 2002, to October

14, 2002.      Each vehicle had uninsured/underinsured motorists (UM/UIM) coverage in the

amount of $10,000.       USAA acknowledged that there was stacked UM/UIM coverage in the

total amount of $50,000, but asserted that it was entitled to a set-off in the amount of the

liability coverage under the Rowell insurance policy. Rowell was a minor who had coverage

under a State Farm Insurance Company policy during the relevant time period, based on his

parents’ automobile policy number 2469-438-24H.            This policy provided for liability coverage

in the maximum amount of $25,000.

¶4.      On November 18, 2003, Deborah filed a Complaint for Declaratory Judgment in the

Chancery Court of the First Judicial District of Hinds County pursuant to Miss. R. Civ. P. 57,

         1
         The coverages provided included liability coverage for bodily injury and property damage, medical
payments coverage, physical damage coverage, uninsured motorists coverage, and uninsured motorists
property damage coverage.

                                                    2
arguing that USAA was not entitled to any “set-off” amount pursuant to the insurance policy

purchased by Robert inasmuch as Deborah would not be “made whole” for Robert’s death by

the payment of the UM/UIM benefits in the amount of $50,000.2

¶5.     Upon timely motion by USAA, Deborah’s case was transferred to the Chancery Court

of Forrest County. After USAA answered the complaint, Deborah filed a motion for summary

judgment, arguing that USAA was not entitled to offset the amount of liability coverage that

Rowell held on April 20, 2002. USAA also filed a motion for summary judgment and claimed

that it was entitled to off-set the amount of Rowell’s liability coverage.

¶6.     After a hearing the chancery court granted Deborah’s motion for summary judgment and

denied USAA’s motion for summary judgment. Relying on this Court’s decision in Hare v.

State, 733 So. 2d 277 (Miss. 1999), where we adopted the “made whole” rule of subrogation,

the chancery court found that USAA was not entitled to a set off in the amount of the liability

coverage held by Rowell.        The chancellor entered a final judgment pursuant to Miss. R. Civ.

P. 54(b), and USAA timely appealed to us.

                                               DISCUSSION

¶7.     The standard of review for summary judgment is well-established by this Court:

               Rule 56(c) of the Mississippi Rules of Civil Procedure allows summary
        judgment where there are no genuine issues of material fact such that the
        moving party is entitled to judgment as a matter of law. To prevent summary
        judgment, the nonmoving party must establish a genuine issue of material fact
        by means allowable under the rule. Richmond v. Benchmark Constr. Corp., 692


        2
          The propriety of bringing this suit in chancery court, as opposed to circuit court, has not been raised
as an issue in this appeal, thus we need not address this issue today.

                                                       3
       So.2d 60, 61 (Miss. 1997); Lyle v. Mladinich, 584 So.2d 397, 398 (Miss.
       1991).
               This Court employs a de novo standard in reviewing a lower court's grant
       of summary judgment. Mississippi Ethics Comm'n v. Aseme, 583 So.2d 955,
       957 (Miss. 1991); Cossitt v. Federated Guaranty Mut. Ins. Co., 541 So.2d
       436, 438 (Miss. 1989). Evidentiary matters are viewed in a light most favorable
       to the nonmoving party. Palmer v. Biloxi Regional Medical Center, Inc., 564
       So.2d 1346, 1354 (Miss. 1990). If any triable issues of material fact exist, the
       lower court's decision to grant summary judgment will be reversed. Otherwise,
       the summary judgment is affirmed. Richmond, 692 So.2d at 61; Brown v. Credit
       Center, Inc., 444 So.2d 358, 362 (Miss. 1984).

Hare, 733 So. 2d at 279.

¶8.    Focusing on today’s case, the applicable sections of Robert’s policy are as follows:

       PART C - UNINSURED MOTORIST COVERAGE
       INSURING AGREEMENT
            A. UMBI Coverage. We will pay compensatory damages which
            a covered person is legally entitled to recover from the owner or
            operator of an uninsured motor vehicle because of BI (bodily
            injury) sustained by a covered person and caused by an auto
            accident.
                                          *****
            E. We will pay under these coverages only after the limits of
            liability under any of the following that are applicable to the
            uninsured motor vehicle have been exhausted by payment of
            judgment or settlements:

                       1. Liability bonds or policies; or

                       2. Deposits of cash or securities.

       LIMIT OF LIABILITY
                                            *****
               D. Whether Paragraph A or Paragraph B applies[3]:



       3
          Paragraph A applies if the uninsured motor vehicle is not a “covered” vehicle and Paragraph B
applies if the uninsured motor vehicle is “your covered auto.”

                                                   4
                        2. The limits of liability under UMBI Coverage
                        (each person each accident) and UMPD Coverage
                        shall be reduced by all sums paid because of BI or
                        PD by or on behalf of the owner or operator of the
                        uninsured motor vehicle.

          NON-DUPLICATION

          No covered person will be entitled to receive duplicate payments under this
          coverage for the same elements of loss which were:

                 A. Paid because of the BI or PD by or on behalf of persons or
                 organizations who may be legally responsible.

(Emphasis Added).4

¶9.       Based on the stacked UM/UIM coverage available, USAA, pursuant to the policy

provisions, tendered to Deborah the amount of $50,000, minus a “set off” of $25,000 based

on the liability coverage provided under Rowell’s insurance policy. Deborah refused USAA’s

tender of payment, arguing that the $50,000 available in UM/UIM benefits from USAA and the

$25,000 available from the at-fault driver did not reflect the true present value of Robert’s lost

income.

¶10.      The chancellor held that USAA would typically be entitled to a set-off on most of the

UM claims made under its policies. The chancellor stated that because this was a “catastrophic

situation which involve[d] the death of a gainfully employed 45 year-old male who made

approximately $25,000 per year,” the set-off asserted by USAA was not enforceable until

Deborah, as the insured, was made whole.


          4
         The relevant provisions of the USAA policy in today’s case are almost identical to the provisions
of the USAA policy in Wise v. United Services Auto. Ass’n, 861 So.2d 308 (Miss. 2003).

                                                    5
¶11.   The “made whole” rule is “the general principle that an insurer is not entitled to

equitable subrogation until the insured has been fully compensated.” Hare, 733 So. 2d at 281.

In Hare, this Court adopted the “made whole” rule and held that:

       [I]t is not to be overridden by contract language, because the intent of
       subrogation is to prevent a double recovery by the insured, especially here as
       expressly stated in the State Health Plan. Until the insured has been fully
       compensated, there cannot be a double recovery. Otherwise, to allow the literal
       language of an insurance contract to destroy an insured’s equitable right to
       subrogation ignores the fact that this type of contract is realistically a unilateral
       contract of insurance and overlooks the insured’s total lack of bargaining power
       in negotiating the terms of these types of agreements.

Id. at 284 (citations omitted). Hare, insured by the Mississippi State and Public School

Employees’ Health Plan, was involved in a motor vehicle accident with an uninsured motorist.

Id. at 278. Hare was also insured under an UM policy by Progressive Insurance, with policy

limits of $10,000 per person and $20,000 per accident. Id. at 279. The Court determined that

the State could not assert a subrogation claim against the UM benefits collected by Hare

because Hare would not be “made whole.” Id. Hare suffered $8,667.50 in medical expenses,

$6,056.50 of which was paid by the State. Id. at 284. Expert witnesses, through affidavits,

stated that Hare’s potential recovery would fall between $50,000 and $175,000. Id.

¶12.   However, USAA reminds us that while it can be argued that most of our UM/UIM cases

which acknowledge an insurance company’s right of set-off predate our 1999 decision in

Hare, this Court has affirmed a UM/UIM carrier’s right of set-off on at least two occasions

since Hare, citing Wise v. United Services Auto. Ass’n, 861 So.2d 308 (Miss. 2003); and,

City of Jackson v. Perry, 764 So.2d 373 (Miss. 2000).

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¶13.      Discussing these cases in reverse order, Perry involved a suit against the City of

Jackson based on a minor child’s sustaining injuries in an automobile collision with a vehicle

driven by a Jackson police officer.      We stated that the case “presents issues concerning the

interplay between our underinsured motorist statutes and those governing sovereign

immunity.”     764 So.2d at 375. We certainly acknowledged the right of set-off in appropriate

cases, but on the issue of set-off in Perry, we held that set-off (or offset) was inapplicable

since there was no record that the UM carrier’s insurance policy had an offset provision.     Id.

at 383.

¶14.      In Wise, we stated:

          It is undisputed that the Wises had UM coverage limits of $300,000 per person
          and $600,000 per accident. It is also undisputed that Bostic’s vehicle was
          covered by a USF & G single limit liability policy of $300,000. The question
          this Court must answer is in determining whether a vehicle is an uninsured
          vehicle pursuant to statute, which amount is used when multiple claimants are
          involved – the per person or the per accident limit?

861 So.2d at 312. After discussing some of our decisions in UM/UIM cases, we stated:

          While the above cases are illustrative of this State’s history of uninsured
          motorist law, the cases do not provide a clear answer as to whether the per
          person or the per accident limit should be used to determine if the tortfeasor is
          an uninsured motorist when there are two or more claimants under the same
          uninsured motorist policy.

Id. at 317.

¶15.      In finding that the Wises were entitled to UM benefits, we relied on two cases from our

sister state of North Carolina; namely, Nationwide Mut. Ins. Co. v. Haight, 152 N.C. App.

137, 566 S.E.2d 835 (2002); and, North Carolina Farm Bureau Mut. Ins. Co. v. Gurley, 139


                                                 7
N.C. App. 178, 532 S.E.2d 846 (2000). After a thorough discussion of Haight and Gurley, we

stated:

          Using the North Carolina cases as guidance, Bostic’s single liability limit of
          $300,000 is equivalent to a per accident limit. Comparing that limit to the per
          accident limit of the Wises’ USAA policy of $600,000, Bostic’s vehicle should
          be considered an underinsured motor vehicle pursuant to statute. Therefore, the
          Wises are entitled to uninsured motorists benefits.

816 So. 2d at 319.

¶16.      In applying USAA policy provisions almost identical to the USAA policy provisions in

today’s case, we held that USAA was entitled to an offset, and stated:

          [T]he trial court was correct in determining that the Wises no longer   have any
          uninsured motorist claims available to them. The Wises have admitted    that they
          have been paid, through settlements, an amount which exceeds their       available
          uninsured motorist benefits; therefore, USAA is no longer liable         for any
          uninsured motorist benefits.

Id.

¶17.      We are firmly convinced that the learned chancellor attempted to fairly decide the case

sub judice based on what he genuinely believed to be the applicable law. However, we are

constrained to find that the chancellor incorrectly decided this case by applying Hare, instead

of Wise and its predecessor cases.

¶18.      As already noted, Hare was a subrogation case. We have defined subrogation as “‘the

substitution of one person in place of another, whether as a creditor or as the possessor of any

rightful claim so that he who is substituted succeeds to the rights of the other in relation to the

debt or claim, and its rights, remedies, or securities.     Words and Phrases Vol. 7, p. 6722.’



                                                  8
Trust Company v. Peters, 72 Miss. 1058, 18 So. 497, 30 L.R.A. 829.” First Nat’l Bank of

Jackson v. Huff, 441 So.2d 1317, 1319 (Miss. 1983).           While we reaffirm our decision in

Hare to stand for the proposition that the “made whole” rule may be appropriately applied to

certain subrogation cases, we unhesitatingly state here that Hare did not overrule the long line

of UM/UIM cases, many of which were discussed in Wise, which was decided more than four

years after Hare. If we had intended such a result in Hare, we would have said so in express

language overruling prior case law.     Wise was not a subrogation case, and neither is today’s

case.

¶19.      Although there is a dispute between Deborah and USAA has to what the parties had

stipulated to in the trial court, we quote only so much as is necessary here concerning what

USAA admits to us:

          USAA further admits that Mr. Stewart was gainfully employed with the State of
          Mississippi at Camp Shelby making approximately $25,000 a year at the time
          of his death. USAA also admits that $75,000 ($50,000 offered pursuant to the
          USAA policy and $25,000 available from the at-fault driver) does not reflect the
          true present value of the lost income stream suffered due to the death of Mr.
          Stewart. USAA denies that the “made-whole” doctrine is applicable to the
          Plaintiffs’ claim for uninsured/underinsured motorist benefits.

(Emphasis in original).

¶20.      We concluded in Hare: “[T]his Court adopts the “made whole” rule of subrogation,

because the general intent of subrogation . . . is to prevent a double recovery by the insured.

Until the insured has been fully compensated, there cannot be a double recovery.” 733 So.2d

at 285.



                                                 9
¶21.    There can be no doubt that Deborah will not be made whole by the $50,000 UM/UIM

benefits and the $25,000 liability coverage from the at-fault driver.           However, we have to

recognize that in many UM/UIM cases, it is virtually impossible for the injured insured(s) to

be made whole. It is hardly uncommon for the injured insured(s) to incur injuries and damages

far in excess of the available insurance coverage.         In State Farm Mut. Auto. Ins. Co. v.

Kuehling, 475 So.2d 1159 (Miss. 1985), by applying the provisions of the UM statute and the

specific insurance policy, we allowed a set-off by way of a reduction of UM benefits based on

the amount of liability coverage provided under the tortfeasor’s policy. If we were to expand

the “made whole” rule to apply not only to certain subrogation cases, but also to UM/UIM

cases, we would in effect overrule Kuehling and its progeny, including our recent decision in

Wise. This, we refuse to do.       If we overruled this long line of cases, such action on our part

would understandably create chaos for the trial bench and bar, which have a right to expect

consistency from this Court.      Our application of stare decisis is necessary, inter alia, so that

trial courts can make correct decisions and lawyers can properly advise their clients.

                                            CONCLUSION

¶22.    Applying Wise and its predecessor cases, USAA is entitled to a set-off of $25,000,

based on the liability coverage provided under the Rowell insurance policy.                Since the

chancellor held otherwise, we reverse the chancellor’s judgment and remand this case to the

Forrest County Chancery Court for proceedings consistent with this opinion.

¶23.    REVERSED AND REMANDED.



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     SMITH, C.J., WALLER AND COBB, P.JJ., DICKINSON AND RANDOLPH, JJ.,
CONCUR. EASLEY, J., DISSENTS WITHOUT SEPARATE WRITTEN OPINION. DIAZ
AND GRAVES, JJ., NOT PARTICIPATING.




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