                      IN THE COURT OF APPEALS OF TENNESSEE
                          WESTERN SECTION AT JACKSON




MISSISSIPPI FARM BUREAU              )
MUTUAL INSURANCE COMPANY,            )
                                     )
       Plaintiff/Appellee,           )      Shelby Law No. 63735 T.D.
                                     )
vs.                                  )
                                     )      Appeal No. 02A01-9607-CV-00151
LATONIA SCRUGGS JONES and            )
THOMAS JONES,

       Defendants/ Appellants.
                                     )
                                     )
                                     )
                                           FILED
                                           November 14, 1997

                                           Cecil Crowson, Jr.
                                           Appellate C ourt Clerk

               APPEAL FROM THE CIRCUIT COURT OF SHELBY COUNTY
                           AT MEMPHIS, TENNESSEE




                    THE HONORABLE GEORGE H. BROWN, JR., JUDGE




For the Plaintiff/Appellee:          For the Defendants/Appellants:
Melanie M. Shuttleworth              Phil Zerilla, Jr.
Memphis, Tennessee                   Memphis, Tennessee



                                     AFFIRMED



                                     HOLLY KIRBY LILLARD, J.


CONCUR:


ALAN E. HIGHERS, J.


DAVID R. FARMER, J.
                                              OPINION

          In this case, an insurance company sought declaratory judgment on the issue of whether the

language in the insurance policy automatically increased the policy’s coverage limits to those

required by Tennessee’s Financial Responsibility Law, absent certification of the policy. The trial

court ruled that it did not. We affirm.

          Appellee Mississippi Farm Bureau Mutual Insurance Company (“MFB”) issued an insurance

policy to Brenda Boyd (“Boyd”), a Mississippi resident. The policy provided liability coverage up

to $10,000 per person and $20,000 per accident, complying with Mississippi’s requirements for

minimum coverage. See Miss. Code Ann. § 63-15-43 (2)(b)(1972). The policy also provided, in

pertinent part:

          6. Financial Responsibility Laws - Coverage A and B. If this policy is one that
          is certified following an accident as proof of financial responsibility for future
          accidents under Mississippi Code Annotated, Section 63-15-43, and amendments
          thereto, and under like provisions of the Motor Vehicle Financial Responsibility Law
          of any State or Province, such insurance as is afforded by this policy shall comply
          with the provisions of such law to the extent of the coverage and minimum limits of
          liability required, provided, however, that this policy will not conform to any
          requirements by any other state or providence [sic] as to the types and/or amounts of
          coverage other than “bodily injury” and “property damage” liability.

In 1993, Boyd had an automobile accident in Tennessee involving Appellants Latonia Scruggs Jones

and Thomas Jones (“Joneses”). The Joneses subsequently filed a claim for personal injuries arising

out of the accident.

          The Tennessee Financial Responsibility Law of 1977, Tennessee Code Annotated §§ 55-12-

101 et. seq., requires policy limits of $25,000 per person and $50,000 per accident after 1989. Tenn.

Code Ann. § 55-12-102(12)(C)(ii) (1993). Prior to the accident, however, MFB had not certified

the policy as proof of financial responsibility. To determine the policy limits for the Tennessee

accident, MFB filed a complaint in Circuit Court in Tennessee for declaratory judgment. MFB

asked the trial court to determine the question of whether the above-quoted language in the policy

operated to automatically increase the liability limits to those required by the Financial

Responsibility Law.

          Both parties moved for summary judgment. The trial court granted summary judgment for

MFB and denied the Joneses’ motion for summary judgment. From this decision the Joneses now

appeal.
        The issue on appeal is whether language in the MFB policy increased the policy’s liability

limits to comply with those required by the Financial Responsibility Law, despite the fact that MFB

had not certified the policy as proof of financial responsibility.

        A trial court should grant a motion for summary judgment when the movant demonstrates

that there are no genuine issues of material fact and that the moving party is entitled to a judgment

as a matter of law. Tenn. R. Civ. P. 56.03. Summary judgment is only appropriate when the facts

and the legal conclusions drawn from the facts reasonably permit only one conclusion. Carvell v.

Bottoms, 900 S.W.2d 23, 26 (Tenn. 1995). Since only questions of law are involved, there is no

presumption of correctness regarding a trial court's grant of summary judgment. Id. Therefore, our

review of the trial court’s grant of summary judgment is de novo on the record before this Court.

Id.

        In Tennessee, a motorist who is involved in an automobile accident resulting in a death,

personal injury, or property damage in excess of four hundred dollars must file an accident report

with the Commissioner of Safety. Tenn. Code Ann. § 55-12-104(a) (1993). When the commissioner

receives such a report, if he receives notice of a claim filed against the motorist and determines that

the claimant’s chance of winning a judgment are reasonably possible, he then requires a security

deposit from the motorist to cover the possible judgment. Id. § 55-12-105(a) (1993). If the motorist

fails to provide a security deposit, the commissioner revokes the motorist’s driver’s license and

registrations. Id. If the motorist is a nonresident, the commissioner revokes his privilege to drive

in the state. Id.

        A security deposit is not required, however, if the motorist “had in effect at the time of the

accident, an automobile liability policy or bond with respect to the vehicle involved in the accident,”

unless the vehicle was being driven without the owner’s express or implied permission. Tenn. Code

Ann. § 55-12-106(1) (Supp. 1997). In order to qualify, the policy must meet the following

requirements:

        (a) No policy or bond shall be effective under § 55-12-106, unless issued by an
        insurance company or surety company licensed to do business in this state . . . and
        unless such policy or bond provides security not less than the amounts specified in
        § 55-12-102.

Id. § 55-12-107(a) (1993). Section 55-12-102 requires, as one option for any period after December

31, 1989, “[a] split-limit policy with a limit of not less than twenty-five thousand dollars ($25,000)



                                                  2
for bodily injury to or death of one (1) person, not less than fifty thousand dollars ($50,000) for

bodily injury to or death of two (2) or more persons in any one (1) accident, and not less than ten

thousand dollars ($10,000) for damage to property in any one (1) accident.” Id. § 55-12-

102(12)(C)(ii).

        Finally, a motorist may provide proof of financial responsibility by “filing with the

commissioner the written certificate of any insurance carrier duly authorized to do business in this

state, certifying that there is in effect a motor vehicle liability policy for the benefit of the person

required to furnish proof of financial responsibility.” Tenn. Code Ann. § 55-12-120 (1993). A

nonresident can file such a certificate from a carrier licensed to do business in the state in which the

motorist’s vehicle is registered, so long as the carrier meets two requirements:

                (1) The insurance carrier shall execute a power of attorney authorizing the
        commissioner to accept service on its behalf of notice or process in any action arising
        out of a motor vehicle accident in this state; and

                 (2) The insurance carrier shall agree in writing that such policies shall be
        deemed to conform with the laws of this state relating to the terms of motor vehicle
        liability policies issued therein.

Id. § 55-12-121 (1993).

        The pertinent statutes are discussed in McManus v. State Farm Mutual Auto. Ins. Co., 225

Tenn. 106, 463 S.W.2d 702 (1971). In McManus, the plaintiff filed for declaratory judgment

against the defendant insurance company, asserting that an exclusion clause in the policy was void

as being in conflict with the Financial Responsibility Law. Id. at 107-09, 463 S.W.2d at 703. The

plaintiff noted that his policy was on file with and had been approved by the Commissioner of

Insurance and Banking, and asserted that the Financial Responsibility Law was therefore applicable.

Id. at 108-09, 463 S.W.2d at 703. In discussing the history of the Financial Responsibility Law, the

Court noted that the legislature chose to require public liability insurance only after a first accident,

as opposed to requiring public liability insurance of everyone in the state. Id. at 109, 463 S.W.2d

at 703. After discussing the Financial Responsibility Law, the Court found:

                 In keeping with the intent of the Legislature that the sanctions of this statute
        apply only after an accident, then the requirements that an insurance policy conform
        to this statute . . . would apply only to insurance policies issued and certified to the
        Commissioner of Safety as proof of financial responsibility in accord with the statute.

Id. at 111, 463 S.W.2d at 704. In McManus, the plaintiff had not certified his insurance policy as




                                                   3
proof of financial responsibility. The Court explained:

          The only language in the policy in regard to financial responsibility laws is as
          follows:

                 When certified as proof of future financial responsibility under any
                 motor vehicle financial responsibility law and while such proof is
                 required during the policy period, this policy shall comply with such
                 law if applicable * * *.

                  The above language of this policy is a negation of any argument it has been
          certified as proof of financial responsibility.

Id. at 112, 463 S.W.2d at 704. The Court concluded by noting that “[t]he fact the insurance policy

in question is on file and approved by the Commissioner of the Insurance and Banking . . . does not

make the policy a ‘certified policy’ under our financial responsibility law.” Id. at 112, 463 S.W.2d

at 705.

          These issues are also addressed in Holt v. State Farm Mutual Auto. Ins. Co., 486 S.W.2d

734 (Tenn. 1972). In Holt, the plaintiff insurance company sought declaratory judgment regarding

its liability on two insurance policies. Id. at 734-35. At issue were the exclusion clauses, which

provided that the relative of an insured who lived in the same household as the insured was not

covered for bodily injuries under the policies. The defendant argued that the exclusion clauses were

void because they violated the Financial Responsibility Law. Id. at 735. The Court disagreed,

finding that the Financial Responsibility Law was inapplicable under the facts of the case. The

parties stipulated that the policies had been in effect at the time of the accident and that, after the

accident, the insurance company had filed papers with the commissioner attesting that the car

involved in the accident had been covered by insurance at the time the accident occurred. Id. at 736.

The Court found:

                   The requirements of T.C.A. Section 59-1223 apply only to policies procured
          and certified to the Commissioner of Safety as proof of financial responsibility after
          an accident by the owner or operator who at the time of the accident carried no
          liability insurance on the automobile.

Id.

          Pursuant to McManus and Holt, it is clear that the MFB policy limits do not have to comply

with those set forth in the Financial Responsibility Law. The pertinent statutes indicate that the need

for proof of financial responsibility comes into effect only after a motorist has had an accident. See

Tenn. Code Ann. §§ 55-12-104 to -105; McManus, 225 Tenn. at 109, 463 S.W.2d at 703. In

essence, the law allows a motorist a “first bite at the apple” before requiring that he carry insurance


                                                    4
or meet any particular insurance coverage requirements. The language in the MFB policy mandates

no different result. Indeed, the language in the MFB policy is similar to that at issue in McManus.

See McManus, 225 Tenn. at 112, 463 S.W.2d at 704. The policy provides that it will comply with

the financial responsibility law of another state only if it “is certified following an accident as proof

of financial responsibility for future accidents” (emphasis added). As far as the record indicates, this

was Boyd’s first accident in Tennessee, and the policy had not been certified as proof of financial

responsibility. Therefore, the plain language of the policy indicates that its coverage limits need not

conform to those required under Tennessee’s Financial Responsibility Law. Ballard v. North Am.

Life & Cas. Co., 667 S.W.2d 79, 82-83 (Tenn. App. 1983) (absent ambiguity, courts are to interpret

insurance policies according to the plain meaning of the language used).

        The Joneses argue that Winecoff v. Nationwide Mutual Ins. Co., 223 Tenn. 267, 444 S.W.2d

84 (1969), requires a different result. In Winecoff, the Court interpreted certain policy provisions

to require coverage limits in line with those required by the Financial Responsibility Law. Id. at

271, 274-76, 444 S.W.2d at 85, 87-88. A key provision provided the following:

        ‘When certified as proof of financial responsibility for the future under the provisions
        of any motor vehicle financial responsibility law, such insurance as is afforded by
        this Policy under Coverages C(1) and C(2) shall comply with the provisions of such
        law to the extent of the coverage required by such law.’

Id. at 271, 444 S.W.2d at 86. This provision is similar to the language discussed above. However,

the policy in Winecoff contained two additional provisions. The first provided:

        ‘This policy does not comply with motorists’ financial responsibility laws of your
        state unless there is a premium charge shown for Coverages C(1) and C(2) in Item
        5.’

Id. at 271, 444 S.W.2d at 85. The second provided:

        ‘The limits of the Company’s liability under Coverages C(1) and C(2) shall comply
        with the limits of liability required by any applicable motor vehicle financial
        responsibility law.’

Id. Each policy showed premium charges for Coverages C(1) and C(2) in Item 5, and the Court

concluded that the insurance company had agreed to comply with the Tennessee Financial

Responsibility Law and the coverage limits contained therein. Id. at 274-76, 444 S.W.2d at 87-88.

Unlike the policy in Winecoff, the MFB policy in this case contains no provision for premium

charges for any added coverage necessary to comply with any state’s financial responsibility law and

in no way purports to comply with such a law unless MFB first certifies the policy for future



                                                   5
accidents.

       The decision of the trial court is affirmed. Costs on appeal are assessed against Appellants,

for which execution may issue if necessary.




                                     HOLLY KIRBY LILLARD, J.


CONCUR:



ALAN E. HIGHERS, J.




DAVID R. FARMER, J.




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