Mississippi Insurance Law – Part 7MISSISSIPPI Insurance-Related Law  — An A to Z GuideHere’s the next post sharing our 2016 update.  If you like a full copy or have any questions, please email or call.NegligenceChildrenMississippi applies the common law “rule of sevens.”  A child under the age of seven is irrefutably deemed to be incapable of negligence.  Children between the ages of 7 and 14 are presumed to be incapable of negligence, but the presumption may be rebutted by showing that the child had elevated capacity.  Children above the age of 14 are presumed to be capable of negligence.  Steele v. Holiday Inn, 626 So. 2d 593 (Miss. 1993).Statutory Standards of Care Negligence per se, or a presumption of negligence, is the general rule in Mississippi if the plaintiff claims that a defendant violated a particular statute.  In order to determine if the statute provides the necessary standard of care, a plaintiff must prove that he or she is in the class that the statute was designed to protect and the harm was of the type that the statute was designed to prevent.  See Byrd v. McGill, 478 So. 2d 302 (Miss. 1985). Notice of Insurance ClaimThe duty to defend presupposes the duty to notify the insurer of any proceedings instituted against them.  Without notice the insurer cannot be expected to provide a defense.  Mimmitt v. Allstate County Mut. Ins. Co., Inc., 928 So. 2d 203, 207 (Miss. App.  2006).Owner’s LiabilityWithout some special relationship, an owner of an automobile, merely by virtue of his ownership interest, is not liable for injuries negligently caused by a permissive driver.  Wood v. Nichols, 416 So. 2d 659 (Miss. 1982).  See also, Vicarious Liability.Parental LiabilityParents may be found liable for property damage up to $5,000 caused by the willful or malicious acts of their minor children between age 10 and 18.  Miss. Code Ann. § 93-13-2.Parents have a duty to take reasonable measures to supervise their children in order to protect others from acts of their children which are reasonably foreseeable.  Williamson v. Daniel, 748 So. 2d 754, 759 (Miss. 1999).There is joint and several liability between a minor and the person who signed the minor’s application for a driver’s license for the willful or negligent acts of a minor under 17 while operating motor vehicle. M.C.A. § 63-1-25.Parents are liable for their minor child who willfully defaces or damages a sign, device, signal, bridge, underpass or overpass up to $200.  Miss. Code Ann. § 97-15-1.See also, Minors, Parental Liability for Medical ExpensesPremises LiabilityGenerallyThe duty which a landowner owes to another is determined by the common law statuses: trespasser, invitee, and licensee.  Little v Bell, 719 So.2d 757 (Miss. 1998).  A three-step process is applied to determine premises liability:  determining the status of the injured person; the duty that is owed based on the status; and whether the duty was breached by the landowner.  Leffler v. Sharp, 891 So. 2d 152 (Miss. 2004).TrespasserA trespasser is someone who enters the property of another without permission.  Hughes v. Star Homes, Inc., 379 So. 2d 301, 303 (Miss 1980).  A landowner owes the trespasser the duty not towillfully or wantonly injure him.  Id. at 304.The Attractive Nuisance Doctrine applies to situations involving child trespassers.  The plaintiff must prove four elements when a child enters another’s property and is injured by a dangerous condition: 1) that the owner knew or should have known of the dangerous artificial condition, 2) that the owner knew or should have known that children frequent the area where the dangerous condition exists, 3) that it is unlikely that the child trespasser could appreciate the risk presented, and 4) that the cost to correct the dangerous condition is minimal compared to the magnitude of the risk.  It should be noted that the plaintiff is NOT required to show that the child was actually attracted by the dangerous condition.  Keith v. Peterson, 922 So. 2d 4 (Miss. Ct. App. 2005), cert. denied, 926 So. 2d 922 (Miss. 2006).Mississippi codified the definition and duty owed to a trespasser in the 2016 legislative session.  See, Miss. Code Ann. § 95-5-31.  It maintained the common law duty to avoid willful and wanton injury, but established several situations with respect to children or adults who are in a “position of peril.”  The law created a duty of reasonable care to a trespasser if the owner discovers the trespasser in a position of peril on the property.  The law also contains a final paragraph which appears to maintain the common law defenses and immunities.  It is unclear exactly how this statute will be applied and what, if any, effect it will have on the ultimate outcome of a case other than perhaps broadening the “attractive nuisance” doctrine.LicenseeA licensee is someone who enters the property of another for his own benefit with the express or implied permission of the owner.  Little, 719 So. 2d at 760.  A landowner owes a licensee the duty to refrain from willfully or wantonly injuring him (same as Trespasser).  Hughes, 379 So. 2d at 304.  “Social guests” are considered licensees.InviteeAn invitee is someone who enters the property of another with the express or implied permission of the owner for the mutual benefit of the invitee and the owner.  Hoffman v. Planters Gin Co. Inc., 358 So. 2d 1008, 1011 (Miss. 1978).  The duties that the landowner owes to an invitee are to keep the premises reasonably safe and to warn of hidden dangers.  Mayfield v. The Hairbender, 903 So. 2d 733 (Miss. 2005).Hoffman Exception The premises owner is liable for injuries proximately caused by his affirmative or active negligence which subjects a person to unusual danger, or increases hazard to him, when his presence is known to the owner.  The standard is of ordinary and reasonable care in these situations.  Hoffman v. Planters Gin Co., Inc., 358 So. 2d 1008, 1013 (Miss. 1978).Slip and FallIn order for a plaintiff to recover in a slip and fall case, he must show (1) that some negligent act of the defendant caused his injury; or (2) that the defendant had actual knowledge of a dangerous condition and failed to warn the plaintiff; or (3) that the dangerous condition existed for a sufficient amount of time to impute constructive knowledge to the defendant, in that the defendant should have known the dangerous condition.  Anderson v. B. H. Acquisitions, Inc., 771 So. 2d 914, 918 (Miss. 2000) (citing Downs v. Choo, 656 So. 2d 84, 86 (Miss. 1995)). Primary/Excess IssuesThere is no statute in Mississippi governing “other insurance” provisions.  There is no case law that has invalidated “excess” policy provisions as contrary to public policy or based on the statute mentioned.Nevertheless, there are some situations that will arise that will create a conflict between a carrier’s attempt at designating its policy as excess, and the “other” insurance company’s attempts to do the same thing.  Under Mississippi case law, when two (or more) policies present competing other insurance clauses (such that, if both literally read, would leave no primary coverage), the courts will disregard both provisions, and deem the policy for the accident vehicle as the primary.  Travelers Indemnity Company v. Chappell, 246 So. 2d 498 (Miss.1971); USF&G  v. John Deere Insurance Co., 830 So. 2d 1145 (Miss. 2002).In other words, when two “other insurance” clauses conflict such that neither insurer purports to carry the primary policy of coverage, the two “other insurance” clauses cancel each other out.  This common law invention is known as “The Rule of Repugnancy.”  Once the rule is applied, “the policy of the owner of the vehicle involved in the accident is ordinarily considered to be the ‘primary policy.’”  Chappell, at 505.Where there are two conflicting “other insurance” clauses, a carrier still should examine the language of the policies to see if in fact they conflict.  As it stands right now, however, this basic rule of contract construction comes with a caveat in Mississippi, for even where the policies do not conflict, the appellate courts have shown a tendency to apply the “primary” rule anyway.  As a result, it is becoming more and more “universal” (as one Mississippi opinion put it) to make the “primary” insurer the one with coverage of the automobile involved, conceivably in the face of policy language to the contrary.  Recently, the Mississippi Supreme Court summarily held “[t]he long-standing law in Mississippi is that the insurance policy issued to the owner of the vehicle is the primary policy . . . .”  See Guidant Mut. Ins. Co. v. Indemnity Ins. Co. of North America, 13 So. 3d 1270 (Miss. 2009).  That “primary” insurer will be required to exhaust the limits of the policy before the other, excess policy will be invoked.  Assuming a court can be reminded to look at the policy language first, in a case in which the other policy announces itself to be the primary policy or provides that coverage is to be pro rated between the insurers, the company’s excess provision would not be in conflict, and would in fact be excess.A similar issue arises when insurance carriers dispute which company will be able to take the offset of other available insurance (such as the tortfeasor’s liability policy).  The only Mississippi case to have addressed the question of priority of a set-off is Dixie Insurance Company v. State Farm Mut. Auto. Ins. Co., 614 So.2d 918 (Miss. 1992).  In Dixie, the court appeared to create the rule that the primary carrier is entitled to the offset.   The court stated, “[t]he trial court correctly held that the primary insurer was entitled to offset first.”  Id.  See also Strickland v. Hill, 2002 WL 31654961(E.D. La.) (unpublished opinion) (noting that the offset doctrine “appears to be tailored based on the ranking of insurance companies”).  However, this “rule” may be an overstatement of Mississippi law as the court strayed from policy interpretation in this decision and the announcement of this rule was unnecessary. Privacy of Insurance InformationAs a general rule, financial, health and personally identifiable information contained within an insurance policy, declarations page, or general insured’s file are private.  Both Federal law and Mississippi law obligate an insurance company to protect and withhold the release of this information unless authorized to do so.  See, 15 U.S.C.A. §6801 et seq. (Graham-Leach-Bliley Act) and Miss. Code Ann. §83-1-1 et seq., and Mississippi Insurance Dep’t Regulations 2001-1, 2000-7, 2001-2, et al. Property Damage Adjusting (Auto)Excerpts from Consumer Alert issued by Mississippi Department of Insurance in 2014 (can be found at www.mid.gov/consumers): SteeringUnder Mississippi law, an insurance company may not dictate to you where you must have your repairs made. An insurance company may recommend that repairs be made at a designated repair facility where they have a contractual relationship; however, payment of the claim may not be conditioned on the use of a particular repair facility. Also, an insurance company cannot refuse to pay a claim because the repairs were made at a particular repair facility. Measure of DamageThe damages that may be recovered under an automobile claim is defined in the policy and is often the actual cash value of the property immediately prior to the loss, or the amount necessary to properly repair the damage.Most policies will provide for two (2) different manners for recovery by the policyholder:
  1. Insurance company pays for the loss; or,
  2. Insurance company repairs the vehicle.
 Policyholders are encouraged to read the policy to clearly understand what the insurance company will pay under the policy. Any dispute regarding whether the insurance company has paid in accordance with the policy is a question of fact. A question of fact is to be determined by the finder of fact, which is either a jury or a judge. Amounts to be PaidBy law, the most an insurance company shall be required to pay for the repair of the vehicle or repair or replacement of the glass is the lowest amount that such vehicle or glass could be properly repaired or replaced by a contractor or repair shop within a reasonable geographical or trade area of the insured. Most insurance policies actually provide for greater payment than what is statutorily required in Mississippi by providing that the insurance company will pay the median or average amount to properly and reasonably repair or replace within the policyholder’s geographical or trade area.In preparing an estimate, an insurance company will base the amount it will cost to properly repair the vehicle on the insurance company’s set hourly rate pursuant to policy terms. This estimate will be provided to the policyholder before repairs are made. The insurer’s hourly rate must conform to statutory law.A policyholder may choose to have the repairs made at a repair facility that charges more than what the insurance company has agreed to pay. Insurance companies do not set repair facility hourly rates so there may be a difference between the two rates. In that instance, either the repair facility will agree to make the repairs for the amount in the insurance company’s estimate or the policyholder will have to pay for the difference.Policyholders should be aware of and address any potential differences between the insurance company’s and the repair facility’s estimate before allowing the repair facility to begin to repair the vehicle.If additional damage is discovered in the repair process, the insurer will inspect the vehicle before agreeing to the repairs. After it is determined these repairs are needed and covered under the policy, a supplemental check will be issued to the repair facility to cover these additional costs.AMP vs. Non-OEMMississippi law allows for the use of Aftermarket parts (AMP) and Non-original equipment manufactured aftermarket crash parts. AMP and Non-OEM parts may be authorized for use by the insurer and used by the repair facility in the manner authorized by Mississippi law for making repairs. AMP and Non-OEM parts are allowed to be used if they are used in conformance to statutory law, the provisions of the policy, and the parts properly and safely repair the vehicle.AMP is commonly referred to as “used” parts. However, AMP may be new or used parts. AMP is defined by law as the replacement for any of the non-mechanical sheet metal or plastic parts which generally constitutes the exterior of a motor vehicle. As these are parts manufactured by the car manufacturer, there is no statutory requirement that the use of these parts be disclosed to the insured.Non-OEM parts are aftermarket crash parts that are made by any manufacturer other than the original vehicle manufacture or his supplier. Some repair facilities may use the term “Competitive Parts” when referring to these types of parts. As Non-OEM parts are not made by the original manufacturer, there are certain statutory requirements that must be followed when using them.A policyholder is not required to accept a non-OEM part as part of their repairs but may be required to make up the difference in price. Reasonable Expectation DoctrineMississippi has adopted the reasonable expectations doctrine on public policy grounds: “The objectively reasonable expectations of applicants and intended beneficiaries regarding the terms of insurance contracts will be honored even though the painstaking study of the policy provisions would have negated those expectations.”  Brown v. Blue Cross & Blue Shield, 427 So. 2d 139, 141, fn. 2 (Miss. 1983) (citing Keeton, Insurance Law Rights at Variance with Policy Provisions, 83 Harv. L. Rev. 961, 967 (1970)). Recording ConversationsOne-Party Consent:  A person has the right to record the contents of an oral, telephonic or other communication if the person is a party to the communication or if one of the parties has given prior consent.  Miss. Code Ann. § 41-29-531(e). ReleasesIn order to obtain a valid and binding settlement and release, certain situations require court or other governmental agency approval:Minors (under 18)Although the age of majority in Mississippi is 21, all persons 18 or older are deemed to be adults for purposes of personal property, which includes the right to settle a claim, and accept money in the settlement of a claim.  Miss. Code Ann. § 93-19-13.  Garret v. Gay, 394 So. 2d 321, 323 (Miss. 1981).However, for all persons under 18, there are only three ways to bind a minor to a settlement (no matter what the amount is): 1) remove the disability of a minor, 2) appoint a guardian to approve the settlement, and 3) chancery court approval, without a guardianship, for claims less than $25,000.  In re Wilhite, 121 So. 3d 301 (Miss. App. 2013).Both parents are necessary parties to a minor settlement proceeding.  Miss. Bar Assoc. v. Moyo, 525 So. 2d 1289 (Miss. 1988).Incompetent AdultsSimilar to minors, incompetent adults lack the capacity to enter into legally binding contracts.  Options to settle with an incompetent adult include: 1) obtain a guardianship or conservatorship over the adult and proceed with chancery court approval, or 2) settle with a person that has a durable power of attorney over the adult.Estates If a claimant is asserting a claim on behalf of the Estate, the claim must be approved by the Chancery Court for estates valued in excess of $50,000.For small estates, where the estate assets are less than $50,000 and an estate administration has not been opened, there is a procedure involving the use of affidavits by the “successor” that can be utilized. Miss. Code Ann. § 91-7-322. Wrongful DeathChancery court jurisdiction in wrongful-death litigation may be invoked in only three instances: (1) for opening the decedent’s estate so that beneficiaries may pursue a wrongful-death claim in the circuit court; (2) for the approval or rejection of a minor’s wrongful-death settlement; and (3) to determine wrongful-death beneficiaries. Wrongful death cases that only involve adult beneficiaries, and do not involve any claim by the Estate of the decedent, do not require chancery court approval of the settlement.  However, chancery court proceedings are required to determine the proper wrongful death beneficiaries.  If an unknown beneficiary were to present himself within the applicable statute of limitations period, he would still be able to assert a claim and file suit and would not be bound by the settlement agreement unless beneficiaries were determined in chancery court.  Chancery Court proceedings include publications that cut off the rights of any unknown beneficiaries and ensure a complete and binding settlement of the case. Thus, it is important to utilize the chancery court process in wrongful death cases. If there is a beneficiary who is a minor, his portion of the wrongful death settlement must proceed like any other minor settlement.Workers Compensation       In some situations a claimant is injured while in the course of his employment and receives medical or other benefits as a result of his employer’s workers compensation insurance.  The workers compensation carrier has a statutory right of reimbursement pursuant to Miss. Code Ann. § 71-3-71.By statute, in order to validly settle a liability claim with a person who has received workers compensation benefits, certain approval must be obtained.   Miss. Code Ann. § 71-3-71.If no lawsuit has been filed, approval must be obtained by filing a petition with the Mississippi Workers Compensation Commission.If a lawsuit has been filed, approval must be obtained from the court in which the suit is pending.NOTE: These requirements only apply to liability insurance settlements.  Payments of UM benefits are exempt from any such requirement and no approval need be obtained.  Cossitt v. Nationwide Mut. Ins. Co., 551 So. 2d 879 (Miss. 1989).In order for the workers compensation carrier to become entitled to reimbursement it must: 1) intervene or join into the plaintiff-employee third party litigation (at any time before disbursement); 2) enter into a contractual subrogation agreement with the employee, or 3) file its own suit against the at-fault party.  Liberty Mutual Ins. Co. v. Shoemake,  11 So. 3d 1207 (Miss. 2013).Repair ShopInsurer cannot condition the payment of a claim on the requirement that repairs be made by a particular repair shop.  In other words, the claimant or insured has the right to select the repair shop of his or her choice.  However, the insurer is only required to pay the lowest possible amount for which the repair could properly and fairly be made within a reasonable geographic area.  Miss. Code Ann. § 83-11-501. Draft/Check When there is not a total loss, the insurer must add the name of the repair shop or any lienholders as a payee on a check.  In the case of a total loss, the insurer must add the name of any lienholder to the insured as payee on the check.   Miss. Code Ann. § 83-11-551 (currently scheduled to be repealed July 1, 2017)._____________________A word of caution is necessary whenever legal issues are at stake. The information contained in these posts is for general guidance on matters of interest only.  The application and impact of laws can vary widely based on the specific facts involved. Given the changing nature of laws, rules and regulations, there may be omissions or inaccuracies in information contained in this report or laws may have changed or been reinterpreted.  Accordingly, the information in this report is provided with the understanding that the authors are not herein engaged in rendering legal, tax, or other professional advice and services.  As such, it should not be used as a substitute for consultation with legal or other competent advisers.  Before making any decision or taking any action, particularly before denying any first-party claims, you should consult with your counsel or the attorneys at Holcomb Dunbar. 
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