Walker v. Allstate Insurance ( 1999 )

UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 98-60678
VICTORIA D. WALKER;
AND, TERRY E. WALKER;
Plaintiffs-Appellants,
v.
ALLSTATE INSURANCE COMPANY;
Defendant-Appellee,
Appeal from the United States District Court
for the Northern District of Mississippi
(2:97-C-152-B-B)
August 16, 1999
Before HIGGINBOTHAM, JONES, and DENNIS, Circuit Judges.
PER CURIAM:*
On June 2, 1994, while driving an automobile owned by
Ralph and Jane Holt, Victoria Walker was injured when she was rear-
ended by a van driven by an uninsured motorist, Thomas Frazier. In
the accident, Victoria sustained injuries and the Holt automobile
sustained limited damage. No accident report was prepared,
however, and Victoria did not report the accident to her insurer,
Allstate Ins. Co. (“Allstate”). On July 31, 1996, without
Allstate’s consent, Victoria and her husband, Terry Walker, settled
all potential claims against Frazier up to the limit of his policy
*
Pursuant to 5TH CIR. R. 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opinion should not be published and is not precedent except under the limited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 5TH CIR. R. 47.5.4.
-- $10,000 for each person.1 The Walkers did not make an uninsured
motorist claim against Allstate for the June 1994 accident until
April 30, 1997.2
When Allstate refused to pay the claim, the Walkers filed
an action to recover their uninsured motorist benefits in
Mississippi state court on May 29, 1997. The action was removed to
the Northern District of Mississippi and, based on the parties’
consent, was referred to a magistrate judge. Following Allstate’s
motion, the magistrate judge granted summary judgment and dismissed
the Walkers’ claims. The Walkers timely appealed.
Under the Walkers’ policy with Allstate, coverage is
specifically excluded for “damages an insured person is legally
entitled to recover because of . . . bodily injury to any person
who makes a settlement with the owner or operator of the uninsured
auto without [Allstate’s] written consent.” This provision
preserves Allstate’s subrogated interest in any claims against an
uninsured tortfeasor. See Miss. Code § 83-11-107; United States
Fidelity & Guar. Co. v. Hillman, 367 So. 2d 914, 920 (Miss. 1979);
1
Under the Mississippi Uninsured Motorist statute, an “uninsured motor
vehicle” is defined as,
An insured motor vehicle, when the liability insurer of such vehicle
has provided limits of bodily injury liability for its insured which
are less than the limits applicable to the injured person provided
under his uninsured motorist coverage.
Miss. Code § 83-11-103(c)(iii). The uninsured motorist limit under the Walkers’
policy with Allstate was $100,000 for each person.
2
In her deposition, Victoria testified that she mentioned the June
1994 accident to her Allstate agent in July 1994. She confirmed, however, that
she was not making a claim at that time. Moreover, it is undisputed that the
Walkers did not seek Allstate’s consent prior to settling their claim with
Frazier.
2
see also Shepherd v. State Farm Mut. Auto. Ins. Co., 607 F. Supp.
75, 76 (S.D. Miss. 1985). Even with this provision, when an
insured settles with a tortfeasor without the insurer’s consent,
the insurer’s subrogation rights are extinguished. See St. Paul
Property and Liab. Ins. Co. v. Nance, 577 So. 2d 1238, 1241-42
(Miss. 1991). Thus, one of an insurer’s limited protections
against non-consensual settlements by an insured is a breach of
contract defense to an uninsured motorist claim by the settling
insured. See id. at 1242. Under Hillman, Mississippi law mandates
the result reached by the magistrate judge in this case. See
Hillman, 367 So. 2d at 921-22. The Walkers can cite no cases to
the contrary, and because it is undisputed that Allstate was not
given the opportunity to consent to the Walker/Frazier settlement,
Murriel v. Alfa Ins. Co., 697 So. 2d 370, 371-72 (Miss. 1997), is
inapposite.3
AFFIRMED.
3
Because we have resolved this case on Hillman grounds, this court
need not reach Allstate’s alternative arguments for affirmance.
3