Home Insurance Co. v. Mississippi Insurance Guaranty Ass'nHome Insurance Co. v. Mississippi Insurance Guaranty Ass'n
for the Court.
¶ 1. Thrеe oil rig workers filed suit against G.B. “Boots” Smith Corp., alleging personal injuries as a result of an accident which occurred in 1983. At that time, Home Insurance Company was Smith’s primary liability insurer, providing up to $500,000 in coverage. Mission National Insurance Company was Smith’s reinsurer or exсess liability carrier, providing up to $5,000,000 in coverage. The plaintiffs offered to settle within Hоme’s policy limits, but Home declined the offer. A subsequent trial resulted in a $2,050,000 verdict against Smith. Prior to payment of its portion of the amount owed by Smith, Mission filed for bankruptcy. It was later discоvered that Home failed to inform Smith of the settlement offer. To safeguard against a bad faith claim by Smith, Home paid the entire amount of the judgment against Smith, including that part which exсeeded the Home policy limit of $500,000. Later, Home secured an assignment from Smith of all оf its potential claims against Mission.
¶ 2. Home subsequently notified the Mississippi Insurance Guaranty Association (“MIGA”), a non-profit, unincorporated legal entity created “to provide a mechanism for the payment of covered claims under certain insurance policies to avoid excessive delay in payment and to avoid financial loss to claimants or policyholders because of the insolvency of the insur-er_”
¶ 3. MIGA filed this action for a declaratory judgment against Home and Smith requesting a declaration that it was not statutorily liable tо satisfy the judgments rendered against Smith. Smith was later dismissed from the suit. MIGA’s motion for summary judgment was granted, and Home appeals.
¶ 4. Home raises three issues concerning the liberal construction of the Mississippi Insurance Guaranty Association Law. Miss.Code Ann. § § 83-23-101 to -137 (Rev.1999). We will not address the issues as presented by Home because we find that Home lacks standing to raise these issuеs and assert a claim against the MIGA.
DISCUSSION
¶ 5. Pursuant to Rule 56 of the Mississippi Rules of Civil Procedure, we review a trial court’s grant of summary judgment de novo. Spencer v. Greenwood/Leflore Airport Auth.,
¶ 6. The circuit court did not err in its grant of summary judgment to MIGA. Home has no standing to raise the issues presented since it is not an insured and does not have a “covered claim” within the definition of the statute.
¶ 7. Home claims that it has an “assignment” of all claims from Smith, and, since Smith’s claims would have been covered under the statute, Home’s claims are covered under the statute. However, even though Home’s documеnt is called an “assignment,” it really is a disguised subrogation attempt. Subrogation is defined as “the substitution of one party for another whose debt the party pays, entitling the paying party tо rights, remedies, or securities that would otherwise belong to the debtor.” Black’s Law Dictionary 1158 (7th ed.2000). To be entitled to subrogation
¶ 8. Home’s failure to settle within the policy limits when the offer was made, combined with its failure to inform its insured of such offer, automatically opеrated to extend Home’s limits to the full amount of the judgment rendered. For this reason alonе, we find that Home does not have standing to bring this suit since Home’s policy limits were extended tо cover the entire judgment against Smith, and no subrogation would be allowed under the MIGA Law.
CONCLUSION
¶ 9. The circuit court was correct in finding that Home lacks standing to raise the issues presented in this appeal as it is not an “insured” and has no “covered claim” under the MIGA Law. We therefore affirm the circuit court’s grant of summary judgment to MIGA.
¶10. AFFIRMED.