Lead Opinion
for the Court:
¶ 1. Fоr more than one hundred and thirty years, this Court has held that an insurance company may void a policy when the insured made material misrepresentations during the application process.
FACTS AND PROCEDURAL HISTORY
¶2. While driving his mother’s 2003 Chevy Silverado in Rankin County, sixteen-yeаr-old William Busby crashed into Kenneth Tarlton’s car, which in turn collided with a car driven by Katriee Jones-Smith. When William’s mother, Michelle, applied to Safeway Insurance Company for an insurance policy on the Silverado, the application required her to warrant that she had provided the names of all regular frequent drivers of the covered vehicles, as well as all residents of her household fourteen years old or older. Michelle failed to disclose that fifteen-year-old William resided in her home, and Safeway issued her a policy on the Silverado at a premium that was lower than the premium would have been had Safeway known about William.
¶ 3. So after William’s accident, Safeway sought a declaratory ruling that Michelle’s failure to identify William was a material misrepresentation, rendering the policy voidable. In response, Katriee— along with her mother Nancy Jones, who owned the car Katriee was driving — filed an answer and counterclaim asserting that William was at fault in the аccident and that he was covered by the Safeway policy. The parties filed competing motions for summary judgment, and the circuit judge — finding Michelle’s failure to disclose William was a material misrepresentation — granted summary judgment to Safeway.
ANALYSIS
¶ 4. The appellants contend that, under this Court’s recent decision in Lyons v. Direct General Insurance Company of Mississippi, the circuit judge was precluded from declaring this policy void because an injured third party cannot be denied recovery up to the statutorily imposed minimum-policy limits.
I. Lyons v. Direct General does not control this case.
¶ 5. In Lyons, Roderick Holliday caused an accident while driving a car insured by his mother.
¶ 6. On appeal, we concluded that the named-driver exclusion violated Mississippi’s statutorily imposed minimum-liability insurance law.
¶ 7. Our analysis in Lyons, which assumed a valid insurance policy had been issued, prohibited the insurance company from excluding statutorily required coverage, but it created no duty to issue a policy. It did no more than address an invalid exclusion within a valid insurance policy.
¶ 8. By contrаst, the question in this case is not whether the terms of Michelle’s policy with Safeway covered the accident, but whether the policy itself was voidable. And the longstanding, well-established law of this State renders voidable a policy issued as a result of material misrepresentations.
II. The circuit judge correctly voided Busby’s policy.
¶ 9. In 1876, in Cooperative Life Association of Mississippi v. Leflore, this Court stated:
Nothing is better settled, both in regard to insurance contracts and contracts of all sorts, than that an untrue statement by either party, as to a matter vital to the agreement, will avoid it, though there be no intentional fraud in the misrеpresentation.9
There, the beneficiaries to a life-insurance policy brought an action in the Montgomery County Circuit Court to recover the proceeds of that policy after the insured’s death.
¶ 10. This Court first considered whether insurance contracts should be considered under their own set of legal rules, or whether they should sit on equal footing with other contracts, controlled by the general law of contracts.
An immense amount of labor and learning is displayed in the books in the consideration of what are, and what are not, material matters in contracts of insurаnce, a false statement in relation to which will avoid the policy; and it is impossible to resist the conclusion, in perusing the cases, that the courts, in order to avoid supposed hardships in this class of suits, have been disposed to adopt other rules than those applicable to ordinary contracts. For this difference we can recognize no sound principle. Contracts of insurance ar'e neither mala prohibita nor mala in se, and, where entered into by persons sui juris, are to be regulated and determined by the same rules that govern ordinary agrеements, with neither more nor less favor than is shown in other cases.14
The Court also posited that:
No man can read the history of the struggle between the courts and the insurance companies on the question of what false statements, made by the applicant, will avoid the policy, as that history is developed in the adjudged cases, without perceiving a manifest disposition to apply to such agreements a rule far more rigid than that which governs ordinary contracts. However commendable the disposition to protect unsuspecting, and frequently ignorant, men from the evil consequences of agreements into which they have been entrapped by cunningly and obscurely worded conditions, so written or printed as to escape observation, there can be no justification for disregarding, in their behalf, fundamental principles of law, or relieving them from engagements as to which there is no pretence for charging fraud. If the insurance companies, conforming their policies to the requirements of еach successive decision, have protected themselves against all possible loss by any misrepresentation, no matter how insignificant or unintentional, it would be most unseemly in the courts to seek, by new exactions, to nullify these advantages. It is neither the duty nor the right of courts to protect adults against the consequences of their agreements incautiously entered into. Their functions are exhausted when they construe and enforce them as written.15
¶ 11. In other words, jurists had been reluctant to invalidаte insurance policies based on the misrepresentations of the insured when the invalidation would deny innocent beneficiaries the right to recover, giving rise to the idea that insurance policies should not be treated equally with other contracts. But, in this Court’s opinion, the desire to avoid the unpalatable result was not a “sound principle” upon which the Court could recognize a distinct law of insurance contracts. Instead, insurance contracts were “to be regulated and detеrmined by the same rules that govern ordinary agreements, with neither more
¶ 12. Then, having determined that insurance contracts should be treated like all other contracts, the Court explained when a contract becomes invalid based on misrepresentations in the application process. The Court rejected the circuit court’s instruction that actual fraud need be shown, and instead explained that the relevant law was that of warranties and material misrepresentations.
’ ¶ 13. That is, when “the misstatements of which the applicant was guilty were manifestly as to matters material to the contract, ... according to all the authorities, [they] avoided the policy.”
¶ 14. Then, in the 1908 case Fidelity Mutual Life Insurance Company v. Miaz-za, this Court expanded on these principles, stating that “[i]t is the universal rule that any contract induced by misrepresentation or concealment of material facts may be avoided by the party injuriously affectеd thereby.”
¶ 15. There, an insured obtained life insurance by failing to disclose previous illnesses when requested to do so in the application.
¶ 16. This law, though old, has persisted. Eighty years later, an insured submitted a claim for damages his truck incurred in an accident, and the insurer denied coverage based on the insured’s failure to disclose two speeding tickets when asked to do so in the application process.
¶ 18. Applying this century-old precedent on insurance contracts to the facts before us today, there can be no doubt that the circuit judge properly voided the policy issued by Safeway. The application required Michelle to warrant that she had provided the names of all residents of her homé over the age of fourteen. She admittedly failed to do so by failing to disclose fifteen-year-old William, to whom she even gifted a car covered by the policy. Because the parties to the contract characterized this assertion as a warranty, its materiality heed- not be questioned, and the circuit judge properly voided the contract because the statement wаs not literally true.
¶ 19. And we would reach the same result even if we characterized Michelle’s failure to disclose William as a misrepresentation, because it was both material and not substantially true. The representation was entirely false because the application required Michelle to disclose all household residents over age fourteen and she did not provide all of the names she was required to provide. The representation was material because, without, а 209 percent increase in Michelle’s rate, Safeway would not have issued the policy. So, under either standard, the circuit judge reached the right result.
CONCLUSION
¶20. Because Michelle obtained her Safeway policy through what was at best a material misrepresentation, we affirm the circuit judge’s decision to void the policy.
¶ 21. AFFIRMED.
Notes
.Coop. Life Ass’n of Miss. v. Leflore,
. Lyons v. Direct Gen. Ins. Co. of Miss.,
.Id. at 888.
. id.
. Id. at 890-91.
. Id. at 890 (quoting Miss.Code Ann. § 63-15-4(2)(a) (Rev.2013))
. Lyons,
. Id. We note that, after our decision in Lyons exposed what many considered to be a glitch in the law, the Legislature promptly fixed it by amending Section 63-15-3(j)-effective July 1, 2015-to provide that "[ljiability insurance required under this pаragraph (j) may contain exclusions and limitations on coverage as long as the exclusions and limitations language or form has been filed with and approved by the Commissioner of Insurance.”
. Coop. Life Ass'n of Miss.,
. Id.
. Id.
. Id.
. Id. at 14-15.
. Id.
. Id. at 18-19.
. Id. at 15.
. Id. at 18.
. Id. at 12.
. Id. at 18.
. Id. at 15.
. Fid. Mut. Life Ins. Co. v. Miazza,
. Id.
. Id. at 817-18.
. Id. at 819.
. Sanford v. Federated Guar. Ins. Co.,
. Id. at 216 (quoting Colonial Life & Accident Ins. Co. v. Cook,
. Sanford,
. Sanford,
Dissenting Opinion
dissenting:
¶ 22. Because I believe Mississippi Code Section 63-15-4(2) (Rev.2013) and this Court’s decision in Lyons v. Direct General Insurance Company of Mississippi,
¶23. Mississippi law requires liability insurance for every motor vehicle operated on the streets, roads, and highways of the state:
Every motor vehicle operated in this state shall have an insurance card maintained in the motor vehicle as proof of liability insurance that is in compliance with the liability limits required by Section 63 — 15—3(j). The insured parties shall be responsible for maintaining the insurance card in each motor vehicle.
.... in the amount of Twenty-five Thousand Dollars ($25,000.00) because of bodily injury to or death of one (1) person in any one (1) accident, and subject to said limit for one (1) person, in the amount of Fifty Thousand Dollars ($50,-000.00) because of bodily injury to or death of two (2) or more persons in any one (1) accident, and in the amount of Twenty-five Thousand Dollars ($25,-000.00) because of injury to or destruction of property of others in any one (1) accident.
Miss.Code Ann. § 63-15-3(j) (Rev.2013).
¶24. This Court recently interpreted these statutes with regard to named-driver exclusions in Lyons. In that case, Ma-chón Lyons suffered severe injuries in a single-car automobile accident when a Chevrolet Lumina automobile driven by Roderick Holliday, in which Lyons was a passenger, collided with a tree. Lyons v. Direct Gen. Ins. Co.,
¶ 25. The circuit court granted summary judgment in favor of Direct, finding that the policy clearly and specifically excluded coverage of Holliday. Id. Lyons appealed, arguing that Lang’s policy covered the damages incurred by Holliday because Mississippi law requires minimum limits of liability insurance coverage for all permissive drivers. Id.
¶ 26. The Mississippi Court of Appeals reversed, holding that an insured’s policy must cover all permissive drivers, rendering the named-driver exclusion void up to the amount of the policy’s minimum-coverage limits. Although the Court of Appeals reached the right result, it cited an incorrect statute in arriving at that result. Lyons v. Direct Gen. Ins. Co.,
¶ 27. We looked to Section 63-15-4(2)(b), which provides that an “insurance сompany issuing a policy of motor vehicle liability insurance as required by this section shall furnish to the insured an insurance card for each motor vehicle ....” Miss.Code Ann. § 63-15-4(2)(a) (Rev.2013) (emphasis added). Moreover, Section 63-15-4(2)(a) requires that “[ejvery motor vehicle operated in this state shall have an insurance card maintained in the motor vehicle as proof of liability insurance....” Miss.Code Ann. § 63-15-4(2)(a) (Rev.2013) (emphasis added). Given this express statutory language, the Court held that the “mandatory liability insurance requirement pertains to vehicles, nоt owners or operators.” Lyons,
¶ 28. To resolve this case, this Court should determine whether the Busby vehicle was insured, not whether the driver, William Hunter Busby, was insured. It is uncontested that Michelle Busby had pur
¶29. Safeway argues that Lyons and Section 63-15-4(2) do not abrogate an insurance company’s common law right to void an insurance policy due to material misrepresentаtions. It also argues that no Mississippi law prohibits an insurance company’s rescission of an insurance contract for material misrepresentations. But the duty to provide minimum-limits liability insurance coverage for a covered vehicle is absolute. Id.
¶ 30. A common rule of statutory construction is expressio unius est exclusio alterius, or “expression of the one is exclusion of the other.” See McCoy v. McRae,
¶ 31. Safeway also argues that, under the terms of the insurance policy between itself and Michelle Busby, it is allowed to void the contract if it discovers material misrepresentations on the part of Busby.
¶ 32. Moreover, it is not established in the record that the alleged misrepresentation, that William Busby was a member of Michelle Busby’s household, was material. We have held that a “a representation, if substantially true and not material to the risk, will not invalidate the policy in the absencé of fraud.” National Cas. Co. v. Johnson,
¶ 33. Safeway is not divested of its ability to control, within the bounds of applicable laws and regulations, the language of its insurance contracts. This Court has held that “[t]he parties indeed may negotiate-and automobile insurers may include-exclusions from coverage, so long as those exclusions do not emasсulate the statutorily required minimum coverage.” Lyons,
¶34. It is clear that Mississippi law, without exception, requires minimum-liability insurance limits for all over-the-road
KING, J., JOINS THIS OPINION.
. The policy issued to Busby states:
The statements made by you in the application are deemеd to be warranties. Any false or misleading information provided by you on the application to us which materially affects the acceptance or rating of the risk by us, by either direct misrepresentation, omission, concealment of facts or inconsistent statements, will result in your policy being null and void from its effective date. This paragraph shall also apply to misstatement of use and omission of fact. We do not provide coverage for any insured who has made fraudulent statemеnts engaged in fraudulent conduct in connection with any accident or loss for which coverage is sought under this policy.
(Emphasis in original.)
. In a very narrow exception to the State's mandatory liability insurance statutes, certain parties are allowed to self-insure:
(1) Any person in whose name more than 25 motor vehicles are licensed may qualify as a self-insurer by obtaining a certificate of self-insurance issued by the department as provided in subsection (2) of this section.
(2) The department may, in its discretion, upоn the application of a person, issue a certificate of self-insurance when it is satisfied that such person is possessed and will continue to be possessed of ability to pay judgments obtained against such person.
(3)Upon not less than five days notice and a hearing pursuant to such notice, the department may upon reasonable grounds cancel a certificate of self-insurance. Failure to pay any judgment within thirty days after such judgment shall have become final shall constitute a reasonable ground for the cancellation of a certificate of self-insurance.
Miss.Code Ann. § 63-15-53 (Rev.2013).