Case ID: so2d_693/html/0498-01.html
Source: Caselaw Access Project
Author: {"author": "CRAWLEY, Judge. THOMPSON, Judge,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

ALFA MUTUAL INSURANCE COMPANY v. Debra C. BARBEE.
    2951350.
    Court of Civil Appeals of Alabama.
    March 28, 1997.
    
      Connie Ray Stockham and Stephanie Zo-har of Stockham & Stockham, P.C., Birmingham, for Appellant.
    D. Michael Barrett and Richard C. Shuleva of Barrett & Poore, P.C., Birmingham, for Appellee.
   CRAWLEY, Judge.

In October 1994, State Farm Mutual Automobile Insurance Company filed an inter-pleader action against Debra C. Barbee and several other defendants. The action arose from a multiple-vehicle accident involving William Michael Bowden, State Farm’s insured. State Farm interpleaded $89,500, the balance of the policy limits after other settlements, into the trial court. Following a hearing, the trial court entered a judgment disbursing the funds among several defendants, including Barbee. In its judgment the trial court stated the following:

“BACKGROUND FACTS
“3. ... The Barbee vehicle was insured by Alfa Mutual Insurance Company under a policy of insurance which provided un-derinsured motorist policy limits of $20,000 per person/$40,000 per occurrence. At the time of the collision defendant Barbee had an additional vehicle in her household insured by Alfa with underinsured motorist policy limits of $20,000/$40,000. Alfa Mutual Insurance Company is not a party to this action. The court notes, however, that Alfa, with knowledge of this pending action, has executed a written waiver of sub-rogation against William M. Bowden (the negligent party) and has neither filed an intervention petition nor had counsel appear on anyone’s behalf.
“TAKING OF TESTIMONY AND FINDINGS OF FACT
“12. ...
“D. [Debra] Barbee was insured under ... policies of insurance numbered # A1273506 and # A1204674 by Alfa Insurance Company which provided under-insured motorist coverage on two vehicles in her household in the policy amounts of $20,000 per person/$40,000 per occurrence. It appears to this court that a maximum of $40,000 in underin-sured motorist coverage is available to Ms. Barbee to compensate her for injuries suffered in the accident.
“ORDER
“1. ... Under said coverage, Alfa is obligated to pay Barbee $40,000.”

In November 1995, Alfa filed a motion for relief from the trial court’s judgment, pursuant to Rule 60(b)(1), (4), and (6), alleging that the judgment is void as to Alfa’s obligation to pay Barbee because, Alfa argued, the trial court did not have in personam jurisdiction over Alfa. Alfa alleged that it was not a party to State Farm’s interpleader action and was never served with process in that action. Alfa further alleged that it did not intervene or enter an appearance in the interpleader action because Barbee had not sued Bowden, State Farm’s insured, or Alfa for underin-sured motorist benefits. Alfa also alleged that it had waived its subrogation rights in order to enable settlement with Bowden. Following a hearing, the trial court amended its judgment by removing the sentence, “Under said coverage, Alfa is obligated to pay Barbee $40,000,” but retained all other references to Alfa.

Alfa appeals, arguing that the trial court should have removed from the judgment all references to it and its policy with Barbee. Alfa contends that the trial court cannot legally order it to pay benefits to Barbee. After examining the references to Alfa in the trial court’s judgment, it appears that the only reference ordering Alfa to pay benefits to Barbee was removed by the trial court upon Alfa’s motion. The other references to Alfa only state the trial court’s findings of fact describing Barbee’s underinsured motorist benefits, but these references do not impose an obligation on Alfa to disburse any underinsured motorist funds to Barbee.

The doctrine of res judicata does not prevent Alfa from litigating its liability pursuant to Barbee’s underinsured motorist coverage, because there has been no adjudication of Alfa’s liability. Smith v. Union Bank & Trust Co., 653 So.2d 933 (Ala.1995). Neither would the doctrine of collateral es-toppel prevent Alfa from litigating its liability, because the issue of its liability pursuant to Barbee’s underinsured motorist coverage was not litigated in State Farm’s interpleader action. Id.

Therefore, we conclude that the trial court did not err in denying Alfa’s Rule 60(b) motion after removing the sentence ordering Alfa to pay Barbee underinsured motorist benefits.

AFFIRMED.

ROBERTSON, P.J., and YATES and MONROE, JJ., concur.

THOMPSON, J., dissents.

THOMPSON, Judge,

dissenting.

I respectfully disagree. The trial court improperly made reference to Alfa’s uninsured/underinsured motorist coverage and wrongly considered the amount of that coverage when dividing the interpleaded proceeds of the State Farm liability policy amongst the injured parties.

One can certainly empathize with the unenviable position of the trial judge. He obviously determined that the funds available from the State Farm policy were not adequate to cover the damages presented by the various parties. However, the proceeds from the Alfa policy were not available to remedy this dilemma.

The trial court’s decision dealt with Alfa’s $40,000 uninsured/underinsured motorist policy limits as if they were funds that were before the court as part of the interpleader. They were not.

Alfa was not a party to this action, but, in essence, it was made one in the trial court’s judgment. The trial court’s decision allows the other parties to the interpleader to share in Barbee’s uninsured/underinsured motorist coverage.

In this regard, I find Putman v. Womack, 607 So.2d 166 (Ala.1992), to be on point. In Putman, the trial court awarded the three injured parties in an action for interpleader equal shares of the funds before the court. Ms. Putman, one of the three injured people, asserted that she should be awarded a greater amount of the funds because the other two parties to the interpleader had been paid benefits from their own uninsured motorist policies.

Our Supreme Court refused to accept Ms. Putman’s argument. “To allow her to recover more than a proportional share of the interpleaded proceeds would, in effect, allow her to recover under the provisions of the other policies, under which she is not an insured.” Id. at 169.

The trial judge in the present matter, when evaluating the individual claims of the parties to the interpleader, determined that Barbee’s claim was the most valuable claim of all the parties. However, when the inter-pleaded funds were divided, Barbee’s portion was significantly less that two of the other injured parties. Additionally, Barbee was ordered by the court to repay $12,000 of the amount awarded to her “upon payment of her underinsured motorist proceeds by Alfa Insurance Company.”

Underinsured motorist coverage is not an extension of liability coverage. Underin-sured motorist coverage is a type of coverage that does not apply unless the total amount of liability coverage available to the injured party is less than the damages which the injured party is legally entitled to recover. See Ala.Code 1975, § 32-7-23. In this case, had the trial court made an award of the interpleaded funds that was proportionate to its assessment of the injuries sustained by the parties, Alfa’s underinsured motorist exposure for Barbee’s injuries might arguably have been less.

The majority opinion states that the judgment rendered in the interpleader action does not serve to prevent Alfa from litigating its liability to Barbee under her uninsured motorist coverage with the company. It correctly states that the doctrines of res judica-ta and collateral estoppel will not apply because no adjudication was made as to Alfa’s liability. However, I am not persuaded that this is valid reason to deny Alfa’s request. It is the possibility of such further litigation and negotiation that gives rise to Alfa’s request to have the potentially damaging references to Barbee’s policy removed from the judgment.

Although I am mindful of the broad discretion vested in the trial court when ruling on Rule 60(b), Ala.R.Civ.P., motions, I believe that the exceptional circumstances of this case require relief under Rule 60(b)6.

The trial court should have granted Alfa’s request and removed from the judgment all references to Barbee’s insurance coverage with Alfa. Therefore, I dissent from the majority opinion.