Case Title: Mid-Century Insurance Company v. Watts

Citation: 

Docket Number: 1180852

State: alabama

Court: Alabama Supreme Court

Date: 2020-09-18T00:00:00Z

Document:
Rel: September 18, 2020
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter.  Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
SPECIAL TERM, 2020
____________________
1180852
____________________
Mid-Century Insurance Company
v.
Rodney Watts, as personal representative of the Estate of
Leiah Watts, deceased, et al.
Appeal from Talladega Circuit Court
(CV-17-900251)
BOLIN, Justice.
This Court granted Mid-Century Insurance Company ("Mid-
Century") permission to appeal from the denial of its motion
for a partial summary judgment in an action seeking
1180852
underinsured-motorist benefits filed by Rodney Watts, as the
personal representative of the estate of his wife Leiah Watts,
deceased, and others (hereinafter collectively referred to as
"the Watts plaintiffs"). See Rule 5, Ala. R. App. P.
Facts and Procedural History
On July 16, 2016, Leiah Watts, Caiden Watts, Jackson
Watts, Faye Howard, Mary Adair, Evelyn Watts, Tammy McBurnett,
Renee Stone, and Victoria Stone were traveling in a 2014 Ford
Expedition sport-utility vehicle ("the Watts vehicle") when
the Watts vehicle was struck by a vehicle being driven by
Wiley "Pete" Whitworth.  The collision killed Leiah Watts,
Faye Howard, Mary Adair, and Evelyn Watts. Tammy McBurnett,
Renee Stone, Caiden Watts, Jackson Watts, and Victoria Stone
suffered serious injuries in the collision.
The Watts vehicle was insured by a policy of insurance
issued by Farmers Insurance Exchange to Rodney Watts
("Rodney") and underwritten by Mid-Century.1  The insurance
policy 
provided 
underinsured/uninsured-motorist 
("UIM") 
1Following the accident, Whitworth's insurer tendered the
liability policy limits of $300,000 available under a policy
of insurance issued to Whitworth. Farmers and Mid-Century
authorized Rodney's acceptance of those moneys and waived
their subrogation interests. 
2
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coverage of $50,000 per person and $100,000 per accident. The
insurance policy listed five vehicles that were covered under
the policy. The insurance policy also contained a "stacking"
provision in the policy endorsements "Part II-Uninsured
Motorist" section, allowing the stacking of benefits.
A dispute arose between Mid-Century and Rodney as to the
amount of UIM benefits payable to the Watts plaintiffs under
the policy.  Mid-Century contended that, because the policy
allowed for the stacking of up to three UIM coverages, the
maximum amount of UIM benefits available under the policy for
the accident in this case is $300,000, based on $100,000 per
accident.  However, the Watts plaintiffs contended that each
of the nine occupants of the Watts vehicle involved in the
accident (or his/her personal representative) was entitled to
$150,000 in UIM benefits ($50,000 per person limit of the
occupied vehicle plus the per person limit of $50,000 for two
additional coverages under the stacking provision of the
policy). Thus, the total sought by Rodney in UIM benefits was
$1,350,000 (9 x $150,000). 
3
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On August 3, 2017, the Watts plaintiffs sued Mid-Century, 
Farmers 
Insurance 
Exchange, 
and 
Farmers 
Group, 
Inc.2
(hereinafter 
collectively 
referred 
to 
as 
"the 
defendants"), 
in
the Talladega Circuit Court ("the trial court"), asserting
claims alleging fraud, breach of contract, wrongful denial of
UIM benefits, and bad faith. On August 28, 2017, the
defendants filed, pursuant to 28 U.S.C. § 1446, a notice of
removal of the action to the United States District Court for
the Northern District of Alabama, Eastern  Division ("the
federal district court"). On that same date, the defendants
moved the federal district court to dismiss the Watts
plaintiffs' fraud claims, breach-of-contract claim, and bad-
faith claim.   On October 19, 2017, the federal district court
entered an order requiring, among other things, that the Watts
plaintiffs file an "Amended Complaint setting out with the
specificity required by the Federal Rules of Civil Procedure
(including Rule 9 as to any fraud claims) all claims against
all defendants." 
On November 30, 2017, the Watts plaintiffs filed their
first amended complaint, reasserting their claims against the
2Farmers Group is an entity that administers insurance
policies issued by Farmers Insurance Exchange. 
4
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defendants with more specificity. On December 14, 2017, the
defendants moved the federal district court to dismiss the
fraud claims, the bad-faith claim, and the breach-of-contract
claim asserted against them in the Watts plaintiffs' first
amended complaint. 
On April 27, 2018, the federal district court entered an
order granting in part and denying in part the defendants'
motion to dismiss. The court granted the motion to dismiss the
fraud claims as to Farmers Group only and denied the motion to
dismiss the fraud claims as to Farmers Insurance Exchange and
Mid-Century. Additionally, the court dismissed without
prejudice -- based on ripeness grounds -- the breach-of-
contract and bad-faith claims against all the defendants. 
On May 25, 2018, the Watts plaintiffs filed a second
amended complaint against Farmers Insurance Exchange and Mid-
Century, reasserting their fraud claims and to more
specifically 
state 
a 
breach-of-contract claim 
for 
UIM 
benefits
("the UIM claim"). On June 14, 2018, the Watts plaintiffs
moved to dismiss their UIM claim against Farmers Insurance
Exchange. On June 29, 2018, the federal district court entered
an order granting the Watts plaintiffs' unopposed motion to
5
1180852
dismiss, without prejudice, the UIM claim against Farmers
Insurance Exchange. 
On July 27, 2018, the Watts plaintiffs moved the federal
district court to remand the case to the trial court. On
September 6, 2018, the federal district court entered an order
remanding the case to the trial court.
On February 18, 2019, Mid-Century  moved the trial court
for a partial summary judgment on the UIM claim, arguing that
the UIM coverage available to the Watts plaintiffs under the
uninsured-motorist statute, § 32-7-23, Ala. Code 1975, and the
UIM provisions of the policy issued to Rodney was $300,000.
Mid-Century also moved the trial court for an order  allowing
it to pay UIM benefits of $300,000 into the trial court for
distribution to the Watts plaintiffs.  On March 12, 2019,
Farmers Insurance Exchange and Mid-Century moved the trial
court pursuant to Rule 21, Ala. R. Civ. P., to sever the Watts
plaintiffs' fraud claims from the UIM claim.      
On March 22, 2019, the Watts plaintiffs filed their
motion in opposition to Mid-Century's motion for a partial
summary judgment on the UIM claim, arguing that Mid-Century's
limit of liability under the uninsured-motorist statute and
6
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the UIM provisions of the policy was $150,000 per injured
person, for a total of $1,350,000.
  
On March 26, 2019, the trial court entered an order
granting Mid-Century's motion to pay its asserted UIM policy
limit of $300,000 into the trial court. On April 29, 2019, the
trial court entered an order granting the motion to sever the
fraud claims from the UIM claim. On June 21, 2019, the trial
court entered an order denying Mid-Century's motion for a
partial summary judgment as to the Watts plaintiffs' UIM
claim.
On July 10, 2019, Mid-Century moved the trial court
pursuant to Rule 5, Ala. R. App. P., for permission to appeal
the interlocutory order denying its motion for a partial
summary judgment as to the UIM claim, and on July 19, 2019,
the trial court entered an order granting Mid-Century
permission to appeal. On July 26, 2019, Mid-Century petitioned
this Court for permission to appeal. On October 2, 2019, this
Court granted Mid-Century permission to appeal pursuant to
Rule 5, Ala. R. App. P.
   
Standard of Review
"'Where, as here, the facts of a case are
essentially undisputed, this Court must determine
7
1180852
whether the trial court misapplied the law to the
undisputed facts, applying a de novo standard of
review. Carter v. City of Haleyville, 669 So. 2d 812,
815 (Ala. 1995). Here, in reviewing the denial of a
summary judgment when the facts are undisputed, we
review de novo the trial court's interpretation of
statutory language and our previous caselaw on a
controlling question of law.'"
Wood v. Wayman, 47 So. 3d 1212, 1215 (Ala. 2010)(quoting
Continental Nat'l Indem. Co. v. Fields, 926 So. 2d 1033, 1035
(Ala. 2005)).
This Court has stated the following with regard to
permissive appeals:
"In the petition for a permissive appeal, the
party seeking to appeal must include a certification
by the trial court that the interlocutory order
involves a controlling question of law, and the trial
court must include in the certification a statement
of the controlling question of law. Rule 5(a), Ala.
R. App. P. In conducting our de novo review of the
question presented on a permissive appeal, 'this
Court will not expand its review ... beyond the
question of law stated by the trial court. Any such
expansion would 
usurp 
the 
responsibility entrusted 
to
the trial court by Rule 5(a).' BE&K, Inc. v. Baker,
875 So. 2d 1185, 1189 (Ala. 2003). ..."
Alabama Powersport Auction, LLC v. Wiese, 143 So. 3d 713, 716
(Ala. 2013). The trial court certified the controlling
question of law as follows:
"What are the total amount of limits available to the
[Watts] Plaintiffs under the governing automobile
insurance policy as dictated by, and in accordance
8
1180852
with, 
the 
Alabama 
uninsured motorist 
statute (Section
32-7-23[, Ala. Code 1975])?"
Discussion
I. Permissive Appeal
The Watts plaintiffs initially argue that this Court
improvidently granted the Rule 5 motion for a permissive
appeal. Rule 5 provides, in part:
"(a) Petition for Permission to Appeal. A party
may 
request 
permission 
to 
appeal 
from 
an
interlocutory order in civil actions under limited
circumstances. Appeals of interlocutory orders are
limited to those civil cases that are within the
original 
appellate jurisdiction of 
the 
Supreme Court.
A petition to appeal from an interlocutory order must
contain a certification by the trial judge that, in
the 
judge's 
opinion, 
the 
interlocutory order involves
a controlling question of law as to which there is
substantial ground for difference of opinion, that an
immediate appeal from the order would materially
advance the ultimate termination of the litigation,
and that the appeal would avoid protracted and
expensive litigation. The trial judge must include in
the certification a statement of the controlling
question of law.
"....
"(b) Content of Petition; Answer.
"(1) Petition. The petition shall contain a
statement of the facts necessary to an understanding
of the controlling question of law determined by the
order of the trial court, supported by reference to
the appendix accompanying the petition; a statement
of the question itself, as stated by the trial court
in its certification; and a statement of the reasons
9
1180852
why a substantial basis exists for a difference of
opinion on the question, why an immediate appeal
would materially advance the termination of the
litigation, and why the appeal would avoid protracted
and expensive litigation."
It is "our time-honored rule that a final judgment is an
essential precondition for appealing to this Court." John
Crane–Houdaille, Inc. v. Lucas, 534 So. 2d 1070, 1073 (Ala.
1988). However, in exercising its rule-making authority, this
Court has provided in Rule 5 that "[a] party may request
permission to appeal from an interlocutory order in civil
actions under limited circumstances." Rule 5 "allows for an
appeal of an interlocutory order involving a controlling issue
of law as to which there is substantial ground for difference
of opinion when an immediate appeal would materially advance
termination of the litigation and would avoid protracted and
expensive litigation." Ex parte U.S. Bank Nat'l Ass'n, 148 So.
3d 1060, 1062 (Ala. 2014).  
A. Controlling Question of Law.
The Watts plaintiffs argue that no controlling question
of law is presented in this permissive appeal, because, they
say, this Court is being asked only to apply well established
10
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principles of uninsured-motorist law to the facts of this
case. 
"Rule 5 does not apply in situations that involve the
application of law to facts or factual issues that
are so one-sided that it can be said that 'as a
matter of law' those issues can be decided only one
way. 'Rule 5 is not a vehicle by which to obtain
review of "significant and unresolved factual
issues."' Gowens v. Tys. S., 948 So. 2d 513, 530
(Ala. 2006) (quoting Spain v. Brown & Williamson
Tobacco 
Corp., 
872 
So. 
2d 
101, 
104 
(Ala.
2003)(emphasis added in Gowens). See also McFarlin v.
Conseco Servs., LLC, 381 F.3d 1251, 1259 (11th Cir.
2004) 
(stating 
that 
permissive appeals 
are 
'intended,
and should be reserved, for situations in which the
court of appeals can rule on a pure, controlling
question of law without having to delve beyond the
surface of the record in order to determine the
facts' (emphasis added) ...."
Once Upon a Time, LLC v. Chappelle Props., LLC, 209 So. 3d
1094, 1106-07 (Ala. 2016)(Murdock, J., dissenting).
Section 
32-7-23, 
the 
uninsured-motorist 
statute, 
provides,
in pertinent part:
"(a) No automobile liability or motor vehicle
liability policy insuring 
against 
loss 
resulting from
liability imposed by law for bodily injury or death
suffered by any person arising out of the ownership,
maintenance, or use of a motor vehicle shall be
delivered or issued for delivery in this state with
respect 
to 
any 
motor 
vehicle 
registered 
or
principally garaged in this state unless coverage is
provided therein or supplemental thereto, in limits
for bodily injury or death set forth in subsection 
(c) of Section 32-7-6, under provisions approved by
the Commissioner of Insurance for the protection of
11
1180852
persons insured thereunder who are legally entitled
to recover damages from owners or operators of
uninsured motor vehicles because of bodily injury,
sickness or disease, including death, resulting
therefrom ....
"....
"(c) The recovery by an injured person under the
uninsured 
provisions 
of 
any 
one 
contract 
of
automobile insurance shall be limited to the primary
coverage plus such additional coverage as may be
provided for additional vehicles, but not to exceed
two additional coverages within such contract."
Section 32-7-6(c), Ala. Code 1975, provides, in pertinent
part:
"[E]very policy or bond is subject, if the accident
has resulted in bodily injury or death, to a limit,
exclusive of interest and costs, of not less than
twenty-five thousand dollars ($25,000) because of
bodily injury to or death to one person in any one
accident and subject to the limit for one person, to
a limit of not less than fifty thousand dollars
($50,000) because of bodily injury to or death of two
or more persons in any one accident ...."
Thus, § 32–7–6(c) requires that uninsured-motorist  coverages
provide coverages on both a per person basis and a per
accident basis. See also Weaver v. Champion Ins. Co., 567 So.
2d 380 (Ala. 1990); Safeco Ins. Co. v. Jones, 243 So. 2d 730
(Ala. Civ. App. 1970).  
In accordance with § 32–7–6(c), the insurance policy at
issue here provides UIM  coverage of $50,000 per person and
12
1180852
$100,000 per accident.  Five vehicles were listed in and
covered by the policy. The insurance policy also contained the
following "stacking" provision:
"2.
When there is more than one insured car on the
policy:
"a.
And the insured was occupying your
insured car at the time of the
accident:
"(1)
The limit of liability
for Uninsured Motorist
coverage stated in the
Declarations for 
each
person for the occupied
insured car, plus the
sum 
of 
the 
highest
limits of liability for
Uninsured 
Motorist
coverage stated in the
Declarations 
for 
each
person applicable to any
other insured car on the
policy, up to a maximum
of 
two 
additional
limits, is our maximum
limit of liability for
all damages....
"(2)
Subject to the limit for
each person, the limit
of 
liability 
for
Uninsured 
Motorists
coverage stated in the
Declarations 
for 
each
accident 
for 
the
occupied 
insured 
car,
plus the sum of the
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highest 
limits 
of
liability for Uninsured
Motorists 
coverage
s t a t e d  
i n  
t h e
Declarations 
for 
each
accident applicable to
any other insured car on
the policy, up to a
m a x i m u m  
o f  
t w o
additional 
limits, 
is
our maximum limit of
liability 
for 
all
damages 
for 
bodily
injury 
resulting 
from
any one accident...."
Mid-Century argues that the phrase in § 32–7–6(c), "two
or more persons in any one accident," as incorporated by §
32–7–23(a), makes clear that when two or more injured persons
seek UIM benefits under the same policy arising out of the
same accident, those injured persons are eligible to receive
only the per accident limit under the policy. Mid-Century
continues that the phrase "subject to the limit for one
person" in § 32–7–6(c) makes it clear that when only one
person seeks UIM benefits under a policy, that injured person
is eligible to receive only the per person limit under the
policy. Mid-Century  concludes that, because the accident here
involved "two or more injured persons," the per accident
benefit of $100,000 is applicable.  Mid-Century further argues
14
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that the "stacking" provision in § 2a.(2) of the insurance
policy allows the Watts plaintiffs to stack the per accident
benefit of $100,000 for up to two additional coverages. Thus,
Mid-Century concludes that the Watts plaintiffs are entitled
to $300,000 in UIM benefits pursuant to the uninsured-motorist
statute and Rodney's insurance policy. 
The Watts plaintiffs' initially argue that the per
accident limit in the insurance policy is an exclusion not
authorized by the uninsured-motorist statute. The Watts
plaintiffs contend that "in the absence of an exclusion in the
Act, none is authorized to be read into it. In other words,
the legislature could have authorized exclusions in the
uninsured motorist statute but not having done so, no such
exclusions are permitted." Gatson v. Integrity Ins. Co., 451
So. 2d 361, 362-63 (Ala. Civ. App 1984). 
The Watts plaintiffs further argue that the phrase
"subject to the limit for each person" contained in § 2a.(2)
of the insurance policy is ambiguous and that, like all
ambiguities in provisions of an insurance policy, it should be
construed strictly against the insurance company. See Twin
City Fire Ins. Co. v. Alfa Mut. Ins. Co., 817 So. 2d 687 (Ala.
15
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2001). The Watts plaintiffs contend that § 2a.(2) of the
insurance policy should be construed so that the per accident
limit of liability is subordinate or inferior to the per
person limit of liability because the per accident limit of
liability is "subject to the limit for each person." The Watts
plaintiffs contend that this understanding is consistent with
the commonly understood meaning of "subject to" and best
reflects the reasonable expectations of Rodney, as the
contracting party,  that UIM coverage would be available on
all five vehicles for which the coverage was purchased. Thus,
the Watts plaintiffs conclude that each of the persons in the
Watts vehicle is entitled to "stack" the per person limit of
liability of $50,000 up to two additional coverages for an
individual UIM benefit of $150,000 per person and total UIM
benefits for the accident of $1,350,000 under the policy. 
In the alternative, the Watts plaintiffs argue that at a
minimum they are entitled to at least $500,000 in UIM
benefits. The Watts plaintiffs state that the accident
resulted in the death of four persons and injury to five
others. They also state that there are five vehicles covered
under the UIM policy for a total of five available coverages.
16
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The Watts plaintiffs contend that § 32-7-23(c) permits each
injured person to recover from the primary coverage plus two
additional coverages but places no limitations on which
additional coverages the injured persons may rely upon to draw
the UIM benefits. For example, the Watts plaintiffs contend
that all nine persons could draw UIM benefits from the primary
coverage under the policy and that four of the nine could draw
UIM benefits from the second and third available coverages. 
The Watts plaintiffs further argue that the remaining five
injured persons could then draw UIM benefits from the fourth
and fifth available coverages.  Applying the $100,000 per
accident limit, the Watts plaintiffs conclude that the total
UIM  benefit limit using all five available coverages is at
least $500,000. The Watts plaintiffs state that Mid-Century's
contrary position deprives them of two coverages sold and
issued by Mid-Century and violates the illusory-promises
doctrine. 
As noted earlier, the trial court has certified the
following question of law:
"What are the total amount of limits available to the
[Watts] Plaintiffs under the governing automobile
insurance policy as dictated by, and in accordance
17
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with, 
the 
Alabama 
uninsured motorist 
statute (Section
32-7-23)?"
The underlying facts of this case are not disputed, and
this Court is not called upon to review any unresolved factual
questions or to apply any well settled principles of law to a
particular set of facts. The certified question presented by
the trial court requires this Court to undertake a legal
analysis of the relevant portions of the uninsured-motorist 
statute and the policy of insurance issued in this case.
Although the question as certified by the trial court is
rather broad, it adequately encompasses the purely legal issue
presented to this Court under the uninsured-motorist statute
and the UIM provisions of the policy as set forth and argued
by the parties.  Accordingly, we conclude that the trial court
has properly certified the controlling question of law in this
case.3
B. Substantial Ground for Difference of Opinion. 
The Watts plaintiffs next argue that the underlying legal
principles of law that this Court must invoke in answering the
3Because we have determined that the trial court has
certified a proper controlling question of law presented in
this case, we pretermit discussion of the Watts plaintiffs'
argument that this Court should reframe that question. 
18
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question of the available limits of UIM  coverage involves
basic rules of statutory construction  and the application of
the uninsured-motorist  statute, both of which, they say, are
well established and lacking of any substantial ground for a
difference of opinion.
"[T]he limitation in Rule 5 to issues 'as to which
there is substantial ground for difference of
opinion' is a limitation to questions of law that
either have never been decided or are the subject of
a split of authority or a conflict in our precedents.
Otherwise, this Court is merely performing the trial
court's function of researching and deciding legal
issues, a task for which the trial court is well
equipped and to which it equally is assigned. See,
e.g., Couch v. Telescope Inc., 611 F.3d 629, 633 (9th
Cir. 2010) (noting that '[c]ourts traditionally will
find that a substantial ground for difference of
opinion exists where "... novel and difficult
questions of first impression are presented"'
(quoting 3 Federal Procedure § 3:212 (Lawyers ed.
2010)))."
Once Upon a Time, 209 So. 3d at 1107 (Murdock, J.,
dissenting). 
The Watts plaintiffs' argument misapprehends the query 
presented here. It is true that principles of law related to
statutory and contract construction are well settled and lack
any ground for a difference of opinion. Likewise, the
application of the uninsured-motorist statute is largely well
settled and lacks any ground for a difference of opinion.
19
1180852
However, the actual legal question presented here pertaining
to the amount of coverage available under the insurance
policy, as dictated by the applicable provisions of the
uninsured-motorist statute, appears to be a question of first
impression. 
Therefore, 
we 
conclude 
that 
there 
is 
a
"'substantial ground for a difference of opinion.'"  Once Upon
a Time, 209 So. 3d at 1107 (Murdock, J., dissenting). 
C. Materially Advance the Ultimate Termination of the
Litigation and Avoid Protracted and Expensive Litigation.
The Watts plaintiffs state that two actions are pending
in the trial court against Mid-Century -- the fraud claims and
the UIM claim that were originally filed together but that
were later severed by the trial court. The Watts plaintiffs
argue that, whatever the outcome of this appeal, the fraud
claims remain to be litigated. Thus, they contend, it is
likely that there will be multiple, piecemeal appeals in this
matter and that, therefore, this permissive appeal will not
"materially 
advance 
the 
ultimate 
termination 
of 
the
litigation" between them and Mid-Century. We disagree.
The trial court entered an order severing the fraud claims
from the UIM claim pursuant to Rule 21, Ala. R. App. P. The
trial court ordered that the fraud claims and the UIM claim
20
1180852
proceed as independent actions. The trial court also directed
the circuit court clerk to designate the fraud claims with
their own civil-action case number.  Thus, this permissive
appeal consists only of the Watts plaintiffs' UIM claim
seeking to recover UIM benefits, and a determination of that
claim  by this Court on permissive appeal would effectively
end the litigation of the UIM claim.  Accordingly, we conclude
that this permissive appeal will materially advance the
ultimate termination of this litigation and will help to avoid
protracted litigation and the expense associated with such
litigation; thus, the permissive appeal was properly granted.
II. UIM Claim
As 
mentioned above, pursuant to § 32–7–6(c), the insurance
policy here provides UIM coverage on both a per person basis
and a per accident basis.  The coverage limit on the per
person basis is $50,000; the coverage limit on the per
accident basis is $100,000. The parties dispute which coverage
limit is available to the Watts plaintiffs in accordance with
the terms of the uninsured-motorist statute and the insurance
policy. 
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Section 
32-7-6(c), 
incorporated 
by 
§ 
32–7–23(a), 
provides,
in pertinent part:
"The policy ... shall not be effective under this
section unless ... every policy ... is subject, if
the accident has resulted in bodily injury or death,
to a limit, exclusive of interest and costs, of not
less than twenty-five thousand dollars ($25,000)
because of bodily injury to or death to one person in
any one accident and subject to the limit for one
person, to a limit of not less than fifty thousand
dollars ($50,000) because of bodily injury to or
death of two or more persons in any one accident
...."
"When a court construes a statute, '[w]ords used in [the]
statute must be given their natural, plain, ordinary, and
commonly understood meaning, and where plain language is used
a court is bound to interpret that language to mean exactly
what it says.'" Ex parte Berryhill, 801 So. 2d 7, 10 (Ala.
2001) (quoting IMED Corp. v. Systems Eng'g Assocs. Corp., 602
So. 2d 344, 346 (Ala. 1992)).
Reading the phrases "subject to the limit for one person"
and "bodily injury to or death of two or more persons in any
one accident" in § 32-7-6(c) so as to give those words their
"natural, plain, ordinary, and commonly understood meaning,"
we conclude that, in those cases where two or more persons are
injured or killed in a single accident, the per accident limit
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of liability contained in the policy is the proper coverage
limit to be applied. The policy here contains a per accident
limit of coverage as required by § 32-7-6(c). Because the
accident made the basis of this UIM claim involved "two or
more persons," the per accident coverage limit of $100,000
found in the policy is applicable. Section 32-7-23(c) of the
uninsured-motorist statute and § 2a.(2) of the insurance
policy allow the Watts plaintiffs to "stack" the primary
coverage of $100,000 for up to two additional coverages, or a
total amount of $300,000 in UIM benefits. 
The Watts plaintiffs do not necessarily dispute the above
interpretation of the uninsured-motorist statute and the
policy provision. Rather, they challenge the interpretation
and application of the uninsured-motorist statute and
insurance policy in other ways. Initially, they argue that a
per accident limit is an exclusion not authorized by the
uninsured-motorist statute and that, "in the absence of an
exclusion in the Act, none is authorized to be read into it."
Gatson, 451 So. 2d at 362-63. This argument, however, is
without merit. Initially, we note § 32-7-6(c) requires that
UIM coverage contained in automobile-insurance policies be
23
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provided on both a per person and per accident basis. Weaver,
supra; Jones, supra.  Further, the required per accident limit
of coverage for UIM benefits appears on the declaration page
of the insurance policy. The "Uninsured Motorist Coverage,"
which governs how and on what basis the UIM  benefits are
paid, appears in Part II of the policy provisions. Part II of
the UIM provisions contains the following exclusions: 
"This coverage shall not apply to the benefit of any
insurer 
or 
self-insurer 
under 
any 
workers'
compensation law, or directly to the benefit of the
United States, or any state or any political
subdivision.
"This coverage does not apply to bodily injury
sustained by a person:
"1.
While occupying any vehicle owned by
you or a family member for which
insurance is not afforded under this
policy or through being struck by that
vehicle. 
"2.
If 
that 
person 
or 
the 
legal
representative of that person makes a
settlement without written consent.
"3.
While occupying your insured car when
used to carry persons or property for
a charge. This exclusion does not
apply to shared-expense carpools.
"4.
During active participation in any
organized or agreed-upon racing or
speed contest or demonstration or in
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practice or preparation for any such
contest."
The per accident limit is set forth in the declarations page
of the policy -- not in the UIM exclusions found in Part II of
the insurance policy. Thus, it is clear from § 32-7-6(c) and
the policy provisions that the per accident limit is not an
exclusion under the policy.
The Watts plaintiffs next argue that the phrase "subject
to the limit for each person" contained in § 2a.(2) of the
insurance policy is ambiguous and should be construed against
the insurance company, Mid-Century. See Twin City Fire Ins.
Co., supra. The Watts plaintiffs argue that the ambiguity in
the language triggers the "reasonable-expectations rule,"
under which an insured is entitled to the protection that he
or she may reasonably expect from the insurance policy
containing the ambiguity. See Lambert v. Liberty Mut. Ins.
Co., 331 So. 2d 260 (Ala. 1976). The Watts plaintiffs contend
that the "subject to the limit for each person" phrase in §
2a.(2) of the insurance policy should be construed so as to
make the per accident limit of liability subordinate or
inferior to the per person limit of liability, because, they
say, that interpretation is consistent with the commonly
25
1180852
understood meaning of "subject to" and best reflects the
reasonable expectations of Rodney, as the contracting party,
that UIM coverage would be available on all five vehicles for
which it was purchased and not limited to the primary coverage
plus two additional coverage. 
When determining how to construe the provisions of an
insurance policy, this Court is guided by the following
principles:
"'When analyzing an insurance policy,
a court gives words used in the policy
their 
common, 
everyday 
meaning 
and
interprets them as a reasonable person in
the 
insured's 
position 
would 
have
understood them. Western World Ins. Co. v.
City of Tuscumbia, 612 So. 2d 1159 (Ala.
1992); St. Paul Fire & Marine Ins. Co. v.
Edge Mem'l Hosp., 584 So. 2d 1316 (Ala.
1991). If, under this standard, they are
reasonably certain in their meaning, they
are not ambiguous as a matter of law and
the rule of construction in favor of the
insured does not apply. Bituminous Cas.
Corp. v. Harris, 372 So. 2d 342 (Ala. Civ.
App. 1979). Only in cases of genuine
ambiguity or inconsistency is it proper to
resort to rules of construction. Canal Ins.
Co. v. Old Republic Ins. Co., 718 So. 2d 8
(Ala. 1998). A policy is not made ambiguous
by the fact that the parties interpret the
policy differently or disagree as to the
meaning of a written provision in a
contract. Watkins v. United States Fid. &
Guar. Co., 656 So. 2d 337 (Ala. 1994). A
court must not rewrite a policy so as to
26
1180852
include or exclude coverage that was not
intended. Upton v. Mississippi Valley Title
Ins. Co., 469 So. 2d 548 (Ala. 1985).'
"B.D.B. v. State Farm Mut. Auto. Ins. Co., 814 So. 2d
877, 879–80 (Ala. Civ. App. 2001). However, if a
provision in an insurance policy is found to be
genuinely ambiguous, 'policies 
of 
insurance should 
be
construed liberally in respect to persons insured and
strictly with respect to the insurer.' Crossett v.
St. Louis Fire & Marine Ins. Co., 289 Ala. 598, 603,
269 So. 2d 869, 873 (1972)."
State Farm Mut. Auto. Ins. Co. v. Brown, 26 So. 3d 1167, 1169-
70 (Ala. 2009). 
We first note that the Watts plaintiffs do not challenge
the "subject to" language in § 32-7-6(c), the actual statutory
provision setting forth the circumstances in which either the
per person or per accident limit is applicable.  Rather, the
"subject to" language challenged by the Watts plaintiffs is
found in the "stacking" provision § 2a.(2) of Part II of the
UIM section of the policy. Further, the Watts plaintiffs'
argument that the "subject to" language creates an ambiguity
is conclusory only, with no real explanation as to how the
phrase creates an ambiguity and with no citation to any
authority supporting the contention that the phrase is
ambiguous. In fact, the same "subject to" language contained
in the UIM provision here has been held to be unambiguous in
27
1180852
the context of the availability of the per person limit or per
accident limit in such coverage. See Livingston v. Farmers
Ins. Co., 79 Wash. App. 72, 900 P.2d 575 (1995).  Accordingly,
we conclude that the Watts plaintiffs have failed to
demonstrate an ambiguity in the UIM provisions of the
insurance policy. Therefore, the reasonable-expectations
doctrine, a "rule of construction that applies to interpret
ambiguous insurance policies," has no application here. 
Nationwide Mut. Ins. Co. v. J-Mar Mach. & Pump, Inc., 73 So.
3d 1248, 1253 (Ala. 2011). 
The Watts plaintiffs next alternatively argue that, if
this Court does not find an ambiguity in the policy language
that requires the application of the per person limit and a
finding that they are entitled to a total UIM benefit of
$1,350,000, then they are entitled to a total UIM benefit of
at least $500,000. As set forth in detail above, the Watts
plaintiffs argue that § 32-7-23(c) permits each injured person
to recover from the primary coverage plus two additional
coverages, but places no limitation as to which policy an
injured person may choose the additional coverages from which
to draw his or her benefit. The Watts plaintiffs next argue
28
1180852
that all nine of the persons injured or the representatives of
those killed in the accident would recover UIM benefits from
the primary coverage and that four of the nine could recover
from the second and third available coverages. They continue
that the remaining five injured persons, in addition to
recovering from the primary coverage, could then recover from
the fourth and fifth available coverages. The Watts plaintiffs
further state that because the uninsured-motorist statute
provides for a total of three coverages being available for
recovery of uninsured-motorist  benefits (the primary and two
additional) for "an injured person," and there are a total of
five coverages available, the total limit of coverage
available is at least $500,000 if the per accident limit of
coverage is applied. The Watts plaintiffs contend that if Mid-
Century's interpretation of the uninsured-motorist statute and
the policy is adopted, two coverages sold and issued by Mid-
Century would never be available to any claimant and that such
a result would violate the illusory-promises doctrine. 
 Section 32–7–23(c) provides: "The recovery by an injured
person under the uninsured provisions of any one contract of
automobile insurance shall be limited to the primary coverage
29
1180852
plus such additional coverage as may be provided for
additional vehicles, but not to exceed two additional
coverages within such contract." Nothing can be read in § 32-
7-23(c) as limiting the number of vehicles an insurer can
insure under a policy of insurance. Section 32-7-23(c)
expressly 
contemplates 
multiple 
coverages 
for multiple
vehicles through the phrase "additional coverage as may be
provided for additional vehicles."  Although § 32-7-23(c) does
not limit the number of vehicles an insurer may insure, the
phrase limiting recovery by an injured person "to the primary
coverage plus such additional coverage as may be provided for
additional vehicles, but to not exceed two additional
coverages within such contract," expressly limits the stacking
of uninsured-motorist coverage by an insured to a total of
three coverages under a single policy. Hall, supra.  This
statutory language must be given its plain and ordinary
meaning, and this Court must construe the language to mean
exactly what it says. Ex parte Berryhill, supra. The insurance
policy before us covered five vehicles; however, § 32-7-23(c)
expressly limits the stacking of uninsured-motorist benefits
to a total of three coverages for a single policy. 
30
1180852
The Watts plaintiffs' contention that Mid-Century's
interpretation of the uninsured-motorist statute and the UIM
provisions of the policy would result in two coverages under
the policy he was sold that would never be available to any
claimant is without basis and, therefore, without merit. 
"'When 
limitations 
or 
exclusions 
completely 
contradict 
the
insuring provisions, insurance coverage becomes illusory.'
Alabama 
law 
does 
not 
'"countenance 
such 
illusory
'coverage.'"'" Shrader v. Employers Mut. Cas. Co., 907 So. 2d
1026, 1033 (Ala. 2005) (citations omitted).  All five vehicles
here carried UIM coverage of $50,000 per person and $100,000
per accident. Pursuant to the terms of the uninsured-motorist
statute and the insurance policy, the Watts plaintiffs were,
however, able to stack only three of those five coverages, but
that does not necessarily mean that the Watts plaintiffs were
deprived of coverages on two of the vehicles. Nothing in the
record, or in allegations made by counsel, indicates that Mid-
Century had denied UIM coverage on any of the vehicles.
Rather, the Watts plaintiffs were, simply put, prohibited by
the uninsured-motorist statute and the insurance policy only
from stacking more than three coverages. Such exclusion or
31
1180852
limitation does not completely contradict the stacking
provision of the policy so as to make coverage "illusory";
rather, to so interpret the stacking provision would make the
provision itself illusory. Accord Hall, supra. 
Based on the foregoing, we conclude that the Watts
plaintiffs are unable to stack more than three coverages under
the uninsured-motorist statute and insurance policy, and the
fact that they cannot do so does not render the coverage under
the policy illusory. 
Conclusion
We reverse the trial court's order denying Mid-Century's
motion for a partial summary judgment as to the UIM  claim and
remand the case for further proceedings consistent with this
opinion. 
REVERSED AND REMANDED. 
Shaw, Wise, Bryan, Sellers, Mendheim, and Mitchell, JJ.,
concur.
Parker, C.J., and Stewart, J., dissent.
32