Case Title: American Economy Ins. Co. v. Thompson

Citation: 643 So. 2d 1350

Docket Number: 1911958

State: alabama

Court: Alabama Supreme Court

Date: 1994-07-01T00:00:00Z

Document:
643 So. 2d 1350 (1994)
AMERICAN ECONOMY INSURANCE COMPANY and American States Insurance Company
v.
Benjamin Paul THOMPSON and Sharon Thompson.
1911958.

Supreme Court of Alabama.
July 1, 1994.
*1351 Ronald G. Davenport, Amy C. Vibbart and N. Wayne Simms, Jr. of Rushton, Stakely, Johnston & Garrett, P.A., Montgomery, for appellants.
John A. Owens and Susie T. Carver of Phelps, Owens, Jenkins, Gibson & Fowler, Tuscaloosa, for appellees.
COOK, Justice.
This case involves Benjamin Paul Thompson's claim that he can "stack" $300,000 in uninsured motorist coverage from one policy onto $200,000 already recovered pursuant to another policy issued by American Economy Insurance Company to Raymon's East, Inc. It also involves the right of American States Insurance Company, as the workers' compensation carrier for Thompson's employer, to be subrogated to money paid by another insurance carrier for the benefit of Thompson and his wife Sharon Thompson.
Benjamin Paul Thompson was employed by Raymon's of Columbus, Inc., in Columbus, Mississippi. He had traveled to Tuscaloosa, Alabama, at the request of Bernard Raymon, a partial owner of Raymon's of Columbus, to assist him in redecorating a Tuscaloosa store operated by Raymon's East, Inc., also partially owned by Bernard Raymon. After Thompson had completed his stay in Tuscaloosa and while he was returning home to Columbus, he had an accident. At the time of the accident, he was driving a van owned by Raymon's of Columbus and principally garaged in Mississippi. The accident occurred in Alabama, and it involved a collision between the van Thompson was driving and a vehicle driven by an uninsured motorist, Chester Waters. A third vehicle, driven by Beatrice Adkins, allegedly pulled out in front of Waters, but that third vehicle was not involved in the collision. There was a factual dispute as to whether the accident was caused by Adkins, who was insured by The Hartford Insurance Company, or by Waters. Thompson, who was permanently disabled as *1352 a result of the accident, has received workers' compensation payments from American States. Following the accident, Hartford Insurance Company paid its policy limit of $100,000 to the Thompsons, and American Economy paid its policy limit of $200,000 on the insurance policy covering the vehicles owned by Raymon's of Columbus.
The Thompsons then sued American Economy, claiming that Thompson should be entitled to stack the $300,000 under the second policy issued by American Economy onto the $200,000 already received by him. American States sought subrogation rights to the $100,000 paid to the Thompsons by Hartford. The Trial court held in favor of the Thompsons. American Economy and American States appealed. We affirm in part and reverse in part.
American Economy had issued two automobile insurance policies to Raymon's East. One policy covered two vehicles owned and principally used by the Raymon's of Columbus store and the other policy covered three vehicles owned and principally used by the Tuscaloosa store. Although both policies were issued to Raymon's East, Raymon's East contends that it was reimbursed by Raymon's of Columbus for the premium payments it made on the policy covering the vehicles owned by Raymon's of Columbus. Following the accident, American Economy paid Thompson $200,000 in uninsured motorist benefits, pursuant to the policy covering the vehicles owned by Raymon's of Columbus; however, it refused to pay $300,000, which Thompson contends he is entitled to "stack," pursuant to the second policy covering automobiles owned by Raymon's East. This case was presented to the trial judge ore tenus; the judge found that at the time of the accident Thompson was working for both Raymon's of Columbus and Raymon's East. Furthermore, he applied Mississippi law to the issue of stacking and determined that Thompson was entitled to the $300,000 under the second policy issued to Raymon's East.
As a result of the accident, Atkins's liability carrier, The Hartford, paid $64,000 ($100,000 less $36,000 in attorney fees) into an escrow account for the benefit of the Thompsons. (Sharon Thompson had claimed a loss of consortium.) American States Insurance Company, the workers' compensation carrier for Raymon's, claims the right to be reimbursed with regard to that money, pursuant to § 25-5-11(a), Ala.Code 1975, because it has been making workers' compensation payments to Thompson since the accident. The trial judge held that the money paid for the benefit of the Thompsons by The Hartford was not subject to subrogation by American States because, the judge found, the Thompsons had not been made whole as a result of the moneys that they had received. In so holding, the trial judge also determined that the proceeds from the $100,000 Hartford policy applied solely to Mrs. Thompson's claim for loss of consortium and not to the claims of Mr. Thompson.
"548 So. 2d  at 164-65."
Powell v. Blue Cross & Blue Shield, 581 So. 2d 772, 774 (Ala.1990). Nevertheless, footnote 8 of Powell states:
Powell v. Blue Cross & Blue Shield, n. 8 at 779. We find the above-quoted language in Powell dispositive of the claim of American States for reimbursement. It is undisputed that American States was the workers' compensation carrier for Raymon's. Pursuant to Powell, the payments made to Thompson in compliance with the Workers' Compensation Act are governed by § 25-5-11(a), which states:
Thus, American States is entitled to the funds in the escrow account to the extent of its reimbursement claim.
The trial court noted that in the event that this Court made the determination we have just made, then the entire $100,000 should be allocated to Sharon Thompson's claim for loss of consortium. In a special concurrence to Powell, Justice Jones stated:
Powell, 581 So. 2d  at 783 (Jones, J., concurring). Thus, the "allocation" of the money to Sharon Thompson will not defeat American States' right to reimbursement, in light of the principle stated in that paragraph of Justice Jones's special concurrence quoted above; we now adopt that principle.
We will now consider Thompson's claim that he is entitled to stack the proceeds of the second policy issued to Raymon's East onto the $200,000 in insurance proceeds he has already received from American Economy. First, we must address Thompson's claim that Mississippi law should apply to the insurance contract in question and to his right to stack. This Court has considered conflict of laws questions in insurance settings in the past. In Cotton v. State Farm Mutual Automobile Insurance Co., 540 So. 2d 1387 (Ala.1989), we wrote:
Both policies in this case were issued by Prichett Moore in Tuscaloosa to Raymon's East, located in Tuscaloosa. The application for the policy at issue was taken in Alabama, and the policy was delivered, or issued for delivery, in this state; we conclude that it should be interpreted according to the uninsured motorist insurance laws of the state of Alabama. The policy was issued to an Alabama corporation by an Alabama insurance company, and all premium notices were mailed to Raymon's East in Tuscaloosa. Thus, Alabama law applies.
Having resolved that issue, we consider whether stacking would be allowed under Alabama law. Section II of the insurance policy defines "WHO IS AN INSURED":
Clearly, Thompson does not fall within part a. or part c; however, we must consider whether Thompson falls within the language of part b. Part b. states that coverage exists for "[a]nyone else while using with your permission a covered `auto' you own, hire, or borrow." The trial judge found, and the evidence supports the finding, that Thompson was an employee of both Raymon's East and Raymon's of Columbus at the time of the accident. Although he was driving a vehicle owned by Raymon's of Columbus, the purpose of his trip to Tuscaloosa was to help remodel the Raymon's East store. Furthermore, Thompson's use of the van in Tuscaloosa was in conjunction with his work at the Raymon's East store. American Economy cites Schroeder v. Board of Supervisors of Louisiana State University, 591 So. 2d 342, 346 (La.1991), for the proposition that, under the circumstances of this case, the vehicle could not be classified as having been "borrowed" by Raymon's East. We disagree. Schroeder states:
Schroeder, supra, at 347. (Citations omitted.) Under the facts of this case, Thompson, as an employee of Raymon's East, had dominion and control over the van in which the accident occurred. It simply cannot be said that Raymon's East did not have control over the vehicle at the time of the accident when, in fact, Thompson, as an employee of Raymon's East was in Tuscaloosa on business for Raymon's East and his use of the vehicle in Tuscaloosa was for that purpose.
This present case differs from United States Fidelity & Guaranty Co. v. Perry, 361 So. 2d 594 (Ala.Civ.App.1978), in that the insurance policy in Perry had the following definition excluding coverage:
361 So. 2d  at 596. In Perry, the automobile was owned by an employee, Jerry Ivey, and was being driven by him at the time of the accident. The accident killed two coemployee passengers, Kenneth Perry and Roy David Gulley. The Court of Civil Appeals held that the automobile did not fall within the policy definitions for coverage:
Perry, 361 So. 2d  at 597 (citations omitted). Based on the foregoing discussion, we conclude that Thompson is covered under the insurance policy.
Now we must determine whether, under Alabama law, Thompson is entitled to stack the coverage under this insurance policy onto the coverage of the other insurance policy from which he has already collected. This Court, in State Farm Mutual Automobile Insurance Co. v. Fox, 541 So. 2d 1070 (Ala.1989), stated:
"`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' [Emphasis added in Fox.]
541 So. 2d  at 1072. On the authority of Fox, Thompson is entitled to stack.
AFFIRMED IN PART AND REVERSED IN PART.
HORNSBY, C.J., and MADDOX, SHORES, KENNEDY and INGRAM, JJ., concur.
HOUSTON, J., concurs in part and concurs in the result in part.
HOUSTON, Justice (concurring in part and concurring in the result in part).
I concur with the holding that Thompson is entitled to stack.
Although I dissented in Powell v. Blue Cross & Blue Shield of Alabama, 581 So. 2d 772 (Ala.1990), I agreed with footnote 8 of the plurality opinion in Powell; and I agree that American States is entitled to the funds in the escrow account to the extent of its reimbursement claim, pursuant to Ala.Code 1975, § 25-5-11(a). However, I am not certain that I agree with Justice Jones's special concurrence in Powell involving indemnity under § 25-5-11(a) and loss of consortium claims. It appears from the record that Ms. Thompson's claim for loss of consortium would be for noneconomic loss; therefore, American States would be entitled to the $64,000 (or to the funds to the extent of its reimbursement claim if that claim is less than $64,000). It is not necessary in this *1357 case to decide whether a spouse's derivative claim for economic loss would take priority over the insurer's reimbursement claim under § 25-5-11(a).