Case Title: Safeco Insurance Co. of America v. Jones

Citation: 243 So. 2d 736

Docket Number: 

State: alabama

Court: Alabama Supreme Court

Date: 1970-12-17T00:00:00Z

Document:
243 So. 2d 736 (1970)
SAFECO INSURANCE CO. OF AMERICA, a Corp.,
v.
Irby C. JONES.
Ex parte Irby C. JONES.
4 Div. 401.

Supreme Court of Alabama.
December 17, 1970.
*737 Tipler, Fuller & Melton, Andalusia, for petitioner.
Truman M. Hobbs and Richard H. Gill, Montgomery, and Jack C. Gallalee, Mobile, amici curiae.
Powell & Sikes, Andalusia, and Huie, Fernambucq & Stewart, and Paul G. Smith, Birmingham, for respondent.
Pillans, Reams, Tappan, Wood & Roberts, Richard W. Vollmer, Jr. and Geary A. Gaston, Mobile, amici curiae.
MERRILL, Justice.
This case presents a question of first impression in Alabama. It involves a construction and application of our Uninsured Motorist statute.
The first such statute was enacted in New Hampshire in 1957. Ours became effective January 1, 1966. At least forty states now have like statutes.
The decisions construing these statutes fall into three general categories: (1) where the statute specifically authorizes an "Other Insurance" exclusion (with which we are not concerned), (2) where the statute was construed as limiting recovery to the statutory limit (here $10,000.00) to only one policy, and (3) where the statute was construed to allow recovery on more than one policy, even though the statutory limit on one policy was exceeded, if the injured party's injuries exceeded the limits of one of the policies.
Examples of (1) supra are: Grunfeld v. Pacific Auto Ins. Co., 232 Cal. App. 2d 4, 42 Cal. Rptr. 516 (1965); LeBlanc v. Allstate Ins. Co., La.App., 194 So. 2d 791 (1967), and Vernon v. Harleysville Mutual Casualty Co., 244 S.C. 152, 135 S.E.2d 841 (after South Carolina had amended its statute authorizing the "Other Insurance" exclusion).
Examples of (2) supra are: Maryland Casualty Co. v. Howe, 106 N.H. 422, 213 A.2d 420; Tindall v. Farmers Automobile Management Corp., 83 Ill.App.2d 165, 226 N.E.2d 397 (1967); State Farm Mutual Automobile Ins. Co. v. Bafus, 77 Wash. Dec.2d 732, 466 P.2d 159 (1970), and Harris v. Southern Farm Bureau Cas. Ins. Co., Ark., 448 S.W.2d 652 (1970). This is the line of cases followed by our Court of Civil Appeals.
Examples of (3) supra are: Bryant v. State Farm Mutual Automobile Ins. Co., 205 Va. 897, 140 S.E.2d 817 (1965); Smith v. Pacific Automobile Ins. Co., 240 Or. 167, 400 P.2d 512, and Vernon v. Harleysville Mutual Casualty Co., 244 S.C. 152, 135 S.E.2d 841 (decided on a state of facts occurring prior to the adoption of the amendment authorizing exclusions as noted supra). Cases from courts in Florida, North Carolina, Georgia, Pennsylvania, Nebraska, Kansas, Arizona and Indiana, also in this category, are listed later in the opinion.
Our Uninsured Motorist statute, Act No. 866, Acts of Alabama 1965, Vol. II, p. 1614, listed in the 1958 Recompilation as Tit. 36, § 74(62a), provides:
The "Other Insurance" clauses of both Miller's policy and Jones' policy provided:
The facts are essentially that appellee Jones was a passenger in an automobile operated by one Edward Miller when it was involved in a collision with an automobile operated by a driver who was uninsured. Appellee suffered severe injuries as a result of this accident. Appellee subsequently recovered an un-contested judgment for $25,000.00 against the uninsured motorist. Miller, at the time of the accident, was insured by Bituminous Casualty Company under an automobile liability policy that included uninsured motorist coverage in the amounts of $10,000.00 per person and $20,000.00 per accident. Bituminous paid appellee $10,000.00, which was the limit of its policy. Appellee then made demand on his insurer, Safeco Insurance Company of America, for $10,000.00 under the uninsured motorist endorsement of his liability policy. This request was denied. An action was then filed against the insurer, Safeco, by the insured Jones for $9,900.00. A demurrer to the complaint was overruled, and issue was joined by the filing of a plea and answer. The case was submitted to the trial court on the pleadings and stipulation of facts which included a demand for $10,000.00 against Safeco.
The trial court rendered a judgment for the plaintiff, Jones, and against the defendant, Safeco, in the amount of $10,000.00. From said judgment, an appeal was perfected.
This court is now faced with the same question as was the Court of Civil Appeals. Do we adopt the minority rule, exemplified by the cases listed in (2) supra, or the majority rule, examples of which appear in (3) supra?
The Uninsured Motorist statute of Florida is the same as ours. The first case in that state followed the same path as the instant case. The trial court allowed recovery in spite of the "Other Insurance" exclusion, the District Court of Appeal reversed, and the Supreme Court of Florida quashed the decision of the District Court of Appeal on a certified question in Sellers v. United States Fidelity & Guaranty Co., 185 So. 2d 689. The question posed to that court was:
The answer to that question was in part:
That court also said:
The Sellers case, 185 So. 2d 689, has been cited with approval in the next five cases listed.
In Geyer v. Reserve Insurance Company, 8 Ariz.App. 464, 447 P.2d 556, Sellers was followed, and later, in Transportation Insurance Company v. Wade, 11 Ariz.App. 14, 461 P.2d 190 (1970), the court said:
In Stephens v. Allied Mutual Ins. Co., 182 Neb. 562, 156 N.W.2d 133 (1968), it was said:
In Travelers Indemnity Company v. Williams, 119 Ga.App. 414, 167 S.E.2d 174 (1969), the court said:
The Georgia court also said:
In Moore v. Hartford Fire Ins. Co. Group, 270 N.C. 532, 155 S.E.2d 128 (1967), it was said:
In Harleysville Mutual Casualty Co. v. Blumling, Penn., 429 Pa. 389, 241 A.2d 112 (1968), it was said:
Although the facts were different, two separate vehicles insured, we quote the following from Sturdy v. Allied Mutual Ins. Co., 203 Kan. 783, 457 P.2d 34:
In Safeco Insurance Company of America v. Robey, 399 F.2d 330 (8 Cir., 1968), the court said:
And in the most recent case we have seen (not cited in briefs), a federal court concluded in Simpson v. State Farm Mutual Automobile Insurance Co., 318 F. Supp. 1152 (1970) where the Indiana Uninsured Motorist statute was construed, that it would be unconscionable to permit insurers to collect a premium for a coverage which they are required by statute to provide, and then to avoid payment for a loss because of language of limitation devised by themselves.
The following excerpts are from "A Guide to Uninsured Motorist Coverage," by Professor Widiss, from which the Court of Civil Appeals quoted with approval:
The key words in our statute are "coverage * * * for protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles."
Here, the original plaintiff and appellee Jones was legally determined to have been damaged to the extent of $25,000.00. He was legally entitled to recover $10,000.00 from the driver Miller, and it was paid to him. Had he elected to sue his own insurer first, Safeco, he would have been legally entitled to recover $10,000.00 from it. But because Miller's insurer had already paid Jones $10,000.00, Safeco seeks to avoid payment under its "Other Insurance" provision.
We think the decision of the Court of Civil Appeals has added a maximum to the statute, making it read, in effect, "legally entitled to recover damages but in no event shall such damages exceed $10,000.00."
We think the majority view in this nation, as exemplified by the jurisdictions cited in (3) supra, is the better view, and we place Alabama in that group.
We hold that our statute sets a minimum amount for recovery, but it does not place a limit on the total amount of recovery so long as that amount does not exceed the amount of actual loss; that where the loss exceeds the limits of one policy, the insured may proceed under other available policies; and that where the premiums have been paid for uninsured motorist coverage, we cannot permit an insurer to avoid its statutorily imposed liability by its insertion into the policy of a liability limiting clause which restricts the insured from receiving that coverage for which the premium has been paid.
This holding does not permit a recovery in excess of that amount to which the injured party was "legally entitled to recover" by virtue of the judgment against the uninsured motorist. By this latter statement, we do not consider that we are amending or adding to the statute. The statute limits recovery of damages to that amount to which the injured party is "legally entitled to recover" and that amount is legally settled prior to the claims under the statute and the policies.
The opinion of the Court of Civil Appeals and briefs of the insurer cite and rely on our recent case of State Farm Mutual Automobile Ins. Co. v. De La Cruz, 283 Ala. 167, 214 So. 2d 909. That case is not apt authority, and we note that the author of that opinion, Kohn, J., carefully observed that our Uninsured Motorist statute "was not in effect at the time of the present accident. We, therefore, decline at this time to decide the effect of this statute on such insurance provision as it is not necessary for a disposition of this case."
The judgment of the Court of Civil Appeals is reversed, and the cause is remanded to that court with directions to affirm the judgment of the trial court.
Reversed and remanded with directions.
LAWSON, SIMPSON, COLEMAN, HARWOOD, BLOODWORTH, MADDOX and McCALL, JJ., concur.