Title: State Farm Mut. Auto. Ins. Co. v. Jackson

State: alabama

Issuer: Alabama Supreme Court

Document:

462 So. 2d 346 (1984)
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a Corporation
v.
Jerry W. JACKSON, as the Administrator of the Estate of Kenneth L. Ivey; and Shellie K. Ivey.
83-1245-CER.

Supreme Court of Alabama.
December 21, 1984.
*347 Harvey Jackson, Jr. of Tweedy, Jackson & Beech, Jasper, for appellant.
Jerry W. Jackson, Haleyville, for appellees.
SHORES, Justice.
The following question has been certified to this Court by the United States Court of Appeals, Eleventh Circuit, pursuant to Rule 18, Alabama Rules of Appellate Procedure:
Whether Kenneth Ivey, at the time of his death, was a person insured under the liability provisions of the policies in question in accordance with the holding in State Farm Automobile Ins. Co. v. Reaves, 292 Ala. 218, 292 So. 2d 95 (1974).
We answer in the affirmative.
The litigation began when State Farm Mutual Insurance Company filed suit for declaratory judgment arising out of an automobile accident, requesting the federal court for the Northern District of Alabama to find that there was no coverage provided under the uninsured motorist clause contained in seven insurance policies. State Farm appealed the trial court's judgment finding coverage to the Eleventh Circuit Court of Appeals, which certified the question set out above to us.
Because the district court, Propst, J., correctly interpreted the applicable Alabama law and entered an excellent memorandum opinion reflecting a complete understanding thereof, we set out and adopt that court's opinion as our own in answer to the question certified:
"1. This case arises out of a single motor vehicle accident in which Kenneth L. Ivey, deceased, was a passenger, which accident occurred on April 17, 1982, on what is known as the Strip Pit Road in Winston County, Alabama. This motor vehicle was owned and operated by Leslie Swart, Jr., who also died as a result of the accident. Leslie Swart, Jr., was a cousin of the mother of the deceased, Kenneth L. Ivey, and his parents, Mr. and Mrs. Shellie K. Ivey, at Route # 4, Box 160, Haleyville, Winston County, Alabama, at the time of this accident. Prior to April 17, 1982, the date of the accident, the plaintiff had issued seven (7) automobile liability insurance policies wherein defendant, Shellie K. Ivey, was the named insured in three (3) of these policies and Kenneth L. Ivey, deceased, was the named insured in four (4) of them. None of these policies had terminated as of the date of the accident and at that time the said Leslie Swart, Jr., was an uninsured motorist. Certified copies of the policies as listed in the complaint are authentic and true and correct.
"2. Under the three (3) policies issued to Shellie K. Ivey, the father of Kenneth L. Ivey, deceased, and the four (4) policies issued to Kenneth L. Ivey, deceased, the following definitions are contained:
"4. UNDER SECTION ILIABILITYCOVERAGE A of all of the policies commencing on Page 5 thereof there is the statement: THERE IS NO COVERAGE: and continuing on page 6 thereof:
"5. UNDER SECTION IIIUNINSURED MOTOR VEHICLECOVERAGE U on page 7 thereof the following statement is found:
"6. The vehicle involved was not an owned vehicle as to Shellie K. Ivey and Kenneth L. Ivey, deceased, but was owned by and furnished by Leslie Swart, Jr., for his regular use, Swart being a relative of both Shellie K. Ivey and Kenneth L. Ivey, deceased. Kenneth L. Ivey, deceased, was a resident relative living with his father and mother, Mr. and Mrs. Shellie K. Ivey, at Route # 4, Box 160, Haleyville, Winston County, Alabama, at the time of this accident.
"7. It is agreed that all seven (7) policies are introduced into evidence in this case.
"... The starting point is § 32-7-23, Code of Alabama 1975, which provides:
*349 "The earliest Alabama case cited by the parties, which appears to have a direct pertinency to the facts of this case, is State Farm Automobile Insurance Co. v. Reaves, 292 Ala. 218, 292 So. 2d 95 (1974). In Reaves, the plaintiff, James Reaves, his mother Catherine Reaves, and his sister Annie Ruth Franklin, were all residents of the same household. State Farm had issued two automobile insurance policies to Annie Ruth Franklin only, but James was an `insured' under the omnibus clauses of the two policies. James, a minor, was injured when his mother's uninsured motorcycle was struck by an uninsured motorist. James and his mother sought to recover from State Farm under the uninsured motorist provisions of his sister's policies. The sister's policies contained the following exclusions to the uninsured motorist provisions:
The policies defined `owned motor vehicle' to mean `the motor vehicle or trailer described in the declarations....[1]'
"While rejecting an argument to find in the Alabama statute the same intent which the Supreme Court of Florida had found in the Florida statute (Mullis v. State Farm Mutual Automobile Insurance Co., 252 So. 2d 229 (Fla.1971)), Justice Bloodworth, in a unanimous decision, affirmed the trial court's conclusion that the exclusion clause recited above was void.
"Justice Bloodworth emphasized the language in § 32-7-23 which states, `[u]nless coverage is provided therein or supplemental thereto ... for the protection of persons insured thereunder ...'; concluding that `[b]y the literal words of the statute, it mandates uninsured motorist coverage for "persons insured thereunder" in the policy.' Further that, `The use of the broader term "persons insured thereunder" and the narrower term "named insured" in the same sentence appears to us to indicate clearly that the legislature intended to draw a distinction between the two types of insureds, and did indeed intend to require uninsured motorist coverage for the broader class "persons insured thereunder."' 292 Ala. at 222 [292 So. 2d 95]. Further that:
"292 Ala. at 223 [292 So. 2d 95].
"The Supreme Court of Alabama then concluded that the above recited exclusion was void as being repugnant to then Title 36, § 74(62a), Code of Alabama 1940 (now § 32-7-23). The Court expounded:
"292 Ala. at 224 [292 So. 2d 95] (emphasis added).
"Reaves stands for the proposition that if a person is insured under the liability coverage provision of a motor vehicle insurance policy and uninsured motorist coverage is not rejected, the uninsured motorist coverage dictated by § 32-7-23 cannot be excluded from the policy as to such an insured person. In Reaves, the Supreme Court determined that the plaintiff was an `insured' under provisions which stated:
"292 Ala. at 220-21 [292 So. 2d 95].
"Under the stipulated facts the following exclusion appears to cover this case:
However, a clause purporting to exclude uninsured motorist coverage was held to be void in Reaves, supra. See also Higgins v. Nationwide Mutual Insurance Co., 291 Ala. 462, 282 So. 2d 301 (1973), (a clause which excluded automobiles owned by governmental entities from the definition of uninsured motorists was held void as to the plaintiff).
"This court's inquiry cannot stop, however, with a reading of the exclusion clause. The court must determine, pursuant to Reaves, whether Kenneth Ivey was `a person insured' under the liability provisions of the policies in question.
"Each of the policies provides, as to liability coverage, that:
"Further that:
"The policies further provide that:
"Further that:
"On first blush, it would appear that Kenneth L. Ivey was an insured under the liability provisions of all the policies and that, under Reaves, supra, he was covered as a victim of an accident caused by an uninsured motorist under the provisions of all the policies at issue at the time of his death notwithstanding the exclusion clause. As to four of the policies, Kenneth L. Ivey was the named insured and the `you' and `the first person named in the declarations.' As to the other three policies, Kenneth L. Ivey was a relative of `the first person named in the declarations.' Being thus prima facie covered under the liability provisions of all policies at issue, Reaves would appear to dictate that Kenneth L. Ivey was covered under the uninsured motorist provisions of all policies at issue and that the exclusion clause is void as to him. It should be remembered that James Reaves was injured while driving an uninsured motor vehicle owned by a relative member of the same household. Kenneth L. Ivey was a passenger in an uninsured vehicle owned by a relative member of the same household.
"....
"The court's conclusions are supported by language in Holloway v. Nationwide Mutual Insurance Co., 376 So. 2d 690 (Ala. 1979), where the court distinguished between `insureds of the first class' and `insureds of the second class.' Under the discussion in that case, Kenneth L. Ivey would be an `insured of the first class' under all the policies. See 376 So. 2d 694.[2] The court's conclusion is further supported by the following language in Alabama *352 Farm Bureau Mutual Casualty Insurance Company v. Pigott, 393 So. 2d 1379 (Ala.1981):
"393 So. 2d  at 1382-83.
"In Lambert v. Liberty Mutual Insurance Co., 331 So. 2d 260 (Ala.1976), the Alabama Supreme Court interpreted Reaves as follows:
"331 So. 2d  at 265.
"For other cases which interpret Reaves as authoritatively construing Reaves as conferring uninsured motorist coverage in favor of persons who are insured under the general liability coverage expressed in the relevant policy, see Insurance Company of North America v. Thomas, 337 So. 2d 365, 369 (Ala. [Civ.App.] 1976); Billups v. Alabama Farm Bureau Mutual Casualty Insurance Co., 352 So. 2d 1097, 1100 (Ala. 1977); USF&G v. Perry, 361 So. 2d 594, 596 (Ala. [Civ.] App.1978); and Nationwide Mutual Insurance Co. v. United Services Automobile Association, 359 So. 2d 380, 381 (Ala. [Civ.] App.1978).'
"....
"... The crucial language in Reaves which is applicable to this case is that which says: `[o]nce an automobile liability policy is issued extending coverage to a certain class of insureds under such a clause, uninsured motorist coverage must be offered to cover the same class of insureds.' 292 Ala. at 223 [292 So. 2d 95] (emphasis added). Reaves further holds that once the liability coverage is extended to a class of insureds, the uninsured motorist coverage cannot be excluded. Reaves does not say that the liability coverage so extended must extend to every automobile which said insured may drive or occupy.
"It is apparent that State Farm intended to extend some liability coverage to Kenneth L. Ivey under his own policies and the policies under which Shellie K. Ivey is the named insured. While State Farm may not have intended the uninsured motorist coverage to be as expansive as is here declared, the Alabama Statute and the *353 Reaves interpretation constructively supply that intent.
"It appears to this court that the uninsured motorist coverage inures to a person, not to a vehicle. It further appears that uninsured motorist coverage is not dependent on the insured person being injured in connection with a vehicle which is covered by the liability insurer against whom recovery is sought under the uninsured motorist provisions. While to have uninsured motorist coverage the person must have some liability coverage under the policy sued on, he need not have liability coverage in all events and for all purposes. Any liability coverage to an `insured of the first class' spawns uninsured coverage which then becomes fixed as to that insured. Once in place the uninsured motorist coverage is in the nature of casualty or health and accident coverage which is conditioned on injury for which an uninsured motorist is legally liable. It is not necessary to find that Swart's automobile was covered by the liability provisions of the seven policies in order for Kenneth L. Ivey to have been covered under their uninsured motorist provisions. If Swart's automobile had been so covered he would not have been uninsured."
CERTIFIED QUESTION ANSWERED.
All the Justices concur, except TORBERT, C.J., who is recused.