Opinion ID: 1687183
Heading Depth: 1
Heading Rank: 2

Heading: Policy Terms/Stacking

Text: This is an insurance stacking case. In Sullivan v. State Farm Mutual Automobile Insurance Co., 513 So.2d 992 (Ala.1987), this Court, citing State Farm Automobile Insurance Co. v. Reaves, 292 Ala. 218, 292 So.2d 95 (1974), held that the classification of insured under uninsured motorist vehicle coverage must be as broad as the definition of insured under the bodily injury liability coverage (primary liability). Also, in Lambert v. Liberty Mutual Insurance Co., 331 So.2d 260 (Ala.1976), Justice Jones wrote in his special concurrence: If Lambert is an insurednamed or otherwiseunder the primary liability provisions, the statute mandates coverage for uninsured motorist protection to the same extent and in the same manner as all other insureds under the basic liability coverage. 331 So.2d at 266. Section IV of the Canal policy, Persons Insured, which is part of the primary liability provisions, states that [e]ach of the following is an insured under this insurance to the extent set forth below: A. Under the Garage Bodily Injury and Property Damage Liability Coverages: (1). The named insured. (2). With respect to garage operations other than the automobile hazard: (a). Any employee, director, or stockholder of the named insured while acting within the scope of his duties as such. The uninsured motorist coverage provision of the policy issued by Canal to First Class provided as follows: Each of the following is an insured under this insurance to the extent set forth below: (a). . . . (b) Any other person while occupying an insured highway vehicle.... It is undisputed that at the time of the accident Roy Burns was an employee of Mike Burns d/b/a First Class Auto Sales. Pursuant to the holdings of this Court in Reaves and Lambert and the Canal primary liability provisions, Roy Burns as an employee must be extended uninsured motorist coverage under the Canal policy. As an employee, Roy Burns is designated as an insured under the liability provisions of the Canal policy. Contrary to what Canal argues, whether Roy Burns owned the vehicle he was driving or paid any of the premiums for the insurance is of no consequence. See, White v. Georgia Casualty & Surety Insurance Co., 520 So.2d 140 (Ala.1987). In White, Mr. White was injured while driving his employer's truck in the line and scope of his duties. The Court held that White, as an employee and as an insured in the primary liability portion of his employer's fleet insurance policy was entitled to stack coverage under the uninsured motorist provisions. Mike Burns and Roy Burns testified that Roy was on the business of First Class when the accident occurred. Roy was returning from searching for auto parts to be used in repairing cars for resale at First Class. Applying the rationale of White, supra, we agree with the trial court that Roy Burns can stack the Canal uninsured motorist coverage because the evidence supports a finding that he is within the definition of an insured under the terms of the Canal uninsured motorist coverage provisions. It is well settled that where the insured's loss exceeds the limits of one uninsured motorist policy, the insured may stack the coverages provided by other uninsured motorist policies to cover up to the amount of damages required to compensate for the actual injury sustained. State Farm Mutual Automobile Insurance Co. v. Fox, 541 So.2d 1070 (Ala.1989). Ala.Code 1975, § 32-7-23(c), states: 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. Roy Burns asserts that the $40,000 tendered under the Allstate contract will not cover the amount of damages he would be entitled to as compensation for actual harm sustained and, therefore, he seeks to recover under the Canal uninsured motorist provision. The statute limits stacking to the primary coverage plus coverage for two additional vehicles. In Fox, supra, this Court held: The phrases `any one contract' and `within such contract' refer to a single insurance contract. There may be no significant difference between five single vehicle insurance policies and one insurance policy covering five vehicles, as State Farm contends. However, the legislature clearly directed its limitation of stacking of uninsured/underinsured motorist coverage to a single policy covering multiple vehicles.... The plain meaning of § 32-7-23(c) is that an injured person covered under a multi-vehicle policy may stack the uninsured/underinsured motorist coverage for additional vehicles covered within the policy, limited to `the primary coverage plus such additional coverage as may be provided for additional vehicles, but not to exceed two additional coverages.' 541 So.2d at 1072. When statutory language is unequivocal and unambiguous, it is to be given its plain, clear, and ordinary meaning. Mann v. City of Tallassee, 510 So.2d 222 (Ala.1987). The statute does not prevent stacking under two or more separate contracts of insurance. The statutory language clearly imposes a limitation only on the number of uninsured motorist coverages that can be stacked within one contract of insurance. Fox and § 32-7-23(c) do not prohibit the stacking of uninsured motorist coverages provided under separate multi-vehicle contracts; they only limit stacking to a total of three coverages under each separate contract of insurance. The language of § 32-7-23(c) cannot be interpreted to allow stacking only under one multi-vehicle insurance contract. In American Economy Insurance Co. v. Thompson, 643 So.2d 1350 (Ala.1994), American Economy insured for Thompson's employer two vehicles under one contract and three vehicles under a separate contract. Thompson was involved in an accident with an uninsured motorist while driving a vehicle owned by his employer in the line and scope of his duties. American Economy tendered to Thompson the policy limits under the contract covering two vehicles; we held that, pursuant § 32-7-23(c), Thompson was entitled to stack the coverages under the separate contract covering three vehicles. Furthermore, this Court has held that exceptions to insurance coverage must be narrowly construed so as to provide the maximum coverage available. Cotton States Mutual Insurance Co. v. Michalic, 443 So.2d 927 (Ala. 1983).