Opinion ID: 1598888
Heading Depth: 1
Heading Rank: 1

Heading: The Facts and the Proceedings Before the Trial Court

Text: This mandamus petition relates to an action that was filed by Walter Kenney and his wife, Thelma Kenney, to recover uninsured-motorist benefits and medical-payments benefits under an automobile insurance policy GEICO had issued to Mr. Kenney. Mr. Kenney was injured in an automobile accident that he says was caused by an uninsured motorist. Thelma Kenney claimed a loss of consortium, based on her husband's injuries. On November 9, 1992, Walter Kenney sued Timothy Allen Roach in the Circuit Court of Coffee County, alleging that Roach had negligently caused the automobile accident. Mr. Kenney joined GEICO as a defendant, seeking from GEICO uninsured-motorist and medical-payments benefits under his GEICO policy. Before the lawsuit was filed, GEICO had paid Mr. Kenney $2,000; this was the maximum amount of coverage provided under the medical-payments provision. After Mr. Kenney had filed his lawsuit, GEICO offered him $38,000 under the uninsured-motorist provision of his policy to settle his claims under the policy. According to GEICO and the wording of the policy, $38,000 was the most Mr. Kenney could be paid, because of the offset provision of the uninsured-motorist portion of his policy. GEICO's manual for its adjusters requires adjusters to reduce benefits payable to an insured under the uninsured-motorist coverage by any amount that has been paid under the medical-payments coverage. GEICO applies this offset uniformly, even though the Alabama statute governing uninsured-motorist coverage, § 32-7-23, Ala. Code 1975, requires that each automobile liability policy providing such coverage provide a minimum of $20,000 in coverage. Because the Kenneys owned two cars as to which GEICO had provided the minimum $20,000 uninsured-motorist coverage, their coverages were stacked to provide them with a total of $40,000 in coverage. See Great Central Ins. Co. v. Edge, 292 Ala. 613, 298 So.2d 607 (1974) (this Court recognized stacking of insurance policy benefits), and Ala.Code 1975, § 32-7-23(c). [1] Mr. Kenney rejected the $38,000 offer and amended the lawsuit, adding counts alleging breach of contract and bad-faith failure to pay. On May 9, 1994, Mr. Kenney again amended the complaint to add a fraud count and to aver that he brought the action on behalf of all GEICO policyholders that had purchased GEICO policies containing an endorsement permitting the offset of medical-payments benefits against uninsured-motorist or underinsured-motorist benefits. The essence of Mr. Kenney's claims is that GECO's procedure for paying claims under its uninsured-motorist policies violates Alabama's Uninsured Motorist Statute. On or about June 18, 1996, Mr. Kenney filed a motion for class certification. Mr. Kenney sought class certification under Rule 23(b)(1), 23(b)(2), and 23(b)(3), seeking injunctive relief that would prohibit GEICO from using the medical-payments coverage to reduce benefits paid to a policyholder under the uninsured/underinsured-motorist provision of the GEICO policy. The injunctive relief sought by Mr. Kenney would also order a rewrite of the language in future GEICO automobile policies to prevent what he alleges is a wrongful offset of benefits. The trial court heard the motion for class-action certification on October 25, 1996, and on December 16, 1997 it issued an order conditionally certifying the class action, as follows: 1. Class IClass I shall be maintained as a Rule 23(b)(1) class action with Walter S. Kenney and Thelma June Kenney as the named class representatives on behalf of the following defined class Plaintiffs: Each and every individual or entity within the State of Alabama, who has purchased at any time from a period of six years preceding the filing of this action, or who will purchase an automobile liability insurance policy marketed, sold or administered by GEICO Insurance Company, which contains substantially the following provisions in such liability, or uninsured, or underinsured motorist coverage as follows: `... the amount payable under this coverage will be reduced by all amounts: `. . . . `(b) Paid or payable under the Bodily Injury Coverage or Medical Payments Coverage of this policy....' This class action is to proceed under all theories advanced by Plaintiffs in their complaint and amended complaint for declaratory and injunctive relief and equitable restitution. 2. Class IIClass II shall be maintained as a Rule 23(b)(2) class action with Walter S. Kenney and Thelma June Kenney as the named class representatives on behalf of the following defined class of Plaintiffs: Each and every individual or entity within the State of Alabama, who has an action, or who will purchase an automobile liability insurance policy marketed, sold or administered by GEICO Insurance Company, which contained substantially the provision in such liability, or uninsured, or underinsured motorist coverage as follows: `... the amount payable under this coverage will be reduced by all amounts: `. . . . `(b) Paid or payable under the Bodily Injury Coverage or Medical Payments Coverage of this policy....' This class action is to proceed under all theories advanced by Plaintiffs in their complaint and amended complaint for declaratory and injunctive relief and equitable restitution. GEICO petitions for a writ of mandamus directing the trial court to vacate the conditional class certification. GEICO argues that the trial court abused its discretion in certifying the classes of plaintiffs in this action because, it says, the court's analysis did not meet the rigorous-analysis requirement of Rule 23, Ala. R. Civ. P., for certification of a class action. Ex parte American Bankers Life Assurance Co. of Florida, 715 So.2d 186 (Ala.1997).