Opinion ID: 1776454
Heading Depth: 1
Heading Rank: 1

Heading: Coley and Moore

Text: On June 24, 1988, a vehicle driven by Charles Hughes, Jr., struck a vehicle driven by Bertina Coley. Alberta Coley and Patsy Moore were occupants in the Coley vehicle. Alberta Coley died as a result of injuries received in the accident. Bertina Coley and Patsy Moore suffered substantial injuries. At the time of the accident, Hughes was covered under a liability policy with the now insolvent Champion Insurance Company, with policy limits of $20,000 per claimant, up to a maximum coverage of $40,000 per accident. The estate of Alberta Coley; Bertina Coley; and Moore and her husband (the latter on a claim of loss of consortium), received out-of-court insurance settlements under various UM coverages because Hughes's liability insurer was insolvent. The amounts of these settlements were as follows: the estate of Alberta Coley received $45,000; Bertina Coley, $21,000; and Moore and her husband, $127,000. They now seek compensation from the AIGA as the guaranty fund for the insolvent liability insurer, Champion, because, they say, they have not been made whole. The AIGA does not dispute the contention that they have not been made whole, but argues that their recoveries more than offset the $20,000 per person of Champion liability coverage the AIGA would cover. The claimants argue that the offset statute does not apply where the claimant is not made whole, because, they say, as a practical matter the AIGA payment on a claim cannot be a duplicate or windfall payment when one has not been made whole by previous recoveries. The AIGA sought a declaratory judgment in the Coley/Moore case to determine whether it could offset their recoveries on UM coverage against their AIGA claim on the liability coverage. The AIGA moved for, and was granted, a summary judgment declaring that it could. The claimants argue that the trial court incorrectly applied the law to the undisputed facts. Our review of the judgment is de novo, because no presumption of correctness attaches to a summary judgment. Hightower & Co. v. United States Fidelity & Guar. Co., 527 So.2d 698, 701 (Ala.1988). The trial court stated: [A] set-off is allowed in the following situation: Victim sues Tortfeasor whose insurer is declared insolvent, an event which renders Tortfeasor uninsured. Victim makes [a] claim ... under his UM coverage which pays the claim. Victim then claims against the Guaranty Fund [for the] Tortfeasor's insolvent insurer. In that instance, courts have held that the Guaranty Fund is entitled to a set-off because [V]ictim was only entitled to his UM coverage due to the insolvency of the [T]ortfeasor's insurer. Except for the operation of § 27-42-12, the victim would recover both his UM and the liability insurancea windfall or duplication of recovery because [V]ictim would receive more money than he would have received had [T]ortfeasor's insurer not become insolvent. We agree. The question to be asked is, would payment from the AIGA to the claimant result in a windfall or a duplicate recovery of insurance proceeds previously received. [1] We are sensitive to the problem faced by claimants who are not made whole by insurance settlements, but we emphasize that the legislature sought only to offer a measure of protection to remedy the problem of the nonexistence of coverage due to the insolvency of an insurer, not to redress the problem of inadequate existing coverage. Thus, the issue before us does not turn on whether the Coley/Moore claimants have been made whole. On the Coley/Moore claims, had Champion been solvent, these claimants could have recovered from Champion only $20,000 each, not to exceed a total of $40,000 from that liability coverage. They could not have recovered the $45,000, $21,000 and $127,000 UM coverage amounts they have recovered. Thus, for the AIGA to pay monies in addition to this amount would be an impermissible windfall.