Alabama Farm Bureau Mut. Cas. Ins. Co. v. Clem

• Decision Date: 07 February 1973
• Citation: 273 So.2d 218,49 Ala.App. 457
• Parties: ALABAMA FARM BUREAU MUTUAL CASUALTY INSURANCE COMPANY, a corporation v. Albin Judson CLEM, Sr. as Executor of the Estate of Mabel Clare Clem, Deceased. Civ. 60.
• Court: Alabama Court of Civil Appeals

Page 218

273 So.2d 218

49 Ala.App. 457

ALABAMA FARM BUREAU MUTUAL CASUALTY INSURANCE COMPANY, a corporation v. Albin Judson CLEM, Sr. as Executor of the Estate of Mabel Clare Clem, Deceased.

Civ. 60.

Court of Civil Appeals of Alabama.

Feb. 7, 1973.

Camp, Page, Williams & Spurrier, Huntsville, for appellant.

Barksdale & Blizzard, Athens, for appellee.

BRADLEY, Judge.

This is an appeal from a judgment of the Circuit Court of Limestone County awarding damages to the appellee-plaintiff in the amount of $10,000.00.

The action was commenced by the filing of a complaint seeking a recovery under the uninsured motorist coverage of a policy of insurance issued by appellant-defendant. Appellant's demurrer to the complaint was overruled and it pled in short by consent, etc. No jury was demanded and the case was submitted to the trial court on a written stipulation of facts with exhibits. After judgment there was an appeal to this court.

The three assignments of error question the judgment rendered in favor of appellee.

The facts show that Mabel Clare Clem, the wife of appellee A. J. Clem, was, on February 11, 1969, riding as a passenger in a 1963 Rambler owned and operated by Mrs. Willie D. Leonard. The car driven by Mrs. Leonard was involved in a collision on said day with an automobile operated by Joe D. Hines. Mrs. Clem and Mrs. Leonard died as a result of injuries received in the collision.

On the day in question, i.e., February 11, 1969, there was in effect a policy of insurance issued by appellant to A. J. Clem covering a 1965 Ford Falcon. The policy provided for uninsured motorist coverage up to $10,000.00 per person. This coverage obligated the appellant to pay such sums as became due as a result of the recovery of damages from an owner or operator of an uninsured vehicle. This coverage contained, however, the following exclusion:

'EXCLUSIONS--INSURING AGREEMENT III

'This endorsement does not apply:

'(a) to bodily injury to an Insured, or care or loss of services recoverable by an Insured, with respect to which such Insured, his legal representative or any person entitled to payment under this endorsement shall, without written consent of the Company, make any settlement with or prosecute to judgment any action against any person or organization who may be legally liable therefor . . ..'

There was also in existence on the day of the accident a policy of insurance issued by State Farm Fire and Casualty Insurance Company to Mrs. Leonard providing bodily injury liability, medical payments and uninsured motorist coverage.

On or about April 8, 1969 appellee filed an action in the Circuit Court of Limestone County against State Farm Fire and Casualty Insurance Company seeking to recover $10,000.00 under the uninsured motorist coverage and $1,000.00 under the medical payment coverage of the policy issued by said company to Mrs. Leonard.

It was alleged in this complaint that the liability for the accident rested with the uninsured motorist, Joe D. Hines.

On April 10, 1969 appellee received from State Farm $1,000.00 as medical payment benefits, $4,000.00 under the uninsured motorist coverage and $5,000.00 under the bodily injury liability coverage of said policy. In exchange for such sums, appellee executed a loan receipt for the $1,000.00 medical payment, a release and trust agreement for the $4,000.00 uninsured motorist payment, and a covenant not to sue the estate of Mrs. Willie D. Leonard plus a pro tanto release discharging the estate of Mrs. Leonard from liability for the February 11, 1969 accident in exchange for the $5,000.00 payment made under the bodily injury liability provisions of said policy. It should be noted however that appellee in executing the covenant not to sue the estate of Mrs. Leonard expressly stated that said agreement not to sue was not to be construed as an admission by Mrs. Leonard of liability for the accident, but to the contrary was to be taken as a denial of liability.

On April 11, 1969 appellee dismissed his action against State Farm.

Beginning on June 23, 1969 appellee, through his attorney, wrote several letters to agents of the appellant claiming under the uninsured motorist coverage of the policy issued to him by appellant for the death of his wife and requesting permission to sue Joe D. Hines, the uninsured motorist involved in the collision with Mrs. Leonard's car.

On July 30, 1969 appellant, through its attorney, gave written permission for appellee to file an action against Joe D. Hines for the death of his wife, but specifically denied that appellee had a claim against it under the uninsured motorist coverage of the policy issued to appellee.

On August 1, 1969 appellee filed an action in the Circuit Court of Limestone County against Joe D. Hines for the wrongful death of his wife. A judgment in the amount of $39,300.00 was rendered in favor of appellee and against the uninsured motorist, Joe D. Hines.

On May 24, 1971 appellee filed an action against appellant seeking $10,000.00 under the uninsured motorist coverage of the policy previously issued to appellee by appellant. The case was submitted to the court on a stipulation of facts with attached exhibits. There was a judgment for appellee in which the trial court held that the exclusionary clause in controversy tended to limit or restrict the recovery of the appellee under the uninsured motorist coverage of his policy and therefore constituted an invalid infringement of the coverage required by the uninsured motorist statute, i.e., Title 36, Section 74(62a), Code of Alabama 1940, as Recompiled 1958.

Appellant argues that the language of the clause in question is clear, requiring the written approval of the insurer prior to a settlement by the insured with anyone who may be liable for the accident, whether he be insured or uninsured, and that this clause is valid as protecting the contracted for subrogation rights of the insured set out in the policy as follows:

'Trust Agreement. In the event of payment to any person under this...