Auto-Owners Ins. Co. v. Stokes

• Decision Date: 07 August 1969
• Docket Number: AUTO-OWNERS,4 Div. 316
• Parties: INSURANCE COMPANY, a Corporation v. Mathew V. STOKES, III, a minor who sues by and through his father M. V. Stokes, Jr., et al.
• Court: Alabama Supreme Court

Page 320

226 So.2d 320

284 Ala. 537

AUTO-OWNERS INSURANCE COMPANY, a Corporation v. Mathew V. STOKES, III, a minor who sues by and through his father M. V. Stokes, Jr., et al.

4 Div. 316.

Supreme Court of Alabama.

Aug. 7, 1969.

Rehearing Denied Sept. 18, 1969.

J. M. Albritton, Robert B. Albritton, Albrittons & Rankin, Andalusia, for appellant.

Tipler & Fuller, Andalusia, Holberg, Tully & Hodnette, Mobile, for appellees.

HARWOOD, Justice.

This is an appeal from a decree entered in a declaratory judgment action. The bill was filed by M. V. Stokes III, suing by his father and next friend M. V. Stockes, Jr. The respondents were Auto-Owners Insurance Company, and six individuals who had filed suits against M. V. Stokes III, claiming damages for injuries suffered in a collision between an automobile driven by M. V. Stokes III, and another automobile.

Paragraph 1 of the bill is in usual form for introduction of the parties.

Paragraphs 2 and 3 are as follows:

'2. That on or about the 3rd day of August, 1966, the Respondent, Auto-Owners Insurance Company, a corporation, under its policy of automobile liability insurance numbered 60011703067573 covered a 1960 Chevrolet automobile owned by M. V. Stokes, Jr., father of Complainant, for a period of three months, said policy being issued and delivered by Robert C. O'Neal, the duly authorized agent of Auto-Owners Insurance Company, a copy of said policy, together with a schedule of coverages, being hereto attached, marked 'Exhibit A' and made a part of this Bill of Complaint as completely as if set out in this paragraph in full.

'3. That the above mentioned policy of liability insurance afforded complainant insurance coverage as to bodily injury in the amount of $50,000.00 for each person; and $100,000.00 for each occurrence while driving the vehicles scheduled therein; and afforded insurance coverage as to property damage in the amount of $5,000.00 for each occurrence.'

Paragraph 4 asserts that while driving the 1960 Chevrolet scheduled in the policy of insurance, complainant was involved in an automobile accident resulting in bodily injuries to the named individual respondents, and that one of the individual respondents, Samuel A. Minervino, suffered property damage.

Paragraphs 5, 6, 7, 8, 9, and 10, describe the suits filed by the individuals, who are respondents in this proceeding, against M. V. Stokes III, as a result of the automobile accident.

Paragraph 11 details the forwarding of the suit papers to Auto-Owners with a request that it defend the suits. The paragraph further avers that Auto-Owners acknowledged receipt of the suit papers but contended that the policy afforded coverage for only $10,000.00 damages for one person and $20,000.00 for each occurrence instead of $50,000.00 and $100,000.00 coverage.

That part of the prayer of the bill pertinent to this review is as follows:

'He prays that upon a final hearing of this cause Your Honor will render a declaratory judgment and decree construing the policy of insurance made 'Exhibit A' hereto and declaring the amount of coverage your complainant is afforded with respect to the accident of August 7, 1966, as far as bodily injury coverage is concerned.

'Complainant prays for general relief.'

The respondent Auto-Owners filed a demurrer to the bill, and upon its being overruled, filed an answer. The remaining individual respondents also filed their answers. The cause then came on for hearing.

At the beginning of the hearing below the Chancellor announced that the case would be tried under the equity rule and no objections or exceptions would be necessary, and only legal evidence would be considered.

The material, relevant, competent, and legal evidence produced below tends to show that for some ten years M. V. Stokes, Jr., had procured his automobile insurance through the O'Neal Agency in Andalusia. This agency is an independent insurance agency representing some ten companies. The casualty coverage in these policies had been for $50,000.00 for each person and $100,000.00 for each occurrence as shown on the 'Secedule of Coverages.'

In early May of 1966, Mr. Stokes bought a 1960 Chevrolet Impala for the use of his sixteen year old son, M. V. Stokes, III. At this time he called Robert O'Neal of the O'Neal Agency, and requested that he insure the 1960 Impala. At this time as before stated, Mr. Stokes had in force an automobile insurance policy issued by Auto-Owners covering two other automobiles he owned. The casualty coverage on these two automobiles was $50,000.00 and $100,000.00. The expiration date of this policy was 3 August 1966.

Both Mr. Stokes and Mr. O'Neal testified that the amount of coverage for the Impala was not mentioned in this conversation.

On 11 May 1966, Mr. O'Neal forwarded to Auto-Owners a form 'To add a car or change to a young Driver Class.' This form disclosed that the automobile to be added to the policy was to be principally operated by M. V. Stokes III. The limits of the casualty coverage requested were designated '50/100.'

On 18 May 1966, Auto-Owners wrote Mr. O'Neal:

'Acknowledging your Endorsement Request of May 11, to add a 1960 Chevrolet for the young driver at Class 2--1 rates.

'Our Company is not interested in writing the limit of liability of $50,000/$100,000 for this young driver since the vehicle will be used daily to go to and from school. We feel that the maximum limits we can write on this particular item is $10,000/$20,000 bodily injury and $5,000 property damage and are endorsing the policy accordingly.

'Your Agency will be receiving the Endorsement shortly and you should advise the Assured of the change in coverage.'

O'Neal testified that after receiving the above letter, he went to Stokes' place of business and read him the letter and told him it was the intent of Auto-Owners to limit the coverage on 'the boy' to 'ten-twenty' and this was all they would write coverage for.

Shortly after this O'Neal received from Auto-Owners a schedule of coverage covering all three automobiles owned by Stokes. The date of this coverage was May 1, 1966. The casualty coverage on the two automobiles covered in the schedule of coverage remained unchanged, that is, such coverage was 50 and 100 thousand dollars. The coverage on the added Impala was '10/20.'

This schedule is divided into columns with intersecting lines forming squares. At the top of each column are various legends. The first column on the left is under the legend 'Car No.' In the respective squares in this column the three automobiles owned by Mr. Stokes are listed separately, one in each square. About midway of the top of the schedule is a column designated 'Bodily Injury--Limits unless otherwise specified.' In this square appear the words 'Each person,' with the figure 50 typed immediately above, and beneath the words 'Each occurrence,' with 100 typed above. Also at the bottom of this square are the words 'Thousands of Dollars.' In the squares applicable to the two automobiles for which the policy was originally issued only the typed amount of the premium for the casualty insurance is shown.

In the square pertaining to the coverage on the 1960 Chevrolet (the automobile involved in the accident) appear the typed figures '10/20,' with the figures '51.60' immediately beneath.

Mr. O'Neal testified positively that upon receipt of the schedule of coverage adding the Impala, he personally delivered the same to Mr. Stokes.

Mr. Stokes testified to the effect that he knows no one read any letter to him pertaining to limiting the coverage on the Impala--and as to whether O'Neal told him of the limited coverage, Mr. Stokes testified:

'No, I can't swear he didn't come out and discuss with me * * * and I have given it a lot of thought.'

Mr. Stokes testified to this effect several times, until he was placed on the stand for a third time by counsel for the individual respondents for further cross examination. He testified he had not seen the letter from Auto-Owners limiting the casualty coverage on the 1960 Impala until it was shown him during the course of the trial. On further examination by counsel for Auto-Owners, he again testified he was not saying O'Neal did not come out and tell him he could get only ten and twenty casualty coverage on the Impala but he was saying O'Neal did not read the letter from Auto-Owners to him, nor did he himself read the letter.

Mr. Stokes was again further examined by counsel for the individual respondents, and answered affirmatively a question as to whether he considered his recollection as good as 'O'Neal's The record then shows the following:

'Q. (Mr. Tipler continuing) Is it your recollection that Robert (O'Neal) told you you had only ten and twenty before that wreck or not?

'A. No, he did not.'

Mr. O'Neal testified to the effect that he had formerly been associated with Mr. Stokes in the stockyard business, and is still a stockholder in the Stokes-Brogden Stockyards. He visited the Stokes-Brogden Stockyards once or twice a week. He personally delivered the policies and endorsements to Mr. Stokes, and so delivered the Schedule of Coverages. The jacket of the policy remains the same, and when a schedule of coverage is delivered it becomes a part of the policy by being placed therein.

The Impala was added to the policy by the Schedule of Coverages in May 1966. Mr. O'Neal testified that in July 1966 he renewed the policy sued on by obtaining from Auto-Owners a schedule of coverages for the period 3 August 1966 to 3 February 1967. This schedule was the same as that of May 1966, in that it showed a casualty coverage of fifty-one hundred thousands of dollars on the 1963 Chevrolet and the 1965 Ford, and '10/20' on the 1961 Chevrolet. As to the delivery of this document, O'Neal testified:

'Q. In your best judgment did you take the renewal on 8--3 of '66 out there?

'A. Prior to then, yes sir.

'A. Sometime in July?

'A. That's right, either July or the first part of August.'

Mr....