Criterion Ins. Co. v. Anderson

• Decision Date: 03 June 1977
• Citation: 347 So.2d 384
• Parties: CRITERION INSURANCE COMPANY v. Harold ANDERSON, who sues as Administrator of the Estate of Gina Baker, Deceased. SC 2186.
• Court: Alabama Supreme Court

Page 384

347 So.2d 384

CRITERION INSURANCE COMPANY v. Harold ANDERSON, who sues as Administrator of the Estate of Gina Baker, Deceased.

SC 2186.

Supreme Court of Alabama.

June 3, 1977.

Richard A. Ball, Montgomery, for appellant.

Richard H. Gill, Montgomery, for appellee.

BLOODWORTH, Justice.

Insurer Criterion Insurance Company appeals from a summary judgment for plaintiff, Administrator of the Estate of Gina Baker, deceased, the insured. We reverse and remand.

The undisputed facts are stated in the following paragraphs from the trial court's judgment:

"On May 25, 1974 Gina Elizabeth Baker, age 2, was a passenger in her parents' car. In a collision with a car driven by Ben E. Thornton, Gina Baker was killed and her mother and father were seriously injured. It is agreed that the collision was the fault of Thornton. Both Mr. and Mrs. Baker sued Thornton and recovered judgments of $13,000 and $10,000 respectively. Thornton had a policy of liability insurance with the Home Indemnity Co. in the limits of $10,000/$20,000, which was exhausted in satisfaction of the two judgments. Defendant concedes that these judgments were in no way excessive in view of the serious injuries to the two plaintiffs.

"Thereafter, plaintiff, the administrator of the estate of Gina Baker, filed suit against Thornton and obtained a judgment of $10,000. Payment of that judgment was refused by the Home on the ground that there was no coverage remaining to pay the estate of Gina Baker. It is stipulated that there has been no recovery from any source by Gina Baker's estate other than funeral expenses from defendant Criterion under its medical payments coverage.

"Suit was brought against Criterion which had issued a policy of uninsured motorist insurance to Gina's father Richard Baker, under which Gina was an insured."

On cross motions for summary judgment, the trial court held that Thornton was an uninsured motorist with respect to the claim by the estate of Gina Baker and awarded the estate $10,000 plus interest from the date of the filing of the claim. The trial court indicated that it is ". . . a policy of the Alabama law to provide a recovery by an injured party of at least up to the $10,000 minimum assuming damages in that amount."

Criterion appeals contending that Thornton was not an uninsured motorist because he had coverage with the limits prescribed by Tit. 36, § 74(46)(c), Code of Alabama 1940 (Recompiled 1958), as amended, which has been incorporated into the Uninsured Motorist Act, Tit. 36, § 74(62a). It argues that the provisions of § 74(46)(c) for $20,000 per-accident minimum coverage and for $10,000 per-person minimum coverage is controlling.

This is a case of first impression in Alabama and involves the meaning of the term "uninsured motor vehicles" in Tit. 36, § 74(62a), supra, which states:

"No automobile liability or motor vehicle liability policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless coverage is provided therein or supplemental thereto, in limits for bodily injury or death set forth in subsection (c) of section 74(46) of this title, under provisions approved by the commissioner of insurance, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom . . . ." (Italics supplied.)

Tit. 36, § 74(46)(c), supra, is that portion of the Motor Vehicle Safety-Responsibility Act which excepts from the security requirements of § 74(46)(a) the operator or owner of a vehicle involved in an accident

". . . if such owner had in effect at the time of such accident an automobile liability policy with respect to the motor vehicle involved in such accident; * * * provided, however, every such policy or bond is subject, if the accident has resulted in bodily injury or death, to a limit, exclusive of interest and costs, of not less than $10,000 because of bodily injury to or death to one person in any one accident and, subject to said limit for one person, to a limit of not less than $20,000 because of bodily injury to or death of two or more persons in any one accident, and, if the accident has resulted in injury to or destruction of property, to a limit of not less than $5,000 because of injury to or destruction of property of others in any one accident."

In sum, Section 74(62a) merely requires that insurers provide uninsured motorist coverage in the same minimum limits required under the provisions of § 74(46)(c) for liability policies.

The issue is whether Thornton's automobile was an "uninsured motor vehicle" as to the Insured even though it was covered by liability insurance in the minimum limits prescribed by Tit. 36, § 74(46)(c), supra. We hold that it was not an "uninsured motor vehicle."

The Insured's policy defined "uninsured automobile" as follows:

"(1) an automobile with respect to the ownership, maintenance or use of which there is, in at least the amounts specified by the financial responsibility law of the state in which the insured automobile is principally garaged, no bodily injury liability bond or insurance policy applicable at the time of the accident with respect to any person or organization legally responsible for the use of such automobile, or with respect to which there is a bodily injury liability bond or insurance policy applicable at the time of the accident but the company writing the same is or becomes insolvent; or

"(2) a hit-and-run automobile as defined; but the term 'uninsured automobile' shall not include:

(i) an insured automobile . . . ." (Italics supplied.)

Our holding in this case gives effect to this definition insofar as it pertains to the facts of this case, since it is not inconsistent with the uninsured motorist provisions of our Motor Vehicle Safety-Responsibility Act.

Moreover, our holding is consistent with our prior decisions.

In Higgins v. Nationwide Mutual Insurance Co., 291 Ala. 462, 466-67, 282 So.2d 301, 305 (1973), this Court wrote that:

"It is reasonable and safe to state that 'an "uninsured automobile" is ordinarily defined to include motor vehicles with respect to which neither the owner nor the operator carries bodily injury liability insurance, and "hit and run" automobiles.' . . ."

Additional instances in which other courts have found vehicles to be "uninsured" were noted in Wilbourn v. Allstate Insurance Co., 293 Ala. 466, 468, 305 So.2d 372, 373 (1974):

"It is well-settled and common knowledge that a motorist or a vehicle carrying no liability insurance is 'uninsured.' Courts have also found motorists were 'uninsured,' in other situations: (1) policy limits are below the statutory minimum, (2) the policy fails to cover the injury involved, (3) the insurer becomes insolvent after the policy is issued so there is no insurance applicable to, or at the time of, the accident, (4) the owner or operator of the vehicle causing the accident is unknown, commonly classified as a 'hit-and-run' case. . . ." (Italics supplied.)

In Wilbourn, this Court held that a motor vehicle was not "uninsured" as to an injured party whose injuries exceeded $10,000 where it was covered by a liability policy with the minimum limits and $10,000 was paid to the injured party. The Court stated that the vehicle was "under insured," but not "un insured."

The Insured contends, however, that this Court should extend the definition of uninsured motor vehicles to cover situations in which the tortfeasor's liability coverage is exhausted before each insured recovers at least $10,000, assuming, of course, damages in that amount or more. The Insured proposes that, subject to the limits of the uninsured motorist coverage available, the uninsured motorist coverage should be used to provide each injured party a recovery of damages up to at least $10,000. The assumption underlying the Insured's argument, and the trial court's holding, is that the policy of the Alabama uninsured motorist statute is to assure to each injured party the availability of a minimum of $10,000 coverage.

We think that assumption to be incorrect. The statute mandates a minimum of $10,000 coverage only in the case of accidents resulting in bodily injury to or the death of one person. Where an accident results in bodily injury to or the death of two or more persons, the statute mandates a minimum coverage of $20,000 for the accident. The statute clearly contemplates situations in which the recovery of each individual might be less than $10,000. It appears, therefore, that the policy behind the statute is to assure the availability of minimum coverage for each accident, not for each injured person. The minimum which the legislature intended to...