Great Central Ins. Co. v. Edge

• Decision Date: 08 August 1974
• Citation: Great Central Ins. Co. v. Edge, 298 So.2d 607, 292 Ala. 613 (Ala. 1974)
• Parties: GREAT CENTRAL INSURANCE COMPANY, a corp. v. Robert J. EDGE. SC 774.
• Court: Alabama Supreme Court

Page 607

298 So.2d 607

292 Ala. 613

GREAT CENTRAL INSURANCE COMPANY, a corp. v.Robert J. EDGE.

SC 774.

Supreme Court of Alabama.

Aug. 8, 1974.

Ball, Ball, Matthews & Lamar and Tabor R. Novak, Jr., Montgomery, for appellant.

Mooneyham & Mooneyham, Montgomery, for appellee.

HEFLIN, Chief Justice.

This appeal was originally filed with the Alabama Court of Civil Appeals, but was transferred to this court because that court determined it did not have jurisdiction because of the amount in controversy.Title 13, Section 111(11),Code of Alabama 1940, as amended(Recompiled 1958--Supp.1971) permits such transfer.It appears that the transfer was proper since under Section 111(3) the jurisdiction of the Civil Appeals Court is limited to cases wherein the amount in controversy does not exceed $10,000.00.'Amount' is defined as the 'amount of recovery.'Although the final judgment in this case was reduced to $10,000.00 upon payment of an undisputed liability of $10,000.00 there was a trial court order of recovery of $20,000.00 for the plaintiff.

The facts of the case are not in dispute.On November 12, 1972, plaintiff-appellee Edge, while a pedestrian at his service station in Montgomery, Alabama was struck by an automobile negligently operated by an uninsured motorist.At the time of the accident, a policy of insurance issued by defendant-appellant insurance company providing for uninsured motorists coverage was in effect.Edge had paid an annual premium of $7.65 which provided such coverage.Edge suffered personal injury damages in excess of $20,000.00.

The uninsured motorist coverage extended to any automobile owned by Edge for which liability coverage was afforded.The policy schedule did not specifically identify any automobile, but the annual premium for uninsured motorists was based on the number of vehicles at that time.The premium of $7.65 was computed on the basis of $5.00 for the first vehicle, $4.00 for the second, with an annual deviation rate of 15%.

In addition to the schedule which indicated that the limits of liability under uninsured motorist coverage was $10,000 each person, $20,000 each accident,' the policy also contained the following 'Limits of Liability' clause:

'Regardless of the number of insureds under this policy, the company's liability is limited as follows:

(a) The limit of liability stated in the Schedule as applicable to 'each person' is the limit of the company's liability for all damages because of bodily injury sustained by one person as the result of any one accident and, subject to the above provision respecting 'each person', the limit of liability stated in the schedule as applicable to 'each accident' is the total limit of the company's liability for all damages because of bodily injury sustained by two or more persons as the result of any one accident.'

The appellant insurance company contends, (1) that an insurer may limit its liability for uninsured motorist coverage to $10,000 per person and $20,000 per accident where it does so in plain unmistakable language regardless of the fact that the policy was issued with respect to two automobiles and the premium was computed based on two automobiles, and (2) where an insured pays premiums for uninsured motorist coverage for more than one automobile insured under one policy of insurance, corresponding cumulative multiple uninsured motorist coverage limits of $10,000 for each person and $20,000 for each accident, are not statutorily imposed for each vehicle insured thereunder.

Since a determination can properly be predicated on the merits of the first contention, a discussion of the second contention is unnecessary.This court holds that under the facts of this case where the insurer issued a policy providing uninsured motorist coverage and collected a premium with respect to more than one automobile the insurer can not preclude a recovery based on each premium by a limiting clause.

The initial decision of this court dealing with the 'stacking' problem of uninsured motorists insurance after the passage of the uninsured motorists statute was Safeco Insurance Co. of America v. Jones, 286 Ala. 606, 243 So.2d 736(1970), a case in which the holding in part is applicable to the instant decision.In Safeco this court considered whether recovery could be made on more than one insurance policy, if the insured party's injuries exceed the limits of one of the policies.The court states in part: '(W)e cannot permit an insurer to avoid its statutorily imposed liability by its insertion into the policy of a liability limiting clause which restricts the insured from receiving that coverage for which the premium has been paid.'

The court noted that the Alabama Uninsured Motorists' Insurance Statute is the same as Florida's, and cited the Florida decision of Sellers v. United States Fidelity & Guaranty Co., 185 So.2d 689(Fla.1966):

'It is clear that the statute does not limit an insured only to one $10,000 recovery under said coverage where his loss for bodily injury is greater than $10,000, and he is the beneficiary of more than one policy issued under § 627.0851.The statute is designed to protect the insured as to his actual loss within such limits, but being of statutory origin it is not intended that an insured shall receive more from such coverage than his actual loss, although he is the beneficiary under multiple policies issued pursuant to F.S. § 627.0851, F.S.A.'

In State Farm Mutual Automobile Ins. Co. v. Cahoon, 287 Ala. 462, 252 So.2d 619(1971), the plaintiff was injured by an uninsured motorist while driving a truck in the course of his employment.The plaintiff's employer had uninsured motorist coverage to the extent of $10,000 and also provided different insurance coverage under the Alabama Workmen's Compensation Act which entitled plaintiff to $2,400 in medical benefits and future compensation payments of between $10--11,400.State Farm had 'other insurance' provisions, and an 'excess escape' clause in its uninsured motorist endorsement.It sought to have its uninsured motorist liability reduced or set off by any benefits paid to the plaintiff as...