Hall v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 07 August 1987
• Citation: 514 So.2d 853
• Parties: Karen HALL, Administratrix of the Estate of Stevie C. Swain, Deceased v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY. 86-414.
• Court: Alabama Supreme Court

Page 853

514 So.2d 853

Karen HALL, Administratrix of the Estate of Stevie C. Swain, Deceased v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY.

86-414.

Supreme Court of Alabama.

Aug. 7, 1987.

Rehearing Denied Sept. 25, 1987.

Sam E. Loftin, Phenix City, for appellant.

J. Pelham Ferrell of Ferrell, McKoon & Britton, Phenix City, for appellee.

BEATTY, Justice.

This case poses the question of whether an insurance policy issued by State Farm Mutual Automobile Insurance Company ("State Farm") provided plaintiff's intestate, Stevie C. Swain, with uninsured motorist coverage. The trial court entered a summary judgment for State Farm, relying principally on this Court's decision in Ex parte O'Hare, 432 So.2d 1300 (Ala.1983). Because we hold that Ex parte O'Hare does not apply to the facts sub judice, we reverse and remand.

The parties do not dispute the facts, which were stipulated in the trial court. This action arises out of an accident involving one vehicle, which occurred on February 29, 1984, when a 1979 Toyota, driven by Gordon Wayne Johnson, struck a bridge on U.S. Highway 80 in Russell County, Alabama. The Toyota was owned by Gordon's mother, Bennie Mae Johnson, and was insured by State Farm under Policy No. 417 1282-B20-01B.

Gordon Wayne Johnson did not reside in the home of his mother and, thus, did not meet the policy's definition of a "relative." He was covered under the policy insuring the Toyota, nonetheless, because he was driving the vehicle with his mother's permission and within the scope of her consent when the accident occurred.

Riding in the Toyota as a passenger was the plaintiff's intestate, Stevie C. Swain. Swain was the son-in-law of Bennie Mae Johnson and a resident relative of her household; therefore, Swain met State Farm's definition of "insured" under the policy issued for the Toyota. At the same time, Swain fell squarely under a liability exclusion in that policy that is commonly called the "household exclusion," in that he was a member of Mrs. Johnson's family and resided in her household at the time of the accident. State Farm denied liability coverage to the administratrix of Swain's estate on the basis of that exclusion.

Bennie Mae Johnson owned a second vehicle, a 1980 Plymouth Horizon, which she also insured with State Farm but under a totally separate insurance policy (Policy No. 436 4747-EO1-01D). As a resident relative, the plaintiff's intestate met the definition of "insured" under the policy on the Horizon as well.

Once State Farm had denied liability coverage to the estate of Stevie C. Swain due to the "household exclusion," the administratrix of that estate filed a complaint that sought to make an uninsured motorist claim under either or both of the State Farm policies issued to Bennie Mae Johnson.

Both the defendant and the plaintiff moved for summary judgment on the issue of whether uninsured motorist coverage was available to the estate of plaintiff's intestate, Swain, under either of the two policies of insurance issued to Bennie Mae Johnson by State Farm, and both submitted briefs in support of their positions. The trial court held that the plaintiff's intestate was not covered by either policy and granted summary judgment in favor of State Farm; the administratrix of the estate appeals.

The issue regarding the availability of uninsured motorist coverage under the policy insuring the 1979 Toyota is not before us. The plaintiff concedes in her brief that our holding in Ex parte O'Hare, supra, controls as to that question.

Thus, the sole issue before us is whether a vehicle, which is insured for liability under one policy, but coverage thereunder has been denied, can be considered an uninsured motor vehicle under a policy of insurance issued on another vehicle. The plaintiff contends that the uninsured motorist coverage is afforded by the plain and unambiguous construction of State Farm's policy language. State Farm, on the other hand, insists that the issue is controlled by Ex parte O'Hare, supra, and Dale v. Home Ins. Co., 479 So.2d 1290 (Ala.Civ.App.1985), which it argues, stand for the proposition that an insured vehicle does not become uninsured simply because liability coverage may not apply to a particular individual.

The proposition on which State Farm relies first appeared in Watts v. Preferred Risk Mutual Ins. Co., 423 So.2d 171 (Ala.1982), in which this Court held that a denial of liability coverage, due to the lack of cooperation by the named insured, did not entitle the passenger in a vehicle to make a claim for uninsured motorist coverage under the policy insuring that vehicle. In that case, we adopted the logic in the holding of a Florida Supreme Court decision, Reid v. State Farm Fire & Casualty Co., 352 So.2d 1172 (Fla.1977), because "we [were] persuaded that the Florida court correctly construed the exclusion where the same vehicle [was] involved in the claim for liability coverage and the uninsured motorist coverage." 423 So.2d at 175.

In Watts, we quoted from the Reid decision as follows:

" 'We hold that the family car in this case is not an uninsured motor vehicle. It is insured and it does not become uninsured because liability coverage may not be available to a particular individual. Taylor v. Safeco Insurance Co., 298 So.2d 202 (Fla. 1st DCA 1974); Centennial Insurance Co. v. Wallace, 330 So.2d 815 (Fla. 3d DCA 1976).

" 'We recognize, as a general rule, that an insurer may not limit the applicability of uninsured motorist protection. Hodges v. National Union Indemnity Co., 249 So.2d 679 (Fla.1971); Salas v. Liberty Mutual Fire Insurance Co., 272 So.2d 1 (Fla.1972). We believe, however, that the present case is factually distinguishable from previous cases and is an exception to the general rule. Here the family car, which is defined in the policy as the insured motor vehicle, is the same vehicle which appellant, under the uninsured motorist provision of the policy, claims to be an uninsured motor vehicle.' " 423 So.2d at 175.

The proposition on which State Farm relies again appeared in Ex parte O'Hare, in which this Court upheld the exclusionary definition in the uninsured motorist coverage, which stated: "but the term uninsured motor vehicle shall not include (i) a vehicle defined herein as an insured motor vehicle." 432 So.2d at 1303. We found that this exclusion was reasonable in light of our holding in Watts. We went on to say:

"Here, as in Reid v. State Farm Fire and Casualty Co., 352 So.2d 1172 (Fla.1977), the automobile, 'which is defined in the policy as the insured motor vehicle, is the same vehicle which [petitioner], under the uninsured motorist provision of our policy claims to be an uninsured motor vehicle.' 352 So.2d at 1174.

"In our view the Court of Civil Appeals was correct in writing:

" 'The Supreme Court of Mississippi in the case of Aitken v. State Farm Mutual Automobile Insurance Co., 404 So.2d 1040 (Miss.1981), in interpreting a similar policy under similar facts held that the motor vehicle cannot be both insured and uninsured in the same policy. Neither can a driver be insured as a permissive driver and at the same time be uninsured for purposes of uninsured motorist coverage....' "

(Emphasis added.) 432 So.2d at 1303.

Actually, the holding in Reid, the logic of which we had previously adopted, was squarely on point to the issue in O'Hare. Both cases addressed the same exclusion in a State Farm policy and both involved the denial of liability coverage to a passenger because of the household exclusion. In both cases, the passengers had then attempted to make an uninsured motorist claim under the very policy that had initially excluded them from liability coverage. Under those circumstances, we quoted from Reid, 352 So.2d at 1173, when we wrote that "an insured automobile does not become uninsured because liability coverage may not be available to a particular individual." 432 So.2d at 1303.

The Court of Civil Appeals addressed the same situation in Dale v. Home Insurance Co., 479 So.2d 1290 (Ala.Civ.App.1985). Dale concerned a fireman who was injured in an accident involving the fire truck in which he was riding. The insurance company denied liability coverage due to the "fellow employee" exclusion; the fireman then tried to assert a claim for uninsured motorist coverage under the policy on the fire truck. Citing Watts and O'Hare, the Court of Civil Appeals held:

"It is clear to us, that in the present case, the fire truck cannot be both an 'insured vehicle,' with coverage for plaintiff under the uninsured motorist provision of the Home [Insurance Company] policy, and an 'uninsured vehicle' under the same Home policy. Dale is not legally entitled to claim uninsured motorist benefits under the Home policy under these facts."

(Emphasis added.) 479 So.2d at 1291.

The courts in these cases have consistently held that, when the insurance carrier of the vehicle involved in an accident denies liability coverage to an individual because of an applicable liability exclusion or exclusionary definition, that denial does not trigger the availability of uninsured motorist coverage to that individual under the same policy.

Thus, State Farm has taken the proposition on which it relies out of context. Its reliance on O'Hare and Dale is misplaced because those cases do not address the present issue of whether an individual who has had liability coverage and uninsured motorist coverage denied to him under the policy covering the vehicle in which he was riding can press a claim for uninsured motorist coverage under another and different policy of insurance. The question posed to us here is one of first impression in this state.

An examination of the policy language for the 1980 Plymouth Horizon automobile is necessary in order to determine whether uninsured motor vehicle coverage is involved in the present case. The insuring agreement provides:

"SECTION III--UNINSURED MOTOR VEHICLE--COVERAGE U.

"We will pay...