Hamilton v. Allstate Ins. Co.
| Decision Date | 26 April 1990 |
| Docket Number | No. 89-SC-278-CL,89-SC-278-CL |
| Citation | 789 S.W.2d 751 |
| Parties | Cindy HAMILTON and George Hamilton, Movants, v. ALLSTATE INSURANCE COMPANY, Respondent. |
| Court | United States State Supreme Court — District of Kentucky |
Christopher J. Mehling, Taliaferro and Mann, Covington, for movants.
Thomas R. Yocum, Benjamin, Yocum & Heather, Cincinnati, Ohio, Duane C. Quaini, William T. Barker, Steven M. Levy, Sonnenschein Carlin Nath & Rosenthal, Chicago, Ill., Florie S. Perellis, Allstate Ins. Co., Northbrook, Ill., for respondent.
James T. Gilbert, Coy, Gilbert & Gilbert, Richmond, for amicus curiae, Kentucky Academy of Trial Attorneys.
This cause comes before the Court on request for certification of the law from the United States District Court for the Eastern District of Kentucky. CR 76.37. We have been informed that litigation now pending in that Court between Movants and Respondent presents a question of Kentucky law which may be determinative of the cause, and upon which the certifying court found no controlling precedent from this Court or the Court of Appeals. For these reasons we have accepted certification, received the parties' briefs, and heard oral argument.
The question of law certified to us is as follows:
"Are Allstate's (hereinafter Respondent) uninsured motorist policy provisions prohibiting the stacking or aggregation of uninsured motorist coverage limits in an automobile insurance policy insuring multiple vehicles violative of the Kentucky Uninsured Motorist Statute, KRS 304.20-020(1), or any other principal of Kentucky law?"
For a proper understanding of the legal issue presented, it is necessary to state the facts. While riding as a passenger in a motor vehicle being operated by her brother, Gary Bender, Movant Cindy Hamilton sustained injuries as a result of being struck by an uninsured motorist. Her damages are alleged to be in excess of $100,000. Movant's brother had a policy of insurance which paid her $10,000 in basic reparation benefits and $25,000 in uninsured motorist coverage.
At the time of the accident, movants owned a single automobile insurance policy issued by respondent. The policy provided various coverages associated with three motor vehicles and provided three items of uninsured motorist coverage of $25,000. For each of the three items of uninsured motorist coverages, a separate premium was paid by movants and collected by respondent. It has been agreed that movant was covered by the uninsured motorist provisions of her policy; the question is whether the uninsured motorist coverage may be aggregated or stacked, or whether movant is limited to a single recovery of $25,000.
The insurance policy in question is a so-called "plain language" policy. Respondent contends the language employed in the anti-stacking provision is unambiguous and must be enforced as written. The provision relied upon appears on the first and second pages of the policy text and is as follows:
We agree with respondents that the foregoing policy language is unambiguous but as will be discussed hereinafter, disagree as to its enforceability.
To resolve the issue presented, we need look no further than this Court's decisions in Meridian Mutual Ins. Co. v. Siddons, Ky., 451 S.W.2d 831 (1970), and Ohio Casualty Ins. Co. v. Stanfield, Ky., 581 S.W.2d 555 (1979). In Siddons two liability insurance policies were found to contain the uninsured motorist coverage required by statute. Relying on the applicable statute (reenacted and recodified as KRS 304.20-020), the Court held that the "other insurance" exclusionary clause in the policy violated the statute and was therefore void. We determined that the statute plainly requires each policy to contain uninsured motorist coverage and compared such coverage to accident insurance. The effect of the "other insurance" clause in Siddons is remarkably similar to the "Combining Limits of Two or More Autos Prohibited" clause before us in the case at bar. In each instance, the applicable policy provision limits insurance liability to recovery upon only one uninsured motorist policy. From the opinion in Siddons, the clarity or lack thereof of the "other insurance" clause does not appear to have influenced the Court's decision. Thus, respondent's contention that Siddons authorizes an anti-stacking provision if such is clearly stated is mistaken.
In Stanfield, an employee sought to stack the uninsured motorist coverage in a fleet policy covering 63 vehicles. Disallowing such attempted stacking, the Court distinguished between a named insured and members of his household on the one hand and a person who was merely an employee authorized to operate the motor vehicle on the other. The Court determined that Stanfield could not stack uninsured motorist coverage under the fleet policy because he was not a named insured, had not paid the premium, and was without any reasonable expectation of coverage. As to his own insurance policies, however, the Court noted that Stanfield bought and paid for the coverage, was a named insured of the first class, and had a reasonable expectation of double coverage. As in the case at bar, Stanfield's uninsured motorist coverage was in a single policy with the same limits for the two vehicles he owned. As is Siddons, the Stanfield decision was predicated on our interpretation of KRS 304.20-020.
From the foregoing authorities, it is clear that this Court has recognized an inherent difference between liability insurance and uninsured motorist insurance coverage and regarded the latter as personal to the insured. Our interpretation has been based on the language of KRS 304.20-020 and its predecessor as well as the doctrine of reasonable expectations, the continued viability of which was recently underscored in Simon v....
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