Hampton v. Allstate Ins. Co., 2

• Decision Date: 04 June 1980
• Docket Number: CA-CIV,No. 2,2
• Citation: 126 Ariz. 403,616 P.2d 78
• Parties: Marion L. HAMPTON, a single man, Plaintiff/Appellant, v. ALLSTATE INSURANCE COMPANY, a corporation, Defendant/Appellee. 3494.
• Court: Arizona Court of Appeals

Page 78

616 P.2d 78

126 Ariz. 403

Marion L. HAMPTON, a single man, Plaintiff/Appellant, v. ALLSTATE INSURANCE COMPANY, a corporation, Defendant/Appellee.

No. 2 CA-CIV 3494.

Court of Appeals of Arizona, Division 2.

June 4, 1980.

Rehearing Denied July 15, 1980.

Review Denied Sept. 4, 1980.

Miller, Pitt & Feldman, P. C. by Nanette M. Warner and Robert A. Fortuno, Tucson, for plaintiff/appellant.

Slutes, Browning, Zlaket & Sakrison, P. C. by A. John Pelander, Tucson, for defendant/appellee.

OPINION

HOWARD, Judge.

This case involves the uninsured motorist provisions of a motor vehicle liability insurance policy, the issue being whether the coverage can be "stacked".

Allstate issued the policy to M. L. Hampton, the named insured. The declarations show that three passenger vehicles, a 1964 Chevrolet, a 1969 Plymouth, and a 1972 Dart were each covered by the uninsured motorist coverage provided by the policy. The declarations also state that the coverage and limit of liability under the uninsured motorist coverage is $15,000 each person and $30,000 each accident. For this coverage a premium of $8 was charged for the first vehicle and a premium of $7 each was charged for the other two.

Under the policy conditions is found the following provision entitled "Limits of Liability" "The limit of liability stated in the declarations as applicable to 'each person' is the limit of Allstate's liability for all damages, including damages for care or loss of services, 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 declaration as applicable to 'each accident' is the total limit of Allstate's liability for all damages, including damages for care or loss of services, because of bodily injury sustained by two or more persons as the result of any one accident."

The policy defines the word "insured" under the uninsured motorist coverage as:

". . . (a) The named insured as stated in the policy, the spouse of any such named insured and relatives of either, while residents of the same household;

(b) Any other person while occupying an insured automobile, . . ."

After the policy was issued Marion L. Hampton, Jr., the son of the named insured and a resident of the same household, was a passenger in a car involved in a one-car accident. The driver and car were uninsured. Mr. Hampton sustained bodily injuries exceeding $15,000. He brought this action for declaratory judgment contending that the uninsured motorist coverage provided him with a total of $45,000. Allstate contended that he could not "stack" the coverages and was entitled to only $15,000. Summary judgment was entered in favor of Allstate, the trial court declaring that $15,000 was the total amount available to appellant under the uninsured motorist coverage.

Appellant contends that the "limits of liability" clause contained in the policy is ambiguous, and, if it is held not to be, it violates the public policy of the state and should not be given effect.

The provision at issue has been held not to be ambiguous. Allstate Insurance Company v. Mole, 414 F.2d 204 (5th Cir. 1969); Allstate Insurance Company v. Shmitka, 12 Cal.App.3d 59, 90 Cal.Rptr. 399 (1970); Otto v. Allstate Insurance Company, 2 Ill.App.3d 58, 275 N.E.2d 766 (1971); Allstate Company v. McHugh, 124 N.J.Super. 105, 304 A.2d 777 (1973), aff'd 315 A.2d 423 (App.Div.1974); Polland v. Allstate Insurance Company, 25 A.2d 16, 266 N.Y.S.2d 286 (1966); Pacific Indemnity Company v. Thompson, 56 Wash.2d 715, 355 P.2d 12 (1960).

In the foregoing cases the contention was made that the limits of liability clause was ambiguous when the policy also had a separability clause stating, "when two or more automobiles are insured by this policy, the terms of this policy shall apply separately to each . . .". The courts held that the separability clause did not create an ambiguity when construed with the limits of liability clause and did not allow stacking. The policy issued by Allstate here specifically excludes the separability provision from the uninsured motorist coverage. In Indiana Insurance Company v. Ivers, 395 N.E. 820 (Ind.App.1979) the court was dealing with an uninsured motorist provision where the same attack as appellant makes was presented. It held that since the separability clause was expressly inapplicable to uninsured motorist coverage an ambiguity did not exist.

Other courts have held the limits of liability clause to be ambiguous. In Hartford Accident and Indemnity Company v. Bridges, 350 So.2d 1379 (1977), the court relied on Employer's Liability Assurance Corporation Ltd. v. Jackson, 289 Ala. 673, 270 So.2d 806 (1972) in declaring the provision ambiguous. The rationale of these cases is that when a separate premium is charged for each automobile there is an inference that there is double coverage since to hold otherwise would mean that the insured was paying two premiums for no good reason. They take the position that unless the limits of liability provision states that coverage in any event is limited to $15,000 or to the amount of coverage required by statute an ambiguity exists. We are unable to agree with these cases, and believe that they reflect a misconception as to the coverage afforded under the uninsured motorist provisions. There is no double coverage. As was stated in Allstate v. McHugh, supra "There is, however, increased risk incurred by the carrier when insuring separate motor vehicles under Coverage S (uninsured motorist coverage). It is true that the named assured is covered under Coverage S regardless of the circumstances under which he is injured by an uninsured motorist. He has this coverage whether one, two or more vehicles are covered. Coverage S extends not only to...