Long v. United States Fidelity and Guaranty Co.

• Decision Date: 17 April 1975
• Docket Number: Civ. A. No. 74-L-880-NE.
• Citation: 396 F. Supp. 966
• Parties: Karen Ann LONG, a Minor, by and through her next friend and father, Donald E. Long, Plaintiff, v. UNITED STATES FIDELITY AND GUARANTY COMPANY, a Corp.; Government Employees Insurance Company, a Corp., Defendants.
• Court: U.S. District Court — Northern District of Alabama

396 F. Supp. 966

Karen Ann LONG, a Minor, by and through her next friend and father, Donald E. Long, Plaintiff, v. UNITED STATES FIDELITY AND GUARANTY COMPANY, a Corp.; Government Employees Insurance Company, a Corp., Defendants.

Civ. A. No. 74-L-880-NE.

United States District Court, N. D. Alabama, Northeastern Division.

April 17, 1975.

Aubrey O. Lammons, of Lammons, Bell & Sneed, Huntsville, Ala., for Donald E. Long.

James H. Porter, of Bell, Richardson, Cleary & Tucker, Huntsville, Ala., for U. S. Fidelity and Guaranty Co.

Robert L. Hodges, of Ford, Caldwell, Ford & Payne, Huntsville, Ala., for Gov't Employees Ins. Co.

MEMORANDUM OPINION

LYNNE, Senior District Judge:

I. STATEMENT OF THE CASE.

Karen Ann Long was injured, to an undetermined degree,¹ in an automobile accident with an allegedly uninsured motorist on May 12, 1974. She was a passenger in a vehicle driven by Brenda Ann Kepple, and owned by Brenda's father, Joseph Kepple.

She now claims uninsured motorist coverage from Government Employees Insurance Company ("GEICO") in the amount of $30,000 through her father's insurance with that company, his policy listing three automobiles as insured vehicles. He paid a separate and specific premium for uninsured coverage for each vehicle.

Likewise, she claims $20,000 through a policy issued by United States Fidelity & Guaranty Company ("USF&G") to Joseph Kepple, such policy listing two automobiles, in one of which plaintiff was a passenger at the time of the accident. A separate and specific premium was paid for uninsured coverage on each vehicle.

By motions for summary judgment, filed by USF&G on February 10, 1975, by plaintiff on February 12, 1975, and by GEICO on February 21, 1975, the following issues are raised:

A. Is USF&G's liability limited to a maximum of $10,000 by virtue of the "limits of liability" clause in its policy?

B. May plaintiff stack the benefits under either policy?

C. Are USF&G's benefits to plaintiff primary to those of GEICO?

The Court concludes that USF&G is primarily liable to plaintiff, that the maximum benefits she may collect from USF&G are limited by the amount of $10,000, and that the maximum benefits she may collect from GEICO are limited by the amount of $30,000.

II. DISCUSSION.

A. Limitation Clause.

Plaintiff and defendant USF&G have stipulated that there was a single policy of insurance between defendant and Joseph K. Kepple, Jr., and that this policy covered two separate automobiles. This insurance policy contained the following provision:

Limits of Liability

(a) The limit of liability for uninsured motorists (family protection) coverage stated in the declarations as applicable to "each person" is the limit of the company's liability for all damages, including damages for care or loss of services, because of bodily injuries 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 declarations as applicable to "each accident" is the total limit of the company's liability for all damages, including damages for care or loss of services, because of bodily injury sustained by two or more persons as a result of any one accident.

Defendant contends that the above provision effectively limits its total liability to $10,000.00 based on the Kepple policies. The Supreme Court of Alabama has considered and rejected this precise limitation clause in at least three other cases, Employers Liability Assur. Corp., Ltd. v. Jackson, 289 Ala. 673, 270 So.2d 806 (1972); Phenix Ins. Co. v. Stuart, 289 Ala. 657, 270 So.2d 792 (1972) (per curiam); and Great Cent. Ins. Co. v. Edge, 292 Ala. 613, 298 So.2d 607 (1974).

In Edge, the Supreme Court holds that, regardless of how clear and unambiguous the language of the limiting clause might be, "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." Id., at 608. Since it is stipulated that USF&G received two premiums under Kepple's policy, it would seem that Edge invalidates the liability limitation urged in the present case.

This case, however, is distinguishable from those cited above in that here plaintiff seeks to collect under a policy on which she herself paid no premiums. In the foregoing three cases, the plaintiffs themselves, or a member of the plaintiff's immediate family, paid the premiums on the policies in suit. In Jackson, a husband and wife sued under a policy on which the wife had paid the premiums; in Stuart, the plaintiff herself had apparently paid the premiums; and in Edge, the plaintiff himself had paid the premiums. Thus, the policies there were issued to the plaintiff or to a member of his or her immediate family.

Whether this should dictate a different result here is doubtful. The language from Edge quoted above emphasizes receipt of two premiums by the insurance company. On the other hand, in discussing the Jackson opinion, the Court emphasizes "the fact that the insured had paid two premiums—. . .." 298 So.2d at 610. Likewise, in Jackson, the Court concluded: "We think the better holding is that the appellant should pay in two instances because the insured had paid a premium in two instances for uninsured motorist coverage." 289 Ala. at 679, 270 So.2d at 810.

This issue need not be resolved on the facts presented here, since it is concluded that plaintiff may not stack the USF&G policies for reasons explicated below.

B. Stacking.

USF&G concedes that plaintiff may recover $10,000 under the Kepple policy because she was an occupant of an insured vehicle. The defendant argues, however, that she may not stack the coverage provided by USF&G on the other Kepple automobile.²

The Supreme Court of Alabama has yet to face the factual situation presented here, where a person attempts to "stack" the uninsured coverage provided by policies under which she is an "insured" only because she was a passenger in a covered vehicle.

In its initial "stacking" decision, Safeco Ins. Co. of America v. Jones, 286 Ala. 606, 243 So.2d 736 (1970), the Court was confronted with a plaintiff seeking to recover $10,000 under his own liability policy. He had already recovered $10,000 in uninsured motorist coverage, of his total $25,000 in damages, from the liability carrier for the driver of the vehicle in which the plaintiff was a passenger at the time of the accident. The Court held that the plaintiff could collect the policy limits from his insurer, "so long as that amount does not exceed the amount of actual loss; . . .." 286 Ala. at 614, 243 So.2d at 742.

In Hogan v. Allstate Ins. Co., 287 Ala. 696, 255 So.2d 35 (1971), the plaintiff was an insured under her father's policy on his automobile. She was injured while a passenger in a car owned by one Speegle, driven by Speegle's daughter. Speegle had uninsured coverage on his vehicle. The Court allowed plaintiff to collect $10,000 from her father's carrier, despite the fact that she had collected $4,500 from Speegle's carrier.³

In Employers Liability Assur. Corp., Ltd. v. Jackson, 289 Ala. 673, 270 So.2d 806 (1972), the action was brought by an insured and her spouse against the insurer under the uninsured motorist provisions covering two automobiles owned by the couple. They had been injured while passengers in an automobile owned by one Mary R. Bell and had collected, respectively, $10,000 and $2,250 from the uninsured coverage on the Bell vehicle. The Supreme Court allowed both the wife and her husband to collect an additional $20,000 each from their own carrier.⁴

In Great Cent. Ins. Co. v. Edge, 292 Ala. 613, 298 So.2d 607 (1974),⁵ plaintiff had been injured, while a pedestrian, by an uninsured motorist. He had in effect at the time a policy covering two vehicles, on which he had paid separate premiums for uninsured protection. The Supreme Court allowed him to stack the coverage.

The question presented by plaintiff's claim against USF&G thus appears to be open, and this Court must predict the outcome of this case were it before the Alabama courts. In Jones, supra, the Court relied heavily upon the Florida case of Sellers v. United States Fidelity & Guaranty Co., 185 So.2d 689 (1966). Reliance on that case was predicated upon the similarity between the Florida and Alabama uninsured motorist laws. 286 Ala. at 610, 243 So.2d at 738. In Edge, supra, the reliance upon Sellers was reaffirmed. 292 Ala. at 614, 298 So.2d at 608-9. Research into the Florida cases, however, reveals no case which has presented the factual problems confronting this Court, so that decisions from that jurisdiction afford little guidance as to the path our own Supreme Court might adopt.

Nor do any of the cases from other jurisdictions, cited with approval in Jones, supra,⁶ or in Jackson, supra,⁷ treat the problem presented here.⁸

A case presenting a similar issue, however, has been decided by this Court, Witcher v. Travelers Indemnity Co., Civil Action No. 73-1023 (N.D.Ala., Sept. 10, 1974) (Lynne, J., unreported). There an omnibus insured, injured while a passenger in her employer's vehicle, attempted to stack the coverage on all vehicles covered by her employer's commercial insurance policy. She was not allowed to do so, on the authority of Cunningham v. Ins. Co. of North America, 213 Va. 72, 189 So.2d 832 (1972).

In Cunningham, the Virginia Supreme Court refused to allow a state employee to stack the coverage on all 4,368 state-owned automobiles. The Court reasoned that uninsured motorist policies contemplated two classes of insured: first, the named insured (and his relatives), and second, any other person while occupying the automobile. Stacking would be allowed only as to the first class, since a member of the second class "pays no premium and does not receive the broader uninsured motorist coverage of a named insured." 189 S.E.2d...