Safeco Ins. Co. of America v. Jones

• Decision Date: 17 December 1970
• Docket Number: 4 Div. 401
• Citation: 286 Ala. 606,243 So.2d 736
• Parties: SAFECO INSURANCE CO. OF AMERICA, a Corp., v. Irby C. JONES. Ex parte Irby C. JONES.
• Court: Alabama Supreme Court

Page 736

243 So.2d 736

286 Ala. 606

SAFECO INSURANCE CO. OF AMERICA, a Corp., v. Irby C. JONES Ex parte Irby C. JONES.

4 Div. 401.

Supreme Court of Alabama.

Dec. 17, 1970.

Tipler, Fuller & Melton, Andalusia, for petitioner.

Truman M. Hobbs and Richard H. Gill, Montgomery, and Jack C. Gallalee, Mobile, amici curiae.

Powell & Sikes, Andalusia, and Huie, Fernambucq & Stewart, and Paul G. Smith, Birmingham, for respondent.

Pillans, Reams, Tappan, Wood & Roberts, Richard W. Vollmer, Jr. and Geary A. Gaston, Mobile, amici curiae.

MERRILL, Justice.

This case presents a question of first impression in Alabama. It involves a construction and application of our Uninsured Motorist statute.

The first such statute was enacted in New Hampshire in 1957. Ours became effective January 1, 1966. At least forty states now have like statutes.

The decisions construing these statutes fall into three general categories: (1) where the statute specifically authorizes an 'Other Insurance' exclusion (with which we are not concerned), (2) where the statute was construed as limiting recovery to the statutory limit (here $10,000.00) to only one policy, and (3) where the statute was construed to allow recovery on more than one policy, even though the statutory limit on one policy was exceeded, if the injured party's injuries exceeded the limits of one of the policies.

Examples of (1) supra are: Grunfeld v. Pacific Auto Ins. Co., 232 Cal.App.2d 4, 42 Cal.Rptr. 516 (1965); LeBlanc v. Allstate Ins. Co., La.App., 194 So.2d 791 (1967), and Vernon v. Harleysville Mutual Casualty Co., 244 S.C. 152, 135 S.E.2d 841 (after South Carolina had amended its statute authorizing the 'Other Insurance' exclusion).

Examples of (2) supra are: Maryland Casualty Co. v. Howe, 106 N.H. 422, 213 A.2d 420; Tindall v. Farmers Automobile Management Corp., 83 Ill.App.2d 165, 226 N.E.2d 397 (1967); State Farm Mutual Automobile Ins. Co. v. Bafus, 77 Wash.Dec.2d 732, 466 P.2d 159 (1970), and Harris v. Southern Farm Bureau Cas. Ins. Co., Ark., 448 S.W.2d 652 (1970). This is the line of cases followed by our Court of Civil Appeals.

Examples of (3) supra are: Bryant v. State Farm Mutual Automobile Ins. Co., 205 Va. 897, 140 S.E.2d 817 (1965); Smith v. Pacific Automobile Ins. Co., 240 Or. 167, 400 P.2d 512, and Vernon v. Harleysville Mutual Casualty Co., 244 S.C. 152, 135 S.E.2d 841 (decided on a state of facts occurring prior to the adoption of the amendment authorizing exclusions as noted supra). Cases from courts in Florida, North Carolina, Georgia, Pennsylvania, Nebraska, Kansas, Arizona and Indiana, also in this category, are listed later in the opinion.

Our Uninsured Motorist statute, Act No. 866, Acts of Alabama 1965, Vol. II, p. 1614, listed in the 1958 Recompilation as Tit. 36, § 74(62a), provides:

'No automobile liability or motor vehicle liability policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless coverage is provided therein or supplemental thereto, in limits for bodily injury or death set forth in subsection (c) of section 74(46) of this title, under provisions approved by the commissioner of insurance, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom; provided, that the named insured shall have the right to reject such coverage; and provided further, that unless the named insured requests such coverage in writing, such coverage need not be provided in or supplemental to a renewal policy where the named insured had rejected the coverage in connection with the policy previously issued to him by the same insurer.'

The 'Other Insurance' clauses of both Miller's policy and Jones' policy provided:

"With respect to bodily injury to an insured while occupying an automobile not owned by the named insured, the insurance under Uninsured Motorists shall apply only as excess insurance over any other similar insurance available to such insured and applicable to such automobile as primary insurance, and this insurance shall then apply only in the amount by which the limit of liability for this coverage exceeds the applicable limit of liability of such other insurance.

"Except as provided in the foregoing paragraph, if the insured has other similar insurance available to him and applicable to the accident, the damages shall be deemed not to exceed the higher of the applicable limits of liability of this insurance and such other insurance, and the company shall not be liable for a greater proportion of any loss to which this coverage applies than the limit of liability hereunder bears to the sum of the applicable limits of liability of this insurance and such other insurance."

The facts are essentially that appellee Jones was a passenger in an automobile operated by one Edward Miller when it was involved in a collision with an automobile operated by a driver who was uninsured. Appellee suffered severe injuries as a result of this accident. Appellee subsequently recovered an un-contested judgment for $25,000.00 against the uninsured motorist. Miller, at the time of the accident, was insured by Bituminous Casualty Company under an automobile liability policy that included uninsured motorist coverage in the amounts of $10,000.00 per person and $20,000.00 per accident. Bituminous paid appellee $10,000.00, which was the limit of its policy. Appellee then made demand on his insurer, Safeco Insurance Company of America, for $10,000.00 under the uninsured motorist endorsement of his liability policy. This request was denied. An action was then filed against the insurer, Safeco, by the insured Jones for $9,900.00. A demurrer to the complaint was overruled, and issue was joined by the filing of a plea and answer. The case was submitted to the trial court on the pleadings and stipulation of facts which included a demand for $10,000.00 against Safeco.

The trial court rendered a judgment for the plaintiff, Jones, and against the defendant, Safeco, in the amount of $10,000.00. From said judgment, an appeal was perfected.

This court is now faced with the same question as was the Court of Civil Appeals. Do we adopt the minority rule, exemplified by the cases listed in (2) supra, or the majority rule, examples of which appear in (3) supra?

The Uninsured Motorist statute of Florida is the same as ours. The first case in that state followed the same path as the instant case. The trial court allowed recovery in spite of the 'Other Insurance' exclusion, the District Court of Appeal reversed, and the Supreme Court of Florida quashed the decision of the District Court of Appeal on a certified question in Sellers v. United States Fidelity & Guaranty Co., 185 So.2d 689. The question posed to that court was:

'May an automobile liability insurance carrier providing coverage against injury by an uninsured motorist in accord with the requirements of § 627.0851, Florida Statutes (F.S.A.), after accepting a premium for such coverage, deny coverage on the ground that the insured has other similar insurance available to him?'

The answer to that question was in part:

'It is our view that the statute, F.S. § 627.0851, F.S.A., operates to invalidate Condition 5 in the United States Fidelity and Guaranty Company automobile liability insurance policy providing petitioners' coverage against injury by an uninsured motorist. We agree with the chancellor in this respect and quash the decision of the District Court of Appeal.'

That court also said:

'It appears to us that the statute expresses the statutory requirements both as to coverage to be provided by the insurer, and as to its sources of recovery of insurance protection it paid from other persons, including other insurers legally responsible for the bodily injury to insureds, to the exclusion of inconsistent language inserted in an automobile liability policy. There appears no latitude in the statute for an insurer limiting its liability through 'other insurance'; 'excess-escape' or 'pro rata' clauses, as attempted in Condition 5. If the statute is to be meaningful and controlling in respect to the nature and extent of the coverage and to the sources of recovery and subrogation of the insurer, all inconsistent clauses in the policy to the controlling statutory language such as are contained in Condition 5 must be judicially rejected.

'Our views herein are predicated upon our construction of § 627.0851. We consider that it provides for a limited type of compulsory automobile liability coverage. It appears to require coverage for bodily injury caused by the negligence of an uninsured motorist to the extent of specific limited amounts. It does not permit 'other insurance' clauses in the policy which are contrary to the statutorily limited amounts of coverage. 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. * * *'

The Sellers case, 185 So.2d 689, has been cited with approval in the next five cases listed.

In Geyer v. Reserve Insurance Company, 8 Ariz.App. 464, 447 P.2d 556, Sellers was followed, and later, in Transportation Insurance Company v. Wade, 11 Ariz.App. 14, 461 P.2d 190 (1970), ...