State Farm Mut. Auto. Ins. Co. v. Cahoon
| Decision Date | 13 May 1971 |
| Docket Number | 1 Div. 646 |
| Parties | STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. Patrick P. CAHOON. |
| Court | Alabama Supreme Court |
Richard W. Vollmer, Jr., and Geary A. Gaston, Mobile, for appellant.
Caffey, Gallalee & Edington, Mobile, for appellee.
Patrick P. Cahoon was an employee of the White Swan Linen Rental. While driving a truck in the course of his employment, Cahoon was involved in a collision with an automobile driven by an uninsured motorist, one Norman Patrick.
Cahoon thereafter filed a suit against State Farm Mutual Automobile Insurance Company claiming the sum of $10,000 allegedly due under a policy issued to Cahoon by State Farm on his personal automobile. This policy provided coverage to the extent of $10,000 for damages or bodily injury caused by an uninsured motorist.
The hearing was before the court and after the hearing the court entered a judgment in favor of the plaintiff and assessed damages at $12,270. Of this amount $2,270 represents interest.
The case was presented to the court on a stipulation of facts and the testimony of Cahoon. Cahoon's testimony was directed toward the circumstances of the collision, the nature of his injuries, hospitalization, and medical treatments. Cahoon's injuries were serious and grievous. At the conclusion of Cahoon's testimony, it was stated for the record that his testimony was intended only to supplement the stipulation, and not to contradict or change it.
In parts pertinent to this review the stipulation was to the effect that Cahoon's policy covering his personal automobile was in effect on the date of the accident and that such policy contained an uninsured motorist provision as mentioned above, and it was further stipulated:
1. That Cahoon's injuries were caused through the negligence of the uninsured motorist Patrick, and for the basis of the stipulation only, it was agreed that Cahoon's damages were $33,800;
2. That White Swan Linen Rental provided coverage to Cahoon under the Alabama Workmen's Compensation Act, and that as of 11 May 1970, Cahoon has been paid $7,600 compensation, and $2,400 medical expenses by White Swan's workmen's compensation insurance carrier, and will receive by future compensation payments a total of at least $10,000, but not more than $11,400, not including the medical benefit payments;
3. That the truck operated by Cahoon at the time of the collision and owned by White Swan was an insured vehicle under a policy carried by White Swan with the American Mutual Liability Insurance Company, which policy contained uninsured motorist coverage to the extent of $10,000. Such truck was not owned by Cahoon, and was not insured by State Farm;
4. That as of the date of trial Cahoon has not filed suit against American Mutual Liability Insurance Company under the uninsured motorist provision in American Mutual's policy, and no monies have been paid him by American Mutual;
5. That if the Workmen's Compensation provisions in the State Farm and American Mutual policies (to be referred to) are held by the court not to preclude Cahoon's recovery under the uninsured motorist provisions of either policy, then Cahoon could recover $10,000 from American Mutual under the uninsured motorist provision in that policy, although a law suit would be necessary to accomplish such result.
Therefore the parties agreed that except for the necessity of a law suit, and subject to a holding by the court that the Workmen's Compensation provisions do not preclude Cahoon's recovery, the $10,000 uninsured motorist coverage contained in American Mutual's policy was 'available' to the plaintiff as such term is used in the uninsured motorist coverage provisions of State Farm's policy. It was further stipulated, however, that Cahoon did not admit that the Workmen's Compensation, or other provisions, in either policy, are valid and effective.
Appellant's assignments of error 4 and 8 respectively assert error on the part of the court in sustaining the plaintiff's (appellee's) demurrers to pleas 5 and 9 respectively. These pleas are substantially of the same tenor, and set up as a defense the 'excess escape clause' and 'other insurance provisions' set forth in that portion of State Farm's policy which reads as follows:
Pending the submission of this case on the call of the First Division, this court rendered its decision in Safeco Insurance Co. of America v. Jones, 286 Ala. 606, 243 So.2d 736. Therein we considered the validity of a provision of virtually the same import as that set out above. We held that under our Uninsured Motorist Act (Act No. 866, Acts of Alabama 1965, Vol. 2, p. 1614, found in 1958 Recompilation as Title 36, Section 74 (62a)), an insurer cannot avoid the liability imposed by our Uninsured Motorist Act by inserting into a policy a liability limiting clause restricting an insured from recovering actual damages suffered, within the limits of a policy, where premiums have been paid for such uninsured motorist coverage, even though an insured has other similar insurance available to him.
The Safeco opinion was written by Justice Merrill. It contains a full and thorough discussion of the point involved in assignments 4 and 8, and an extensive discussion of authorities from other jurisdictions.
We see no need to reiterate what was written in Safeco other than to observe that the contention of the appellant was not accepted, but a contrary conclusion was reached. We do wish, however, to call attention to the following statement in Safeco:
'We hold that our statute sets the minimum amount for recovery, but it does not place a limit on the total amount of recovery so long as that amount does not exceed the amount of actual loss; that where the loss exceeds the limit of one policy, the insured may proceed under other available policies; and that where the premiums have been paid for uninsured motorist coverage, we cannot permit an insurer to avoid its statutorily imposed liability by its insertion into the policy of a liability limiting clause which restricts the insured from receiving that coverage for which the premium has been paid.'
Assignments of error 4 and 8, we deem to be without merit.
Assignments 5 and 9 relate to the action of the court in sustaining plaintiff's demurrers to pleas 6 and 10 respectively.
These pleas set up as a defense the specific pro rata part of the 'other insurance' provision in the State Farm policy, which part reads:
'Subject to the foregoing paragraph, if the insured has other similar insurance available to him against a loss covered by this coverage, then 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 under this coverage for a greater proportion of the applicable limits of liability of this coverage than such limit bears to the sum of the applicable limits of liability of this insurance and such other insurance.'
We can see no basis of distinction between the effect of this clause and the 'excess-escape' clause held invalid in Safeco. The effect of giving recognition to either clause would be to avoid or reduce State Farm's statutory liability imposed by our Uninsured Motorist Act for coverage for which premiums have been paid and damages suffered. We hold assignments of error 5 and 9 to be without merit.
Assignments of error 3 and 7 assert error in the court's action in sustaining plaintiff's demurrers to pleas 4 and 8 respectively. These pleas assert that Cahoon's benefits under the Workmen's Compensation Law will be equal to or exceed the $10,000 claimed by him in this suit, and as a result Cahoon ought not to recover in this suit because of the Insuring Agreement clause III, which is the uninsured motorist coverage, which clause provides:
'(c) Any loss payable under the terms of this coverage to or for any...
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