State Farm Mut. Auto. Ins. Co. v. Hubbard

• Decision Date: 23 March 1961
• Docket Number: 6 Div. 284
• Citation: State Farm Mut. Auto. Ins. Co. v. Hubbard, 272 Ala. 181, 129 So.2d 669 (Ala. 1961)
• Parties: STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. Johnnie Mae HUBBARD.
• Court: Alabama Supreme Court

Page 669

129 So.2d 669

272 Ala. 181

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. Johnnie Mae HUBBARD.

6 Div. 284.

Supreme Court of Alabama.

March 23, 1961.

Rehearing Denied May 18, 1961.

Jas. L. Shores, Jr., Birmingham, and Dominick, Rosenfeld & Roberts, Tuscaloosa, and Jackson, Rives, Pettus & Peterson, Birmingham, for appellant.

Skidmore & Davidson and deGraffenried, deGraffenried & DeGraffenried, Tuscaloosa, for appellees.

GOODWYN, Justice.

Huey Hubbard and his wife, Johnnie Mae Hubbard, and their son were on a trip in Mr. Hubbard's automobile when it became stuck in a mud hole near Boligee, Alabama. To get the car out, Mr. Hubbard placed some boards under the rear wheels to furnish traction. Mrs. Hubbard and the son then moved away from the car. As Mr. Hubbard was driving the car out of the mud hole, the rapid turn of the rear wheels caused one of the boards to be thrown against Mrs. Hubbard's leg, injuring her. She was hospitalized for about twelve days and was on crutches for about three months. She incurred certain medical expenses in connection with her injury.

Mr. Hubbard's car, at the time, was covered by a policy of liability insurance issued by State Farm Mutual Automobile Insurance Company, herein referred to as State Farm, with limits of $5,000 in case of bodily injury or death of one person, $10,000 when more than one person is involved, and $500 for medical expenses.

With respect to the bodily injury coverage (Coverage A), the policy contains what is generally referred to as a 'household exclusion' provision, that is, there is excluded from such coverage 'any member of the family of the insured residing in the same household as the insured.'

Mrs. Hubbard received her injury on May 12, 1956. On July 7, 1956, Mr. Habbard reported it to the Tuscaloosa agent of State Farm who had sold him the policy. The agent, on the same day, informed State Farm's adjuster of the injury, who then secured, on the same day, a written statement from Mr. Hubbard concerning the accident. This statement not only gave details as to how the accident occurred but also showed Mrs. Hubbard's injury, medical treatment and hospitalization. There was some discussion between the adjuster and Mr. Hubbard as to whether there was coverage of Mrs. Hubbard's medical expenses. The adjuster wrote State Farm's regional office at Birmingham concerning this question. Upon receiving notice from the regional office that the policy covered the medical expenses, the adjuster, on July 10, 1956, notified Mr. Hubbard to this effect. Mr. Hubbard informed the adjuster that Mrs. Hubbard was still under medical treatment and her final medical expenses had not been determined. There is evidence supportive of a finding that both the agent and adjuster knew or were informed that Mr. and Mrs. Hubbard were residing in the same household at the time of the accident.

During the following three or four months the adjuster had several telephone conversations with the Hubbards concerning Mrs. Hubbard's condition. Towards the end of this period the adjuster offered to pay $327.17 for the medical expenses incurred by Mrs. Hubbard. The offer was refused. In this connection, the adjuster presented for execution a release acknowledging said sum to be 'in full settlement and discharge of any and all amounts due the undersigned.'

On October 17, 1956, Mrs. Hubbard filed with the director of public safety of Alabama a report of the accident on a so-called form SR-13. (This form was prepared by the director of public safety pursuant to § 4 of the 'Motor Vehicle Safety-Responsibility Act,' Act No. 704, appvd. Sept. 5, 1951, effective Jan. 1, 1952, Acts 1951, Reg. Sess., Vol. II, p. 1224 [ §§ 7 and 14 of Act No. 704 were amended by Act No. 72, appvd. June 18, 1959, Acts 1959, Vol. 1, p. 478, but such amendments do not affect this case]. It is to be noted that § 4 requires the operator of a motor vehicle to make the report. However, the fact that the report was made by the injured person and not the operator is of no significance in this case.) The report stated when, where and how the accident occurred, the nature of Mrs. Hubbard's injury, and that the driver and owner of the vehicle was Huey Hubbard, giving his address.

On November 6, 1956, the director's office sent to Mrs. Hubbard a form SR-54 (also prepared by the director of public safety, apparently pursuant to § 2(a) of Act No. 704, supra, providing that 'The Director shall administer and enforce the provisions of this Act and may make rules and regulations necessary for its administration'), which included an affidavit, to be completed by her and returned if she had a claim for personal injuries or property damages. Mrs. Hubbard completed her part of the SR-54 and returned it to the director's office on November 16, 1956. Since the attending doctor's report was not filled out, the SR-54 was sent back to Mrs. Hubbard. The doctor's report was then obtained and the form returned to the director's office of November 27, 1956. The affidavit showed a $25,000 claim by Mrs. Hubbard against Mr. Hubbard for her personal injuries. The doctor's report showed the cost of his services to date (November 23, 1956) to be $105 and the estimated total cost of medicines to be 'unknown.' Mrs. Hubbard's affidavit made no separate claim for medical expenses.

After receipt of the SR-54 in the director's office, a search was made to determine whether there was on file in said office evidence satisfactory to the director showing security on behalf of Mr. Hubbard with respect to said accident ( § 5, Act No. 704, supra). Finding none, the director's office, on November 28, 1956, mailed to Mr. Hubbard its form SR-8 (apparently prepared by the director pursuant to § 2(a) of Act No. 704), being, in essence, a notice of the security requirements of Act No. 704. This form contained an order that Mr. Hubbard forward to the department of public safety his driver's license, registration certificate, and registration plates, by December 14, 1956, in event he should fail to comply with the security provisions of the law ( § 5(b), Act No. 704). The notice also contained the following with respect to the security required, viz.:

'As a result of the above referred to motor vehicle accident in which you or a motor vehicle owned by you were involved, you have become subject to the Alabama Motor Vehicle Safety-Responsibility Law.

'(1) If there was in effect at the time of the accident a standard provisions automobile liability policy insuring your liability for damages resulting from the accident, you must secure at once from the insurance agent or company a notice to that effect, (Form SR 21), and send it to this Unit with this letter. If you file Form SR 21 you are relieved of furnishing security, and you should disregard the remainder of this letter.

'(2) If you are unable to comply with paragraph (1) above, then you are required on or before the effective date of the below order of suspension.

'(a) To deposit cash, certified check, surety bond or negotiable securities in the amount of $5,000.00 with the Department of Public Safety, Safety Responsibility Unit, as security to satisfy any judgment or judgments for damages resulting from the accident.

'(b) Or to submit to the Department of Public Safety, Safety Responsibility Unit, a notarized release for damages from all persons injured, whether a pedestrian, an occupant of your vehicle or any other vehicle involved in the accident, and from all persons whose property was damaged in excess of fifty dollars ($50.00), which may be a general release or a conditional release based on an agreement to pay an agreed amount in installments.'

On December 4, 1956, the director's office received a form SR-13 (report of accident, apparently prescribed by the director pursuant to § 4 of Act No. 704) completed by Mr. Hubbard and to which was attached by perforation a form SR-21. (We find no provision of the Act calling for such Form SR-21. Apparently it was prepared by the director under the provisions of § 2(a).) Mr. Hubbard had completed the required portion of this form SR-21 in connection with the security provisions of Act No. 704. On the form he indicated that he had an insurance policy with State Farm covering liability damage or injury to others in connection with the accident of '5-12-56 in or near Boligee, Alabama.' This part of the form SR-21 is as follows:

'Alabama

Do Not Detach If you fail to give full information below, it will be assumed that you did not have automobile liability insurance

Case No. E 21515

'Name of Company which issued Insurance

Policy to Cover Liability for Damage or injury to others State Farm Insurance Company

Name of Agent who sold policy Ralph K. Bowen

Address Box 909, Tuscaloosa, Ala.

Policy Period from 2-20-56

To 2-20-57 8-20-56

Policy No. 569782-B2001

Date of Accident 5-12-56

In or Near Boligee, Alabama

Make of Your Vehicle Mercury

Type 2-DR.

Year 1952 Motor No. 58391 Ala.

Lic. No. 63-3834 State No.

Driver Huey Hubbard

Address Holt, Alabama

Owner Same

Address Same

Policy Holder Same

Address Same

Form SR-21'

On the other side is another part of the form SR-21 for execution by the insurance carrier. This was mailed by the director's office to State Farm's regional office in Birmingham. Before mailing, the form SR-21 had been detached from the form SR-13 filed by Mr. Hubbard. On December 14, 1956, the form SR-21 was returned to the director's office, State Farm having verified that it had insured Mr. Hubbard with an automobile liability policy that conformed with the 'requirements of the Motor Vehicle Safety-Responsibility Act.'

This part of from SR-21, as completed by State Farm, is as follows:

'Do Not Detach This Form SR-21

'To: Drivers License Division

Motor Vehicle Safety Responsibility Unit

P.O. Box 1471

Montgomery, Alabama

'The undersigned company advises that with respect to the accident and the automobile liability policy reported on reverse...