Travelers Ins. Co., Inc. v. Jones

• Decision Date: 24 June 1988
• Citation: 529 So.2d 234
• Parties: TRAVELERS INSURANCE COMPANY, INC. v. Waltina JONES and Doris McNish. 86-672.
• Court: Alabama Supreme Court

Page 234

529 So.2d 234

TRAVELERS INSURANCE COMPANY, INC. v. Waltina JONES and Doris McNish.

86-672.

Supreme Court of Alabama.

June 24, 1988.

Douglas L. Brown and D. Brent Baker of Armbrecht, Jackson, DeMouy, Crowe, Holmes & Reeves, Mobile, for appellant.

James F. Barter, Jr. of Diamond, Leon & Barter, Mobile, for appellees.

MADDOX, Justice.

This case involves the "stacking" of uninsured motorist coverage provided in an insurance policy covering two automobiles.

The plaintiffs, Waltina Jones and Doris McNish, were passengers in an automobile driven by Randolph Bellamy. They were involved in a collision with an uninsured motorist, and both were injured. Bellamy had an insurance policy with the defendant, Travelers Insurance Company, Inc., which covered two different automobiles that Bellamy owned. ¹ In this action, the plaintiffs seek to stack the uninsured motorist coverages provided under the policy. Neither of the plaintiffs is a named insured in the policy; neither is married to or otherwise related to Bellamy; and neither has ever paid any premiums on the policy.

Travelers filed a motion for partial summary judgment as to the issue of stacking coverages. The plaintiffs filed a motion for partial summary judgment as to the issue of liability based upon the negligence of the other driver involved in the accident and that driver's lack of liability insurance. The trial judge granted plaintiffs' partial summary judgment motion as to liability, and denied Travelers' motion for partial summary judgment on the issue of stacking. Travelers was given permission to file this interlocutory appeal (see Rule 5, Ala.R.App.P.), contending that a distinction exists in classes of insureds when it comes to stacking uninsured motorist coverages and that this Court has consistently recognized that distinction since Lambert v. Liberty Mutual Insurance Co., 331 So.2d 260 (Ala.1976).

The facts of the case are not disputed. The only issue presented for review is whether the plaintiffs are entitled to stack the uninsured motorist coverages under the policy owned by Bellamy. The trial judge held that they were so entitled, citing Ala.Code 1975, § 32-7-23(c):

"(c) The recovery by an injured person under the uninsured provisions of any one contract of automobile insurance shall be limited to the primary coverage plus such additional coverage as may be provided for additional vehicles, but not to exceed two additional coverages within such contract. (Acts 1965, No. 866, p. 1614; Acts 1984, No. 84-301, p. 672, § 4.)"

The trial judge held that the plaintiffs were "injured persons" within the meaning of the statute and were therefore entitled to stack coverage.

Travelers argues that § 32-7-23(c) was not intended to change the law with regard to classes of insureds, and was intended only to limit the number of coverages that could be "stacked."

This Court has recognized that there are distinctions between two classes of insureds in stacking situations. See, White v. Georgia Casualty & Surety Insurance Co., 520 So.2d 140 (Ala.1987); Holloway v. Nationwide Mutual Insurance Co., 376 So.2d 690 (Ala.1979); and Billups v. Alabama Farm Bureau Mutual Casualty Insurance Co., 352 So.2d 1097 (Ala.1977).

In the recent case of White v. Georgia Casualty & Surety Insurance Co., supra, this Court stated its latest explanation of these two classes of insureds:

"We agree with the Virginia Supreme Court [ Cunningham v. Insurance Co. of North America, 213 Va. 72, 189 S.E.2d 832, 836 (1972) ] that the rationale upon which stacking under multi-vehicle policies has been justified for insureds of the first class is inapplicable to insureds of the second class. Although an insured of the first class is covered under uninsured motorist policy provisions in whatever vehicle he may be occupying, an insured of the second class is ... covered only if the particular vehicle he occupies is specifically included under the coverage of some policy. Thus, the payment of an additional premium to cover additional vehicles obtains a substantial benefit insofar as insureds of the second class are concerned. Not being a party to the contract, the expectations of an insured of the second class as to the extent of his coverage do not result in contract ambiguity and are not sufficient to avoid the effect of the policy's limiting clause."

520 So.2d at 141-42, quoting Lambert v. Liberty Mutual Insurance Co., 331 So.2d 260, 264-65 (Ala.1976).

In the White case, Mr. White and his wife were injured while riding in a truck owned by his employer that Mr. White drove in the line and scope of his employer's business. We authorized Mr. White to stack, but we specifically disallowed stacking by his wife, stating:

"Ala.Code (1975), § 32-7-23, provides the basis for stacking insurance coverage by a person 'insured thereunder' as provided in the primary liability policy. In the present case, Johnny C. White, as an employee of Automatic Gas Company, is included in the primary liability part of the insurance policy as one who is 'insured thereunder,' and is, therefore, entitled to stack coverage under the fleet policy. Mary E. White is not a person 'insured thereunder,' according to the insurance policy and is not entitled by statute to stack coverage. She is entitled only to the $10,000.00 already paid to her under the uninsured motorist provision of the policy."

White, supra, 520 So.2d at 141.

The plaintiffs in this case argue, and the trial judge agreed, that under the plain language of the statute, which was not applicable in White, they are entitled to stack coverages. In short, they argue that by adopting § 32-7-23(c), the legislature intended to change the rule so as to eliminate the distinctions between classes of insureds in stacking situations and to provide that any injured person who is covered under one policy is entitled to stack coverages. We agree that the plaintiffs, in this case, can stack because they are within the definition of an "insured" under the terms of the uninsured motorist coverage portion of the policy, and in this case there is an additional "coverage" for another automobile "within such contract."

We have carefully reviewed the legislative history of Act No. 84-301, and specifically Section 4 of that Act, which contains subsection (c). Section 4 reads as follows:

"Section 4. Section 32-7-23, Code of Alabama 1975, is hereby amended to read as follows:

" ' § 32-7-23. (a) 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 32-7-6, 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 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 [sic].

" '(b) The term 'uninsured motor vehicle' shall include, but is not limited to, motor vehicles with respect to which: (1) neither the owner nor the operator carries bodily injury liability insurance; (2) any applicable policy liability limits for bodily injury are below the minimum required under section 32-7-6; (3) the insurer becomes insolvent after the policy is issued so there is no insurance applicable to, or at the time of, the accident; (4) the sum of the limits of liability under all bodily injury liability bonds and insurance policies available to an injured person after an accident is less than the damages which the injured person is legally entitled to recover.

" '(c) The recovery by an injured person under the uninsured provisions of any one contract of automobile insurance shall be limited to the primary coverage plus such additional coverage as may be provided for additional vehicles, but not to exceed two additional coverages within such contract.' "

House Bill 81 was introduced by Rep. Marietta and others, and the title to that bill read as follows:

"H. 81. To amend Chapter 7 of Title 32 of the Code of Alabama 1975, commonly known as the Motor Vehicle Safety-Responsibility Act by amending Section 32-7-5, 32-7-6, 32-7-16 and 32-7-23 thereof so as to increase the amount of property damage which must be sustained to require an accident report to be filed and to provide what the term 'uninsured motor vehicle' shall include under the uninsured motorist coverage section of the Motor Vehicle Safety-Responsibility Act, increases [sic] the amount of payment on judgments necessary to satisfy the requirements of the Motor Vehicle Safety-Responsibility Act, and to increase the minimum amount of liability required under a motor vehicle liability policy under the Motor Vehicle Safety-Responsibility Act."

1984 Journal of the House, p. 20.

Representative Coleman offered the following substitute to H.B. 81 as amended:

"To amend Chapter 7 of Title 32 of the Code of Alabama 1975 commonly known as the Motor Vehicle Safety-Responsibility Act by amending Sections 32-7-5, 32-7-6, and 32-7-23 thereof so as to increase the amount of property damage which must be sustained to require an accident report to be filed and to increase the security required for an automobile or a motor vehicle liability policy while prohibiting duplication and the stacking of such under the uninsured and...