Nationwide Mutual Fire Insurance Company v. Walter George Austin and Charlene Austin

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REL: 09/30/2009 Notice: T h i s o p i n i o n i s s u b j e c t t o f o r m a l r e v i s i o n b e f o r e p u b l i c a t i o n i n the advance s h e e t s o f Southern R e p o r t e r . R e a d e r s a r e r e q u e s t e d t o n o t i f y t h e R e p o r t e r o f D e c i s i o n s , A l a b a m a A p p e l l a t e C o u r t s , 300 D e x t e r A v e n u e , M o n t g o m e r y , A l a b a m a 3 6 1 0 4 - 3 7 4 1 ( ( 3 3 4 ) 2 2 9 ¬ 0 6 4 9 ) , o f a n y t y p o g r a p h i c a l o r o t h e r e r r o r s , i n o r d e r t h a t c o r r e c t i o n s may be made b e f o r e t h e o p i n i o n i s p r i n t e d i n Southern R e p o r t e r . SUPREME COURT OF ALABAMA SPECIAL TERM, 2009 1061505 Nationwide Mutual F i r e I n s u r a n c e Company v. W a l t e r George A u s t i n and Charlene Appeal from Madison C i r c u i t (CV-05-1511) MURDOCK, Court Justice. Nationwide appeals Austin from Nationwide's an Mutual order motion Fire of Insurance the Madison Company Circuit t o show s a t i s f a c t i o n ("Nationwide") Court denying o f the judgment and g r a n t i n g W a l t e r G e o r g e A u s t i n and C h a r l e n e A u s t i n ' s m o t i o n for 1061505 taxation the of additional costs Austins. We affirm in part I. On accident Austins they May 18, with benefits automobile The ("the injuries insurance Austins' in of pertinent in r e s u l t of and this Circuit seeking Nationwide of part. History v e h i c l e was Madison Company involved in Court The and alleging uninsured-motorist and ("State accident, an State Farm"), Farm the Mutual Austins' carriers. automobile-insurance p o l i c y with policy") provided Conditions a i n the from 1 as Horton Insurance coverage reverse Procedural Austins' UM coverage. medical-payment coverage. UM and a v e h i c l e d r i v e n by S t e p h e n A n t h o n y H o r t o n . against Automobile and 2004, the a complaint negligence ("UM") Facts suffered filed f o l l o w i n g a judgment i n favor The contained a Payment." In The Nationwide p o l i c y also provided p o r t i o n of the p o l i c y p r o v i d i n g section that entitled section, the "Limits policy and stated, part: A s d e f i n e d i n t h e A u s t i n s ' p o l i c y , a n d as u s e d i n t h i s o p i n i o n , t h e t e r m s " u n i n s u r e d m o t o r i s t " and " u n i n s u r e d motor v e h i c l e " r e f e r to both uninsured and u n d e r i n s u r e d motorists and m o t o r v e h i c l e s . See a l s o § 3 2 - 7 - 2 3 ( b ) , A l a . Code 1975. L i k e w i s e , t h e t e r m "UM" i s u s e d i n t h i s o p i n i o n as a s h o r t h a n d reference to both uninsured and u n d e r i n s u r e d m o t o r i s t s and motor v e h i c l e s . 1 2 1061505 "4. Damages payable [ f o r UM r e d u c e d b y any amount p a i d "a) the Medical policy." coverage] or payable Payments coverage will be under: i n this F o l l o w i n g d i s c o v e r y , b o t h S t a t e Farm and N a t i o n w i d e motions, trial which the t r i a l court granted, pursuant to the procedure provided v. N a t i o n w i d e to opt out filed of the b y t h i s C o u r t i n Lowe I n s u r a n c e C o . , 521 S o . 2 d 1 3 0 9 (Ala. 1988). 2 As c o n t e m p l a t e d i n Lowe, N a t i o n w i d e r e m a i n e d a p a r t y d e f e n d a n t t o the Austins' action. 3 The r e c o r d i n d i c a t e s t h a t f o l l o w i n g d e p o s i t i o n s , Horton reached a settlement with the Austins f o r the l i m i t s of coverage a v a i l a b l e under h i s l i a b i l i t y insurance policy. N a t i o n w i d e , w h o s e p o l i c y w i t h t h e A u s t i n s p r o v i d e d UM c o v e r a g e of $300,000 p e r p e r s o n and $900,000 p e r o c c u r r e n c e , "fronted" the proposed settlement amount to the Austins, thereby continuing the a c t i o n against Horton. 2 3 The Court explained i n Lowe that "[a] p l a i n t i f f i s a l l o w e d e i t h e r t o j o i n as a p a r t y defendant h i s own liability insurer in a suit against the underinsured motorist or merely to give i t notice of the f i l i n g of the a c t i o n against the m o t o r i s t and o f t h e p o s s i b i l i t y o f a c l a i m under t h e underinsured motorist coverage at the conclusion of t h e t r i a l . I f t h e i n s u r e r i s named a s a p a r t y , i t would have the r i g h t , w i t h i n a reasonable time a f t e r s e r v i c e of process, to e l e c t e i t h e r to p a r t i c i p a t e in the t r i a l ( i n w h i c h case i t s i d e n t i t y and t h e reason f o r i t s being involved are proper information for the j u r y ) , or not to p a r t i c i p a t e i n the t r i a l ( i n w h i c h c a s e no m e n t i o n o f i t o r i t s p o t e n t i a l i n v o l v e m e n t i s p e r m i t t e d by t h e t r i a l c o u r t ) . Under 3 1061505 At the conclusion rendered a damages in verdict the of in the trial favor amount of of on May the for B a s e d on court the entered a amounts a g a i n s t the Austins The Austins 1975, 4 the judgment b o t h H o r t o n and filed a motion requested, taxation as service reporting of and Nationwide. On for taxation costs of § the physicians jury assessed Austin of for May 12-21-144, and and trial the same 15, 2007, additional costs. amounts p a i d transcripts treating and Walter date to the t h a t v e r d i c t , the same pursuant for depositions on 2007, Austins $130,000 $60,000 f o r C h a r l e n e A u s t i n . 2, Ala. to videotapes that the a Code court- of two Austins had e i t h e r e l e c t i o n , t h e i n s u r e r w o u l d be b o u n d b y the f a c t f i n d e r ' s d e c i s i o n s on t h e i s s u e s o f liability and damages. I f t h e i n s u r e r i s n o t j o i n e d b u t m e r e l y i s g i v e n n o t i c e of the f i l i n g of the a c t i o n , i t can decide e i t h e r to i n t e r v e n e or to s t a y out of the c a s e . The r e s u l t s of e i t h e r c h o i c e p a r a l l e l those s e t o u t a b o v e - w h e r e t h e i n s u r e r i s j o i n e d as a p a r t y d e f e n d a n t . W h e t h e r t h e c h o i c e i s t i m e l y made i s l e f t t o t h e d i s c r e t i o n o f t h e t r i a l c o u r t , t o be j u d g e d according to the posture of the c a s e . In e i t h e r event, the trial court could then fashion its judgment a c c o r d i n g l y . " Lowe, 521 So. 2d at 1310 (emphasis omitted; emphasis added). Section 12-21-144 p r o v i d e s , in pertinent part, that " [ t ] h e c o s t s o f any d e p o s i t i o n i n t r o d u c e d , i n whole or i n p a r t , i n t o e v i d e n c e a t t h e t r i a l by t h e p a r t y t a k i n g i t s h a l l be t a x e d as c o s t s i n t h e c a s e u p o n t h e c e r t i f i c a t e o f the p e r s o n b e f o r e whom t h e d e p o s i t i o n was t a k e n " 4 4 1061505 o f f e r e d as e v i d e n c e d u r i n g an objection On o f any May 29, $95,369.07, and Austins full it refused 2007, to t h i s tendered to styled as the asserted policy, tendered to Charlene acknowledge a motion to as of a setoff judgment payments of and the awarded. to the A u s t i n s policy i n the $11,201.29 The taxation trial of satisfaction court under amounts to Charlene court held additional of the i s s u e d an o r d e r Nationwide's Nationwide had the of $14,630.93 Austin. a hearing costs and judgment. On what terms medical against previously the medical-payments in judgment. to the of The filed the that, pursuant to Austin payment payments i t had p r e v i o u s l y t e n d e r e d t o the A u s t i n s final file $31,736.71. Nationwide satisfaction entitled d i d not Walter payments as a r e s u l t , show to Austin these i n i t s motion i t was Nationwide motion. Nationwide f o r t h e judgment, and, Nationwide of kind the t r i a l . the made provision to Walter Austin 5 on t h e A u s t i n s ' Nationwide's June 20, 2007, g r a n t i n g the A u s t i n s ' motion motion motion the and for for trial denying motion. I t i s n o t c l e a r f r o m t h e r e c o r d who p a i d t h e r e m a i n i n g p o r t i o n o f t h e j u d g m e n t , a l t h o u g h we p r e s u m e t h a t S t a t e F a r m h a s p a i d a n y p o r t i o n f o r w h i c h i t was r e s p o n s i b l e ; S t a t e F a r m i s not a p a r t y to t h i s appeal. 5 5 1061505 With trial the regard court actual to found cost were i n t r o d u c e d that in of such this case" taxation of the Austins of each during concluded, pursuant cost the additional costs, the had " p r o p e r l y and t h a t deposition established depositions said the course of the t r i a l . " I t therefore t o § 1 2 - 2 1 - 1 4 4 , A l a . Code 1 9 7 5 , t h a t " t h e depositions should be t a x e d as a d d i t i o n a l i n t h e amount o f $903.83 a g a i n s t costs a l l t h e named defendants. Concerning Nationwide's judgment, the t r i a l court setoff i n the f i n a l provision the allotted to the Austins contrary to the public 6 Section of the b o u n d i t t o t h e amount o f damages judgment of for satisfaction concluded that Nationwide's e l e c t i o n to opt out of the l i t i g a t i o n awarded motion and t h a t policy would i n the f i n a l the medical-payments limit recovery in a manner p o l i c y o f § 3 2 - 7 - 2 3 , A l a . Code 1975, 32-7-23(a) p r o v i d e s , judgment the i n pertinent part: " ( a ) No a u t o m o b i l e l i a b i l i t y o r m o t o r v e h i c l e liability p o l i c y insuring against loss resulting from l i a b i l i t y imposed by law f o r b o d i l y i n j u r y o r d e a t h s u f f e r e d by any p e r s o n a r i s i n g o u t o f t h e ownership, maintenance or use of a motor v e h i c l e s h a l l be d e l i v e r e d o r i s s u e d f o r d e l i v e r y i n t h i s s t a t e w i t h r e s p e c t t o any motor v e h i c l e r e g i s t e r e d or p r i n c i p a l l y garaged i n t h i s s t a t e u n l e s s coverage is provided therein or supplemental thereto, i n limits f o r b o d i l y i n j u r y or death set forth i n 6 6 1061505 which requires automobile automobile-liability coverage in their Nationwide order, the appeals to both Nationwide's the 2, the jury N a t i o n w i d e o f f e r s no May 2, objection to 2007, that taxing review under § trial court Gorman, a 2007, provide UM order; satisfaction of the that i t of in 2007, and Nationwide verdict J u n e 20, a d d i t i o n a l costs for order a r g u m e n t s on appeal, states the favor accordingly, Standard trial court's Ala. exceeded So. selling of trial the Austins. however, i t court concerning has waived any order. 12-21-144, 434 to court's of motion II. We Alabama trial alternative, May memorializing the the of the in from the In judgment. appeals policies companies policies. objecting denial insurance 2d Code of Review ruling 1975, to i t s discretion. 760, 762 (Ala. on taxation determine See 1983) of whether Vulcan O i l Co. (stating that subsection (c) o f S e c t i o n 3 2 - 7 - 6 , u n d e r p r o v i s i o n s a p p r o v e d by t h e C o m m i s s i o n e r o f I n s u r a n c e f o r t h e p r o t e c t i o n o f p e r s o n s i n s u r e d t h e r e u n d e r who are l e g a l l y e n t i t l e d t o r e c o v e r damages f r o m owners o r operators of u n i n s u r e d motor v e h i c l e s because of b o d i l y i n j u r y , s i c k n e s s or d i s e a s e , i n c l u d i n g death, r e s u l t i n g therefrom " 7 costs the v. "the 1061505 taxation judge, is of costs ... rests whose d e c i s i o n w i l l i n the d i s c r e t i o n of the n o t be r e v e r s e d u n l e s s trial clear abuse shown."). Although motion filed from had been pursuant 60(b)(5) of styled for relief judgment final not as provides Rule that the ground that i s properly considered a motion C i v . P. Rule 60(b)(5), a categories, satisfied, postjudgment on court namely: A l a . R. may judgment i f the c i r c u m s t a n c e s three Nationwide's the judgment satisfied to such, relieve a presented " [ i ] the fall from a w i t h i n one judgment has been or [ i i ]a prior judgment upon w h i c h i t i s b a s e d has been r e v e r e d or otherwise vacated, or r e l e a s e d , or discharged, party the [ i i i ] i t i s no longer equitable that have p r o s p e c t i v e a p p l i c a t i o n . " on the basis the first As has been three Industries, whether the circumstances and 60(b)(5) motion f o r r e l i e f of t h e judgment i n cases I n c . , 553 So. warrant such 2d n o t be relief reversed 8 as 61, can i n v o l v e the " d i s c r e t i o n i t sdecision will should falls within categories. recognized Winston Rule Nationwide's of a s a t i s f a c t i o n of these t h e judgment 63 Satterfield ( A l a . 1 98 9 ) , t o a movant of the t r i a l unless v. there under court, [ i s ] an 1061505 abuse of t h a t d i s c r e t i o n . " As however, of Rule when new "[t]hat Satterfield after applies the o r i g i n a l application The portion judgment of an in and the or inequitable." new 553 abuse-of-discretion on law by arises So. 2d 63. cases issue relief sought. As for relief one standard at in r e f e r e n c e to motions Rule facts relied i s c o n s i s t e n t w i t h the nature of the s u c h as S a t t e r f i e l d presented 60(b)(5) noted, judgment i s e n t e r e d , r e n d e r i n g p r o s p e c t i v e of the application only the Court i n S a t t e r f i e l d c o u r t has of the explained nature provided by 60(b), " [ i ] f there i s a d i s c r e t i o n a r y a p p r a i s a l or weighing by t h e [ t r i a l ] c o u r t of t h e f a c t s of a p a r t i c u l a r c a s e , t h e [ t r i a l ] c o u r t ' s d e t e r m i n a t i o n on a p p e a l i s s u b j e c t to abuse or misuse of d i s c r e t i o n . Here, the standard of review is the standard abuse of discretion test." In re Marriage 203 251 Mont. 334, 336, 825 P.2d 201, (1992). Our cases different novo recognize that provision standard of issue purely was of Barnes of to one. Rule review jurisdiction legal able of where 60(b) -- i s applied. raised Thus relief Rule This i n a Rule i t was that contradistinguish the 9 the i s sought 60(b)(4) i s so 60(b)(4) Court alternative in under -- a because motion a de the is a Satterfield relief sought 1061505 under Rule 60(b)(4) in that case Rule i n that 60(b)(5): under case the from the relief above-referenced also sought portion of "The s t a n d a r d o f r e v i e w on a p p e a l f r o m the d e n i a l of r e l i e f under Rule 60(b)(4) i s not whether t h e r e h a s b e e n an a b u s e o f d i s c r e t i o n . When t h e g r a n t o r d e n i a l o f r e l i e f t u r n s on t h e v a l i d i t y of t h e j u d g m e n t , as u n d e r R u l e 6 0 ( b ) ( 4 ) , d i s c r e t i o n h a s no p l a c e . I f t h e j u d g m e n t i s v a l i d , i t m u s t s t a n d ; i f i t i s v o i d , i t m u s t be s e t a s i d e . " 553 So. 2d the Eleventh Circuit Eurisol, de at 64. 48 8 novo ... As F.3d a the U n i t e d S t a t e s Court explained in Sloss 922, district 925 (11th court's motion to s e t a s i d e a judgment of validity the added). 1469 pursuant addressed to a n d w i l l n o t be We r e v i e w de Rule a judgment to the is a novo, however, 60(b)(4) motion a legal of discretion of the the question (Emphasis F.3d 1466, for relief from Procedure 60(b) district court some a b u s e o f d i s c r e t i o n . a district court's ruling t o s e t a s i d e a j u d g m e n t as v o i d , 10 review 60(b)(4) I n c . , 54 Civil v. Rule one." motions for Corp. "We because Indus., Federal Rules reversed absent upon as v o i d , ("Ordinarily, sound Industries C i r . 2007): ruling E x p o r t Group v. Reef ( 9 t h C i r . 1995) judgment are See of of Appeals upon ... a because 1061505 the q u e s t i o n of the v a l i d i t y (emphasis As is a legal one.") added). the Insurance 166 of a judgment P.3d Supreme Co. Court of Montana v. Moose's S a l o o n , 451, 455-56 Inc. explained 338 in Mont. 423, Essex 428-29, (2007): "Our standard of review of a [ t r i a l ] c o u r t ' s r u l i n g on a m o t i o n p u r s u a n t t o [ R u l e ] C i v . P. 60(b) d e p e n d s on t h e n a t u r e o f t h e f i n a l j u d g m e n t , o r d e r , or p r o c e e d i n g f r o m w h i c h r e l i e f i s s o u g h t and t h e s p e c i f i c b a s i s of t h e R u l e 60(b) m o t i o n . ... As a g e n e r a l r u l e , the [ t r i a l ] c o u r t ' s r u l i n g i s reviewed f o r abuse of d i s c r e t i o n . ... By c o n t r a s t , w h e r e the movant sought r e l i e f u n d e r s u b s e c t i o n (4) o f R u l e 6 0 ( b ) on t h e g r o u n d t h a t t h e j u d g m e n t i s v o i d , the standard of review i s de novo, since the d e t e r m i n a t i o n t h a t a judgment i s or i s not v o i d i s a c o n c l u s i o n of law. E x p o r t Group [v. Reef Indus., I n c . ] , 54 F . 3 d [ 1 4 6 6 ] a t 1469 [ ( 9 t h C i r . 1 9 9 5 ) ] ('We r e v i e w de n o v o ... a d i s t r i c t c o u r t ' s r u l i n g u p o n a Rule 60(b)(4) motion to s e t a s i d e a judgment as v o i d , because the q u e s t i o n of the v a l i d i t y of a judgment i s a l e g a l one.')." (Emphasis Yu Ren, (not added.) (No. See ruling Supp. determination reconsider, on discretion; L a n d m a r k West E n t e r s . , LLC CIV.-07-0280-F, r e p o r t e d i n F. court's also to the extent discretionary to the of June 2d) 2007) (W.D. ("When r e v i e w i n g a a Rule the factors, extent 8, the 11 60(b)-type bankruptcy the review bankruptcy court v. Okla. Wei 2007) bankruptcy motion to based i t s i s f o r abuse court's ruling of was 1061505 based on its traditional erroneous and de findings review i s the novo of and a p p l i e s to those standard review Because the fact determinations of r e v i e w applies to the issue presented f o r the legal is entitled Austins under medical-payments against amounts o t h e r w i s e UM coverage -- Nationwide's we review motion de novo costs depositions the trial. the to the fact, legal one to the the policy under the p o l i c y ' s trial of in -¬ court's the denial of judgment. Analysis the trial court defendants for Austins introduced as the erred in taxing expense evidence of two during the S p e c i f i c a l l y , Nationwide argues t h a t the i n v o i c e s from for According to therefore, services taxation expense of those failed coverage the court-reporting motion clearly s e t o f f amounts p a i d for a satisfaction contends that additional -- law, conclusions."). owed t h e A u s t i n s III. Nationwide to of f i n d i n g s of here i s a p u r e l y whether Nationwide the conclusions to Austins additional costs attached to to their establish the depositions c o n s t i t u t e d inadmissible hearsay. Nationwide, establish the of the trial the court without cost should 12 the of invoices, the the Austins depositions, have d e n i e d their and, motion. 1061505 Nationwide did court. In trial concerning the not fact, taxation court. Horton f i l e d he not did an issue to prove we cannot Tenbrunsel, 910 cannot consider rather, our considered Oil Co., is by 2d the i t 1255, the the cost 1263 on the So. trial 2d 409, due to court.'" 410 costs the to Austins' of motion, allegedly the presented appeal. (Ala. first to trial Marks ("'This t i m e on The d e n i a l of i t s motion f o r s a t i s f a c t i o n the p r o v i s i o n i n the A u s t i n s ' Court appeal; arguments trial of the trial Merritt court's of the coverage. latter costs court's judgment based automobile-insurance policy p e r m i t s Nationwide to set o f f b e n e f i t s p a i d under the benefits portion v. affirmed. noted above, N a t i o n w i d e a l s o appeals the The using the Andrews v. (Ala. 1992)). but depositions. See 2005) (quoting trial motion f o r t a x a t i o n of a d d i t i o n a l be the whatsoever Austins' not in argument arguments r a i s e d f o r the the A u s t i n s ' therefore As of motion r e v i e w i s r e s t r i c t e d t o t h e e v i d e n c e and 612 r u l i n g on So. no to a r g u m e n t was consider Austins' additional objection the the made of raise Because Nationwide's to i t evidence hearsay court, object policy against coverage 13 is the d a m a g e s due provided on that medicalfor pursuant UM to 1061505 § 32-7-23, A l a . Code ( " t h e UM A c t " ) . that every delivered limits 1975, uninsured-motorist statute 3 2 - 7 - 2 3 , A l a . Code 1975, "[Section] the requires automobile-liability-insurance policy i n Alabama p r o v i d e for bodily injury uninsured-motorist or death person, unless the writing by named insured." 2d 929 Pinkston, the 941 The So. trial coverage 926, court satisfaction of noted litigation, and, factfinder's damages." that of this as judgment a Lowe, 521 So. 2d with $20,000 per rejected in Cas. v. least Continental Nationwide's elected result, on coverage specifically f o r three had decisions at or Co. ( A l a . 2006). denied Nationwide that the is of issued reasons. to opt Nationwide the was issues a t 1310. meant t h a t N a t i o n w i d e c o u l d motion of The for First, out of "bound the by liability trial not object court i t the and ruled t o the award damages i n t h e a c t i o n . In concluding satisfaction of provision the litigation, in that the judgment policy the t r i a l Nationwide court on because the could basis i t had not of opted the out misunderstood the opt-out 14 demand setoff of the process 1061505 we explained for UM i n Lowe. benefits under As t h e Lowe C o u r t s t a t e d , the p l a i n t i f f ' s i n an action policy, " [ i ] f t h e i n s u r e r i s named a s a p a r t y , i t w o u l d h a v e the r i g h t , w i t h i n a r e a s o n a b l e time a f t e r s e r v i c e of process, to e l e c t e i t h e r to p a r t i c i p a t e i n the t r i a l ( i n w h i c h c a s e i t s i d e n t i t y and t h e r e a s o n f o r i t s being i n v o l v e d are proper information f o r the j u r y ) , o r n o t t o p a r t i c i p a t e i n t h e t r i a l ( i n w h i c h c a s e no mention of i t or i t s potential involvement i s permitted by the trial court) . Under either election, the insurer would be bound by the factfinder's decisions on t h e i s s u e s o f liability and damages." Lowe, 521 So. 2 d a t 1310 (some e m p h a s i s added; some emphasis omitted). If the the above-emphasized trial court passage interpreted i s t o be i t , then N a t i o n w i d e ' s p o s i t i o n w o u l d n o t be a b l e would otherwise have that matter to assert to enforce a an insurer to assert setoff other contractual interpreted in any r i g h t i t provision, or f o r defenses i t might have under the terms of i t s i n s u r a n c e p o l i c y , even i f i t e l e c t e d participate i n the l i t i g a t i o n . that insurer a UM litigation passage the elects not to forgoes the r i g h t to question, indicates, alleged that The c o r r e c t the reading fact-finder's decision tortfeasor i s liable 15 to the insured to o f Lowe i s participate as t h e as in the above-quoted as to whether and, i f so, i n 1061505 what amount. than That q u e s t i o n , whether, contractual insurer's against as between terms of liability the to Nationwide is purported right p a y m e n t s i t has awarded. damages," So. setoff for 2d does not p r o v i s i o n of at insured, policy the limit damages the the awarded the amount of damages against Horton; i t i s a s s e r t i n g i t s the policy Nationwide decisions litigation insured challenging on factfinder's the insurance to offset a l r e a d y made t o t h e A u s t i n s Because 521 and question 7 and based is a different insurer parties' not awarded to the A u s t i n s the the the t o r t f e a s o r . however, on the 1310, is not of i t s election i t s policy with against medical the amount questioning issues p r o h i b i t i t from the liability and opt out of the t a k i n g advantage of the the to "the Austins. 8 We n o t e t h a t , i n i t s a n s w e r t o t h e c o m p l a i n t , N a t i o n w i d e placed the A u s t i n s and the trial c o u r t on n o t i c e o f i t s i n t e n t i o n t o s e e k a s e t o f f , c l a i m i n g as i t s n i n t h d e f e n s e a r i g h t t o " o f f s e t " "any c o l l a t e r a l p a y m e n t s s u c h as medical e x p e n s e s ... f o r some o f t h e d a m a g e s c l a i m e d i n t h i s l a w s u i t . " 7 The t r i a l c o u r t ' s o r d e r g r a n t i n g N a t i o n w i d e ' s m o t i o n to opt out of the litigation explicitly recognized that N a t i o n w i d e " w i l l be b o u n d b y t h e j u r y ' s d e t e r m i n a t i o n i n t h i s c a s e o f damages s u b j e c t t o i t s p o l i c y l i m i t s and t h e i n s u r a n c e coverage l e v e l s of the remaining defendants." (Emphasis added.) This l i m i t a t i o n i s c o n s i s t e n t w i t h the principle r e c o g n i z e d b y A l a b a m a c o u r t s t o t h e e f f e c t t h a t , u n d e r t h e UM 8 16 1061505 The t r i a l the trial court also denied Nationwide's motion because court "specifically recall[ed] that the [Austins'] c o u n s e l , i n f i n a l argument, p o i n t e d out t o the j u r y t h a t most o f t h e p a s t m e d i c a l b i l l s i n c u r r e d by t h e [ A u s t i n s ] had been p a i d and t h a t t h e [ A u s t i n s ] were a s k i n g o n l y t o be r e i m b u r s e d f o r t h e i r d e d u c t i b l e o r out of pocket expenses. The [Austins] offered evidence of s u b s t a n t i a l future medical expenses along with evidence of l o s t income, permanent disabilities and p a i n and s u f f e r i n g . The total damages p r e s e n t e d by t h e [ A u s t i n s ] significantly e x c e e d e d t h e j u r y a w a r d a n d , as n o t e d h e r e i n , d i d not include past medical expenses t h a t had been previously reimbursed. The C o u r t t h e r e f o r e finds t h a t t h e r e was no d o u b l e r e c o v e r y b y t h e [ A u s t i n s ] in t h i s case." The p r o b l e m w i t h at the p o l i c y this language Austins' p o l i c y provides reasoning at issue. i s found i n a c l o s e r The UM provision that Nationwide " w i l l look of the p a y damages ... Act, the insured " i s e n t i t l e d to c o l l e c t w i t h i n the l i m i t s of t h e p o l i c y , a l l d a m a g e s w h i c h he i s ' l e g a l l y e n t i t l e d t o recover.'" U n i t e d S e r v s . A u t o . A s s ' n v . S m i t h , 57 A l a . A p p . 5 0 6 , 5 0 9 , 329 S o . 2 d 5 6 2 , 564 ( A l a . C i v . A p p . 1 9 7 6 ) ( q u o t i n g § 3 2 - 7 - 2 3 ( a ) , A l a . Code 1975) ( e m p h a s i s a d d e d ) ) ; s e e e . g , A l f a Mut. I n s . C o . v . M o r e l a n d , 589 S o . 2 d 1 6 9 , 171 ( A l a . 1 9 9 1 ) ( s t a t i n g t h a t " [ i ] n an a c t i o n f o r u n i n s u r e d m o t o r i s t b e n e f i t s , a b s e n t f r a u d o r b a d f a i t h , a n i n s u r e d may r e c o v e r f r o m h i s i n s u r e r d a m a g e s o n l y up t o t h e l i m i t s p r o v i d e d f o r i n the c o n t r a c t o f i n s u r a n c e " ; S a f e c o I n s . Co. o f A m e r i c a v . J o n e s , 286 A l a . 6 0 6 , 6 1 4 , 2 4 3 S o . 2 d 7 3 6 , 742 ( 1 9 7 0 ) ( n o t i n g t h a t § 3 2 - 7 - 2 3 ( a ) , A l a . Code 1 9 7 5 , " l i m i t s r e c o v e r y o f damages t o t h a t amount t o w h i c h t h e i n j u r e d p a r t y i s ' l e g a l l y e n t i t l e d t o recover' and t h a t amount i s l e g a l l y s e t t l e d p r i o r t o t h e c l a i m s under t h e s t a t u t e and t h e p o l i c i e s . " ) . 17 1061505 w h i c h a r e due b y l a w t o [ t h e i n s u r e d ] of an uninsured suffered accident 3. by motor [the insured.] arising the because Damages motor vehicle." bodily result injury from an 2. m a i n t e n a n c e ; o r The t r i a l court's w o u l d be a p p r o p r i a t e i f i t h a d been e s t a b l i s h e d t h a t " d a m a g e s ... d u e b y l a w " t o t h e A u s t i n s m o t o r i s t , Horton, from the uninsured i n c l u d e d t h e amounts o f $130,000 and $60,000 awarded by t h e j u r y plus a l r e a d y made on b e h a l f This of must o u t o f t h e 1. o w n e r s h i p ; use; of the uninsured reasoning t h e amounts of the medical of each of the A u s t i n s by payments Nationwide. 9 was n o t e s t a b l i s h e d , h o w e v e r . Instead, order, in vehicle f r o m t h e owner o r d r i v e r according the Austins their to the t r i a l court's d i dnot ask the jury awards t o t h e A u s t i n s June 20, 2007, to consider including any amounts f o r t h e p r e v i o u s l y made m e d i c a l payments. Therefore, we do n o t know w h e t h e r , i f the had the jury to Austins asked include i n i t s awards In such a case, t h e r e s u l t reached by t h e t r i a l court when i t d e n i e d N a t i o n w i d e ' s p o s t j u d g m e n t m o t i o n , i . e . , l e a v i n g Nationwide r e s p o n s i b l e f o r t h e f u l l measure o f t h e $130,000 and $60,000 a w a r d e d b y t h e j u r y , w o u l d be a c h i e v e d b y a d d i n g the amount o f t h e p r i o r m e d i c a l payments t o t h e amounts a w a r d e d b y t h e j u r y t o c a l c u l a t e t h e " d a m a g e s ... d u e b y l a w " and t h e n a l l o w i n g a c r e d i t f o r t h e amount o f t h e p r i o r m e d i c a l p a y m e n t s , t h u s l e a v i n g an amount due f r o m t h e i n s u r e r e q u a l t o the amounts awarded by t h e j u r y . 9 18 1061505 amounts e q u a l to I n d e e d , w h a t we the jury award the had due any by to event, from only i t Nationwide concluded to set recovered on expressed i n the statement in Motley, 90 9 Uninsured a UM off the respect the policy medical Act. The trial State Farm injured by 806, 812 Statute is an uninsured 19 that has to such must the operate. construed motorist so motion permitting damages public quoted t h i s that policy Court's Insurance 2005), been ascertained against Automobile ... jury actually provision court (Ala. "damages Nationwide's payments UM Mutual of issue denied contrary Motorist to otherwise the to at was 2d they state Austins claim So. damages that expenses measure court that is speculation. policy provisions trial court, medical to case i s the measure t h a t the to prior attempt actual Horton the Finally, person Any of trial a l l the their It i s necessarily with "damages" t h a t to the so. j u r y would have d e c l i n e d a l l of so. the established in this because do j u r y w o u l d have done Austins know, t h e some d e g r e e law" awarded. the some o r asked require In award a l l we Austins the know, a c c o r d i n g not For i t been would do did requested. such payments, Co. v. "'"[t]he as to assure a will be able to 1061505 recover be t h e amount o f h i s damages i n t h a t t h e allowed to insured's 601 Alabama Ins. Co. v. Freight, The So. 8 94 , Guar. Ass'n I n c . v. trial court 1 So. the before benefits. i n McKinney the insured of is any the v. September the also 996, 999 587 So. would us quoting 2d 419, Progressive ( A l a . 2008) 2d 946, 957 the Guar. in turn 423 (Ala. Speciality (citing (Ala. limitation same "where legally payment by the final Star 1991)). policy on So. an Ins. has UM addresses Co., and recover contracted the total exceed t o r t f e a s o r ' s i n s u r e r , the 20 of [Ms. (Ala. 2009). insured to recovery Fire of Nationwide Court 3d coverage entitled this the provision with their Mutual limit judgment. a setoff question 2009] that i n the Austins' Nationwide 30, impermissibly i s whether s t a t u t o r y m i n i m u m UM are So. Austins the improper This for the in i n McKinney 1071506, held found an 1992 ) , See limiting v. A l a b a m a I n s . Hamm, 601 provision question constitutes policy not reasoned t h a t e n f o r c i n g the p o l i c y ' s m e d i c a l - to nature today 3d allotted The the (Ala. v. Sheffield, payments-setoff recovery 896 omitted)). Gore, in (quoting D i l l a r d 2d (emphasis Ins. provisions recovery."'" Ass'n, 1992) insert insurer will We only damages the total insured's UM 1061505 coverage and insurer any to medical benefit the insured, a also policy paid by provision the liability allowing the i n s u r e r t o s e t o f f any m e d i c a l - b e n e f i t payments a g a i n s t t h e coverage So. 3d i s u n e n f o r c e a b l e as a m a t t e r at The of p u b l i c policy." . present case differs from McKinney in that the A u s t i n s h a v e c o n t r a c t e d f o r more t h a n t h e s t a t u t o r y minimum coverage. the Even Austins' will a c c o u n t i n g f o r the r e c o v e r y under still provided be in well § above t h e UM the 32-7-23(a), medical-payments provision required Ala. Code in their statutory 1975. policy minimum Under liability of UM coverage policy. 1 0 We to be of r e q u i r i n g provided in certain every the giving e f f e c t t o the c o n t r a c t u a l l y a g r e e d upon s e t o f f p r o v i s i o n not contravene the p u b l i c p o l i c y UM setoff, p a r t i c u l a r circumstances presented i n the present case, amounts UM would minimum automobile t h e r e f o r e conclude that the t r i a l court I n response to J u s t i c e Woodall's s p e c i a l w r i t i n g , i t i s i m p o r t a n t t o n o t e t h a t i t i s t h e same c o n t r a c t o f insurance t h a t c r e a t e s i n t h e i n s u r e d a r i g h t t o c o l l e c t more t h a n t h e s t a t u t o r y minimum $ 2 0 , 0 0 0 o f UM insurance that places a condition on a p o r t i o n of that non-required, additional c o v e r a g e . N o t h i n g i n o u r l a w p r e v e n t s t h e two p a r t i e s t o t h a t insurance contract from voluntarily bargaining for and a g r e e i n g t o t h e payment o f an a d d i t i o n a l p r e m i u m f o r s u c h a d d i t i o n a l UM coverage or from a g r e e i n g t o a premium f o r a d d i t i o n a l UM c o v e r a g e t h a t i s c o n d i t i o n e d i n some r e s p e c t . 1 0 21 1061505 erred i n r e f u s i n g t o honor t h e o t h e r w i s e c l e a r and unambiguous setoff provision found i n the parties' IV. For trial the foregoing court's motion f o r taxation portion o f t h e same satisfaction trial court Cobb, 2007, granting order Nationwide's denying The c a u s e action Bolin, C . J . , and Lyons dissent order costs, I N PART; R E V E R S E D Smith, we a f f i r m t h e p o r t i o n of a d d i t i o n a l f o rfurther Stuart, reasons, 20, contract. Conclusion of t h e judgment. AFFIRMED and June insurance consistent motion i s remanded with this the f o ra to the opinion. REMANDED. a n d Shaw, J J . , and Woodall, Austins' a n d we r e v e r s e I N PART; AND Parker, the of the concur. J J . , concur i n part i n part. The p u b l i c - p o l i c y concern t h a t informs our d i s a l l o w a n c e of s u c h a c o n d i t i o n when i t i n t e r f e r e s with the s t a t u t o r i l y r e q u i r e d minimum amount o f UM c o v e r a g e d o e s n o t e x t e n d b e y o n d t h e p r o t e c t i o n o f t h a t minimum c o v e r a g e t o impede t h e p a r t i e s ' freedom o f c o n t r a c t as t o s u c h a d d i t i o n a l coverage and premiums t o w h i c h t h e y may v o l u n t a r i l y a g r e e . 22 1061505 LYONS, J u s t i c e (concurring Does Ala. an insurer Code 1975, even by 1 1 satisfy that every in watering down a setoff and d i s s e n t i n g requirement policy though i t c o n t r a c t e d including the benefits uninsured-motorist $20,000 i n part must an provision provide amount the r i g h t s f o r higher of § limits 32-7-23, coverage f o r not t o more allowing in part). less than than $20,000, $20,000, i t to deduct The legislative If $20,000 by merely than permitting an the legislature's a private the s e t o f f coverage, t o have thereby does t o have at was least making not v i o l a t e objective at least public-policy. was $20,000 and more i f t h e i n s u r e d the coverage matter between the i n s u r e d public-policy an i n s u r e d coverage, insured objective t o p u r c h a s e any u n i n s u r e d - m o t o r i s t $20,000 insurer, permitting of the scope of public-policy i n uninsured-motorist the motorist i n an u n d e r s t a n d i n g legislature's insured's decision greater lies of the intent. the fulfilled answer by payments made t o i t s i n s u r e d u n d e r t h e m e d i c a l - b e n e f i t s p o r t i o n policy? than fulfilled and If by i n uninsured- cared to purchase Section 32-7-6(c), A l a . Code 1975, w h i c h sets the r e q u i r e d l i m i t s o f c o v e r a g e , was a m e n d e d i n 2 0 0 8 t o i n c r e a s e the amount f r o m $20,000 t o $25,000. 1 1 23 1061505 it, then the matter of private matter setoffs s h o u l d n o t be Section excess above the insured between $20,000 and i s not the p e r m i t t e d to defeat the 32-7-23(a), A l a . Code 1975, simply a insurer, and coverage. in pertinent part, provides: "No a u t o m o b i l e l i a b i l i t y ... p o l i c y i n s u r i n g a g a i n s t l o s s r e s u l t i n g from l i a b i l i t y imposed by law ... a r i s i n g out of the o w n e r s h i p , m a i n t e n a n c e or use of a m o t o r v e h i c l e s h a l l be d e l i v e r e d ... in this s t a t e ... u n l e s s c o v e r a g e i s p r o v i d e d ... i n l i m i t s for b o d i l y i n j u r y or death set f o r t h i n s u b s e c t i o n (c) o f S e c t i o n 3 2 - 7 - 6 ... f o r the p r o t e c t i o n of p e r s o n s i n s u r e d t h e r e u n d e r who a r e l e g a l l y e n t i t l e d to r e c o v e r damages f r o m owners or o p e r a t o r s of u n i n s u r e d motor v e h i c l e s " The reference to 32-7-6 b r i n g s i n t o less than The for not thrust less served right play set the forth of the s t a t u t e than $20,000 not s e e how we by to such therefore join denying Justice when of not can 24 "of for § not i n the coverage amount conclude that public to of ($25,000)." coverage the coverage Woodall's (c) coverage i s thus p r o v i s i o n protection benefit subsection dollars and I do in requirement t w e n t y - f i v e thousand $20,000. is limits insured's exceeds special policy statutory $25,000. writing. of I 1061505 WOODALL, J u s t i c e (concurring I concur f u l l y I concur trial in Part court's Austin's i n Part III to order insofar i t reverses the as I Fire The ... the extent of the does not have Mitchell, 522 the i n my motorist the A u s t i n s ' r e c o v e r y limit of subject from to be Part III denying order the Nationwide fault the established [the] insured j u r y v e r d i c t even i f [Horton] in that coverage. 25 by purpose amount." Harvey v. The limit on (Ala. 1988). insured's purpose "[t]he of u n d e r i n s u r e d - m o t o r i s t the is coverage i s to allow 773 the purchased damages p r o v e d , only b e n e f i t s i s the "'Underinsured compensation to the to the Charlene i s due overlooked Horton's coverage 771, such coverage provides costs Also, that and dissent coverage amount o f t h e 2d i t holds judgment f i l e d by opinion, Austins' insurance So. opinion. Austin court's part). Company. has, of the to recover injury, trial Once S t e p h e n A n t h o n y [underinsured-] policy that Walter underinsured-motorist Austins. of Insurance majority the the extent respectfully motion for a s a t i s f a c t i o n and dissenting in motion f o r t a x a t i o n of a d d i t i o n a l However, of and I I of the m a j o r i t y granting affirmed. Mutual in part extent policy of the limits.'" motorist insured's State Farm 1061505 Mut. Auto. (quoting (Ala. I n s . Co. Hardy v. 1988)). motorist minimum, Thus, such of agree w i t h Cobb, C.J., 90 9 So. Progressive coverage determination cannot v. M o t l e y , where in policy of J., 26 80 6, 531 81 1 So. provides the rights majority's Lyons, Co., coverage insured's the and a excess minimum an Ins. 2d ( A l a . 2005) 2d conclusion concur. required irrelevant under the to 887 underinsured- statutorily is 885, to policy, the and a I contrary.

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