James McKinney v. Nationwide Mutual Fire Insurance Company

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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 t h e 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 b e 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 1071506 James McKinney v. Nationwide Appeal MURDOCK, from Fire I n s u r a n c e Company Tuscaloosa C i r c u i t (CV-05-337) Court Justice. James Circuit Mutual McKinney appeals Court Nationwide entering Mutual Fire a from an o r d e r summary Insurance of the Tuscaloosa judgment Company i n favor of ( " N a t i o n w i d e " ) on 1071506 McKinney's complaint We t h e judgment reverse I. McKinney's vehicle Tuscaloosa. Court was John McKinney's damage answered defense: potential in and the in sued i n the the Jackson of and and Nationwide the following offset a Circuit injuries accident. pleads with City Tuscaloosa personal submitted "[Nationwide] collision Jackson McKinney sustained uninsured in a for alleged the complaint ninth Elwin insurer, recovery property court. involved Subsequently, seeking benefits. and P r o c e d u r a l H i s t o r y vehicle by underinsured-motorist of the t r i a l Facts driven Nationwide, seeking as i t s against any m o t o r i s t b e n e f i t s due t o [ M c K i n n e y ] a n d c l a i m s t h a t i t i s e n t i t l e d by c o n t r a c t t o o f f s e t any u n i n s u r e d motorist payments with [McKinney] f o r medical automobile policy ("UM") c o v e r a g e Conditions in payments payments." made by [Nationwide] The p o r t i o n o f M c K i n n e y ' s providing uninsured/underinsured contained of Payment." a section entitled In that s e c t i o n , motorist "Limits the p o l i c y Damages payable [ f o r UM coverage] r e d u c e d b y any amount p a i d o r p a y a b l e 2 and stated, pertinent part: "4. to will be under: 1071506 "a) The to the Medical policy." trial court a stipulation had paid dismissed had i t s full waived any i n this J a c k s o n as a d e f e n d a n t of d i s m i s s a l McKinney Nationwide Payments coverage because policy rights pursuant his liability limit of of insurer $ 2 5 , 000 subrogation and against Jackson. McKinney f i l e d an a m e n d e d c o m p l a i n t a l l e g i n g , i n a d d i t i o n to the claims already pay McKinney also a a claim. judgment declaring automobile insurance not valid, policies additional ruling from in a to Alabama The the provision setoff Nationwide of issues a l lp o t e n t i a l a l l closed should court, claims be p a i d class setoff provisions to in light a n d an o r d e r in and the i n Alabama i s t h e s e t o f f p r o v i s i o n , an o r d e r UM b e n e f i t s i n s e r t i n g such class certification policies review by t h e t r i a l requested that reformation containing Nationwide made, b a d - f a i t h r e f u s a l b y N a t i o n w i d e t o members' compelling determine of a enjoining i f favorable Nationwide in its policies issued i n the future. trial court subsequently entered an o r d e r granting McKinney's motion f o r a separate t r i a l of h i s bad-faith against a motion Nationwide. Nationwide 3 filed for a claim summary 1071506 j u d g m e n t as t o a l l t h e o t h e r c l a i m s . submitted to concerning stipulation the trial Nationwide's of facts court a motion M c K i n n e y and joint for a p r o v i d e d as stipulation summary Nationwide of facts judgment. follows: "1. N a t i o n w i d e M u t u a l F i r e I n s u r a n c e Company i s s u e d a p o l i c y o f a u t o m o b i l e i n s u r a n c e c o v e r a g e t o James McKinney that afforded uninsured/underinsured motorist coverage and m e d i c a l payments coverage. S a i d p o l i c y was i n f u l l f o r c e a n d e f f e c t on t h e d a t e of the collision made the subject of the above-styled case. " 2 . [ M c K i n n e y ] was c h a r g e d a n d he p a i d a s e p a r a t e premium for medical payments coverage and the u n i n s u r e d or u n d e r i n s u r e d m o t o r i s t coverage. "3. That the uninsured/underinsured motorist coverage policy limit of the Nationwide policy i s s u e d b y N a t i o n w i d e t o Mr. M c K i n n e y i s $ 2 0 , 0 0 0 . 0 0 . "4. That [McKinney] has no applicable uninsured/underinsured m o t o r i s t coverage other than t h a t a f f o r d e d by t h e N a t i o n w i d e p o l i c y and t h a t o n l y one v e h i c l e i s i n s u r e d u n d e r t h e N a t i o n w i d e p o l i c y . " 5 . T h a t on M a r c h 18 , 2 0 0 3 , w h i l e t h e N a t i o n w i d e p o l i c y was in full f o r c e and e f f e c t , [McKinney] s u s t a i n e d b o d i l y i n j u r i e s and p a i n and s u f f e r i n g as a r e s u l t of a motor v e h i c l e a c c i d e n t c a u s e d by t h e n e g l i g e n c e of John E l w i n J a c k s o n . " 6 . T h a t t h e a m o u n t Mr. M c K i n n e y i s l e g a l l y e n t i t l e d to r e c o v e r f r o m t h e t o r t f e a s o r , John E l w i n J a c k s o n , the underinsured motorist, is in excess of $45,000.00. "7. T h a t t h e l i a b i l i t y has paid [McKinney] i n s u r e r of John E l w i n J a c k s o n i t s full policy limits of 4 The 1071506 $25,000.00 and Nationwide waived any subrogation against John E l w i n Jackson. rights of "8. T h a t [ M c K i n n e y ] h a s s a t i s f i e d a n d c o m p l i e d w i t h a l l o f t h e t e r m s a n d c o n d i t i o n s as d e f i n e d b y t h e Nationwide policy. "9. That [McKinney's] insurance policy with Nationwide expressly states that the l i m i t s f o r Underinsured M o t o r i s t Coverage, as s t a t e d i n t h e Policy Declarations, a r e t o 'be r e d u c e d b y a n y amounts p a i d o r p a y a b l e under t h e M e d i c a l Payments coverage i n the p o l i c y . ' "10. That N a t i o n w i d e h a s p a i d t o [McKinney] o r h i s physicians $2,000.00 under the medical payment coverage of the insurance p o l i c y , which c o n s t i t u t e s the f u l l p o l i c y l i m i t s f o r t h a t c o v e r a g e . "11. That [McKinney] d i s p u t e s N a t i o n w i d e ' s r i g h t t o d e d u c t a n y p a y m e n t s made u n d e r i t s m e d i c a l p a y m e n t s c o v e r a g e f r o m any amounts due u n d e r t h e u n d e r i n s u r e d motorist coverage. "12. That [McKinney] contends that allowing the o f f s e t would r e s u l t i n [McKinney] r e c e i v i n g less t h a n t h e minimum $20,000.00 i n u n d e r i n s u r e d m o t o r i s t coverage provided by h i s i n s u r a n c e p o l i c y with N a t i o n w i d e and as r e q u i r e d b y l a w . Nationwide's c o n t e n t i o n i s t h a t even by a l l o w i n g t h e o f f s e t , [McKinney] still receives t h e minimum limit of $20,000.00, b u t t h a t [McKinney] cannot r e c o v e r under two p r o v i s i o n s o f t h e p o l i c y . "13. That N a t i o n w i d e c l a i m s i t has a r i g h t t o d e d u c t the payments made under i t s medical payments c o v e r a g e f r o m a n y amounts due u n d e r t h e u n d e r i n s u r e d m o t o r i s t coverage p r o v i d e d by t h e p o l i c y . " The motion trial court e n t e r e d an o r d e r g r a n t i n g f o r a summary j u d g m e n t , 5 stating, Nationwide's i n pertinent part: 1071506 " A f t e r r e v i e w i n g the j o i n t s t i p u l a t i o n of f a c t s , and the c o n t e n t i o n s of the p a r t i e s , this Court h e r e b y f i n d s as a m a t t e r o f l a w t h a t N a t i o n w i d e i s entitled to a judgment. The Court f i n d s , as a matter of law, t h a t the o f f s e t p r o v i s i o n i n the insurance policy i s c l e a r and u n a m b i g u o u s . The Court further finds that, because the policy language i s clear and unambiguous, i t must be e n f o r c e d as w r i t t e n . The Court thus holds that N a t i o n w i d e i s e n t i t l e d t o deduct the amounts p a i d under the m e d i c a l payments coverage a f f o r d e d by the p o l i c y f r o m a n y a m o u n t s owed a n d p a i d u n d e r the u n i n s u r e d or u n d e r i n s u r e d m o t o r i s t coverage p r o v i d e d by the i n s u r a n c e p o l i c y . The C o u r t t h u s ORDERS, ADJUDGES a n d DECREES t h a t d e f e n d a n t N a t i o n w i d e i s e n t i t l e d to o f f s e t the u n i n s u r e d and/or u n d e r i n s u r e d m o t o r i s t payment by t h e amount p r e v i o u s l y p a i d u n d e r the medical payments coverage p r o v i d e d by the insurance policy. "The C o u r t n o t e s t h a t [ M c K i n n e y ] h a s a s s e r t e d a s e p a r a t e bad faith claim. The court finds that c l a i m n e e d n o t be r e s o l v e d a t t h i s t i m e . However, a l l o t h e r c l a i m s of [McKinney] r e l a t e s o l e l y to the e n f o r c e a b i l i t y of the o f f s e t p r o v i s i o n . The c o u r t f i n d s t h a t t h e r e i s no j u s t r e a s o n f o r d e l a y i n t h e entry of a summary judgment on those claims. T h e r e f o r e , i t i s ORDERED, ADJUDGED AND DECREED t h a t t h e a f o r e m e n t i o n e d r u l i n g on t h e e n f o r c e a b i l i t y o f t h e o f f s e t p r o v i s i o n i s h e r e b y made a f i n a l j u d g m e n t pursuant to Rule 54(b) of the Alabama Rules of C i v i l Procedure." McKinney appeals from the summary judgment in favor of Nationwide. II. Our the facts Standard of Review s t a n d a r d o f r e v i e w i s s t r a i g h t f o r w a r d w h e n , as are undisputed: 6 here, 1071506 "An o r d e r g r a n t i n g o r d e n y i n g a s u m m a r y j u d g m e n t i s r e v i e w e d de n o v o , a p p l y i n g t h e same s t a n d a r d a s the t r i a l court applied. A m e r i c a n Gen. Life & A c c i d e n t I n s . Co. v . U n d e r w o o d , 886 So. 2 d 8 0 7 , 811 (Ala. 2 0 0 4 ) . I n a d d i t i o n , ' [ t ] h i s c o u r t r e v i e w s de novo a t r i a l c o u r t ' s i n t e r p r e t a t i o n of a s t a t u t e , because o n l y a q u e s t i o n of law i s p r e s e n t e d . ' Scott B r i d g e Co. v . W r i g h t , 883 So. 2d 1 2 2 1 , 1223 (Ala. 2003). Where, as h e r e , t h e f a c t s o f a c a s e are e s s e n t i a l l y u n d i s p u t e d , t h i s C o u r t must determine whether the t r i a l c o u r t m i s a p p l i e d the law to the u n d i s p u t e d f a c t s , a p p l y i n g a de n o v o s t a n d a r d of review. C a r t e r v . C i t y o f H a l e y v i l l e , 669 So. 2d 812, 815 ( A l a . 1995). Here, in reviewing the [entry] o f a s u m m a r y j u d g m e n t when t h e f a c t s a r e undisputed, we r e v i e w de n o v o t h e t r i a l court's interpretation of statutory language and our p r e v i o u s c a s e l a w on a c o n t r o l l i n g q u e s t i o n o f l a w . " Continental Nat'l 35 (Ala. I n d e m . Co. This will not addressed the issue 1 honored. Ala. 42 926 So. 2d 1033, 1034¬ 2005). III. policy v. F i e l d s , be Analysis the first time whether a specific provision of m e d i c a l payments providing for a setoff Alabama In Employers N a t i o n a l Insurance 236 So. 2d 699 (Ala. 1970), Co. the v. courts in have a UM should be Parker, insurer filed 286 a A s d e f i n e d i n M c K i n n e y ' s p o l i c y , and 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 "UM," " 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 " refer to both uninsured and underinsured m o t o r i s t s and m o t o r v e h i c l e s . This i s also consistent with the statutory provision addressing underinsured-motorist coverage. See n o t e i n f r a 4. 1 7 1071506 declaratory-judgment liability -- that action seeking a determination of f o r UM b e n e f i t s a n d c o n t e n d e d -- among o t h e r the t r i a l court erred i n concluding i t s things that "medical p a y m e n t made t o t h e i n s u r e d under the 'Expenses F o r M e d i c a l Services' coverage of the p o l i c y ' h a s no e f f e c t u p o n t h e u n i n s u r e d motorist coverage.' The a r g u m e n t i s made t h a t t h e i n s u r e r w i l l be c o m p e l l e d t o p a y t h e i n s u r e d t w i c e f o r t h e same e x p e n s e s , since medical expenses would be included i n the recovery under the uninsured motorist coverage." 286 Ala. The policy a t 48-49, Parker 236 S o . 2 d a t 7 0 4 . Court however, i n t h a t case d i d not c o n t a i n of t h e i n s u r e r ' s medical owed b y i t u n d e r the noted, Court noted the insurer's the any payment of the p o l i c y . concession otherwise Specifically, that "'[a]ll the cases that [ i t had] f o u n d [concerning this issue] relate to s i t u a t i o n s where e i t h e r a s t a t u t e o r an express clause of the p o l i c y provides that medical payments once paid under the medical payment provision may be thus deducted i n considering the uninsured motorist provision. T h e s e c a s e s a r e shown in the annotation o f 24 A . L . R . 3 d a t p a g e 1356, e t s e q . T h e r e d o e s n o t a p p e a r t o be any provision i n Policy 213003 which c o n t a i n s s u c h an e x p r e s s p r o v i s i o n . ' " 8 insurance a provision f o r the setoff payment a g a i n s t t h e UM c l a u s e that 1071506 286 The Ala. a t 4 9 , 236 S o . 2 d a t 705 Court concluded that (quoting because the insurer's policy brief). in question "list[s] s e p a r a t e premiums f o r m e d i c a l payments and u n i n s u r e d motorist coverage," in i t s policy obligations insurer] and because t h e i n s u r e r any under provision these two "failed to insert i t s respective relating independent covenants, c a n n o t now be h e a r d t o c o m p l a i n i f i t i s h e l d promises." Id. clause allowing policy would Thus, a not the Parker setoff of medical violate the § 3 2 - 7 - 2 3 , A l a . Code 1975 Relying on P a r k e r , same conclusion Civ. App. insured can motorist provision time, c o l l e c t payments within o f an 4 2 3 S o . 2 d 901 ( A l a . concerned the issue i t s insurer from under insurance o f t h e same p o l i c y . " McKinney, the insured recover motorist which should UM Act"). v. G r i f f i n , provision to a a statute, policy "whether the a n d , a t t h e same 423 S o . 2 d a t 9 0 2 . i n Russell actual have contended damages included 9 an uninsured f r o m t h e same i n s u r e r u n d e r t h e m e d i c a l entitled that the Court of C i v i l Appeals reached the Russell collect to both indicated uninsured-motorist ( " t h e UM i n Russell 1982). Court [the against that the her medical payments Similar to " s h e [was] uninsured expenses." 1071506 423 So. 2d a t 903. question As i n P a r k e r , [did] not contain deducting payments made a to "the insurance provision an insured policy i n for offsetting under the or medical p a y m e n t s p r o v i s i o n f r o m a n y p a y m e n t s t o b e made t o t h e i n s u r e d under The the uninsured Court of C i v i l motorist Appeals provision." 423 So. 2d a t 904. reasoned: "[A]s stated i n Parker, a specific provision a l l o w i n g an o f f s e t o f m e d i c a l p a y m e n t s a g a i n s t a recovery under the uninsured m o t o r i s t p r o v i s i o n i s necessary to prevent a s o - c a l l e d double recovery i n the i n s t a n t case. ... "In the absence of such a p r o v i s i o n i n the insurance policy i n question, [the insured] i s e n t i t l e d t o r e c o v e r a l l o f h e r damages, i n c l u d i n g medical expenses, from the uninsured tort-feasor, Griffin, and thus a g a i n s t [ t h e i n s u r e r ] under t h e u n i n s u r e d m o t o r i s t p r o v i s i o n o f i t s p o l i c y up t o t h e policy limit. 423 So. 2d a t 904. In Griffin v. B a t t l e s , 1995), the Court of C i v i l setoff provisions circumstances. Battles, involved in negligently Appeals i n a UM In G r i f f i n , an u n i n s u r e d an 656 S o . 2 d 1 2 2 1 policy Mary motorist, automobile or wantonly addressed under 10 App. the v i a b i l i t y of a different set of Simon Griffin alleging that she had been that Battles accident; caused (Ala. Civ. the accident; sued and t h a t Dwayne had as a 1071506 result and of the a c c i d e n t , G r i f f i n sustained property had suffered personal damage t o h e r a u t o m o b i l e . d i s c l o s e d t h a t G r i f f i n had r e c e i v e d $20,500 company, pursuant information found was to provided for Griffin damages o f and had received be allowed should be relieved that to the j u r y against $20,500 a setoff court granted from her trial due of record insurance that trial. and this The awarded jury Griffin court denied appeal, amount, company, satisfied. he and, t h e r e f o r e , against Griffin him. and The ordered f i l e d a post- court's r u l i n g , but the motion. the Court court's allowance C i v i l Appeals insurance B a t t l e s ' s motion f o r a s e t o f f her t o be r e v e r s e d . arguing that because the judgment judgment motion o b j e c t i n g t o the t r i a l On and during Battles f o r that of paying t h e j u d g m e n t be m a r k e d trial from her coverage, f i l e d a motion f o r a s e t o f f , should trial UM The $11,105. Battles Griffin her injury of C i v i l Appeals of a b e n e f i c i a l R e l y i n g on P a r k e r concluded setoff that the to Battles and R u s s e l l , the reasoned: "An i n s u r a n c e c o m p a n y may be a l l o w e d t o set-off d a m a g e s when t h e p o l i c y c o n t a i n s e x p r e s s set-off p r o v i s i o n s i n i t s coverage f o r separate types of claims, e.g., medical payments coverage and 11 was Court 1071506 uninsured motorist coverage. ... In o t h e r words, w h i l e s e t - o f f may be c l a i m e d b y G r i f f i n ' s i n s u r e r b y v i r t u e o f an e x p r e s s p r o v i s i o n i n i t s p o l i c y , t h a t set-off is not available to Battles, the t o r t - f e a s o r , and t h e t r i a l c o u r t e r r e d i n a l l o w i n g Battles the benefit of an insurance set-off a v a i l a b l e o n l y b y an e x p r e s s r e s e r v a t i o n . " 656 So. 2d at 1224-25 (citing i t i s true that Parker and Russell (emphasis added)). Although setoffs[, by] preclude 389, the same setoffs." 390 reached in express does McKinney and that these three his cases allowing the presented here, cases, whether would is be when t h e UM did the requested which violated i n s u r e d has coverage. brief We by not this Co., today 717 this We Court conflict however, as that in none of enter addressed a judgment the concern in the underlying of 2d Appeals in note, for not So. Civil Moreover, a aforesaid the UM Act setoff provision f o r o n l y the s t a t u t o r y minimum that 12 of actually enforcement does conclusion Court, policy contracted hold Ins. t h e r e f o r e , i s not court public the 32-7-23 statute. to provide § Court setoff. was the The the Griffin, terms of the in ... Allstate 1 998). r e s t a t e d i n R u s s e l l and the v. App. Parker, with 32-7-23 does not reasoning, Guess (Ala. Civ. "§ enforcement of a setoff 1071506 provision would she in this prevent the is "legally Unlike the Nationwide include v i o l a t e s that insured recovering entitled parties agreed an circumstance McKinney's UM reduced any by to a sums p a i d the to be McKinney It is well to the contracts terms, can then I f the is payable literally under The UM 2 McKinney insurance The that and does provision payable under ... language the will in be Medical and i n t e r p r e t e d t o mean t h a t the benefits will the Act. or is clear be r e d u c e d by a l l medical-payments s e t t l e d that "insurance rules applicable p o l i c y i s c l e a r and no the "[d]amages policy." same g e n e r a l there of that or d a m a g e s he Griffin, provision. t o M c K i n n e y f o r UM policy. subject contract amount p a i d u n a m b i g u o u s and and states policy the under setoff Payments coverage i n t h i s amount p a i d recover" in Russell upon express from p o l i c y when i t question of portion contracts to other of are written unambiguous i n i t s interpretation or I n y e t a n o t h e r c a s e , Alabama Farm B u r e a u M u t u a l C a s u a l t y I n s u r a n c e Co. v . H u m p h r e y , 54 A l a . App. 343, 308 So.2d 255 (Ala. C i v . App. 1975), the C o u r t of C i v i l A p p e a l s a d d r e s s e d t h e i s s u e o f a m e d i c a l - b e n e f i t s s e t o f f p r o v i s i o n i n e v e n more depth. Humphrey i s d i s c u s s e d infra. 2 13 1071506 construction." American Co., 1226, 699 As before So. 2d both p a r t i e s the Court in 1228 & Foreign (Ala. in the The UM 1997). agree, however, the this case c o n t r a c t u a l p r o v i s i o n , c l e a r and i s made i n v a l i d Ins. is Co. v. Tee Jays 3 controlling whether the question above-quoted u n a m b i g u o u s t h o u g h i t may o r u n e n f o r c e a b l e by Mfg. be, the p u b l i c p o l i c y embodied Act. UM Act provides, in 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 f r o m l i a b i l i t y i m p o s e d 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 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 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 m o t o r 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, in limits for bodily i n j u r y or d e a t h s e t forth in 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 the protection 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 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 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 because of I n e s s e n c e , the p a r t i e s have c o n t r a c t e d f o r the i n c l u s i o n i n the p o l i c y of a m e d i c a l b e n e f i t t h a t i s p a y a b l e to c o v e r i n c u r r e d medical expenses without a w a i t i n g a determination w h e t h e r t h e t o r t f e a s o r i s u n i n s u r e d and w i t h o u t a w a i t i n g a determination of the f i n a l amount t h e insured is "legally e n t i t l e d to recover" from the t o r t f e a s o r . Also, benefits r e c e i v e d u n d e r t h e m e d i c a l - b e n e f i t c l a u s e may be r e t a i n e d e v e n i f i t u l t i m a t e l y i s d e t e r m i n e d t h a t the t o r t f e a s o r i s not uninsured. 3 14 1071506 b o d i l y i n j u r y , s i c k n e s s or disease, i n c l u d i n g resulting therefrom death, " ( b ) The t e r m ' u n i n s u r e d m o t o r v e h i c l e ' shall i n c l u d e , but i s not l i m i t e d t o , motor v e h i c l e s w i t h respect to which: fi "(4) The sum of the limits of l i a b i l i t y under a l l b o d i l y i n j u r y l i a b i l i t y bonds and i n s u r a n c e p o l i c i e s a v a i l a b l e t o an i n j u r e d p e r s o n a f t e r an a c c i d e n t i s l e s s t h a n t h e damages w h i c h t h e i n j u r e d p e r s o n is l e g a l l y e n t i t l e d to recover." 4 (Emphasis added.) vehicle-liability coverage at a At the time statutes set minimum of As t h e C o u r t o f C i v i l A l l s t a t e , 717 S o . 2 d a t 3 9 0 : 4 applicable the $20,000 Appeals here, required per our limits person, explained motorfor unless in Guess "In 1984 our legislature amended the term 'uninsured motor v e h i c l e ' to i n c l u d e ' u n d e r i n s u r e d ' motor v e h i c l e . See § 3 2 - 7 - 2 3 ( b ) ( 4 ) . Underinsured m o t o r i s t c o v e r a g e a p p l i e s 'where t h e n e g l i g e n t o r w a n t o n t o r t f e a s o r h a s some l i a b i l i t y i n s u r a n c e b u t does not have enough t o f u l l y compensate t h e v i c t i m s of h i s negligence or wantonness.' Hardy v. Progressive I n s . C o . , 531 S o . 2 d 8 8 5 , 887 ( A l a . 1988). (Emphasis added.) 15 UM the v. 1071506 coverage insured. was specifically rejected by the named 5 In L e F e v r e v. W e s t b e r r y , Court in writing 590 So. 2d r e v i e w e d t h e a d o p t i o n o f t h e UM 154 ( A l a . 1991), the Act: "In 1966, the Alabama L e g i s l a t u r e joined a g r o w i n g number o f s t a t e s i n e n a c t i n g legislation mandating that insurers offer uninsured motorist coverage to persons insured under automobile l i a b i l i t y p o l i c i e s i s s u e d b y t h e i n s u r e r . 1965 A l a . A c t s 866 ( c o d i f i e d a t A l a . Code 1975, § 3 2 - 7 - 2 3 ) . The p o l i c y o f c o m p e n s a t i o n u n d e r l y i n g t h e s t a t u t e was 'to p r o v i d e f i n a n c i a l recompense to i n n o c e n t p e r s o n s who a r e i n j u r e d a n d t o d e p e n d e n t s o f t h o s e who are k i l l e d because of the w r o n g f u l conduct of uninsured motorists.'" 590 So. Act requires be 2 d a t 156 "legally operator further of (citation that, t o be entitled the to o m i t t e d ; emphasis entitled t o UM benefits, r e c o v e r " damages uninsured vehicle. added). As from the The the the UM insured owner LeFevre or Court explained: "Uninsured m o t o r i s t coverage i n Alabama i s a hybrid i n that i t blends the features of both first-party and third-party coverage. The f i r s t - p a r t y aspect i s e v i d e n t i n that the i n s u r e d Section 32-7-23 s e t s t h e r e q u i r e d d o l l a r amounts of c o v e r a g e by r e f e r e n c e t o § 3 7 - 2 - 6 ( c ) , w h i c h a t t h e t i m e o f McKinney's accident s e t t h e minimum c o v e r a g e at $20,000; § 3 7 - 2 - 6 ( c ) was a m e n d e d i n 2 0 0 8 t o p r o v i d e f o r c o v e r a g e o f "not l e s s t h a n t w e n t y - f i v e t h o u s a n d d o l l a r s ($25,000) because of b o d i l y injury t o o r d e a t h t o one person i n any one accident." A c t No. 2 0 0 8 - 3 9 3 , § 1, A l a . A c t s 2 0 0 8 . 5 16 1071506 m a k e s a c l a i m u n d e r h i s own c o n t r a c t . A t t h e same time, however, t h i r d - p a r t y l i a b i l i t y p r i n c i p l e s a l s o are operating i n t h a t the coverage requires the i n s u r e d t o be ' l e g a l l y e n t i t l e d ' t o c o l l e c t -- t h a t i s , t h e i n s u r e d m u s t be a b l e t o e s t a b l i s h f a u l t on t h e p a r t o f t h e u n i n s u r e d m o t o r i s t a n d m u s t be a b l e t o p r o v e t h e e x t e n t o f t h e d a m a g e s t o w h i c h he or s h e w o u l d be e n t i t l e d . " 590 So. 2d at Among t h e this Court Cahoon, 287 is 159 (emphasis added). cases relied State Farm M u t u a l Ala. 462, 252 upon by So. Court considered the q u e s t i o n an could injured party owed to benefits i t s insured payable to McKinney Automobile 2d 619 UM by the the insured Insurance (1971), whether the reduce in his brief in liability coverage b e n e f i t s amount by of his workers' employer. Co. which v. the insurer of otherwise compensation The observed: "[In S a f e c o I n s u r a n c e Co. o f A m e r i c a v . J o n e s , 28 6 Ala. 606, 243 S o . 2 d 736 ( 1 9 7 0 ) , ] we c o n s i d e r e d the v a l i d i t y o f a p r o v i s i o n o f v i r t u a l l y t h e same i m p o r t as t h a t s e t o u t a b o v e . We h e l d t h a t ... an i n s u r e r c a n n o t a v o i d t h e l i a b i l i t y i m p o s e d by our U n i n s u r e d M o t o r i s t A c t by i n s e r t i n g i n t o a p o l i c y a l i a b i l i t y limiting clause restricting an insured from recovering actual damages suffered, within the l i m i t s of a p o l i c y , where premiums have been p a i d f o r s u c h u n i n s u r e d m o t o r i s t c o v e r a g e , e v e n t h o u g h an i n s u r e d has other s i m i l a r insurance a v a i l a b l e to him." 17 to Court 1071506 287 A l a . at Cahoon C o u r t 466, 252 So. 2d then quoted from at 621 Safeco (emphasis as added). The follows: "'We h o l d t h a t our s t a t u t e s e t s the minimum amount f o r r e c o v e r y , but i t does n o t p l a c e a l i m i t on t h e t o t a l a m o u n t o f recovery so l o n g as t h a t a m o u n t d o e s n o t exceed t h e amount o f a c t u a l l o s s ; that where the l o s s exceeds the l i m i t of one p o l i c y , t h e i n s u r e d may p r o c e e d u n d e r o t h e r available policies; and that where the premiums have been paid for uninsured motorist coverage, we cannot permit an insurer to avoid i t s s t a t u t o r i l y imposed l i a b i l i t y by i t s i n s e r t i o n i n t o t h e p o l i c y of a liability limiting clause which r e s t r i c t s the i n s u r e d from r e c e i v i n g t h a t c o v e r a g e f o r w h i c h t h e premium has been paid.'" 287 A l a . a t 4 6 6 , America (1970) v. Jones, (emphasis Consistent the 252 statutory So. 28 6 2 d a t 621 Ala. 60 6, (quoting 614, 2d noted 384, 387 243 So. 2d 736, of 742 added)). with the purpose above-emphasized of providing amount o f a c t u a l damages s u f f e r e d by Court S a f e c o I n s . Co. in Criterion passages regarding UM coverage the injured party, I n s u r a n c e Co. up v. A n d e r s o n , to 347 ( A l a . 1977): "[T]he legislative purpose behind the uninsured m o t o r i s t s t a t u t e was t o p u t t h e i n s u r e d i n t h e same p o s i t i o n he w o u l d h a v e b e e n i n i f t h e t o r t f e a s o r h a d been a l i a b i l i t y i n s u r a n c e p o l i c y h o l d e r . 18 the this So. 1071506 "Our own C o u r t o f C i v i l A p p e a l s h e l d i n H i g g i n s v. N a t i o n w i d e Mutual Insurance Co., 50 A l a . App. 6 9 1 , 6 9 5 , 282 So. 2 d 2 9 5 , 300 (1973), a f f ' d H i g g i n s [291 A l a . 4 6 2 , 282 So. 2d 301 (1973)]: "'... i t a p p e a r s t o us f r o m t h e p l a i n and unambiguous w o r d i n g of the s t a t u t e , t h a t i t i s the b a s i c purpose of the [UM] A c t , and thus the p u b l i c p o l i c y of the State as to this matter, that Alabama citizens purchasing automobile liability insurance be able to obtain for an additional premium the same p r o t e c t i o n a g a i n s t i n j u r y o r d e a t h a t t h e h a n d s o f an u n i n s u r e d m o t o r i s t as t h e y w o u l d h a v e h a d i f t h a t m o t o r i s t had o b t a i n e d f o r h i m s e l f t h e minimum l i a b i l i t y c o v e r a g e r e q u i r e d by the S a f e t y R e s p o n s i b i l i t y A c t . (some e m p h a s i s With the consideration added.) foregoing of the principles o p i n i o n of the Alabama Farm B u r e a u M u t u a l C a s u a l t y 54 Ala. App. 343, Humphrey a d d r e s s e d more d e t a i l of this than 308 the So. 2d Court turn of C i v i l Insurance 255 we (Ala. Co. Civ. now to Appeals v. a in Humphrey, App. 1 975). i s s u e of a m e d i c a l - s e t o f f p r o v i s i o n i n d i d the a n a l y s i s -- i n mind, three Parker, cases Russell, discussed and at the outset Griffin: "In [Alabama Farm B u r e a u C a s u a l t y Insurance C o m p a n y v . ] C l e m , [49 A l a . A p p . 4 5 7 , 273 So. 2 d 218 (Ala. C i v . App. 1 9 7 3 ) , ] we p o i n t e d out t h a t the Alabama uninsured motorist statute contained no p r o v i s i o n a s t o r i g h t s o f s u b r o g a t i o n , a s do the s t a t u t e s i n some o t h e r s t a t e s . We f u r t h e r p o i n t e d out t h e p r i n c i p l e e n u n c i a t e d by our Supreme C o u r t i n 19 1071506 other cases. That principle i s , the uninsured m o t o r i s t s t a t u t e i s t o be c o n s t r u e d so as t o a s s u r e a p e r s o n i n j u r e d b y a n u n i n s u r e d m o t o r i s t t h a t he will be able to recover, from whatever source a v a i l a b l e , up t o t h e t o t a l a m o u n t o f h i s d a m a g e s . The i n s u r e r w i l l n o t be p e r m i t t e d t o i n s e r t any p r o v i s i o n i n i t s p o l i c y l i m i t i n g such r e c o v e r y by the i n s u r e d . 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 , 2 4 3 S o . 2 d 736 [ ( 1 9 7 0 ) ] ; S t a t e F a r m M u t u a l A u t o . I n s . C o . v . C a h o o n , 287 A l a . 4 6 2 , 252 So. 2 d 619 [ ( 1 9 7 1 ) ] ; E m p l o y e r s L i a b i l i t y Assurance C o r p . , L t d . v . J a c k s o n , 2 8 9 A l a . 6 7 3 , 270 S o . 2 d 806 [ ( 1 9 7 4 ) ] ; G r e a t C e n t r a l I n s u r a n c e Co. v . E d g e , [292] Ala. [ 6 1 3 ] , 298 S o . 2 d 607 [ ( 1 9 7 4 ) ] . " 54 A l a . App. reasoned that at a 346, 308 So. subrogation 2d at clause 257. the than the uninsured motorist i n t e n t of the uninsured 346-47, out, insured may i s invalid and c o n t r a r y t o not Nonetheless, recover i f he the court has pointed been fully 54 A l a . A p p . 3 4 7 , 308 S o . 2 d a t 2 5 8 . The H u m p h r e y payment be at issue, from t o r t - f e a s o r s c o m p e n s a t e d f o r h i s damages b y any t o r t - f e a s o r . " at then m o t o r i s t s t a t u t e . " 54 A l a . A p p . a t 308 S o . 2 d a t 2 5 7 - 5 8 . "an court i n the p o l i c y "when a p p l i e d t o s e t t l e m e n t w i t h o r r e c o v e r y other The court t o the i n s u r e d under set o f f against under then t h e UM proceeded to consider a medical-benefits t h e amount otherwise p r o v i s i o n of the p o l i c y whether clause a could owed b y t h e i n s u r e r i n a case i n which (a) t h e o n l y d a m a g e s t h e i n s u r e d was " l e g a l l y e n t i t l e d t o r e c o v e r " 20 1071506 from the tortfeasor claim asserted was t h o s e damages a t the $17,500 settlement (with and insured's to the a medical damages $ 2 6 , 5 0 0 , an insured motorist) which the to benefits depends on insured is entitled to in 6 could have not determined ultimately total first that, amount of medical the tanto uninsured part of to concluded paid both of insured medical benefits explained had Because been the the jury a pro coverage. recover the received other court It that the the the improper. (b) than had the ability had jury a s e t o f f of the given $ 1 0 , 0 0 0 UM expenses allowing rule, already insured's entitled," be damages, amount l e s s t h a n t h e tortfeasor "legally would punitive a w r o n g f u l - d e a t h c l a i m and set the were by the be that the as insurer a general benefits actual the and damages UM the recover: "The m e d i c a l p a y m e n t c o v e r a g e a n d t h e u n i n s u r e d m o t o r i s t coverage are s e p a r a t e i n the p o l i c y . Each requires a payment of premium. I t seems t h a t i f actual damages of the policyholder exceed[] the maximum o f the uninsured motorist coverage, the i n s u r e d has a c c e s s t o t h e m e d i c a l p a y m e n t s c o v e r a g e , i f a v a i l a b l e under the f a c t s . I f a c t u a l damages a r e p a i d w i t h i n the u n i n s u r e d m o t o r i s t coverage, there i s no r i g h t t o p a y m e n t u n d e r t h e m e d i c a l p a y m e n t In the s e t o f f cases of L e F e v r e , Cahoon, and Safeco discussed a b o v e , t h e t o t a l damages s u f f e r e d by t h e insured exceeded the combined total of the UM coverage and the coverage f o r which the i n s u r e r sought a s e t o f f . 6 21 1071506 coverage. Defendant appears i n i t s argument i n b r i e f . to agree with this view " I n t h i s c a s e , an a c t i o n f o r w r o n g f u l death, a c t u a l damages were d e t e r m i n e d t o be $26,500.00, $ 9 , 0 0 0 . 0 0 o f w h i c h was due from defendant. Such damages were p u n i t i v e and d i d n o t i n c l u d e m e d i c a l e x p e n s e s c o v e r e d by t h e m e d i c a l payment p r o v i s i o n o f the p o l i c y . To a l l o w s e t - o f f o f m e d i c a l p a y m e n t i n this case would l i m i t the r i g h t of r e c o v e r y of actual damages under the uninsured motorist coverage. Such i s c o n t r a r y t o the p r i n c i p l e s t a t e d by S a f e c o v. J o n e s , s u p r a , Clem, s u p r a , and o t h e r cases c i t e d hereinabove." 54 A l a . App. at 347, 308 So. 2d at 258 (emphasis added). Thus, d e s p i t e t h e f a c t t h a t t h e t o t a l damages t o w h i c h insured amount and was of "legally the the did insured's recovery the a d d i t i o n a l insured, entitled" from a m o u n t o f t h e UM particular nature not of exceed one of benefits the the the t o be damages at combined tortfeasors p a i d to setoff regarding (a) d i d n o t v i o l a t e placing the position than i f the judgment was entered minimum and (b) i n s u r e d the f u l l insured uninsured had actually application been was the above-stated in the tortfeasor insured necessary o f i t s UM 22 same, but to coverage medical- principles no against at the i s s u e meant t h a t t h e Humphrey c o u r t ' s d e c i s i o n n o t t o e n f o r c e t h e benefit the the better, whom the statutory afford to the to the damages 1071506 the insured that was legally the one expenses of case hand, covered t h e damages differs this a minimum h a n d , we within t h e UM i f the objective coverage know of recover t o know t h a t the damages of what t h e i n s u r e d t h e amount Because erred we in payment know respects: case; clause also are part entitled to recover." coverage and l o g i c a l l y i s to put the insured by the must i n the i f the t o r t f e a s o r had t h e UM Act. On the held other medical-benefit already a t h e UM as clause entitled insured i s legally entitled to t h o s e d a m a g e s do i n f a c t e x c e e d t h e t o t a l this, allowing against the of coverage Nonetheless, "legally required i n two from t h e p a r t i e s ' s t i p u l a t i o n s enough about t h e amount and as d e t e r m i n e d i n wrongful-death i s "legally same, b u t no b e t t e r , p o s i t i o n t h a n the Humphrey by t h e m e d i c a l - b e n e f i t fall considered from i s not the insured They t h e r e f o r e be to recover, judgment. The p r e s e n t On entitled to we has r e c o v e r e d from the t o r t f e a s o r a v a i l a b l e under can conclude full setoff of that the t h e UM provision. the t r i a l medical court benefits coverage. noted, the are part recover" 23 expenses covered by the o f t h e damages t h e i n s u r e d i s and, therefore, unlike in 1071506 Humphrey, put logically the insured the the total entitled had amount recovered insurer under setoff of to recover coverage been a minimum-liability-insurance What we do n o t know i n t h i s already UM i f the objective i s to i n t h e same, b u t no b e t t e r , p o s i t i o n t h a n i f tortfeasor policyholder. must be c o n s i d e r e d the damages exceeds the the combined respect i s whether insured total is legally o f t h e amount by McKinney from t h e t o r t f e a s o r and from t h e the medical-benefits a v a i l a b l e under i s appropriate. clause, the p o l i c y . To t h e e x t e n t and t h e amount o f I f they they fall do, t h e n short of no this amount, e n f o r c e m e n t o f t h e 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 a t issue would achieved amounts not by of our UM "recompense" conflict with legislature coverage an purpose in prescribing that insured the by h i s or law her must sought certain be actual to minimum available damages, be but to no more. Our the understanding UM other Act i s i n line states enacting v. of the l e g i s l a t u r e ' s as to with the the understanding intent of their comparable, i f not i d e n t i c a l , Illinois National intent i n enacting Insurance 24 Co., of courts in legislatures in UM s t a t u t e s . 1 Ill. App. In Melson 3 d 1 0 2 5 , 274 1071506 N.E.2d law in courts 664 (1971), i t s own the state, Illinois but i n three other states c o u r t not also only addressed explained Louisiana, the New holdings York and of North Dakota: "Although no decision involving the i n t e r p r e t a t i o n o f t h e p r o v i s i o n has been c i t e d , our r e s e a r c h has r e v e a l e d t h r e e c a s e s i n t e r p r e t i n g t h e i d e n t i c a l provision appearing i n p l a i n t i f f ' s policy. See, T a y l o r v. S t a t e Farm M u t u a l A u t o m o b i l e I n s . Co., 237 So. 2 d 690 ( L a . A p p . 1 9 7 0 ) ; H u t c h i s o n v . H a r t f o r d Accident & Indemnity Co., 34 A.D.2d 1010, 312 N.Y.S.2d 789 (1970); Wittig v. United Services A u t o m o b i l e A s s o c i a t i o n , 300 F. S u p p . 679 (N.D. I n d . 1969). These c a s e s b a s e d t h e i r i n t e r p r e t a t i o n s upon the r a t i o n a l e t h a t : "'... (the medical payment crediting p r o v i s i o n i s ) designed o n l y to p r o t e c t the i n s u r a n c e company f r o m d o u b l e e x p o s u r e f o r m e d i c a l payments. Thus i t p r e v e n t s an i n s u r e d whose m e d i c a l e x p e n s e s have been p a i d under the M e d i c a l Payments Coverage from c o l l e c t i n g f o r those m e d i c a l expenses once a g a i n ( T a y l o r v. S t a t e Farm M u t u a l A u t o m o b i l e I n s . C o . , s u p r a , 237 So. 2d a t 6 9 3 ) . "The defendant i n the case at b a r does not d i s a g r e e w i t h t h i s r a t i o n a l e s i n c e i t has a d m i t t e d that the p r o v i s i o n i s d e s i g n e d so t h a t 'medical expenses a s an i t e m o f d a m a g e s f o r b o d i l y injury s h a l l n o t be p a i d t w i c e b y t h e i n s u r a n c e c o m p a n y . ' "The d e f e n d a n t h a s a d m i t t e d t h a t t h e p l a i n t i f f ' s d a m a g e s a r e i n e x c e s s o f $ 12 , 0 00.0 0 a n d t h e trial j u d g e f o u n d h i s d a m a g e s t o be g r e a t l y i n e x c e s s o f 25 the 1071506 that amount. Since the plaintiff has been compensated f o r $2,000.00 of m e d i c a l expenses he still has remaining a minimum of $10,000.00 in d a m a g e s w h i c h h a v e n o t b e e n p a i d as m e d i c a l e x p e n s e s a n d a r e n o t p a y a b l e a s s u c h s i n c e he h a s a l r e a d y e x h a u s t e d h i s m e d i c a l payment c o v e r a g e . Therefore, regardless i f the remaining $10,000.00 of his a d m i t t e d damages i s r e g a r d e d as m e d i c a l expenses, lost wages, damages for pain, suffering or f o r permanent d i s a b i l i t y , i t i s c l e a r t h a t d o u b l e payment w i l l not occur i f the l i m i t of u n i n s u r e d m o t o r i s t s coverage i s paid. " I t f o l l o w s t h a t d o u b l e payment can e x i s t , and that t h e r e f o r e the deduction p r o v i s i o n a p p l i e s , o n l y i f t h e t o t a l amount o f p r o v e n o r u n d i s p u t e d damages does not exceed the t o t a l of u n i n s u r e d m o t o r i s t s c o v e r a g e and m e d i c a l expense c o v e r a g e . Indeed, t h i s is the interpretation which Taylor, Wittig and H u t c h i s o n have a l l p l a c e d upon the p r o v i s i o n . "We hold that where the total proven or undisputed damages incurred by the insured are g r e a t e r than the combined t o t a l of u n i n s u r e d m o t o r i s t and m e d i c a l c o v e r a g e , t h e c r e d i t i n g p r o v i s i o n c a n n o t apply. Since the defendant admits that the p l a i n t i f f ' s d a m a g e s a r e i n e x c e s s o f $ 1 2 , 0 0 0 . 0 0 we affirm the summary judgment in the amount of $10,000.00." 1 Ill. App. In 3d a t 1 0 2 7 - 2 8 , 274 S t a t e Farm M u t u a l 125 Ga. App. of 696, Georgia enforceability benefits 188 also of N . E . 2 d a t 666 Automobile S . E . 2 d 813 expressly a Insurance v. Harper, (1972), the Court of Appeals for the insured's total 26 added). Co. differentiated provision p a y m e n t s when t h e (emphasis setoff between of the medical- damages e x c e e d the 1071506 amounts i t could recover u n d e r i t s UM a n d m e d i c a l c o v e r a g e when i t d o e s n o t , d i s t i n g u i s h i n g a n e a r l i e r the former case that fell category: "In this case the t r i a l judge d i d not give credit f o r t h e $1,000 the defendant paid each p l a i n t i f f under t h e p r o v i s i o n s f o r m e d i c a l payment b u t o n l y c r e d i t e d t h e t w o p a y m e n t s made u n d e r t h e u n i n s u r e d m o t o r i s t p r o v i s i o n t o t a l i n g $18,000. As a result the p r i n c i p a l amount of the judgment was $ 1 4 , 5 0 0 a l l o w i n g t h e p l a i n t i f f s t o r e c o v e r $ 3 4 , 5 0 0 on the two policies when their judgment on which recovery was predicated totaled $32,500. The p o l i c i e s c o n t a i n l a n g u a g e p r o v i d i n g t h a t t h e amount p a y a b l e as u n i n s u r e d m o t o r i s t s c o v e r a g e be r e d u c e d b y a n y sums p a i d u n d e r m e d i c a l c o v e r a g e . " I n P h i l l i p s v. S t a t e Farm Mut. A u t o . I n s . Co., [437 F . 2 d 365 (5 t h C i r . 1 9 7 1 ) ] , t h e f e d e r a l c o u r t h e l d t h a t sums p a i d u n d e r m e d i c a l p r o v i s i o n s o f a p o l i c y c o u l d n o t s e r v e t o r e d u c e t h e a m o u n t owed a s uninsured motorist coverage. In that case p l a i n t i f f had damages i n e x c e s s o f t h e $10,000 c o v e r a g e f o r uninsured motorists. We think the r e s u l t there r e a c h e d was c o r r e c t . "However, this i s not the s i t u a t i o n i n the instant case. H e r e u n d e r t h e two p o l i c i e s , the p l a i n t i f f s were a b l e t o r e c o v e r t h e f u l l amounts f o r their claims, to wit, $12,500 and $20,000 respectively. ... fi " I n s o f a r as t h e j u d g m e n t h e r e i n e n t e r e d the plaintiff recovery i n excess of the damages, i t i s e r r o r a n d must be reversed." 27 allowed actual and in 1071506 125 Ga. App. L e m r i c k v. 1978) (disallowing damages 666); from P.2d damages o f UM 744 exposure 1 the coverage, the policy and H a r t f o r d was 795 495, grounds (Utah 32 1985)); P.3d 289 B a s e d on has contracted the total exceed the the the the u n i n s u r e d by Beck Tolson foregoing, f o r the damages t h e insured's UM v. total proven or than c o v e r a g e and quoting with at 1028, 25 274 N.E.2d U t a h 2d 311, at 317, instant action, plaintiff's under was not motorist Farmers uninsured subject expenses. entitled Allstate the to Under to o f f s e t the coverage.") Ins. Ins. 108 such medical (Overruled Exchange, Co., double 701 Wash. P.2d App. (2001). only total v. (Iowa greater medical not also were limits Hartford circumstances, other the See N.W.2d 714 263 & I n d e m . Co., ("In 816-17. insured medical plaintiff's on the I l l . App.3d for payments a g a i n s t at because by and (1971) exceeded motorist setoff H a r t f o r d Acc. 739, S.E.2d R e i n s u r a n c e Co., a Melson, L y o n v. 188 incurred combined t o t a l approval 480 699-700, G r i n n e l l Mut. undisputed the at of we s t a t u t o r y m i n i m u m UM insured any c o n c l u d e t h a t w h e r e an are payment by coverage, and 28 any legally the insured coverage entitled to and recover tortfeasor's insurer, medical benefit also paid 1071506 by the l i a b i l i t y allowing against insurer to the insured, a policy provision t h e 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 t h e UM c o v e r a g e i s u n e n f o r c e a b l e policy. Accordingly, reversed. This proceedings Stuart, judgment i s remanded consistent with R E V E R S E D AND Cobb, cause the this payments as a m a t t e r o f p u b l i c of the to that trial court court i s for further opinion. REMANDED. Smith, Bolin, C . J . , and Lyons Parker, a n d Shaw, J J . , c o n c u r . and W o o d a l l , result. 29 J J . ,concur i n the 1071506 WOODALL, J u s t i c e The minimum required by McKinney's James (concurring limit § accident, McKinney's legally coverage. that of the coverage its [UM] a imposed insured from r e c e i v i n g 614, 243 liability 2d 736, and least already insurer, that McKinney $45,000 from received liability the $25,000, coverage. to recover the f u l l his amount policy. r e c o v e r y under i t paid $2,000 ... him the under UM his where the premiums have cannot liability limiting permit by an insurer i t s insertion clause that coverage 742 his However, § 32-7-23 " s e t s a minimum and S a f e c o I n s . Co. So. i s the the by we the McKinney's coverage. of at has by that reduced policy been p a i d . " recover afforded coverage, statutorily at that McKinney is entitled a m o u n t f o r r e c o v e r y , ... for and tortfeasor's argues m u s t be 1975, I n s u r a n c e Company, a g r e e McKinney medical-payments paid of McKinney Nationwide coverage amount Code $20,000, and limit t h e UM of to Consequently, of time entitled tortfeasor, the coverage Ala. was Fire result). u n i n s u r e d - m o t o r i s t ("UM") 32-7-23, Nationwide Mutual is of i n the which to avoid into the restricts the f o r which the premium o f A m e r i c a v . J o n e s , 286 A l a . (1970)(emphasis 30 been added). In has 606, other 1071506 words, "an insurer cannot avoid Uninsured Motorist A c t by inserting into a policy a limiting clause damages suffered, premiums insured have has Farm Mut. 2d 619, Mut. been Auto. 621 paid v. state with from collecting that coverage that a respect a 287 to holding Great Central 607, 609 even be under and, unenforceable. Consequently, So. Risk the law of an insurer then taking the in violation v. Edge, 252 (1971). precludes clause, State 213 that coverage, an the [UM] A l a . 613, 292 of rationale 616, (1974). than Mut. where though 466, 2d c a s e s make i t c l e a r t h a t p o l i c y t e r m s § actual Preferred So. ... our liability policy, also 251 coverage I n s . Co. restrictive Speciality See for certain would the A l a . 462, established a limiting by a v a i l a b l e to him." A l a . 251, [UM] premium 298 of coverage, added). firmly statute." thus, [UM] imposed from r e c o v e r i n g v . C a h o o n , 287 Holmes, away b y contrary Recent limits s i m i l a r insurance "rather this 2d insured (1971)(emphasis i t is So. an for I n s . Co. liability the within other I n s . Co. Thus, restricting the 32-7-23 Ins. Co., Nationwide are v o i d as See, e.g., 834 may So. not 31 2d against reduce 772 the a r e more public Walker 769, that v. policy GuideOne ( A l a . 2002). amount i t owes 1071506 McKinney under under h i s UM coverage by t h e amount the separate medical-payments For these reasons, I concur Cobb, C . J . , and L y o n s , only coverage. i n the J . , concur. 32 i t paid result. t o him

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