Frank v. Allstate Insurance Co.

ALMA WILSON, Justice,

dissenting:

Oh June 19, 1980, the appellant Gary B. Frank and his wife Linda Frank were riding together in their 1973 Toyota automobile. Mr. Frank was driving the car and Mrs. Frank was riding as a passenger when they suddenly became involved in a serious automobile accident. Their car was struck by another vehicle driven by an uninsured motorist who was undisputedly negligent. Mrs. Frank was killed in the accident, and Mr. Frank was severely injured. Specifically, Mr. Frank suffered permanent and disabling brain damage as a result of the accident.

Over the following year, medical expenses due to Mr. Frank’s injuries totalled $9,792.23 and the funeral expenses for Mrs. Frank totalled $2,610.00. In 1978, Mr. and Mrs. Frank had purchased an automobile policy from the appellee, Allstate Insurance Company, which was still in effect at the time of the accident. The policy covered both of the Frank’s 1973 Toyotas, serial numbers RA21102020 and RN 22038088 respectively. The Franks purchased a complete policy which included not only liability coverage, but also uninsured motorist coverage and medical payments coverage.

The policy shows that the Franks purchased uninsured motorist coverage of $10,000 per person ($20,000 per accident) for each car, and medical payments coverage of $2,000 per person for each car also. The policy coverage sheet shows that separate premiums were paid for each car and reads as follows:

COVERAGES, PREMIUMS AND OTHER POLICY INFORMATION

COVERAGE DESCRIPTION 73-TOYOT 73-TOYOT

AA & BB BODILY INJURY & PROPERTY DAMAGE LIAB. $ 74.00 $ 59.00

SS UNINSURED MOTORISTS 6.00 6.00

CC AUTO MEDICAL PAYMENTS 10.00 10.00

DD AUTO COLLISION 41.00 31.00

HH AUTO COMPREHENSIVE 14.00 8.00

TOTAL PREMIUM BY VEHICLE $145.00 $114.00

GOOD DRIVER RATE APPLIED YES YES

MULTIPLE CAR DISCOUNT YES YES

COMPACT CAR DISCOUNT YES YES

TOTAL PREMIUM $259.00

The policy also contained an explicit clause seeking to prevent the “stacking” of policy limits under the uninsured motorist coverage and also the medical payments coverage.

However, Allstate did “stack” the uninsured motorists coverage and paid a total of $40,000 in conformity with Keel v. MFA Insurance Company, 553 P.2d 153 (Okl.1976), and the line of cases following Keel. But Allstate refused to stack the medical payments coverage and reimbursed Mr. Frank only $2,000 for his medical expenses and $2,000 for Mrs. Frank’s funeral expenses. The appellant brought this suit seeking an additional reimbursement of $610 for Mrs. Frank and $2,000 for Mr. Frank. Both parties were in agreement as to the facts of this case, and moved for summary judgment. On March 9, 1983, the trial court judge granted summary judgment in favor of the appellee Allstate Insurance Company. The appellant argues on appeal that the clause seeking to prevent “stacking” of the medical payment *583coverages is contrary to public policy and therefore void.

The relevant clause of the policy states that:

COVERAGE CC-AUTOMOBILE MEDICAL PAYMENTS INSURANCE Limit of Allstate’s Liability
Regardless of the number of automobiles insured, only one of the limits of liability stated in the declarations as applicable to “each person” is the total limit of Allstate’s liability for all expenses incurred by or for each person as the result of any one accident. Further, if the accident involves an owned automobile, then the limit stated in the declarations as applicable to that automobile shall be the total limit of Allstate’s liability for each person.

Also relevant is General Condition #3 which states:

3. Insurance On Two or More Automobiles
When two or more automobiles are insured by this policy, the terms of this policy shall apply separately to each....

This Court has repeatedly held that clauses that seek to prevent “stacking” of uninsured motorist coverages are void. Keel v. MFA Insurance Co., supra; Richardson v. Allstate Insurance Co., 619 P.2d 594 (Okl.1980); Lake v. Wright, 657 P.2d 643 (Okl.1982); Babcock v. Adkins, 695 P.2d 1340 (Okl.1984); State Farm Mutual Auto Insurance Co. v. Wendt, 708 P.2d 581 (Okl.1985). In Keel this Court stated:

“The insured in this case has two policies for which he has paid an additional premium for uninsured motorist coverage. There is no dispute that both policies cover the insured in this accident. The pyramiding or the stacking of the policies is the only dispute. By imposition of both policies, the insured is not receiving a windfall. He has paid the insurer a premium for this protection, and is only attempting to recover the actual amount of his damages which are within the limits of both policies. On the other hand, the insurer has collected a premium for each policy. In such instance, it would be manifestly unjust to permit the insurer to avoid its statutorily imposed liability by its assertion of ‘other insurance clauses’ which would deny the insured from receiving that for which he has paid a premium.” Id. at 156.

This Court is clearly committed to the principles of Keel. Where insurance premiums have been paid for separate policies, then the insurer must provide coverage under the policy in order to avoid unjust enrichment of the insurer. State Farm Mutual Auto Insurance Co. v. Wendt, 708 P.2d at 585.

There is a split of authority in other jurisdictions as to whether the “stacking” principle should also apply to medical payment provisions. See e.g., Cameron Mutual Insurance Co. v. Madden, 533 S.W.2d 538 (Mo.1976); Pettid v. Edwards, 195 Neb. 713, 240 N.W.2d 344 (1976). See also 25 A.L.R.4th 66 (1983). No explicit Oklahoma authority exists on this issue. However, Aetna Casualty and Surety Company v. State Board for Property and Casualty Rates, 637 P.2d 1251 (Okl.1981), appeared to indicate that medical payment coverages should be “stacked” following the general principles of Keel. A federal court sitting in Oklahoma has also held that policy provisions prohibiting “stacking” of medical payment coverages are unenforceable. The federal court reasoned that no substantial difference between medical payment provisions and uninsured motorist provisions exists, since in either case, the insurer is attempting to deny coverage to the insured when the insurer has received a premium for such coverage. Duckett v. Allstate Insurance Company, 606 F.Supp. 728 (W.D.Okl.1985).

An outstanding commentator on insurance law has discussed the “stacking” issue and found the better view to be in favor of stacking stating that: *584tions literally, and do not permit a stacking of coverage. Others, cognizant of the fact that the company has collected a separate premium upon each vehicle insured, find this to be in violation of public policy, or find the policies to be ambiguous, and permit stacking in any situation. Still others permit stacking where the expenses incurred exceed the amount of such coverage provided by any single policy. Certainly this has some merit where it is recalled that under a medical payments provision, unlike a separate death or dismemberment proviso, the insurer is not liable automatically for a fixed sum but for the payment of expenses incurred up to the limit provided.

*583A more frequent problem arises in connection with medical expenses, in such a situation, assuming several coverages exist with a similar policy limitation. Again, some courts enforce such limita-

*584In reviewing this matter, the approach of some of the insurers — which include some of the largest in the industry — is quite surprising.... Since actuarial computations demonstrate that the true cost of such coverage is nominal, and a separate premium is paid upon each contract, it is quite surprising that the carriers do not voluntarily, and cheerfully, permit a stacking of such coverage. In most of such cases, the medical expense will be less than the limits of the first of these policies; if the expense is greater, the insured is in need of access to the funds promised, and it ill behooves his insurer, which cheerfully collected his premiums, to assert a defense which means so little in terms of total dollars to it. Appleman, Insurance Law and Practice § 4902.55 (1981).

I agree that provisions seeking to prohibit “stacking” of medical payments coverage are invalid where the medical expenses incurred exceed the amount of coverage provided by a single policy. The principle involved here is the same as in the uninsured motorist case of Keel. If an insured pays more than one premium, an insured is entitled to “stack” coverages. To do otherwise would allow unjust enrichment for the insurer, since the insurer would then receive payment and provide no coverage.

The judgment of the trial court should be reversed and the case remanded to the trial court with instructions to enter summary judgment in favor of the appellant.

I am authorized to state that SIMMS, C.J. and KAUGER, J. join the views expressed herein.