227 So. 3d 475
Ala.2017Background
- Teresa Boop added liability and UM/UIM coverage for a pickup to an Alfa policy and listed her minor son as a rated driver; the policy’s "covered person" definition limited coverage to "any other person while using the covered car with the express permission of you or a family member."
- On May 23, 2010, Amy Arrington drove Boop’s pickup (allegedly without express permission), collided with the Grimeses, who were injured; Liberty Mutual insured the Grimeses’ vehicle and sued Arrington; the Grimeses sued Arrington and Boop.
- Arrington claimed she was a “covered person” under Boop’s Alfa policy and demanded defense/indemnity from Alfa; Alfa filed for declaratory judgment denying coverage because Arrington lacked express permission.
- Trial court found the Alfa policy limited coverage to users with express permission, declined to apply § 32‑7‑22 (MVSRA) to require coverage for implied permissive users, and entered judgment for Alfa; the Grimeses appealed.
- The core legal dispute: whether the Mandatory Liability Insurance Act (MLIA) and Motor Vehicle Safety Responsibility Act (MVSRA) require mandatory liability policies to cover permissive drivers who have only implied (not express) permission.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MLIA/MVSRA require liability policies to cover drivers with implied permission | Grimeses: § 32‑7‑22 (MVSRA) and Billups require coverage for express or implied permissive users; MLIA must be read in pari materia with MVSRA | Alfa: MLIA does not incorporate the MVSRA omnibus requirement for liability policies; courts have long recognized a distinction between automobile liability policies and motor‑vehicle liability (proof‑of‑financial‑responsibility) policies | Court: MLIA does not mandate an omnibus clause covering implied permissive users; insurer may limit coverage to express permission absent statutory or public‑policy conflict; affirmed trial court |
| Whether Billups requires all mandatory liability policies to include implied‑permission coverage | Grimeses: Billups held liability (and coextensive UM) coverage must include express or implied users | Alfa: Billups concerned UM coverage tied to a motor‑vehicle liability policy under MVSRA, not all policies issued under MLIA | Court: Billups does not control liability policies issued under the MLIA; MVSRA’s motor‑vehicle liability provisions are not automatically imported into MLIA policy requirements |
| Whether excluding implied permissive users violates public policy | Grimeses: public‑policy purpose of MLIA/MVSRA is to protect accident victims, so omnibus coverage should be required | Alfa: Public‑policy challenge fails because legislature omitted omnibus requirement from MLIA and allowed bonds/cash deposits to expressly cover implied users; insureds can buy broader coverage | Court: Public‑policy argument not sufficiently clear to override freedom to contract; exclusions are permissible unless they conflict with statute or clear public policy |
| Statutory construction: should MLIA be read in pari materia with MVSRA to require omnibus clauses | Grimeses: MLIA § 32‑7A‑25 directs pari materia construction; definitions and cross‑references compel inclusion of implied permissive users | Alfa: MLIA incorporated only minimum limits and OIVS mechanisms from MVSRA; legislature could have but did not add § 32‑7‑22 omnibus language to MLIA | Court: Because legislature did not expressly incorporate § 32‑7‑22 into MLIA’s mandatory insurance requirements, courts may not read omnibus coverage into MLIA policies |
Key Cases Cited
- Billups v. Alabama Farm Bureau Mut. Cas. Ins. Co., 352 So.2d 1097 (Ala. 1977) (held UM coverage must be coextensive with liability coverage and interpreted § 32‑7‑22 to require express or implied permissive‑user coverage in that context)
- Hubbard v. State Farm Mut. Auto. Ins. Co., 272 Ala. 181, 129 So.2d 669 (Ala. 1961) (distinguished between "automobile liability policy" for post‑accident purposes and "motor vehicle liability policy" as proof of financial responsibility)
- Mooradian v. Canal Ins. Co., 272 Ala. 373, 130 So.2d 915 (Ala. 1961) (explained MVSRA's limited retrospective reach and that compulsory proof of financial responsibility attaches only when required)
- Jennings v. Alfa Specialty Ins. Co., 906 So.2d 195 (Ala. Civ. App. 2005) (MLIA does not necessarily bar policy exclusions; legislature contemplated circumstances where mandatory policies would not provide coverage)
- Hooper v. Allstate Ins. Co., 571 So.2d 1001 (Ala. 1990) (courts enforce unambiguous insurance exclusions unless they violate statute or public policy)