Putman v. Womack

Citations: 607 So. 2d 166; 1992 Ala. LEXIS 1188; 1992 WL 281995Docket: 1910955

Court: Supreme Court of Alabama; October 16, 1992; Alabama; State Supreme Court

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A dispute arose regarding the distribution of uninsured motorist insurance proceeds among three claimants, following a car accident caused by uninsured motorist Dennis Howard Nail, resulting in two fatalities and one severe injury. The trial court divided the interpleaded fund of $100,000 equally among the claimants—Brandon Louis Pescevic, Thomas Scott Lanier, and Heather Womack—despite the fact that Lanier and Womack had received additional proceeds from their own automobile insurance policies, totaling $40,000 each. Ms. Putman, as administratrix of Pescevic's estate, appealed the decision, arguing it was inequitable not to consider the other recoveries in the division of the proceeds. The trial court based its ruling on written stipulations and did not hear oral testimony, allowing for a de novo review. The court affirmed the equal division, emphasizing that equity principles apply in interpleader actions. Ms. Putman suggested a "hotchpot" calculation, proposing that total recoveries from all policies ($180,000) should be divided equally among the claimants.

Mr. Lanier and Mr. Womack, having already recovered $40,000 each, would receive an additional $20,000 each from the interpleaded funds, while Ms. Putman would receive $60,000. Ms. Putman references *Sheehan v. Liberty Mutual Fire Insurance Co.*, arguing for an equitable distribution based on the 'unsatisfied portions' of their claims against an uninsured tortfeasor. In *Sheehan*, the court found equal division of funds inappropriate due to claimants having unequal losses. Although the claims here are equal, the amounts previously recovered by Mr. Lanier and Mr. Womack under their own policies create a difference in their net recoveries. The trial court noted that in *Sheehan*, all claimants could recover from a common fund, which is not the case here since the only common fund is the interpleaded proceeds that do not include amounts recovered under their own policies.

Ms. Putman argues that the trial court acted inequitably by granting Mr. Lanier and Mr. Womack stacking coverage under her policy, referencing *Travelers Insurance Co. v. Jones*, which allowed stacking for all insured persons, including those not named. Consequently, Mr. Lanier and Mr. Womack could stack coverage from Ms. Putman's second vehicle onto the coverage for the vehicle in the collision. The trial court awarded $33,333.33 plus one-third of the accrued interest to each insured, leading to Mr. Lanier and Mr. Womack receiving $73,333.33 each, while Ms. Putman received only $33,333.33. Ms. Putman asserts that the legislature did not intend for Class II insureds to benefit excessively at the expense of Class I insureds. However, the court concludes that the plain language of § 32-7-23(c) must be upheld, allowing all insured persons to stack coverages as intended by the legislation. Further discussion of legislative intent is deemed unnecessary for this appeal.

Ms. Putman is not covered under the uninsured motorist provisions of either the Lanier or Womack policies, hence she lacks the legal right to claim benefits from them. The principle of equitable distribution, as established by the maxim "equality is equity," applies here, indicating that when several parties have claims against a common fund that cannot fully satisfy all claims, the distribution should be pro rata. In this case, the proceeds from Ms. Putman’s policy represent the common fund, with three parties having equal claims. Since the fund is insufficient to cover all claims, it is equitable to divide the proceeds equally among the claimants. The trial court correctly ruled that Ms. Putman is entitled only to the proceeds from her own uninsured motorist policy, preventing her from recovering more than her proportional share from the interpleaded funds. The court's interpretation of legislative intent and its distribution of the proceeds are affirmed. The term "hotchpot" refers to pooling property for equal division, underscoring the equitable distribution principle. Courts are required to interpret statutes based on their clear language, enforcing them as written.