RECENT DECISIONS
By David Marsh and Tom Powell
In this issue, we primarily look at three generalinterest decisions from our Alabama Supreme Court that (1) addressed underinsured motorist coverage when the other driver works for a governmental entity, (2) determined whether the "sealed container" doctrine applies in a UCC breach of implied warranty action, and (3) revisited the "stream of commerce" test relating to personal jurisdiction in a product liability action.
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Kendall v. United Services Automobile Association, Ms. 1061472 (Ala. May 15, 2009) – Kendall suffered severe injuries when a vehicle operated by Mercer, an employee of the Elmore County District Attorney's office, ran a red light and struck Kendall's vehicle. This opinion says that Mercer was acting within the line and scope of her employment at the time of the collision, but fails to say whether Mercer was operating a county-owned vehicle (she presumably was). Kendall sued Mercer and Elmore County. Kendall's medical expenses exceeded $100,000. The county offered $100,000 – the amount of the statutory governmentalentity cap – to settle Kendall's claims against the county. Kendall notified her own insurer, USAA, of the settlement offer and Kendall demanded that USAA pay her $75,000, the policy limits of Kendall's underinsured motorist coverage. The county paid its $100,000 to Kendall and Kendall sued USAA for the UIM benefits. USAA moved for summary judgment on the basis that, because the statute caps the county's liability at $100,000 and Kendall had recovered that amount from the county, then Kendall was not "legally entitled to recover" damages against the county beyond that amount and USAA thus owed no UIM coverage beyond that amount. The trial court entered a summary judgment and Kendall appealed.
Justice Bolin's opinion for seven members of the Supreme Court (Chief Justice Cobb specially concurred and Justice Parker concurred in the result) affirmed the summary judgment, concluding that "[b]ecause Kendall had already recovered the statutory maximum of $100,000, she was no longer 'legally entitled to recover' damages from the County.
