Bobby Clayton v. Essentia Insurance Company

CourtCourt of Appeals for the Eleventh Circuit
DecidedJuly 8, 2026
Docket24-13873
StatusPublished

This text of Bobby Clayton v. Essentia Insurance Company (Bobby Clayton v. Essentia Insurance Company) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bobby Clayton v. Essentia Insurance Company, (11th Cir. 2026).

Opinion

USCA11 Case: 24-13873 Document: 38-1 Date Filed: 07/08/2026 Page: 1 of 20

FOR PUBLICATION

In the United States Court of Appeals For the Eleventh Circuit ____________________ No. 24-13873 ____________________

BOBBY RAY CLAYTON, Plaintiff-Appellee, versus

ESSENTIA INSURANCE COMPANY, Defendant-Appellant. ____________________ Appeal from the United States District Court for the Middle District of Alabama D.C. Docket No. 2:23-cv-00441-KFP ____________________

Before BRASHER, KIDD, and WILSON, Circuit Judges. BRASHER, Circuit Judge: This appeal is about Alabama insurance law. Alabama law requires automobile liability policies to provide uninsured and un- derinsured motorist coverage in the amount of at least $25,000. ALA. CODE § 32-7-23; id. § 32-7-6(c). But Alabama law also allows USCA11 Case: 24-13873 Document: 38-1 Date Filed: 07/08/2026 Page: 2 of 20

2 Opinion of the Court 24-13873

for its coverage requirements to be fulfilled by a combination of policies from one or more carriers. Id. § 32-7-22(j). The Alabama Supreme Court has held that uninsured motorist coverage must be portable, meaning that it follows the individual covered by the pol- icy and is not tied to a particular vehicle. The question in this appeal is whether policy language is void under Alabama law if it means that an automobile liability policy does not provide $25,000 in portable uninsured and underinsured motorist coverage, even if the policy requires that the insured maintain other insurance that provides that coverage and the in- sured in fact maintains that separate policy. Every state court to have addressed the question under a similar state law has answered “no.” We predict that the Alabama Supreme Court would too. Ac- cordingly, we reverse. I.

Bobby Ray Clayton was injured by an uninsured motorist. At the time of his injury, he owned two vehicles relevant to this dispute: a motorcycle and an antique 1965 Ford F-100. Clayton was also a named insured under two policies: a standard auto insurance policy issued by GEICO that covered his motorcycle, and an ad- junctive specialty auto insurance policy issued by Essentia Insur- ance Company that covered his antique vehicle. Clayton paid an annual policy premium of $197.52 for his standard auto insurance policy and $117 for the adjunctive specialty policy. USCA11 Case: 24-13873 Document: 38-1 Date Filed: 07/08/2026 Page: 3 of 20

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At the time of the accident, Clayton was driving his motor- cycle. GEICO’s standard policy provided uninsured motorist cov- erage to the full extent required by Alabama law. See ALA. CODE § 32-7-6(c). And Clayton collected $25,000 under his GEICO policy. Because Clayton was not occupying or operating his antique 1965 Ford F-100 at the time of the accident, the Essentia policy did not provide additional uninsured motorist coverage. The Essentia in- surance contract limits what qualifies as a “covered auto” under the policy to antique or classic vehicles that are “maintained primarily for use in car club activities, exhibitions, parades, other functions of public interest or for a private collection” and are “used only in- frequently for other purposes.” Doc. 24-3 at 5. The Classic Auto- mobile Policy’s section on Uninsured Motorist Coverage narrowly defines who qualifies as an “insured” under the policy to include only named and non-named insureds strictly “while using or occu- pying [the] covered auto” or “while not occupying a motor vehi- cle.” Doc 24-3 at 30 (citation modified). The Liability Coverage sec- tion of the policy similarly defines “insured” as limited to incidents involving the “covered auto.” Doc. 24-3 at 5–6. If a claimant does not qualify as “insured” under these definitions, the policy states that Essentia has “no duty to defend any suit or settle any claim for bodily injury or property damage” arising from accidents. Doc. 24- 3 at 6 (citation modified). There are also express exclusions in the policy for vehicles that do not qualify as a covered auto. For purposes of the Unin- sured Motorists Coverage provided by the Classic Automobile Pol- icy, the definition of “insured” is framed in exclusive terms, stating USCA11 Case: 24-13873 Document: 38-1 Date Filed: 07/08/2026 Page: 4 of 20

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that “insured shall NOT mean and does NOT include” any named or non-named insureds with respect to incidents arising from occu- pying, operating, or using vehicles that are not the “covered auto” under the specialty policy. Doc. 24-3 at 30 (citation modified). The Classic Automobile Policy defines the scope of its coverage, in part by identifying what is excluded: This policy provides the coverage(s) . . . but only for your ownership, maintenance and use of your cov- ered auto. In no event will this policy:

1. Provide coverage for any vehicles other than your covered auto; or 2. Be your primary personal vehicle insurance; or 3. Provide insurance for any auto or other motor vehi- cle, other than your covered auto, with respect to ex- posures or legal obligations arising out of the owner- ship, maintenance or use of that vehicle if it is owned by or regularly used by you, a family member or any other relative that resides with you. Doc. 24-3 at 18–19 (citation modified). At the same time, the Classic Automobile Policy requires that the insured have separate coverage that satisfies Alabama’s le- gal requirements. The policy emphasizes that coverage is issued based on the insured’s representation that he or she will maintain separate insurance to serve as primary coverage with respect to all vehicles except the “covered auto.” Doc 24-3 at 33. The policy’s Regular Use Vehicle Requirement explains that, in addition to USCA11 Case: 24-13873 Document: 38-1 Date Filed: 07/08/2026 Page: 5 of 20

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ownership of a regular use vehicle, the insured must maintain a separate insurance policy that “[s]atisfies all minimum state insur- ance requirements, including but not limited to minimum require- ments for liability coverage, uninsured motorist coverage and un- derinsured motorist coverage . . .” while serving as the primary pol- icy for all auto insurance requirements except those related to the “covered auto.” Doc. 24-3 at 19. Essentia reserved the right to re- scind, cancel, and refuse to renew the Classic Automobile Policy if the insured “do[es] not have a separate insurance policy in effect with at least . . . all of the types of coverage required by law” for the entire duration of the insurance contract. Doc. 24-3 at 19. Despite the definitions and exclusions in the policy, Clayton filed a claim with Essentia for uninsured motorist coverage. Clay- ton argued that Alabama law requires Essentia to provide portable uninsured motorist coverage. After Essentia denied the claim based on the terms of the Classic Automobile Policy, Clayton sued. Essentia moved for summary judgment against Clayton on the issue of uninsured motorist benefits. First, Essentia argued that Clayton does not qualify for uninsured motorist coverage for fail- ure to meet the definition of “insured” under the Liability Cover- age section because the damages resulted from an accident involv- ing a vehicle excluded by the terms of the specialty policy. Second, Essentia argued that the specialty policy’s limited coverage com- plies with the requirements of Alabama’s uninsured motorist stat- ute by operating in tandem with a separate auto insurance policy providing portable coverage. In the alternative, Essentia argued USCA11 Case: 24-13873 Document: 38-1 Date Filed: 07/08/2026 Page: 6 of 20

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that even if liable, the court should limit the benefits to the mini- mum amount required by Alabama’s uninsured motorist statute.

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Bobby Clayton v. Essentia Insurance Company, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bobby-clayton-v-essentia-insurance-company-ca11-2026.