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GREENE v. HANOVER INS. CO.5/23/1997
aggrieved so as to express that intention, so far as it can be done without prejudice to the rights acquired by third persons in good faith and for value."
(Emphasis added.) Section 8-1-2 codified the equitable remedy of reformation of contracts. American Liberty Ins. Co. v. Leonard, 270 Ala. 17, 21, 115 So.2d 470, 473 (1959). This remedy will not operate to prejudice third parties, such as bona fide purchasers, who acquire rights for value that would be affected by the reformation. Irvin v. Griffin Corp., 808 F.2d 802, 806 (11th Cir. 1987) (interpreting Ala. Code 1975, § 8-1-2). The no-prejudice bar will not, however, prevent reformation that will affect the rights of third parties, such as judgment creditors, where those rights were acquired without paying value. See Beasley v. Mellon Fin. Servs. Corp., 569 So.2d 389, 394 (Ala. 1990) ("Reformation will be allowed . . . against . . . judgment creditors"); 66 Am.Jur.2d Reformation of Instruments § 69 (1973) ("reformation of an instrument may be had in equity as against judgment creditors, since they are not regarded as bona fide purchasers for value"); see also 2 Couch on Insurance 3d § 27:82 (1975) ("insurance policies may be reformed or modified to limit or exclude coverage if such was the intention of the parties, even where the rights of third-party claimants who are not parties to insurance contract are adversely affected"). The trial court properly reformed the Primary Endorsement to reflect the undisputed intention of VEC and Hanover to exclude Scott from coverage. Greene cannot recover under the Primary Policy.
II. UMBRELLA POLICY
Next, Greene argues that even if the Primary Policy does not cover Scott, Hanover's Umbrella Policy does. Specifically, Greene contends that the general language of the "Excess Insurance" section of the Umbrella Policy provides excess coverage (i.e., coverage in excess of the underlying policy limits) with respect to VEC's employees, including Scott, if the underlying insurance (i.e., Hanover's Primary Policy) is inapplicable. Thus, Greene argues that if we hold
that the Primary Policy does not cover Scott, then we must hold that the Umbrella Policy does cover Scott as "excess insurance." This argument misses the point. Regardless of whether the Umbrella Policy coverage takes the form of excess or nonexcess coverage, it is still subject to the Umbrella Endorsement's exclusion for injuries arising from the use of automobiles. The Umbrella Endorsement unambiguously provides that the Umbrella Policy does not cover " 'bodily injury,' 'property damage' or 'personal injury' arising out of the ownership maintenance, use or entrustment" of VEC's vehicles. Greene's injury and damage claims fall squarely within this exclusion because they arose from Scott's use of VEC's vehicle. We therefore hold that Greene cannot recover under the Umbrella Policy. See Cook v. Aetna Ins. Co., 661 So.2d 1169, 1170 (Ala. 1995) (holding that an unambiguous exclusion in an insurance policy will be enforced according to its terms).
The judgment of the trial court is affirmed.
AFFIRMED.
HOOPER, C.J., and MADDOX, ALMON, SHORES, HOUSTON , KENNEDY, COOK, and BUTTS, JJ., concur.
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