Justia Alabama Supreme Court Opinion Summaries

Travelers Home and Marine Insurance Company ("Travelers") appealed the grant of summary judgment in favor of Dianne and Martin Gray in the Grays' action arising from injuries Dianne suffered as the result of a motor-vehicle accident. In 2010, Lawana Coker and Dianne were involved in a motor-vehicle accident in Elmore County; Coker was without motor-vehicle insurance at the time of the accident. Two years later, the Grays filed in the trial court a three-count complaint naming as defendants Coker and Travelers and a fictitiously named defendant. Travelers answered the complaint, denying the material allegations therein and asserting certain affirmative defenses. Coker, however, failed to answer the complaint. In 2013, the Grays moved the trial court to enter a default judgment in their favor and against Coker, requesting that the trial court assess damages in the amount of $500,000 for Dianne and $50,000 for Martin. The Grays' motion requested no relief as to Travelers. Shortly thereafter, the Grays filed a new summary-judgment motion in which, for the first time, they sought relief against Travelers. The Grays did not base their summary judgment motion against Travelers on the ground that there was no genuine issue of fact as to whether tortious conduct by Coker caused them to suffer injury. Instead, they based their summary-judgment motion against Travelers solely on the fact that they previously had obtained a default judgment against Coker. In this regard, the Grays argued that they were entitled to a judgment as a matter of law against Travelers because, they said, "Travelers as a party defendant had notice and adequate opportunity to intervene and present any defenses and arguments necessary to protect its position with respect to the entry of or the amount of damages in the Default Judgment. By failing to do so, Defendant Travelers legally is bound by the judgment." After review, the Supreme Court reversed: because Travelers as the Grays' UM carrier, was not bound by the default judgment entered against Coker, Travelers was not required to submit evidence in opposition to a motion for a summary judgment that relied solely on that default judgment. Consequently, the trial court erred in entering a summary judgment in favor of the Grays and against Travelers. View "Travelers Home & Marine Ins. Co. v. Gray" on Justia Law

Alabama Mutual Insurance Corporation ("AMIC") appealed the trial court's order certifying a class in the action filed by the City of Vernon and a class of similarly situated entities that had purchased uninsured motorist/underinsured-motorist coverage ("UM/UIM coverage") from AMIC. Vernon was the original class representative; however, after AMIC filed its notice of appeal of the class-certification order, Vernon settled its claims against AMIC and withdrew as the class representative. Because there was no longer a representative to "fairly and adequately protect the interests of the class," the Supreme Court remanded the case back to the trial court for a new class representative to be substituted for Vernon. The City of Fairfield substituted for Vernon as the class representative. After review of the parties' arguments on appeal, the Supreme Court did not reach the merits of the underlying dispute: the Court concluded that the trial court lacked subject-matter jurisdiction over this dispute. Initial jurisdiction over this dispute was with the Alabama Department of Insurance and its commissioner. Therefore, the Supreme Court vacated the trial court's class-certification order, and remanded for dismissal. View "Alabama Mutual Insurance Corporation v. City of Fairfield" on Justia Law

In 2010, Baldwin Mutual Insurance Company (BMIC) filed an "Application for Temporary Restraining Order, Motion for a Preliminary Injunction and Complaint for Declaratory Judgment" against 122 individuals who were insured under various insurance policies issued by BMIC. According to the complaint, the insureds, through their legal counsel, had sent a letter requesting BMIC provide copies of the policy file for each of the insureds, and the letter accused BMIC of "bad faith" as to its treatment of the insureds. According to BMIC's complaint, the various insurance policies at issue provided that BMIC or an insured could invoke an appraisal process if BMIC and the insured could not reach an agreement as to the amount of compensation due the insured for a loss covered under the insured's policy. BMIC asked that the restraining order "enjoin[] the [insureds] from engaging in the appraisal process and stay[] the time in which [BMIC] has to identify an appraiser or otherwise participate in said process." Also, BMIC asserted that "it will be caused immediate and irreparable injury, loss or damage should it be required to engage in the appraisal process demanded prior to determining whether [the insureds] separately and severally are entitled to invoke the appraisal process." BMIC appealed the Circuit Court's order modifying a previous order granting BMIC injunctive relief. Based on its review of the record, the Supreme Court concluded the circuit court erred by ordering BMIC to engage in the appraisal process before the insureds satisfied their respective post-loss obligations and before BMIC had sufficient information on which it could decide whether it disagreed with the respective claims of the insureds. Accordingly, the Court reversed the circuit court and remanded this matter for further proceedings. View "Baldwin Mutual Insurance Company v. Adair et al. " on Justia Law

Electric Insurance Company petitioned the Supreme Court for a writ of mandamus to direct the Circuit Court to allow Electric, an uninsured-motorist insurer, to "opt out" of the trial of the underlying case. The issue presented by this petition was whether Electric asserted its right to opt out within a reasonable time. Upon review, the Supreme Court concluded that it did; thus, it granted the petition and issued the writ. View "Bolt v. Electric Insurance Company" on Justia Law

Pennsylvania National Mutual Casualty Insurance Company ("Penn National") was sued by Jacob Walker, an employee of its named insured, seeking underinsured-motorist ("UIM") benefits following an automobile accident. After settling the claims against it, Penn National filed a cross-claim against Michael Bradford, the alleged tortfeasor, asserting a subrogation theory of recovery. The trial court dismissed the cross-claim on the ground that it was barred by the statute of limitations, and Penn National appealed. Finding no reversible error, the Supreme Court affirmed the trial court's judgment. View "Pennsylvania National Mutual Casualty Insurance Company v. Bradford " on Justia Law

State Farm Mutual Automobile Insurance Company petitioned the Supreme Court for a writ of mandamus to direct the Clarke Circuit Court to vacate its order denying State Farm's motion to transfer this case to the Mobile Circuit Court and to enter an order granting the motion. The underlying action arose from an automobile accident that occurred in Mobile County in 2010. Sandra Banks, a resident of both Clarke and Mobile Counties, sued Robert Spray, a resident of Baldwin County, and State Farm. Banks alleged that she suffered injuries as a result of the wrongful, negligent, and/or wanton conduct of Spray when the vehicle he was driving and owned struck her vehicle. Additionally, Banks alleged that at the time of the accident she had a policy of insurance with State Farm, which included uninsured-/underinsured-motorist coverage, and that she was due proceeds under her coverage. Because both the "convenience of parties and witnesses" and the "interest of justice" prongs of the doctrine of forum non conveniens compelled the transfer of this case from Clarke County to Mobile County, the Supreme Court concluded the trial court abused its discretion in refusing to transfer the action. Therefore, the Court granted State Farm's petition and issued a writ directing the Clarke Circuit Court to vacate its order and to enter an order granting the motion.View "Banks v. Spray" on Justia Law

In late 2005 or early 2006, Corey Culverhouse began constructing a house for himself on a five-acre lot in Hartford. He obtained a policy from Alfa Mutual Insurance Company to insure the house during the remainder of the construction process and after construction was completed. In 2009, a minor fire damaged the kitchen of the house. Culverhouse submitted a claim to Alfa, which paid for a remediation company to clean and repair the smoke damage caused by the fire. During this process, Culverhouse moved out of the house and into a barn on his property. After about two weeks of living in the barn, Culverhouse moved into a house he was constructing for eventual sale across the road from his house. Later that year, another fire damaged the house. This time, the fire could not be extinguished, and the house, its contents, and an adjacent swimming pool were completely destroyed. Culverhouse promptly informed Alfa. Alfa immediately questioned the Culverhouse's claim because he had not submitted with his claim an inventory of the contents of the house and supporting documentation, and he had not submitted any evidence supporting the large claim he had submitted for loss of use in the two-month period prior to the second fire. Culverhouse ultimately sued Alfa for payment of the claim. A hearing on the summary-judgment motion was held on in 2013, and the trial court granted Alfa's motion and dismissed each of Culverhouse's claims; the trial court also dismissed an Alfa counterclaim as moot. Culverhouse thereafter retained a new attorney and, on moved the trial court to alter, amend, or vacate its order. The trial court granted Culverhouse's motion in part and amended its summary-judgment order so as to exclude Culverhouse's breach-of-contract claim from the judgment, leaving it as the only remaining claim in the case. Alfa's argument on appeal did not relate to the merits of Culverhouse's breach-of-contract claim. Rather, it concerned only whether the trial court acted properly by amending its summary-judgment order to resurrect that claim in response to Culverhouse's motion to alter, amend, or vacate the judgment pursuant to Rule 59(e). Finding no reversible error, the Supreme Court affirmed the trial court's decision. View "ALFA Mutual Insurance Co. v. Culverhouse " on Justia Law

This case arose from a contract between Roanoke Healthcare Authority (doing business as Randolph Medical Center) and Batson-Cook Company, a general contractor, to renovate the medical center, located in Roanoke. Batson-Cook received written notice from Roanoke Healthcare that work on the renovation project had been suspended. Batson-Cook notified one of its subcontractors, Hardy, of the suspension and stated that "[t]he contract has been suspended by [Roanoke Healthcare] through no fault of Batson-Cook ... or its subcontractors. [Roanoke Healthcare] is currently out of funding and has subsequently closed the facility while seeking a buyer." Liberty Mutual, the project's insurer, alleged in its answer that Roanoke Healthcare failed to pay Batson-Cook $241,940.51 for work performed pursuant to the contract. Batson-Cook sent Hardy a change order the change order deducted from the subcontract the $147,000 in equipment and materials another subcontractor Hardy hired, Johnson Controls, Inc. (JCI), had furnished for the renovation project and for which it has not received payment. JCI notified Liberty Mutual, Roanoke Healthcare, Batson-Cook, and Hardy by certified letters of its claim on a payment bond. The letters identified Batson-Cook as the general contractor and Hardy as the debtor. Liberty Mutual denied the claim. JCI sued Liberty Mutual, alleging JCI was entitled to payment on the payment bond Liberty Mutual had issued to Batson-Cook. Upon review, the Supreme Court concluded JCI was a proper claimant on the payment bond. Therefore, the circuit court erred in entering a summary judgment in favor of Liberty Mutual and denying JCI's summary judgment motion. View "Johnson Controls, Inc. v. Liberty Mutual Insurance Company " on Justia Law

Alfa Life Insurance Corporation ("Alfa") and Brandon Morris, an agent for Alfa, appealed a judgment entered against them following a jury verdict for Kimberly Colza, the widow of Dante Colza. In 2010, Morris met with Dante to assist him in completing an application for a life-insurance policy. There was disputed evidence as to whether Morris asked Dante whether he had had a moving traffic violation, a driver's license suspended, or an accident in the prior three years, it was undisputed that Morris entered a checkmark in the "No" box by that question. The evidence indicated that Dante applied for the Preferred Tobacco premium rate. Dante named Kimberly as the beneficiary under the policy. At the close of the meeting, Kimberly wrote a check payable to Alfa for $103.70, the monthly Preferred Tobacco premium rate. Kimberly testified at trial that Morris informed them that Dante would be covered as soon as they gave Morris the check. Dante was later examined by the medical examiner. During the examination, Dante informed the examiner that his family had a history of heart disease and that he had had moving traffic violations within the past five years. The day after he had his medical examination, Dante was killed in an accident. Two days later, Alfa received the medical examiner's report, which indicated that Dante's family had a history of heart disease, that Dante's cholesterol was above 255, and that Dante had had moving traffic violations in the past five years. In light of the report, Alfa's underwriters determined that Dante was not eligible for the Preferred Tobacco rate for which he had applied; rather, the proper classification would have been the Standard Tobacco rate (which had a higher premium). Additionally, in light of the moving vehicle violations, Dante was a greater risk to insure and a "rate-up" of $2.50 per $1,000 worth of coverage was required. Alfa notified Kimberly by letter that no life-insurance coverage was available for Dante's death "because no policy was issued and the conditions of coverage under the conditional receipt were not met." Kimberly sued Alfa seeking to recover under the terms of the conditional receipt (an acknowledgment of the policy). She alleged, among other claims, that Alfa had breached the contract and had acted in bad faith when it refused to pay life-insurance benefits on Dante's death. Kimberly also sued Morris, alleging, among other claims, that he had negligently failed to procure insurance coverage for Dante. After a trial, the jury found that Alfa had breached the contract and had in bad faith refused to pay the insurance benefits due, and that Morris had negligently failed to procure insurance. Upon review, the Supreme Court concluded Alfa and Morris were entitled to a judgment as a matter of law on those claims, and the trial court erred by submitting the claims to the jury for consideration. View "Alfa Life Insurance Corporation v. Colza " on Justia Law

Lambert Law Firm, LLC ("Lambert"), petitions the Supreme Court for a writ of mandamus to direct the Circuit Court to set aside an order awarding respondent Shawn Brechbill a portion of certain funds filed with the Circuit Court clerk. Brechbill, was represented by the law firm of Morris, Conchin & King. He sued State Farm Fire and Casualty Company seeking damages for breach of contract and bad-faith failure to pay an insurance claim. The law firm filed the initial complaint, prepared various pleadings, conducted discovery, engaged experts, and filed a response to a motion for a summary judgment filed by State Farm. Later, the law firm withdrew its representation of Brechbill. The trial court held a hearing and issued an order stating that the law firm would have a lien against any settlement or judgment that became payable to Brechbill arising from his claims against State Farm. Ultimately, the law firm's interest in the lien was assigned to Gary Conchin, a partner in the law firm. Brechbill hired Lambert to continue the litigation. Brechbill ultimately received a judgment against State Farm on his breach-of-contract and bad-faith claims. At some point after the judgment was entered, Lambert withdrew from further representation of Brechbill, and the trial court entered an order granting Lambert a lien on any recovery Brechbill might be awarded. State Farm elected to appeal the verdict on the bad-faith claim, but paid one-half of the amount of the verdict in satisfaction of the verdict on the breach-of-contract claim to the circuit court clerk. While State Farm's appeal was pending, both Conchin and Lambert moved to "condemn" the funds held by the circuit clerk. Brechbill also moved the trial court to release the funds to him. Upon review of the competing claims for the money, the Supreme Court concluded that the trial court clearly acted within its discretion in refusing, at the time of the hearing, to determine the amount of the liens at issue. "However, given the mandatory nature of section 34-3-61, the priority of the two liens in this case, and the limited funds to which the liens attached, the trial court must first determine the amount of the fees owed to ensure that any preliminary disbursement would not divest the fund of money in which, by law, another party would have a priority in interest." The Court held that Lambert demonstrated a clear legal right to relief, and therefore directed the trial court to vacate its May 30, 2013, order and to hold further proceedings. View "Brechbill v. State Farm Fire & Casualty Co." on Justia Law