Justia Alabama Supreme Court Opinion Summaries

Town & Country Property, L.L.C., and Town & Country Ford, L.L.C. (collectively referred to as "T&C") appealed a circuit court's grant of summary judgment Amerisure Insurance Company and Amerisure Mutual Insurance Company (collectively referred to as "Amerisure"), holding that Amerisure was not obligated to pay a $650,100 judgment entered on a jury verdict in favor of T&C and against Amerisure's insured, Jones-Williams Construction Company, because, the trial court reasoned, the faulty construction of the T&C facility upon which the judgment was based was not an "occurrence" covered under the commercial general-liability ("CGL") insurance policy Amerisure had issued Jones-Williams. On October 21, 2011, the Supreme Court affirmed in part the judgment entered by the trial court, agreeing that faulty construction did not in and of itself constitute an occurrence for CGL-policy purposes and that, accordingly, "Amerisure was not required to indemnify Jones-Williams for the judgment entered against it insofar as the damages represented the costs of repairing or replacing the faulty work." On remand, the parties filed briefs with the trial court: T&C argued that the vast majority of the $650,100 judgment should be attributed to covered damage, while Amerisure argued that the damages T&C sought for the repair and/or replacement of defective construction exceeded the amount of the verdict and thus none of the judgment should be attributed to covered damage to personal property or nondefective portions of the T&C property. In its order resolving the issue on remand, the trial court identified $257,500 in damages claimed by T&C at trial as representing the repair or replacement of faulty construction. It therefore subtracted that amount from the $650,100 awarded by the jury and awarded T&C $392,600 plus interest and costs. Upon a review of the record, the Supreme Court found that the $392,600 judgment entered by the trial court was not supported by the evidence. The judgment entered by the trial court on remand was accordingly reversed, and the case was again remanded for the trial court to enter a final judgment in favor of T&C for the amount of damages the Supreme Court deemed T&C was entitled to: $600. View "Town & Country Property, L.L.C. v. Amerisure Insurance Co. " on Justia Law

These consolidated appeals arose from the same facts: in 1990, Richard L. Parker applied to American Family Life Assurance Company of Columbus (Aflac) for a cancer-indemnity insurance policy. Aflac issued Parker a policy. The term of the 1990 policy was month-to-month; the monthly premium was $28.50. Aflac received payments for the 1990 policy from August 25, 1990, to August 17, 1996. Parker applied for a new policy in May 1996 for when the 1990 policy was set to terminate. The 1996 policy took effect August 16, 1996, and used the same number as the 1990 policy. Parker renewed the policy once again in 2009, but the 2009 policy contained an arbitration clause. By a special waiver, the 2009 policy's language stated that Parker would give up his "current" policy and its benefits for the benefits in the new one. Parker paid according to the term of the 2009 policy. But in 2010, Parker sued Aflac asserting a claim of bad faith for Aflac's alleged failing to pay policy benefits owed under the 1990 policy. Aflac responded by filing a motion to compel arbitration according to the terms of the 2009 policy. The circuit court conducted a hearing on the motion and denied it. Upon review, the Supreme Court concluded that Aflac satisfied its burden of proving that an arbitration agreement existed that applied to Parker's claims against it. Because there was no issue as to whether the contract containing the arbitration agreement affected interstate commerce, the burden then shifted to Parker to offer evidence refuting the evidence offered by Aflac and Hunter; Parker offered no evidence to refute that evidence and presented "no persuasive argument" that Aflac failed to meet its burden. The Court reversed the circuit court's decision and remanded the case for further proceedings. View "American Family Life Assurance Company of Columbus v. Parker " on Justia Law

Auto Owners Insurance, Inc. (Auto Owners) appealed a circuit court's denial of its motion to dismiss or, in the alternative, to compel arbitration in an action against it filed by Blackmon Insurance Agency, Inc. Blackmon and Auto Owners entered into an "agency agreement" authorizing Blackmon to act as an agent for the sale of Auto Owners' insurance in Alabama (the 1995 agreement). A 2005 document entitled "Letter of Instructions" was alleged to be an independent document from the 1995 agreement. Auto Owners contended that the 2005 document was contemplated by and incorporated into the 1995 agreement. The 2005 document contained instructions governing the issuance of a variety of bonds by an agency of Auto Owners. In late 2010, Blackmon filed a complaint in the circuit court seeking a declaratory judgment as to the arbitrability of a dispute between Blackmon and Auto Owners as to which Auto Owners had already initiated arbitration proceedings in its home state of Michigan. Blackmon also alleged that in the Michigan arbitration proceeding Auto Owners based its claims on the 2005 document and a 2009 agreement. Upon review of the matter, the Alabama Supreme Court concluded that the circuit court erred in denying Auto Owners' motion to compel arbitration. The Court therefore reversed that order and remanded the case for the circuit court to grant the motion to compel arbitration and either issue a stay of these proceedings pending arbitration or dismiss the case. View "Auto Owners Insurance, Inc. v. Blackmon Insurance Agency, Inc. " on Justia Law

Main & Associates, Inc., d/b/a Southern Springs Healthcare Facility, filed an action in the Bullock Circuit Court, on behalf of itself and a putative class of Alabama nursing homes, against Blue Cross and Blue Shield of Alabama (BCBS), asserting claims of breach of contract, intentional interference with business relations, negligence and/or wantonness, and unjust enrichment and seeking injunctive relief. BCBS removed the case to the the federal court, arguing among other things, that Southern Springs' claims arose under the Medicare Act and that the Medicare Act, as amended by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (the MMA) completely preempted Southern Springs' state-law claims. Southern Springs moved the federal court to remand the case to the circuit court, arguing that the federal court did not have jurisdiction over its claims. The federal court granted the motion and remanded the case to the Bullock Circuit Court. After remand, BCBS moved the circuit court for a judgment on the pleadings, arguing that Southern Springs had not exhausted its administrative remedies and that the circuit court did not have subject-matter jurisdiction over the case. The circuit court denied BCBS's motion, and BCBS petitioned the Supreme Court for a writ of mandamus to direct the circuit court to dismiss Southern Springs' claims. Upon review, the Court concluded that Southern Springs' claims were inextricably intertwined with claims for coverage and benefits under the Medicare Act and that they were subject to the Act's mandatory administrative procedures and limited judicial review. Southern Springs did not exhaust its administrative remedies, and the circuit court did not have jurisdiction over its claims. Therefore, the Court granted BCBS's petition and issue a writ of mandamus directing the circuit court to dismiss the claims against BCBS. View "Main & Associates, Inc. v. Blue Cross & Blue Shield of Alabama" on Justia Law

The Travelers Indemnity Company of Connecticut appealed a judgment in which it was ordered to pay $251,913.91 to Willie A. Miller. Smith House Movers, Inc. (Smith), was hired was hired to move houses located in the path of road construction to be performed. Miller entered into a contract with Smith to purchase one of the houses and to move it from Red Bay to Vina. The contract provided that Smith was to move the house, pour a foundation, and place the house on the new foundation. Smith cut the house into two pieces and delivered the first piece. However, the foundation was improperly poured and did not fit, and the house had been damaged in the move. Ultimately Miller had to hire another company to complete the move and repair the damage. Miller then sued Smith alleging breach of contract, negligence and wantonness. Smith did not answer or appear, and Miller moved to a default judgment against Smith. In an attempt to collect the amount of the default judgment, Miller sent a copy to Smith's general liability insurer, Travelers. As Miller tried to get Travelers to respond to its demand, Miller learned that Smith had declared bankruptcy. Two years following the default judgment, the bankruptcy trustee lifted its stay on Smith's affairs to allow him to collect on the default judgment to the extent that the insurance coverage would allow. Travelers subsequently denied the claim. Miller then sued Travelers for payment. Travelers moved for summary judgment to dismiss Miller's claim, arguing that the general liability policy did not provide coverage based on the terms in the policies. The trial court denied the motion, and eventually entered judgment against the company. Travelers then appealed to the Supreme Court. The issue before the Court was whether the notice of the original lawsuit was timely. The Court found that because Miller's knowledge of Smith's certificate of insurance from the underlying lawsuit put Miller on notice that he should have notified Travelers of the default judgment. As such, the Court concluded that Miller was barred from recovering under Smith's policies. The Court reversed the trial court and remanded the case for further proceedings. View "Travelers Indemnity Company of Connecticut v. Miller" on Justia Law

Defendant National Security Fire & Casualty Company appealed a circuit court order that certified a class for a class action lawsuit. Plaintiff Maurice DeWitt's mobile home was damaged by Hurricane Katrina, and at the time of his loss, Plaintiff was insured by National Security. In 2007, Plaintiff filed suit in circuit court against National Security and other insurance companies alleging that the Defendants breached his insurance policy when they did not include a 20% "general contractor overhead and profit" (GCOP) amount in its loss payment. Specifically, Plaintiff alleged the insurance companies did not take into account Plaintiff's loss and the need for additional general contractor services in rebuilding his home. Plaintiff sought to represent similarly situated policyholders whose claims were allegedly miscalculated in the same fashion. Upon review, the Supreme Court concluded that Plaintiff did not satisfy his burden of establishing the predominance and superiority requirements to certify his class action. Accordingly, the Court held that the trial court exceeded its discretion in cerfifying the class. View "National Security Fire & Casualty Company v. Maurice DeWitt " on Justia Law

In separate petitions, the Hampton Insurance Agency and Ginger Spencer, Acceptance Indemnity Insurance Company and Ashland General Agency all defendants in an action filed by Mary Alice Patton, d/b/a Hole in the Wall Lounge, petitioned the Supreme Court for a writ of mandamus to direct the trial court to transfer the action to the Tuscaloosa Circuit Court. Ms. Patton purchased insurance for her lounge from Ms. Spencer, an independent insurance agent for Hampton. At issue was the nature and extent of the coverage Ms. Patton sought. The lounge was destroyed by fire in 2009. Upon filing her insurance claim, Ms. Patton was informed that her policy did not include coverage for property damage. Accordingly, Ms. Patton sued because "defendants were negligent and/or wanton in their procurement of full coverage insurance for [Patton] on her lounge building and its contents." Hampton responded with a motion to dismiss or in the alternative, to transfer the case on grounds that the case was filed in an improper venue. Upon review, the Supreme Court found that the defendant insurance companies met the requirements for the writ of mandamus. The Court directed the trial court to vacate its order denying defendants' motions to transfer, and to enter orders granting those motions to transfer to the Tuscaloosa Circuit Court. View "Patton v. Hampton Insurance Agency" on Justia Law

Employers Mutual Casualty Company (Employers Mutual) appealed a circuit court's denial of its motion to intervene in a pending case. Holman Building Company was sued by multiple homeowners who claimed their homes were poorly built from inferior building materials with poor quality workmanship. In 2010, Employers Mutual moved to intervene in the action, asserting that it had issued Holman commercial general-liability and umbrella policies that covered some if not all of the allegations made by the homeowners. Upon review, the Supreme Court held that the trial court did not abuse its discretion in denying Employers Mutual's permissive intervention: "given the complexity of this case, the trial court was clearly within ints discretion to deny Employers Mutual's request to intervene for the purpose of obtaining a bifurcated trial of insurance-coverage issues or a special verdict or a general verdict accompanied by answers to interrogatories ... this case provides a prime example of the need for discretion in a trial court's ruling on an insurer's motion for permissive intervention." Accordingly, the Court affirmed the trial court's decision to deny the insurance company's intervention. View "Employers Mutual Casualty Company v. Holman Building Co., LLC et al. " on Justia Law

Town & Country Property, L.L.C., and Town & Country Ford, L.L.C. (T&C), sued Amerisure Insurance Company and Amerisure Mutual Insurance Company (Amerisure) and its insured, Jones-Williams Construction Company, Inc., alleging that Amerisure was obligated to pay a $650,100 judgment entered in favor of T&C and against Jones-Williams in a separate action pursuant to a commercial general-liability insurance policy Amerisure had issued Jones-Williams. The trial court entered a summary judgment in favor of Amerisure, and T&C appealed. Specifically, the trial court held that Amerisure was not required to indemnify Jones-Williams because there had been no occurrence invoking coverage under the policy. Upon review, the Supreme Court affirmed the trial court's judgment to the extent the awarded damages represented the costs of repairing or replacing faulty work covered under the liability policy. The Court remanded the case to the trial court so that it could consider arguments from the parties to determine if any of the damages awarded represented compensation for damaged property. View "Town & Country Property, L.L.C.v. Amerisure Ins. Co." on Justia Law

The Federal District Court for the Northern District of Alabama certified a question to the State Supreme Court. The Court was asked whether the failure of an insured to give notice of a proposed settlement to an insurance company causes the insured to forfeit underinsured motorist coverage (UIM), regardless of the insured’s actual knowledge of that coverage, and regardless of prejudice to the insurance company if the insured has a copy of the policy that contains the coverage. In 2007, Delbert and Lou Ann Downey were stopped at an intersection on their motorcycle when a vehicle driven by Wyndell Thompson failed to stop and hit them. At the time of the accident, multiple insurance policies were in force. The Downeys had underinsured motorist coverage. The Downeys, in consideration of $10,000 and while represented by counsel (but without having notified Travelers Property Casualty Insurance Company that they were doing so), executed a general release to discharge Mr. Thompson and his insurance company from all liability arising out of the accident. Subsequently, and with different counsel, the Downeys notified Travelers of the accident for the first time and that they were making a claim under their underinsured motorist policy. Travelers denied the claim and the Downeys sued. The Supreme Court found that the Downeys were at all relevant times in possession of the policy, and it clearly provided UIM coverage. However, the Downeys did not meet the threshold of showing any condition under which their lack of notice could be excused. "In other words, the Downeys have ‘forfeit[ed]’ UIM coverage." View "Downey v. Travelers Property Casualty Insurance Co." on Justia Law