Justia Insurance Law Opinion Summaries

The case involves National Trust Insurance Company ("National Trust") and Whaley Construction Company, Inc. ("Whaley"). Whaley was a general contractor on a project at a Lockheed Martin facility. Smith's Inc. of Dothan ("Smith's of Dothan") was a subcontractor hired to install an HVAC system on the project, and Phoenix II Contracting, LLC ("Phoenix II"), was a subcontractor hired to install the roofing. Smith's of Dothan's subcontract with Whaley provided that Smith's of Dothan would name Whaley and Lockheed Martin as additional insureds on its liability policies. National Trust issued Smith's of Dothan a commercial-package policy and a commercial-liability umbrella policy ("the subject policies") through Harmon-DennisBradshaw, Inc. ("HDB"). Whaley and Lockheed Martin were additional insureds under the subject policies. Timothy L. Bozeman was working as a roof laborer on the Lockheed Martin project when he fell through an opening in the roof and was seriously injured. Bozeman sued Phoenix II and various fictitiously named defendants in the circuit court ("the state-court action").National Trust commenced a declaratory-judgment action in the Northern Division of the United States District Court for the Middle District of Alabama ("the federal-court action"). The complaint in the federal-court action named Smith's of Dothan, Whaley, Lockheed Martin, and the estate as respondents and included the following factual allegations: "25. A dispute has arisen as to whether Respondents Smith's [of Dothan], Whaley, and Lockheed [Martin] are entitled to a defense and indemnification as to the claims asserted in the Underlying Lawsuit. National Trust asserts that, based on the terms, conditions, and exclusions contained in the [subject] policies, Respondents Smith's [of Dothan], Whaley, and Lockheed [Martin] are not entitled to a defense in the underlying lawsuit or indemnification against settlement, award, or judgment therefrom.On April 14, 2023, Whaley filed a third-party complaint against National Trust and Continental Insurance Company ("Continental") in the state-court action. The third-party complaint alleged claims of breach of contract and bad-faith refusal to pay against National Trust and Continental. On May 4, 2023, National Trust filed a motion to dismiss in the state-court action. In the motion, National Trust asked the circuit court "to reconsider its previous Order … dated April 21, 2023, granting Whaley's motion for leave to file a third-party complaint against [National Trust] and further move[d] pursuant to Rule 12(b)(6) of the Alabama Rules of Civil Procedure to dismiss both of Whaley's claims asserted against [National Trust] in the Third-Party Complaint." In its motion, National Trust asserted that Whaley's claims against it were due to be dismissed "because they were compulsory counterclaims that Whaley was required to file in the federal[-court] action pursuant to § 65-440, Ala. Code 1975." On June 7, 2023, the circuit court entered an order denying National Trust's motion to dismiss the third-party complaint. National Trust subsequently filed a petition for a writ of mandamus asking this Court to direct the circuit court to enter an order dismissing National Trust from the state-court action.The Supreme Court of Alabama granted National Trust's mandamus petition in part and issued a writ directing the circuit court to enter an order dismissing Whaley's breach-of-contract and bad-faith claims in the state-court action that were based on National Trust's refusal to indemnify Whaley for the amount it had paid to settle Lockheed Martin's indemnity claim against it. However, the court denied the petition as to Whaley's contingent claims for a defense and indemnification. View "Ex parte National Trust Insurance Company" on Justia Law

In October 2020, Larry Knight's residence was damaged by Hurricane Zeta. He filed an insurance claim with Foremost Insurance Company, which was denied. Knight then sued Foremost, claiming that the company had insured his residence. Over the course of the litigation, Knight amended his complaint six times, eventually adding claims related to a rental property that Foremost admitted to insuring. He also added Karen Bradford and Bradford Agency, LLC as defendants. Foremost moved to strike Knight's latest amended complaint, while Bradford and the Agency moved to quash service of process and to be dismissed from the case, arguing that service on them had been insufficient. The trial court denied these motions.Foremost, Bradford, and the Agency petitioned the Supreme Court of Alabama for a writ of mandamus, arguing that they were entitled to relief. The court agreed, finding that Knight had failed to demonstrate good cause for amending his complaint for a sixth time and that allowing the amendment would result in actual prejudice to Foremost and unduly delay the trial. The court also found that service on Bradford and the Agency was ineffective, as Knight had failed to comply with the service requirements in Rule 4 of the Alabama Rules of Civil Procedure. The court therefore granted the petition and issued the writ, directing the trial court to strike Knight's sixth amended complaint and to grant Bradford and the Agency's motions to quash service of process and to dismiss them from the lawsuit. View "Ex parte Foremost Insurance Company v. Foremost Insurance Company" on Justia Law

The case revolves around a car accident that occurred on February 6, 2016, involving Melissa A. Keller and her daughter, Caroline Keller, who were insured by State Farm Mutual Automobile Insurance Company. The Kellers were hit by Xavier Blanchard, who ran a red light. Xavier's vehicle was owned by his father, Harvey Blanchard, and was also insured by State Farm. The Kellers filed a complaint against the Blanchards on January 8, 2018, alleging negligence and wantonness. However, the complaint did not state any claim against State Farm. On January 26, 2023, the Kellers settled their claims with the Blanchards and subsequently filed an "Amended Complaint for Underinsured Motorist Coverage" against State Farm on January 27, 2023.State Farm moved to dismiss the new complaint, arguing that it was filed outside the six-year statute-of-limitations period applicable to contract-based claims. The insurer contended that the claim did not relate back to the original complaint as Keller knew or should have known that State Farm was her insurer. Keller, on the other hand, argued that her claim for underinsured-motorist coverage did not accrue until the date she settled with the Blanchards. The trial court denied State Farm's motion to dismiss on June 12, 2023, without making specific findings of fact or law.The Supreme Court of Alabama granted State Farm's petition for a writ of mandamus, directing the trial court to dismiss Keller's underinsured-motorist claim against it. The court held that the accrual date for a direct uninsured/underinsured-motorist claim against an insurer is the date of the accident. Since Keller did not assert her direct claim for underinsured-motorist benefits against State Farm until more than six years after the date of the accident, that claim was time-barred. View "Ex parte State Farm Mutual Automobile Insurance Company" on Justia Law

In this case, an automobile repair technician, Donijah Virgo, was injured when his stalled vehicle was hit by a car driven by Heather Michelle Roberts while he was attempting to push it across a road. Virgo sued Roberts for negligence, but the Mobile Circuit Court granted Roberts a partial summary judgment, dismissing Virgo's counterclaim. The Supreme Court of Alabama affirmed the lower court's decision.In October 2020, Virgo was diagnosing a mechanical problem in a Crown Victoria automobile. The car stalled on a road, and he moved it into a median left-turn lane. After waiting for about 10 minutes for traffic to clear, Virgo attempted to push the car across the road, during which Roberts's vehicle collided with it, resulting in major damage and serious injuries to Virgo.Roberts sued Virgo for negligence and wantonness and sought uninsured motorist benefits from GEICO Casualty Company. Virgo filed a counterclaim alleging negligence on Roberts's part. After settling the claim against GEICO, Roberts moved for a summary judgment on Virgo's counterclaim, which the circuit court granted.The Supreme Court of Alabama affirmed the circuit court's decision. The court concluded that Virgo failed to present substantial evidence to raise a genuine issue of material fact regarding his counterclaim, and thus, the circuit court did not err in granting a summary judgment in favor of Roberts. View "Virgo v. Roberts" on Justia Law

The Supreme Court of Alabama dismissed an appeal by the Great American Insurance Company. The insurance company had appealed a lower court's decision denying its motion to invoke the appraisal procedure in a dispute with the Crystal Shores Owners Association, Inc. The dispute arose following damage to the Crystal Shores Condominium complex due to Hurricane Sally and a subsequent bathtub overflow in one of the units. The insurance company argued that the dispute over the amount of loss was subject to an appraisal procedure described in the insurance policy, which it contended was a form of arbitration. The Supreme Court of Alabama held that, regardless of whether federal law or Alabama law controlled the definition of "arbitration" in the Federal Arbitration Act, the appraisal clause in the insurance contract did not qualify as a clause calling for "arbitration". As such, the lower court's denial of Great American's motion did not constitute an order denying a motion to compel arbitration, and the Supreme Court of Alabama dismissed the appeal as one stemming from a nonfinal judgment. View "Great American Insurance Company v. Crystal Shores Owners Association, Inc." on Justia Law

Petitioners Insurance Express, LLC ("Insurance Express"), Wayne Taylor, and Julie Singley sought a writ of mandamus to direct a circuit court to vacate an order staying the underlying action against defendants Lynne Ernest Insurance, LLC ("LEI"), Lynne Ernest, Chynna Ernest, and Deadra Stokley. According to the complaint, Lynne and Stokley were longtime employees of Insurance Express. It alleged that they, while still employed by Insurance Express, entered Insurance Express's office after business hours and, without authorization, made electronic copies of various business records related to Insurance Express's clients and insurance policies. Lynne and Stokley resigned soon after and began employment with LEI, which purportedly had been formed by Lynne and Chynna and was a direct competitor of Insurance Express. Lynne and Stokley, it is alleged, then induced some Insurance Express clients to transfer their policies to LEI. Insurance Express sought injunctive relief to, among other things, prevent defendants from communicating with past or current customers of Insurance Express and to require defendants to return any customer information taken by them. It further sought damages for breach of contract, conversion, intentional interference with business relations, breach of fiduciary duty, and civil conspiracy. After review, the Alabama Supreme Court found petitioners established they had a clear legal right to the relief they sought. The Court granted their petition and directed the trial court to vacate its order granting a stay. View "Ex parte Insurance Express, LLC, et al." on Justia Law

State Farm Mutual Automobile Insurance Company ("State Farm") appealed a judgment entered against it on a jury verdict in an automobile-accident case. Brian Wood ("Brian") was driving through an intersection in Auburn when his vehicle was T-boned by a vehicle being driven by Mark Stafford. Brian and his wife Jennifer sued Stafford, an uninsured motorist, alleging claims of negligence, wantonness, and loss of consortium. Because Stafford was uninsured, the Woods also sued State Farm, their automobile-insurance company, seeking uninsured-motorist benefits under their policy. The jury returned a verdict in the Woods' favor, awarding them $700,000 in compensatory damages, and the trial court entered a judgment on that verdict. The jury did not award any punitive damages. State Farm filed a postjudgment motion challenging the judgment on various grounds, including whether the wantonness claim should have gone to the jury. The postjudgment motion was denied by operation of law, and State Farm appealed. After review, the Alabama Supreme Court concluded State Farm failed to establish the trial court erred by not setting aside its judgment entered on the jury's verdict, therefore the judgment was affirmed. View "State Farm Mutual Automobile Ins. Co. v. Wood" on Justia Law

Douglas Ghee, as the personal representative of the estate of Billy Fleming, appealed a circuit court judgment dismissing Ghee's wrongful-death claim against USAble Mutual Insurance Company d/b/a Blue Cross Blue Shield of Arkansas and Blue Advantage Administrators of Arkansas ("Blue Advantage"). The circuit court correctly dismissed the aspect of Ghee's claim that, on the face of the complaint, was based on an insurance-benefits decision by Blue Advantage. The Alabama Supreme Court found the circuit court erred, however, by dismissing the aspect of Ghee's claim that was based on Blue Advantage's alleged provision of medical advice, because it was not clear from the complaint that that aspect was based on an insurance-benefits decision. Accordingly, the Supreme Court affirmed the judgment in part and reversed it in part. View "Ghee v. USAble Mutual Insurance Company d/b/a Blue Cross Blue Shield of Arkansas, et al." on Justia Law

Progressive Direct Insurance Company ("Progressive") appealed a circuit court order granting a motion for a partial summary judgment filed by Madison Keen and joined by Robert Creller and Alfa Mutual Insurance Company ("Alfa"); the trial court certified its order as final pursuant to Rule 54(b), Ala. R. Civ. P. In September 2019, Keen was involved in a motor-vehicle accident. She sought compensation from Creller, who was the driver of the other vehicle involved in the accident. The vehicle Creller was driving was owned by his parents and was insured by Alfa. The evidence suggested that Creller and his spouse were living with Creller's parents at the time of the accident. Alfa paid Keen the limits of the insurance policy, and Keen executed a settlement agreement and a release in favor of Creller and Alfa. In June 2021, Keen filed the lawsuit at issue here seeking underinsured-motorist benefits from two different policies, namely, a policy issued by Progressive covering the vehicle Keen was driving at the time of the accident and a policy issued by State Farm Automobile Insurance Company ("State Farm") covering a second vehicle in Keen's household. Because Keen was driving the vehicle insured by Progressive at the time of the accident, her Progressive underinsured-motorist coverage was the primary insurance and the State Farm underinsured-motorist coverage was the secondary insurance. During the litigation, Creller was deposed and revealed the existence of an additional insurance policy covering his spouse's vehicle, which had been issued by Allstate Insurance Company ("Allstate") and which identified Creller as a named insured. The discovery of the Allstate policy raised the possibility that Creller might have had additional liability insurance coverage that could have compensated Keen for her injuries. Based on the alleged existence of additional insurance benefits, she asserted that there had been a mutual mistake among the parties to the settlement agreement and the release. Keen eventually moved for partial summary judgment, arguing the Allstate policy did not provide coverage. For its part, Progressive opposed Keen's motion, because the availability of benefits under the Allstate policy might affect Progressive's interests with respect to Keen's underinsured- motorist claim. The trial court granted Keen's motion and certified its order as final pursuant to Rule 54(b). Progressive appealed. Because it appeared there was a question of fact based on the evidence before the trial court existed when it entered the partial summary judgment, the Alabama Supreme Court reversed that judgment and remanded the case for further proceedings. View "Progressive Direct Ins. Co. v. Keen, et al." on Justia Law

After a fire at James and Suzanne Skinner's house, their insurer sought a judgment declaring that it did not owe either of them coverage. The circuit court entered summary judgment for Suzanne while the claim against James remained pending. A year later, with the claim against James still pending, the circuit court certified the judgment in Suzanne's favor as final and thus immediately appealable under Rule 54(b), Ala. R. Civ. P. Because the circuit court exceeded its discretion in doing so, the Alabama Supreme Court set aside the Rule 54(b) certification and dismissed this appeal. View "Alabama Insurance Underwriting Association v. Skinner" on Justia Law