Justia Insurance Law Opinion Summaries

Articles Posted in Supreme Court of Alabama
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Allstate Insurance Company ("Allstate") petitioned the Alabama Supreme Court for a writ of mandamus to direct the Perry Circuit Court ("the trial court") to vacate its order denying Allstate's motion to transfer an action filed against it by Devin Harrison in Perry County to Shelby or Bibb County. Harrison, a resident of Bibb County, was driving an automobile in Perry County. The automobile was owned by Thomas Hobson, a resident of Bibb County ("Hobson"), and was insured by Allstate, whose principal place of business is in Shelby County. Dylan Gardner and Alexander Hobson, Hobson's grandson, were passengers in the vehicle Harrison was driving. While Harrison was driving, the automobile was involved in a single-vehicle accident. Gardner died as a result of injuries sustained in the accident, and Alexander Hobson was injured. Gardner's estate filed a wrongful-death action against Harrison and obtained a $2 million dollar judgment. At some point, Alexander Hobson also filed an action in the trial court against Harrison and Allstate seeking damages for injuries relating to the accident. In May 2018, Harrison filed the action underlying this petition in the trial court against Allstate in which he asserted claims of breach of contract and bad faith based on Allstate's alleged refusal to defend or indemnify him in the wrongful-death action. Allstate removed the action to the United States District Court for the Southern District of Alabama. After that court remanded the case to the trial court, Allstate filed a motion to transfer the action to Shelby County or Bibb County, arguing that venue in Perry County was improper. The Alabama Supreme Court concluded after review of the trial court record that Allstate demonstrated venue was improper in Perry County, and was proper in Shelby or Bibb County. The trial court was directed to vacate its order denying Allstate’s motion for a change of venue and to transfer the action. View "Ex parte Allstate Insurance Company." on Justia Law

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Zachariah Cowart ("Zachariah") accidentally ran over his wife Misty Cowart ("Misty"). Misty was partially compensated for her injuries under one provision of her automobile-insurance policy, and she sought to use the uninsured-motorist provision of the policy to make up the difference. The trial court entered a summary judgment in favor of the insurer and upheld its denial of uninsured-motorist benefits to Misty. The Alabama Supreme Court determined that judgment, however, was not supported by the language of the policy. For that reason, and because there wer key factual questions that were unresolved, the Supreme Court reversed summary judgment and remanded for further proceedings. View "Cowart v. GEICO Casualty Company" on Justia Law

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D.P.T. sought a writ of mandamus to direct the Circuit Court to rescind a discovery order that, D.P.T. asserted, required him to execute written authorizations allowing the respondents, D.P.T.'s insurers--United States Automobile Association, American Bankers Insurance of Florida, Inc., and American Collectors Insurance, LLC, to obtain records containing communications that he alleged were privileged under the psychotherapist-patient privilege. The insurers represented to the Alabama Supreme Court that they sought only D.P.T.'s "employment" records. In a rare move, the trial court itself filed a brief in response to the mandamus petition, in which it represented to the Supreme Court that it directed D.P.T. to execute an authorization allowing only the release of "employment" records. After review, the Supreme Court found D.P.T., who, as the petitioner, had the burden of establishing a clear legal right to the issuance of the writ of mandamus, did not demonstrate his "employment" records contained privileged communications. Thus, the Court denied the petition for mandamus relief. View "Ex parte D. P. T." on Justia Law

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Douglas Ghee, as the personal representative of the estate of Billy Fleming, appealed a circuit court order dismissing a wrongful-death claim brought against USAble Mutual Insurance Company d/b/a Blue Advantage Administrators of Arkansas ("Blue Advantage"). Fleming presented to the emergency department complaining of constipation and abdominal pain. He would ultimately need a colectomy, but the hospital informed him Blue Advantage had decided that a lower quality of care (continued non-surgical management) was more appropriate than the higher quality of care (surgery) that Fleming's surgeon felt was appropriate. Fleming and his family had multiple conversations with agents of Blue Advantage in an unsuccessful attempt to convince the company that the higher surgery was the more appropriate course of care. Ultimately, an agent of Blue Advantage suggested to Fleming that he return to the hospital in an attempt to convince hospital personnel and physicians to perform the surgery on an emergency basis. For five days, Fleming would present to the emergency room, each time he was treated by non-surgical means, then returned home. On the evening of July 15, 2013, Fleming's condition had deteriorated such that he had to be intubated. He died after midnight of septic shock due to a perforated sigmoid colon with abundant fecal material in the peritoneal cavity. A lawsuit was filed against Blue Advantage, asserting that the combined negligence of the hospitals and clinics involved and Blue Advantage, proximately caused Fleming's death. Because the trial court determined that Ghee's allegations against Blue Advantage as stated in the original complaint were defensively preempted by ERISA, the Alabama Supreme Court found Ghee should have had the right to amend his complaint to clarify his state-law claims. Because the Court concluded that Ghee should have been afforded the right to amend his complaint, it reversed the judgment of the trial court and remanded for further proceedings. View "Ghee v. USAble Mutual Insurance Company d/b/a Blue Advantage Administrators of Arkansas" on Justia Law

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Defendant Nationwide Mutual Fire Insurance Company ("Nationwide") appealed a judgment entered in favor of plaintiff The David Group, Inc. ("TDG"), which held TDG was entitled to coverage and indemnification under a commercial general- liability ("CGL") insurance policy issued by Nationwide. Under the terms of that CGL policy, Nationwide agreed to "pay those sums that the insured becomes legally obligated to pay as damages because of 'bodily injury' or 'property damage' to which this insurance applies." According to the policy, its coverage applied to "bodily injury" and "property damage" only if "[t]he 'bodily injury' or 'property damage' is caused by an 'occurrence.'" In October 2006, while TDG's CGL policy with Nationwide was in effect, Saurin and Valerie Shah purchased a newly built house from TDG. After they moved in, the Shahs began experiencing problems with their new house. Despite TDG's efforts at correcting the problems, however, in February 2008, the Shahs sued TDG. Although Nationwide initially defended TDG against the Shahs' action, Nationwide withdrew its defense after conducting its own investigation into the Shahs' allegations. It concluded that it had no duty either to defend or to indemnify TDG because, according to Nationwide, the damage the Shahs complained of did not constitute an "occurrence" so as to trigger coverage under the CGL policy. The Alabama Supreme Court concluded the trial court erred in finding that TDG was entitled to coverage and indemnification under its CGL policy with Nationwide. Thus, the Court reversed the trial court's judgment and remanded the case for further proceedings. View "Nationwide Mutual Fire Insurance Company v. The David Group, Inc." on Justia Law

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Alfa Insurance Corporation, Alfa Mutual General Insurance Corporation, Alfa Life Insurance Corporation, and Alfa Specialty Insurance Corporation (collectively, "Alfa") petitioned the Alabama Supreme Court for a writ of mandamus requiring the Montgomery Circuit Court to vacate its May 23, 2018, orders: (1) denying Alfa's motion for a protective order as to materials Alfa contended were protected by the attorney-client privilege; and (2) compelling Alfa to produce such materials for in camera inspection and for discovery. The underlying suit arose out of a policy dispute in which one side invoked an arbitration clause in the policy at issue. The insured claimed Alfa breached the policy by refusing to provide a defense and/or indemnity coverage. After review, the Supreme Court was satisfied Alfa established the trial court exceeded its discretion when it disregarded the attorney-client privilege and entered the May 2018 orders denying Alfa's motion for a protective order and compelling Alfa to produce the materials sought for in camera inspection or for discovery. Accordingly, the Supreme Court granted Alfa's petition for the writ of mandamus and directed the trial court to vacate the May 2018 orders denying Alfa's motion for a protective order and compelling Alfa to produce the materials at issue. View "Ex parte Alfa Insurance Corporation et al." on Justia Law

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Somnus Mattress Corporation d/b/a Posturecraft Mattress Company ("Somnus") appealed the grant of summary judgment in favor of Stephen Hilson and Crutchfield & Graves Insurance Agency, LLC ("CGIA"), on Somnus's claim that Hilson and CGIA were negligent in advising Somnus not to purchase insurance coverage for business interruption and loss of profits ("business-income coverage"). After review of the circuit court record, the Alabama Supreme Court concluded Hilson and CGIA did not have a duty to advise Somnus concerning the adequacy of its insurance coverage. Without such a duty, as a matter of law Somnus could not establish that Hilson and CGIA were negligent in their actions. Therefore, the circuit court did not err in entering a summary judgment in favor of Hilson and CGIA. View "Somnus Mattress Corp. v. Hilson" on Justia Law

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Ace American Insurance Company ("Ace"), an intervenor in the action below, appeals from the Baldwin Circuit Court's dismissal of the action filed by Ace's insured, Willie James Westbrook, against Rouse's Enterprises, LLC, d/b/a Rouses Markets ("Rouses Markets"). In August 2016, Westbrook sued Rouses Markets seeking to recover damages for injuries he sustained as the result of the allegedly negligent operation of a pallet jack by a Rouses Markets' employee while Westbrook was delivering goods to the Rouses Markets' location in Spanish Fort during the course of his employment with Cardinal Logistics Management Corporation ("Cardinal"). The Alabama Supreme Court has stated previously that, "'since dismissal with prejudice is a drastic sanction, it is to be applied only in extreme situations' and that, as a result, 'appellate courts will carefully scrutinize such orders and occasionally will find it necessary to set them aside.'" The Court could not say that the circumstances presented by this case presented an extreme situation in which dismissal of Ace's claim for want of prosecution was warranted. Accordingly, it reversed the judgment of the trial court dismissing Ace's claim and remanded the case for further proceedings. View "Ace American Insurance Company v. Rouse's Enterprises, LLC, d/b/a Rouses Markets" on Justia Law

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Kimberly Blalock appealed a circuit court order holding Crimson Sutphin was the rightful beneficiary of a policy insuring the life of Loyd Sutphin, Jr. ("Loyd"), issued by New York Life Insurance Company. Loyd took out a $250,000 individual whole life-insurance policy, naming his daughter, Sutphin, as the sole beneficiary. In October 2012, Loyd married Blalock, and they lived together at his home in Henegar. Soon after, in December 2012, Loyd submitted a change-of-beneficiary-designation form to New York Life, designating Blalock and Sutphin each as a 50% beneficiary under the policy. A few years later, in February 2016, Loyd and Blalock divorced; however, the life-insurance policy was not addressed in the divorce judgment, and Loyd never changed the beneficiary designation following the divorce. Loyd died later that year on December 23, 2016. In April 2017, Sutphin filed a action seeking a judgment declaring that she was the rightful beneficiary of the entire proceeds of the New York Life policy because, she asserted, pursuant to section 30-4-17, Ala. Code 1975, Blalock's beneficiary designation had been revoked upon her divorce from Loyd. Blalock moved to dismiss the action, arguing that Tennessee, not Alabama, law should govern and, thus, that the DeKalb Circuit Court did not have subject-matter jurisdiction to hear the case. The circuit court denied the motion to dismiss; Blalock filed a motion to reconsider the denial. At an evidentiary hearing on her motion to reconsider, Blalock again argued that the DeKalb Circuit Court lacked subject-matter jurisdiction but also asserted that the application of 30-4-17 in this instance violated section 22 of the Alabama Constitution of 1901; the circuit court denied Blalock's motion to reconsider. The case proceeded to a bench trial, at which Blalock argued that she and Loyd had established a common-law marriage after their divorce and before his death, thereby reviving her beneficiary designation under the policy. The circuit court heard testimony from numerous witnesses on this issue, most of whom testified on Blalock's behalf. In 2018, the circuit court issued a final order in the case, holding that Sutphin was the rightful beneficiary under the policy because Blalock's beneficiary designation had been revoked by virtue of 30-4-17 and no common-law marriage existed to revive that designation before Loyd's death. Finding that Blalock's beneficiary designation was revoked under 30-4-17 by virtue of her divorce, the Alabama Supreme Court affirmed the circuit court. View "Blalock v. Sutphin" on Justia Law

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Plaintiffs Jimmy Larry Beddingfield ("Larry"), his wife, Rebecca, and their adult son, James Cody Beddingfield ("Cody") appealed the grant of summary judgment in favor of the defendants Mullins Insurance Company, Mullins & Company Insurance, Rand Mullins, and David Mullins (referred to collectively as "Mullins"), on the Beddingfields' claims stemming from Mullins's alleged failure to properly procure insurance coverage. In 1997, Larry and Rebecca purchased a homeowners' liability-insurance policy from Rand Mullins that protected Larry and Rebecca's primary residence. In 2001, Larry and Rebecca purchased a second liability-insurance policy that provided coverage for a rental house located in Florence; they later constructed another house in Guntersville and, in 2003, purchased an additional liability-insurance policy for that property. In July 2003, Mullins canceled the insurance policy on the Florence house allegedly based on a belief that "the policy was issued in duplicate." Allegedly unbeknownst to Larry and Rebecca, however, the requested cancellation left the Florence house uninsured. One month later, pursuant to a mortgage refinance on the Beddingfields' residence, Larry and Rebecca paid one year's insurance premium on that residence; the check was endorsed and deposited into Mullins's account. In March 2004, the policy on the Beddingfields' residence was canceled because of nonpayment of the premium; neither Larry nor Rebecca, however, was able to recall receiving notice of the cancellation. After those two events, Larry and Rebecca were without insurance on their residence and the Florence house, leaving them with liability insurance only on their Guntersville house. In July 2004, a minor guest at the Beddingfields' Guntersville house, Trace Linam, suffered a serious eye injury in a fireworks-related incident. In 2008, Linam and his father, Linam, sued the Beddingfields, alleging that they, and particularly Cody (who was a minor at the time), were responsible for the injury. Because the underwriter of the Beddingfields' policy had been placed into receivership in Texas in 2006, the Alabama Insurance Guaranty Association ("AIGA") covered the Beddingfields' legal-defense costs in the Linam litigation; however, the maximum amount of liability coverage available was limited to $100,000 –- the amount of the liability- insurance policy Larry and Rebecca had obtained from Mullins to insure that property -- and not $500,000, the amount they say would have been available had the other two policies not been canceled. In February 2011, a judgment was entered on a $600,000 jury verdict against the Beddingfields in the Linam litigation. The Beddingfields appealed that decision. Because, however, AIGA did not post the requisite supersedeas bond, and the Beddingfields were allegedly unable to obtain a bond, execution of the judgment was not stayed during the pendency of the appeal. In July 2011, while their appeal was pending, the Beddingfields sued Mullins, alleging numerous counts of negligence and wantonness with relation to Mullins's handling of the various insurance policies. After review of the trial court record, the Alabama Supreme Court affirmed summary judgment as to the negligence claims, reversed as to the wantonness claims, and remanded the case for further proceedings. View "Beddingfield et al. v. Mullins Insurance Company et al." on Justia Law