Justia Insurance Law Opinion Summaries

Defendant Alfa Mutual Insurance Company petitioned for mandamus relief when a circuit court denied its motion to strike an amended complaint filed by plaintiffs Ronald and Mary Land on a dispute between the parties on a dispute arising out of a farm-owner's policy insurance issued to the Langs by Alfa. The matter was set for trial and was continued on at least four occasions. Thereafter, in connection with further discovery efforts by the Langs, Alfa asked whether the Langs intended to amend their original complaint and allegedly received no response from the Langs' attorney. Almost exactly two years from the filing date of their original complaint, the Langs filed an amended complaint, which added a fictitiously named defendant identified as the party "whose responsibility it was to inspect the property of the Langs, to insure their farm policy provide[d] adequate coverage and/or that the Langs were not paying for insurance to property which they did not own." The Langs' complaint, as amended, added new counts asserting negligence and fraudulent/reckless misrepresentation and an additional breach-of-contract claim. Alfa moved to strike the amended complaint on numerous grounds. The Supreme Court granted Alfa's application and issued the writ, finding that the Langs failed to demonstrate good cause ("or, in fact, any cause") for the excessive delay in amending their complaint when they knew or should have known of the claims before or at the time they filed their original complaint. "Further, the claims were actually suggested by Alfa's counsel." At the time the Langs filed their amendment, the case had been set for trial on several occasions, and the amendment would unduly prejudice Alfa, who, as a result of the Langs' excessive delay, could not fully and fairly defend against the claims added by the amendment because a key witness had died.The trial court exceeded its discretion in allowing the Langs to amend their complaint so near the trial date in order to add claims based on facts that were or ought to have been known to the Langs well prior to that date. View "Ex parte Alfa Mutual Insurance Company." on Justia Law

Har-Mar Collisions, Inc. appealed a circuit court judgment after a jury verdict of $101,054.40 in favor of Har-Mar Collisions on its breach-of-contract claim against Scottsdale Insurance Company. The trial court offset the jury verdict by the amounts Har-Mar Collisions had recovered from a settlement agreement it had entered into with Auto-Owners Insurance Company and Owners Insurance Company and from a settlement agreement it had entered into with CRC Insurance Services, Inc. ("CRC"). Because the total amount Har-Mar Collisions recovered from those two settlement agreements exceeded the amount of the jury verdict, the trial court entered a judgment awarding Har-Mar Collisions $0. Har-Mar Collisions appeals, challenging the setoff. Scottsdale cross-appealed from the judgment against it. After review, the Supreme Court reversed the judgment to the extent it applied a setoff against the jury verdict returned against Scottsdale and remanded the case for the trial court to enter a judgment reinstating the jury verdict of $101,054.40. The Court remanded for the trial court to reconsider Har-Mar Collisions' motion to tax costs. The trial court was affirmed in all other respects. View "Scottsdale Insurance Company v. Har-Mar Collisions, Inc." on Justia Law

In appeal no. 1140870, Southern Cleaning Service, Inc. ("SCSI"), appealed the grant of summary judgment entered favor of Essex Insurance Company and Genesee General Agency, Inc. (collectively, "the insurance defendants"), on SCSI's claims stemming from Essex's refusal to provide SCSI coverage under a commercial general-liability policy based on an alleged failure to timely notify Essex of the facts leading to the claim for coverage. In appeal no. 1140918, the insurance defendants cross-appealed the trial court's denial of their requests for costs. Winn-Dixie Montgomery, LLC entered into a contract with SCSI for provide floor-care and general janitorial services to multiple grocery stores in central Alabama. SCSI entered into a subcontract with Phase II Maintenance Systems, LLC, whereby Phase II became responsible for providing those services. That subcontract required Phase II to carry a minimum level of liability insurance and to list both SCSI and Winn-Dixie as "additional insureds" on such policies. Phase II contacted Alabama Auto Insurance Center ("Alabama Auto") for a policy; Alabama Auto in turn contacted Genesee, a managing general agency located in Georgia that connected independent agents like Alabama Auto with different insurance companies that provided the type of coverage being sought by the independent agent's customer. Ultimately, Genesee sent Alabama Auto a quote for a commercial general-liability policy issued by Essex that would meet Phase II's needs, and Alabama Auto presented that quote to Phase II. Phase II accepted the quote; Alabama Auto transmitted notice of that acceptance to Genesee; and Genesee, which held issuing authority for Essex, then issued Phase II the desired policy on behalf of Essex. In 2011, Beverly Paige was shopping at a Phase II-serviced Winn-Dixie in Montgomery when she allegedly slipped on a wet floor, fell, and was injured. A Phase II employee on duty at the store at the time of the fall reported the incident to Phase II's owner and president, William Wedgeworth, that same day, and Wedgeworth has given sworn testimony indicating that he separately notified both SCSI and Alabama Auto of the incident on the next available business day,and further specifically asked Alabama Auto to notify Genesee of the incident. After review of the trial court record, the Supreme Court concluded the trial court erred in granting summary judgment, citing several disputes of material fact that should have precluded the court's ultimate decision. As such, the Supreme Court reversed and remanded the outcome for further proceedings. The cross appeal was rendered moot. View "Essex Insurance Company and Genesee General Agency, Inc. v. Southern Cleaning Service, Inc." on Justia Law

Liberty National Life Insurance Company petitioned the Alabama Supreme Court for a writ of certiorari to review the Court of Civil Appeals' decision: (1) holding, as a matter of first impression, that 27-14-3(f), Ala. Code 1975, required an insurable interest in a life-insurance policy to exist at a point other than the time at which the policy becomes effective; and (2) reversing the trial court's dismissal of the complaint filed by Misty Ann Barton, as administratrix of the estate of Benjamin H. Miller, Jr, in which Barton alleged that Liberty National was negligent in allowing Leanne Miller, Benjamin Jr.'s stepmother, to substitute herself as beneficiary of an insurance policy insuring the life of Benjamin Jr. The Court granted Liberty National's petition, and, affirmed in part and reversed in part the judgment of the Court of Civil Appeals. Barton alleged that Liberty National was negligent in allowing Leanne to name herself as beneficiary of an insurance policy that was owned by Benjamin Sr. at his death and, pursuant to the terms of the policy, payable to Benjamin Jr.'s estate. The Court found that the policy was not produced or viewed by the trial court, nor had any discovery ensued concerning ownership of the policy, and who exactly had the right to effect a beneficiary change. Accordingly, in viewing the allegations of Barton's complaint most strongly in Barton's favor, it appeared to the Supreme Court that Barton could, under certain circumstances, maintain a cause of action against Liberty National alleging negligence on its part in allowing Leanne, either as personal representative of Benjamin Sr.'s estate or individually, to substitute herself as beneficiary on the policy insuring Benjamin Jr.'s life. The Court affirmed that portion of the Court of Civil Appeals' opinion reversing the trial court's order dismissing Barton's complaint. The Court reversed the Court of Civil Appeals' judgment insofar as it interpreted section 27-14-3(f) to require an insurable interest in personal insurance to exist at any point beyond the time the policy of insurance becomes effective. View "Ex parte Liberty National Life Insurance Company." on Justia Law

In appeal no. 1140870, Southern Cleaning Service, Inc. ("SCSI"), appealed the grant of summary judgment in favor of Essex Insurance Company and Genesee General Agency, Inc. on SCSI's claims stemming from Essex's refusal to provide SCSI coverage under a commercial general-liability policy ("the Essex policy") based on the alleged failure to timely notify Essex of the facts leading to the claim for coverage. In appeal no. 1140918, the insurance defendants cross-appeal the trial court's denial of their requests for costs. In August 2006, Winn-Dixie Montgomery, LLC ("Winn-Dixie"), entered into a contract with SCSI that obligated SCSI to provide floor-care and general janitorial services to multiple Winn-Dixie grocery stores in central Alabama. In 2011, a store customer allegedly slipped and fell on a wet floor, and sued. Winn-Dixie sought indemnification from SCSI. SCSI sought indemnification from Phase II, one of its cleaning subcontractors. Phase II, SCSI, and Winn-Dixie again asked Essex to provide them with a defense and indemnity under the terms of the Essex policy; however, their requests were denied. With regard to appeal no. 1140870, the Supreme Court concluded that the summary judgment entered in favor of the insurance defendants should have been reversed because there was a genuine issue of material fact as to who among the insurance defendants acted under the doctrine of apparent authority to settle the Winn Dixie customer's slip and fall claim. The Court pretermitted all discussion of the other grounds for reversal SCSI offered. Because the insurance defendants would have been entitled to the costs they seek in appeal no. 1140918 only if there was a final judgment in their favor, that appeal was dismissed as moot. View "Essex Insurance Co. v. Southern Cleaning Service, Inc." on Justia Law

In 2006, plaintiff Robert Kyle Morris, a licensed insurance agent, was working for his father's independent insurance agency, the Morris Insurance Agency ("Morris Insurance"). At some point, Morris contacted one of the Farmers entities about becoming a Farmers agent. Morris testified that he initially became interested in working as a Farmers agent because Farmers had a policy whereby a Farmers agent could place insurance with a different company if a customer was not eligible for insurance issued by Farmers or if Farmers refused to underwrite a policy for the customer. He further testified that he had not been looking to disaffiliate himself from his father's insurance agency and that he had told a Farmers recruiter that he did not want to cut off the working relationship he had with his father. Morris also testified that, when he agreed to become a Farmers agent, he signed several different agreements; that nothing in any of those agreements or documents indicated that his relationship with his father's agency constituted a conflict of interest; that the documents given to him did not say anything contrary to what he had been told by any recruiter, or that any representations made to him by the agents of Farmers were false. Despite signing an agent agreement, and having been recruited, Morris' contract was ultimately terminated for conflict of interest. Morris sued Farmers, arguing that Farmers had fraudulently induced him to become a Farmers agent. The trial court ruled in Morris' favor, and Farmers appealed. The Supreme Court affirmed in part and reversed in part. The Court found Morris did not blindly rely on oral representations and ignore the terms of his contract. "The only information contrary to what Morris had been told was buried in a 200-page manual among dozens of other documents provided for training modules, and even longtime Farmers employees were not aware of the existence of the statement." Morris presented sufficient evidence of fraudulent inducement for the matter to be decided by the jury. Farmers' postjudgment motion was denied by operation of law, but the trial court did not make any findings regarding Farmers' request for a remittitur of the punitive-damages award. The Court remanded this case for the trial court to conduct a hearing on the punitive-damages award. View "Farmers Insurance Exchange v. Morris" on Justia Law

State Farm Mutual Automobile Insurance Company petitioned the Alabama Supreme Court for certiorari review of the Court of Civil Appeals' decision affirming the trial court's judgment ordering State Farm to pay an attorney fee based on a common-fund theory for the recovery of the moneys advanced by State Farm to James Ross Pritchard, Jr., pursuant to "Lambert v. State Farm Mutual Automobile Insurance Co.," (576 So. 2d 160 (Ala. 1991)). Pritchard sued Broderick McCants, State Farm (Pritchard's uninsured/underinsured-motorist ("UIM") insurer), and others seeking damages for injuries Pritchard suffered in an automobile accident with a vehicle being operated by McCants. Applying the Court's determination that a UIM insurer does not have a subrogation interest in a "Lambert" advance to the facts of this case, the Court held that State Farm did not have a subrogation interest in the $50,000 it advanced to Pritchard pursuant to "Lambert" and, consequently, that Pritchard's recovery from the tortfeasor of the "Lambert" advance did not create a common fund from which State Farm was required to pay its share of Pritchard's attorney fee. View "Ex parte State Farm Mutual Automobile Insurance Company." on Justia Law

In 2004, Michael Britt purchased a Beneteau brand sailboat. Michael had insured the sailboat with St. Paul pursuant to a Seahorse Underwriters Boat Insurance Policy that provided coverage limits of $85,000 for "accidental direct physical loss of or damage to [the sailboat] ... except as specifically stated or excluded in this policy." From 2004 onward, the sailboat served as Michael's residence in Florida; Michael had no other established residence. In early September 2011, Michael telephoned Willis Britt, "Britt," his father, and told Britt that he had accepted a job driving a commercial truck and that he had to attend orientation for the new job in Oklahoma City, Oklahoma. Michael informed Britt that he planned to sail the sailboat from West Palm Beach, Florida, to Jacksonville, Florida, store the boat in Jacksonville, and rent a car in Jacksonville to drive to Oklahoma City for the orientation. On or around September 11, 2011, Michael set sail for Jacksonville. On September 15, 2011, the United States Coast Guard boarded the sailboat approximately one mile off the coast of Cape Canaveral, Florida, for a "cold hit" inspection. That inspection revealed that the sailboat was seaworthy. There was no evidence of any severe weather in the Cape Canaveral area on September 15, 2011, on which date, Michael was supposed to check in with his father upon arrival in Jacksonville, but never did. In October 2011, Britt contacted St. Paul to report the sailboat as lost. In 2012, Britt was appointed conservator of Michael's estate by the Chilton Probate Court. Shortly thereafter, Britt filed a claim with St. Paul for the lost sailboat. St. Paul sent Britt a letter in which it declined coverage for the sailboat. The Supreme Court found that the "mysterious-disappearance" exclusion in Michael's insurance policy was not ambiguous, nor did it conflict with the 30-day provision; rather, the policy, when read as a whole, could accommodate both provisions (one providing coverage and one excluding coverage). Because the Court held that the mysterious-disappearance exclusion was unambiguous and does not conflict with the 30-day provision, and because there was no genuine issue of material fact concerning the disappearance of the sailboat, the trial court should have entered a summary judgment in St. Paul's favor. View "St. Paul Fire & Marine Insurance Company v. Britt" on Justia Law

Federal Insurance Company appealed a circuit court order denying its motion to compel arbitration of the breach-of-contract claim asserted against it by Kert Reedstrom. In 2008, Reedstrom entered into a written employment agreement with Marshall-Jackson Mental Health Board, Inc., d/b/a Mountain Lakes Behavioral Healthcare ("MLBHC"), to begin serving as its executive director in Guntersville. During the course of Reedstrom's employment with MLBHC, MLBHC held an executive-liability, entity-liability, and employment-practices-liability policy issued by Federal Insurance that generally protected certain MLBHC officers and employees described as "insureds" in the policy from loss for actions committed in the course of their employment with MLBHC. It was undisputed that Reedstrom was an "insured" covered by the Federal Insurance policy. The Federal Insurance policy contained an arbitration provision. A separate endorsement to the Federal Insurance policy further highlighted the arbitration provision and explained that its effect was that any disagreement related to coverage would be resolved by arbitration and not in a court of law. In July 2010, MLBHC terminated Reedstrom's employment and, in December 2010, Reedstrom sued MLBHC alleging that his termination constituted a breach of his employment contract. MLBHC asserted various counterclaims against Reedstrom based on his alleged misconduct while serving as executive director. Thereafter, Reedstrom gave Federal Insurance notice of the claims asserted against him and requested coverage under the terms of the Federal Insurance policy. Federal Insurance ultimately denied his claim and refused to provide him with counsel to defend against MLBHC's claims. A jury returned a verdict awarding Reedstrom $150,000 on his claim against MLBHC and awarding MLBHC $60,000 on its claims against Reedstrom. Consistent with its previous denial of his request for coverage, Federal Insurance refused Reedstrom's request to satisfy the judgment entered against him. Reedstrom sued Federal Insurance, asserting one claim of breach of contract and seeking $72,000 in damages ($60,000 for the judgment entered against him and $12,000 for the attorney fees he incurred in defending those claims). The Supreme Court reversed and remanded, finding that the trial court did not articulate its rationale for denying the motion to compel arbitration. The denial was apparently based on the court's resolving at least one of the arbitrability issues raised by Reedstrom in his favor and against Federal Insurance. However, because the subject arbitration provision delegated to the arbitrators the authority to resolve such issues, the trial court erred by considering the waiver and nonsignatory issues raised by Reedstrom instead of granting the motion to compel arbitration and allowing the arbitrators to resolve those issues. View "Federal Insurance Company v. Reedstrom" on Justia Law