ALFA MUT. INS. v. Nationwide Mut. Ins.

684 So. 2d 1295, 1996 WL 637394
CourtSupreme Court of Alabama
DecidedNovember 1, 1996
Docket1940678, 1940756
StatusPublished

This text of 684 So. 2d 1295 (ALFA MUT. INS. v. Nationwide Mut. Ins.) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
ALFA MUT. INS. v. Nationwide Mut. Ins., 684 So. 2d 1295, 1996 WL 637394 (Ala. 1996).

Opinion

684 So.2d 1295 (1996)

ALFA MUTUAL INSURANCE COMPANY
v.
NATIONWIDE MUTUAL INSURANCE COMPANY, as subrogee of Friedlander Realty, Inc.
John HALL
v.
NATIONWIDE MUTUAL INSURANCE COMPANY, as subrogee of Friedlander Realty, Inc.

1940678, 1940756.

Supreme Court of Alabama.

November 1, 1996.

*1296 D. Scott Wright, William H. Sisson and Thomas H. Nolan, Jr. of Brown, Hudgens, P.C., Mobile, for Alfa Mutual Insurance Company.

Robert H. Smith of Collins, Galloway & Smith, Mobile, for John Hall.

J. Stuart Wallace, Mobile, and J. F. Janecky, Mobile, for Nationwide Mutual Insurance Company.

COOK, Justice.

Alfa Mutual Insurance Company ("Alfa") and John Hall appeal from a judgment in favor of Nationwide Mutual Insurance Company ("Nationwide"), as subrogee of Friedlander Realty, Inc. ("Friedlander"). As to Alfa, we reverse the judgment of the trial court and enter a judgment for Alfa; as to Hall, we reverse the judgment and remand.

These appeals are from a judgment entered following this Court's remand of this action in Nationwide Mutual Insurance Co. v. Hall, 643 So.2d 551 (Ala.1994) ("Nationwide I"). Because the issues in this appeal turn on the interpretation to be accorded our holdings in that case, we shall discuss that case at length, and, for the convenience of the reader, we set forth the factual and procedural background of this dispute as stated in Nationwide I:

"Both the plaintiff Nationwide ... and the defendants John Hall ... and Alfa ... appeal from a ... summary judgment in favor of Nationwide. This case arose out of a personal injury and wrongful death action brought as a result of a fire in an apartment building owned by Hall and managed by Friedlander, in which a tenant was killed and her infant child was injured....
"Hall owns an apartment building in Mobile. In May 1986 Hall entered into a management agreement with Friedlander. Included in this management agreement was this indemnity provision:
"`Owner agrees to save agent harmless from all damage suits and claims arising in connection with said property and from all liability for injuries to persons or property while in, on, or about the premises. Owner agrees to carry, at his own expense, appropriate amounts of public liability insurance and such other liability insurance as may be reasonably applicable to this property [;] said policies shall be so endorsed as to protect agent in the same manner and to the same extent as owner. If these policies or endorsements are not furnished to agent within 10 days after execution of this agreement, coverage may be secured by agent and charged to owner, although agent does not assume this responsibility.'
"Presumably in accordance with this provision of the management agreement, Hall owned a contract of insurance with Alfa, which covered himself, as the named insured, and Friedlander, as `Any person... acting as [Hall's] real estate manager.' The Alfa policy also covered Hall against all claims made against him on the basis of the indemnity agreement with Friedlander. Friedlander was covered under a policy of its own issued by Nationwide.
"On April 14, 1987, a fire in the apartment building owned by Hall and managed by Friedlander caused the death of a tenant named Sheila Harris and severe injuries *1297 to her minor daughter Courtney Sedeidra Harris. As administratrix of the estate of Sheila Harris and as guardian and next friend of Courtney Sedeidra Harris, Ella Mae Packer brought a wrongful death and personal injury action against Hall and Friedlander. On September 23, 1988, Friedlander sent a letter to Hall and Alfa, requesting that they provide it with a defense and indemnify. Alfa received this letter on September 29, 1988. Neither Hall nor Alfa answered this letter. Between September 23, 1988, and October 18, 1988, Friedlander made several additional, oral requests that Hall and Alfa defend and indemnify in regard to the claims alleged in the Packer action. Neither Hall nor Alfa responded to these requests. On October 18, 1988, Friedlander sent Hall and Alfa a second written request for a defense and indemnification. Again neither responded.
"In accordance with its policy, Nationwide provided Friedlander with a defense, and on July 31, 1989, Nationwide entered into an agreement with Packer settling the claims against Friedlander for $250,000. The circuit court judge later approved the settlement in a prochein ami hearing, and the settlement agreement was subsequently consummated. To defend Friedlander in the Packer action, Nationwide paid $48,123 in attorney fees and $7,621 in other expenses.
"Hall never responded to any of Friedlander's requests for indemnity under the management agreement. The evidence indicates that Alfa did not determine that Friedlander was covered under the Hall policy until August 21, 1989, and did not advise Friedlander that it was covered until November 28, 1989. After the settlement agreement between Packer and Friedlander was consummated on January 12, 1990, Alfa also entered into an agreement with Packer on behalf of Hall, settling the claims against Hall for $300,000, the limit of coverage under the Alfa policy.
"On October 22, 1991, as subrogee of Friedlander, Nationwide brought this action against Hall and Alfa, seeking the amount it paid to settle the claims against Friedlander and the attorney fees and other expenses it paid to defend Friedlander. In its complaint, Nationwide alleged that Hall breached the indemnity provision of the management agreement. Nationwide also alleged that Alfa breached its contract of insurance with Friedlander, that Alfa negligently failed to settle the claims against Friedlander, that it wantonly failed to defend and indemnify Friedlander, and that it acted in bad faith by failing to investigate Friedlander's claim of coverage and by failing to provide Friedlander with coverage or a defense. In their answer, Hall and Alfa denied most of Nationwide's allegations and pleaded, as affirmative defenses, that Nationwide had failed to state a claim and that it had no standing as a subrogee of Friedlander to prosecute the breach-of-contract claim against Hall and the negligence, wantonness, and bad faith claims against Alfa.
"Nationwide moved for a summary judgment against Hall and for a partial summary judgment against Alfa. After the parties submitted sundry items of deposition, affidavit, and documentary evidence, the circuit court entered a summary judgment in favor of Nationwide on its breach-of-contract claim against Alfa. In a thorough, written judgment, the circuit court held that the Alfa and Nationwide policies both provided Friedlander with primary insurance coverage and that Alfa was obligated under its policy to contribute a pro rata share of the $250,000 paid to settle the claims against Friedlander and a pro rata share of the prejudgment interest thereon and to pay one-half of the attorney fees and other expenses paid by Nationwide to defend Friedlander and one-half of the prejudgment interest on these fees and costs. The circuit court calculated Alfa's pro rata share of the settlement and the prejudgment interest thereon based on the proportion that the limit of coverage of the Alfa policy bore to the total limit of insurance coverage applicable to the loss suffered by Friedlander.

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Cite This Page — Counsel Stack

Bluebook (online)
684 So. 2d 1295, 1996 WL 637394, Counsel Stack Legal Research, https://law.counselstack.com/opinion/alfa-mut-ins-v-nationwide-mut-ins-ala-1996.