Alfa Mutual Insurance Co. v. Culverhouse

149 So. 3d 1072, 2014 WL 590268, 2014 Ala. LEXIS 18
CourtSupreme Court of Alabama
DecidedFebruary 14, 2014
Docket1121127
StatusPublished
Cited by1 cases

This text of 149 So. 3d 1072 (Alfa Mutual Insurance Co. v. Culverhouse) 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 Mutual Insurance Co. v. Culverhouse, 149 So. 3d 1072, 2014 WL 590268, 2014 Ala. LEXIS 18 (Ala. 2014).

Opinion

STUART, Justice.

Alfa Mutual Insurance Company (“Alfa”) and William Koch (hereinafter referred to collectively as “the Alfa defendants”) appeal an order of the Geneva Circuit Court granting in part Corey Cul-verhouse’s motion to vacate the summary judgment entered in favor of the Alfa defendants in Culverhouse’s action asserting that Alfa had wrongfully refused to pay him benefits he was entitled to under a homeowner’s insurance policy. We affirm.

I.

In late 2005 or early 2006, Culverhouse, a self-employed general contractor, began constructing a house for himself on a five-acre lot in Hartford. Culverhouse initially financed the construction of the house himself; however, he eventually sought financing from a mortgage company, and, at that same time, he obtained from Alfa a policy insuring the house during the remainder of the construction process and after construction was completed. Culverhouse does not remember many of the details surrounding his purchase of the policy, but it appears that Koch was the agent responsible for selling Culverhouse the policy. Culverhouse acknowledges receiving a copy of the policy after he purchased it, and it appears that he subsequently renewed the policy after moving into the house when construction was finished sometime in 2007 or 2008. For the one-year period beginning June 19, 2009, the policy offered a total of $975,700 in coverage — $464,600 for the structure, $325,200 for the personal property contained in the [1073]*1073house, $46,500 for other structures on the property, and $139,400 for loss of use.

On July 3, 2009, a minor fire damaged the kitchen of the house. Culverhouse submitted a claim to Alfa, which paid for a remediation company to clean and repair the smoke damage caused by the fire. During this process, Culverhouse moved out of the house and into a barn on his property. After about two weeks of living in the barn, Culverhouse moved into a house he was constructing for eventual sale across the road from his house.

In the early morning of July 30, 2009, Culverhouse was awakened by his father, who had been alerted by a newspaper-delivery person and had driven to Culver-house’s house, and told that his house across the road was again on fire. This time, however, the fire could not be extinguished, and the house, its contents, and, according to the parties, the adjacent swimming pool were completely destroyed. Culverhouse promptly informed Alfa of the fire, and Alfa thereafter began an investigation into the cause. Ultimately, however, the investigator retained by Alfa was unable to establish how the fire began; its cause remains unknown.

On September 21, 2009, Culverhouse submitted a proof of loss to Alfa, claiming a total loss of $934,450 related to the fire. Alfa, however, immediately questioned the claim because Culverhouse had not submitted with his claim an inventory of the contents of the house and supporting documentation, and he had not submitted any evidence supporting the large claim he had submitted for loss of use in the two-month period since the fire or evidence indicating that any other structure besides the house and swimming pool had been destroyed.1 Moreover, using its standard procedures, Alfa had determined that the replacement value of Culverhouse’s house was $432,-268 — a sum within the $464,600 of coverage Culverhouse had on the house itself— and Culverhouse had submitted no contradictory estimates.

Culverhouse, through his attorney, sent Alfa itemized lists of the alleged contents of the house at the time of the fire; however, deeming those lists to be insufficiently specific and lacking in supporting documentation, Alfa, on November 6, 2009, notified Culverhouse that it was invoking its right under the policy to examine him under oath regarding his claim. On January 18, 2010, Culverhouse sat for the examination. During the course of the examination, Culverhouse admitted that some of the information he had submitted to Alfa was inaccurate, and he essentially acknowledged that he had just invented some values and guessed at others after becoming “frustrated and aggravated” with the claim process. Eventually Cul-verhouse refused to answer any more questions and left the examination.

On February 2, 2010, Culverhouse returned to finish the examination. Again, Culverhouse acknowledged that the list of contents he had submitted was inaccurate, and he was further unable to explain how he had arrived at the values he placed on many of the items on the list. Following the conclusion of that examination, Culver-house submitted additional itemized lists supporting his claim for contents of the house that were lost in the fire. As an example of contents included, that documentation included a claim that he had lost over 400 pairs of underwear and over 150 undershirts in the fire. Alfa was still not satisfied with the submitted information, [1074]*1074deeming it to lack sufficient specificity and support documentation.

On March 24, 2010, Culverhouse submitted an estimate from his chosen builder stating that it would cost $464,154 to rebuild the house, and, on March 26, 2010, Culverhouse by letter requested that Alfa release the insurance proceeds he was due; Alfa responded by offering to settle Cul-verhouse’s claim for $458,750. On April 2, 2010, Culverhouse rejected Alfa’s offer, stating that it was “unacceptable and in bad faith” and demanding that Alfa pay the limits of the policy ($975,700). On April 12, 2010, Culverhouse reiterated his demand that Alfa pay the policy limits. On April 16, 2010, Alfa advised Culver-house that it would not meet his request to pay the policy limits because his “demand for policy limits [did] not make sense as there [were] various coverage[s] under the policy that [were] not applicable.” Alfa further offered to settle Culverhouse’s claim by paying $464,600 to rebuild the house and an additional $100,000 to settle all other claims.

Culverhouse thereafter advised Alfa that he would submit a response to its offer; however, on July 8, 2010, Culverhouse instead filed the instant action, alleging that Alfa had willfully refused to pay him the insurance proceeds he was due under the policy and asserting claims of breach of contract, negligence, the tort of outrage, fraud, and bad-faith failure to pay an insurance claim. Culverhouse claimed $975,700 in compensatory damages and $2,000,000 in punitive damages, plus an additional sum for attorney fees and costs. The Alfa defendants thereafter filed an answer denying Culverhouse’s claims and moving to dismiss the complaint. That motion to dismiss was granted in part, and the breach-of-contract claim against Koch was dismissed along with the entire negligence claim.

At a subsequent deposition, Culverhouse acknowledged that he had given Alfa false information in the past regarding his claim, explaining that he had been upset and had wanted to “throw the book” at Alfa, but he estimated at that time that approximately $200,000 in personal property was destroyed in the fire, plus or minus $50,000. He also testified that he had moved into another house he owned after the fire and that his only loss-of-use costs associated with that move were $500 to purchase blinds for the house into which he had moved. With regard to the “other structures” coverage of his policy, it is also undisputed that Culverhouse had only a swimming pool, and he submitted an estimate of $22,000 to rebuild that pool. Regardless of these facts, Culverhouse claimed at his deposition that he was entitled to the entire policy limits — $975,700— because he had paid his premiums.

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Cite This Page — Counsel Stack

Bluebook (online)
149 So. 3d 1072, 2014 WL 590268, 2014 Ala. LEXIS 18, Counsel Stack Legal Research, https://law.counselstack.com/opinion/alfa-mutual-insurance-co-v-culverhouse-ala-2014.