State Farm Mut. Auto. Ins. Co. v. BrownState Farm Mut. Auto. Ins. Co. v. Brown
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Judy Brown and Michael Brown asserted a claim against State Farm Mutual Automobile Insurance Company, the liability insurer for the alleged tortfeasor, Waylon Gant, seeking a declaratory judgment as to the amount of liability insurance coverage available under Gant‘s State Farm policy to indemnify Gant should the Browns succeed in the action the Browns had filed against Gant. The Browns had sued Gant, with whom Judy Brown had been involved in a motor-vehicle accident, alleging claims of negligence and/or wantonness on behalf of Judy Brown, and a claim of loss of consortium on behalf of Michael Brown. State Farm contended that under its policy with Gant, only $50,000 coverage was available to the Browns; the Browns cited Tate v. Allstate Insurance Co., 692 So.2d 822 (Ala. 1997), for their argument that they are entitled to $100,000 under Gant‘s State Farm policy — $50,000 for Judy‘s claim and $50,000 for Michael‘s loss-of-consortium claim. State Farm also included in its answer the affirmative defense that the claim asserted by the Browns against State Farm is a direct action agаinst State Farm before a judgment has been entered against its insured, in contravention of
Facts
On or about November 29, 1999, Waylon Gant was involvеd in a motor-vehicle accident with Judy Brown, who sustained severe physical injuries. Gant is insured under an automobile liability policy issued by State Farm. The “liability” coverage section of Gant‘s State Farm policy provides, in part, that State Farm will “pay damages which an insured becomes legally obligated to pay because of . . . bodily injury to othеrs. . . .” The policy defines “bodily injury” as “bodily injury to a person and sickness, disease or death which results from it.” The definition of “bodily injury” contains no words like “loss of services” or “loss of consortium” or any language similar to those words. The limits of Gant‘s liability coverage for bodily injury under the policy is $50,000 for “[e]ach [p]erson” and $100,000 for “[e]ach [a]ccident.” Specifically, the limits of liability for bodily injury in Gant‘s policy provide:
“Under `Each Person’ is the amount of coverage for all damages due to bodily injury to one person. `Bodily injury to one person’ includes all injury and damages to others resulting from this bodily injury. Under `Each Accident’ is the total amount of coverage, subject to the amount shown under `Each Person,’ for аll damages due to bodily injury to two or more persons in the same accident.”
On January 24, 2001, the Browns sued Gant in the Etowah Circuit Court, alleging that he had been negligent and/or wanton and that his negligence and/or wantonness had caused the November 29, 1999, accident. The complaint alleges that the injuries Judy sustained in the accident exceed $50,000. Judy‘s husband, Michael, who was not in the car at the time of the accident, claims to have “lost the services, comfort and consortium of his wife Judy Brown” as a result of the accident and claims that that loss exceeds $50,000 in damages. The Browns also asserted a direct claim, titled “Complaint for Declaratory Judgment,” against State Farm as Gant‘s liability insurer seeking a declaration that, based on this Court‘s decision in Tate v. Allstate Insurance Co., supra, the policy should be “interpreted so as to provide $50,000 coverage for Judy Brown‘s claims and an additional $50,000 coverage for Michael Brown‘s claims.”
On February 16, 2001, State Farm filed its answer to the Browns’ declaratory-judgment complaint, asserting, among other things, the affirmative defenses that the Browns’ сlaim against State Farm was a prohibited direct action against an adversary‘s liability insurer, and that the bodily-injury liability limits for “[e]ach [p]erson” under the language of Gant‘s State Farm policy “were not expanded by a derivative claim asserted by a person not having received any bodily injury [i.e., Michael Brown].” State Farm relied upon this Court‘s opinion in Weekley, supra, in arguing that the coverage afforded Gant for both Judy Brown‘s claim for damages for bodily injuries and Michael Brown‘s derivative claim for damages for loss of consortium is limited to $50,000 for bodily injury to one person. On March 15, 2001, Gant
On March 26, 2001, the Browns filed a motion for partial summary judgment,1 supported by a certified copy of Gant‘s State Farm policy. In that motion, the Browns argued that Tate, supra, entitled them to a judgment declaring as a matter of law that Gant‘s State Farm policy afforded Gant “a total of $100,000 in coverage for their claims.” State Farm opposed the motion on two grounds; it argued 1) that Maness v. Alabama Farm Bureau Mutual Casualty Insurance Co., 416 So.2d 979 (Ala. 1982), prohibitеd a direct action against State Farm before a judgment has been had against the alleged tortfeasor/policyholder, and 2) that, even if Maness does not prohibit such a direct action, the insurance coverage available to Gant was limited to the $50,000 “[e]ach [p]erson” limit for both Judy‘s personal-injury claim and Michael‘s derivative loss-оf-consortium claim. The Browns submitted a reply memorandum in response to State Farm‘s opposition reiterating that Tate controlled and arguing that Weekley had been at least partially abrogated by City of Lanett v. Tomlinson, 659 So.2d 68 (Ala. 1995).
On September 12, 2003, the trial court, relying upon Tate and City of Lanett, entered an order, stating:
“The Court hereby declares that the total amount of coverage from the State Farm policy which affords coverage to defendant Gant is $50,000 for the claims of the [sic] Judy Brown, and an additional $50,000 for the claims of her husband Michael Brown, for a total of $100,000 in coverage.”
On October 9, 2003, State Farm filed a motion to vacate the judgment and to dismiss the claim against it or, in the alternative, to certify the partial summary judgment as final pursuant to
Standard of Review
We review a summary judgment under the following standard:
“This Court‘s review of a summary judgment is de novo.
“`In reviewing the disposition of a motion for summary judgment, “we utilize the same standard as thе trial court in determining whether the evidence before [it] made out a genuine issue of material fact,” Bussey v. John Deere Co., 531 So.2d 860, 862 (Ala. 1988), and whether the movant was “entitled to a judgment as a matter of law.” Wright v. Wright, 654 So.2d 542 (Ala. 1995);
Rule 56(c), Ala.R.Civ.P. When the movant makes a prima facie showing that there is nogenuine issue of material fact, the burden shifts to the nonmovant to present substantial evidence creating suсh an issue. Bass v. SouthTrust Bank of Baldwin County, 538 So.2d 794, 797-98 (Ala. 1989). Evidence is “substantial” if it is of “such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved.” Wright, 654 So.2d at 543 (quoting West v. Founders Life Assurance Co. of Florida, 547 So.2d 870, 871 (Ala. 1989)). Our review is further subject to the caveat that this Court must review the record in a light most favorable to the nonmovant and must resolve all reasonable doubts against the movant. Wilma Corp. v. Fleming Foods of Alabama, Inc., 613 So.2d 359 (Ala. 1993) [overruled on other grounds, Bruce v. Cole, 854 So.2d 47 (Ala. 2003)]; Hanners v. Balfour Guthrie, Inc., 564 So.2d 412, 413 (Ala. 1990).‘”
Pittman v. United Toll Sys., LLC, 882 So.2d 842, 844 (Ala. 2003). Also, in Callaway v. Whittenton, 892 So.2d 852 (Ala. 2003), this Court stated:
“`“Regarding a question of law, . . . this Court indulges no presumption of correctness as to the trial court‘s ruling.“‘”
(Quoting Eagle Prods., Inc. v. Glasscock, 882 So.2d 280, 282 (Ala. 2003), quoting in turn Bell v. T.R. Miller Mill Co., 768 So.2d 953, 956 (Ala. 2000).)
The same standard applies to a declaratory judgment:
“Our review of a declaratory judgment is generally governed by the ore tenus standard of review. However, in cases such as this, where there are no disputed facts and where the judgment is based entirely upon documentary evidence, no such presumption of correctness applies; our review is de novo.”
Alfa Mut. Ins. Co. v. Small, 829 So.2d 743, 745 (Ala. 2002).
Analysis
State Farm argues that the trial court erred on two grounds. State Farm first argues that by allowing the Browns to go forward with their claim against State Farm the trial court allowed the Browns to pursue a direct action against an insurance company, something State Farm alleges is not permitted by
Section
“Upon the recovery of a final judgment . . ., if the defendant in such action was insured against the loss or damage at the time when the right of action arose, the judgment creditor shall be entitled to have the insurance money provided for in the contract of insurance between the insurer and the defendant applied to the satisfaction of the judgment. . . .”
State Farm argues thаt this statute establishes the necessity of a “recovery of a final judgment” before a direct action can be filed against an insurance company to recover for the actions of an insured. The Browns have not yet obtained a judgment against Gant.
This Court addressed
“The injured party, however, can bring an action against the insurer only after he has recovered a judgment against the insured and only if the insured was covered against the loss or damage at the time the injured party‘s right of action arose against the insured tort-feasor.”
416 So.2d at 981-82. The opinion explained that the Manesses’ declaratory-judgment action was an improper direct action prohibited by
“We hold that the cross-claims of the Manesses against the insurance carriers are a form of direct action against an insurance carriеr and not allowable under Alabama law because an injured party cannot bring a direct action against the insurance carrier, absent a final judgment against its insured, see, Code 1975, §§
27-23-1 and-2 . Therefore, the dismissal of the cross-claims by the trial court was proper.”
416 So.2d at 982. See also Knox v. Western World Ins. Co., 893 So.2d 321 (Ala. 2004) (affirming order dismissing plaintiff‘s declaratory-judgment claim on basis that final judgment had not been еntered against insured/alleged tortfeasor); Wiggins v. State Farm Fire Cas. Co., 686 So.2d 218, 220 (Ala. 1996) (quoting Maness for the proposition that an injured party “`can bring an action against the insurer only after he has recovered a judgment against the insured‘“); Hicks v. Alabama Pest Servs., Inc., 548 So.2d 148, 150 (Ala. 1989) (judgment had not been entered for plaintiff; therefore, plaintiff had no right to pursue cause of action against insurance company); Stewart v. State Farm Ins. Co., 454 So.2d 513, 514 (Ala. 1984) (citing Maness and holding that a plaintiff could not bring a direct action against the alleged tortfeasor‘s liability insurer under a third-party-beneficiary theory); Howton v. State Farm Mut. Auto. Ins. Co., 507 So.2d 448, 450 (Ala. 1987) (noting Maness, Stewart, and other cases in holding that a plaintiff may not maintain a direct action against an insurer before a judgment has been rendered against the insured/alleged tortfeasor unless the insurer causes an independent injury to the plaintiff).
The Browns argue that
The Browns attempt to distinguish Maness, a case involving a declaratory judgment, by stating that the Manesses did not proceed under
State Farm argues in reply that in specifically referring to
Like any other action, a bona fide justiciable controversy is essеntial to maintain a declaratory-judgment action. Harper v. Brown, Stagner, Richardson, Inc., 873 So.2d 220, 223 (Ala. 2003) (to maintain a declaratory-judgment action, there must be a “bona fide justiciable controversy” between the parties); Creola Land Dev., Inc. v. Bentbrooke Housing, L.L.C., 828 So.2d 285, 288 (Ala. 2002) (“`[a]ll that is required for a declaratory judgment action is a bona fide justiciable controversy‘” (quoting Gulf South Conference v. Boyd, 369 So.2d 553, 557 (Ala. 1979))). State Farm argues that there is no justiciable controversy between the Browns and State Farm to justify a direct action against it like the one filed by the Browns.
A controversy is justiciable when present legal rights are affected, not when a controversy is merely anticipated. See Creola Land Dev., supra; Baldwin County v. Bay Minette, 854 So.2d 42, 45 (Ala. 2003). Nor does the declaratory-judgment statute empower a court to give an advisory opinion. Hornsby v. Sessions, 703 So.2d 932 (Ala. 1997). The Browns’ negligence and wantonness and loss-of-consortium claims аgainst Gant remain pending, and the Browns have yet to obtain a judgment against Gant awarding the Browns damages that would initiate any duty on the part of State Farm to indemnify Gant. Therefore, any question as to whether State Farm would owe anything to the Browns in the future is speculative at best.
State Farm also contends that the direct-action statute,
We agree with State Farm‘s argument that
State Farm also argues that even if the direct-action statute did not prohibit this action, the trial сourt erred in determining that Michael, for his derivative loss-of-consortium claim, should under Gant‘s policy be entitled to $50,000 separate from the $50,000 in liability coverage Judy would under Gant‘s policy be entitled to for her personal injuries. We need not address this question because our resolution of the first issue renders moot the need for us to address the second.
We reverse the judgment of the trial court and remand the case for the trial court to enter a judgment granting State Farm‘s motion to vacate the summary judgment in favor of the Browns and to dismiss the claims against State Farm on the basis of the direct-action statute,
REVERSED AND REMANDED.
HOUSTON, SEE, BROWN, HARWOOD, WOODALL, and STUART, JJ., concur.