Shane Traylor Cabinetmaker, L.L.C. v. American Resources Insurance Company, Inc.
Annotate this Case
Justia Opinion Summary
Want to stay in the know about new opinions from the Supreme Court of Alabama?
Sign up for free summaries delivered directly to your inbox. Learn More ›
You already receive new opinion summaries from Supreme Court of Alabama. Did you know we offer summary newsletters for even more practice areas and jurisdictions? Explore them here.
Shane Traylor Cabinetmaker, L.L.C. ("STC"), and Michael Shane Traylor sued American Resources Insurance Company, Inc., alleging breach of contract and bad faith, based on American Resources' refusal to defend or to indemnify STC and Traylor on counterclaims filed against them by Robert Barbee and R.L. Barbee Builders, Inc. in a separate action. The circuit court entered a summary judgment in favor of American Resources, and STC and Traylor appealed. Finding no error, the Supreme Court affirmed.
Download PDF
R e l : 5/3/13 Notice: T h i s o p i n i o n i s s u b j e c t t o f o r m a l r e v i s i o n b e f o r e p u b l i c a t i o n i n t h e advance s h e e t s o f Southern R e p o r t e r . R e a d e r s a r e r e q u e s t e d t o n o t i f y t h e R e p o r t e r o f D e c i s i o n s , A l a b a m a A p p e l l a t e C o u r t s , 300 D e x t e r A v e n u e , M o n t g o m e r y , A l a b a m a 3 6 1 0 4 - 3 7 4 1 ( ( 3 3 4 ) 2 2 9 ¬ 0 6 4 9 ) , o f a n y t y p o g r a p h i c a l o r o t h e r e r r o r s , i n o r d e r t h a t c o r r e c t i o n s may b e made b e f o r e t h e o p i n i o n i s p r i n t e d i n Southern R e p o r t e r . SUPREME COURT OF ALABAMA OCTOBER TERM, 2012-2013 1110418 Shane T r a y l o r Cabinetmaker, L.L.C., and Michael Shane Traylor v. American Resources Insurance Company, Inc. Appeal from Mobile C i r c u i t Court (CV-08-2178) BRYAN, Justice. Shane T r a y l o r C a b i n e t m a k e r , L.L.C. ("STC"), a n d M i c h a e l Shane T r a y l o r s u e d A m e r i c a n R e s o u r c e s I n s u r a n c e Company, I n c . ("American R e s o u r c e s " ) , faith, a l l e g i n g breach of contract b a s e d on A m e r i c a n R e s o u r c e s ' r e f u s a l and bad t o defend or t o 1110418 i n d e m n i f y STC and T r a y l o r on c o u n t e r c l a i m s by Robert L. (hereinafter Barbee and collectively separate action. R.L. referred Barbee to Inc. "Barbee"), in a a summary j u d g m e n t and T r a y l o r appealed. affirm. Facts and P r o c e d u r a l I n 2005 and 2006, B a r b e e History h i r e d STC to perform cabinetry and w o o d w o r k i n g on homes B a r b e e was b u i l d i n g i n B a l d w i n ("the s u b j e c t p r o p e r t i e s " ) . One R o b e r t L. B a r b e e ' s p e r s o n a l residence. Traylor sued account, Barbee, work and misrepresentation, labor and subject properties. d e c l a r i n g whether STC and, of performed, foreclosure on contract, unjust was and open enrichment, a materialman's and w o o d w o r k i n g STC lien had done on t h e STC and T r a y l o r a l s o r e q u e s t e d a j u d g m e n t had an o w n e r s h i p i n t e r e s t a judgment d e c l a r i n g e f f e c t i v e l y d i s s o l v e d on M a r c h 28, STC and T r a y l o r a r g u e u r g i n g by R o b e r t L. B a r b e e , Interest," transferring a R o b e r t L. B a r b e e . Traylor 1 I n June 2007, STC breach R o b e r t L. B a r b e e i f so, County of the s u b j e c t p r o p e r t i e s alleging r e l a t e d to the c a b i n e t r y in them Builders, as The c i r c u i t c o u r t e n t e r e d i n f a v o r o f A m e r i c a n R e s o u r c e s , and STC We f i l e d against 2007. that STC had been 1 t h a t , i n December 2006, a f t e r much T r a y l o r e x e c u t e d an " A s s i g n m e n t o f 5 0 % o w n e r s h i p i n t e r e s t i n STC t o also executed a r e l a t e d operating 2 1110418 B a r b e e f i l e d an a n s w e r and of c o n t r a c t , money l e n t , misrepresentation, one of the properties, conversion. Barbee respective ownership counterclaim, of money p a i d by a l l e g i n g breach mistake, negligence, s l a n d e r o f t i t l e b a s e d on a l i e n p l a c e d subject dissolution counterclaim, STC. adding also sought rights In enrichment, and a judgment d e t e r m i n i n g the in July additional unjust on STC 2008, claims and requested Barbee the its interest for amended and s e e k i n g m e n t a l - a n g u i s h damages on i t s s l a n d e r - o f - t i t l e c l a i m . STC and Traylor notified A m e r i c a n R e s o u r c e s , w i t h whom t h e y had a b u s i n e s s - l i a b i l i t y i n s u r a n c e p o l i c y ("the policy"), o f B a r b e e ' s c l a i m s a g a i n s t them a s s e r t e d i n i t s c o u n t e r c l a i m a g r e e m e n t , w h i c h had been p r e p a r e d by B a r b e e ' s attorney. A c c o r d i n g t o STC and T r a y l o r , R o b e r t L. B a r b e e d i d n o t e x e c u t e the assignment of i n t e r e s t or the o p e r a t i n g agreement u n t i l M a r c h 28, 2007. STC and T r a y l o r a r g u e d t h a t s e v e r a l t i m e s b e t w e e n December 2006 and M a r c h 28, 2007, T r a y l o r i n f o r m e d R o b e r t L. B a r b e e t h a t he was r e v o k i n g h i s d e c i s i o n t o t r a n s f e r o w n e r s h i p t o R o b e r t L. B a r b e e and t h a t t h e o n l y b u s i n e s s r e l a t i o n s h i p b e t w e e n STC and B a r b e e was t h e one t h a t had e x i s t e d p r i o r t o T r a y l o r ' s e x e c u t i o n o f t h e o p e r a t i n g a g r e e m e n t and t h e a s s i g n m e n t o f i n t e r e s t . On M a r c h 29, 2007, T r a y l o r f i l e d i n the M o b i l e P r o b a t e C o u r t a " D e c l a r a t i o n of M e m b e r s h i p and S t a t u s " on b e h a l f o f STC, d e c l a r i n g t h a t he had r e v o k e d h i s i n t e n t i o n t o t r a n s f e r o w n e r s h i p t o R o b e r t L. B a r b e e and t h a t STC was still a single-member limitedl i a b i l i t y company. A c c o r d i n g t o STC and T r a y l o r , R o b e r t L. Barbee never f i l e d the assignment of i n t e r e s t or the o p e r a t i n g agreement w i t h the p r o b a t e c o u r t . 3 1110418 and r e q u e s t e d t h a t A m e r i c a n R e s o u r c e s d e f e n d and i n d e m n i f y STC and T r a y l o r a g a i n s t t h o s e c l a i m s u n d e r t h e p o l i c y . Resources refused, arguing that c o v e r e d by t h e p o l i c y . STC Barbee's American claims were not and T r a y l o r a g a i n r e q u e s t e d t h a t A m e r i c a n R e s o u r c e s i n d e m n i f y and d e f e n d them p u r s u a n t t o t h e terms of the p o l i c y ; American Resources a g a i n r e f u s e d . In November 2008, STC and T r a y l o r s u e d A m e r i c a n R e s o u r c e s i n the M o b i l e C i r c u i t Court, a l l e g i n g breach of c o n t r a c t bad f a i t h . A m e r i c a n R e s o u r c e s moved t h e c i r c u i t summary j u d g m e n t , a r g u i n g , Traylor had triggered Resources not coverage. motion. court acted The an under on circuit the the for a partial claim. supplemental In policy advice court that of denied and would that counsel American judgment Resources on filed their 2011, American in s u p p l e m e n t a l summary-judgment m o t i o n . 4 have denying Resources' circuit breach-of- a response Resources and American " c r o s s - m o t i o n " f o r a summary j u d g m e n t May STC and T r a y l o r moved t h e summary American court for a "occurrence" that I n F e b r u a r y 2011, STC contract claims. identified coverage had among o t h e r t h i n g s , and and a on both amended its 1110418 The a circuit c o u r t h e l d o r a l argument on t h e m o t i o n s f o r summary j u d g m e n t , a n d , on S e p t e m b e r 6, 2011, t h e circuit c o u r t g r a n t e d A m e r i c a n R e s o u r c e s ' m o t i o n a n d e n t e r e d a summary judgment circuit i n i t s favor court found, on STC and T r a y l o r ' s among o t h e r things, shows t h a t t h e r e h a s b e e n no o c c u r r e n c e , claims. that The "the evidence a n d an o c c u r r e n c e was n e c e s s a r y t o t r i g g e r p o t e n t i a l coverage under t h e terms o f t h e policy described i n the Complaint." The c i r c u i t f o u n d t h a t " i f t h e r e h a d b e e n an o c c u r r e n c e , court then t h i s also Court would h o l d t h a t [STC and T r a y l o r ' s ] a l l e g e d c l a i m s [ w e r e ] a l s o excluded the from coverage by [ v a r i o u s exclusion provisions] i n r e l e v a n t p o l i c y , and f u r t h e r , by t h e f a c t t h a t [ A m e r i c a n Resources] a t a l l times r e l i e d addressing upon t h e a d v i c e of counsel i n t h e c l a i m made b y [ S T C a n d T r a y l o r ] . " STC and T r a y l o r moved t h e c i r c u i t or v a c a t e i t s judgment. circuit court denied Traylor court to a l t e r , amend, A f t e r a d d i t i o n a l o r a l argument, t h e STC and T r a y l o r ' s m o t i o n s , a n d STC a n d appealed. Issues STC a n d T r a y l o r review on a p p e a l : present three issues (1) w h e t h e r " B a r b e e ' s 5 for this [counterclaim Court's i n STC 1110418 and T r a y l o r ' s a c t i o n a g a i n s t B a r b e e , as amended,] a l l e g e [ d ] an occurrence f o r which provide ... whether "Barbee's [American a d e f e n s e and R e s o u r c e s ] was coverage under [counterclaim, cause of a c t i o n a g a i n s t [STC and] as required to [the] p o l i c y " ; amended,] (2) allege[d] T r a y l o r f o r which a [American R e s o u r c e s ] was r e q u i r e d t o p r o v i d e [them] w i t h a d e f e n s e coverage under the and ' P r o d u c t s -- c o m p l e t e d o p e r a t i o n s h a z a r d ' coverage p r o v i s i o n s " ; and (3) w h e t h e r "[American Resources] [was] e n t i t l e d t o r e l y upon [ v a r i o u s ] ... p u r p o r t e d e x c l u s i o n s [ i n t h e p o l i c y ] o r t h e a d v i c e o f c o u n s e l d e f e n s e t o deny and] Traylor a defense and coverage for Barbee's [counterclaim]." Standard of Review " T h i s C o u r t ' s r e v i e w o f a summary j u d g m e n t i s de novo. W i l l i a m s v. S t a t e Farm Mut. A u t o . I n s . Co., 886 So. 2d 72, 74 ( A l a . 2003) . We a p p l y t h e same s t a n d a r d o f r e v i e w as t h e t r i a l court applied. S p e c i f i c a l l y , we must d e t e r m i n e w h e t h e r t h e movant has made a p r i m a f a c i e s h o w i n g t h a t no g e n u i n e i s s u e o f m a t e r i a l f a c t e x i s t s and t h a t t h e movant i s e n t i t l e d t o a j u d g m e n t as a m a t t e r o f l a w . Rule 5 6 ( c ) , A l a . R. C i v . P.; B l u e C r o s s & B l u e S h i e l d o f A l a b a m a v. H o d u r s k i , 899 So. 2d 949, 952-53 ( A l a . 2004). I n m a k i n g s u c h a d e t e r m i n a t i o n , we must r e v i e w t h e e v i d e n c e i n t h e l i g h t most f a v o r a b l e t o t h e nonmovant. W i l s o n v. Brown, 496 So. 2d 756, 758 (Ala. 1986). Once t h e movant makes a p r i m a f a c i e s h o w i n g t h a t t h e r e i s no g e n u i n e i s s u e o f m a t e r i a l f a c t , t h e b u r d e n t h e n s h i f t s t o t h e nonmovant t o 6 [STC 1110418 p r o d u c e ' s u b s t a n t i a l e v i d e n c e ' as t o t h e e x i s t e n c e of a genuine i s s u e of m a t e r i a l f a c t . B a s s v. S o u t h T r u s t Bank o f B a l d w i n C o u n t y , 538 So. 2d 794, 797-98 ( A l a . 1 9 8 9 ) ; A l a . Code 1975, § 12-21-12. ' [ S ] u b s t a n t i a l e v i d e n c e i s e v i d e n c e of such w e i g h t and q u a l i t y t h a t f a i r - m i n d e d p e r s o n s i n t h e e x e r c i s e o f i m p a r t i a l j u d g m e n t can reasonably infer the e x i s t e n c e o f t h e f a c t s o u g h t t o be p r o v e d . ' " Dow (Ala. v. Alabama 2004) Florida, 547 Democratic (quoting So. Party, West 2d 870, 871 v. 897 Founders (Ala. So. 2d Life 1035, Assur. 1038-39 Co. of 1989)). Analysis STC and T r a y l o r f i r s t argue t h a t the c i r c u i t c o u r t erred i n e n t e r i n g a summary j u d g m e n t i n f a v o r o f A m e r i c a n R e s o u r c e s because, they argue, a l l e g e s an o c c u r r e n c e under the p o l i c y . The Barbee's counterclaim, as that t r i g g e r s a duty to provide policy provides, amended, coverage in pertinent part: " a . We w i l l pay t h o s e sums t h a t t h e i n s u r e d becomes l e g a l l y o b l i g a t e d t o pay as damages b e c a u s e o f ' b o d i l y i n j u r y ' , p r o p e r t y damage' o r 'personal and a d v e r t i s i n g i n j u r y ' t o w h i c h t h i s insurance applies. We w i l l have t h e r i g h t and d u t y t o d e f e n d the insured against any 'suit' seeking those damages. However, we w i l l have no d u t y t o d e f e n d t h e i n s u r e d a g a i n s t any ' s u i t ' s e e k i n g damages f o r ' b o d i l y i n j u r y ' , ' p r o p e r t y damage' o r ' p e r s o n a l and a d v e r t i s i n g i n j u r y ' , t o w h i c h t h i s i n s u r a n c e does not apply. We may a t our d i s c r e t i o n , i n v e s t i g a t e any ' o c c u r r e n c e ' and s e t t l e any c l a i m o r ' s u i t ' t h a t may r e s u l t . ... 7 1110418 " "b. This insurance a p p l i e s : "(1) To ' b o d i l y i n j u r y ' damage' o n l y i f : and 'property "(a) The ' b o d i l y i n j u r y ' o r ' p r o p e r t y damage' i s c a u s e d b y a an 'occurrence' that takes place i n the 'coverage t e r r i t o r y ' ; "(b) The ' b o d i l y i n j u r y ' o r ' p r o p e r t y damage' o c c u r s d u r i n g the p o l i c y p e r i o d ; and (c) Prior to the p o l i c y p e r i o d , no i n s u r e d l i s t e d u n d e r P a r a g r a p h C.1. Who I s An I n s u r e d and no 'employee' a u t h o r i z e d b y you t o g i v e o r r e c e i v e n o t i c e o f an 'occurrence' o r c l a i m , knew that the 'bodily injury' or ' p r o p e r t y damage' h a d o c c u r r e d , i n w h o l e o r i n p a r t . ... " (Emphasis added.) An " o c c u r r e n c e " i s d e f i n e d i n t h e p o l i c y as "an a c c i d e n t , i n c l u d i n g continuous or repeated exposure t o s u b s t a n t i a l l y the same g e n e r a l harmful conditions." I n i t s summary judgment, the c i r c u i t c o u r t s t a t e d : "Where t h e r e h a s b e e n no o c c u r r e n c e , t h e r e c a n be no c o v e r a g e a n d t h e r e c a n be no d u t y t o d e f e n d . This is because ' i t i s the f a c t s , not the legal p h r a s e o l o g y , t h a t d e t e r m i n e w h e t h e r an i n s u r e r has a duty t o defend i t s insured i n the a c t i o n . ' [ H a r t f o r d C a s . I n s . Co. v. M e r c h a n t s & F a r m e r s Bank, 8 1110418 928 So. 2d 1006, 1012 ( A l a . 2 0 0 5 ) . ] A c c o r d i n g l y , i n o r d e r t o p r e v a i l a t t r i a l and t o r e c o v e r , as a t h r e s h o l d matter, [STC and T r a y l o r ] must e s t a b l i s h t h a t t h e r e has b e e n an o c c u r r e n c e as d e f i n e d by t h e p o l i c y of i n s u r a n c e d e s c r i b e d i n the Complaint. [STC and T r a y l o r ] c a n n o t meet t h i s b u r d e n . " "The d e f i n i t i o n of o c c u r r e n c e found i n the p o l i c y i n t h e c a s e a t b a r i s c l e a r on i t s f a c e and r e q u i r e s an a c c i d e n t , and t h a t t e r m has b e e n c l e a r l y d e f i n e d by t h e c o u r t s i n t h i s s t a t e . [ ] What [STC and T r a y l o r ] d e s c r i b e i s n o t an a c c i d e n t , b u t r a t h e r a b u s i n e s s d i s p u t e b e t w e e n [STC and T r a y l o r ] and [ B a r b e e ] and n o t h i n g t h a t [STC and T r a y l o r ] c o n t e n d 2 2 This C o u r t has stated: "Merchant[ & Farmers Bank's] policy with Hartford [ C a s u a l t y I n s u r a n c e Company] d e f i n e s an ' o c c u r r e n c e ' as 'an a c c i d e n t . ' The t e r m ' a c c i d e n t ' i s n o t d e f i n e d i n t h e p o l i c y , b u t i t i s a commonly used word i n the l e g a l p r o f e s s i o n . In S t . P a u l F i r e & Marine Insurance. Co. v. C h r i s t i a n s e n M a r i n e , I n c . , 893 So. 2d 1124, 1136 ( A l a . 2 0 0 4 ) , t h i s C o u r t a p p l i e d the f o l l o w i n g d e f i n i t i o n of ' a c c i d e n t ' found i n B l a c k ' s Law D i c t i o n a r y 15 ( 7 t h ed. 1 9 9 9 ) : 'An u n i n t e n d e d and unforeseen injurious occurrence; s o m e t h i n g t h a t does n o t o c c u r i n t h e u s u a l c o u r s e o f e v e n t s o r t h a t c o u l d be r e a s o n a b l y a n t i c i p a t e d . ' I n U n i t e d S t a t e s F i d e l i t y & G u a r a n t y Co. v. Bonitz I n s u l a t i o n Co. o f A l a b a m a , 424 So. 2d 569, 572 ( A l a . 1 9 8 2 ) , t h i s C o u r t , c i t i n g E m p l o y e r s I n s u r a n c e Co. o f A l a b a m a v. R i v e s , 264 A l a . 310, 87 So. 2d 653 ( 1 9 5 5 ) , s t a t e d : 'The t e r m [ ' a c c i d e n t ' ] has ... b e e n variously defined as something unforeseen, unexpected, or u n u s u a l . ' " H a r t f o r d Cas. I n s . Co. v. M e r c h a n t s & F a r m e r s Bank, 928 1006, 1011 ( A l a . 2 0 0 5 ) . 9 So. 2d 1110418 can transform that occurrence here." STC business dispute into an and T r a y l o r argue t h a t "Barbee's c o u n t e r c l a i m that Traylor's properties] were particulars Traylor's cabinet work a n d wood w o r k i n g a t [ t h e s u b j e c t defective and deficient a n d h a d t o be r e p a i r e d brief, alleged a t 41. They in several or replaced." go on STC a n d t o argue that such a l l e g a t i o n s c o n s t i t u t e an " a c c i d e n t " u n d e r t h i s C o u r t ' s c a s e law. However, i n Town & C o u n t r y P r o p e r t y , LLC v. A m e r i s u r e I n s u r a n c e Co., [Ms. 1100009, O c t o b e r 2 1 , 2011] (Ala. 2011) ("Town & C o u n t r y I " ) , t h i s So. 3d C o u r t made , clear t h a t " f a u l t y w o r k m a n s h i p i t s e l f " s i m p l y does n o t c o n s t i t u t e an a c c i d e n t o r " o c c u r r e n c e " w i t h i n t h e meaning o f a comprehensive general-liability the p o l i c y here. insurance See a l s o policy ("a CGL p o l i c y " ) , Town & C o u n t r y Property, A m e r i s u r e I n s . Co., [Ms. 1100009, November 2, 2012] (Ala. 2012) following opinion (opinion on application previously considered alleged for LLC v . So. 3d rehearing on r e t u r n t o r e m a n d ) . I n Town & C o u n t r y I , we e x p l a i n e d damage s u c h as t o be t h a t " [ t ] h i s C o u r t has cases r e q u i r i n g i t t o determine whether the r e s u l t of f a u l t y workmanship i s c o v e r e d u n d e r a CGL p o l i c y , a n d , i n e a c h c a s e , 10 i t s decision 1110418 has h i n g e d on t h e n a t u r e workmanship." went on to Guarantee (Ala. So. 3d a t contrast Co. 1984) two (emphasis added). cases: v. W a r w i c k United Development Co., 446 ( A l a . 1983). faulty This States Court Fidelity So. & 2d 1021 Insurance ("Warwick"), and Moss v. Champion 442 So. 2d 26 . o f t h e damage c a u s e d b y t h e Co., Town & C o u n t r y I , So. 3d a t I t n o t e d t h a t t h e C o u r t i n W a r w i c k h e l d t h a t no recovery was a v a i l a b l e u n d e r a CGL p o l i c y f o r t h e c o s t o f r e p a i r i n g o r replacing the portions of a new house d e f e c t i v e l y c o n s t r u c t e d by the i n s u r e d . that CGL that had been I n c o n t r a s t , we noted " i n Moss we h e l d t h a t t h e r e h a d been an o c c u r r e n c e policy purposes when t h e c o n t r a c t o r ' s p o o r for workmanship r e s u l t e d i n n o t m e r e l y a p o o r l y c o n s t r u c t e d r o o f b u t damage t o the p l a i n t i f f ' s attic, interior f u r n i s h i n g s . " Town & C o u n t r y I , This Court then ceilings, and a t l e a s t So. 3d a t . explained: " R e a d i n g Moss and W a r w i c k t o g e t h e r , we may c o n c l u d e t h a t f a u l t y w o r k m a n s h i p i t s e l f i s n o t an o c c u r r e n c e but that faulty workmanship may lead to an occurrence i f i t subjects personal property or other p a r t s of the s t r u c t u r e t o 'continuous or repeated e x p o s u r e ' t o some o t h e r ' g e n e r a l h a r m f u l c o n d i t i o n ' ( e . g . , t h e r a i n i n Moss) and, as a r e s u l t o f t h a t exposure, personal property or other p a r t s of the s t r u c t u r e a r e damaged." 11 some 1110418 Town & C o u n t r y I , As STC counterclaim So. 3d a t and Traylor . themselves argue, Barbee's a l l e g e d " t h a t t h e work b y [STC and] T r a y l o r 'was n o t p e r f o r m e d i n a w o r k m a n l i k e manner ... r e q u i r i n g R o b e r t L. B a r b e e t o r e p a i r a n d / o r r e p l a c e t h e work p e r f o r m e d b y [STC a n d Traylor]." Neither STC a n d T r a y l o r ' s b r i e f , the counterclaim damage t o t h e s u b j e c t a t 51 ( e m p h a s i s a d d e d ) . n o r t h e amended c o u n t e r c l a i m properties alleged as a r e s u l t o f t h e a l l e g e d f a u l t y workmanship, a d d i t i o n a l r e p a i r s or remodeling t o the s u b j e c t p r o p e r t i e s n e c e s s i t a t e d b y STC a n d T r a y l o r ' s a l l e g e d l y faulty Nor work, o r any l o s s d i d the counterclaim of use of t h e s u b j e c t o r t h e amended c o u n t e r c l a i m damage r e s u l t i n g f r o m " ' c o n t i n u o u s some other other and 'general properties. harmful allege or repeated exposure' t o condition'" (i.e., a condition t h a n STC a n d T r a y l o r ' s a l l e g e d l y d e f e c t i v e w o r k ) . Country I , So. 3d a t STC a n d T r a y l o r inference, counterclaim damage[] t o o t h e r property," including for loss Fidelity damage . attempt t o argue t h a t , t h e Barbee Town set[s] "[b]y reasonable forth claims f o r STC a n d T r a y l o r ' s b r i e f , of use. They c i t e United & G u a r a n t y Co. v. A n d a l u s i a Ready M i x , Inc., 12 a t 50, States 436 So. 1110418 2d 868 ( 1 9 8 3 ) , i n s u p p o r t o f t h i s a r g u m e n t . M i x a l s o i n v o l v e d a CGL p o l i c y , w h i c h , l i k e A n d a l u s i a Ready the p o l i c y here, d e f i n e d an " o c c u r r e n c e " as an " a c c i d e n t , i n c l u d i n g c o n t i n u o u s or r e p e a t e d exposure t o c o n d i t i o n s . " 436 So. 2d a t 870. The CGL p o l i c y i n A n d a l u s i a Ready M i x i n c l u d e d a p r o d u c t s - h a z a r d provision, w h i c h p r o v i d e d , among o t h e r t h i n g s , coverage f o r " b o d i l y i n j u r y a n d p r o p e r t y damage a r i s i n g o u t o f [ A n d a l u s i a Ready M i x ' s ] products or r e l i a n c e upon a representation or w a r r a n t y made a t any t i m e w i t h r e s p e c t t h e r e t o . " 436 So. 2d a t 870. Andalusia Ready Mix requested coverage under i t s CGL p o l i c y a f t e r i t was s u e d b y W i l l M. G r e g o r y , I n c . ( " G r e g o r y " ) , f o r damage a l l e g e d l y c a u s e d b y d e f e c t i v e g r o u t A n d a l u s i a Ready Mix had sold constructing to Gregory, which a water-treatment plant. "'due t o t h e d e f e c t i v e q u a l i t y necessary Gregory t o do e x t e n s i v e had Gregory used argued in that o f s a i d g r o u t , i t [had been] repairing and r e m o d e l i n g o f said Waste W a t e r T r e a t m e n t P l a n t ... w h i c h i n c l u d e d t h e p u r c h a s e o f a d d i t i o n a l g r o u t a n d m a t e r i a l s a n d t h e payment b y [ G r e g o r y ] t o m e c h a n i c s a n d l a b o r e r s who p e r f o r m e d t h e c o r r e c t i v e work a n d i n s t a l l e d t h e new m a t e r i a l s . ' " 13 A n d a l u s i a Ready M i x , 436 So. 1110418 2d a t 870. A n d a l u s i a Ready M i x filed a declaratory-judgment a c t i o n a g a i n s t U n i t e d S t a t e s F i d e l i t y & Guaranty & G"), seeking a defense After provision Court reviewing i n the CGL and the indemnity language policy i n A n d a l u s i a Ready M i x and on G r e g o r y ' s of the Company the ("USF claims. products-hazard r e l e v a n t caselaw, the concluded: "USF & G has c o n c e d e d t h a t t h e c o m p l a i n t i n t h e underlying action a l l e g e s t h a t the product in q u e s t i o n f a i l e d t o p e r f o r m as w a r r a n t e d . Moreover, Gregory's r e l i a n c e upon t h e p r o d u c t as warranted c l e a r l y was a l l e g e d , and has n o t b e e n q u e s t i o n e d by [USF & G ] . Hence, we c o n c l u d e t h a t t h e r e was an 'occurrence' w i t h i n the terms of the p o l i c y . " 436 So. Norrell (Ala. 2d at Heating 1979)). 871 (citing Cotton States & A i r C o n d i t i o n i n g Co., The C o u r t went on t o Mut. 370 So. Ins. Co. 2d 270, state: "Though t h e c o m p l a i n t c o n t a i n s no e l a b o r a t i o n o f t h e r e s u l t a n t d e f e c t s of the [water-treatment] p l a n t , i t does i n c l u d e f u r t h e r a l l e g a t i o n s t h a t t h e d e f e c t i v e c o n d i t i o n o f t h e p l a n t , as o p p o s e d t o t h e g r o u t , n e c e s s i t a t e d ' e x t e n s i v e r e p a i r i n g and r e m o d e l i n g o f [ t h e ] Water T r e a t m e n t P l a n t ... w h i c h i n c l u d e d t h e purchase o f a d d i t i o n a l g r o u t and m a t e r i a l s (emphasis added). B a s e d on t h i s l a n g u a g e , we h o l d t h a t t h e t r i a l c o u r t r e a s o n a b l y c o u l d have c o n c l u d e d t h a t i n j u r y m i g h t have b e e n done t o p r o p e r t y o t h e r t h a n t h e i n s u r e d ' s p r o d u c t , f o r w h i c h USF & G i s r e q u i r e d t o p r o v i d e a d e f e n s e and t o pay damages." A n d a l u s i a Ready M i x , 436 So. 2d a t 14 871. v. 275 1110418 STC Andalusia and Traylor argue that, like the complaint in Ready M i x , "Barbee's c o u n t e r c l a i m a l l e g e d s p e c i f i c d e f e c t s i n [STC and] T r a y l o r ' s p r o d u c t o r w o r k t h a t g i v e r i s e t o t h e i n f e r e n c e t h e s u c h d e f e c t s c a u s e d damage[] t o o c c u r t o ' o t h e r p r o p e r t y ' a t B a r b e e ' s home. The c o u n t e r c l a i m s p e c i f i c a l l y a l l e g e d t h a t t h e work by [STC and] Traylor 'was not performed in a w o r k m a n l i k e manner ... r e q u i r i n g R o b e r t L. B a r b e e t o r e p a i r a n d / o r r e p l a c e t h e work p e r f o r m e d by [STC and T r a y l o r ] . ... ' "By r e a s o n a b l e i n f e r e n c e , B a r b e e ' s r e p a i r a n d / o r r e p l a c e m e n t o f [STC and] T r a y l o r ' s work i n t h e k i t c h e n a r e a a t [ R o b e r t L.] B a r b e e ' s home r e n d e r e d t h e k i t c h e n a r e a u n u s e a b l e f o r s u c h t i m e as t h e r e m e d i a l work was u n d e r w a y . The d e l a y s c a u s e d t h e i n a b i l i t y t o u s e t h e k i t c h e n i n t h e B a r b e e s ' new home due t o t h e r e m e d i a l work c a u s e d b y [STC and] T r a y l o r ' s a l l e g e d breach of duty of workmanlike p e r f o r m a n c e and a r i s i n g o u t o f [ t h e i r ] p r o d u c t o r work. Such a l l e g a t i o n s s u p p o r t t h e r e a s o n a b l e inference t h a t damage w o u l d l i k e l y be done t o cabinets, [S]heetrock, kitchen counter tops, f l o o r i n g and o t h e r p r o p e r t y i n [ R o b e r t L.] B a r b e e ' s home due t o t h e r e p a i r and r e m e d i a t i o n o f [STC and] T r a y l o r ' s p r o d u c t or work." STC and T r a y l o r ' s b r i e f , a t 51-53. However, u n l i k e B a r b e e ' s c o u n t e r c l a i m , the complaint i n Andalusia Ready M i x e x p r e s s l y a l l e g e d damage t o p r o p e r t y than defect a in Andalusia Ready Mix's own other product. S p e c i f i c a l l y , t h e c o m p l a i n t a l l e g e d t h a t A n d a l u s i a Ready M i x ' s defective grout had damaged 15 the water-treatment plant, 1110418 requiring repairs to and remodeling c o n t r a s t , Barbee's c o u n t e r c l a i m d e f e c t i v e work " r e q u i r [ e d ] replace allege Andalusia t o other the plant. R o b e r t L. B a r b e e t o r e p a i r a n d / o r property a n d STC." r e s u l t i n g from I t d i d not that Ready M i x i s d i s t i n g u i s h a b l e i n t h a t r e g a r d , decline to infer speculation as counterclaim loss to of use o r other damage that o r t h e amended was injuries not work. a n d we based alleged counterclaim. T r a y l o r have n o t d e m o n s t r a t e d t h e e x i s t e n c e in that regard In a l l e g e d t h a t STC a n d T r a y l o r ' s t h e work p e r f o r m e d b y T r a y l o r damage of on i n the Thus, STC and o f an " o c c u r r e n c e " t h a t would t r i g g e r American Resources' duty t o d e f e n d o r t o i n d e m n i f y them u n d e r t h e p o l i c y . STC and counterclaim Traylor's Traylor alleged brief, also argue covered a t 47. 'bodily "Bodily p o l i c y as " b o d i l y i n j u r y , s i c k n e s s that "[t]he injury.'" Barbee STC i n j u r y " i s defined or disease person, i n c l u d i n g death time." Barbee d i d a l l e g e i n t h e c o u n t e r c l a i m i n the sustained r e s u l t i n g f r o m any o f t h e s e and by a a t any t h a t R o b e r t L. B a r b e e h a d s u f f e r e d " e m o t i o n a l d i s t r e s s a n d m e n t a l a n g u i s h " as a r e s u l t o f STC a n d T r a y l o r ' s [Traylor] would assign alleged representations "that a 50% i n t e r e s t i n [STC] [ t o R o b e r t L. 16 1110418 B a r b e e ] i n e x c h a n g e f o r payments made b y R o b e r t L. B a r b e e ... and and that Traylor a n d STC would complete the cabinets woodworking f o r [the s u b j e c t p r o p e r t i e s ] . " Barbee a l s o added a request i n t h e amended damages on b e h a l f title that anguish" f o r "mental o f R o b e r t B a r b e e " on B a r b e e ' s claim against this counterclaim STC a n d T r a y l o r . C o u r t has r e c o g n i z e d anguish slander-of- STC a n d T r a y l o r that claims alleging argue "mental f a l l w i t h i n t h e d e f i n i t i o n o f " b o d i l y i n j u r y " as s e t f o r t h i n t h e p o l i c y , c i t i n g A m e r i c a n S t a t e s v. C o o p e r , 518 So. 2d 708, 710 ( A l a . 1987) court's judgment policy, 'bodily injury' includes mental (quoting i n which with approval i t concluded includes that sickness and existence ... which anguish"). the d e f i n i t i o n Traylor trial " i n the or disease Assuming without d e c i d i n g t h a t mental anguish within the have of " b o d i l y i n j u r y " nevertheless o f an o c c u r r e n c e R o b e r t L. B a r b e e ' s c l a i m s failed as d e f i n e d i s included i n the p o l i c y , to demonstrate i n the p o l i c y STC the because f o r m e n t a l - a n g u i s h damages d i d n o t a r i s e f r o m STC and T r a y l o r ' s a l l e g e d l y d e f e c t i v e work o r some other general Instead, harmful the a l l e g e d condition resulting misrepresentations 17 from that justifying work. mental- 1110418 anguish damages related to Robert L. interest i n STC and STC a n d T r a y l o r ' s Barbee's intention ownership t o complete t h e work u n d e r t h e c o n t r a c t , a n d , i n t h e c a s e o f t h e s l a n d e r of-title of claim, STC a n d T r a y l o r ' s p l a c e m e n t the subject properties. Thus, of a l i e n STC a n d T r a y l o r on one have n o t demonstrated t h a t Barbee's c l a i m s f o r m e n t a l - a n g u i s h damages arose as d e f i n e d from an occurrence i n the p o l i c y or our caselaw. STC and Traylor also argue that "[t]he Barbee c o u n t e r c l a i m a l l e g e d c o v e r a g e f o r [STC and] T r a y l o r u n d e r t h e 'products--completed o p e r a t i o n s hazard' coverage p r o v i s i o n s . " STC a n d T r a y l o r ' s b r i e f , a t 43. "products--completed policy contemplate injury "arising referring defines operations hazard" coverage out of both "your and quality, 'your product" product' and representations durability, product o r work. In l i g h t Traylor attempt t o c o n s t r u c t provisions f o r p r o p e r t y damage to the insured's product "warranties fitness, With c e r t a i n e x c e p t i o n s , the or ... work" with performance of these The as or use provisions, bodily work,'" policy including respect an a r g u m e n t b a s e d 18 or 'your o r work. "your i n the to the of" the STC and on A n d a l u s i a 1110418 Ready M i x a n d C o t t o n held that for similar losses States, two c a s e s products-hazard resulting from i n which clauses breaches this afforded of Court coverage warranty and misrepresentations. However, STC a n d T r a y l o r have n o t i d e n t i f i e d any b r e a c h of-warranty amended. claims alleged Moreover, counterclaim i n Barbee's counterclaim, the misrepresentations alleged r e l a t e t o R o b e r t L. B a r b e e ' s o w n e r s h i p as i n the interest i n STC a n d t o STC a n d T r a y l o r ' s p r o m i s e t o c o m p l e t e t h e work on t h e s u b j e c t relate use p r o p e r t i e s under t o "the f i t n e s s , quality, o f " STC a n d T r a y l o r ' s work. the contract. durability, They do n o t performance or The r e p r e s e n t a t i o n s h e r e a r e d i s t i n g u i s h a b l e i n t h a t r e g a r d from those i n C o t t o n S t a t e s and Andalusia Ready M i x , w h i c h r e l a t e d , a t l e a s t t o some e x t e n t , t o t h e q u a l i t y o f t h e work p e r f o r m e d b y t h e i n s u r e d s cases 3 and f a l l operations Traylor o u t s i d e t h e scope o f t h e " p r o d u c t s - - c o m p l e t e d hazard" have i n those p r o v i s i o n s i n the p o l i c y . not demonstrated that Thus, STC a n d the counterclaim, as The a l l e g e d m i s r e p r e s e n t a t i o n s i n C o t t o n S t a t e s i n c l u d e d , among o t h e r t h i n g s , r e p r e s e n t a t i o n s as t o t h e n e c e s s i t y a n d q u a l i t y o f c l e a n i n g p e r f o r m e d on c o i l s i n an a i r - c o n d i t i o n i n g unit. The a l l e g e d m i s r e p r e s e n t a t i o n i n A n d a l u s i a Ready M i x r e l a t e d t o t h e f i t n e s s and q u a l i t y o f t h e g r o u t f o r use i n constructing a water-treatment p l a n t . 3 19 1110418 amended, a l l e g e s p r o p e r t y damage o r b o d i l y i n j u r y " a r i s i n g out of are ' [ t h e i r ] product' or not ' [ t h e i r ] work'"; t h e r e f o r e , e n t i t l e d t o coverage under the p o l i c y i n t h a t they regard. Conclusion For have the not foregoing presented r e a s o n s , we hold that s u b s t a n t i a l evidence of STC and an Traylor "occurrence" t h a t would t r i g g e r American Resources' duty under the p o l i c y to defend asserted or to against counterclaim, nor indemnify them operations and i n Barbee's have they t h a t A m e r i c a n R e s o u r c e s was d e f e n s e and STC Traylor on counterclaim claims and amended substantial presented required the evidence to provide t o i n d e m n i f y them u n d e r t h e them w i t h a "products--completed h a z a r d " p r o v i s i o n s i n the p o l i c y . Therefore, they have n o t r e b u t t e d A m e r i c a n R e s o u r c e s ' p r i m a f a c i e s h o w i n g t h a t there i s no genuine i s s u e of m a t e r i a l fact, and j u d g m e n t i n f a v o r o f A m e r i c a n R e s o u r c e s i s due Our decision in this regard pretermits the t o be summary affirmed. consideration and T r a y l o r ' s a r g u m e n t s r e g a r d i n g t h e a p p l i c a b i l i t y o f exclusion provisions of the policy American Resources' advice-of-counsel AFFIRMED. 20 or the defense. of STC various viability of 1110418 Moore, C . J . , and S t u a r t , B o l i n , Wise, J J . , concur. Murdock, J . , c o n c u r s specially. 21 P a r k e r , Shaw, M a i n , and 1110418 MURDOCK, J u s t i c e ( c o n c u r r i n g I concur in the main specially). opinion. I write separately to comment on what I p e r c e i v e t o be an a p p a r e n t l a c k o f p r e c i s i o n i n t h i s C o u r t ' s a s s e s s m e n t i n Town & C o u n t r y P r o p e r t y , v. A m e r i s u r e I n s u r a n c e Co., So. 3d , ( A l a . 2011) [Ms. 1100009, O c t . 21, (an o p i n i o n i n w h i c h I 2011] concurred), of whether f a u l t y workmanship i s c o v e r e d under the today's standard The in L.L.C. terms of form comprehensive g e n e r a l - l i a b i l i t y p o l i c y . main o p i n i o n a c c u r a t e l y quotes t h i s C o u r t ' s d e c i s i o n Town & C o u n t r y as follows: "'[W]e may c o n c l u d e t h a t f a u l t y w o r k m a n s h i p i t s e l f i s n o t an o c c u r r e n c e b u t t h a t f a u l t y w o r k m a n s h i p may l e a d t o an occurrence i f i t subjects personal property or other parts of the structure to "continuous or repeated e x p o s u r e " t o some o t h e r " g e n e r a l h a r m f u l c o n d i t i o n " ( e . g . , t h e r a i n i n Moss [v. Champion I n s u r a n c e Co., 442 So. 2d 26 (Ala. 1 9 8 3 ) ] ) and, as a r e s u l t o f t h a t e x p o s u r e , p e r s o n a l property or other parts of the structure are damaged.'" So. 3d a t ( q u o t i n g Town & C o u n t r y , (emphasis added). the quoted Consistent In r e t r o s p e c t , I q u e s t i o n passage, with r u l e as f o l l o w s : the the particularly opinion the emphasized i s s u e d today, 3d a t portions. I would s t a t e i s not cost of 22 r e p a i r i n g or the "property o r " a r i s i n g o u t o f " an " o c c u r r e n c e . " f a c t t h a t the ) the p r e c i s i o n of " f a u l t y workmanship i t s e l f " damage" " c a u s e d by" is, So. replacing That faulty 1110418 workmanship i t s e l f i s n o t t h e i n t e n d e d o b j e c t o f t h e i n s u r a n c e p o l i c y does n o t n e c e s s a r i l y mean t h a t , i n an a p p r o p r i a t e c a s e , a d d i t i o n a l damage t o a c o n t r a c t o r ' s work r e s u l t i n g f r o m f a u l t y w o r k m a n s h i p m i g h t n o t p r o p e r l y be c o n s i d e r e d " p r o p e r t y damage" " c a u s e d b y " o r " a r i s i n g o u t o f " an " o c c u r r e n c e . " Of c o u r s e , where a " y o u r work" e x c l u s i o n the foregoing 4 i s applicable, r e f i n e m e n t o f o u r s t a t e m e n t i n Town & C o u n t r y w o u l d make no d i f f e r e n c e . Among o t h e r t h i n g s , t h e " y o u r work" e x c l u s i o n i n t h e s t a n d a r d comprehensive g e n e r a l - l i a b i l i t y p o l i c y p r o v i d e s t h a t " ' p r o p e r t y damage' t o 'your work' a r i s i n g o u t o f i t o r any p a r t o f i t and i n c l u d e d i n t h e p r o d u c t s - - c o m p l e t e d o p e r a t i o n s hazard" i s e x c l u d e d from coverage. The s t a n d a r d f o r m comprehensive g e n e r a l - l i a b i l i t y p o l i c y , however, e x c e p t s from t h i s e x c l u s i o n ( i . e . , t h e p o l i c y c o v e r s ) s u b s e q u e n t l y damaged work when t h a t work, o r t h e work o u t o f w h i c h t h e s u b s e q u e n t damage a r i s e s , h a s b e e n p e r f o r m e d b y a s u b c o n t r a c t o r . 4 23
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
