Robert McDaniel and Shirley McDaniel v. Harleysville Mutual Insurance Company

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REL: 10/28/2011 Notice: T h i s o p i n i o n i s s u b j e c t t o formal 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 , Alabama 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 . ALABAMA COURT OF CIVIL APPEALS OCTOBER TERM, 2011-2012 2100622 Robert McDaniel and S h i r l e y McDaniel v. H a r l e y s v i l l e Mutual Insurance Company Appeal from Madison C i r c u i t Court (CV-10-901128) On A p p l i c a t i o n f o r R e h e a r i n g THOMPSON, P r e s i d i n g The following opinion Judge. o f August 12, 2011, i s w i t h d r a w n , i s substituted therefor. and t h e 2100622 Robert McDaniel and S h i r l e y McDaniel ("the McDaniels") appeal from a judgment entered by the Madison C i r c u i t Court i n favor Mutual of Harleysville ("Harleysville"). that F o r the reasons judgment a n d remand t h e cause Insurance stated herein, f o rfurther On A u g u s t 3 1 , 2 0 1 0 , t h e M c D a n i e l s f i l e d Harleysville and B r i a n Homes, a l l e g e d that they had entered for the construction others had f i l e d among o t h e r contract, asserted claims an things, and that, against action, f o r Brian that, on November their favor Homes Homes"). i n 2002, Brian Homes action"). Brian Homes insurance i n t h e amount They Homes they and asserting, The McDaniels was policy to their covered that by action. a judgment o f $82,000 a f t e r which H a r l e y s v i l l e disclaimed They had been against liability. a had been H a r l e y s v i l l e had provided i n t h e 2002 20, 2008, against breach of warranty, breach of by H a r l e y s v i l l e and that defense and t h a t , ("the 2002 commercial-general-liability issued proceedings. a t the time of the events g i v i n g r i s e i n t h e 2002 reverse into a contract with Brian negligence, fraud we an a c t i o n I n c . ("Brian o f a house action Company asserted entered Brian a i n Homes, The M c D a n i e l s s t a t e d t h a t n e i t h e r B r i a n Homes n o r H a r l e y s v i l l e h a d s a t i s f i e d 2 2100622 the judgment, and they a s s e r t e d Ala. Code 1975, w h i c h a c l a i m p u r s u a n t t o § 27-23-2, provides: "Upon t h e r e c o v e r y o f a f i n a l j u d g m e n t a g a i n s t any p e r s o n , firm, or corporation by any person, including administrators or executors, f o r loss or damage on a c c o u n t o f b o d i l y i n j u r y , o r d e a t h o r f o r l o s s o r damage t o p r o p e r t y , i f t h e d e f e n d a n t i n s u c h a c t i o n was i n s u r e d a g a i n s t t h e l o s s o r damage a t t h e t i m e when t h e r i g h t o f a c t i o n a r o s e , t h e judgment c r e d i t o r s h a l l be e n t i t l e d t o have t h e i n s u r a n c e money p r o v i d e d f o r i n the contract of insurance between t h e i n s u r e r and t h e defendant a p p l i e d t o t h e s a t i s f a c t i o n o f t h e judgment, and i f t h e judgment i s n o t s a t i s f i e d w i t h i n 30 d a y s a f t e r t h e d a t e when i t is entered, t h e judgment c r e d i t o r may proceed a g a i n s t t h e defendant and t h e i n s u r e r t o reach and a p p l y t h e i n s u r a n c e money t o t h e s a t i s f a c t i o n o f t h e judgment." On October 29, 2010, dismiss pursuant motion, Harleysville stated a to Rule declaratory-judgment against Brian Homes the Northern D i s t r i c t entry of the jury 2002 a c t i o n . action, the claims that 12(b), that, action a motion C i v . P. i n late 2008, Ini t s i thad ("the f e d e r a l - c o u r t States District to filed action") Court f o r o f Alabama, l e s s t h a n a month b e f o r e t h e verdict i n favor Harleysville stated there filed A l a . R. i n the United i thad obtained declaring Harleysville of the McDaniels that, i n the federal-court a d e f a u l t judgment a g a i n s t was n o i n s u r a n c e t h a t h a d b e e n made a g a i n s t 3 i n the coverage Brian Brian Homes available for Homes i n t h e 2 0 0 2 2100622 action and that H a r l e y s v i l l e d i d not owe a duty to indemnify B r i a n Homes f o r t h e j u d g m e n t t h a t h a d b e e n e n t e r e d the McDaniels because i n t h e 2002 a c t i o n . there i n favor H a r l e y s v i l l e argued had been a j u d i c i a l d e t e r m i n a t i o n that, t h a t i t had d u t y t o i n d e m n i f y B r i a n Homes, a n y l i a b i l i t y i t c o u l d h a v e to the McDaniels Harleysville was which that a party party action differs Inc., to that complaint, a copy On the on judgment "'[a]n even 2d Dictionary 63, 67 256 determined i f the n.2 (7th of affirmative from the f i r s t one.'" So. had effect, defense an i s s u e action, second Bowers (Ala. ed. v. 2001) 1999)). t o i t s motion a copy of the c o m p l a i n t i t a copy of the federal court's 16, 2010, to dismiss. in of the f e d e r a l court's H a r l e y s v i l l e ' s motion November motion as no i n t h e f e d e r a l - c o u r t a c t i o n , a c o p y o f i t s amendment conclusions and 827 Law H a r l e y s v i l l e attached had f i l e d earlier In affirmative from r e l i t i g a t i n g i n an Black's the i s defined significantly Stores, (quoting extinguished. asserting defense b a r r i n g Wal-Mart been estoppel, collateral against had of the for a default default the McDaniels They p o i n t e d federal-court 4 findings judgment, judgment. filed out t h a t , action, and the a response i n the trial to default judge had 2100622 included a declaration Shirley that footnote does McDaniel, read, not prejudice "Of course, the rights o r any o t h e r p a r t i e s w o u l d be a f f e c t e d parties that by t h i s to this proceeding. this of who h a v e declaration, court's Robert an as t h e y See A l a . Code § 6-6-221 and interest are not (1975)." Thus, t h e M c D a n i e l s argued, t h e d e c l a r a t o r y judgment i s s u e d by the federal motion under c o u r t was n o t b i n d i n g was d u e t o b e d e n i e d . § 27-23-2, shoes o f B r i a n and that, on them a n d H a r l e y s v i l l e ' s Harleysville the McDaniels were the federal brought claim against Brian Homes their judgment court's determination that B r i a n Homes h a d n o i n s u r a n c e c o v e r a g e been that, deemed t o s t e p i n t o t h e Homes i n a t t e m p t i n g t o c o l l e c t as a r e s u l t , responded f o rthe claims that had foreclosed the McDaniels' against Harleysville. On December following 20, 2010, the trial court entered judgment: "This Court i s i n receipt of the Motion t o Dismiss filed on behalf of [Harleysville], requesting that this case be dismissed with p r e j u d i c e p u r s u a n t t o R u l e 12 o f t h e A l a b a m a R u l e s of C i v i l P r o c e d u r e . Further, t h i s Court conducted a h e a r i n g on s a i d M o t i o n on December 17, 2 0 1 0 . C o u n s e l f o r H a r l e y s v i l l e was p r e s e n t b u t c o u n s e l f o r [the McDaniels] d i d not appear. After due consideration, H a r l e y s v i l l e ' s Motion t o Dismiss i s 5 the 2100622 h e r e b y GRANTED a n d t h i s case i s dismissed p r e j u d i c e , c o s t s t a x e d as p a i d . " The McDaniels filed a motion to alter, amend, or vacate the judgment, w h i c h , on F e b r u a r y 14, 2 0 1 1 , t h e t r i a l as to Harleysville court but granted court a s t o B r i a n Homes. r e i n s t a t e d the McDaniels' d i r e c t e d the McDaniels t o apply B r i a n Homes n o l a t e r with denied The trial a c t i o n a s t o B r i a n Homes a n d f o r a d e f a u l t judgment than March against 15, 2011. On M a r c h 1 5 , 2 0 1 1 , t h e M c D a n i e l s a p p l i e d f o r a n e n t r y o f default clerk face against noted B r i a n Homes. the entry of default against of the McDaniels' McDaniels f i l e d On M a r c h 2 1 , 2 0 1 1 , t h e c i r c u i t application. a n o t i c e of appeal to this Although of the date Halagan, 23, 2011, the t r i a l the McDaniels filed 29 S o . 3 d 9 1 5 , 917 it after that, That court t r a n s f e r r e d the their appeal, see Johnson v. ( A l a . C i v . App. 2009), an o r d e r against a f u r t h e r review Brian Homes 6 the t r i a l on M a r c h 25, 2 0 1 1 , i n w h i c h of the pleadings, i t appeared t h a t a judgment a l r e a d y had been e n t e r e d McDaniels naming c o u r t was d i v e s t e d o f j u r i s d i c t i o n a s t o enter the the c o u r t p u r s u a n t t o § 1 2 - 2 - 7 ( 6 ) , A l a . Code 1 9 7 5 . court purported stated On M a r c h t o o u r supreme c o u r t o n l y H a r l e y s v i l l e as t h e a p p e l l e e . appeal B r i a n Homes o n t h e i n t h e 2002 i n favor of a c t i o n ; the 2100622 trial court concluded was " w i t h o u t jurisdiction against Brian dismiss the present that, Homes. P.,] Thus, McDaniels' the t r i a l claim purported Brian entered court an o r d e r jurisdiction i f appropriate, either order Homes to i n the an 54(b)[, 14, 2 0 1 1 , o r d e r On May 1 7 , 2 0 1 1 , t h e t r i a l "order i n pertinent and reinvesting f o r a p e r i o d o f 14 d a y s " t o a [Rule] as t o t h e F e b r u a r y i t titled wrote, court against court with a l l pending claims." what judgment, i t action. trial enter, of that t o a w a r d a n y f u r t h e r sums o f m o n e y " On May 3, 2 0 1 1 , t h i s the as a r e s u l t final judgment" A l a . R. C i v . or adjudicate court entered i n which i t part: " [ I ] t i s h e r e b y ORDERED, ADJUDGED a n d DECREED that a l l claims against ... Harleysville are d i s m i s s e d w i t h p r e j u d i c e as p r e v i o u s l y ordered, and a l l c l a i m s a g a i n s t [ B r i a n Homes] h a v e b e e n a d d r e s s e d by t h i s C o u r t i n i t s o r d e r d a t e d March 25, 2011. Thus, a l l p e n d i n g c l a i m s have been a d j u d i c a t e d and t h i s j u d g m e n t i s made f i n a l p u r s u a n t t o R u l e 5 4 ( b ) of t h e Alabama Rules o f C i v i l Procedure." We construe order that order as a d o p t i n g and e n t e r i n g t h e purported o f March 25, 2011, t h u s d i s p o s i n g o f t h e r e m a i n i n g against On Brian Homes. appeal, Harleysville's claim the motion parties to dismiss. 7 dispute the The M c D a n i e l s nature of argue that 2100622 the motion had been converted to one seeking a summary judgment because H a r l e y s v i l l e a t t a c h e d m a t e r i a l s t o i t s motion that the were o u t s i d e attachment the pleadings. Harleysville of p l e a d i n g s from a p r i o r responds pending action that to a m o t i o n t o d i s m i s s d o e s n o t c o n v e r t t h e m o t i o n i n t o one s e e k i n g a summary j u d g m e n t . dismiss As the was, conclude that H a r l e y s v i l l e ' s motion i n s u b s t a n c e , a summary-judgment noted above, assertion estoppel We as of a bar the the to basis the motion. of H a r l e y s v i l l e ' s affirmative defense relitigation of to motion of was collateral i t s potential l i a b i l i t y under the p o l i c y of i n s u r a n c e i t had i s s u e d t o B r i a n Homes. 979 I n L l o y d N o l a n d F o u n d a t i o n , I n c . v. H e a l t h S o u t h C o r p . , So. whether and 2d 784 ( A l a . 2007), a motion to dismiss r e s j u d i c a t a was Determining court that i n fact i t was our supreme court considered that asserted c o l l a t e r a l a motion a motion f o r a summary estoppel judgment. f o r a summary j u d g m e n t , wrote: "The t r i a l c o u r t b a s e d i t s f i n a l o r d e r o n t h e a f f i r m a t i v e d e f e n s e s o f r e s j u d i c a t a and c o l l a t e r a l estoppel. R u l e 8 ( c ) , A l a . R. C i v . P., p r o v i d e s t h a t affirmative defenses shall be set forth in a responsive pleading. 'Res j u d i c a t a ' and ' e s t o p p e l ' are two o f t h e a f f i r m a t i v e d e f e n s e s l i s t e d i n R u l e 8(c). An a f f i r m a t i v e d e f e n s e i s ' [ a ] d e f e n d a n t ' s a s s e r t i o n o f f a c t s and arguments t h a t , i f t r u e , w i l l 8 the 2100622 d e f e a t the p l a i n t i f f ' s or p r o s e c u t i o n ' s c l a i m , even i f a l l the a l l e g a t i o n s i n the complaint are t r u e . ' B l a c k ' s Law D i c t i o n a r y 451 (8th ed. 2004). The p a r t y a s s e r t i n g the a f f i r m a t i v e defense bears the burden of p r o v i n g i t . S t e w a r t v . B r i n l e y , 902 S o . 2d 1 ( A l a . 2004). " G e n e r a l l y , an a f f i r m a t i v e d e f e n s e i s p l e a d e d i n a responsive pleading, such as an answer t o a complaint. The r e a s o n a f f i r m a t i v e d e f e n s e s m u s t b e pleaded i n a r e s p o n s i v e p l e a d i n g i s to g i v e the o p p o s i n g p a r t y n o t i c e of t h e d e f e n s e and a chance t o d e v e l o p e v i d e n c e and o f f e r arguments t o c o n t r o v e r t the defense. Blonder-Tongue Labs., Inc. v. U n i v e r s i t y o f I l l i n o i s , 402 U.S. 3 1 3 , 3 5 0 , 91 S. C t . 1 4 3 4 , 28 L. E d . 2 d 788 (1971). 'Since the f a c t s necessary to establish an affirmative defense g e n e r a l l y must be shown b y m a t t e r s o u t s i d e t h e complaint, the defense technically cannot be a d j u d i c a t e d on a m o t i o n u n d e r R u l e 1 2 [ , F e d . R. C i v . P.].' 5 C h a r l e s A l a n W r i g h t a n d A r t h u r C. M i l l e r , F e d e r a l P r a c t i c e a n d P r o c e d u r e § 1277 ( 3 d e d . 2 0 0 4 ) . However, a p a r t y can o b t a i n a d i s m i s s a l under R u l e 12(b)(6), A l a . R. C i v . P., on t h e b a s i s of an a f f i r m a t i v e d e f e n s e when ' " t h e a f f i r m a t i v e d e f e n s e appears clearly on the face of the pleading."' J o n e s v . A l f a M u t . I n s . C o . , 875 S o . 2 d 1 1 8 9 , 1193 (Ala. 2003) ( q u o t i n g B r a g g s v. J i m S k i n n e r F o r d , Inc., 396 S o . 2 d 1 0 5 5 , 1058 (Ala. 1981)). In Jones v. Alfa, supra, the face of the plaintiffs' complaint d i d not indicate that the statutory limitations period applicable to their bad-faith r e f u s a l - t o - p a y - i n s u r a n c e - b e n e f i t s c l a i m had e x p i r e d b e f o r e t h e y s u e d ; t h e r e f o r e , t h e i n s u r e r was not e n t i t l e d to a d i s m i s s a l pursuant to Rule 12(b)(6), Ala. R. C i v . P., on t h e a f f i r m a t i v e d e f e n s e o f t h e s t a t u t e of l i m i t a t i o n s . " "In the p r e s e n t case, the F o u n d a t i o n ' s c o m p l a i n t does not mention the federal litigation. In 9 2100622 response to the Foundation's complaint, HealthSouth, in c o m p l i a n c e w i t h R u l e 8 ( c ) , A l a . R. Civ. P., p l e a d e d r e s j u d i c a t a and c o l l a t e r a l e s t o p p e l i n i t s amended a n s w e r . HealthSouth f i l e d a 'motion to d i s m i s s , ' and, i n a s u p p l e m e n t a l b r i e f i n s u p p o r t o f i t s motion to dismiss, i t addressed the d o c t r i n e s res j u d i c a t a and c o l l a t e r a l e s t o p p e l . Additionally, HealthSouth a t t a c h e d f i l i n g s from the f e d e r a l c o u r t proceeding. Although HealthSouth's motion addressing i t s defenses of res judicata and c o l l a t e r a l e s t o p p e l was a c t u a l l y f r a m e d a s a ' m o t i o n t o d i s m i s s , ' t h e m o t i o n s h o u l d have b e e n t r e a t e d as one s e e k i n g a summary j u d g m e n t b e c a u s e t h e f a c e o f the c o m p l a i n t d i d n o t r e f e r e n c e t h e p r i o r litigation and H e a l t h S o u t h p r o p e r l y p l e a d e d r e s j u d i c a t a and c o l l a t e r a l e s t o p p e l i n i t s answer. The s u b s t a n c e o f a m o t i o n , not what a p a r t y c a l l s i t , d e t e r m i n e s the nature of the motion. E x p a r t e L e w t e r , 726 S o . 2 d 603 ( A l a . 1 9 9 8 ) . " 979 So. 2d a t 791-92 In the present reference the Harleysville's consider (footnote omitted). case, the McDaniels' federal-court motion, matters the outside action. trial of the documents attached Harleysville's was, in motion, substance, accordingly, we will s t a n d a r d by which we a was motion motion. although t i t l e d a motion for a review the judgment r e v i e w a summary 10 summary decide to namely the as w e l l As motion to not required pleadings, contained i n Harleysville's that Thus, court assertions to c o m p l a i n t does as a result, to dismiss, judgment, pursuant judgment. the to and, the 2100622 The judgment standard i s well by which this court reviews settled: "'"To grant ... a [summaryjudgment] motion, the t r i a l c o u r t must d e t e r m i n e t h a t t h e e v i d e n c e does not c r e a t e a genuine issue of material fact and t h a t the movant i s e n t i t l e d t o a judgment as a matter of law. Rule 5 6 ( c ) ( 3 ) , A l a . R. C i v . P. When t h e movant makes a p r i m a facie s h o w i n g t h a t t h o s e two c o n d i t i o n s are s a t i s f i e d , the burden shifts to the nonmovant to present 'substantial evidence' creating a genuine issue o f m a t e r i a l fact. Bass v. SouthTrust Bank of Baldwin County, 538 S o . 2 d 7 9 4 , 797-98 (Ala. 1989); § 12-21-12(d)[,] A l a . Code 1975. Evidence i s 'substantial' i f i t is of 'such w e i g h t and q u a l i t y that fair-minded persons i n the exercise of i m p a r t i a l judgment can reasonably infer the e x i s t e n c e of the f a c t sought t o be p r o v e d . ' West v. Founders L i f e A s s u r . Co. o f F l o r i d a , 54 7 So. 2 d 8 7 0 , 871 ( A l a . 1 9 8 9 ) . "'"In our review of a summary j u d g m e n t , we a p p l y t h e same s t a n d a r d a s t h e t r i a l c o u r t . E x p a r t e L u m p k i n , 702 S o . 2 d 4 6 2 , 465 ( A l a . 1 9 9 7 ) . Our r e v i e w i s subject to the caveat that we must r e v i e w t h e r e c o r d i n a l i g h t most f a v o r a b l e t o t h e nonmovant and must r e s o l v e a l l r e a s o n a b l e doubts against the movant. 11 a summary 2100622 Hanners v. B a l f o u r G u t h r i e , I n c . , 564 S o . 2 d 412 ( A l a . 1 9 9 0 ) . " ' " P a y t o n v . M o n s a n t o C o . , 801 S o . 2 d 82 9, 832-33 ( A l a . 2001) ( q u o t i n g Ex p a r t e A l f a Mut. Gen. I n s . C o . , 742 S o . 2 d 1 8 2 , 184 ( A l a . 1 9 9 9 ) ) . " Maciasz (Ala. v. Fireman's Fund I n s . C o . , 988 S o . 2 d 991 , 994-95 2008). The McDaniels entering argue a that contend judgment they that forHarleysville. could n o t be bound entered i n the federal-court parties to that For effect a prior the t r i a l action. We later erred Specifically, by the d e f a u l t action because they i n they judgment were n o t agree. judgment as t o an i s s u e on a p a r t y ' s court relitigation t o have a p r e c l u s i v e of that issue, i t must b e s h o w n t h a t t h e p e r s o n a g a i n s t whom t h e p r e c l u s i v e e f f e c t i s sought, to or a person the prior that litigation the issue litigated i nprivity i n which f o rwhich i n the prior with that the issue preclusion action. p e r s o n , was a party was d e c i d e d a n d i s sought See D a i r y l a n d was actually I n s . Co. v . J a c k s o n , 566 So. 2 d 723, 726 ( A l a . 1990) ( l i s t i n g t h e e l e m e n t s of collateral McDaniels parties estoppel). n o r someone with In the present whom to the federal-court they action 12 case, were neither the i n privity i n which were the default 2100622 declaratory G & S j u d g m e n t was e n t e r e d . Glass & ("'"Privity" Supply i s a different types a person, although represented party.'" 1286 (quoting actually 69 flexible So. legal not a party, someone with 2004))). doctrine case prior because, that had h e l d with issue regard was estoppel that to the other actually consent. Cf. Matter of McMillan, not involved 'actually not based upon who i s a action (discussing the was another applicable i s , the default, was & Rental, Inc. " [ i ] n the f i r s t that suit judgment stipulation, or 579 F . 2 d 2 8 9 ( 3 r d C i r . 1 9 7 8 ) terminated litigated' for by d e f a u l t purpose v. Cash E x p r e s s , (Ala. J . , concurring 13 adequately has n o t been 1980) i n an a c t i o n (Lyons, when issue i f that case, estoppel)."); Martin 2010) applying 383 F . 3 d 1 2 8 0 , estoppel litigated, i n i t was several and d i s t i n g u i s h i n g collateral 2011) Inc., an (Ala. Co. v . (Ala. comprising S e e AAA E q u i p . rendered (issues 132 interests action 384 S o . 2 d 1 0 7 , 112 of c o l l a t e r a l that same Moreover, i n a Bldg. has h i s i n t e r e s t s EEOC v . Pemco A e r o p l e x , litigated Bailey, 124, term, the r e s o l v e d by a d e f a u l t judgment. v. 3d o f r e l a t i o n s h i p s and g e n e r a l l y by (11th C i r . Co., See J i m P a r k e r Inc., of judgment collateral 60 S o . 3 d 2 3 6 , 2 5 3 i n the result) ("If the 2100622 previous judgment collateral i s by estoppel default or issue 'actually litigated' judgment not binding on t h e M c D a n i e l s , the issue that circumstances that 537 entered concluding, jurisdictions this case. (10th we have and they join reached injured 149 N.M. issued 364, (concluding required party insured); 248 that P.3d trial was 912, party was n o t made a p a r t y from litigating the Farm Bureau 916-17 insurer's court not of in presented 507 F . 2 d 5 3 3 , d i d not e r r i n bound action by default (N.M. that brought by Gen. I n s . Co., C t . App. insurer not preclude 2010) was t o which liability); party Coleman 8-10 not injured injured I n s . C o . , 708 S o . 2 d 6, 14 litigate number t o those i n proceeding could to conclusion v. Nevada declaring insured result, was n o t i n e f f e c t a t t i m e o f Gallegos judgment to indemnify Mississippi same v. Quinones, that was action i s substantial the no judgment. i n declaratory-judgment against nothing As a are free a r e t h e same o r s i m i l a r judgment d e c l a r i n g t h a t insurance insurer a See, e.g., H a r r i s that c a n be i n the federal-court C i r . 1974) ( h o l d i n g concluding accident because of coverage determined by that so there i n the d e f a u l t judgment."). default in then preclusion the In ... v. (Miss. 2100622 1998) (same); Independent F i r e 2d 1111, that 1113 ( F l a . D i s t . C t . App. the coverage question favor, judicata We not not binding to the declaratory 2d not apply 199, 116, judgment in favor of i n s u r e r was injured had not (holding had of who parties in been made default i t s insured not a under insurance Searle, of the against insurance insured company's 15 68 insurance policy action against to insurer's Bureau Cas. I n s . S.W.2d 4 5 4 , declaring p o l i c y could party insured parties judgment A (holding separate 365 res against under 270-72, of (1966) insurer not l i a b l e this case. this was 118-19 a c t i o n ) ; S o u t h e r n Farm judgment So. argues 456-57 that insurer not estop injured was n o t p a r t y t o d e c l a r a t o r y - j u d g m e n t a c t i o n a n d obtained question that doctrine a c t i o n . " ) ; G l a n d o n v. P.2d who p a r t y who facts 412 that not l i a b l e the the b y an i n s u r e r a g a i n s t v . R o b i n s o n , 236 A r k . 2 6 8 , (1963) that 202-03, declaratory-judgment was under judgment bind insured Co. 633 ("Independent on a t h i r d - p a r t y c l a i m a n t default declaring finding action obtained is did Paulekas, has p r e v i o u s l y been d e c i d e d i n i t s disagree, does declaratory that 1994) v. r e l y i n g on t h e d o c t r i n e o f r e s j u d i c a t a t o s u p p o r t position. Wash. I n s . Co. from litigating liability under who the the 2100622 policy); and Ct. 1951) App. declaration Churchman v. in was Harleysville's assert motion judgment discussion on that action policy insurance court's (holding of the is Ingram, void). other 2d grounds was 300-01 not (La. bound by and insured that Because 1 to 297, insurer without due So. injured party between was 56 we conclude that merit be and reversed, for reversal that the trial we pretermit the McDaniels appeal. S e e a l s o 17 L e e R. R u s s a n d Thomas F. S e g a l l a , C o u c h on I n s u r a n c e § 2 3 9 . 6 8 ( 3 d e d . 2 0 0 5 ) ("When an i n s u r e r a n d i n s u r e d oppose each other i n a p r o c e e d i n g f o r a d e c l a r a t o r y judgment concerning the v a l i d i t y of, or coverage under, a p o l i c y of l i a b i l i t y i n s u r a n c e , t h e r e i s n o t a l w a y s t h e i n c e n t i v e on t h e part of the insured to v i g o r o u s l y contest the insurer's claims. A c c o r d i n g l y , when t h e i n s u r e r a t t e m p t s t o a s s e r t t h e j u d g m e n t i n t h a t p r o c e e d i n g as p r e c l u s i v e o f a l a t e r a c t i o n by t h e i n j u r e d p a r t y , o r b y an i n s u r e r o f t h a t p a r t y , t h e r e i s considerable authority that the earlier judgment i s not binding [ o ] n s u c h new p l a i n t i f f s who were not p a r t y t o the e a r l i e r d e c l a r a t o r y j u d g m e n t a c t i o n . " ( f o o t n o t e s o m i t t e d ) ) ; 20 J o h n A l a n A p p l e m a n , I n s u r a n c e Law a n d P r a c t i c e § 1 1 3 7 1 (1980) ( " P e r s o n s who h a v e b e e n i n j u r e d i n an a u t o m o b i l e a c c i d e n t a r e c e r t a i n l y p r o p e r p a r t i e s t o a s u i t by t h e l i a b i l i t y i n s u r e r t o d e t e r m i n e the c o v e r a g e of i t s p o l i c y , and t h e b e t t e r r u l e w o u l d seem t o be t h a t t h e y a r e b o t h p r o p e r and necessary p a r t i e s to the maintenance of the s u i t . H e n c e , i t w o u l d be e r r o r t o d i s m i s s such persons from the d e c l a r a t o r y judgment suit. I n f a c t , one c a s e was r e v e r s e d upon a p p e a l where i t r e f u s e d the r i g h t to i n t e r e s t e d p a r t i e s to a t t a c k a d e f a u l t judgment. However, i f the c o u r t does not or c a n n o t s e c u r e j u r i s d i c t i o n o v e r them, t h e i r r i g h t s c a n n o t be d e s t r o y e d by t h e i r n o n a p p e a r a n c e ; n o r c a n s u c h r i g h t s be d e t e r m i n e d w h e r e t h e y a r e n o t made p a r t i e s t o t h e s u i t . " ( f o o t n o t e d o m i t t e d ) ) . 1 16 2100622 Harleysville argues on appeal that the t r i a l j u d g m e n t c a n b e a f f i r m e d b e c a u s e i t was e n t e r e d the McDaniels' failure disagree. We discretion to dismiss R. to recognize that circumstances default, that o r some party. 487-88 dismissing dismissal of Rule trial court's the McDaniels' was Harleysville's 2 the based on motion. a trial t o Rule purposeful contumacious However, 2 action. action a v. E r v i n , 519 20, indicates that consideration Although the order i t s action willful on t h e p a r t So. i n the present December of case, 2010, the order the order the merits notes that of 2d 486, of of counsel 41(b) reads: "For f a i l u r e of the p l a i n t i f f to prosecute or to comply w i t h these r u l e s o r any order o f c o u r t , a d e f e n d a n t may move f o r d i s m i s s a l o f a n a c t i o n o r o f any c l a i m a g a i n s t t h e d e f e n d a n t . U n l e s s t h e c o u r t i n its order for dismissal otherwise specifies, a d i s m i s s a l under t h i s s u b d i v i s i o n and any d i s m i s s a l not provided for i n this rule, other than a d i s m i s s a l f o r lack of j u r i s d i c t i o n , f o r improper v e n u e , o r f o r f a i l u r e t o j o i n a p a r t y u n d e r R u l e 19, o p e r a t e s as an a d j u d i c a t i o n upon t h e m e r i t s . " 17 We court's delay, conduct of 41(b), A l a . has f a i l e d t o prosecute See R i d d l e s p r i g g e r ( A l a . 1987). language i t i s within evidencing other as a r e s u l t their an a c t i o n p u r s u a n t C i v . P., w h e n a p a r t y under prosecute court's 2100622 for to of the McDaniels d i d not appear dismiss, the order the trial reflects court's "due f o r the hearing t h a t i t was on t h e entered consideration" of motion as a the result pending motion, not because of a l a c k of d i l i g e n c e by the M c D a n i e l s i n prosecuting their action. Further indicating c o u r t d i d n o t c o n c l u d e t h a t t h e a c t i o n was for failure aside to prosecute i t s December 20, i s the f a c t 2010, order due that the t o be trial dismissed that the t r i a l court i n part, despite a lack argument i n the M c D a n i e l s ' postjudgment motion r e l a t i v e t o possible f a i l u r e to prosecute their action. Indeed, the set of any first t i m e i n t h i s e n t i r e a c t i o n t h a t an i s s u e has b e e n r a i s e d as t o a possible is failure to prosecute in Harleysville's contained action the on had the b a s i s hearing on the part appellate brief; i n the record Moreover, on the no such of the proceedings trial that court of the counsel had Harleysville's motion to the to dismiss, The the t r i a l c o u r t was attend such an McDaniels a response to H a r l e y s v i l l e ' s motion to dismiss, a result, is McDaniels' failed a c t i o n would have c o n s t i t u t e d r e v e r s i b l e e r r o r . filed suggestion below. dismissed their McDaniels and, as f u l l y apprised of the McDaniels' p o s i t i o n with respect to that motion. 18 Furthermore, the record 2100622 does not contain any purposeful delay, conduct on the failure to attend did extend, not the trial willful part of the See or, the The v. any in trial the Cobern, So. of contumacious their counsel's court's discretion so action 36 suggestion other circumstances, dismiss Gill or McDaniels hearing. to indeed, default, under these court prosecute. evidence 3d f a r as to allow for failure to 31, 32-34 (Ala. trial court 2009). B a s e d on erred to to the foregoing, we conclude t h a t the r e v e r s a l when i t d i s m i s s e d Harleysville. due t o be for additional 3 reversed APPLICATION As a result, and the McDaniels' trial court's cause remanded t o the action as judgment i s trial court 12, 2011, proceedings. OVERRULED; OPINION WITHDRAWN; O P I N I O N S U B S T I T U T E D ; Pittman, the the Bryan, Thomas, and OF AUGUST R E V E R S E D AND Moore, REMANDED. J J . , concur. T h e M c D a n i e l s do n o t r a i s e a s an i s s u e on a p p e a l , t h u s we do n o t a d d r e s s , whether the t r i a l court erred d i s m i s s i n g B r i a n Homes f r o m t h e a c t i o n . 3 19 and in

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