Employers Mutual Casualty Company v. Carl Hobbs Construction Company, Inc. et al
MEMORANDUM OPINION AND ORDER that Employer Mutual's 19 MOTION for Summary Judgment is DENIED with leave to re-file at a more appropriate time, namely when the parties have engaged in sufficient discovery; that the defendants' 23 MOTION Deny or Defer Ruling on Plaintiff's Motion for Summary Judgment is GRANTED, given that the Court has denied Employer Mutual's Motion for Summary Judgment; that Employer Mutual's 27 MOTION to Strike is DENIED. Signed by Honorable Judge Mark E. Fuller on 3/22/2012. (Attachments: # 1 Civil Appeals Checklist)(cc, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
EMPLOYERS MUTUAL CASUALTY
CARL HOBBS CONSTRUCTION
COMPANY, INC., et al.,
Case No. 1:11-cv-643-MEF
MEMORANDUM OPINION AND ORDER
This cause comes before the Court on three motions. The first is the Motion for
Summary Judgment (Doc. # 19) filed by the plaintiff, Employers Mutual Casualty
Company. The second is the Motion to Deny or Defer Ruling on Plaintiff’s Motion for
Summary Judgment (Doc. # 23) filed by the defendants. The third is Employers Mutual’s
Motion to Strike (Doc. # 27), which essentially asks the Court to deny the defendants’
Motion to Deny or Defer. For the reasons discussed below, Employers Mutual’s two
motions are due to be denied and the defendants’ motion is due to be granted.
This suit got underway when Employers Mutual filed a declaratory judgment
action against Carl Hobbs Construction and various related defendants. The related
defendants are both the plaintiffs and the defendants in the underlying state court action.
The state court defendants joined with Carl Hobbs Construction are Carl Hobbs and
Donald Trawick; the state court plaintiffs are David Alford and Caroline Alford. Here,
Employers Mutual seeks a declaration that it neither owes a defense nor indemnity to the
construction company defendants as it relates to an underlying state court tort action
against them.1 Thus far Employers Mutual has defended the underlying action, which
commenced on May 5, 2009, despite its claim that it has no obligation to do so.2
After filing the declaratory judgment action, Employers Mutual met with the
defendants. This meeting, which occurred on September 26, 2011, led to an agreement on
deadlines for disclosing expert witnesses, taking discovery, and submitting dispositive
motions. Relevant here, the discovery deadline the parties chose was June 18, 2012, and
the dispositive motion deadline was July 2, 2012. They also agreed, as it relates to
discovery, that they “may rely on the depositions and discovery in the underlying lawsuit
and may need to take various depositions and engage in paper discovery concerning the
plaintiffs’ allegations and the defendants’ defenses in the underlying lawsuit.” (Doc. # 15
at 2.) The parties, as required by Rule 26(f) of the Federal Rules of Civil Procedure,
memorialized this agreement and submitted it to the Court as their Rule 26(f) Report.
(See id.) The Court then issued a Scheduling Order that largely adopted the agreed upon
The underlying action is in the Circuit Court of Houston County, Alabama, and is captioned
David Alford, et. al. v. Carl Hobbs, et al., No. 09-cv-229-M. The Court will simply refer to it as the
Notably, Employers Mutual has provided the defense under a strict reservation of rights.
deadlines. (See Doc. # 16.)
The parties have yet to undertake much, if any, discovery in the declaratory
judgment action. Yet Employers Mutual has already moved for summary judgment,
asking this Court to find in its favor on two issues. First, it believes it is entitled to
judgment as a matter of law on its claim that the underlying action does not involve an
“occurrence” as defined in the insurance contract. And second, the insurer contends that
no genuine issue of material fact exists about whether the construction company
defendants failed to provide timely notice as required by the insurance policy. This
prompted the defendants to move the Court to deny or defer ruling on Employers
Mutual’s dispositive motion. Employers Mutual then moved to strike the defendants’
denial or deferment motion. Now this Court must decide the question on which these
three motions turn: is Employers Mutual’s summary judgment motion premature or ripe
The appropriate time for filing a summary judgment motion depends on the
circumstances of the case. On a purely legal issue, an early summary judgment motion is
proper, indeed desirable: the parties will need little if any discovery to present the issue
cleanly to the court. On the other hand, it makes little sense to rush a fact intensive
motion, because pushing it before the Court too early deprives the nonmovant of the
ability to develop his or her case sufficiently.
Against this background, Rule 56(d) of the Federal Rules of Civil Procedure
provides a district court with the means to handle premature motions for summary
judgment. Under the rule, if a nonmovant can show he lacks the facts necessary to contest
the summary judgment motion, a court can defer ruling on the motion, deny it with leave
to re-file later, allow time for discovery, or issue any other appropriate order. Fed. R. Civ.
P. 56(d)(1)–(3). In Celotex Corp. v. Catrett, 477 U.S. 317 (1986), the Supreme Court, in
discussing this rule, made clear that a party need not wait until all discovery is completed
to move for summary judgment. To the contrary, a party only has to wait until the other
party has had adequate time in which to undertake sufficient discovery. Id. at 322. Even
so, the Fifth Circuit Court of Appeals, in a decision that binds this Court,3 said that
summary judgment “should not ordinarily be granted before discovery has been
completed.” Ala. Farm Bureau Mut. Cas. Co. v. Am. Fid. Life Ins. Co., 606 F.2d 602, 609
(5th Cir. 1979), cert. denied, 449 U.S. 20 (1980). Accordingly, Alabama Farm Bureau
sets up a presumption against early summary judgment motions, although Celotex makes
clear they are sometimes proper.
Here, the Hobbs Construction defendants claim they need time for discovery,
hence making summary judgment inappropriate. Employers Mutual counters by noting
that the underlying state court action has been pending since 2009, thereby providing a
sufficiently developed factual record to go forward with their motion. The Court finds the
See Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc) (adopting pre1981 Fifth Circuit decisions as binding precedent).
defendants’ argument more persuasive.
The plaintiffs in the underlying suit—David and Caroline Alford—have alleged
negligence and breach of contract against Carl Hobbs Construction and its two owners,
Carl Hobbs and Donald Trawick. Because a plaintiff generally cannot assert a tort claim
against a contractor who constructs a building that does not comply with the contract
specifications, the Alfords’ negligence claim turns on whether the new construction work
on their house damaged the existing portions of their home. And Employers Mutual’s
obligation to defend and indemnify turns on the answer to this question. Thus the factual
record about the damage to the Alfords’ home is critically important for resolving the
According to the Hobbs Construction defendants, the Alfords plan to depose an
expert in the near future. The expert, the defendants say, will likely testify not only to the
damage caused to the home, but also about who caused it and how. Because this
testimony will weigh heavily on the dispositive issue in this case, it would make little
sense for the Court to rule on the summary judgment motion now. The motion is
therefore due to be denied with leave to re-file after some discovery.
Employers Mutual has also moved for summary judgment on its second
claim—that the construction company defendants failed to provide Employers Mutual
with adequate notice about the suit against them. Based on the parties’ briefs, it appears
that the facts surrounding this question are much better developed. Still, the construction
company defendants want to take the deposition of a key witness. Besides, it would be in
the interest of judicial economy to require Employers Mutual to re-file and ask for
summary judgment on both grounds simultaneously. As a result, the motion for summary
judgment, as it relates to Employers Mutual’s second claim, is due to be denied with
leave to re-file at a later date.
After carefully reviewing the motions and briefs submitted by the parties, it is
hereby ORDERED as follows:
Employer Mutual’s Motion for Summary Judgment (Doc. # 19) is DENIED
with leave to re-file at a more appropriate time, namely when the parties
have engaged in sufficient discovery;
The defendants’ Motion to Deny or Defer Ruling on Plaintiff’s Motion for
Summary Judgment (Doc. # 23) is GRANTED, given that the Court has
denied Employer Mutual’s Motion for Summary Judgment; and
Employer Mutual’s Motion to Strike (Doc. # 27) is DENIED.
Done this the 22nd day of March, 2012.
/s/ Mark E. Fuller
UNITED STATES DISTRICT JUDGE
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