Colony Insurance Company v. AL & Sons Corp. et al

Filing 15

MEMORANDUM OPINION AND ORDER that the 11 Motion for Summary Judgment is DENIED as further set out in the opinion and order. Signed by Honorable Judge W. Harold Albritton, III on 6/22/2015. (Attachments: # 1 Civil Appeals Checklist)(dmn, )

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
EASTERN DIVISION
COLONY INSURANCE COMPANY,
as subrogee for Regeneration, LLC and
Roy Granger,
Plaintiff,
v.
AL & SONS CORP. and
AL MITCHELL,
Defendants.

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CASE NO. 3:14-cv-1051-WHA-TFM
(WO)

MEMORANDUM OPINION AND ORDER
I. INTRODUCTION
This cause is before the court on Defendants Al & Sons Corporation and Al Mitchell’s
(collectively, “Defendants”) Motion for Summary Judgment (Doc. # 11). Also before the court
are the Response in Opposition (Doc. # 13) filed by the Plaintiff, Colony Insurance Company
(“Colony”), and the Defendants’ Reply thereto (Doc. # 14). The court has jurisdiction on the
basis of diversity of citizenship.
This action arises out of a fire that occurred on the Pepperell Mill property in Opelika,
Alabama on May 12, 2013. Following a settlement reached with the owner of the property in an
underlying tort lawsuit, Colony, as the insurance carrier for a company overseeing work at the
mill site, filed this action against its insureds’ former co-defendants, Al & Sons and Al Mitchell.
Colony’s claim is for common law indemnity. Specifically, it seeks reimbursement for the
amount it paid to settle claims against its insureds, on the grounds that it was the Defendants’
conduct that caused the fire. The Defendants have moved for summary judgment on the ground

that their status as joint tortfeasors with Colony’s insureds in the underlying tort action precludes
any indemnity claim as a matter of law.
For the reasons to be discussed, the Motion for Summary Judgment is due to be
DENIED.
II. SUMMARY JUDGMENT STANDARD
Summary judgment is proper “if there is no genuine issue as to any material fact and . . .
the moving party is entitled to a judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S.
317, 322 (1986).
The party asking for summary judgment “always bears the initial responsibility of
informing the district court of the basis for its motion,” relying on submissions “which it believes
demonstrate the absence of a genuine issue of material fact.” Id. at 323. Once the moving party
has met its burden, the nonmoving party must “go beyond the pleadings” and show that there is a
genuine issue for trial. Id. at 324.
Both the party “asserting that a fact cannot be,” and a party asserting that a fact is
genuinely disputed, must support their assertions by “citing to particular parts of materials in the
record,” or by “showing that the materials cited do not establish the absence or presence of a
genuine dispute, or that an adverse party cannot produce admissible evidence to support the
fact.” Fed. R. Civ. P. 56 (c)(1)(A)–(B). Acceptable materials under Rule 56(c)(1)(A) include
“depositions, documents, electronically stored information, affidavits or declarations, stipulations
(including those made for purposes of the motion only), admissions, interrogatory answers, or
other materials.”
To avoid summary judgment, the nonmoving party “must do more than show that there is
some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio

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Corp., 475 U.S. 574, 586 (1986). On the other hand, the evidence of the non-movant must be
believed and all justifiable inferences must be drawn in its favor. See Anderson v. Liberty Lobby,
477 U.S. 242, 255 (1986).
After the nonmoving party has responded to the motion for summary judgment, the court
shall grant summary judgment if the movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a).
III. FACTS
The submissions of the parties establish the following facts, construed in a light most
favorable to the non-movant:
Plaintiff is the insurer of and subrogee for Regeneration, LLC, which is owned by Roy
Granger. Granger is the only member of the LLC. Granger partnered with Darryl Saucier of
Saucier Investments to purchase the Pepperell Mill property in Opelika, Alabama in 2011.
Saucier Investments was created to purchase and manage the property, and Darryl Saucier and
Roy Granger assigned their purchase rights to Saucier Investments before the sale closed in
November 2011. Saucier Investments and Regeneration (and Granger) then executed an
agreement for the deconstruction of the mill. Regeneration would be responsible for the
deconstruction of the mill, and the parties would split the profits evenly.
In December of 2011, Regeneration entered into an agreement with Al & Sons
Corporation for “Removal of Non-Ferrous and Ferrous Metals.” (Doc. # 11-7 at 2.) In 2012,
Saucier Investments entered into a purchase contract to sell one of the mill buildings.1 As part of
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The record is not entirely consistent in classifying the buildings. The purchase contract and contract for removal of
metals both refer to the address of 2401 1st Avenue in Opelika, and the metal removal contract calls the site the
“Opelika Mill.” (Doc. # 11-7 at 2; Doc. # 11-9 at 2.) Throughout his deposition, Roy Granger referred to the
building that burned as the Gray Mill building. (Doc. # 13-1 at 7–8.) Additionally, Granger stated that the metal
removal contract covered the mill campus generally. (Id. at 22.) What is clear from the deposition is that the Gray
Mill building was the building where the fire occurred, and Al & Sons employees had been working in the area that
day. (Id. at 8–9.)

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that contract, the building had to be stripped of all existing metal and electrical pieces, except the
fire suppression system. Regeneration’s workers removed the majority of the equipment and the
copper in the Gray Mill building, and Al & Sons was responsible for removing remaining piping,
and transformers in lint houses on the second and third floors. At least in the opinion of Darryl
Saucier, the relationship between Regeneration and Al & Sons was that Regeneration was a
general contractor who hired Al & Sons as a subcontractor.
On May 12, 2013, after all the workers in the Gray Mill building had gone home for the
day, there was a fire in the building that caused extensive damage. A state court complaint
regarding the fire alleged that it started in an area where Al & Sons employees had been working
that day.
Colony is the insurance carrier for Regeneration. In October 2013, Colony filed a
declaratory judgment action in this court for the purpose of determining its rights and obligations
under a policy sold by Colony to Regeneration. See Colony Ins. Co. v. Regeneration LLC, Case
No. 3:13-cv-762-LSC-TFM. Colony filed the declaratory judgment action in order “to avoid
defense and indemnity obligations under its policy to Regeneration for any claims arising out of
the Pepperell Mill fire.” (Doc. # 11 at 2.) On March 6, 2014, Saucier Investments filed a state
court action in the Circuit Court of Lee County, Alabama against Regeneration, LLC, Roy
Granger, Al & Sons Corporation, and Al Mitchell (the sole shareholder of Al & Sons). The
complaint alleged two claims: one for negligence or wantonness and one for negligent and
wanton supervision. Both claims were asserted jointly against all of the named defendants.
On October 3, 2014, the parties mediated the state court action filed by Saucier
Investments. Colony participated as Regeneration’s insurance carrier and in order to represent
itself in connection with the federal court declaratory judgment action. Both the federal and state

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court actions were settled as a result of a global settlement reached in the mediation. The parties
settled for a confidential amount, with Colony paying 32% of the total sum and the insurance
carrier for Al & Sons (and Al Mitchell) contributing the other 68% of the settlement amount.
During the mediation, Colony informed Al & Sons and Al Mitchell that it planned to seek a
common law indemnity claim against them to recover the amount it had agreed to pay Saucier
Investments in order to resolve the negligence claims against Regeneration and Roy Granger.
The instant action, filed on October 14, 2014, represents Colony’s effort to recover the
amount it paid to settle the negligence claims against Regeneration and Roy Granger from Al &
Sons and Al Mitchell, under a common law indemnity theory.
IV. DISCUSSION
As a threshold matter, the court notes that Colony has abandoned one of the two
arguments it advanced in its Complaint in support of its claim for common law indemnity.
Specifically, the Complaint asserts that “Al & Sons had a duty under [the] contract to maintain
insurance of at least $2,000,000 per occurrence,” and that “Al & Sons did not comply with that
provision.” (Doc. # 1 at 5.) In the Motion for Summary Judgment, the Defendants argue that
instead the contract required $2,000,000 aggregate in coverage, rather than per occurrence. In its
Response, Colony expressly “concedes that the language of the agreement between Mitchell and
Regeneration, LLC regarding insurance coverage is not clear on the requirement of $2,000,000
per occurrence,” and states that it “will not pursue this argument in support of its claims against
[the Defendants].” (Doc. # 13 at 9.) The court considers the argument based on the
requirements of the contract as to insurance to have been abandoned and will only consider
Colony’s remaining argument as to its claim for common law indemnity.

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In Alabama, the “general rule” is that “in the absence of a statutory or contractual basis
otherwise, there is no contribution or indemnity among joint tortfeasors.” Parker Towing Co. v.
Triangle Aggregates, Inc., 143 So. 3d 159, 167 (Ala. 2013) (citations omitted). However, “a
joint wrongdoer may claim indemnity where he has not been guilty of any fault, except
technically or constructively, or where both parties are at fault, but the fault of the party from
whom the indemnity is claimed was the proximate or primary cause of the injury.” Crigler v.
Salac, 438 So. 2d 1375, 1385 (Ala. 1983) (citing Mallory S.S. Co. v. Druhan, 84 So. 874, 877
(Ala. Ct. App. 1920)). These exceptions are well-recognized in subsequent decisions by
Alabama courts and federal courts applying Alabama law. See, e.g., Unicore, Inc. v. Tenn.
Valley Auth., 768 F.2d 109, 112–13 (6th Cir. 1985) (quoting Mallory S.S. Co. for the exceptions
as part of a “passive negligence” analysis and stating that Mallory S.S. Co. “has been frequently
cited and never overruled”); Greyhound Lines, Inc. v. Goodyear Tire & Rubber Co., No. 3:08cv-516-WHA, 2009 WL 3079198, at *5 (M.D. Ala. Sept. 23, 2009) (Albritton, J.) (quoting
Mallory S.S. Co.); Coates v. CTB, Inc., 173 F. Supp. 1200, 1203 (M.D. Ala. 2001) (Thompson,
J.) (quoting Mallory and citing Crigler); SouthTrust Bank v. Jones, Morrison, Womack &
Dearing, P.C., 939 So. 2d 885, 902–03 (Ala. Civ. App. 2005) (quoting Unicore for its discussion
of Mallory S.S. Co. and citing Coates, among other cases).
The Defendants contend that because they were sued as joint tortfeasors in the underlying
state court action, Colony’s common law indemnity claim is invalid as a matter of law. In
response, Colony highlights facts in the record that—in its view—show that neither Defendant
was an agent of Regeneration and that the Defendants were working independently of
Regeneration. Colony argues that this case falls within the exceptions to the “joint tortfeasor”
rule listed above because “Mitchell clearly was an independent contractor and its negligence

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alone caused or contributed to the fire that destroyed the Gray Mill Building.” (Doc. # 13 at 14–
15.)2
As a preliminary issue, the court must determine whether, as the Defendants argue, the
fact that Regeneration and Al & Sons (and the associated individuals) were sued as joint
tortfeasors is dispositive. The court concludes that this aspect of the case is not dispositive. The
two exceptions listed in Crigler require factually specific inquiries into which party was at fault
or whether one party’s conduct was “the proximate or primary cause of the injury.” 438 So. 2d
at 1385. The form of the underlying state lawsuit has no bearing on these issues beyond the fact
that Saucier Investments alleged that both Regeneration and Al & Sons were negligent in causing
the fire. Only a detailed review of the evidence by a factfinder can determine whether either
exception applies.
Because of the previous settlement of the state action and the related federal declaratory
judgment action, there has been no determination of the cause of the fire or the particular
conduct that contributed to it. In order to conclude that the Defendants are entitled to summary
judgment because neither exception applies, the court would have to engage in impermissible
factfinding regarding these issues. Therefore, the court concludes that summary judgment is
inappropriate at this juncture.
This conclusion is consistent with a Northern District of Alabama case in which the court
found there were disputed issues of fact that precluded granting summary judgment on a
common law indemnity crossclaim under Alabama law. In Mueller v. Chugach Fed. Solutions,
Inc., the court was presented with a motion for summary judgment on a common law indemnity
crossclaim brought by a property management company against a subcontractor hired to service
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The court notes that a later statement by Colony qualifies its certainty as to the cause of the fire. In concluding its
Response, Colony asserts that it was Mitchell’s conduct “that most likely led to the fire that destroyed the building.”
(Doc. # 13 at 15.)

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HVAC cooling towers. No. 12–S-00624-NE, 2014 WL 2891030, at *17, *32 (N.D. Ala. June
25, 2014). After setting out the general rule and, citing Crigler, the exceptions discussed above,
the court found that there remained “genuine issues of material fact concerning whether [the
property management company] was guilty of any fault, and which defendant, if any, was the
proximate cause of [the plaintiff’s] death.” Id. at *32. For that reason, the court denied
summary judgment on the crossclaim for common law indemnity.
Similarly, the record before the court in this case, viewed in the light most favorable to
Colony as the non-movant, reveals that there are genuine issues of material fact as to the
relationships between the parties, the fault of the parties, and both the cause in fact and
proximate cause of the fire. In order to determine whether either of the exceptions to the joint
tortfeasor rule applies, the court would have to impermissibly engage in factfinding on those
issues. Therefore, the Motion for Summary Judgment is due to be DENIED.
V. CONCLUSION
For the reasons discussed, it is hereby
ORDERED that the Motion for Summary Judgment (Doc. # 11) is DENIED.

DONE this 22nd day of June, 2015.

/s/ W. Harold Albritton
W. HAROLD ALBRITTON
SENIOR UNITED STATES DISTRICT JUDGE

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