Leo v. Alfa Mutual Insurance Company et al

Filing 139

MEMORANDUM OPINION AND ORDER GRANTING IN PART and DENYING IN PART 125 128 131 MOTIONS to Strike, DENYING 129 MOTION to Strike, GRANTING IN PART and DENYING IN PART 103 MOTION for Summary Judgment as set out herein, GRANTING IN PART and DENYING IN PART 105 MOTION for Summary Judgment as set out herein. Signed by Judge Virginia Emerson Hopkins on 3/28/2016. (JLC)

FILED
2016 Mar-28 PM 02:03
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
EASTERN DIVISION
ROCCO J. LEO, in his Capacity as
Trustee for the Bankruptcy Estate of
Ashley Murphree,
Plaintiff,
v.
ALFA MUTUAL INSURANCE
COMPANY, et al.,
Defendants.

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) Case No.: 1:13-CV-1826-VEH
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MEMORANDUM OPINION AND ORDER
This case was originally filed on October 2, 2013, by the plaintiff, Rocco J. Leo
(hereinafter referred to as “the plaintiff” or “Leo”), the Trustee for the Bankruptcy Estate
of Ashley Murphree (hereinafter referred to as “Ashley” or “Murphree”). (Doc. 1). At
the time Leo filed the case, Murphree was alive. She has since died. The Second
Amended Complaint (doc. 96) was filed on June 26, 2015, and names as defendants Alfa
Mutual Insurance Company (“Alfa”), Rebecca A. Walker (“Walker”), and Stephanie
Wagner (“Wagner”).

Alfa is Murphree’s former automobile liability insurance carrier,

and Walker and Wagner are her former attorneys.
Leo’s complaint first seeks to void, as a fraudulent transfer under the bankruptcy
code, a document in which Murphree promised not to sue these defendants.

(Count

One). Against Alfa, Leo alleges “Negligent/Wanton Failure to Investigate and Settle”
(Count Two), “Bad Faith Failure to Investigate and Settle” (Count Three), “Suppression”
(Count Four), and “Conspiracy” (Count Five). Against Walker and Wagner, Leo alleges
a claim under Ala. Code § 6-5-570, et seq., for “Legal Service Liability” (Counts Six and
Seven).

All counts pertain to an underlying lawsuit (the “Underlying Action”) filed

against Murphree by Willow Jo Cameron (“Cameron”).

Leo’s claims arise out of the

defendants’ handling of the Underlying Action, and, after an excess verdict was returned
against Murphree in that case, the defendants obtaining her signature on a Covenant Not
To Sue them in retrun for Alfa’s agreement to pay for an attorney to prepare bankruptcy
papers for Murphree, who wanted to file for bankruptcy because of that excess judgment.
On January 27, 2016, this court granted Wagner’s uncontested motion for
summary judgment, and dismissed Count Seven, and Wagner, from this case. (Doc. 138).
Accordingly, as to pleadings filed jointly by Walker and Wagner before Wagner was
dismissed, the court will simply refer to them as filed by Walker. Further, the court will
from time to time collectively refer hereinafter to Alfa and Walker as “the defendants.”
The case now comes before the court on the motions for summary judgment filed
by the sole remaining defendants, Alfa (doc. 103) and Walker (doc. 105).

Also before

the court are the motions to strike filed by Walker (doc. 125) and Alfa (docs. 128, 129,
131). All motions have been responded to and are under submission. For the reasons

2

stated herein, document 129 will be DENIED. The remaining motions to strike will each
be GRANTED in part and DENIED in part as noted. Finally, the motions for summary
judgment will each be GRANTED in part and DENIED in part as noted.
I.

THE DEFENDANTS’ M OTIONS TO STRIKE PORTIONS OF THE
AFFIDAVIT OF MICHELLE BURGESS (DOCS. 125, 131)1
A.

Standard

It has long been the law in this circuit that, when deciding a motion for summary
judgment, a district court may not consider evidence which could not be reduced to an
admissible form at trial. See Macuba v. Deboer, 193 F.3d 1316, 1323 (11th Cir. 1999).
But, until 2010, Rule 56 lacked a formal procedure to challenge such inadmissible
evidence. In 2010, the advisory committee added Rule 56(c)(2), which provides:
A party may object that the material cited to support or dispute a fact
cannot be presented in a form that would be admissible in evidence.
FED. R. CIV. P. 56(c)(2).

Although the parties have styled their motions as motions to

strike, the motions are, in substance, a challenge to the admissibility of evidence.
Therefore, the court will treat the motions as objections under Rule 56(c)(2).
The advisory committee’s note to Rule 56(c)(2) provides that:
[An] objection [under Rule 56(c)(2)] functions much as an objection at trial

1

The majority of the argument on this issue appears in Walker’s motion to strike. (Doc.
125). Alfa’s motion incorporates Walker’s motion, and includes one paragraph of additional
argument. (Doc. 131). The plaintiff’s response to the motions appears in one document. (Doc.
132). Walker filed a reply brief. (Doc. 136). Alfa did not file a reply brief.
3

. . . . The burden is on the proponent to show that the material is
admissible as presented or to explain the admissible form that is
anticipated.
FED. R. CIV. P. 56 advisory committee’s note to 2010 amendments (emphasis added).
B.

Analysis

As the court has noted, Ashley Murphree died after this lawsuit was filed.
Michelle Burgess (“Burgess”) is Murphree’s mother.

In the absence of direct evidence

from Murphree herself, Leo is relying on Burgess’s declaration, at summary judgment,
solely to establish Murphree’s mental anguish damages.
123 at 27-29).

(See doc. 122 at 37-39; doc.

Accordingly, the court’s analysis focuses on Burgess’s statements

offered for that limited purpose.
The defendants attack only portions of paragraphs 5, 7, 8, 9, and 10 of Burgess’s
declaration, as more specifically set out below.

The court will examine each paragraph

attacked, in turn, in light of the specific objections thereto.
1.

Paragraph 5

The defendants argue that the following portions of paragraph 5 are inadmissible
hearsay, subject to no exceptions:
– “It was evident to me, based upon . . . the communications I was able to
have with her around that period of time, that Ashley was very much
agitated and stressed by the entire process, especially since it was
happening during the same time she was dealing with other difficult issues.”
– “This was evident to me based upon Ashley’s statement[.]”
4

– “By way of example[,] Ashley . . . expressed stress about the issue of
whether she would have to be brought before the judge and jury in clothing
she was issued in the SAP program.”2
(Doc. 122-4 at 3-4).
Rule 801(c) of the Federal Rules of Evidence provides that the term “hearsay”
means a statement that: “(1) the declarant does not make while testifying at the current
trial or hearing; and (2) a party offers in evidence to prove the truth of the matter asserted
in the statement.” FED. R. EVID. 801(c). Although the plaintiff does not expressly argue
that these statements are not hearsay, he does dispute it implicitly by stating that “any
hearsay that may be contained in paragraph 5 falls within the state-of-mind exception [to
the rule against hearsay].” (Doc. 132 at 4).3
Rule 803(3) of the Federal Rules of Evidence provides:
The following are not excluded by the rule against hearsay, regardless of
whether the declarant is available as a witness: . . .
(3) Then-Existing Mental, Emotional, or Physical Condition. A statement
of the declarant's then-existing state of mind (such as motive, intent, or
plan) or emotional, sensory, or physical condition (such as mental feeling,
pain, or bodily health), but not including a statement of memory or belief
to prove the fact remembered or believed unless it relates to the validity or
terms of the declarant's will.

2

As will be dismissed later in this opinion, Murphree was arrested during the pendency of
the Underlying Action.
3

Accordingly, the court will not address the issue of whether the statements qualify as
“not hearsay,” under FED. R. EVID. 801(d).
5

FED. R. EVID. 803(3).

The plaintiff states that “[i]f Murphree’s nonverbal and verbal

conduct is considered hearsay,4 then it clearly falls within the state-of-mind exception
of Rule 803 because it goes to her then-existing mental condition.” (Doc. 132 at 4).
The Eleventh Circuit has specifically held that the types of statements offered by
Burgess in her affidavit cannot come in under Rule 803(3). The court has stated:
“[T]he state-of-mind exception does not permit the witness to relate any of
the declarant's statements as to why he held the particular state of mind, or
what he might have believed that would have induced the state of mind.”
Consistent with that position, we have explained that the purpose of the
exclusion from Rule 803(3) admissibility is “to narrowly limit those
admissible statements to declarations of condition-‘I'm scared’-and not
belief-‘I'm scared because [someone] threatened me.’”
United States v. Samaniego, 345 F.3d 1280, 1282 (11th Cir. 2003) (quoting United
States v. Cohen, 631 F.2d 1223, 1225 (5th Cir.1980)) (footnotes omitted).
Accordingly, the statement in paragraph 5 that Murphree was “agitated and stressed” falls
within the exception, but not the portion of that sentence which states: “by the entire
process.”

This portion of this sentence will be stricken.

Similarly, the statement that

Murphree was “stress[ed]” falls within the exception, but not that the stress was “about
the issue of whether she would have to be brought before the judge and jury in clothing
she was issued in the SAP program.”5
4

This latter portion of this sentence will be

Again, this conclusory statement is not an argument that the statements are “not

hearsay.”
5

As to this statement, the plaintiff, in a conclusory fashion, argues that “[t]he mere
utterance by Murphree of the statement indicates her state of mind circumstantially, regardless of
6

stricken.
The statement “[t]his was evident to me based upon Ashley's statement,” is on a
different footing. It does not state “why” Murphree was agitated or stressed. Instead, it
lays a foundation for how Burgess would have personal knowledge of Murphree’s
agitation or stress. It will not be stricken.
The defendants next assert that, despite surviving the hearsay challenge. Burgess’s
remaining statement that Murphree was “agitated” and “stressed,” and similar such
statements, should also be struck under Rule 602 of the Federal Rules of Evidence,
which provides: “A witness may testify to a matter only if evidence is introduced
sufficient to support a finding that the witness has personal knowledge of the matter.
Evidence to prove personal knowledge may consist of the witness’s own testimony.”
FED. R. EVID. 602.

In this case, Burgess’s declaration establishes that Burgess had

personal knowledge of Murphree’s emotional state.

The statements in paragraph 5 that

Murphree was “agitated” and “stressed” are limited in time by another statement in that
same paragraph that Murphree “was dealing with a very emotionally difficult time in her
life during much of the Cameron matter. Especially leading up to and including the trial
of the case.”

(Doc. 122-4 at 3).

Burgess states that she was very familiar with

the truth of the statement. In this regard, the statement is not hearsay.” (Doc. 132 at 5). In this
case, the “truth of the matter” being asserted is the explanation for why she was upset. The
statement is offered to show that Murphree was upset that “she would have to be brought before
the judge and jury in clothing she was issued in the SAP program.”
7

Murphree’s personality, mood, and attitude, and that her observations are based on: 1)
being in Murphree’s presence “during trial and the communications I was able to have
with her around that period of time”

(doc. 122-4 at 3); and 2) observation of “her

expressions, appearance, tone of voice, and mannerisms (doc. 122-4 at 4).
The defendants assert that the “array of challenges facing Ashley Murphree during
this period of her life . . . might . . . result in anxiety, agitation, stress, disappointment,
and other emotions.”

(Doc. 125 at 12).

They contend that any conclusion Burgess

makes that her anxiety and stress were caused by the defendants is not supported.
Importantly, paragraph 5 contains no such conclusions.6

Further, the defendants’

argument is the stuff of cross examination.7
2.

Paragraph 7

Paragraph 7 reads:
7.
After the bankruptcy, Ashley expressed worry with regard to the fact
that she now would have ruined credit for a number of years. She told me
that a very important part of her future would be the ability to get her own
place to live and she was disappointed the bankruptcy made this so difficult.
(Doc. 122-4 at 4). As with paragraph 5, the defendants argue that Burgess’s statement
6

Assuming, however, that any of Burgess’s statements, anywhere in the declaration,
regarding the reasons Murphree was upset, were not based upon what Murphree told her, but were
Burgess’s own statement or opinion as to the reasons, they will be stricken as without foundation.
7

In addressing the motion for summary judgment however, this court finds that, once the
stricken portions of the declaration are removed, the remaining statements regarding the
mental/emotional state of Murphree fail to prove that she experienced mental anguish as a result of
any conduct of the defendants. See infra at section IV.C.5.
8

of the reasons Murphree expressed worry is hearsay, subject to no exceptions.

The

plaintiff argues that this statement is not hearsay, because it is offered only to show
Murphree’s mental stress, not that she actually “would have ruined credit, that she wanted
her own place to live, or that the bankruptcy prevented her from obtaining her own place.”
(Doc. 132 at 5).

This argument misses the point.

Burgess offers the statement that

“Ashley expressed worry,” in order to prove that Murphree was worried–the truth of the
matter asserted. The remaining portion of paragraph 7 is an effort to explain why she was
worried. Everything in paragraph 7, except the statement that “Ashley expressed worry,”
will be stricken for the reasons stated in the preceding section.
3.

Paragraph 8

Paragraph 8 reads:
8.
As she was working towards her recovery she also told me it would
be important to her to have a good vehicle in order to get to work and care
for her daughter, Ollie. Again, she expressed to me great concern that this
would be impossible, even with stable employment because of the
bankruptcy.
(Doc. 122-4 at 4).

The defendants argue that Burgess’s statement of the reasons

Murphree expressed “great concern” is hearsay, subject to no exceptions. For the same
reasons set out previously, everything in paragraph 8, except the statement that Murphree
“expressed to me great concern,” will be stricken.

9

4.

Paragraphs 9

Paragraph 9 reads:
9.
. . . Again, being familiar with Ashley’s expressions, appearance, tone
of voice and mannerisms, I was able to tell that her diminished future
prospects resulting from her bankruptcy disappointed her and dampened
what should have been a more positive outlook for her recovery and future.
(Doc. 122-4 at 5).

The defendants argue that Burgess’s statement of the reasons

Murphree was “disappointed” and “dampened” is hearsay, subject to no exceptions. For
the same reasons set out previously, everything in paragraphs 9, except the statements
that Murphree was “disappointed” and “dampened” will be stricken.
5.

Paragraph 10

Paragraph 10 reads:
10.
. . . I do not believe Ashley appreciated or was capable of
appreciating the full consequences of declaring bankruptcy on her future.
It is my belief that if Ashley had known and appreciated the full risk and
potential consequences of going to trial, along with the fact that she had
absolutely nothing to lose and would suffer no negative consequence[] by
Alfa settling, that Ashley would have requested that Alfa do so.
(Doc. 122-4 at 5). Paragraph 10 is pure speculation. It will be stricken in its entirety.
II.

ALFA’S MOTION TO STRIKE TESTIMONY OF IVEY GILMORE (DOC.
128)
Alfa moves this court to strike “the affidavit and deposition testimony of

[p]laintiff’s proffered expert, Ivey Gilmore.” (Doc. 128 at 1). Mr. Gilmore is a lawyer
who provides opinions regarding the propriety of Alfa’s conduct in this case. In opposing
10

summary judgment, the plaintiff cites to Gilmore’s opinions stated in: 1) his expert
disclosure report, provided pursuant to Rule 26 of the Federal Rules of Civil Procedure8 ,
and 2) his deposition. As to the expert report, Alfa targets “opinions in paragraphs 1, 2,
4, & 5 [which] state, in part, that Alfa acted ‘intentionally’ and in ‘bad-faith.’” (Doc. 128
at 4, ¶ 13 (citing doc. 123-1 at 6-8)).

As to Gilmore’s deposition testimony, Alfa

objects to one specific section where Gilmore testified “‘that Walker and Alfa acted
“intentionally,” “wrong[fully],” and deplorabl[y].’” (Doc. 128 at 4 (citing doc. 115-1 at
63(16)).9 The court will address each source separately.
A.

Standard

In evaluating expert testimony, the Eleventh Circuit Court of Appeals has outlined
the following analysis:

8

The expert disclosure is attached to, and incorporated by, Gilmore’s declaration. (See
doc. 123-1 at 2) (“A true and correct copy of my March 2, 2015[,] report that accurately reflects
my qualifications, professional opinions and documents relied upon in forming such opinion is
attached hereto[.]”). There is no objection that the report is improper evidence because it is
hearsay, and/or not sworn.
9

These are the only specific sections Alfa cites from either source. The motion could be
read at points to argue that all of Gilmore’s opinions, specified or not, should be stricken. (See doc.
128 at 1 (arguing that this court should strike “the affidavit [incorporating the report] and deposition
testimony”); see also, doc. 128 at 6 (“Mr. Gilmore’s expert opinion testimony must be stricken”)).
Elsewhere, the motion seems more focused on the specific sections cited to the court. (See doc.
128 at 6 (seeking to “strike the testimony of Ivey Gilmore as set forth above”)). Further
complicating this court’s task is the fact that the motion is mostly a series of unrelated statements of
law, with no analysis. (See doc. 128 at 2-3). Regardless, the court has attempted to apply Alfa’s
general attacks, such as that Gilmore is not qualified, to his opinions and statements as a whole,
from all sources. More specific attacks on particular opinions, such as Gilmore’s opinion that Alfa
acted “intentionally” and in “bad faith,” will be directed only to those portions cited by Alfa. To the
extent that the court strays from this approach, it will note as much.
11

The admissibility of expert testimony is governed by Federal Rule
of Evidence 702. FED.R.EVID. 702. That rule requires a district court to
engage in a three-prong inquiry, considering whether
(1) the expert is qualified to testify competently regarding
the matters he intends to address; (2) the methodology by
which the expert reaches his conclusions is sufficiently
reliable as determined by the sort of inquiry mandated in
[Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 113 S.
Ct. 2786, 125 L. Ed. 2d 469 (1993)]; and (3) the testimony
assists the trier of fact, through the application of scientific,
technical, or specialized expertise, to understand the evidence
or to determine a fact in issue.
[United States v. Frazier, 387 F.3d 1244, 1260 (11th Cir. 2004)] (quoting
City of Tuscaloosa v. Harcros Chems., Inc., 158 F.3d 548, 561 (11th
Cir.1998)). The proponent of the expert opinion bears the burden of
establishing qualification, reliability, and helpfulness by a preponderance
of the evidence. Id. (quoting [McCorvey v. Baxter Healthcare Corp., 298
F.3d 1253, 1257 (11th Cir. 2002)]); see also [Daubert v. Merrell Dow
Pharm., Inc., 509 U.S. 579, 592 n.10, 113 S. Ct. 2786, 2796, 125 L. Ed. 2d
469 (1993)].
United States v. Wilson, No. 12-14449, 2015 WL 8956435, at *15 (11th Cir. Dec. 16,
2015).
B.

Qualifications

In a conclusory fashion, specifically one sentence of its motion, Alfa merely
states that “Mr. Gilmore is not qualified to give admissible testimony under FED. R.
EVID ., Rule 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579
(1993).” (Doc. 128 at 1-2). This argument is not further developed. For that reason
alone the motion, on this ground, is due to be denied.
12

Regardless, as shown below,

Gilmore is qualified.
The Eleventh Circuit has stated that
experts may be qualified in various ways. While scientific training or
education may provide possible means to qualify, experience in a field may
offer another path to expert status. In fact, the plain language of Rule 702
makes this clear: expert status may be based on “knowledge, skill,
experience, training, or education.” (emphasis added). The Committee
Note to the 2000 Amendments of Rule 702 also explains that “[n]othing in
this amendment is intended to suggest that experience alone ... may not
provide a sufficient foundation for expert testimony.” Fed.R.Evid. 702
advisory committee's note (2000 amends.).
Frazier, 387 F.3d at 1260-61 (emphasis in original).
Mr. Gilmore’s resume reflects that he has worked as an insurance claims adjuster,
or insurance defense attorney, since May of 1990. (Doc. 115-1 at 32).

Gilmore worked

as an automobile claims adjuster and appraiser for Crawford & Company Insurance
Adjusters from 1990 until 1993. In 1993, Gilmore went to work for Cincinnati Insurance
Company as a Multi-Lines Claims Adjuster and Catastrophe Adjuster. In that position,
he handled workers’ compensation, complex property loss, complex casualty loss, and
complex casualty claims.

He also was responsible for monitoring litigation files,

participating in mediations on behalf of the company, and testifying as a corporate
representative.

(Doc. 115-1 at 32, 60).

In his deposition, Gilmore testified that

“multi-line adjusters handled everything, liability coverage and worker's comp[ensation]”
and that he “handled multi-million dollar property losses.” (Doc. 115-1 at 5(18)).

13

Furthermore, Gilmore testified that he handled complex liability, which he described as
“serious fatalities, serious catastrophic injuries, serious liability

claims”

such as

“[s]omething greater than a sprain or a strain, you know, where you have got someone
who has been maimed or killed.” (Doc. 115-1 at 5(19-20)).
While at Cincinnati Insurance Company, Gilmore attended law school at night.
During the same time frame, he served as company representative in over a hundred
mediations throughout North Alabama. (Doc. 115-1 at 6(22)). In his expert disclosure,
Gilmore states that he received his Juris Doctor from Birmingham School of Law in
1999, and thereafter “immediately received his Alabama law license.” (Doc. 115-1 at
60). Thereafter, Gilmore practiced law with the firm of Burgess & Hale (formally Lamar,
Burgess, Hale, Miller, Norris & Fieldman) from 1999 until 2002. (Doc. 115-1 at 60).
He worked as an insurance defense attorney “on numerous complex civil cases,
participated in several intricate jury trials, and obtained summary judgment in favor of
his client in many other high-exposure cases.” (Doc. 115-1 at 60).
In 2003, Gilmore began practicing at Owens & Millsaps, and became a partner in
that firm in 2006. (Doc. 115-1 at 32, 61). While there, he “continued to handle
high-exposure cases, including jury trials and further maintained a successful record
obtaining summary judgment in favor of his clients in other difficult cases.” (Doc. 115-1
at 61). In 2010, Gilmore co-founded the law firm of Gilmore, Poole & Rowley, LLC

14

(formerly Gilmore & Poole), where he is currently an active partner. (Doc. 115-1 at 32).
That firm also handles “insurance defense” as part of its practice. (Doc. 115-1 at 32).
An expert is qualified “by [(1)] knowledge, [(2)] skill, [(3)] experience, [(4)]
training, or [(5)] education.”

FED.R.EVID. 702 (brackets inserted). Mr. Gilmore’s

opinions focus on the standard of care, and alleged breach thereof, applicable to:
investigating and settling cases (doc. 123-1 at 6); handling the claims process (doc. 1231 at 7); evaluating cases for settlement (doc. 123-1 at 7); managing litigation (doc. 123-1
at 7); keeping the insured and clients properly informed (doc. 123-1 at 7); managing
potential conflicts of interest (doc. 123-1 at 7); engaging in post-verdict litigation (doc.
123-1 at 8); and advising and directing the conduct of the insured/client after a judgment
has been rendered against them (doc. 123-8). Gilmore states that his opinions are “based
on the methodology used in evaluating/managing claims and litigation during [his] career
in the insurance industry and [his] career overall.” (Doc. 115-1 at 63).

After due

consideration of the above qualifications, and in the absence of any specific objection,
this court holds that Gilmore has demonstrated sufficient “knowledge, skill, experience,
training, or education” so that, for summary judgment purposes, he is qualified to render
the opinions noted, and opinions closely related thereto.
C.

The Expert Report

The specific sections of the report to which Alfa objects state, in pertinent part:

15

– “Specifically, it is my opinion that Alfa had at its disposal enough information
and facts but despite the information and evidence procured during the discovery
process, it knowingly and intentionally placed its insured in peril by repeatedly
ignoring the underlying [p]laintiff’s demand for a policy limit settlement.” (Doc.
123-1 at 7) (emphasis added).
– “It is my opinion that Alfa acted in bad-faith by failing to provide it[]s insured
with copies of the demand to settle letters written by the underlying [p]laintiff’s
counsel during the underlying case. Alfa’s conduct was intentional and wrongful
in that it represented to its insured that the underlying case was winnable despite
the actual facts known to Alfa.” (Doc. 123-1 at 7) (emphasis added).
– Alfa acted in bad-faith by failing to process and provide to the insured the
settlement demands in a timely manner and making the true risk known to the
insured in such a way that the insured could read the letters and perceive the
obvious danger that was at hand which ultimately resulted in an excess verdict.”
(Doc. 123-1 at 7) (emphasis added).
– “It is my opinion that Alfa acted in bad-faith by failing to conduct any post
verdict action to protect its insured. Rather, Alfa acted with a conscious disregard
of Ashley Murphree’s rights by placing her in touch with a bankruptcy attorney and
asking her to sign a covenant not to sue in exchange for Alfa paying the bankruptcy
attorney’s fee. Alfa’s conduct post verdict, clearly demonstrates its conscious
disregard for its insured’s financial exposure and Alfa’s bad faith.” (Doc. 123-1
at 8) (emphasis added).
– “It is my opinion that all of the conduct described [in the expert report] was
intentional and in bad-faith and completely against its insured’s financial interest.
Furthermore, it is my opinion that Alfa failed miserably to protect its insured
leading up to the trial and following the excess verdict. Alfa acted in bad-faith
when it failed to take any post judgment action which could protect its insured.
Rather, Alfa’s decision to pay for a bankruptcy attorney and encourage bankruptcy
shows Alfa’s intent to protect its own financial interest rather than protect its
insured’s financial interest.” (Doc. 123-1 at 8) (emphasis added).
The defendant argues that every opinion cited above should be stricken because
“they merely state conclusory opinions based on the ultimate issues and fail to state
16

facts upon which the ‘opinion’ is based to assist the trier of fact.” (Doc. 128 at 3-4) (see
also doc. 128 at 6 (“The ‘opinion’ testimony of Gilmore is not based on a single
fact[.]”)).
The court notes first that
An expert may testify as to his opinion on an ultimate issue of fact.
F ED .R.EVID. 704. An expert may not, however, merely tell the jury what
result to reach. Id. at committee notes (merely telling jury what result to
reach is not helpful to the jury and therefore is not admissible testimony).
A witness also may not testify to the legal implications of conduct; the
court must be the jury's only source of law. United States v. Poschwatta,
829 F.2d 1477, 1483 (9th Cir.1987); United States v. Baskes, 649 F.2d
471, 479 (7th Cir.1980).
Montgomery v. Aetna Cas. & Sur. Co., 898 F.2d 1537, 1541 (11th Cir. 1990).

In this

case, statements such as that Alfa acted “intentionally,” “knowingly,” and with a
“conscious disregard for the rights of Murphree,” might be admissible if there were
some basis or explanation for that opinion in the report. See, Corey Airport Servs., Inc.
v. City of Atlanta, 632 F. Supp. 2d 1246, 1266-67 (N.D. Ga. 2008) rev'd in part on
other grounds sub nom. Corey Airport Servs., Inc. v. Decosta, 587 F.3d 1280 (11th Cir.
2009) (conclusion that City of Atlanta’s actions were intentionally biased were
admissible because expert explained why he reached that conclusion; if the trier of fact
believed the expert, then the trier of fact may infer that the City intentionally
discriminated). However, in the instant case, none of the conclusions in Gilmore's report
are supported by specific facts.

Although the plaintiff argues that the report reflects “a
17

well-reviewed record of facts upon which [Gilmore] based his opinions” (doc. 134 at 6),
the report merely sets out generally the sources of evidence Gilmore “reviewed” when
creating it. (Doc. 123-1 at 6).

Each of the opinions are supported in the report with only

vague references to “facts.”
For example, Gilmore discusses how Alfa “failed to exercise reasonable care,”
because it was “provided with enough discovery and information during its investigation
which should have enabled [it] to recognize that liability was so great and clear that an
excess judgment would result if the case was tried to a jury.” (Doc. 123-1 at 7). He does
not specify “the discovery and information” to which he refers, and upon which he bases
his conclusion that “Alfa failed to exercise reasonable care.” (Doc. 123-1 at 7).10 The
report is replete with such vague references.

(See id. at 7, ¶ 1 (“Alfa had sufficient

information at its disposal during the claims investigation and the discovery process in
the defense of the underlying case that it should have tendered its limits of coverage to
avoid subjecting its insured to an excess verdict”); id. at 7, ¶1 (“Alfa had at its disposal
enough information and facts . . .”); id. at ¶2 (“. . . [Alfa] represented to the insured that
the underlying case was winnable . . .”); id. at ¶2 (“Alfa was armed with superior
knowledge . . .”); id. at 7, ¶3 (“Alfa . . . fail[ed] to process and provide to the insured the

10

Also, throughout the report, Gilmore is quick to opine that the standard of care was
breached, but he is never clear as to what the standard of care is in any given situation. For that
reason as well, the opinions in the report would not be “helpful” to the trier of fact.
18

settlement demands in a timely manner and [failed to make] the true risk known to the
insured . . .”); id. at 7, ¶3 (“Alfa . . . “fail[ed] to adequately and appropriately communicate
the . . . policy limits demand and failed to emphasize the need to have outside counsel
explain [the] risk . . .”).
The plaintiff states that “Gilmore . . . made clear in his testimony that the report
provided only a summary of his opinions.”

(Doc. 134 at 6) (emphasis added). The

Eleventh Circuit has stated that
[p]resenting a summary of a proffered expert's testimony in the form of
conclusory statements devoid of factual or analytical support is simply not
enough. The party offering the expert must present the witness' proposed
testimony in a form that persuades the trial court that the testimony will in
fact assist the trier of fact. As we have held previously, carrying this burden
requires more than the ipse dixit of the expert.
Cook ex rel. Estate of Tessier v. Sheriff of Monroe Cty., Fla., 402 F.3d 1092, 1113
(11th Cir. 2005) (internal quotations omitted).11,

12

Because the report is generally

11

Also, Rule 26 provides that an expert report must contain, inter alia: “(i) a complete
statement of all opinions the witness will express and the basis and reasons for them; [and] (ii) the
facts or data considered by the witness in forming them[.]” Fed. R. Civ. P. 26(a)(2)(B)(i)-(ii)
(emphasis added). Although the report is deficient in this regard, the defendant has not moved to
strike Gilmore’s testimony on this basis.
12

The plaintiff cites Samples v. Atlanta, 916 F2d 1548, 1551 (11th Cir 1990), in which the
following passage appears:
The plaintiffs also argue that the district court erred in admitting testimony
from the defendants' “use of force” expert. After establishing the witness's
extensive qualifications as an expert in the field of the proper use of force by law
enforcement officers, the defense attorney posed a hypothetical based on the facts
already in evidence regarding what Officer Oglesby saw as he approached David
Samples on the night of the shooting. The attorney then asked for the expert's
19

devoid of facts which support Gilmore’s conclusions, all conclusions stated therein, in
addition to those cited above, will be disregarded in ruling on the motion for summary
judgment.
Further, all statements that Alfa acted “in bad faith” are also due to be stricken for
the alternative reason that they do nothing more than to tell the jury what conclusion to
reach. See, Camacho v. Nationwide Mut. Ins. Co., 13 F. Supp. 3d 1343, 1367 (N.D. Ga.
2014) (expert may not testify as to whether insurer’s conduct amounted to bad faith). 1 3
opinion as to “whether or not it was reasonable for the officer to discharge his
firearm when David Samples charged him with a knife.” Over the plaintiffs'
objection, the expert testified that in his opinion Officer Oglesby acted reasonably.
We agree with the plaintiffs that the literal wording of the question posed tends to
call for an answer that would invade the province of the jury, which in this case was
to decide the reasonableness of the officer's actions. We find, however, that the
questions leading up to this testimony, and the manner in which the expert answered
the question, properly informed the jury that the expert was testifying regarding
prevailing standards in the field of law enforcement. After posing the hypothetical,
but before asking for the expert's opinion as to the reasonableness of the officer's
actions, the defense questioned the expert regarding the industry standards for
judging the appropriate use of force. The expert testified that he agreed with the
standard as set out by a previous expert witness, which involved a three-pronged
inquiry into the subject's ability to harm, his opportunity to harm, and whether
someone was in jeopardy of being harmed by the subject at the time the officer used
force against the subject. Then, in explaining his answer to the question posed, the
expert spoke in terms of this three-pronged inquiry, analyzing David Samples's ability
and opportunity to harm Officer Oglesby, and the jeopardy faced by the officer.
Samples, 916 F.2d at 1551. The instant case is distinguishable from Samples as the expert in this
case has not specifically set out the facts upon which his opinions are based. Notably, even the
plaintiff, in arguing for the application of Samples, states that opinions as to the ultimate issue are
appropriate when such opinions are “thoroughly explored based on the facts.” (Doc. 134 at 7).
Gilmore’s opinions in the report are not thoroughly explored.
13

The plaintiff argues that use of the term “bad faith” is “regularly used in the lexicon of
the industry.” (Doc. 134 at 5). Gilmore does not state that he is using the phrase “bad faith” in that
20

Gilmore’s expert report will not be considered in deciding the motion for
summary judgment.
D.

The Deposition

Alfa only attacks the following portion of Gilmore’s deposition:
Q.
. . .What is the risk, in your opinion, to Ashley Murphree and how
would Alfa be placing its financial interest ahead of its insured?
A.
That's a great question, and I have a good answer for you. First of all,
I can't think of anybody in America that would just want to waltz into a
bankruptcy filing and have bankruptcy placed on their shoulders for any
reason. And at the end of this lawsuit, it was an excess judgment, a verdict;
and had Alfa done what it should have done and settled this case, there
would have never been an excess verdict and there would never have been,
most likely, the need for bankruptcy. And then for Alfa to work in concert
with the lawyer to go out and seek a bankruptcy lawyer and to pay for a
bankruptcy lawyer and then, furthermore, get a release from this young lady
while she is in jail, that's intentional, it's wrong, it's deplorable, and it
shouldn't have happened.
(Doc. 115-1 at 16(62-63)) (emphasis added).
The opinions in Gilmore’s deposition, although similar to those in his report, stand
on a different footing than those in the report. Alfa has cited to only one segment of the
deposition, without context. It is impossible, from what has been cited, to know whether
the opinions stated by Gilmore have evidentiary support elsewhere in the deposition, or

sense, and he does not explain what constitutes “bad faith” in his opinion. For that reason, even if
the phrase was not being used to describe the tort of bad faith, his opinion cannot be helpful to the
jury. Further, the risk that the jury might confuse any “common” usage with the expert telling them
that Alfa has committed the tort of bad faith, militates against allowing Gilmore to use the phrase.
21

otherwise have a proper foundation.
That being said, Gilmore’s opinion that Alfa’s conduct was “deplorable,” is
irrelevant, and will not assist the trier of fact.

It will be stricken from the cited

deposition testimony. The remainder of the cited testimony, and Gilmore’s other
opinions in his deposition, are allowed.14
III.

THE MOTION TO STRIKE “NON-COMPLIANT PORTIONS OF LEO’S
RESPONSE TO ALFA’S MOTION FOR SUMMARY JUDGMENT.” (DOC.
129)
In this motion, Alfa states:
3.
The following statements of fact by Alfa were not disputed with any
reference to the record and should therefore be deemed admitted:
Paragraphs 16, 17, 27, 28, 29, 30, 31, 32, 34, 37, 46, 60, 61, 64, 65, 68,
69, 70, 71, 72, 79, 82, 85, 86, 87, 90, 91, 92, 93, 98, 99, 100, 101, 102,
103, 115, 117, 129, 130.
4.
In numerous of the foregoing paragraphs, Leo merely states that he
disputes that Alfa’s citations to admissible evidence “establish[] the truth
of the matter.” See e.g., ¶¶ 17, 27, 34, 37, etc. In other paragraphs, Leo
claims to dispute the truth of Walker’s testimony, but cites no evidence in
contradiction. See e.g., ¶ 28, 29, 30, 32, 68, 69, 71, etc. Leo’s failure to
state any evidence in contradiction allows this Court to establish the truth
of the matters for summary judgment purposes. Fed. R. Civ. P., Rule
56(e)(2).

(Doc. 129 at 2).

Several of Alfa’s facts reference the contents of documents.

14

The

Alfa also attacks Gilmore’s opinions as being based on the wrong standard of care
because, according to Alfa, it cannot be liable when its insured opposed settlement. (Doc. 128 at 56; doc. 137 at 3-4). As noted later in this opinion, Alfa is wrong. See infra at section IV.C.2.a.
Regardless, this argument goes to the weight of Gilmore’s opinion, rather than the admissibility.
22

plaintiff responds to many of these facts with the statement that he “does not dispute that
the document states as it does, but [p]laintiff does dispute that what the document states
establishes the truth of the matter.”

(Doc. 123 at 3).

Similarly, when Alfa recounts

Walker’s testimony regarding what someone else (particularly Murphree) stated, the
plaintiff often writes that he “does not dispute that Walker testified as stated. However,
Plaintiff disputes that Walker’s testimony establishes the content thereof as undisputed
facts. The totality of the evidence reflects that Murphree was not fully informed.” (Doc.
123 at 3).
This court requires that all facts which are “disputed by the non-moving party must
be followed by a specific reference to those portions of the evidentiary record upon
which the dispute is based. All material facts set forth in the statement required of the
moving party will be deemed to be admitted for summary judgment purposes unless
controverted by the response of the party opposing summary judgment.” (Doc. 9 at
16-17) (emphasis in original).

The responses noted above contain no citation to the

record supporting a dispute. These types of responses are merely undeveloped argument,
more appropriate for to a motion to strike, which the plaintiff did not file.

However, the

plaintiff’s response to the motion to strike does specifically attack three facts. The court
will treat those specific arguments as a motion to strike those specific facts.
The plaintiff first specifically mentions paragraph 34 of Alfa’s statement of

23

undisputed facts where it alleges: “On or about November 1, 2010, Walker reported to
Lyon that she had explained to Burgess and Murphree the dangers in the case.” (Doc.
133 at 2). The plaintiff argues that Walker’s report to Alfa that she explained the dangers
of the case is not evidence that she actually did so. Alfa responds that the fact is only
offered for the purpose of establishing that Walker reported to Alfa that she had
explained the dangers of the case to Murphree and Burgess. (Doc. 135 at 2-3). It is not
hearsay and will not be stricken.
Next, the plaintiff attacks paragraphs 28 and 71 of Alfa’s facts, because they cite
to Walker’s deposition, where she testified that she and Murphree spoke regarding “the
risks of [an] excess verdict,” and that Murphree verbally stated to Walker that she
understood the risks. (Doc. 133 at 3-5). Unlike Burgess’s declaration, these statements
are evidence of Murphree’s mental impression and are therefore admissible.

FED. R.

EVID. 803(3). Further, a statement by a party, which is offered against that party, is not
hearsay. FED. R. EVID. 801(d)(2).15 These facts will not be stricken.
That having been said, Alfa’s motion to strike will be denied. In its ruling on the
motions for summary judgment, the court will examine each individual fact Alfa cites and
determine, at that time, whether, pursuant to the terms of the scheduling order, and the
applicable rules, the fact should be included. However, generally, to the extent that the

15

Leo, as bankruptcy trustee, stands in the shoes of Murphree. In re Halabi, 184 F.3d
1335, 1337 (11th Cir. 1999).
24

plaintiff’s responses are similar to those noted herein, Alfa’s cited facts will be deemed
to be admitted as stated. Still, as to documents, as it did above, the court will merely
deem as true, for summary judgment purposes, that the cited document contains the
language the proffered fact alleges it contains. That does not mean that the court deems
the language itself to be stating a truth. As to instances where the plaintiff disputes the
truth of a statement made by a deponent, at their deposition, the court generally will note
the deponent, and the testimony given by the deponent.

In its analysis, the court will

examine the probative value of any such testimony–i.e. whether there is any evidence
which disputes said testimony.
IV.

THE DEFENDANTS’ MOTIONS FOR SUMMARY JUDGMENT (DOCS.
103, 105)
A.

Standard

Under Federal Rule of Civil Procedure 56, summary judgment is proper if there
is no genuine dispute as to any material fact and the moving party is entitled to judgment
as a matter of law. FED. R. CIV. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S.
317, 322 (1986) (“[S]ummary judgment is proper if the pleadings, depositions, answers
to interrogatories, and admissions on file, together with the affidavits, if any, show that
there is no genuine issue as to any material fact and that the moving party is entitled to
a judgment as a matter of law.”) (internal quotation marks and citation omitted).

The

party requesting summary judgment always bears the initial responsibility of informing
25

the court of the basis for its motion and identifying those portions of the pleadings or
filings that it believes demonstrate the absence of a genuine issue of material fact.
Celotex, 477 U.S. at 323. Once the moving party has met its burden, Rule 56(e) requires
the non-moving party to go beyond the pleadings in answering the movant. Id. at 324. By
its own affidavits – or by the depositions, answers to interrogatories, and admissions on
file – it must designate specific facts showing that there is a genuine issue for trial. Id.
The underlying substantive law identifies which facts are material and which are
irrelevant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). All reasonable
doubts about the facts and all justifiable inferences are resolved in favor of the nonmovant. Chapman, 229 F.3d at 1023. Only disputes over facts that might affect the
outcome of the suit under the governing law will properly preclude the entry of summary
judgment. Anderson, 477 U.S. at 248. A dispute is genuine “if the evidence is such that
a reasonable jury could return a verdict for the nonmoving party.” Id. If the evidence
presented by the non-movant to rebut the moving party’s evidence is merely colorable,
or is not significantly probative, summary judgment may still be granted. Id. at 249.
How the movant may satisfy its initial evidentiary burden depends on whether that
party bears the burden of proof on the given legal issues at trial. Fitzpatrick v. City of
Atlanta, 2 F.3d 1112, 1115 (11th Cir. 1993). If the movant bears the burden of proof on
the given issue or issues at trial, then it can only meet its burden on summary judgment

26

by presenting affirmative evidence showing the absence of a genuine issue of material
fact – that is, facts that would entitle it to a directed verdict if not controverted at trial.
Id. (citation omitted). Once the moving party makes such an affirmative showing, the
burden shifts to the non-moving party to produce “significant, probative ev idence
demonstrating the existence of a triable issue of fact.” Id. (citation omitted) (emphasis
added).
For issues on which the movant does not bear the burden of proof at trial, it can
satisfy its initial burden on summary judgment in either of two ways.

Id. at 1115-16.

First, the movant may simply show that there is an absence of evidence to support the
non-movant’s case on the particular issue at hand. Id. at 1116. In such an instance, the
non-movant must rebut by either (1) showing that the record in fact contains supporting
evidence sufficient to withstand a directed verdict motion, or (2) proffering evidence
sufficient to withstand a directed verdict motion at trial based on the alleged evidentiary
deficiency. Id. at 1116-17. When responding, the non-movant may no longer rest on
mere allegations; instead, it must set forth evidence of specific facts. Lewis v. Casey,
518 U.S. 343, 358 (1996). The second method a movant in this position may use to
discharge its burden is to provide affirmative evidence demonstrating that the nonmoving party will be unable to prove its case at trial. Fitzpatrick, 2 F.3d at 1116. When
this occurs, the non-movant must rebut by offering evidence sufficient to withstand a

27

directed verdict at trial on the material fact sought to be negated. Id.
B.

Facts

The plaintiff, Rocco J. Leo, is the Trustee for the bankruptcy estate of Ashley
Murphree, who is now deceased. The fees and costs associated with that bankruptcy were
paid by defendant Alfa, who provided automobile liability insurance to Murphree and
who, pursuant to that insurance policy, retained Walker to defend Murphree in the
Underlying Action. Alfa’s payment of those fees arose out of Murphree’s post-judgment
“Request for Assistance in Filing for Bankruptcy and Covenant Not To Sue” (“Covenant
Not To Sue”), drafted by Walker without talking to Murphree, and signed by Murphree
at a time she was represented by Walker and Wagner and, because she was in jail, had no
access to other counsel.

(See Doc. 1-8 at 2).

The circumstances that led up to the

Covenant Not To Sue, and the Covenant Not To Sue itself, are the focus of the claims in
this case.
1.

The Car Accident Between Murphree and Cameron

The story of this case begins on January 25, 2010, when Murphree and Cameron
were in an automobile accident. Each party contended that they had the green light and
that the other was at fault.
An accident report was created by Officer Michael Prater.
summary section of that report, Officer Prater initially wrote:

28

In the narrative

According to [Cameron,] the driver of Unit #1[,] and all three witnesses[,]
Unit #1 was making a left turn off Country Club Drive onto Rainbow Drive
on a green traffic signal when she was hit by Unit #2 [driven by Murphree].
All said that Unit #2 ran the traffic signal. The driver of Unit #2 said that
her light was . . . green.
(Doc. 109-11 at 10). The report named Frankie Alford as “witness #1,” Jean Walker as
“witness #2,” and Jessica Clayton as “witness #3.” (Doc. 109-11 at 10-11).
Subsequently, Officer Prater revised the accident report. In addition to the quoted
language above, Prater wrote that, on January 28, 2010, he “spoke with witness #1
[(Frankie Alford)] who said that Unit #1 [(driven by Cameron)] ran the redlight [sic] and
caused the accident.” (Doc. 109-11 at 6). When asked at trial about this addition, Prater
explained that, about an hour after the accident, while at the hospital, he was speaking
with Alford. (Doc. 103-9 at 9(344)-10(345)). He stated:
Somewhere in the conversation while we were there Ms. Alford –
something was brought up about the light and that Ms. Cameron had ran
[sic] the light. And I remember bringing Ms. Alford outside the room. And
I said tell me again what you saw at the accident. And she said that she had
saw [sic] Ms. Cameron run the light. And I was – and again, I asked her, I
said, I was under the impression you told me – when she first told me, she
had a green light and made a turn on the green light. But her story had
changed. So at that point, that’s when I went back to the station, and I called
the other witness[es] back to make sure we were all on the same page.
(Doc. 103-9 at 10(345)).16

16

The plaintiff proffers the following fact: “The phone call from Alford to the investigating
officer was instigated by a phone call from Michelle Burgess (Murphree’s mother) to Alford.
(Depo. of Frankie Alford p.59:7-15).” (Doc. 122 at 7-8). Nothing in the cited material discusses a
phone call from Alford to the officer. The cited portion of Alford’s deposition discusses a call from
29

2.

Alfa’s Investigation

Cameron claimed $247,465.52 in medical bills resulting from the accident, and
sought payment from Alfa.1 7

Alfa district claims manager, Doug Lyon, assigned Robby

Elrod to adjust and investigate the claim.
On February 5, 2010, Elrod spoke to Murphree who said that she, Murphree, had
the green light, and Cameron had the red light.18

Also, the following exchange occurred:

RE (Robby Elrod): Okay and so what's the first time you caught view of
her?
AM (Ashley Murphree): Well I saw her right before we hit her, but I saw
her car way before that.
(Doc. 103-2 at 15). Murphree’s statement continues:
RE: Okay if you will now just go ahead and describe for me what happened
as you approached the intersection and what happened as far as the accident
happening?
AM: Okay, we were driving on the way home and ah the little old lady I like
saw her stopped there before I got to her but she didn’t stop she just kept
going.

Burgess to Alford, and reads: “[s]he wanted to know did I – how did I see it. And I told her. And
she said well, the policeman said that I had changed my story. And I said ‘No, I have not.’” (Doc.
122-6 at 16(59)).
17

Murphree’s father, Charles Burgess, was insured by Alfa. His policy covered
Murphree. (Doc. 1-1 at 7).
18

In his affidavit, Lyon refers to these statements as “testimony.” (Doc. 103-1 at 3).
There is no indication that these statements were taken under oath, or in any other manner which
would qualify them as “testimony.” Accordingly, the court refers to them as “statements.”
30

RE: And you are saying that she did not stop, she pulled up and as she got
towards the intersection she just kept coming?
AM: It looked like she stopped but she was going as slow as she could and
when we got right there at the light, she didn’t pull up in time.
(Doc. 103-2 at 14).
On February 3, 2010, Elrod took a statement from witness Frankie Alford, who
said that she was directly behind Cameron when Cameron ran the red light, causing the
car accident with Murphree. Alford (who is also known as “Copeland”) told Elrod that
Cameron never stopped for the light, even though Cameron’s light was red, and that
Cameron just went straight into the intersection at about 15 miles per hour.
In contrast to the statements of Murphree and Alford, on February 5, 2010, Jessica
Clayton told Elrod that she believed Murphree, not Cameron, had the red light. Further,
Elrod obtained a copy of a notarized statement by Jean Walker (also known as “Jean
Walker Nelson”) who stated that she was stopped at the traffic light, heading in the same
direction as Murphree, and that Murphree ran the red light.

Finally, on February 11,

2010, Cameron told Elrod that she, Cameron, had the green light, and that Murphree was
the one who had run a red light.
3.

The Underlying Action Begins

On April 1, 2010, Cameron filed a lawsuit, in the Circuit Court of Etowah County,
Alabama, against Murphree and her father, Charles Burgess (“Charles”), for negligence,

31

wantonness, and negligent entrustment. 1 9

Cameron was represented by attorneys Ted

Mann and Robert Potter of the law firm Mann & Potter, P.C. On or about April 6, 2010,
Lyon assigned defendant Walker to represent Murphree and Charles.
On May 20, 2010, Walker reported to Lyon that Cameron's attorney had advised
that Cameron had suffered a broken hip and neck, and that medical bills exceeded
$100,000. (Doc. 109-2 at 22).20 However, Walker stated “I feel certain [that] is not the
subrogated amount.”

(Doc. 109-2 at 22).

Walker also stated that she had found

inconsistencies between the police report and the witness statements that discredited the
witnesses who said Cameron had the green light.
4.

The Initial Settlement Demand

Depositions of the parties occurred in early October 2016.

After they were

concluded, but before Walker and Mann had left the location of the depositions, Mann
verbally made a settlement demand to Walker, and sought Murphree’s full policy
limits–$100,000.
Walker reported the settlement demand to Lyon in an October 12, 2010, letter,

19

The lawsuit also named State Farm Mutual Automobile Insurance Company (“State
Farm”) (Cameron’s insurance company), and, against that entity, sought uninsured/underinsured
motorist benefits. (Doc. 103-13 at 10). State Farm’s involvement is not relevant to the issues
before this court, and will not be further discussed in this opinion.
20

The plaintiff cites this letter as evidence that “Both Walker and Alfa knew very early in
the case that Cameron was seriously injured and incurred large medical bills.” (Doc. 122 at 8).
Walker correctly notes that the phrases “very early in the case,” “seriously injured,” and “large
medical bills,” are vague. (Doc. 130 at 2). The letter will speak for itself.
32

and stated that, even considering collateral sources, “this is a case that could easily result
in a verdict in excess of policy limits.” (Doc. 109-3 at 6).

Furthermore, Walker

acknowledged to Alfa that “[i]f there is even a slight chance that the favorable witness
testimony will not hold up at trial, we need to consider settling because this is a very
dangerous case.” (Doc. 109-3 at 6). Walker noted that Murphree “did a good job [in her
deposition],” but Walker was “not sure that she will come across well at trial.” (Doc.
109-3 at 6). Walker was also “even more concerned about her mother [Burgess], since
she tended to be argumentative.” (Doc. 109-3 at 6). Walker was “reluctant to settle” and
stated that she would like to depose the witnesses and assess their testimony before
settling.

(Doc. 109-3 at 6). Walker explained that there could possibly be an additional

witness, Jessica Clayton’s brother, who would testify that Murphree had run a red light.
In a letter dated October 13, 2010, Mann followed up his verbal settlement
demand with a written one. Again, Mann demanded Murphree’s $100,000 policy limits.
(Doc. 109-3 at 7).21 The letter advised that Murphree was inadequately insured given the
amount of Ms. Cameron’s injuries and specifically requested that Walker advise
Murphree that, if the plaintiff was successful in obtaining an excess verdict, she would
“attempt to collect every penny from [Murphree] personally.” (Doc. 109-3 at 7).

21

When asked in deposition if she “ever actually [gave] Ms. Murphree any of Mr. Mann or
Mr. Potter's actual demand letters,” Walker testified: “I think I probably showed them to
her whenever we met.” (Doc. 109-1 at 37(146)).
33

On October 14, 2010, Lyon, responding to Walker’s letter of October 12, sent an
email to Walker stating that he saw the need to take the witness depositions to see how
credible they were, and “[a]fter that we can make a more knowledgeable decision.” (Doc.
103-2 at 14).
5.

Walker’s Early Reports to Murphree.

In a letter dated October 21, 2010, Walker advised Murphree that, after Murphree
had left her deposition, Mann “had a bit of a temper tantrum. He apparently thought that
I would just agree to hand over your policy limits.” (Doc. 109-3 at 11). Walker also
noted that Mann had followed up with the letter of October 13, 2010. Walker described
Mann’s letter as a “threatening letter wherein [Mann] demanded policy limits.”

(Doc.

109-3 at 11). Walker informed Murphree that “this is a dangerous case if we lose on
liability, since Mrs. Cameron had extensive injuries.” (Doc. 109-3 at 11). Walker also
stated that, because of conflicting witness testimony, there was a dispute as to liability
and that she would be better able to evaluate the case after depositions of the witnesses.
That letter did not inform Murphree about Mann’s threat to attempt to recover any excess
judgment from her personally. It also did not discuss Walker’s concerns about Murphree
and her mother testifying at trial.
A letter dated November 1, 2010, from Walker to Lyon, advises of the policy
limits demand against Murphree.

(Doc. 109-3, p. 17).

34

Walker explained to Alfa that

Mann threatened to collect any excess judgment against Murphree personally.

Walker

also stated that she had “explained in writing to . . . Murphree the dangers in this case,
should we lose on the issue of liability.” (Doc. 109-3 at 17). Walker again stated to
Lyon that she thought the depositions of the witnesses and investigating officer would
assist in helping to evaluate whether the case should be settled.
On November 2, 2010, Lyon emailed Walker and asked if Alfa needed to send
Murphree an excess letter. (Doc. 103-3, at 18). The very same day, Alfa increased its
reserves to the bodily injury policy limits of $100,000. (Doc. 103-1 at 5). On November
3, 2010, Walker responded to Lyon, via email, and told him to hold off on sending the
excess letter, and that Walker was “keeping the insureds very informed about the dangers,
etc., and have advised them to get their own attorney, should they wish to do so.” (Doc.
103-3 at 20). Walker noted: “We will re-evaluate after I depose the witnesses and the
investigating officers.” (Doc. 103-3 at 20).
On November 10, 2010, Mann wrote to Walker, informing her that “this is a policy
limits case and [we] would be happy to entertain payment of policy limits to settle this
case[.]” (Doc. 1-3 at 2). In that same letter, Mann also gave Walker a list of liens against
Cameron. (Doc. 1-3 at 3).
On November 30, 2010, the trial judge in the Underlying Action granted Walker’s
motion for partial summary judgment on the negligent entrustment claim against Charles,

35

and he was dismissed from the Underlying Action.
6.

Walker Reports on the Grounds for a Defense

A January 19, 2011, letter from Walker to Lyon informed Alfa that Cameron had
proven “her cervical and pelvic fractures and other injuries,” and “Trinity’s approximately
$90,000 invoice.” (Doc. 109-4 at 5). Walker also advised that she spoke with Officer
Prater and he informed her that Alford, had initially told him that Cameron had the green
light and then changed her story to say that Cameron ran the red light. (Doc. 109-4 at 6).
Walker further advised that the investigating officer came across as straightforward,
would make a good witness, and might damage the credibility of Alford, their one
favorable witness. (Doc. 109-4 at 6). She also reported that the eye-witnesses who were
unfavorable to Murphree had credibility problems. Walker reported that the depositions
of two of Cameron’s doctors had been taken and then stated:
I have established through both doctors that Ms. Cameron had pre-existing
lupus and clotting disorders, and was on several prescription medications
at the time of the accident . . . to raise doubt about Ms. Cameron’s driving
ability at the time of the accident.
(Doc. 109-4 at 5).
In a January 19, 2011, email from Lyon to Walker, Lyon agreed that they should
get the witness statements and inquired whether they could then decide to settle or try
the case. (Doc. 103-4 at 5). In a January 19, 2011, email from Walker to Lyon, Walker
stated:
36

The only reason we may want to consider settling before then is because
plaintiff's attorney has six medical depositions scheduled before the
witness depos [sic] and I need to file numerous subpoenas. However, if we
settle [an unrelated case], that would free up the week of February 7th, so
I could go ahead and depose the witnesses that week, and then we could
decide before all the medical depos [sic] are taken. This [unrelated case]
will be a policy limits settlement, also.
(Doc.103-4 at 5).
On February 4, 2011, Walker sent Lyon an email stating that the subrogation
claims for Blue Cross and Medicare were $3,292.92 and $30,481.41, respectively,
which made the case “less dangerous.” (Doc. 109-4 at 8). Walker reported that Cameron
had a history of dizziness and balance problems, blood clots, and lupus and that there was
a good chance for a defense verdict.

Walker further explained that the jurors would

likely know that Cameron lives near the Country Club, and that her son-in-law is a doctor,
which would mitigate damages and that the jury pool would include people who would
more likely relate to Murphree than to Cameron.
On February 15, 2011, Walker sent Lyon an email stating that the witness
favorable to Murphree, Frankie Alford Copeland, was 100% sure that Cameron had run
the red light.

A February 21, 2011, email from Lyon to Walker stated that after Walker

obtained the witness depositions, “we need to discuss if we want to try the case or settle.”
(Doc. 103-4 at 11).
On or about April 4, 2011, Lyon received another report letter from Walker

37

stating that Copeland presented as a strong and credible witness in her deposition.
Walker said that a jury could infer from Copeland’s testimony and from Cameron’s
pre-existing medical problems that Cameron was confused or impaired, which caused the
accident.

Walker also reported that Cameron’s uninsured motorist carrier, State Farm

Insurance Company, had opted out, making an additional $25,000 in coverage available
to Murphree.
7.

Walker’s Second Letter to Murphree

A letter dated June 29, 2011, from Walker to Murphree, updated Murphree on the
activity on her case. (Doc. 109-4 at 30). Walker stated: “As you know, Ms. Cameron had
very significant injuries, which makes this case dangerous.

If the jury finds you liable,

then they may very well return a large verdict. You have $100,000 policy limits.” (Doc.
109-4 at 31-32).22

Walker also told Murphree that “[Trinity Hospital’s] invoices total

$90,000,” and set out that Gadsden Regional charges were $18,884.36. (Doc. 109-4 at
32-33). Walker stated that Copeland was a very strong witness for Murphree, although
an officer would testify that Copeland had changed her story. (Doc. 109-4 at 31). Walker
22

This fact was proffered by Walker. It originally began: “On June 29, 2011 Defendant
Walker again wrote Murphree, and apprised her of the policy limits settlement demand.” (Doc. 107
at 6). Wagner then cited the quoted portion of the letter as evidence of her “apprising” Murphree
of the settlement demand. See id. (“Specifically, Walker wrote: ‘As you know, Ms. Cameron had
very significant injuries, which makes this case dangerous. If the jury finds you liable, then they
may very well return a large verdict. You have $100,000 policy limits.’”). This language does not
advise Murphree of a settlement demand, only the limits of the policy.

38

reported that there were three witnesses who supported Cameron–Jean Walker, Jessica
Clayton, and Neal Clayton–all of whom were “very poor” witnesses. (Doc. 109-4 at 31).
8.

Resumption of Reports to Alfa

On or about October 6, 2011, Walker sent Lyon a report reiterating that liability
was disputed, that there was a very favorable witness for Murphree, and that the witnesses
for Cameron did not make sense. Walker reported that she had an expert witness, Dr.
Page, who would testify that Cameron’s preexisting medical conditions could have
impaired Cameron’s driving abilities and that Cameron’s post-accident deep vein
thrombosis was not necessarily a result of the accident, both of which could serve to both
mitigate damages and help defend the issue of liability.
9.

The Exclusion of Murphree’s Expert in the Underlying Action

On March 5, 2012, Cameron filed a motion to exclude Murphree’s expert, Dr.
Page. The motion was granted, at least in part. On May 4, 2012, Walker wrote Murphree
and informed her that Dr. Page had been excluded from testifying that Cameron should
not have been driving given her pre-existing conditions, but that she was hopeful he would
be able to testify about her pre-existing conditions from the standpoint of trying to limit
damages.
On July 16, 2012, Walker wrote Cameron’s attorneys in response to requests for
dates to re-depose Dr. Page, and advised that she did not plan to use Dr. Page at trial.

39

(Doc. 109-6 at 19). On July 25, 2012, Walker wrote Murphree regarding the trial date,
which, at that time, was August 27, 2012. (Doc. 109-6 at 23). In that letter, Walker did
not inform Murphree that Dr. Page would not be testifying at all.
10.

Alfa’s Offer to Mediate and the Second Settlement Demand

Walker testified that she “was given authority to mediate and I offered and nobody
took me up on it.” (Doc. 109-1 at 41(161)).

The following exchange took place in

Lyon’s deposition:
A.

We talked about possibly mediating it.

Q.

And what is your recollection of that discussion?

A.

[Cameron’s attorneys] did not want to. It was full limits or nothing.

Q.

Do you remember anything else?

A.

In regards to?

Q.

Discussion about mediating it with Ms. Walker?

A.
That Cameron didn't want to mediate it is my understanding,
[Cameron’s] attorney.
Q.
Right. They were at only -- they were insisting on a policy limits
settlement?
A.

That’s my understanding.

(Doc. 103-19 at 46(179-180)).

Walker testified that she told Mann that she would

mediate the case from a position of “disputed liability,” which she says Mann interpreted

40

as an offer to settle for $50,000. (Doc. 109-1 at 43(170)).
deposition that

Walker stated in her

“disputed liability” in this case meant negotiating within policy limits.

The parties did not mediate.
11.

More Demands

A March 22, 2012, letter, from Potter to Walker, made another demand for policy
limits, and informed Walker that should Cameron obtain an excess verdict, Cameron
would enforce it against Murphree personally. (Doc. 1-4 at 6). The letter indicated that
the demand would expire after 14 days.

The letter also stated: “[y]our settlement offer

literally puts nothing in Ms. Cameron’s pocket after my expenses and the subrogation
claim.” (Doc. 1-4 at 6).
A March 30, 2012, letter from Walker to Lyon discussed the policy limits
demand, inclusive of the 14-day time limit stated by the attorneys for the plaintiff in the
Underlying Action. She also told Lyon that Cameron’s attorneys had threatened to collect
any excess verdict from Murphree personally. Walker provided the opinion
I think they are just blowing smoke, because I think they would be glad to
get $100,000 at any time. Second, I have heard them say in court
proceedings that they never try to recover anything other than policy limits.
Third, I am not convinced that Ms. Cameron’s family would allow her
attorneys to try to take the assets of a young woman. However, as you
know, since Ms. Cameron has such extensive medical injuries, there is the
possibility of an excess verdict, if the jury believes that she ran the red
light.
(Doc. 109-5 at 27). Walker also wrote:
41

In the event we do not prevail on the issue of liability, then I am taking
several steps to attempt to keep the verdict low. We have $100,000 limits,
plus there is an additional $25,000 available in underinsured motorist
coverage from Ms. Cameron's automobile policy with State Farm. The
plaintiff will put $245,000 in medicals on the board, but we will be allowed
to show that almost all of this amount was paid for by Blue Cross and
Medicare. They can then come back and show that they will have to repay
Medicare and Blue Cross approximately $30,000.
(Doc. 109-5 at 29).
The record also reflects a March 30, 2012, letter from Walker to Murphree which
stated:
I first want to advise you that Ms. Cameron's attorneys have made a demand
for your policy limits of $100,000. This is nothing new, but they have put
a 14 day time limit to respond. They say that if we do not offer the limits
within 14 days, then they are taking the offer off the table, and they will try
to recover any excess verdict from you.
(Doc. 109-5 at 30). The letter then, nearly word for word, restated what Walker had
written to Alfa stating:
I think they are just blowing smoke, because I think they would be
glad to get $100,000 at any time. Second, I have heard them say in court
proceedings that they never try to recover anything other than policy limits.
Third, I am not convinced that Ms. Cameron’s family would allow her
attorneys to try to take the assets of a young woman. However, as you
know, since Ms. Cameron has such extensive medical injuries, there is the
possibility of an excess verdict, if the jury believes that you ran the red
light.
***
In the event we do not prevail on the issue of liability, then I am taking
several steps to attempt to keep the verdict low. You have $100,000 limits,
42

plus there is an additional $25,000 available in underinsured motorist
coverage from Ms. Cameron's automobile policy with State Farm.
[Cameron] will put $245,000 in medicals on the board, but we will be
allowed to show that almost all of this amount was paid for by Blue Cross
and Medicare. They can then come back and show that they will have to
repay Medicare and Blue Cross approximately $30,000.
(Doc. 109-5 at 30-31). Walker also advised Murphree: “Please feel free at any time to
hire your own attorney if you are not satisfied with the job I am doing, and/or to advise
you regarding any possible excess verdict.” (Doc. 109-5 at 30).

Walker did not specify

in this letter the date the demand had been made, or the date when it would expire.
Walker did not, in this letter, inform Murphree concerning subsequent negligence, and
that the jury could find Murphree liable even if Cameron ran the light.
12.

Alfa Informs Murphree of the Potential for an Excess Verdict

The record reflects an April 3, 2012, letter from Alfa to Murphree, sent via
certified mail, which was signed for upon receipt by Murphree. In that letter, Alfa advised
Murphree, as follows:
Because the amount of damages claimed by the plaintiff is considerably
more than the $100,000.00 liability limits afforded by your insurance
policy, there is a possibility that a judgment could be rendered in excess of
your liability coverage. Because of this I want to be sure you are aware that
you could be liable for any excess judgment. You may wish to retain an
attorney, at your expense, to advise you regarding this potential personal
liability.
If for any reason you feel we should not proceed in trying this case and you
feel we should pay your policy liability limits, please be sure to let me and
your attorney Rebecca Walker know as soon as possible. If we do not hear
43

from you in regards to this potential excess liability I will assume you wish
for Attorney Walker to proceed in defending you in the above referenced
case.
(Doc. 111-21 at 34). Although Alfa's excess letter mentioned a policy limits demand, it
did not specify that there was a deadline or what the deadline was.
An April 12, 2012, Walker sent a letter to Lyon advising that Walker had not heard
anything from Murphree concerning the excess letter and assumed she was agreeable
with proceeding to trial. (Doc. 109-5 at 35).

Walker also reported that there were

medical records that showed that Cameron had no memory of the accident, which
contradicted her previous testimony and supported the theory that Cameron was having
some type of confusion before the accident.

Walker also advised that she thought they

had a good chance at a defense verdict, and “if not, hopefully not an excess verdict.”
(Doc. 109-5 at 36).
13.

Walker Reports that Murphree Wanted To Go to Trial

An August 10, 2012, letter from Potter to Walker made substantially the same
offer as Potter had in his March 22nd letter.

(Doc. 1-5 at 2). Also, in this new letter,

Potter specifically wrote:
We assume that someone has informed Ms. Murphree of the following:
1.

That [Murphree] has a limitation of coverage;

2.

That [Cameron’s] medical expenses exceed $100,000;

44

3.

That there is a potential that a verdict may exceed
[Murphree’s] coverage limits;

4.

That [Murphree] had been advised that should
[Cameron] obtain an excess verdict, we intend to
satisfy the entire judgment against [Murphree]
personally; and

5.

That [Murphree] has the right to obtain personal
counsel to advise her and protect her rights relative to
a potential excess verdict.

(Doc. 1-5 at 2).

There is also a second August 10, 2012, letter from Potter to Walker

in which he again stated substantially the same things as his first letter of that same date.
(Doc. 1-6 at 2). The second letter also stated, “I assume, at this point, our policy limits
demand has been rejected.” (Doc. 1-6 at 2).
The record reflects several August 2012, emails from Walker to Burgess
regarding trial preparation.

None of those emails mention the August 10th demand.

(Doc. 109-6, at 29-30,33).
On August 23, 2012, Lyon received an email from Walker in which Walker
reported that she had met with Murphree and Burgess, and that they were ready to go
forward with trial.

Thereafter, at some point, the trial was continued from August 27,

2012, to February 25, 2013.
In a September 17, 2012, letter from Walker to Burgess and Murphree, Walker
noted that the trial date was February 25, 2013, and stated that Walker would contact

45

them closer to trial. (Doc. 109-7 at 2). The letter did not mention the August 10, 2012,
letter from Potter.

An October 26, 2012, letter from Walker to Lyon noted the

postponement of the trial. It also reported that Walker had met with Murphree and her
mother, and that Walker had again explained the danger of an excess verdict to Murphree.
The letter stated that Murphree and her mother “want to go forward with trial.” (Doc.
109-7 at 3).23 The letter does not mention the demand letter of August 10.
14.

Walker Is Informed of Murphree’s Arrest

In a email dated January 25, 2013, from Walker to Burgess, Walker reminded
Burgess that trial was “still set for February 25th.” (Doc. 109-7 at 5). A January 25,
2013, email response from Burgess to Walker informed Walker that Murphree had been
arrested, and asked that Walker have the trial postponed. (Doc. 109-7 at 5).
15.

Renewed Demand for Policy Limits Following Arrest

In a January 28, 2013, letter from Potter to Walker, Potter this time stated that he
assumed that Walker had “been made aware of [her] client’s recent alleged criminal
activities.” (Doc. 1-7 at 2). In the same letter, Potter also asked Walker to “[p]lease
advise Alfa of these events as well as our policy limits demand to your client.” (Doc. 1-7
at 2).

Again, in this letter, Potter advised Walker of the potential excess liability, his

23

Walker stated in her deposition, “I think she wanted her day in court. When it's all said
and done I think she wanted her day in court. That was her right.” (Doc. 109-1 at 34(133)).
Walker believed that it was best for Murphree to go to trial if Murphree wanted to go to trial. (Doc.
109-1 at 41(164)-42(165)).
46

intent to collect an excess judgment from her client, and his assumption that Walker had
advised Murphree of his letter of January 29th and his policy limits demand. (Doc. 1-7
at 2).
In a January 30, 2013, email Walker told Lyon that “things are going from bad to
worse” and informed Alfa that Murphree had been arrested for theft of property and now
had drug and theft charges. (Doc. 103-6 at 5). The email also stated: “If either of these
charges are crimes of moral turpitude, which I think the drug charge may be, I will
probably not be able to keep this evidence out, and I don't think we will win, [p]lus, I don't
think I can rely on her at trial.” (Doc. 103-6 at 5).24 Walker did not recommend that Alfa
settle the case.
In a February 14, 2013, email, Walker gave Lyon an update on Murphree, and
stated that Walker had filed a motion to continue the case. (Doc. 103-6 at 9). Walker
also wrote:
Plaintiff filed a strenuous objection. The judge has not ruled yet, and I have
a feeling he may delay a ruling hoping the case will settle. Ultimately, I do
not think he will force us to trial. I think it is going to be difficult, if not
impossible, for me to talk to her, but I will try to write her. I do not want to
be forced into a settlement, because her latest problems have no bearing on
the accident that occurred three years ago. Please let me know your
thoughts.

24

The defendants dispute this fact, stating that the phrase “I don’t think we will win”
referred to the issue of whether Walker could keep out the arrest evidence. (Doc. 130 at 7).
Nothing about the email indicates that that was what Walker was referring to. The email speaks
for itself.
47

(Doc. 103-6 at 9).
16.

Walker Meets with Murphree
Possibility

to Discuss Excess Verdict

While Murphree was in jail, Walker met with her for trial preparation. Walker
discussed with Murphree the option to file for bankruptcy if there was an excess verdict.
Wagner was at that meeting and testified that Walker told Murphree that Murphree could
still request to settle if she wanted to. (Doc. 110-1 at 4(12)).
In a February 20, 2013, letter, Walker advised Lyon that Walker had spent two
hours meeting with Murphree in jail. (Doc. 111-9 at 7). Walker wrote that, although
there were no drug-related charges, Murphree had admitted to using crack cocaine prior
to her arrest. Walker told Lyon that she “again discussed [with Murphree] at length the
issues in the case, including the possibility of an excess verdict.”

(Doc. 111-9 at 7).

Walker stated that she “again discussed the pros and cons,” “again reminded [Murphree]
that she can have her own attorney . . . and has the right to demand that Alfa settle the
case.” (Doc. 111-9 at 7). Walker states that she explained to Murphree that any demand
she had that Alfa settle the case would be relayed to Alfa by Walker. (Doc. 111-9 at 7).
Walker states in the letter that, after due consideration, Murphree stated that she wanted
to proceed with trial. (Doc. 111-9 at 7).
Eventually, the February 25th trial date was continued to April 29, 2013.

48

17.

The Trial

Trial began on April 29, 2013. At trial, the attorneys for Cameron and Murphree
stipulated that the medical bills had been paid by collateral sources.

Evidence was

introduced that Cameron owed $4,568.51 to Blue Cross Blue Shield and $31,797.68 to
Medicare for a total of $36,366.19 in actual expenses.
An April 30, 2013, email from Walker to Lyon stated: “[T]hink things are going
well. Pleased with jury, tore their ‘eye’ witnesses to shreds on cross. Evidentiary rulings
OK, except police officer will be allowed to say that our witness changed her story, but
I’ll let you know how his cross goes this afternoon.” (Doc. 103-6 at 13).
At one point during Murphree's testimony at trial, she testified that she hit
Cameron “probably eight to 10 seconds” after she saw her enter the intersection. (Doc.
103-9 at 30(426)).

However, her trial testimony before that was that she did not have

time to honk her horn before she hit Cameron “[b]ecause as soon as I saw her, within like
three seconds I hit her.” (Doc. 103-9 at 30(426)). Murphree also testified, “It might not
have been three seconds, but it wasn’t -- it was very short -- a very short period of time.”
(Doc. 103-9 at 30(426)). Murphree also testified, “I can’t tell you exactly how long it
was. But, I mean, as soon as I saw her we hit -- I had enough time to hit the brakes a little
bit, and we hit her.” (Doc. 103-10 at 1(430)).
In a later email to Lyon sent that same day, Walker stated:

49

Plaintiff attys [sic] have realized that they have a problem with their
witnesses, so now they have new theories. One is that Ashley saw Ms.
Cameron in time to stop, even if she did have the green light. . . . I cautioned
Ashley to not testify that she saw Ms. Cameron before the accident.
However, she ignored me and stated she saw Ms. Cameron's vehicle 8
seconds before the collision and started breaking [sic] quite a distance
back. This was something she never told me and did not testify to in her
deposition. Obviously, they are trying to establish that Ashley had the last
clear chance to avoid the accident, and failed to do so, which would negate
Ms. Cameron's contributory negligence. I think judge will allow a jury
charge on this, but I don't get any really negative feelings about the jury,
although you can never tell.
(Doc. 103-6 at 15).25
Regarding the charge conference, Walker testified:
Q.
And then my recollection at the charge conference is the same as
yours, he didn't charge on contributory negligence at all; correct?
A.

No, I asked him to but he refused.

Q.

Right.

25

As noted above, Murphree told Alfa, during its initial investigation, that she (Murphree)
saw Cameron before the accident. See Section IV.B.2. supra, regarding Murphree’s statements to
Alfa claims adjuster Robbie Elrod. Yet Walker, in this email, tells Lyon that she “cautioned Ashley
[Murphree] to not testify that she saw Ms. Cameron before the accident. However, she ignored me
and stated she saw Ms.Cameron's vehicle 8 seconds before the collision and started breaking [sic]
quite a distance back. This was something she never told me and did not testify to in her
deposition.” (Doc. 103-6 at 15). The court wonders how Walker could have known to “caution
Ashley not to testify” to specific facts if Walker had no prior knowledge that Murphree would
testify to those facts. Nonetheless, assuming that Walker did not know about or had forgotten those
statements by Murphree to Alfa’s investigator, that calls into question Walker’s trial preparation,
since this testimony was very damaging to Murphree in Walker’s opinion. However, as noted in
Section IV.C.6. infra, the plaintiff has expressly disclaimed any claim of malpractice relating to
Walker’s trial preparation or manner of trying the Underlying Action, so the court will not comment
further.
50

A.

It was his rationale that it was who had the green light.

Q.

Right. Did you agree with that reasoning?

A.
To some extent I did, and I did not argue with him really because I
didn't want the last clear chance to come in, so I thought the judge actually
made a good ruling so I didn't object.
(Doc. 109-1 at 20(80)).
During closing arguments, Cameron’s attorney’s told the jury: “[I]f you add up the
medical expenses, the pain and suffering, mental anguish, permanent injuries and out-ofpocket losses, the total is $670,930.62.”

(Doc. 103-12 at 6(773)). He told them that

they could give her more or less than that, based on their judgment. Id. On May 1, 2013,
Walker reported to Lyon that she did not get the impression that the jury wanted to award
a large verdict.
On May 3, 2013, the jury rendered a verdict in the amount of $260,000.00 for
Cameron and against Murphree. In a May 3, 2013, email, Walker told Lyon:
I spoke with several jurors after trial. Two of the male jurors were
most helpful and discussed this with me at length, They said that they did
not find any of the witnesses to be credible, even the police officer, so they
threw all that testimony out. They decided the case on the photographs and
who they thought was most credible, Cameron or Ashley. Unfortunately,
they did not think Ashley was credible…. The jurors told me that they did
not think there was anything I could have done to make her act better. I
spoke with Judge Millican. He said that he did not think I could have done
anything any better.
(Doc. 103-6 at 19). In this same email Walker wrote:

51

I sent numerous letters to Ms. Murphree about the possibility of an excess
verdict. You did, also. Stephanie and I sat down with her and told her that all
she had to do was tell us she wanted ALFA to settle and we would let ALFA
know. She never made a demand that we settle.
(Doc. 103-6 at 19). She went on to inform Lyon that Murphree may have a potential
negligent failure to settle claim against Alfa arising out of the verdict:

“The worst that

can happen is that she finds an attorney who will file a negligent failure to settle but we
have numerous defenses….” (Doc. 103-6 at 19). It is undisputed that the “we” in “we
have numerous defenses,” referenced Walker and Alfa.
At the time the jury rendered its verdict, Murphree was not in the courtroom as she
had decided to stay in jail. Walker never visited, spoke to, or wrote to Murphree after
the verdict. Instead, Walker sent her daughter and associate Wagner (who had been a
licensed attorney for only eight months), to speak with Murphree. Wagner had virtually
no involvement in the case prior to this point.

Despite knowing that Murphree had

potential extra contractual claims against Alfa, Walker did not explain the possibility of
such claims to Wagner before sending Wagner to speak with Murphree the day of the
verdict. Walker did not explain any grounds for appeal of the verdict to Wagner before
sending Wagner to speak to Murphree. When Wagner met with Murphree the day of the
verdict, Wagner did not inform Murphree of the fact that Murphree had potential
extra-contractual claims (negligent failure to settle and/or bad faith failure to settle),
because Wagner did not even know those causes of action existed.
52

Wagner testified that, at that initial meeting, she “let [Murphree] know her options
included, I mean, she could request to file an appeal.” (Doc. 110-1 at 8(26)). Wagner
testified:
She didn't want to do that because she wanted it -- I mean she wanted this
over. She was hoping this would sort of coincide with her getting out of her
program and just be able to start fresh.
She was not interested in filing an appeal. So we spoke about
bankruptcy that day. She said that was definitely something she wanted to
look into.
(Doc. 110-1 at 8(26)).26 The following exchange took place in Wagner’s deposition:
Q.
When y'all discussed the appeal did you discuss any particular
grounds for appeal?

26

The following exchange took place in Wagner’s deposition:

Q.
Prior to the day of the verdict, that meeting, did you, absent your mom, these
times when it was just you and her did you ever have any conversations with Ashley
about bankruptcy, negligent failure to settle, bad faith failure to settle, anything that
would happen post verdict?
MR. GRAY: Object to the form.
A.
She asked me a couple of questions about bankruptcy. You know, we had
talked about that that first meeting, it had come up as sort of a worst case scenario if
you get a judgment.
I mean I felt like I could talk to her about that because I worked for the
trustee for two and a half years.
I had processed hundreds of bankruptcy petitions, so I felt qualified to talk to
her about if I were in her situation and I got a judgment against me, I would have
filed bankruptcy.
(Doc. 110-1 at 7(21-22)).
53

A.
No, I didn't talk about anything. I just let her know that was -- I mean
if a judgment comes back against you, that's one of your options, and she
wasn't interested in that.
(Doc. 110-1 at 8(27)).
Based upon the legal advice given her, Murphree told Wagner that she wished to
pursue bankruptcy, but expressed concerns about whether she could afford to do so.
When asked if there was any discussion that day about Alfa paying for it, Wagner
testified: “Oh, no, no. I didn't – I mean – there wouldn't have been any mention of that.
That wasn't even, you know, on the table.” (Doc. 110-1 at 9(29)). Instead, in an email to
Burgess dated May 4, 2013, Walker told Burgess: “I think Ashley can get a discharge in
bankruptcy. . . . I may be able to get [A]lfa to pay the bankruptcy fees.” (Doc. 109-7 at
30).
18.

Murphree’s Bankruptcy Filing

In his affidavit, Lyon states:
[O]n or about May 13, 2013, Walker called me and told me that she had met
with Murphree and that Murphree had requested that Alfa help pay for her
to file for bankruptcy. I then consulted with [an attorney] about whether
such a payment was lawful. [The attorney] advised that it was lawful, so long
as it was done at Murphree’s request and was done voluntarily. He also
advised that her request should be made in writing. I then called Walker
back, and Walker stated that the decision to file for bankruptcy was from
Murphree and had not been forced in any way. Morever, the request for
assistance in filing had come from Murphree. . . . I asked Walker to get
something in writing so that I could consider the request.

54

[]Walker then sent me an email on or about May 13, 2013,27 stating
that Murphree did want to file a Chapter 7 bankruptcy petition and that
Murphree had requested that Alfa assist her in paying for the bankruptcy
attorney’s fees. Walker reported that she had discusse[d] the benefits and
disadvantages of such a filing, including the negative impact on her credit
rating.
Walker included a copy of Murphree’s signed request, which
incorporated a covenant not to sue.
(Doc. 103-1 at 13).
Walker drafted the Covenant Not To Sue.

(Doc. 109-1 at 56(221)).

Walker

testified that this document was not drafted until Alfa “let [Walker] know that ALFA
would help with the bankruptcy filing and asked me to draw something up.” (Doc. 109-1
at 56(223)). The Covenant Not To Sue provided:
I, Ashley Murphree, understand that a verdict and judgment against
me has been obtained by Willow Cameron that is in excess of my policy
limits with ALFA. I was aware before trial of this possibility and had
discussed this with my attorney on several occasions. My attorney advised
me on more than one occasion that I could demand that ALFA pay policy
limits to the plaintiff before trial, but I knew that I had the green light and
did not run any red light and I knew that there was an eyewitness who would
testify that it was Ms. Cameron who ran the light, so I wanted to proceed to
trial.
Since the verdict, I have discussed my options with my attorney.
27

The email stated that Murphree asked Walker to ask Alfa

whether ALFA will pay her bankruptcy attorney's fees which will be $1200. We
have discussed with her the benefits of such a filing as well as the disadvantages.
which would primarily be the negative impact on her credit rating for a period of
time. Attached is her request. which incorporates a covenant not to sue. If ALFA
agrees, please let me know how I should handle payment of the bankruptcy fee.
(Doc. 103-6 at 22).
55

Since my only asset is my vehicle, and since I have other debts, and no
income at present, I would like to file a Chapter 7 bankruptcy petition. I am
requesting that ALFA help me with the bankruptcy fees, which I understand
would be approximately $1200. I understand that, by filing for bankruptcy,
my credit rating would be damaged for a period of time, but by filing a
Chapter 7 petition, I could discharge the excess amount of the verdict, and
also discharge other debts that I have. I also understand that there is a very
good chance that the bankruptcy judge will allow me to keep my vehicle,
which is my only asset. I think it would be in my best interests to file a
Chapter 7 petition. My attorney has advised that she will assist me in
finding a bankruptcy attorney, and will help in whatever way she can with
the filing, but she has not pressured me in anyway to file for bankruptcy.
I do not feel pressured by ALFA or my attorney to file for
bankruptcy. It is my voluntary decision. I would be grateful if ALFA would
assist me in paying the bankruptcy fees. In consideration for this assistance,
I agree that I will not institute, prosecute or in any way aid in the institution
or prosecution of any claim, demand, action or cause of action for damages
or costs resulting or arising from the verdict or from any bankruptcy action.
(Doc. 1-8 at 2).28
Walker testified: “I just asked her [Wagner] if she would take it, to go over it
thoroughly with Ashley and to see if Ashley agreed with it and to see if Ashley would sign
it. There was [sic] no other instructions that I recall.” (Doc. 109-1 at 59 at 59(236)).
Walker stated that the release “wasn’t presented as she had to sign it. It was a request

28

Walker proffers the following fact:

22.
Murphree requested assistance with respect to filing a bankruptcy petition.
Her intentions in this respect, are set forth in a document which Murphree signed.
Ex. C:429 ("Request for Assistance in Filing for Bankruptcy and Covenant Not To
Sue").
(Doc. 107 at 16). The document speaks for itself. This fact will not be included.
56

would she sign it.”

(Doc. 109-1 at 56(221)). Wagner testified that, “[t]he only things

that I can specifically remember discussing [with Walker] was just that ALFA had agreed
to pay for the bankruptcy and that this was the document that Ashley could look at and
decide if she wanted to sign if she wanted them to pay for it.” (Doc. 110-1 at 9(30)).
Wagner met with Murphree, in jail, at some point and Murphree signed the document.
(Doc. 109-1 at 54(215), 56(224)-57(225)). 29
No post-verdict motions were filed in the underlying action on Murphree’s behalf.
No appeal was taken on Murphree’s behalf. No post-verdict offers of settlement were
made on Murphree’s behalf.
19.

The Bankruptcy

Alfa paid for attorney Tameria Driskill to represent Murphree in her bankruptcy
petition. The plaintiff has no criticisms of Driskill’s handling of Murphree’s bankruptcy
petition.
On May 24, 2013, Driskill filed a Chapter 7 bankruptcy Petition for Murphree in
the U.S. Bankruptcy Court, Northern District of Alabama, Eastern Division, bearing case
number 13-41009-JJR7. As noted previously, none of the proceeds utilized to cover the
bankruptcy (fees and costs) were paid to or through Murphree. Instead, they were paid

29

It is undisputed that at the time Walker sent Wagner to get the release signed by
Murphree, Wagner's understanding was that Murphree was only releasing any potential claims for
“malpractice” against Wagner, Walker, and Alfa in exchange for paying for Murphree's
bankruptcy. (Doc.110-1 at 9(31-32)).
57

by defendant Alfa.30
Leo testified with regard to the bankruptcy petition. He acknowledged that the
petition shows that, before Murphree was allowed to file her bankruptcy petition, she was
fully advised of the nature of the bankruptcy proceeding, including being advised of the
negative long-term consequences which are attendant with bankruptcy.

Leo also

acknowledged that the petition shows that, in filing the bankruptcy petition, it was
incumbent on Driskell to perform an independent review and assessment of Murphree's
assets, and to report all such assets in the petition. The following exchange also took
place in Leo’s deposition:
Q.
Okay. Is there a place on the bankruptcy petition where a petitioner
can list and disclose claims that they might have against somebody, even if
they haven't filed the lawsuit yet?
A.

Yes.

Q.
Okay. So if a pedestrian had been hit by a car in a crosswalk and they
knew they had a lawsuit against Joe's Fish Fry for driving the truck, they
could list I have a claim for my personal injuries against Joe's Fish Fry but
I've not filed a lawsuit?
A.

Yes.

Q.

They could do that?

A.

Yes.

30

Pursuant to the Bankruptcy Rules, Driskill filed the “Disclosure of Compensation of
Attorney for Debtor” form that verified that the source of her compensation was Alfa. (Doc. 113-1
at 49).
58

(Doc. 113-1 at 14(52)-15(53)).

In his deposition, Leo also acknowledged that, as to

Murphree’s bankruptcy, there were no such claims listed on the petition.

(Doc. 113-1

at 15(55-56)).
On May 17, 2013, Alfa wrote a check to Mann & Potter, P.C. & Willow Cameron
in the amount of $100,000.00, representing the full amount of bodily injury policy limits
available for Murphree’s insurance claim. (Doc. 103-1 at 14, ¶ 47). The check has never
been cashed, deposited, or otherwise negotiated. Despite Mann & Potter, P.C. being in
receipt of the $100,000 partial satisfaction of Murphree’s debt, Mann & Potter, P.C.
filed a creditor’s claim for the full $260,000 verdict for Cameron. Ted Mann listed
himself as assignee for Cameron’s $260,000 creditor’s claim.
Leo was unaware of the $100,000 payment by Alfa until “two or three weeks”
before his June 29, 2015, deposition. Leo never spoke to Murphree about what was her
motivation for signing the Covenant Not To Sue or to determine whether anyone spoke
to Murphree to advise her of her rights regarding the Covenant Not To Sue. Leo never
spoke with Murphree about whether she had been adequately informed of the risks of
going to trial or whether she had been adequately informed of her rights with regard to
settlement. Leo never even spoke to Murphree at all to determine whether she might
substantiate the allegations of the Complaint, including the damages allegations.

59

20.

Walker’s Conversations With Murphree
a.

Assessment of the Case

In Walker’s deposition, the following exchange took place:
Q.
Did you feel like your assessments of the case of its strengths and
weaknesses that you relayed to Ashley did you feel like they were honest
and objective?
A.

Yes.

(Doc. 109-1 at 36(142)). Walker testified that there were “several meetings” where she
“explained to [Murphree] the risks of excess verdict and what that meant, that her assets
could be at risk, whatever assets she had.” (Doc. 109-1 at 31(123)). The following are
just a few examples of such testimony from Walker’s deposition:
– Walker testified that she “told her that I would do whatever she wanted to do, but
we did talk about -- we talked about excess verdicts. We talked about the injuries.
We talked about the dangers. I told her there was a chance that jurors wouldn't like
her.” (Doc. 109-1 at 28(112)-29(113)).
– Walker testified that she and Murphree also discussed the legal doctrines of
subsequent negligence and wantonness several times. (Doc. 109-1 at 21 (81-82)).
– Walker testified that she “specifically told [Murphree], you know, feel free if
you want to get an attorney to talk to you about what your recourse would be if
there is an excess verdict. You know, feel free to do that.”

60

(Doc. 109-1 at

32(125)).
– Walker testified:
Q.
Did you discuss with Ashley Murphree what her excess exposure
might be? Did you discuss potential ranges with her?
A.
Yes. We talked about the amount of medicals. I explained to her
about the collateral source, that we could show there was collateral source.
They could come back and show there was a subrogation interest. They
could also get into evidence what Ms. Cameron paid for her insurance, her
health insurance. We discussed all that. We discussed the fact that there
was not a limitation on what the jury could award. That they could award the
medicals, less than the medicals, some number times the medicals, some
number times the subrogation amount. They could award punitives if the
wantonness claim was not thrown out; that it could be a range. We
discussed that.
(Doc. 109-1 at 30(118-119)).
– Walker testified that Murphree told her that she understood the risk of an excess
verdict. (Doc. 109-1 at 23(92)).
– Walker testified that, in her conversations with Murphree, Walker “repeatedly”
told Murphree that if Murphree wanted to settle, all Murphree needed to do was
to tell her. (Doc. 109-1 at 32(128)).31
b.

Settlement

It is undisputed that Walker never advised either Murphree or Alfa to settle the
case. However, Walker testified that she “made sure that she [Murphree] knew all the

31

Wagner also testified that Walker advised Murphree that she could request the case be
settled if she wanted to. (Doc. 110-1 at 4(12)).
61

risks . . . I don't think I specifically said settle, but I gave her every opportunity to tell me
if she wanted to.” (Doc. 109-1 at 29(114)). As to that issue, Walker testified:
Q.
Okay. We're going to go through the letters here in a minute, and
we'll go through them, but do you remember writing anything -- do you
remember anything in writing to Ashley saying if you ask ALFA to settle
the case, they will?
MR. GRAY: Object to the form.
A.

I don't think I ever -- I don't know if I put that in writing or not.

Q.

(By Mr. Bruner) Okay.

A.
I asked her to -- certainly asked her to let me know, and when we
talked I said -- when we talked I pretty much did everything but get down on
my knees to ask her if she wanted to settle because it certainly would have
been easier for me to have settled the case. I said Ashley, it will not make
me feel any less of you if you ask me or tell me you want to settle. I said
I will go to ALFA. I will let them know that. All you have to do is say the
words. And she was very thoughtful about it. She, she sat and she thought
about it and I said Ashley, you tell me what you want to do. Don’t base your
decision on what you think anybody else wants you to do. You tell me what
you want to do. If you want to settle, all you have to do is tell me and I’ll
tell ALFA. I don't know how I can be any plainer than that to you about what
I said to Ashley and what Ashley said to me.
Q.
Was this a specific conversation you're thinking of, or is this
something that a conversation that you had with her a number of times?
A.
We had it a number of times, but in particular when we were sitting
at the county jail together I think it was the time Stephanie was with me
also, we had a very long discussion. We went through everything. Ashley
told me -- I'm sorry. I can still see Ashley. I'm devastated that she died. I'm
sorry.
Q.

Do you want to take a minute?
62

A.
No. Ashley told me she was in the SAP Program. She voluntarily
entered it according to Judge Russell. She told me that she had renewed her
faith, that she had been baptized, that she wanted to get her life together.
She wanted to finish the SAP Program. She was hoping for probation on the
criminal charges. She told me she wanted to get her life together, that she
wanted to get out of jail. She wanted to see her -- see, she didn't get to see
her daughter the whole time she was in the SAP Program. She told me she
wanted to get out of jail. She wanted to get the litigation behind her. She
wanted to take care of her daughter. She wanted to put all of this behind her,
and I admired her for that. And I said Ashley, if you don't want to go through
trial you don't have to. I said all you have to do is tell me if you want to
settle this case. I won't think any less of you. I don't care what anybody else
wants to do. You tell me what you want to do. And she thought about it. She
sat there and she looked at me and she thought about it. We talked about, of
course, adverse consequences, but to the best of my knowledge she
understood that if she told me she wanted to settle, I would go to ALFA and
I would tell them she wanted to settle. And I know from my perspective it
would have been much easier for me to settle the case because she wouldn't
have had to go through a trial. I think Ashley wanted somebody to believe
in her, and I believed in her and to this day I still do. I am so devastated that
she died. I don't know what happened to cause her death. I heard it was
something to do with drugs, but all I can tell you is that. I don't have all of
that in writing. I mean we can go through everything in you want to. I'm just
telling you that is what happened. And I can't say anything else.
(Doc. 109-1 at 26(103)-27(107)).
Elsewhere in Walker’s deposition, the following exchange took place:
Q.
(By Mr. Bruner) Recommend. Did you in that meeting or at any
other time say to Ashley I think you need to settle this case, I think it would
be in your best interest to settle this case.
A.
I -- no. I told her I said, Ashley, if there is any doubt whatsoever
about who had the light or who had the right-of-way, tell me now. And she
thought about it. And she said no. She said I had the light. And she said I'm
sure I had the light. And I just said are you sure, because certainly she has
63

the right to go to trial. That's her right, and so I didn't argue with her. I think
that she wanted somebody to believe in her, and I did. And I just made sure
that she knew all the risks but, no, I don't think I specifically said settle, but
I gave her every opportunity to tell me if she wanted to.
(Doc. 109-1 at 29(113-114). Walker further testified:
Q.
(By Mr. Bruner) You didn't see from where you were sitting advising
your client a downside for Ashley to settling the case or for ALFA settling
the case?
A.
I did not and that's why I kept repeatedly telling her if she wanted to
settle, all she had to do was tell me.
Q.

But you didn't recommend that she do that?

MR. GRAY: Object to the form.
A.

I don't -- I think it was her decision to make, not mine.

(Doc. 109-1 at 32(128)). Walker further testified:
Q.
You would agree with me, wouldn't you, that even if a case is very
thin liability, that if the damages are -- potential damages are way in excess
of coverage, that may still be a case you have to settle for policy limits if
you can?
MR. GRAY: Object to the form.
A.
Well, I can't agree to that when my client is specifically saying she
wants to go to trial.
Q.

(By Mr. Bruner) Take that part of it out of the equation.

A.
Well, I can't take that out because in this case Ashley said I want to
go trial.
Q.

And you thought it was best for her to go to trial?
64

A.

Yes, if that's what she wanted to do.

Q.

You had no qualms about her taking that risk?

A.
It's not a matter of my qualms. It's a matter of I have given her an
honest assessment of the strengths and weaknesses of the case on many
occasions. I have given her every opportunity to tell me she wants to settle.
And when she says to me I want to go to trial, I didn't run the light, I have a
witness who backs me up, then I have to do what my client wants to do.
(Doc. 109-1 at 41(163)-42(165)).
c.

Potential Claims Against Walker, Wagner, and Alfa

Walker testified:
Q.
(By Mr. Bruner) Did you ever advise her of potential claims she
might bring against ALFA?
A.
No, she never asked me about claims and I never had any indication
that she was interested in any claims. She never made any complaint to me
about myself or ALFA or Stephanie. And based on everything that I had
done and that I knew ALFA had done I didn't think there were any claims.
(Doc. 109-1 at 53(211-212)).32

32

This fact, proffered by Walker, originally included the following: “Defendants Walker and
Wagner testified to several conversations with Murphree, including conversations with Murphree
specifically discussing the fact that someone might try to stir up claims for bad faith or malpractice.
Yet, even with these specific possible claims being discussed, Murphree never expressed any
dissatisfaction with Defendants Walker or Wagner.” (Doc. 107 at 15). There is no citation to the
record supporting this statement, and it has been disputed by Leo. (Doc. 122 at 5). This fact will
not be included.
65

C.

Analysis
1.

Count One – Voiding the Covenant Not To Sue as a Fraudulent
Transfer

“A bankruptcy trustee stands in the shoes of the debtor and has standing to bring
any suit that the debtor could have instituted had [she] not been thrown into bankruptcy.”
O'Halloran v. First Union Nat. Bank of Florida, 350 F.3d 1197, 1202 (11th Cir. 2003)
(citing 11 U.S.C. §§ 541–42). Any defenses a defendant might have against the debtor
would also apply to the trustee. See, Official Comm. of Unsecured Creditors of PSA,
Inc. v. Edwards, 437 F.3d 1145, 1150 (11th Cir. 2006) (“ [T]here is no suggestion in the
text of the Bankruptcy Code that the trustee acquires rights and interests greater than
those of the debtor. . . . If a claim . . . would have been subject to [a] defense . . . at the
commencement of the bankruptcy, then the same claim, when asserted by the trustee, is
subject to the same affirmative defense.”).

The defendants assert that the Covenant Not

To Sue is an affirmative defense entitling them to summary judgment on all of the
plaintiff’s claims.
In Count One, Leo seeks to void the Covenant Not To Sue as a fraudulent transfer
under the bankruptcy code. (Doc. 96 at 31). The code provides:
The trustee may avoid any transfer . . . of an interest of the debtor in
property . . ., that was made . . . on or within 2 years before the date of the
filing of the petition, if the debtor voluntarily or involuntarily–
...
66

(B)(i) received less than a reasonably equivalent value in exchange for such
transfer or obligation; and
(ii)(I) was insolvent on the date that such transfer was made or such
obligation was incurred, or became insolvent as a result of such transfer or
obligation[.]
11 U.S.C.A. § 548. The parties do not generally dispute the applicability of this section
of the code. The only issue in this case is whether Murphree (“the debtor”) “received
less than a reasonably equivalent value in exchange for” agreeing not to sue the
defendants.
Judge Propst, to whom this case was previously assigned, dealt with this issue in
the context of the Walker’s (and dismissed defendant Wagner’s) motion to dismiss.
Judge Propst wrote:
[The defendants] contend that the transfer was, as a matter of law, for
reasonably equivalent value. . . .
In a bankruptcy proceeding, “state law defines the scope and
existence of [a] property interest.” In re Schweizer, 399 Fed. App'x 482,
484 (11th Cir.2010) (citing In re Sinnreich, 391 F.3d 1295, 1297 (11th
Cir.2004) (citing Butner v. United States, 440 U.S. 48, 55 (1979))). In
Alabama, a release acts to extinguish a party's “cognizable claim[s].” Ex
parte Renovations Unlimited, LLC, 59 So.3d 679, 683 (Ala.2010). Based
on this, the individual defendants analogize the effect of the Covenant Not
to Sue to an entry of judgment. (Doc. 18 pg. 13). The Fifth Circuit has held
that a state court's entry of judgment “conclusively established that the
Debtors' claims ... had no merit.” Matter of Besing, 981 F.2d 1488, 1496
(5th Cir.1993). Thus, the claims were worthless, and “the Texas court's
disposition of the Debtors' claims constituted a transfer for reasonably
equivalent value as a matter of law.” Id. The defendants contend that the
same reasoning should apply to a release under Alabama law.
67

The individual defendants' attempt to liken an entry of judgment to
a contractual release is unpersuasive. They overlook the Fifth Circuit's
statement that “[w]e emphasize that our decision addresses only the
disposition of state law claims by a state tribunal.” Id. (emphasis added).
The court stated “under law, the dismissal constituted an adjudication on
the merits of the Debtors' claims.” Id. at 1495 (emphasis added). “The
Bankruptcy Code was not intended to give litigants a second chance to
challenge a state court judgment nor did it intend for the Bankruptcy Court
to serve as an appellate court [for state court proceedings].” Id. at 1496
(quoting In re G & R Mfg. Co., 91 B.R. 991, 994 (Bankr.M.D.Fla.1988)).
Because of this concern for second guessing a state judiciary, the court
“decline[d] the Debtors' invitation to ‘look behind’ the state court judgment
and make an independent evaluation of the claims.” Id.
Avoiding a contractual release, on the other hand, does not require
the court to “look behind” a state tribunal. No state court has addressed the
merit of the plaintiff's claims against the individual defendants, let alone
found them to be worthless. Rather, the individual defendants themselves
addressed the value of the plaintiff's claims. According to the individual
defendants, because of their conclusion, the value of the plaintiff's claims,
as a matter of law, was “zero.” (Doc. 18 pg. 14). They argue, in effect, for
the court to give res judicata effect to their own determination of the
viability of the plaintiff's claims. This court declines to give the individual
defendants the same deference due a state tribunal.
After Busing33 , courts have implicitly reached similar conclusions.
See In re e2 Commc'ns, Inc., 320 B.R. 849 (Bankr.N.D.Tex.2004); In re
N u Me d Home Health Care, Inc. , 3 2 6 B. R. 8 5 9 , 8 6 7
(Bankr.M.D.Fla.2005). After relying on Busing34 to find that the release of
a claim was a transfer under § 548, the Communications, Inc. court stated
“what is relevant to a fraudulent transfer claim is ... how much value the
Debtor received in exchange for the property transferred (did the Debtor
receive reasonably equivalent value in exchange for the property
transferred?).” 320 B.R. at 858. In denying summary judgment, the court

33

Sic.

34

Sic.
68

did not assume that any contractual release between two parties must
necessarily be for reasonably equivalent value. Instead, it found “a genuine
issue of material fact exists as to whether [releases in] the CRA transaction
[are] avoidable.” Id. at 859.
The court disagrees with the individual defendants' assertion that
they acquired the Covenant Not to Sue with reasonably equivalent value as
a matter of law. Rather, whether the claims were transferred for reasonably
equivalent value is “largely a question of fact, as to which considerable
latitude must be allowed to the trier of the facts.” In re Chase & Sanborn
Corp., 904 F .2d 588, 593–94 (11th Cir.1990) (internal citations omitted).
Leo v. Alfa Mut. Ins. Co., No. 1:13-CV-01826-RBP, 2013 WL 6490226, at *4-5 (N.D.
Ala. Dec. 10, 2013) (bracketed alterations in original) (emphasis by underlining added).
The plaintiff argues that Judge Propst’s decision, particularly the underlined
section above, precludes entry of summary judgment in favor of this claim.

(Doc. 123

at 24-25). This court agrees because it agrees with the reasoning and conclusion of that
decision: the trier of fact should decide whether Murphree’s claims were transferred for
reasonable value.35
Alfa notes that Count One “is premised on the notion that a transfer of assets
occurred between Alfa and Murphree that was unequal, i.e. that the $1,200 bankruptcy
filing fee was less than a reasonably equivalent value of Murphree’s potential claims
against Alfa and her attorneys.” (Doc. 104 at 40).

35

Alfa argues that “there is no viable

Judge Propst was addressing Walker and Wagner’s motion to dismiss. The logic applies
equally to Alfa’s argument on this issue (see doc. 104 at 40-42), which has been adopted by
Walker in her motion for summary judgment (see doc. 107 at 22).
69

claim as a result of the verdict [in the underlying case]” (doc. 104 at 41); “Murphree did
not have a valuable claim against Alfa that she was releasing” (doc. 104 at 41); and that
Alfa “is entitled to summary judgment on Count [One] for the same reasons [that] it is
entitled to summary judgment on Counts [Two] through [Five]. There is no viable cause
of action for negligent or bad faith failure to settle.” (Doc. 104 at 42). In other words,
Alfa argues that if dismissal is appropriate on the other counts, then those claims are
worthless, and any value given by the defendants for the release of those counts was
reasonable as a matter of law. (See doc. 104 at 26 (“The . . . claim to void a fraudulent
transfer . . . fail[s] because [it is] contingent on the viability of other causes of action.”)).
Walker adopts Alfa’s position as to the claim against her. (Doc. 107 at 22). The plaintiff,
of course, argues that “this argument fails in light of [p]laintiff’s proper showing that
summary judgment is due to be denied.” (Doc. 123 at 26).
This argument requires the court to first examine the merits of all of the other
counts in the Second Amended Complaint. Because of how the defendants have framed
their argument regarding Count One (i.e. the claims released by the Covenant Not To Sue
are worthless only because they have no merit), if any of the other counts survive
summary judgment, the court will deny summary judgment on this count as well.36
Because, as set out below, at least one of the other claims in this case survives, summary

36

The defendants have presented no evidence or argument as to the value of any claims
that might survive.
70

judgment will be denied as to Count One.37
2.

Counts Two and Three–Negligent/Wanton/Bad Faith Failure To
Investigate and Settle
a.

The Fact that Murphree Wanted To Proceed to Trial Is
Not an absolute Bar to Claims against Alfa of Negligent,
Wanton, and Bad Faith Failure To Settle 38

Alfa cites several non-binding cases which it says stand for the proposition that
“if an insured requests that the insurance company not enter into a settlement, and the
company accedes to that request, the insurer cannot be held liable for any excess
judgment.”

(Doc. 104 at 26-27; see also, doc. 104 at 27-31 (citing and discussing

Puritan Ins. Co. v. Canadian Universal Ins. Co., 775 F.2d 76, 80 (3d Cir.1985) (“When
the decision to try, rather than settle, a personal injury suit is approved by the insured,
neither it nor the excess insurer may recover from the primary carrier when the verdict
exceeds the primary policy limits.”); Eklund v. Safeco Ins. Co., 579 P.2d 1185, 1186
(Colo. App. 1978) (“[H]ere it is undisputed that the [insured] demanded that [the insurer]

37

Leo argues in his response brief that the Covenant Not To Sue was procured
fraudulently, apparently in an attempt to argue that it should be void for that reason as well. (Doc.
123 at 26-27). However, since Leo has not moved for summary judgment on this issue, and since
the court has found that the defendants are not entitled to summary judgment as to Count One, the
court will not address this argument.
38

The court notes that Alfa incorrectly states that “[t]he gravamen of [p]laintiff’s complaint
is that Alfa acted negligently, wantonly, and/or in bad faith by withholding Cameron’s settlement
demands from Murphree, thereby preventing Murphree from making an informed decision as to
whether she should settle[.]” (Doc. 104 at 26). Even a cursory review of the Second Amended
Complaint reflects that Leo complains of much more than that.
71

not settle the claim upon any terms even though claimant’s two offers of settlement were
within the policy limits. The trustee stands in the same position as the bankrupt . . . and
thus he cannot now complain that [the insurer] should be liable for the excess because
a settlement was not effected.”); Peterson v. American Family Mut. Ins. Co., 160
N.W.2d 541, 544 (Minn. 1968) (“In the absence of any probative evidence that the
insurer misled [the insured] with respect to his vulnerability, it is clear that it was his
voluntary and considered decision to try the case. Under these circumstances, it can
hardly be claimed that his insurer is liable to him for not having insisted upon a
settlement within the policy limits.”); Jackson v. St. Paul–Mercury Indem. Co., 339
F.2d 40, 44 (6th Cir.1965) (“[I]f the insured actively concurs in the rejection of a
compromise offer, he cannot recover against the insurer for failure to settle.”)).
However, Alfa has cited no Alabama case, and this court has found none, for this same
proposition. Further, Alfa fails to explain why this court should assume that the Alabama
Supreme Court would follow this approach.39

On the contrary, it seems settled that the

Alabama Supreme Court would find the plaintiff’s decision to try the case would be
merely one factor in the “totality of the circumstances” for the court to consider.
39

The parties’ briefs treat negligent and bad faith refusal to settle together, which is
unfortunate because the two concepts are distinct. In Waters v. Am. Cas. Co. of Reading, Pa.,
261 Ala. 252, 256-58, 73 So. 2d 524, 528 (1953), the Alabama Supreme Court wrote that the two
claims “constitute different concepts. They may be joined in separate counts in a suit, and either
may exist without the other.” Waters, 73 So. 2d at 529. “[I]t is a question for the jury from all the
facts and circumstances to determine whether the failure on the part of the insurer to make
settlement is an act of negligence or one of bad faith.” Id.
72

Judge Watkins, from the Middle District of Alabama, recently explained this
aspect of Alabama law.
NGAC[, the insurer,] contends that, to prevail on her third-party
bad-faith claim, Ms. Franklin[, the insured,] must show the absence of an
arguable or debatable reason for its pre-suit refusal to settle . . . for the
policy limits (“arguable reason” test). According to NGAC, a “genuine
liability dispute” existed based upon Ms. Franklin's persistent denial of
fault and the police report that placed the fault on Mr. SGutierrez. NGAC
further contends that the existence of a genuine liability dispute provides
an arguable reason sufficient to refuse a policy-limits demand, regardless
of the amount of money at stake. Underpinning NGAC’s contention of the
importance of a genuine liability dispute is Alabama's law precluding a
negligence action where the plaintiff was contributorily negligent. Ms.
Franklin contends, on the other hand, that the arguable-reason test plays
only a limited role under Alabama law in a third-party bad-faith insurance
case, and that the arguable-reason test is an element of the plaintiff's claim
only in first-party insurance cases. Further, Ms. Franklin argues that the
proper test for evaluating a third-party bad-faith claim is multi-factored.
. . . Ultimately, after going back to the genesis of the third-party
bad-faith claim, the court finds that under Alabama law, a
totality-of-circumstances approach governs as to claims alleging an
insurer's alleged bad-faith failure to investigate and settle a third-party
claim, and that the arguable-reason test is not an element of the claim, but
rather one of many factors to be considered. To understand how this
conclusion was reached, discussion of the history of both first- and
third-party claims in Alabama is helpful, and necessary.
In a first-party claim, an insured sues the insurer for failure to pay
a direct claim covered under a policy. Whereas, in a third-party claim, the
insured, after exposure to a judgment in excess of policy limits, sues the
insurer for its failure to settle the third-party claim within policy limits.
First-party and third-party bad-faith claims have separate geneses under
Alabama law.
1. The Genesis of the Third–Party Bad–Faith Claim
73

The third-party bad-faith claim was the first born, arriving in the
summer of 1953. In Waters v. American Casualty Co. of Reading, Pa., 73
So.2d 524 (Ala.1953), the divisive inquiry was whether an insurer's liability
for a judgment exceeding policy limits after the insurer refused an
opportunity to settle within the policy limits derives from negligence or
the doctrine of bad faith. The Alabama Supreme Court held that an insured
may predicate liability on negligence or bad faith or on both. The court
explained that, in the third-party bad-faith context, “when an opportunity is
presented to the insurer to make a settlement of the claim in an amount not
more than the limit of liability,” but the insurer refuses and that refusal “is
the proximate result of bad faith,” the insurer is “liable for the full amount
of the judgment, notwithstanding it is in excess of the limit fixed in the
policy.” Id. at 531–32. “[I]t is a question for the jury from all the facts and
circumstances to determine whether the failure on the part of the insurer
to make a settlement is an act of negligence or one of bad faith.” Id. at 529
(emphasis added). The court did not deem it necessary to opine further
upon the application of “negligence” or “bad faith,” given that the terms had
“well understood meaning[s].” Id. It observed, though, that bad faith “is
tantamount to an intentional failure to perform [required] duties,” and that
“the mere failure on the part of the insurer to make a settlement within the
limits of his contract when he has an opportunity to do so is not alone
evidence of negligence or bad faith.” Id. at 529.
On rehearing, however, the Waters court accepted the invitation to
elaborate upon “the application of the rules of negligence and bad faith” in
third-party cases. Id. at 531. The court explained:
A failure to exercise ordinary diligence proximately causing
damage to the insured is actionable in tort. The contract of
insurance gives the insurer the exclusive right to make a
settlement of the claim against [the] insured. That right
imposes a corresponding duty raised by law to observe
ordinary diligence in performing that power, when in the
exercise of it. So that, when an opportunity is presented to the
insurer to make a settlement of the claim in an amount not
more than the limit of liability, the law raises a duty on his
part to use ordinary care to ascertain the facts on which its
74

performance depends if he has not already done so. If the
insurer neglects to exercise ordinary diligence in ascertaining
these facts, if he has not already done so, and as a proximate
result of such neglect he fails to make such a settlement,
which is available, and when such knowledge would have
caused a reasonably prudent person to do so, and a verdict and
judgment are rendered against insured in an amount more than
the limit of liability in the policy, the insurer should be held
liable to the insured for the full amount of the judgment.
If the insurer has already made the investigation and
ascertained the facts, to which we have referred supra, and
refuses to make such proffered settlement, if such refusal is
due to the honest judgment of insurer that the facts do not
warrant such a settlement, and the insurer was not negligent
in the manner of defending the suit, he would not be liable to
[the] insured for an amount in excess of the limit of liability
provided in the policy, although the verdict and judgment
were in excess of it. But if such refusal to settle under those
circumstances is the proximate result of bad faith on the part
of the insurer, he would be liable for the full amount of the
judgment, notwithstanding it is in excess of the limit fixed in
the policy.
Id. at 531–32.
To summarize, the Waters decision imposes upon an insurance
company a duty to use ordinary care in the exercise of its exclusive right
to settle a third-party claim against its insured and emphasizes a
totality-of-circumstances approach. Specifically, Waters held that whether
the insurance company acted negligently or in bad faith in the exercise of
its settlement authority depends upon “all the facts and circumstances.”
Id. at 529 (emphasis added). While negligence and bad faith are separate
torts, the Waters decision reveals that the same facts and circumstances are
relevant for determining the degree of the insurer's culpability, namely,
whether the insurer has acted negligently or in bad faith. See also Allen's
Alabama Liability Insurance Handbook, § 13.09, at 286 (2d ed.2008)
(noting the similarity of proof required in negligence and bad-faith claims
75

in the third-party context).
Although Waters did not provide a specific list of facts and
circumstances for consideration, the opinion highlights the following: (1)
the insurer has a duty to use ordinary care to ascertain facts that are
necessary for an enlightened decision about whether a settlement of a
third-party's claim within policy limits is warranted; (2) the insurer's
refusal to settle based upon an honest judgment that the facts do not warrant
a settlement does not rise to the level of negligence or bad faith; (3) bad
faith results when the insurer intentionally fails to perform its duties; and
(4) the insured’s mere failure to settle within the policy limits, when
presented the opportunity, is insufficient by itself to amount to negligence
or bad faith.
Twelve years after Waters, the third-party bad-faith claim again was
the subject of discussion in Hartford Accident & Indemnity Co. v. Cosby,
173 So.2d 585 (Ala.1965). In Cosby, which was an excess-judgment suit
brought by the insured against the insurer, the insurer assumed control of
the defense in a third-party suit brought against its insured and refused to
settle within the $25,000 policy limits, after which the third party obtained
a $75,000 judgment against the insured. The Supreme Court of Alabama
cited a Fifth Circuit decision as persuasive authority on what proof is
required to prevail on a third-party bad-faith claim:
[T]he insurer cannot escape liability by acting upon what it
considers to be for its own interest alone, but it must also
appear that it acted in good faith and dealt fairly with the
insured. The insurer, as it had a right to do under the policy,
assumed exclusive control of the claim against the insured,
and took unto itself the power to determine for the insured all
questions of liability, settlement, of defense and management
before and during trial, and of appeal after final judgment. We
are of opinion that this relationship imposes upon the insurer
the duty, not under the terms of the contract strictly speaking,
but because of and flowing from it, to act honestly and in
good faith toward the insured. It was open to the jury to find
that the insurer did not perform this duty. Id. at 604–05
(citing Am. Mut. Liability Ins. Co. of Boston v. Cooper, 61
76

F.2d 446, 448 (5th Cir.1932)).
Cosby reaffirms the totality-of-circumstances approach and highlights that
the insurer must “deal[ ] fairly” with its insured and “act honestly and in
good faith” in refusing an offer to settle a third-party claim against its
insured. Id.
Almost twenty-five years after Cosby, in 1989, the Alabama
Supreme Court decided State Farm Mutual Automobile Insurance Co. v .
Hollis, 554 So.2d 387 (Ala.1989). Hollis involved a third-party negligent
failure-to-settle claim, not a third-party bad-faith claim, but it is instructive
because the same factors govern whether an insurer negligently failed to
settle a third-party claim or acted in bad faith. The Hollis court reaffirmed
the Waters decision as establishing the criteria for the third-party
insurance claim and rejected the argument that the insurer's “sincere belief
that [its insured] had not been negligent” could defeat third-party
negligence. Id. at 390. “[T]he good faith standard requires more than proof
of sincerity.” Id. “The insurer has a fiduciary duty to look after the insured's
interest at least to the same extent as its own, and to make a knowledgeable,
honest, and intelligent evaluation of the claim commensurate with its
ability to do so. If the carrier fails to do this then it is liable to the insured
for all damages occasioned thereby.” Id. at 391–92 (citation and internal
quotation marks omitted). Citing out-of-state authority as persuasive, the
Hollis opinion also reiterated a totality-of-circumstances approach:
While the view of the carrier or its attorney as to
liability is one important factor, a good faith evaluation
[of settlement of a third-party claim] requires more. It
includes consideration of the anticipated range of a verdict,
should it be adverse; the strengths and weaknesses of all of
the evidence to be presented on either side so far as known;
the history of the particular geographic area in cases of
similar nature; and the relative appearance, persuasiveness,
and likely appeal of the claimant, the insured, and the
witnesses at trial.
Id. at 391 (citation and internal quotation marks omitted). Hollis highlights
additionally that consideration of the insured's interests is a paramount
77

consideration. See id. at 391 n.2 (“[W]hat might be neglect in one instance
could well constitute bad faith on the part of the insurer. The question is
always: Did the insurer exercise that degree of skill, judgment, and
consideration for the welfare of the insured which it, as a skilled
professional defender of lawsuits having sole charge of the investigation,
settlement, and trial of the suit may have been expected to utilize?”
(citation and internal quotation marks omitted)).
2. The Genesis of the First–Party Bad–Faith Claim
Twenty-eight years after the Waters decision, the Supreme Court of
Alabama brought into the fold the first-party bad-faith claim. Chavers v.
Nat'l Sec. Fire & Cas. Co., 405 So.2d 1, 6 (Ala.1981) (“The law will not
allow an insurer to willfully refuse to evaluate or honor a claim with the
knowledge that the avowed purpose of the insurance contract was to protect
the insured at his weakest and most perilous time of need.”). With respect
to the “standard of proof an insured is required to meet in order to recover
on a claim for bad faith” in the first-party context, the court held that “an
actionable tort arises for an insurer's intentional refusal to settle a direct
claim where there is either (1) no lawful basis for the refusal coupled with
actual knowledge of that fact or (2) intentional failure to determine
whether or not there was any lawful basis for such refusal.” Id. at 7 (internal
quotation marks omitted; emphasis added); see also Nat'l Sec. Fire & Cas.
Co. v. Bowen, 417 So.2d 179, 183 (Ala.1982) (explaining that based upon
Chavers, “[a]n insurer is liable for its refusal to pay a direct claim when
there is no lawful basis for the refusal coupled with actual knowledge of
that fact” and that “[n]o lawful basis means that the insurer lacks a
legitimate or arguable reason for failing to pay the claim.” (citation and
internal quotation marks omitted)).
3. This Court's Findings as to the Proper Standard of Review
On the basis of the Alabama Supreme Court's decisions in Waters,
Cosby, and Hollis, the court finds untenable NGAC's position that an
insurer is not liable on a third-party bad-faith claim where it has an arguable
or debatable reason to deny a claim. Neither Waters nor Cosby nor Hollis
mentions an arguable-reason test as an element of a plaintiff's third-party
claim or suggests that an insurer can prevail if the insured cannot show the
78

absence of an arguable reason for the insurer's refusal to accept a
policy-limits settlement of the claim against the insured by a third party. To
the contrary, these decisions command a totality-of-circumstances
approach. See, e.g., Waters, 73 So.2d at 529 (holding that whether an
insurance company acted in bad faith in the exercise of its settlement
authority depends upon “all the facts and circumstances”).
Additionally, in Waters, the court rejected an argument similar to
the one that NGAC makes in this case. In Waters, the insurer had argued
that the insured should be “estopped” from asserting that the insurer “was
guilty of bad faith or negligence in his decision to try the case ... and not to
settle” it because the insured consistently maintained in the underlying
action that he had not been negligent. See 73 So.2d at 531.40 The court
disagreed, opining that “[t]hese facts were for the consideration of the jury
along with all the other facts and circumstances of the case.” Id. (emphasis
added). Waters indicates that an insurer's pre-suit refusal to settle a
third-party's claim against its insured based upon the insured's headstrong
denial of liability is a factor, but it is not the only factor relevant to the
inquiry of whether the insurer engaged in bad faith in the evaluation of a
third-party settlement offer. Hollis confirms Waters's stance. See Hollis,
554 So.2d at 391 (“While the view of the carrier or its attorney as to
liability is one important factor, a good faith evaluation [of settlement of
a third-party claim] requires more.”).
Furthermore, the Chavers court expressly held that its test applied
to a “direct claim,” 405 So.2d at 7, and, in recognizing a new tort for
first-party bad faith, it did not disown the third-party bad-faith claim.
Rather, it acknowledged the distinctions between first-party and third-party
insurance claims. See 405 So.2d at 5. The distinctions between the two
types of claims support Alabama courts' different treatment of the claims.
Alabama courts do not stand alone.
As explained by the Arizona Supreme Court, which also holds
first-party and third-party claims to different standards and restricts the

40

As previously noted, the facts of the instant case parallel those in Waters. In the instant
case there is undisputed evidence that Murphree wanted to proceed to trial because she felt like she
was in the right; she had the green light.
79

arguable-reason test to the first-party bad-faith claim,
an insurer owes its insured the same duty of good faith and
fair dealing in both first- and third-party actions. The standard
for determining whether the insurer has breached its duty,
however, is different in the two types of cases because of the
different relationships and duties that exist between the
parties. In third-party actions, the insurer exclusively controls
settlement and the insured bears a disproportionate share of
the risk if the insurer fails to accept a reasonable settlement
offer within policy limits. The insured faces personal liability
for an award exceeding policy limits, while the insurer's
potential liability remains constant at policy limits.
Therefore, although the “fairly debatable” standard
sufficiently protects both parties' interests in first-party
actions, it inadequately protects the insured's interests in
third-party actions.
Clearwater v. State Farm Mut. Auto. Ins. Co., 792 P.2d 719, 723–24
(Ariz.1990) (internal citation omitted). In the third-party bad-faith context,
“the debatability of the claim is not determinative; the insurer must also
weigh other considerations, such as the financial risk to the insured in the
event of a judgment in excess of the policy limits.” Id. at 723.
4. The Outlier Decision: Mutual Assurance, Inc. v. Schulte, 970 So.2d
292 (Ala.2007)
NGAC contends that Mutual Assurance, Inc. v . Schulte, 970 So.2d
292 (Ala.2007), is clear authority for its position that the arguable-reason
test is an element of a plaintiff's claim in a third-party bad-faith case. In
Schulte, the Alabama Supreme Court affirmed the trial court's order
denying summary judgment to the insured on a third-party
negligent-failure-to-settle claim. It “express[ed] no opinion,” however, “as
to that part of the trial court's order denying [the insurer's]
summary-judgment motion as to the bad-faith-failure-to-settle claim
because [its] decision on the negligent-failure-to-settle claim and the
unique procedural posture of this case render[ed] a review of that claim
unnecessary.” Id. at 294. Nonetheless, the Alabama Supreme Court later
80

remarked in the same opinion that “the inquiry relevant to a claim alleging
bad-faith failure to settle is whether the insurer's failure to settle had any
lawful basis, that is, whether the insurer had any legitimate or arguable
reason for failing to pay the claim.” Id. at 296 (citations and internal
quotation marks omitted). NGAC's position that Schulte correctly recites
Alabama's standard for analyzing a third-party bad-faith claim is shaky for
at least two reasons.
First, the Supreme Court of Alabama deemed it unnecessary to
address the third-party bad-faith claim based upon an agreement between
the parties that rendered the claim moot. The lone sentence upon which
NGAC then relies is not part of the court's holding. Rather, it is “mere
obiter dictum,” and not binding authority. Ex parte RCHP–Florence, LLC,
––– So.3d ––––, 2013 WL 4873468, at *8 (Ala.Civ.App.2013) (citing
Wilkinson v. Rowe, 98 So.2d 435, 440 (Ala.1957) (“If we were to express
an opinion based on facts not shown by the record in this case, that opinion
would be dicta and would not be binding in subsequent cases.”)). One of the
concurring justices in Schulte also recognized the narrow holding of the
main opinion, sweeping the rest of it into the bin of dicta. See 970 So.2d
at 298 (Because the “only question before this Court ... is the very narrow
question whether the existence of a validly enacted statute automatically
precludes in every case any further inquiry into whether an insurer has
acted reasonably in presuming the constitutionality of that statute and
relying thereon in its decision not to settle a claim against its insured” and
“because upon our decision of this question other issues will become moot
in light of the parties' agreement ..., the discussion of other issues is
dicta.”) (Murdock, J., concurring in result).
Second, although dictum can be persuasive and telling as to how a
state court would hold, this court is not convinced that the Alabama
Supreme Court would find Schulte's dictum convincing. The dictum is
unaccompanied by any analysis. And, although it leans upon a string cite of
two decisions for support, those two decisions were analyzing first-party
bad-faith claims, not third-party bad-faith claims. Adoption of the standard
NGAC draws from the Schulte dictum would require the Alabama Supreme
Court to turn a blind eye to more than fifty years of precedent, where not
once has the court incorporated the arguable-reason test as an element of
a third-party bad-faith claim. Because the dictum in Schulte upon which
81

NGAC relies contradicts Waters' totality-of-circumstances approach, it is
deemed a non-binding, stray remark.
Franklin v. Nat'l Gen. Assur. Co., No. 2:13-CV-103-WKW, 2015 WL 350633, at
*10-15 (M.D. Ala. Jan. 23, 2015)(Watkins. J.)(emphasis by italics in original) (bracketed
alterations in original).
Not only does the Franklin opinion explain that Alabama uses the “totality of the
circumstances,” rule in judging bad faith failure to settle and negligent failure to settle
cases, it also points out that, in the Waters decision, the Alabama Supreme court rejected
the same argument made by Alfa here. The undersigned is persuaded that Frank lin was
correctly decided and applies it here. Summary judgment is not appropriate merely
because Murphree maintained that she did not run the red light, and insisted that the case
be tried. It is only one fact to be considered.41
41

Leo also argues that Murphree’s opinion on settling the case is of no consequence
because “Alfa, and only Alfa, [had] sole authority to settle or not settle the underlying action as it
saw fit.” (Doc. 123 at 14). In support of this argument, Leo cites:
– the policy language of the policy which covered Murphree, which states, inter alia, “[w]e
will settle or defend lawsuits . . .as we consider appropriate,” and “[w]e have the right the
investigate, negotiate and settle any claim or suit.” (Doc. 123 at 14 (quoting doc. 66-1 at
3)).
– the Alabama Supreme Court’s statement in Blackburn v. State Farm Auto. Ins. Co.,
652 So. 2d 1140, 1142 (Ala. 1994), that policy language of that sort means that “[t]he
insured may not compel or prevent such a settlement.”
– Allen’s Alabama Liability Insurance Handbook for the proposition that “‘the insurer
has the exclusive control of the claim against its insured;’” “‘[t]he right [of settlement] is
reserved for the insurer’s personnel to determine not only the amount of any settlement, but
the manner to negotiate, if at all, with an insured’s attorney;’” and “‘by the terms of the
82

b.

The Fact that Alfa Relied on Walker’s Representations
Is Not an absolute Bar to the Claims against Alfa

Alfa next argues that it is entitled to summary judgment on all “failure to settle
claims,” which it identifies as the claims of negligent, wanton, and bad faith failure to
settle, because it relied on Walker’s representations that Murphree was informed of the
dangers of the case, and “made an informed decision to oppose settlement.” (Doc. 104
at 31; see also, doc. 104 at 32-36).

In support of this argument it cites, without

discussion, Nat'l Sur. Corp. v. W. Fire & Indem. Co., 318 F.2d 379, 385 (5th Cir. 1963),
a case which does not interpret or discuss Alabama law.
As noted in the previous section, under binding Alabama law, the trier of fact must
consider the “totality of the circumstances” in deciding whether Alfa should be liable for
failure to settle.

The advice given to Alfa by its attorney is merely one of the

circumstances to consider.42
insurance contract, an insurer may do as it likes, as far as settlement is concerned.’” (Doc.
123 at 15 (quoting Bibb Allen, Allen’s Alabama Liability Insurance Handbook § 13.18
(2nd ed. 2008)).
– Ivey Gilmore’s opinion that Murphree’s desire to try the case “doesn’t matter,” because
Alfa had the power to settle the case “whether their insured like[d] it or not.” (Doc. 123 at
16).
Leo misses the point with these arguments. No one disputes the fact that Alfa could have settled
the case without Murphree’s consent. The only question is, although it had that control, is it
absolved from liability because Murphree did not want to settle, and it heeded its insured’s wishes.
Regardless, based on this court’s holding, this argument is moot.
42

In three separate places, when arguing this point, Alfa seems to argue that there is a lack
of evidence to support Counts Two and Three as a whole. First, Alfa writes:
83

c.

Wanton Failure to Investigate or Settle

Alfa notes that the tort of “wanton” failure to investigate or settle has not been
recognized in Alabama.

(Doc. 104 at 36-37) (citing State Farm Mut. Auto. Ins. Co. v.

Hollis, 554 So. 2d 387, 392 (Ala. 1989) (“We have not had occasion to determine

Alfa acted innocently and in accordance with the reports and recommendations of
Murphree’s assigned counsel in making its determination not to accept the policy
limits demand.
In contrast, bad faith failure to settle is, “in essence, . . . the intentional
failure to settle a claim.” State Farm Mut. Auto. Ins. Co. v. Hollis, 554 So. 2d 387,
392 (Ala. 1989) (discussing Hollis v. Scott, 516 So. 2d 576 (Ala.1987)).
Wantonness requires proof that Alfa, with reckless indifference to the
consequences, consciously and intentionally did some wrongful act or omitted some
known duty. Wal-Mart Stores, Inc. v. Thompson, 726 So. 2d 651, 654-55 (Ala.
1998). There is no evidence of either.
(Doc. 104 at 32) (emphasis added). Next, after discussing Walker’s reports to Alfa, Alfa contends,
in one sentence, that “[i]n light of the foregoing, Alfa must be granted summary judgment on all
[p]laintiff’s claims for failure to settle.” (Doc. 104 at 36) (emphasis added). Finally, in concluding
the discussion of whether Alfa’s reliance on Walker’s reports provides it a complete defense, Alfa
writes that “there is no evidence of intentional bad faith or wantonness by Alfa.” (Doc. 104 at 36).
Alfa may attempt to meet its burden on summary judgment by “showing” that there is an
absence of evidence to support Counts Two and Three as a whole. See Fitzpatrick, 2 F.3d at
1116. However, the quoted language, when read in context, argues only that, because Alfa relied
on Walker, there is no evidence of intentional bad faith or wantonness. Indeed, in the introduction to
its argument, Alfa makes this very point when it says: “There is no evidence of bad faith or
wantonness since Alfa acted according to the reports of counsel that there was disputed liability and
questionable damages.” (Doc. 104 at 25). The court does not read these statements as putting Leo
on notice that he had to provide all of his evidence in support of these counts. See, T.P. ex rel. T.P.
v. Bryan Cty. Sch. Dist., 792 F.3d 1284, 1291 (11th Cir. 2015) (“district courts should not be
expected to construct full blown claims from sentence fragments, appellate courts should not permit
those same fleeting references to preserve questions on appeal.”) (internal citations and quotations
omitted). (See also, doc. 123 at 22 (Plaintiff’s Response Brief) (“Alfa does not present any
evidence or argument as to the evidence, or lack thereof, of wantonness.”))). Because Alfa did not
clearly raise the broader argument of lack of evidence, the court will not address it.
84

whether a cause of action for wantonness is viable.”)). Alfa then states, without providing
any argument, that “[t]here is no basis for creating a new tort.” (Doc. 104 at 37). The
plaintiff’s response merely acknowledges that the issue has not yet been decided by the
Alabama Supreme Court. (Doc. 123 at 22). He does not explain why a new tort would
be recognized by the Alabama Supreme Court. In light of these undeveloped arguments
by both sides, summary judgment on this issue will be denied. See Resolution Trust
Corp. v. Dunmar Corp., 43 F.3d 587, 599 (11th Cir. 1995) (“There is no burden upon
the district court to distill every potential argument that could be made based upon the
materials before it on summary judgment. . . . Rather, the onus is upon the parties to
formulate arguments[.]”).
d.

Negligent Failure to Investigate

Alfa argues that there is “no cognizable claim in Alabama for negligent failure to
investigate.”

(Doc. 104 at 37). Alfa also argues that Leo “cannot offer substantial

evidence that Alfa was negligent in investigating Cameron’s claim.” (Doc. 104 at 38).
Alfa also writes:
Alfa promptly assigned an adjuster to the claim, and the adjuster promptly
took witness statements and properly managed the file. When suit was
filed, the claim was assigned to a manager, and legal counsel was assigned
to represent the insured and to report on developments in the case.
Accordingly, Alfa must be granted summary judgment on Plaintiff’s claim
for negligent failure to investigate.
(Doc. 104 at 38).
85

In response, Leo argues that his claim for negligent failure to investigate “is
encompassed within and subsumed by the negligent failure to settle [claim].” (Doc. 123
at 23). He then cites to the following from Gilmore’s deposition as evidence that the
claim, for negligent failure to investigate and settle, is viable:43
Q. Okay. What criticism do you have of Mr. Elrod regarding his
investigation?
A. Oh, I think Mr. Elrod was doing his job when he went out and took the
statements. What I mean by Alfa's conduct during the claims process and
its unreasonable failure to investigate and settle is that Alfa, Mr. Lyon in
the home office, is choosing to ignore the facts that he has uncovered. This
was a bad accident. It is a disputed liability claim. We have an elderly
woman badly injured. You have got witnesses for the plaintiff and for the
defendant. This lady had a closed-head injury, she had a fracture to the neck,
fractured pelvis, deep vein thrombosis, and early on the retail specials were
reported as excess of two fifty. So the initial investigation should have put
Alfa on high alert that this was a bad case, a dangerous case. And ultimately
Ms. Walker accurately described it as a dangerous case. And so when I say
there is an unreasonable failure to investigate and settle, Alfa early on is
starting to develop a picture of a serious, serious accident involving an
older lady, elderly lady; I think she was in her seventies. And we have a
young female who claims she has the red light -- that Alfa's insured had the
red light or right-of-way. There was a statement I read in there from Robby
Elrod where Ms. Murphree says in the statement, if I recall, I guess we can
look at it, that she observed Ms. Cameron before the collision. That should
have given Alfa, Mr. Elrod and Mr. Lyon a strong sense that this is a bad
case, this is a dangerous case. And later that was characterized appropriately
by Ms. Walker.

43

The briefs set out these arguments, and their responses, in a confusing manner. For
example, Leo’s argument in response to whether there is evidence to support this claim appears in
document 123 at 20-22, and his response to whether a claim exists for negligent failure to
investigate appears in document 123 at 23.
86

So they should have been on high alert early on that this was a bad
case. And it took some several months, if not a year or two -- I think the
accident happened January 25th. They know pretty -- Alfa knows pretty
quickly that this is a bad injury, disputed liability. Ultimately the lawsuit
was filed on April 1st, and there was a moderate reserve placed on the file.
So I criticize Alfa for not putting a policy limits reserve on it immediately,
because the facts as they are uncovering them suggest this is a bad case, and
it ultimately turned out to be a bad case.
(Doc. 115-1 at 10(40)-11(41)).44 Leo states that Gilmore’s opinions establish “that a
verdict in excess of the policy limits was probable.” (Doc. 123 at 21-22).
The cited testimony fails to set out an applicable standard of care at all. All it does
it establish that Alfa had enough information to know “this is a bad case.”

Certainly,

Gilmore is correct that Alfa had enough information to know that there could be a
judgment in excess of policy limits if Murphree lost on liability.

Nothing about

Gilmore’s testimony suggests that such a result was likely, or that, even if it was likely,
that failing to settle would be a breach of some, unmentioned, applicable standard of care.
To the extent that Counts Two and Three are based upon the negligent failure to
investigate the underlying claim/case, summary judgment is appropriate.45

44

Leo also cites to opinions from Gilmore’s report, which, as noted above, will be stricken
and not considered. However, the court has reviewed the two short quotes cited from the report on
this issue. (See doc. 123 at 20, 21). The court concludes that, even if these opinions were
considered, they fail to provide any support for Leo’s claims. The quotes vaguely reference
“conduct,” and the fact that Alfa had “enough discovery and information,” without providing
specifics. Neither quote states exactly what the standard of care is. The information in the quotes
provides nothing that would assist the trier of fact.
45

In its reply brief, Alfa argues generally that “Leo has not offered any evidence of bad faith
or negligence by Alfa.” (Doc. 130 at 14; see also doc. 130 at 14-15). Except in the specific cases
87

3.

Count Four – Suppression

Count Four of the Second Amended complaint sets out several facts which were
known by Alfa, but allegedly “suppressed” from Murohree, both before and after the trial
of the Underlying Action. Alfa argues, in part, that there is no factual support for this
claim. (Doc. 104 at 39).
In response, Leo fails to cite to any evidence supporting this claim, stating only:
The elements of Plaintiff’s suppression claim are: “(1) [that Alfa]
had a duty to disclose an existing material fact; (2) [that Alfa] concealed or
suppressed that material fact; (3) [that Alfa’s] suppression induced
[Murphree] to act or refrain from acting; and (4) [that Murphree] suffered
actual damage as a proximate result.” Crestview Meml. Funeral Home, Inc.
v. Gilmer, 79 So. 3d 585, 590 (Ala. 2011)(quoting Coilplus–Alabama, Inc.
v. Vann, 53 So.3d 898, 909 (Ala.2010)).
Plaintiff alleges that Alfa was duty-bound to disclose but
intentionally, negligently, wantonly, and/or recklessly suppressed the
following facts: (i) the need to seek personal counsel, (ii) the considerable
risk as a result of the failure to timely offer policy limits by Alfa, (iii) the

previously set out in the body of this opinion, this argument was not made in Alfa’s initial brief. “As
a general rule, federal courts do not consider arguments that are presented for the first time in a
reply brief.” Rindfleisch v. Gentiva Health Servs., Inc., 22 F. Supp. 3d 1295, 1301 (N.D. Ga.
2014) (citing Herring v. Sec'y, Dep't of Corrections, 397 F.3d 1338, 1342 (11th Cir.2005) (“As
we repeatedly have admonished, arguments raised for the first time in a reply brief are not properly
before a reviewing court.”) (internal quotation marks, alterations, and citation omitted). That rule is
particularly applicable on summary judgment where the burden is on Alfa to show that there is an
absence of evidence to support the non-movant's case on the particular issue at hand. Fitzpatrick, 2
F.3d at 1116. Only after such a showing is made must the non-movant rebut by either (1) showing
that the record in fact contains supporting evidence sufficient to withstand a directed verdict motion,
or (2) proffering evidence sufficient to withstand a directed verdict motion at trial based on the
alleged evidentiary deficiency. Id. at 1116-17. When allegations of lack of evidence to support a
claim are made for the first time in a reply brief, the non-movant does not have an opportunity to
rebut them. The court will not consider Alfa’s argument on this point.
88

repeated and constant policy limit demands being made by Cameron’s
lawyers, (iv) Walker’s failure and/or refusal to make demand upon Alfa to
pay the policy limits, (v) the existence of viable legal claims against Alfa
as it pertains to its handling of the underlying legal claim by Cameron and
the need to speak to personal counsel about the possibility of bringing legal
claims against Alfa, (vi) the negative effect on Murphree of filing
bankruptcy and how such a filing would advantage Alfa, and (vii) the legal
rights being surrendered by signing the COVENANT NOT TO SUE.
(Doc. 123 at 24). This is nothing more than a mere recitation of the elements of a claim
for suppression, along with a conclusory statement of the plaintiff’s claim.

Leo has

failed to meet his burden to set forth evidence of specific facts. Lewis, 518 U.S. at 358.
Summary judgment will be granted as to Count Four.46
4.

Count Five – Conspiracy

Alfa argues that the conspiracy claims in Count Five should be dismissed because
summary judgment is due on the underlying claims, or “wrongful acts.” (Doc. 104 at 42;
see also, doc. 104 at 26 (“The . . . claim for conspiracy . . . fail[s] because [it is]
contingent on the viability of other causes of action.”)).

In Alabama, if “the underlying

cause of action is not viable, the conspiracy claim must also fail.” Thompson Properties
119 AA 370, Ltd. v. Birmingham Hide & Tallow Co., 897 So. 2d 248, 267 (Ala. 2004).
Because Counts Two and Three will survive to some extent, and given the limited nature
of Alfa’s argument regarding this claim, the conspiracy claim will also survive summary

46

Alfa also argues that Leo cannot prove damages resulting from any alleged suppression.
(Doc. 104 at 39-40). Leo completely fails to respond to this argument. For this reason as well, the
motion for summary judgment will be granted as to this suppression claim.
89

judgment.
5.

Damages

Alfa first argues that, due to Murphree’s death, there is no evidence of mental
anguish arising from the events described in the complaint.

(Doc. 104 at 44-45).

In

response, Leo cites to the statements of Murphree’s mother, Burgess, in which Burgess
addresses Murphree’s mood and the causes for that mood. As noted above, this court has
stricken all such statements by Burgess, except the general statements that, during this
time, Murphree was “agitated,” “stressed,” “worried,” “concerned, “disappointed,” and had
her spirits “dampened.”

Without evidence linking those feelings to the conduct in the

complaint, there is no evidence supporting the mental anguish claim against Alfa.
Accordingly, summary judgment will be granted as to that claim.
Further, as noted by Alfa, Leo cites no authority that he can legally obtain
attorney’s fees in this matter.

(Doc. 104 at 45).

Leo also fails to respond to this

argument. The attorneys’ fees claim will be dismissed.
Lastly, Alfa argues that Leo has “failed to account for Alfa’s post-trial payment of
the policy limits of $100,000.” (Doc. 104 at 45). Alfa contends that, to the extent it is
found to be liable, the correct calculation is the difference between the $260,000
judgment, and what is says it has already paid, $100,000.

Leo’s response to this

argument confusingly discusses where the limits check was sent and an alleged

90

conspiracy to delay the sending of same. However, he does not seem to dispute that Alfa
would be entitled to a credit as to any amount they actually paid. Regardless, the Second
Amended Complaint seeks a sum “to be determined by a jury, which will fairly and
adequately compensation the [p]laintiff for injuries and damages sustained.”

(Doc. 96

at 55). The trier of fact can take into account any applicable credits at the appropriate
time. Summary judgment will be denied as to this claim.47
6.

Count Six – The Malpractice Claim against Walker

Because of the nature of the attack made in Walker’s motion for summary
judgment, it is important to note the exact bases for this count. In several pages of his
Second Amended Complaint, Leo alleges that Walker is liable under Ala. Code § 6-5570, et seq., because she “negligently, carelessly, recklessly, and/or wantonly breached
acceptable standards of practice in providing legal services” by engaging in 19 different
acts before the verdict in the underlying case. (Doc. 96 at 46-49). Specifically, that she:
(a) Choose [sic] to place the interest of ALFA and WALKER’s own
financial interest ahead of the interests of her client, MURPHREE[;]
(b) Choose [sic] to align herself with ALFA and against the best interests
of her client MURPHREE as evidenced by her statement that “we” [that is
WALKER and ALFA] have many defenses” to MURPHREE’s potential
negligent failure to settle action[;]

47

Alfa, in passing, in the introduction to its argument regarding damages, states that Leo
cannot recover damages for “injured credit.” (Doc. 104 at 44). The court will not consider this
underdeveloped argument.
91

(c) Failed to fairly and objectively evaluate the case against MURPHREE[;]
(d) Failed to recommend to ALFA that ALFA pay its policy limits or at
least make some effort to settle the case against its insured MURPHREE[;]
(e) Failed recommend to MURPHREE that MURPHREE request that
ALFA settle the case[;]
(f) Failed to provide ALFA with a thoroughly realistic, objective and honest
assessment of Cameron’s claims against MURPHREE[;]
(g) Failed to provide MURPHREE with a thoroughly realistic, objective
and honest assessment of Cameron’s claims against MURPHREE[;]
(h) Failed to properly and adequately advise MURPHREE of the need (not
just the right) to seek personal counsel;
(i) Failed to properly advise and counsel MURPHREE concerning the facts
and law of the Cameron v. Murphree case[;]
(j) Failed to properly advise and counsel MURPHREE regarding the
likelihood of successfully defending the Cameron v. Murphree case[;]
(k) Failed to properly advise and counsel MURPHREE regarding her
potential monetary exposure in the Cameron v. Murphree case[;]
(l) Failed to properly advise and counsel MURPHREE regarding the risks
and benefits to MURPHREE of ALFA either settling case or proceeding
to trial[;]
(m) Failed to properly and clearly advise MURPHREE of WALKER and
ALFA’s conflicts of interest with MURPHREE both once a policy limits
demand was made, and once the excess verdict was rendered[;]
(n) Failed to accurately and timely apprise MURPHREE of ALFA's refusal
to tender or offer the applicable policy limits in the underlying action;
(o) Failed to properly and timely advise MURPHREE of the repeated and
92

constant policy limit demands being made by Willow Joe Cameron’s
lawyers and their willingness to fully and finally release MURPHREE in
exchange for a payment of ALFA’s policy limits;
(p) Conditioned any settlement negotiations with Cameron’s counsel on the
condition that Cameron’s counsel enter into said negotiations with the
understanding that the case was one of “disputed liability.” That is, it would
have to be negotiated within policy limits. Such a stance again placed the
interest of ALFA (who only had its policy limits to loose) ahead of
WALKER’s own client MURPHREE (who could be financially crushed by
even a relatively modest excess judgment)[;]
(q) Assumed and accordingly advised her client MURPHREE that
Cameron’s counsel were “just blowing smoke” with regard to their stated
intention to collect any excess judgment from MURPHREE should ALFA
not settle the case. Said advice was either intentionally misleading or a
gross and abject failure to comprehend the situation at hand. Even cursory
investigation or research would reveal that Plaintiffs do not as was
WALKER’s claimed experience “always accept policy limits[;]”
(r) Instructed MURPHREE to testify inconsistently with
statements and/or sworn testimony at the trial of this matter; [and]

previous

(s) Failed to reassess her own recommendations regarding settlement both
before and after trial[;]
(Doc. 96 at 46-49) (capitalization in original) (original bold omitted).
The Second Amended Complaint also alleges that, after the jury verdict, Walker
“negligently provided legal services in that she negligently, willfully, and/or wantonly
breached the accepted standards of practice,” in 17 different ways.

(Doc. 96 at 49).

Specifically, Leo states that Walker:
(a) Choose to align herself with ALFA and against the best interests of her
client MURPHREE as evidenced by her statement that “we” [that is
93

WALKER and ALFA] have many defenses” to MURPHREE’s potential
negligent failure to settle action[;]
(b) Chose to avoid any direct contact with her client MURPHREE after the
verdict and instead sent her newly licensed associate and daughter who
WALKER knew or should have known was unable to properly advise
MURPHREE concerning her post verdict options[;]
(c) Failed to ensure that her associate and daughter, WAGNER, knew
MURPHREE’s post-verdict options before sending her to deal with the
MURPHREE by herself[;]
(d) Failed to advise MURPHREE, or otherwise make sure MURPHREE
was advised, of her existing legal claims against ALFA for its handling of
the underlying claim by Cameron;
(e) Chose to affirmatively suppress and hide
MURPHREE’s potential causes of action against ALFA[;]

the

existence

of

(f) Failed to recommend that MURPHREE speak to outside or personal
counsel about the possibility of bringing legal claims against ALFA, and
that there were very significant conflicts of interest between MURPHREE
and ALFA as well as MURPHREE and WALKER;
(g) Failed to recommend ALFA act in the best interest of her client
post-verdict and pay the entire judgment or supersede the same on appeal[;]
(h) Recommended bankruptcy to dispose of Cameron’s judgment;
(i) Drafted and procured execution of the COVENANT NOT TO SUE
contract/release that was to the detriment of her client, MURPHREE, and
to the benefit of WALKER and ALFA;
(j) Exerted improper control over MURPHREE by utilizing her influence
as legal counsel while MURPHREE was incarcerated and engaged in
self-dealing to advantage herself and ALFA;
(k) Failed to advise MURPHREE as to her options other than filing
94

bankruptcy in the post-verdict aftermath time period;
(l) Improperly conspired and worked with ALFA in order to procure
$1200.00 in order to pay for the bankruptcy filing fee and lawyer so that
ALFA could avoid an excess judgment situation and lawsuit;
(m) Improperly procured a release of liability for herself and ALFA to the
detriment of her client MURPHREE;
(n) Improperly drafted the subject COVENANT NOT TO SUE in an attempt
to defraud the United States Bankruptcy Court and/or deprive the
Bankruptcy Court and/or trustee of MURPHREE’S testimony as to the
terms and conditions of the bankruptcy;
(o) Failed to seek or discuss legal options of Motions For New Trial or
Appeal with her client MURPHREE;
(p) Failed to disclose to MURPHREE how the bankruptcy filing advantaged
ALFA who was paying WALKER’s bill, in Cameron v. Murphree and many
other cases both before and since; [and]
(q) Failed to make a demand on ALFA to pay the excess verdict[.]
(Doc. 96 at 50-52) (capitalization in original) (original bold omitted).
It is important that the court set out all of the bases for this claim, because not all
of them are attacked by Walker. The court will address only those which are. Summary
judgment will be summarily denied as to the unaddressed bases for this claim.

95

a.

The Covenant Not To Sue 48

Walker argues that there are no damages which arise out of her drafting and
Murphree’s execution of the Covenant Not To Sue. (Doc. 107 at 23). Although Walker
is not clear which portion of Count Six is attacked, this argument can only apply to
paragraph 159(i) of Count Six of the Second Amended Complaint which alleges
malpractice in that Walker “[d]rafted and procured execution of the COVENANT NOT
TO SUE contract/release that was to the detriment of her client, MURPHREE, and to the
benefit of WALKER and ALFA.” (Doc. 96 at 51). Leo responds that
if the Court finds that the release is avoidable, the breach of the standard of
care still remains as to the drafting and attempted procurement of release
of potential claims. The corresponding damage from that breach is that
Murphree was forced into an unnecessary bankruptcy . . . with all the
attendant future financial problems[.]49
(Doc. 122 at 27).
Leo’s argument is untenable.

Murphree was not “forced” into bankruptcy as a

48

Walker’s argument regarding whether this is a fraudulent transfer (doc. 107 at 22), has
already been addressed by the court. The court cannot see how the Covenant Not To Sue could
operate to release any claims against Walker, since there is no evidence in the file of any
consideration from Walker for Murphree's execution of the Covenant Not To Sue. Further,
Murphree was then only 19 or 20 years old, and she was in jail on drug charges — she was clearly
unable to consult another lawyer before signing the Covenant Not To Sue. However, although the
plaintiff alleges malpractice based in part on these reasons, the plaintiff did not assert these reasons
in defending its fraudulent transfer claims. Nonetheless, for the reasons set out at Section IV.C.1.
supra, the court has already found that those claims survive summary judgment.
49

In his brief, Leo notes that the phrase “with all the attendant future financial problems,”
comes from the expert report submitted by another of Leo’s experts, Tom Burgess. (Doc. 144-1 at
44).
96

result of the preparation or signing of the release.

Wagner discussed bankruptcy with

Murphree on the day of the verdict. (Doc. 110-1 at 8(26)). Before the covenant was
drafted, Murphree told Wagner that she wished to pursue bankruptcy, but expressed
concerns about whether Murphree could afford to do so.

The covenant came later.

“Negligence alone does not afford a cause of action. Liability will be imposed only when
negligence is the proximate cause of injury.” City of Mobile v. Largay, 346 So. 2d 393,
395 (Ala. 1977). Summary judgment will be granted as Count Six, to the extent that that
count is based upon Walker’s “[d]raft[ing] and procur[ing] execution of the COVENANT
NOT TO SUE contract/release that was to the detriment of her client, MURPHREE, and
to the benefit of WALKER and ALFA.”
b.

The Preparation and Trial of the Case

Walker next moves for summary judgment to the extent that the malpractice claim
is addressed to her conduct in preparing for and trying the underlying case. (Doc. 107
at 24-27). None of the conduct described in the Second Amended Complaint appears
directed to such conduct. Regardless, Leo states that “Walker is correct in the sense that
[p]laintiff does not necessarily criticize Walker’s technical skill as a litigator or her
advocacy in the Courtroom. In fact, [p]laintiff asserts that Walker did an excellent job
holding down a verdict which she and Alfa knew could have been significantly worse.”
(Doc. 122 at 28).

Accordingly, to the extent that Count Six can be read as claiming

97

malpractice claims based on the preparation and manner of trial of the Underlying
Action, summary judgment is appropriate and will be granted.
c.

Whether Walker Had a Duty To Recommend to
Murphree that Murphree Request that Alfa Settle the
Case for Policy Limits

Alfa next argues that
Many of the Plaintiff Leo's allegations against Defendant Walker are
centered on Leo's misplaced belief that Defendant Walker should have
convinced Murphree to ask Alfa to accept the policy limits settlement
demand.
(Doc. 107 at 27). As noted above, there are actually many more grounds for Leo’s claim.
Accordingly, the court will consider this argument to be attacking only the grounds stated
in paragraph 158(e) of the Second Amended Complaint, which states that Walker “[f]ailed
to recommend to MURPHREE that MURPHREE request that ALFA settle the case.”
(Doc. 96 at 46). Walker argues that she had no duty to advise Murphree to demand that
Alfa settle “because Alfa had complete discretion with regard to whether to settle the
case, or not.” (Doc. 107 at 28).
It is undisputed that the policy language of the policy which covered Murphree
states, inter alia, “[w]e [Alfa] will settle or defend lawsuits . . .as we consider
appropriate,” and “[w]e have the right the investigate, negotiate and settle any claim or
suit.” (Doc. 123 at 14 (quoting doc. 66-1 at 3)). Leo, in responding to Alfa’s motion for
summary judgment, admits that this language gives “Alfa, and only Alfa, sole authority
98

to settle or not settle the underlying action as it saw fit.”

(Doc. 123 at 14).

See,

Blackburn v. State Farm Auto. Ins. Co., 652 So. 2d 1140, 1142 (Ala. 1994) (noting that
such provisions give the insurer “the exclusive right to make a settlement of any claim
brought against its insured, within the limits of the policy.”) (internal quotations and
citations omitted); Bibb Allen, Allen’s Alabama Liability Insurance Handbook § 13.18
(2nd ed. 2008). (“the insurer has the exclusive control of the claim against its insured;”
“[t]he right [of settlement] is reserved for the insurer’s personnel to determine not only
the amount of any settlement, but the manner to negotiate, if at all, with an insured’s
attorney;” and “by the terms of the insurance contract, an insurer may do as it likes, as far
as settlement is concerned.”). One of Walker’s experts, Tom Woodall, testified that
the insurance company's obligation is not affected one way or another by
a demand or a request by the insured or by the insured's attorney.
The notion that they ought to demand or request something has no
effect on the insurance company's obligation to evaluate the case and
decide what they want to do.
(Doc. 119-1 at 15(57)).

Woodall agrees that the standard of care applicable to an

attorney would not require them to recommend settlement.

He explained that “the

responsibility of the attorneys is to honestly evaluate the case and provide the
information to the insurer. And the real issue is the sufficiency of the information
provided by the attorney to the insurance company[.]” (Doc. 119-1 at 15(60)).

Leo’s

expert, Ivey Gilmore, agrees with this position, stating that Murphree's desire to try the
99

case does not matter, because Alfa had the power to settle the case “whether their insured
like[d] it or not.” (Doc. 115-1 at 21(83)).

Alfa’s corporate representative, Wade

Simpson, also stated in his deposition that Alfa had the right to, and could, settle a lawsuit
over the advice of counsel. (Doc. 112-1 at 24(91-92)).50
As noted, Leo “agrees with Walker that the sole authority to settle the case lies
with Alfa.”

(Doc. 122 at 35). However, Leo insists that “Walker’s argument ignores the

fact that the standard of care nevertheless required Walker to recommend to Murphree
that she demand Alfa to settle the case regardless of whether Alfa controlled settlement.”
(Doc. 122 at 35). Unfortunately, Leo cites no expert opinion or law for the proposition
that Walker had to recommend to Murphree that the case be settled.
Leo cites the testimony of his expert, Tom Burgess, where Burgess stated “Ms.
Walker didn't do that. She never did it,” as evidence that Walker had a duty to advise
Murphree to settle. (Doc. 122 at 35 (quoting doc. 114-1 at 20(78)). When the context
of the testimony is analyzed, it is clear that Leo misconstrues that testimony. The full
testimony, at the portion which includes these phrases, reads:
In my opinion, Ms. Walker breached the . . . standard time after time
after time. The core breach was a failure to do her duty first to Ashley . . .
to make sure she fully and totally [was] informed that, number one, there
is an opportunity and has been several to settle within the limits; and,

50

Woodall opined that the information Walker gave Alfa “was sufficient and that Alfa had
everything that it needed to make its own determination as to whether the case ought to be settled
or not.” (Doc. 107 at 29).
100

number two, the true consequences, and I'm not talking about necessarily
getting deep into what bankruptcy is all about, but the true consequences of
what she may face if the case were not settled. And Ms. Walker didn't do
that. She never did it.
(Doc. 114-1 at 20(78)). This testimony does not stand for the proposition that the
standard of care “required Walker to recommend to Murphree that she demand Alfa to
settle the case.”
Leo next points out that Burgess agreed in his deposition that there was
“absolutely nothing,” “that kept Ms. Walker from recommending Alfa settle the case even
if Murphree didn't want it settled.” (Doc. 122 at 35 (quoting doc. 114-1 at 21(83-84))).
This language also does not establish a duty on the part of Walker to tell anyone that the
case should be settled–just that Walker was not prevented from doing so.
Finally, Leo cites Burgess’s testimony that “Alfa didn’t need Walker to tell them
[to settle the case], but she should have been telling them.” (Doc. 122 at 36 (quoting
114-1 at 22(86)) (emphasis added)). This testimony does not set out that Walker had a
duty to advise Murphree of anything.

In the absence of an expert opinion that the

standard of care required Walker to advise Murphree that she should demand that Alfa
settle the case, summary judgment is appropriate as to this aspect of Count Six.
51

51, 52, 53

In her reply brief, Walker quotes the following testimony from Burgess’s deposition, as
evidence that Burgess agrees that Walker had no duty to tell Alfa to settle:
The industry standard is that Alfa should have settled this case when its defense
attorney for its insured was telling it that this case has a substantial exposure well
above the -- well above the limits and there is a good chance that a jury will find
101

liability, and [Walker] didn't need to say any more.
(Doc. 114-1 at 17(66)). A reasonable jury could conclude that Burgess was only explaining Alfa’s
duty, not Walker’s. In other words, a reasonable jury could determine that Burgess was merely
opining that Alfa had a duty to settle based on the undisputed evidence of what Walker actually told
it, not that what Walker said was all that Walker needed to say. Walker also cites Ivey Gilmore’s
statements that “the insurance company has exclusive right to do whatever it pleases, and whether
the insured wants it settled or doesn't want it settled, it doesn't matter.” (Doc. 127 at 6 (quoting
115-1 at 21(83-84))). Again, Gilmore was speaking to Alfa’s duty, not Walker’s.
52

Walker sums up her argument on this point with the following:

The undersigned maintains the evidence and testimony all shows Defendant
Walker honestly and objectively assessed and advised Murphree relative to the case
against Murphree. Nevertheless, the ultimate issue is what the standard of care for a
lawyer required of Defendant Walker, relative to the settlement demands; and in this
context, it is erroneous to focus on whether or not Defendant Walker could have (or
should have) done more to change Murphree's mind about settlement. Instead,
where Alfa had the exclusive right to pay the policy limits to settle, or not, the
relevant question is whether or not Defendant Walker provided sufficient
information to Alfa so that Alfa could make an informed decision. The facts stated
hereinabove, and the discussion immediately following, shows Defendant Walker
fulfilled that duty, and therefore met the standard of care.
(Doc. 107 at 30-31). The court treats this argument as applying only to whether Walker had to
advise Murphree to settle, and addressing the facts applicable to the standard, as enunciated by
Woodall. The court does not treat is as a general attack on the sufficiency of the evidence as to all
grounds asserted in Count Six.
53

In her reply brief, Walker argues at length that, even if there is a duty to recommend
settlement, “the lack of a recommendation to settle had no causative effect on the outcome of the
underlying lawsuit.” (Doc. 127 at 7; see also doc. 127 at 7-11). This argument was not raised in
her initial brief. “As a general rule, federal courts do not consider arguments that are presented for
the first time in a reply brief.” Rindfleisch v. Gentiva Health Servs., Inc., 22 F. Supp. 3d 1295,
1301 (N.D. Ga. 2014) (citing Herring v. Sec'y, Dep't of Corrections, 397 F.3d 1338, 1342 (11th
Cir.2005) (“As we repeatedly have admonished, arguments raised for the first time in a reply brief
are not properly before a reviewing court.”) (internal quotation marks, alterations, and citation
omitted). That rule is particularly applicable on summary judgment where the burden is on Walker
to show that there is an absence of evidence to support the non-movant's case on the particular
issue at hand. Fitzpatrick, 2 F.3d at 1116. Only after such a showing is made must the non-movant
rebut by either (1) showing that the record in fact contains supporting evidence sufficient to
102

d.

Whether Walker adequately Advised Alfa of All the
Information It Needed in order To Make a Decision To
Settle

Walker’s brief also states that “[a]ll of the evidence shows [that] Walker
adequately advised and informed ALFA of all information ALFA needed in order to make
a decision to settle the case.” (Doc. 107 at 31; see also doc. 107 at 31-34). She ends
this section of her brief by stating:
The undisputed evidence therefore clearly refutes each and every
one of the Plaintiff's claim [sic] malpractice, relative to allegations
concerning Defendant Walker providing an adequate, honest and objective
assessments of the case, sufficient for Alfa to make an informed decision
with respect to trial and settlement.
To the extent Plaintiff Leo's claims for malpractice are premised on
legal services related to the assessment of the lawsuit and decisions
whether or not to settle that case, those claims are due be dismissed with
prejudice.
(Doc. 107 at 33-34)(emphasis supplied).

Again, Walker is not specific as to which bases

for the malpractice claim she is attacking. However, these arguments could be fairly read
to be directed only to Walker’s interactions with Alfa, and appear only to attack the
plaintiff’s allegations that Walker:
(c) Failed to fairly and objectively evaluate the case against

withstand a directed verdict motion, or (2) proffering evidence sufficient to withstand a directed
verdict motion at trial based on the alleged evidentiary deficiency. Id. at 1116-17. When allegations
of lack of evidence to support a claim are made for the first time in a reply brief, the non-movant
does not have an opportunity to rebut them. The court will not consider Walker’s argument on this
point.
103

MURPHREE [in her interactions with ALFA].
(d) Failed to recommend to ALFA that ALFA pay its policy limits or
at least make some effort to settle the case against its insured
MURPHREE.
***
(f) Failed to provide ALFA with a thoroughly realistic, objective and
honest assessment of the Cameron's claims against MURPHREE.
***
(s) Failed to reassess her
settlement both before and after trial.

own

recommendations

(Doc. 96 at 46-49) (capitalization in original) (original bold omitted).

regarding

The court will

deem the plaintiff to have been put on notice that he was required to present any evidence
that he had in response to these specific claims.
Leo argues that “Walker breached the standard of care by failing to fairly and
objectively evaluate the case and failing to provide a thoroughly realistic, objective and
honest assessment of the claims to Murphree or Alfa.” (Doc. 122 at 32; see also doc.
122 at 32-34). The only fact the plaintiff cites as evidence of these claims is the March
30, 2012, letter from Walker to Alfa, where Walker stated that Cameron’s attorneys
were just “blowing smoke.” (Doc. 122 at 32).54

54

However, “generally a plaintiff alleging

Leo cites as evidence of this breach that

Walker knew from very early on in the litigation that Cameron had extensive
medical bills exceeding $250,000, that there were at least two witnesses not in her
104

a legal-malpractice claim must prove that claim through expert testimony.”

Wachovia

Bank , N.A. v. Jones, Morrison & Womack, P.C., 42 So. 3d 667, 679 (Ala. 2009), as
modified on denial of reh'g (Jan. 22, 2010) (citing Tonsmeire v. AmSouth Bank, 659
So.2d 601, 605 (Ala.1995) and Ala.Code 1975, § 6–5–580).55 The plaintiff provides no
expert opinion which states that this characterization breached any applicable standard
of care.
Next, the plaintiff argues that Walker “continually evaluated the case based on one
favorable witness that originally changed her story.”

(Doc. 122 at 33).56 First, the

plaintiff cites no evidence in support of this claim, or which explains what he means when
he says that Walker “continually evaluated” the claim–i.e. was that the only factor she
considered, how often did she reevaluate, etc.

Second, even if the plaintiff had been

favor, the one witness that was in her favor had changed her story, and that
Murphree had stated she saw Cameron’s vehicle at the intersection way before she
got there. Cameron’s attorneys provided numerous opportunities to settle within
policy limits and Walker minimized the seriousness of the demands by characterizing
them as “blowing smoke.”
(Doc. 122 at 32). The only conduct of Walker described in this paragraph is the characterization in
the letter that Cameron’s attorneys were just “blowing smoke.” The same letter was sent to
Murphree as well.
55

“[A]n exception to the general requirement that a plaintiff present expert testimony in
support of a legal-malpractice claim occurs where a legal-service provider's want of skill or lack of
care is so apparent as to be understood by a layperson and requires only common knowledge and
experience to understand it.” Wachovia Bank, N.A., 42 So. 3d at 681. Leo does not alleges that
this exception applies.
56

Although Leo does not specifically so state, the court gives him the benefit of the doubt in
construing this statement to mean “continually evaluated in her discussions with Alfa.”
105

more specific, he cites no expert opinion explaining how this vaguely described conduct
amounts to a breach of some standard of care. Regardless, the evidence is overwhelming
that Walker evaluated the merits of the case on several occasions, based on a number of
factors. She even, at times, described the case as “dangerous,” and stated that Murphree
might lose.
The plaintiff cites Burgess’s opinion that Murphree’s “desire to vindicate herself”
was “[a]bsolutely not” a reasonable justification for Walker not to advise Alfa to settle.
(Doc. 122 at 33). The plaintiff also cites Burgess’s opinion that “Ms. Walker had all of
the information, all of the discovery and all of the evidence and then some to tell her or
for her to assimilate and go to Ashley [Murphree] and go to Alfa and get this case settled.
She had plenty. She had more than enough, and she didn't do it.” (Doc. 122 at 34) (quoting
doc. 114-1 at 22(85)). This evidence relates to the failure by Walker to recommend to
Alfa, directly, that it settle the case. As noted above, Burgess testified that “Alfa didn’t
need Walker to tell them [to settle the case], but she should have been telling them.”
(Doc. 122 at 36 (quoting 114-1 at 22(86)) (emphasis added)). Based upon Burgess’s
opinion that there was such a duty, with respect to Walker’s communications with Alfa,
summary judgment will be denied as to this claim contained in Count Six.
In the absence of any other evidence of how Walker breached a standard of care
in her dealings with Alfa, summary judgment will be granted to the extent that Count Six

106

is based on the fact that Walker allegedly
(c) Failed to fairly and objectively evaluate the case against
MURPHREE [in her interactions with ALFA].
***
(f) Failed to provide ALFA with a thoroughly realistic, objective and
honest assessment of the Cameron's claims against MURPHREE.
***
(s) Failed to reassess her
settlement both before and after trial.

own

recommendations

regarding

(Doc. 96 at 46-49) (capitalization in original) (original bold omitted).57 Summary
judgment will be denied to the extent that it is based on the fact that Walker allegedly
“[f]ailed to recommend to ALFA that ALFA pay its policy limits or at least make some
effort to settle the case against its insured MURPHREE.”

(Doc. 96 at 46-49)

(capitalization in original) (original bold omitted).
e.

Whe the r Walke r Adequately Advised and Informe d
M urphree of the Risks of Trial, Including the Risks of a
Judgment in Excess of her Policy Limits and the Fact of
the Policy Limits Settlement Demand, and her Rights
including Seeking Advice and Counsel from another
Attorney

Walker contends that the evidence shows that she adequately advised and informed

57

Because the court’s holding is based on the plaintiff’s failure to provide evidence in
support of these claims, the court will not address Walker’s affirmative evidentiary showing that the
evidence demonstrates that summary judgment is due to be granted. (Doc. 107 at 31-34).
107

Murphree of: 1) the risks of trial, including the risks of a judgment in excess of her
policy limits; 2) the fact of the policy limits settlement demand;
including seeking advice and counsel from another attorney.

and 3) her rights

Again, Walker is not

specific as to which bases contained in Count Six she attacks. However, the court deems
this argument to put the plaintiff on notice that he needed to produce evidence in support
of his claims that Walker breached the standard of care when she allegedly:
(c) Failed to fairly and objectively evaluate the case against
MURPHREE [in her dealings with MURPHREE][;]
***
(g) Failed to provide MURPHREE with a thoroughly realistic,
objective and honest assessment of the [sic] Cameron's claims against
MURPHREE[;]
(h) Failed to properly and adequately advise MURPHREE of the
need (not just the right) to seek personal counsel;
(i) Failed to properly advise and counsel MURPHREE concerning
the facts and law of the Cameron v. Murphree case[;]
(j) Failed to properly advise and counsel MURPHREE regarding the
likelihood of successfully defending the Cameron v. Murphree case[;]
(k) Failed to properly advise and counsel MURPHREE regarding her
potential monetary exposure in the Cameron v. Murphree case[;]
(l) Failed to properly advise and counsel MURPHREE regarding the
risks and benefits to MURPHREE of ALFA either settling case or
proceeding to trial[;]
(m) Failed to properly and clearly advise MURPHREE of WALKER
108

and ALFA's conflicts of interest with MURPHREE both once a policy
limits demand was made, and once the excess verdict was rendered[;]
(n) Failed to accurately and timely apprise MURPHREE of ALFA's
refusal to tender or offer the applicable policy limits in the underlying
action; [and]
(o) Failed to properly and timely advise MURPHREE of the repeated
and constant policy limit demands being made by Willow Joe Cameron's
lawyers and their willingness to fully and finally release MURPHREE in
exchange for a payment of ALFA's policy limits[.]
(Doc. 96 at 46-49) (capitalization and italics in original) (original bold omitted).
The plaintiff’s response to these arguments is spread out through several different
parts of his response brief. The court will attempt to locate, and address, each contention
in turn.
To the extent that these contentions are based on the March 30, 2012, “blowing
smoke” letter, a copy of which was sent to Alfa and Murphree, again, the plaintiff
provides no expert opinion which states that this characterization breached any applicable
standard of care.
The plaintiff also notes that Burgess opines, in his expert report, that Walker:
let Murphree make the completely uninformed and/or misinformed
decision to acquiesce in proceeding to trial where Murphree had nothing
to gain and everything to lose; [and] let a nineteen- or twenty-year-old tell
her and tell Alfa, “oh, I want my day in court” and that is “way below the
standard of care.”
(Doc. 122 at 32) (quoting 114-1 at 43). Burgess cites no facts in the quoted material

109

supporting his opinion that Murphree was “completely uninformed and/or misinformed.”
Accordingly, this opinion is unhelpful to the trier of fact in determining whether that was
a breach of any applicable standard of care.

Regardless, the overwhelming and

uncontradicted evidence demonstrates that Murphree was regularly informed, in writing
and in person, by Walker regarding the settlement demands, the limits of her coverage,
the risks of proceeding to trial, and the merits of the underlying case.
The plaintiff also cites Burgess’s testimony that
Ms. Walker should have gotten Ashley [Murphree] in and she should have
sat her down – and here is the way it works, and people who do this know
how it works. You say we have a chance to settle this case. Now, we have
to tell -- me and you, Ashley, we have to tell Alfa to get their hundred
thousand dollars out there, that's what we have got to do, we could lose this
case. Honey, you could get out there and have a judgment against you for
a huge amount for the rest of your life or either you have to go to
bankruptcy. That's what you are facing. No, all of this, I'm not throwing you
under the bus, me and you together are going to go to Alfa, we are going to
say settle this case right now before we take a chance of getting that offer
off the table.
(Doc. 122 at 33) (quoting doc. 114-1 at 20(79-80)).

First, in the portion of the

deposition quoted, Burgess cites to no evidence from which he draws the conclusion that
such a meeting did not occur. For that reason, the opinion is not helpful to the trier of
fact.

Further, the evidence in this case is overwhelming, and uncontradicted, that such

a meeting did occur, several times.
The plaintiff cites the unsworn statement Murphree gave to Alfa after the accident,

110

where she stated that she saw Cameron “way before” the collision, and that she had
“started to slow down,” when she saw Cameron. (Doc. 122 at 33) (citing 103-2 at 55,
17).

The plaintiff argues that “instead of properly advising Murphree regarding the law

[concerning subsequent

negligence], Walker let Murphree make the uninformed

decision to go to trial.” (Doc. 122 at 33). The plaintiff cites no evidence in support of
his claim that Murphree was “uninformed.” Further, he cites no expert testimony which
specifically states that a failure to discuss this theory would be a breach of the standard
of care. Regardless, the evidence is, again, overwhelming and uncontradicted, that Walker
explained the law to Murphree several times, and advised her as to the risks of the case
and discussed applicable legal theories, such as “subsequent negligence,” prior to trial.
The plaintiff also argues that “Walker never properly advised Murphree of the
repeated demands by Cameron’s attorneys to settle for policy limits.” (Doc. 122 at 34).
He cites no evidence in support of this claim. Regardless, when asked in her deposition
if she “ever actually [gave] Ms. Murphree any of Mr. Mann or Mr. Potter's actual demand
letters,” Walker testified: “I think I probably showed them to her whenever we met.”
(Doc. 109-1 at 37(146)).

Further, Walker herself advised Murphree by letter, and in

person, that there had been settlement demands. There is no evidence to the contrary.58,

58

The plaintiff argues that Walker never “properly” advised Murphree of the demands.
(Doc. 122 at 34). He stated that “Walker never explained to Murphree the seriousness of such
demands such that Murphree could make an informed decision.” (Doc. 122 at 34). He also cites
Burgess’s opinion that Walker had a duty
111

59

Because there is a lack of evidence supporting these bases for Count Six, summary

judgment will granted to the extent that Count Six alleges that Walker:
(c) Failed to fairly and objectively evaluate the case against
MURPHREE [in her dealings with MURPHREE][;]
***
(g) Failed to provide MURPHREE with a thoroughly realistic,
objective and honest assessment of the [sic] Cameron's claims against
MURPHREE[;]
(h) Failed to properly and adequately advise MURPHREE of the
need (not just the right) to seek personal counsel;
(i) Failed to properly advise and counsel MURPHREE concerning
the facts and law of the Cameron v. Murphree case[;]
(j) Failed to properly advise and counsel MURPHREE regarding the
likelihood of successfully defending the Cameron v. Murphree case[;]
(k) Failed to properly advise and counsel MURPHREE regarding her
potential monetary exposure in the Cameron v. Murphree case[;]

first . . . to make sure she [was] fully and totally informed that, number one, there is
an opportunity and has been several to settle within the limits; and, number two, the
true consequences, and I'm not talking about necessarily getting deep into what
bankruptcy is all about, but the true consequences of what she may face if the case
were not settled.
(Doc. 122 at 34-35) (quoting doc. 114-1 at 20(78)). Again, the cited deposition testimony contains
no facts upon which this conclusion is based. Further, the evidence is overwhelming that Walker
thoroughly discussed these issues with Murphree.
59

Because the court holds that the plaintiff has failed to present any evidence supporting
these claims, it will not address Walker’s affirmative defense argument that all of the evidence
demonstrates that summary judgment is appropriate on these claims. (Doc. 107 at 34-38).
112

(l) Failed to properly advise and counsel MURPHREE regarding the
risks and benefits to MURPHREE of ALFA either settling case or
proceeding to trial[;]
(m) Failed to properly and clearly advise MURPHREE of WALKER
and ALFA's conflicts of interest with MURPHREE both once a policy
limits demand was made, and once the excess verdict was rendered[;]
(n) Failed to accurately and timely apprise MURPHREE of ALFA's
refusal to tender or offer the applicable policy limits in the underlying
action; [and]
(o) Failed to properly and timely advise MURPHREE of the repeated
and constant policy limit demands being made by Willow Joe Cameron's
lawyers and their willingness to fully and finally release MURPHREE in
exchange for a payment of ALFA's policy limits[.]
(Doc. 96 at 46-49).
f.

The Truthfulness
Murphree

of

Walker’s

Representations

to

Walker argues that there is no evidence that she “ever conspired to deceive,
suppress material facts, and/or defraud Murphree.” (Doc. 107 at 41; see also doc. 107
at 41-42). Further, Walker argues that “the extensive correspondence and testimony . .
. shows by overwhelming evidence that everything Walker . . . did was in Murphree’s best
interest.” (Doc. 107 at 41). These generalized arguments, which could fairly be applied
to any of the bases for Count Six, are not expanded upon in any real way. Accordingly,
the court will not consider this underdeveloped argument.

113

g.

Damages

As noted above, there is no admissible evidence of mental and emotional distress
damages. Those claims, as against Walker, will be dismissed. Also as noted above in its
discussion of the damages vis a vis Alfa, any credits as against the total amount of a
judgment to be awarded, if any, can be taken into account by the trier of fact.
V.

CONCLUSION
For the reasons stated herein, it is hereby ORDERED, ADJUDGED, and

DECREED as follows:
1.

Alfa and Walker’s Motions to Strike portions of the affidavit of Michelle Burgess
(docs. 125 and 131) are GRANTED in part and DENIED in part as noted.

2.

Alfa’s Motion to Strike the testimony of Ivey Gilmore (doc. 128) is GRANTED
in part and DENIED in part as noted.

3.

Alfa’s Motion to Strike the plaintiff’s non-compliant portions of his response to
Alfa’s Motion for Summary Judgment (doc. 129) is DENIED.

4.

Alfa and Walker’s Motions for Summary Judgment (doc. 103 and 105) are
GRANTED in part and DENIED in part. More specifically, Summary Judgment
is GRANTED in favor of the defendants and against the plaintiff as to:
A.

Counts Two and Three, only to the extent that they are based on Alfa’s
alleged negligent failure to investigate;

114

B.

Count Four in its entirety;

C.

Count Six, to the extent that that claim is based on:
i.

The allegation in paragraph 159(i) of Count Six of the Second
Amended Complaint which states that Walker “[d]rafted and
procured

execution

of

contract/release that

was

the COVENANT NOT TO
to

the

detriment

of

SUE

her client,

MURPHREE, and to the benefit of WALKER and ALFA.” (Doc. 96
at 51);
ii.

Any allegation of malpractice in preparation for, and manner of trial
of, the Underlying Action;

iii.

The allegation in paragraph 158(e) of the

Second Amended

Complaint, which states that Walker "[f]ailed to recommend to
MURPHREE that MURPHREE request that ALFA settle the case."
(Doc. 96 at 46);
iv.

The allegation in paragraph 158(c)

of the Second Amended

Complaint, which states that Walker “failed to fairly and objectively
evaluate the case against MURPHREE [in her interactions with
ALFA]. (Doc. 96 at 47);
v.

The allegation in paragraph 158(f)

115

of the Second Amended

Complaint, which states that Walker “failed to provide ALFA with a
thoroughly realistic,

objective and honest assessment of the

Cameron's claims against MURPHREE.” (Doc. 96 at 47);
vi.

The

allegation in paragraph 158(s) of the Second Amended

Complaint, which states that Walker “failed to reassess her own
recommendations [to Alfa] regarding settlement both before and
after trial. (Doc. 96 at 46-49);
vii.

The allegation in paragraph 158(c)

of the

Second Amended

Complaint, which states that Walker “failed to fairly and objectively
evaluate the case against MURPHREE [in her dealings with
MURPHREE].” (Doc. 96 at 47);
viii.

The allegation in paragraph 158(g) of the Second Amended
Complaint, which states that

Walker

“[f]ailed

to

provide

MURPHREE with a thoroughly realistic, objective and honest
assessment of the [sic] Cameron's claims against MURPHREE.”
(Doc. 96 at 47);
ix.

The allegation in paragraph 158(h) of the Second Amended
Complaint, which states that Walker “f]ailed to properly and
adequately advise MURPHREE of the need (not just the right) to

116

seek personal counsel.” (Doc. 96 at 47);
x.

The allegation

in

paragraph 158(i) of the Second Amended

Complaint, which states that Walker “[f]ailed to properly advise and
counsel MURPHREE concerning the facts and law of the Cameron
v. Murphree case.” (Doc. 96 at 47);
xi.

The allegation in paragraph 158(j) of the Second Amended
Complaint, which states that Walker “[f]ailed to properly advise and
counsel MURPHREE regarding the likelihood

of

successfully

defending the Cameron v. Murphree case.” (Doc. 96 at 47);
xii.

The

allegation in paragraph 158(k) of the Second Amended

Complaint, which states that Walker “[f]ailed to properly advise and
counsel MURPHREE regarding her potential monetary exposure in
the Cameron v. Murphree case.” (Doc. 96 at 48);
xiii.

The allegation in paragraph 158(l) of the Second Amended
Complaint, which states that Walker “[f]ailed to properly advise and
counsel

MURPHREE

regarding the risks and benefits

to

MURPHREE of ALFA either settling case or proceeding to trial.”
(Doc. 96 at 48).
xiv.

The allegation in paragraph 158(m) of the Second Amended

117

Complaint, which states that Walker “[f]ailed to properly and clearly
advise MURPHREE of WALKER and ALFA's conflicts of interest
with MURPHREE both once a policy limits demand was made, and
once the excess verdict was rendered.” (Doc. 96 at 48);
xv.

The allegation in paragraph 158(n) of the Second Amended
Complaint, which states that Walker “[f]ailed to accurately and
timely apprise MURPHREE of ALFA's refusal to tender or offer the
applicable policy limits in the underlying action.”

xvi.

(Doc. 96 at 48);

The allegation in paragraph 158(o) of the Second Amended
Complaint, which states that Walker “[f]ailed to properly and timely
advise MURPHREE of the repeated and constant policy limit
demands being made by Willow Joe Cameron's lawyers and their
willingness to fully and finally release MURPHREE in exchange for
a payment of ALFA's policy limits.” (Doc. 96 at 48).

D.

All claims for mental anguish damages and claims for attorneys’ fees.

In all other respects, Summary Judgment is DENIED.
DONE and ORDERED this 28th day of March, 2016.

VIRGINIA EMERSON HOPKINS
United States District Judge
118