B. v. Barrow et al

Filing 53

MEMORANDUM OPINION: The Court will GRANT Nationwide's Motion for Summary Judgement 18 and DENY A.B.'s Motion for Summary Judgment 29 and will DENY the remaining motions for summary judgment as MOOT. Further, the court DISMISSES Barrow as a defendant and the court will enter a separate order consistent with this memorandum opinion that closes the case. Signed by Judge Corey L Maze on 8/29/2024. (LCB)

FILED
2024 Aug-29 PM 03:28
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
MIDDLE DIVISION
A.B., a minor, by and through
her next friend and parent,
J.B.,
Plaintiff,
v.

Case No. 4:22-cv-1314-CLM

DAVID JACOBS BARROW and
NATIONWIDE MUTUAL
INSURANCE COMPANY,
Defendants.
MEMORANDUM OPINION
A.B. was a 10-year-old girl. David Barrow was her mother’s boss.
Barrow sexually abused A.B. and used her to film child pornography.
Barrow is now in state prison, and A.B. has a $10 million state-court
judgment against Barrow.
The question here is whether Barrow’s insurer, Nationwide Mutual
Insurance Company (“Nationwide”), must pay the $10 million judgment
under an umbrella policy effective when Barrow abused A.B. Both sides,
A.B. and Nationwide, seek summary judgment. See (docs. 18, 29). As
explained below, the court finds that neither Barrow nor A.B. notified
Nationwide of its potential duty to indemnify in the time required by the
umbrella policy, so Nationwide is not required to satisfy the judgment
against Barrow. The court will therefore GRANT Nationwide’s motion for
summary judgment (doc. 18) and DENY A.B.’s motion for summary
judgment. (Doc. 29).

BACKGROUND
The court’s decision stems from the fact that no one told Nationwide
that Barrow abused A.B. until five years after the abuse happened and
four years after Barrow was arrested for it. Because the timeline matters,
the court starts at the beginning.1
A. Barrow’s Crime
A.B.’s mother worked at Mike’s Merchandise. Barrow was her boss.
In 2013, Barrow asked A.B.’s mother if she would allow her 10-year-old
daughter to “model” for Barrow. A.B.’s mother agreed. At least three times
in 2013, Barrow had A.B. undress down to her underwear or put on
lingerie and pose for photos.
In July 2014, Barrow was arrested and charged with 27 counts of
production of pornography/obscene material with a minor child and
aggravated criminal surveillance. After learning that Barrow also
molested A.B. many times after the first three occasions in 2013 and into
2014, a grand jury indicted Barrow in February 2015 for human
trafficking, sex abuse of a child less than 12 years old, sodomy, and
conspiracy to commit sex abuse of a child less than 12 years old.
Barrow pleaded guilty to two counts of production of pornography/
obscene material with a minor child and two counts of human trafficking
involving a child under the age of 12 or involving child pornography in
March 2016. He is serving a 30-year sentence for those crimes.
B. A.B.’s Lawsuit
In February 2018, A.B. (by and through her father) filed two
lawsuits, one against Barrow for invasion of privacy2 and another against
Barrow and his wife under the Alabama Fraudulent Transfer Act.3
1 A.B. moved to strike certain facts related to Barrow’s crimes and the underlying lawsuit. The
court DENIES that motion because the facts help provide a background and timeline of the case
and are relevant to the notice issue.
2 See A.B. v. David Barrow, 50-cv-2018-900065 (Marshall County, Ala.).
3 See A.B. v. Ann Barrow and David Barrow, 50-cv-2018-900069 (Marshall County, Ala.).

In the AFTA case, A.B. issued interrogatories and requests for
productions in May 2018 that requested the Barrow’s produce information
about insurance policies that could cover the Barrows’ alleged acts:

Mrs. Barrow’s August 2018 responses indicated that Nationwide might
have provided an umbrella policy. So A.B.’s attorney, Greg Reeves, kept
digging, ultimately serving a subpoena on the Barrows’ Nationwide agent
in November 2018. As A.B. put it:

(Doc. 29, p. 11). Nationwide provided Attorney Reeves with the policies in
January 2019. On April 2, 2019, Attorney Reeves sent Nationwide a letter
that said (a) the November 2018 subpoena to the Nationwide agent put

Nationwide on notice of A.B.’s lawsuit and (b) A.B. would ask Nationwide
to satisfy any judgment against Barrow under Ala. Code § 27-23-2.4
Nationwide retained counsel to defend Barrow in state court. That
counsel first appeared in July 2019 and served as lead counsel throughout
discovery and trial.
The state court held a bench trial on A.B.’s invasion of privacy claim
on April 11, 2022. The trial court issued a detailed order finding that A.B.
proved her claim and awarded A.B. $4 million in compensatory damages
and $6 million in punitive damages.
C. The umbrella policy
That brings us to the umbrella policy, which the parties agree was
operative in 2013 and 2014 when Barrow abused A.B. Under the policy,
Nationwide agreed to pay for damages that resulted from covered
“occurrences,” plus claims expenses and defense costs. (Doc. 19-15).
Relevant here, an “occurrence” included an “accident including continuous
or repeated exposure to the same general conditions” that resulted in
“personal injury,” a term that includes an “invasion of rights of privacy.”
Id. (definitions of “occurrence” and “bodily injury”). A.B. argues that the
umbrella policy covers her judgment because a court found that Barrow
invaded A.B.’s right of privacy, resulting in damages.
D. The federal cases
The umbrella policy also contained conditions, including this twopart notice requirement:

4 Ala. Code § 27-32-2 states: “Upon the recovery of a final judgment . . . if the defendant in such
action was insured against the loss or damage at the time when the right of action arose, the
judgment creditor shall be entitled to have the insurance money provided for in the contract of
insurance between the insurer and the defendant applied to the satisfaction of the judgment . .
. and the judgment creditor may proceed against the defendant and the insurer to reach and
apply the insurance money to the satisfaction of the judgment.”

1. Dec Action I: While A.B.’s lawsuit was pending in state court,
Nationwide filed a declaratory judgment action in this court, asking the
court to declare that Nationwide had no duty to defend or indemnify
Barrow because he failed to meet either of the notice requirements under
the umbrella policy and other policies not relevant here. See Nationwide
Mut. Ins., et al. v. Barrow et al., No. 4:19-CV-01019-ACA, 2021 WL 461700
(N.D. Ala. Feb. 9, 2021) (“Dec Action I”). Nationwide asked for summary
judgment, which the court treated as a motion for default judgment
because the Barrows did not appear. A.B. opposed the motion, arguing
that her notice satisfied the umbrella policy’s condition.
This court (Judge Axon) agreed with Nationwide. The court found
that Barrow satisfied neither notice requirement:
Here, Mr. Barrow is the only insured under the umbrella
policy. By its terms, the policy required that Mr. Barrow or
someone acting on his behalf provide written notice to
Nationwide of an occurrence to which the policy might apply
‘as soon as reasonably possible.’ It is undisputed that Mr.
Barrow never notified Nationwide of a potential occurrence
under the umbrella policy or of A.B.’s civil lawsuit.
Therefore, as a matter of law, Mr. Barrow failed to give the
required written notice within a reasonable time and
breached the notice provision of the umbrella policy.
Id. at *4 (record citations omitted). The court further held that A.B.’s
notice—which occurred more than four years after the possibly covered
occurrence—could not satisfy the notice requirement because neither
Barrow nor A.B. provided “evidence of a reasonable excuse for the delay.”
Id. at *4-5 (citing Nationwide Mut. Fire Ins. Co. v. Files, 10 So. 3d 533,
536 (Ala. 2008)). So the court entered “summary judgment against A.B.

and default judgment against Mr. Barrow and Ms. Barrow on
[Nationwide’s] claim that it owes no duty to defend Mr. Barrow pursuant
to the umbrella policy.” Id. at *5. The court did not decide whether
Nationwide had a duty to indemnify Barrow if he lost in state court.
A.B. appealed to the Eleventh Circuit, which ruled that A.B. lacked
standing on the duty to defend issue—i.e., the only duty decided in Dec
Action I—because A.B. would not be injured if Nationwide did not appear
to defend Barrow in her state-court lawsuit. To the contrary, weakening
Barrow’s defense could “help” A.B., not hurt her. Nationwide Mut. Ins. v.
Barrow, 29 F.4th 1299, 1303 (11th Cir. 2022). As a result, the Circuit
Court dismissed A.B.’s appeal.
2. Dec Action II: Having prevailed on the duty to defend issue,
Nationwide filed another declaratory judgment action, asking the court to
declare it had no duty to indemnify Barrow for the same reason. See
Nationwide Mut. Ins. v. Barrow, No. 4:22-CV-725-RDP, 2022 WL
14068890 (N.D. Ala. Oct. 24, 2022) (“Dec Action II”). But the state case
was still pending, so there was no judgment for Nationwide to indemnify.
This court (Judge Proctor) thus abstained from exercising jurisdiction
over the case. See Ameritas Variable Life Ins. v. Roach, 411 F.3d 1328,
1330-31 (11th Cir. 2005) (discussing when federal courts should abstain
from making declarations that affect pending state litigation).
3. This ‘direct action’ case: After securing her judgment against
Barrow, A.B. sued Barrow and Nationwide under Alabama’s Direct Action
Statute, Ala. Code § 27-23-2, to force Nationwide to satisfy the judgment.5
Nationwide removed the case to this court, noting the court has diversity
jurisdiction once the parties are aligned by interest—i.e., Nationwide, who
opposes paying A.B.’s judgment for Barrow, is completely diverse from
A.B. and Barrow, who benefit from Nationwide paying A.B.’s judgment.

A.B. alleged that the policy limit was $1 million per occurrence, so Nationwide had to
pay at least $3 million—i.e., $1 million for each of the three times Barrow photographed
and abused A.B. at a hotel—and possibly the full $10 million.
5

STANDARD OF REVIEW
In reviewing a motion for summary judgment, this court views the
facts and draws all reasonable inferences in the light most favorable to
the non-moving party. See Cuesta v. Sch. Bd. of Miami-Dade Cty., 285
F.3d 962, 966 (11th Cir. 2002). Summary judgment is appropriate when
there is no genuine dispute of material fact, and the moving party is
entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). A genuine
dispute of material fact exists when “the evidence is such that a
reasonable jury could return a verdict for the nonmoving party.” Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
DISCUSSION
Both parties seek summary judgment. But the court starts with
Nationwide’s argument that it does not have a duty to indemnify because
Barrow failed to timely notify Nationwide of a covered occurrence under
Condition 4(a) because (a) if Nationwide is right, the case ends, and (b)
the court dealt with the same notice argument in Dec Action I. To be clear,
the court is not bound to its previous decision because (a) Dec Action I
resolved only the duty to defend claim, not the duty to indemnify claim
(i.e., no claim preclusion), and (b) the Eleventh Circuit held that A.B. did
not have standing to challenge the court’s ruling on appeal, so she has not
had a full and fair opportunity to litigate the notice issue (i.e., no issue
preclusion). But the facts and law haven’t changed, so the court’s analysis
and result will not change.
As explained, the umbrella policy required Barrow to both (a) notify
Nationwide about a possibly covered occurrence “as soon as reasonably
possible” and (b) “promptly” provide Nationwide with a copy of all legal
documents if a claim or lawsuit is filed. Nationwide issued the umbrella
policy in Alabama, so the court applies Alabama law when considering
whether Barrow satisfied these conditions. See St. Paul Fire & Marine
Ins. v. ERA Oxford Realty Co. Greystone, LLC, 572 F.3d 893, 894 n.1. (11th
Cir. 2009); Cherokee Ins. Inc. v. Sanches, 975 So. 2d 287, 292 (Ala. 2007).

1. Alabama law: In Alabama, “the failure of an insured to comply
within a reasonable time with such conditions precedent in an insurance
policy requiring the insureds to give notice of an accident or occurrence
releases the insurer from obligations imposed by the insurance contract.”
Reeves v. State Farm Fire and Cas., 539 So. 2d 252, 254 (Ala. 1989).
As for Barrow’s duty to notify Nationwide of a covered occurrence,
“‘as soon as practicable’ means notice must be given ‘within a reasonable
time in view of the facts and circumstances of the case.’” Am. Builders Ins.
v. Riverwood Constr., LLC, 2022 WL 4367055, at *5 (N.D. Ala. 2022)
(quoting Travelers Indem. Co. of Conn. v. Miller, 86 So. 3d 338, 342 (Ala.
2011)). When evaluating whether the time was “reasonable,” there are
only two factors for a court to consider: (1) the length of the delay and (2)
the reasons for the delay. Id. (citing Miller, 86 So. 3d at 342). “[I]t is the
intersection of a lengthy delay and the lack of justification that warrants
summary judgment.” Emps. Mut. Cas. Co. v. Smith Const. & Dev., LLC,
949 F. Supp. 2d 1159, 1169 (N.D. Ala. 2013).
“If there are disputed facts or conflicting inferences that may
reasonably be drawn from the evidence, ‘the question of the
reasonableness of a delay in giving notice is a question of fact for the
jury.’” Miller, 86 So. 3d at 346 (quoting S. Guar. Ins. v. Thomas, 334 So.
2d 879, 882 (Ala. 1976)). “But if there is no reasonable excuse offered for
a delay in giving notice, the issue may be decided as a matter of law.” Id.
“[T]he insured may be excused for a delay or failure to give the required
notice to the insurer where it appears that, acting as a reasonably prudent
person, he believed that he was not liable for the accident.” Thomas, 334
So. 2d at 884 (quoting 44 Am. Jur. 2d, Insurance, s 1474).
2. Barrow’s notice of an occurrence: Barrow never notified
Nationwide that he sexually abused or photographed A.B., and he never
offered a reason for failing to notify Nationwide. Instead, Barrow
defaulted. And even if he chose to appear, Barrow could not plausibly
argue that he was not liable for the acts that may be covered because
Barrow pleaded guilty to state charges stemming from those acts. So if

you assume that Barrow’s criminal acts constituted a covered occurrence
because they invaded A.B.’s privacy, Barrow did not satisfy Condition 4(a)
of the umbrella policy, thereby releasing Nationwide from its duty to
indemnify. See Reeves, 539 So. 2d at 254.
3. A.B.’s notice of an occurrence: A.B. rightly notes that the Alabama
Court of Civil Appeals has held that third-party notice can satisfy the
insured’s notice requirement. See Safeway Ins. of Ala. v. Thompson, 688
So. 2d 271 (Ala. Civ. App. 1996). But later decisions of the Supreme Court
of Alabama mitigate any positive impact provided by the lower appellate
court’s Thompson decision. So the court starts by looking at two of those
cases, then applying them here.
a. Alabama precedent: The supreme court’s decision in Nationwide
Mutual Fire Insurance v. Estate of Files, 10 So. 3d 533 (Ala. 2008), is most
on point. Nationwide insured Jack Files. Files got into a fight with
Herbert Sanford and injured Sanford. Files never told Nationwide about
the fight. Rather, Sanford’s attorney told Nationwide about the fight five
months after it happened. Sanford refused to help Nationwide, who in
turn refused to defend or indemnify Sanford. Files secured a $75,000
default judgment, which Nationwide refused to satisfy because Sanford
failed to give Nationwide “notice of the underlying occurrence ‘as soon as
practicable,’ as required by the conditions of the liability coverage in his
homeowner’s policy.” Id. at 533. So Files sued Nationwide, and the trial
court ruled that Nationwide had to pay the $75,000 judgment. Id. at 534.
The state supreme court reversed. The court reiterated the same
two-factor test this court previously outlined:
If an ‘occurrence’ takes place, ... the policy requires that the
insured give [the insurer] notice ‘as soon as practicable.’ This
Court has held: ‘The requirement of notice ‘as soon as
practicable’ means that the insured must give notice ‘within
a reasonable time under all the circumstances.’ In making
this determination, the only factors to be considered are the
length of the delay in giving notice and the reasons therefor.

Absence of prejudice to the insurer from the delay is not a
factor to be considered.
In Thomas, cited by this Court in Bonitz Insulation, this
Court stated: ‘Where facts are disputed or where conflicting
inferences may reasonably be drawn from the evidence, the
question of the reasonableness of a delay in giving notice is
a question ... for the trier of fact. Conflicting inferences
concerning the reasonableness of a delay may sometimes be
drawn where the insured offers evidence of mitigating
circumstances.
However, where an insured fails to show a reasonable excuse
or the existence of circumstances which would justify a
protracted delay, the Court should as a matter of law hold
that there has been a breach of the condition as to notice....
Thus, the determination of the fundamental issue, whether
notice of the occurrence or claim was given to the insurer
within a reasonable time, rests on the reasonableness of the
delay.... If conflicting inferences can be drawn from the
evidence, the question of reasonableness is submitted to the
trier of fact. If the facts are undisputed, however, and the
insured does not show justification for the protracted delay,
the court may find the delay unreasonable as a matter of
law.
Id. at 535 (cleaned up, citations omitted).
Under the first factor, the court “assume[d], without deciding,” that
the notice from Files’ attorney five months after the fight stopped
Sanford’s continuing duty to notify Nationwide about the fight. Id. at 536.
It then found that the five-month delay was “sufficiently protracted as to
require the insured to offer evidence of a reasonable excuse for the delay.”
Ibid. (citing cases that determined delays of four, six, and eight months
required a reasonable excuse or justification).

Under the second factor, the court found that Sanford offered “no
evidence of any excuse or justification for his failure to provide the
requisite notice as soon as practicable,” and Files made no attempt to
justify Sanford’s failure. Ibid. Because Sanford offered no justification
under the second factor, the court held “as a matter of law” (a) that
Sanford violated the notice requirement and thus (b) Files could not use
the policy to satisfy his judgment. Ibid.
Three years later, the supreme court clarified that injured parties
do not gain a distinct right to seek indemnification from the defendant’s
insurer after receiving a default judgment. See Travelers Indem. Co. of
Connecticut v. Miller, 86 So. 3d 338, 347 (Ala. 2011). Applying the twofactor rule it used in Files, the court thus found that the injured party
could not seek payment from the defendant’s policy because (a) the injured
party’s post-judgment notice to the insurer was untimely and (b) the
injured party did not offer any excuses for the defendant’s failure to notify
his insurer. Id. at 347-48.
b. Application: The same result is required here. Under the first
factor, the court finds that notice of the occurrences was untimely. In her
motion, A.B. says that the three occurrences that triggered the umbrella
policy all happened “[i]n late 2013.” (Doc. 29, undisputed fact #2). Barrow
did not notify Nationwide of these occurrences. Rather, if you view the
facts in a light most favorable to A.B., Nationwide was first notified of the
occurrences on November 9, 2018, when A.B.’s attorney subpoenaed the
Barrows’ Nationwide agent as part of A.B.’s state court litigation. (Doc.
29, p.5) (stating that a purpose of the subpoena was to “place Nationwide
on notice of the claims made in the underlying state court case”). That
means notice was delayed 58 months. The state supreme court has held
that delays of four, five, six, and eight months require a reasonable excuse
or explanation under the second factor, see Files, 10 So. 3d at 536, so a 58month delay certainly does.
The court finds as a matter of law that no excuse justifies the 58month delay. Like the insured in Files, Barrow offered no excuse or

explanation for his failure to notify Nationwide. Like the injured party in
Files, A.B. offers no excuse for Barrow’s failure to notify. Instead, A.B.
says that her ignorance of the policy excuses the delay. But Files makes
clear that the excuse is tied to the policy holder, see Files, 10 So. 3d at 536,
and Miller clarified that an injured third party does not gain a right
distinct from the insured’s right under the policy. This court must apply
Alabama law, which here mandates a finding that Barrow’s unexcused
failure to notify Nationwide means, as a matter of law, that Nationwide
is released from any duty to satisfy A.B.’s judgment against Barrow.
One final note: It does not matter that A.B.’s diligent pursuit of the
policy resulted in Nationwide participating in the state court litigation
that resulted in the $10 million judgment. Under Alabama law, when
judging whether the insured complied with the notice requirement, “the
only factors to be considered are the length of the delay in giving notice
and the reasons therefor. Absence of prejudice to the insurer from the
delay is not a factor to be considered.” Files, 10 So. 3d at 535. So even if
the court might find that Nationwide suffered no prejudice, Alabama law
prevents the court from considering that fact when ruling on Nationwide’s
motion. Rather, the court can only consider the timeliness of notice and
justification for the delay. And as explained, there is no question of fact
that would allow a juror to find in A.B.’s favor on either of those two
factors. So the court must grant summary judgment. Id. (“If conflicting
inferences can be drawn from the evidence, the question of reasonableness
is submitted to the trier of fact. If the facts are undisputed, however, and
the insured does not show justification for the protracted delay, the court
may find the delay unreasonable as a matter of law.”).
—
Because the court finds that Barrow’s failure to comply with
Condition 4(a) releases Nationwide from any duty to indemnify, the court
addresses no other argument raised by the parties.

CONCLUSION
For the reasons stated within, the court GRANTS Nationwide’s
motion for summary judgment, (doc. 18), and DENIES A.B.’s motion for
summary judgment. (Doc. 29). The court DENIES the remaining motions
for summary judgment as MOOT. (Docs. 37, 48).
Further, A.B. has not pleaded a claim against Barrow nor does she
seek judgment against Barrow. Instead, A.B. was required under
Alabama state law to join Barrow as a necessary party to sufficiently
assert a claim against Nationwide. (Doc 1-1, pp. 50-51). Thus, the court
DISMISSES Barrow as a defendant.
The court will enter a separate order consistent with this
memorandum opinion that closes this case.
DONE and ORDERED on August 29, 2024.

_________________________________
COREY L. MAZE
UNITED STATES DISTRICT JUDGE