National Trust Insurance Company v. Magnolia Enterprises, Inc. et al
ORDER denying 49 Plaintiff's Motion for Summary Judgment as set out and directing the Clerk to strike Gardberg's, DJG, Spherion and A&R from docket.. Signed by Judge Kristi K. DuBose on 2/6/12. (cmj)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
NATIONAL TRUST INSURANCE CO.,
MAGNOLIA ENTERPRISES, INC., et al.,
) CIVIL ACTION NO. 10-00710-KD-C
This matter is before the Court on Plaintiff’s Motion for Summary Judgment (Doc. 49).
Upon consideration of the parties’ briefs and evidentiary submissions (Docs. 50, 50-1, 52, 53-1
to 53-11, 54, 55-1 to 55-3, and 56),1 Plaintiff’s motion is due to be DENIED.
Nature of the Case
Plaintiff National Trust Insurance Company (“National Trust”), an Indiana corporation,
has brought this declaratory judgment action to determine whether it owes insurance coverage to
its former policyholder, Defendant John G. Walton Construction Company, Inc. (“Walton
Construction”), an Alabama corporation, for allegedly tortious conduct that occurred while
Walton Construction and Defendant Volkert Construction Services, Inc. (“Volkert”), another
Alabama corporation, were engaged by the City of Mobile (“the City,” an Alabama municipality
and another Defendant in this action) to repair the water and sewage systems underneath Florida
Street in Mobile, Alabama. Defendants Magnolia Enterprises, Inc., Julie Wheat, Ralph Wheat,
Mobile’s Whistle Stop, Inc., Harold S. Metzger, Jr., Knot Just Beads, Inc., Bob Schwartz, Eileen
Schwartz, Autry Greer & Sons, Inc., Monahan Investments, Inc., McDuff & Allyn Studios, Inc.,
Midtown Dance Studio, Inc., Marianna Hanceri, Pharmacy Services Diversified, Inc., Jodi
Only two Defendants, John G. Walton Construction Company, Inc. and the City of Mobile,
have responded to Plaintiff’s motion.
Silvio, Bill T. Kaller, Joseph Michael O’Bryan, Midtown Antiques & Consignments, and Diane
Caylor (collectively, the “State Court Plaintiffs”) are Alabama residents and corporations that
have sued Walton Construction, Volkert, and the City in the Circuit Court of Mobile County,
Alabama in an effort to recover damages for injuries they allegedly sustained during the Florida
Street repair (the “Underlying Action”).2
To date, National Trust has provided Walton
Construction with a defense in the Underlying Action subject to a reservation of rights, but it
now seeks a declaration that the relevant general liability insurance policy does not cover the
State Court Plaintiffs’ allegations and imposes no duty upon National Trust to defend or
indemnify Walton Construction.
Standard of Review
“The court shall grant summary judgment if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.
R. Civ. P. 56(a). Rule 56(c) governs procedures and provides as follows:
(1) Supporting Factual Positions. A party asserting that a fact cannot be or is
genuinely disputed must support the assertion by:
The Underlying Action is captioned Gardberg Furniture, Inc., et al. v. City of Mobile, et al.
and has been assigned Case No. CV-2008-000266.
For reasons not immediately apparent, not all of the parties to the Underlying Action are
parties to this declaratory judgment suit. At least five entities that sued Walton Construction,
Volkert, and the City in state court were not named in National Trust’s complaint as parties to
this action, and, therefore, those entities are not included within the definition of “State Court
Plaintiffs” as that term is used throughout this Order. Nonetheless, four of those entities —
specifically, Gardberg’s Furniture, Inc. (“Gardberg’s”), DJG, LLC (“DJG”), Spherion, Inc.
(“Spherion”), and A&R, Inc. (“A&R”) — have been incorrectly identified as defendants on the
Court’s docket. Accordingly, the Clerk of Court is DIRECTED to strike Gardberg’s, DJG,
Spherion, and A&R from the docket.
Additionally, National Trust has represented in its summary judgment papers that most of the
State Court Plaintiffs have either settled or dismissed their claims against Walton Construction,
Volkert, and the City. (Doc. 56 at 2 n.1). National Trust has agreed that, in the event that
summary judgment is not granted in its favor, it will voluntarily dismiss from this action those
State Court Plaintiffs who have settled or dismissed their state claims.
(A) citing to particular parts of materials in the record, including
depositions, documents, electronically stored information, affidavits
or declarations, stipulations (including those made for purposes of
the motion only), admissions, interrogatory answers, or other
(B) showing that the materials cited do not establish the absence or
presence of a genuine dispute, or that an adverse party cannot
produce admissible evidence to support the fact.
(2) Objection That a Fact Is Not Supported by Admissible Evidence. 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.
(3) Materials Not Cited. The court need consider only the cited materials, but it
may consider other materials in the record.
(4) Affidavits or Declarations. An affidavit or declaration used to support or
oppose a motion must be made on personal knowledge, set out facts that
would be admissible in evidence, and show that the affiant or declarant is
competent to testify on the matters stated.
Fed. R. Civ. P. 56(c).
National Trust, as the party seeking summary judgment, bears the initial responsibility of
informing the district court of the basis for its motion and identifying those portions of the
pleadings, depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.
Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991) (quoting Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986)).
The mere existence of a factual dispute will not
automatically necessitate denial; rather, only factual disputes that are material preclude entry of
summary judgment. Lofton v. Sec’y of Dep’t of Children & Family Servs., 358 F.3d 804, 809
(11th Cir. 2004).
If National Trust satisfies its initial burden under Rule 56(c), the non-movants must
“demonstrate that there is indeed a material issue of fact that precludes summary judgment.” See
Clark, 929 F.2d at 608. In reviewing whether the non-moving parties have met their burden, the
Court must stop short of weighing the evidence and making credibility determinations of the
truth of the matter. Instead, the evidence of the non-movants is to be believed, and all justifiable
inferences are to be drawn in their favor. Tipton v. Bergrohr GMBH-Siegen, 965 F.2d 994, 99899 (11th Cir. 1992) (internal citations and quotations omitted).
National Trust is an insurance company that, on or about December 31, 2006, issued a
commercial general liability (“CGL”) policy, Policy No. CPP0003195 (the “Policy”), to Walton
Construction. (Doc. 1-1 at 1).3 The Policy was delivered to Walton Construction in Mobile,
Alabama. (Doc. 1 at 6, ¶ 27; Doc. 27 at 2, ¶¶ 24-27). Subject to certain conditions, limitations,
and exclusions, the Policy required National Trust to pay up to $1,000,000 that Walton
Construction may become legally obligated to pay as damages for “bodily injury” and “property
damage,” as defined by the Policy. (Doc. 1-1 at 4). The Policy also required National Trust to
defend Walton Construction in any civil proceeding seeking such damages. (Id. at 4 & 18).4
Between July 2007 and May 2008, Walton Construction engaged in “Phase I” of a
construction project on Florida Street in Mobile, Alabama. (Doc. 53-4 at 2). As described by
Walton Construction’s Job Superintendent, Fred Hall (“Hall”), who was present at the Florida
The Policy’s declaration page indicates that it was prepared on January 2, 2007, though the
policy period began on December 31, 2006. (Doc. 1-1 at 1). Apparently, Walton Construction
renewed a previously issued policy that was also assigned Policy No. CPP0003195. (Id.).
Neither party has offered any evidence as to when that renewal occurred.
The Alabama Supreme Court recently quoted at length from a decision of another state court
of last resort that provided “helpful background on the origination and object” of CGL policies,
most of which “are written on standardized forms developed by an association of domestic
property insurers” and which, like the Policy at issue in this case, “begin with a broad grant of
coverage, which is then limited in scope by exclusions.” See Town & Country Prop., L.L.C. v.
Amerisure Ins. Co., Nos. 1100009 & 1100072, 2011 WL 5009777, at *2-3 (Ala. Oct. 21, 2011)
(quoting Sheehan Constr. Co. v. Cont’l Cas. Co., 935 N.E.2d 160, 162-63 (Ind. 2010)).
Street job site on a daily basis, the construction project involved “digging up Florida Street,”
removing the existing drainage system, and installing a new cast-in-place concrete box culvert.
(Id. at 2-3). While the project was ongoing, Florida Street was “an open excavation pit,” and
traffic was directed away from the street, at least part of which was “100% closed” for safety
(Id. at 3-4).
As the project progressed northward, Walton Construction stored
excavated dirt on site to be used as backfill. (Id. at 3). Though Walton Construction intended to
keep the dirt on the City’s right of way, Hall concedes that there were occasions when dirt and
debris may have been placed on private property or fell from trucks that pulled into, turned
around in, and/or parked in private parking lots. (Id.). Hall also concedes that dirt placed on the
City’s right of way may have been dispersed by wind and water. (Id.).
On February 1, 2008, in the Circuit Court of Mobile County, Alabama, several
corporations that operated businesses on Florida Street filed a lawsuit and sought a preliminary
injunction against the City, Volkert, and eight fictitious defendants who were alleged to have
trespassed and created nuisances upon the corporations’ properties during the course of the
construction project. (Doc. 53-3). On September 24, 2008, the corporations amended their
complaint and joined other Florida Street businesses and property owners as additional plaintiffs
and Walton Construction as a third defendant. (Doc. 53-1 at 5). A Second Amended Complaint
was filed on May 6, 2009 and is presently the operative pleading in the Underlying Action.
The Second Amended Complaint alleges that, during the Florida Street
construction project, Walton Construction, Volkert, and the City blocked pedestrian and
vehicular traffic on Florida Street and placed large deposits of dust, dirt, construction waste,
decayed pipe, and construction equipment on private property belonging to the State Court
Plaintiffs and others. (Doc. 53-2 at 7-9, ¶¶ 31, 36 & 37). Though the Second Amended
Complaint asserts causes of action for trespass, nuisance, and inverse condemnation, only the
trespass and nuisance claims remain active in the Underlying Action. (Doc. 55-3).
National Trust moved to intervene in the Underlying Action on October 22, 2010. (Doc.
53-1 at 17). Two months later, on December 21, 2010, National Trust filed a complaint in this
Court seeking a declaration that it has no duty to defend, indemnify, or expend any sums on
behalf of Walton Construction because 1) none of the damages alleged in the Underlying Action
were caused by an “occurrence,” as that term is defined by the Policy; 2) the plaintiffs in the
Underlying Action neither alleged nor suffered “property damage,” as that term is defined by the
Policy; 3) none of the damages sought by the plaintiffs in the Underlying Action occurred while
the Policy was in effect; and/or 4) coverage is eliminated by several exclusions5 under the Policy.
After seeking and obtaining an extension of time to file dispositive motions (Docs. 40 &
41), National Trust moved for summary judgment on November 29, 2011. (Doc. 51). Walton
Construction and the City responded to National Trust’s motion on December 22, 2011 (Docs.
52 & 54), but Volkert and the State Court Plaintiffs, all of whom are defendants in this action,
did not. After National Trust filed a reply brief on December 29, 2011 (Doc. 56), the Court took
the motion under submission.
Specifically, National Trust’s complaint alleged that coverage is eliminated by the Policy’s
exclusions for expected or intended injury (Doc. 53-2 at 13-14, ¶¶ 50-53), contractual liability
(id. at 14, ¶¶ 54-67), and business risk (id. at 14-16, ¶¶ 58-60). However, National Trust’s
summary judgment briefs made no mention of the contractual liability and business risk
exclusions that respectively provide the basis of Counts V and VI of the complaint.
Accordingly, the Court will construe National Trust’s summary judgment motion as a motion for
partial summary judgment and will refrain from determining the merits of National Trust’s
contention that coverage is excluded by the Policy’s contractual liability and business risk
Duties To Defend and Indemnify
National Trust contends that “it does not have a duty to defend or indemnify [Walton
Construction] in the underlying action.” (Doc. 50 at 3). At present, any determination as to
National Trust’s indemnity obligations would be premature, given that litigation in the
Underlying Action is ongoing. As Chief Judge Steele observed last week, “[c]ase law is legion
for the proposition that an insurer’s duty to indemnify is not ripe for adjudication unless and until
the insured or putative insured has been held liable in the underlying action.” Pa. Nat’l Mut.
Cas. Ins. Co. v. King, No. 11-0577-WS-C, 2012 WL 280656, at *5 (S.D. Ala. Jan. 30, 2012)
(citing, inter alia, Allstate Ins. Co. v. Emp’rs Liab. Assurance Corp., 445 F.2d 1278, 1281 (5th
Cir. 1971)6 (“[N]o action for declaratory relief will lie to establish an insurer’s liability . . . until a
judgment has been rendered against the insured since, until such judgment comes into being, the
liabilities are contingent and may never materialize.”)); see also Emp’rs Mut. Cas. Co. v. All
Seasons Window & Door Mfg., Inc., 387 F. Supp. 2d 1205, 1211-12 (S.D. Ala. 2005) (“It is
simply inappropriate to exercise jurisdiction over an action seeking a declaration of the
plaintiff’s indemnity obligations absent a determination of the insureds’ liability.”).
Accordingly, this Order will address only whether the Policy extends coverage to Walton
Construction and whether National Trust therefore has a duty to defend Walton Construction in
the Underlying Action.
In determining the scope of coverage under the Policy and National Trust’s duty to
All cases decided by the former Fifth Circuit before October 1, 1981, are binding precedent
in the Eleventh Circuit. Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en
defend Walton Construction in the Underlying Action, this Court will apply Alabama law. “[A]
federal court in a diversity case is required to apply the laws, including principles of conflict of
laws, of the state in which the federal court sits.” Manuel v. Convergys Corp., 430 F.3d 1132,
1139 (11th Cir. 2005) (citing Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941)).
Adhering to the principle of lex loci contractus, Alabama courts hold that contract claims are
governed by the laws of the state in which the contract was made, unless the contracting parties
chose a particular state’s laws to govern their agreement. Cherry, Bekaert & Holland v. Brown,
582 So. 2d 502, 506 (Ala. 1991). It is axiomatic that insurance policies are “essentially like all
other contracts,” Hartford Fire Ins. Co. v. Shapiro, 117 So. 2d 348, 352 (Ala. 1960), and are
therefore subject to the lex loci contractus doctrine. See Cincinnati Ins. Co. v. Girod, 570 So. 2d
595, 597 (Ala. 1990) (“Because this dispute involves an interpretation of an insurance policy
issued in the State of Alabama, under Alabama’s conflicts of law rule the trial court would be
obligated to apply the substantive law of Alabama . . . .”). Because the policy at issue here was
delivered to Walton Construction in Alabama and makes no reference to the laws of some other
jurisdiction, Alabama law must govern.
Under Alabama law, the question of whether an insurance company owes its insured a
duty to provide a defense in proceedings instituted against the insured is determined primarily by
the allegations contained in the complaint. See Tanner v. State Farm Fire & Cas. Co., 874 So. 2d
1058, 1063 (Ala. 2003); see also Ajdarodini v. State Auto Mut. Ins. Co., 628 So. 2d 312, 313
(Ala. 1993) (“An insurance company’s duty to defend its insured is determined by the language
of the insurance policy and by the allegations in the complaint giving rise to the action against
“If the allegations of the injured party’s complaint show an accident or
occurrence which comes within the coverage of the policy, the insurer is obligated to defend
regardless of the ultimate liability of the insured.” Gunnin v. State Farm and Cas. Co., 508 F.
Supp. 2d 998, 1002 (M.D. Ala. 2007) (citation omitted). However, in deciding whether the
complaint alleges a covered accident or occurrence, “the court is not limited to the bare
allegations of the complaint in the action against insured but may also look to facts which may
be proved by admissible evidence in a suit for declaratory relief.” Pac. Indem. Co. v. Run-AFord Co., 161 So. 2d 789, 795 (Ala. 1964).
The Alabama Supreme Court summarized the standard that a court will employ to
determine the existence or nonexistence of an insurer’s duty to defend:
If the allegedly injured person’s complaint against the insured alleges a covered
accident or occurrence, then the insurer owes the duty to defend even though the
evidence may eventually prove that the gravamen of the complaint was not a
covered accident or occurrence. If the complaint against the insured does not, on
its face, allege a covered accident or occurrence, but the evidence proves one,
then the insurer likewise owes the duty to defend. The insurer owes no duty to
defend only if neither does the complaint against the insured allege a covered
accident or occurrence nor does the evidence in the litigation between insurer and
insured prove a covered accident or occurrence. If the allegedly injured person’s
complaint against the insured alleges or the evidence proves not only claims based
on a covered accident or occurrence but also claims not based on a covered
accident or occurrence, the insurer owes a duty to defend at least the claims based
on a covered accident or occurrence.
Tanner, 874 So. 2d at 1065 (internal citations omitted). With these principles in mind, the Court
will address whether the facts alleged in the Second Amended Complaint filed in the Underlying
Action state an “occurrence” of “property damage” within the Policy’s coverage period to which
the Policy extends coverage notwithstanding its exclusion for expected or intended injuries.
Scope of Coverage
The Policy provides that National Trust will “pay those sums that [Walton Construction]
becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to
which [the Policy] applies.” (Doc. 1-1 at 4). The policy applies to “bodily injury” and “property
damage” only in particular circumstances as set forth by the policy:
(1) The “bodily injury” or “property damage” is caused by an “occurrence” that
takes place within the “coverage territory”;
(2) The “bodily injury” or “property damage” occurs during the policy period;
(3) Prior to the policy period, no insured listed under Paragraph 1. of Section II
[of the Policy] and no “employee” authorized by [Walton Construction] to
give or receive notice of an “occurrence” or claim, knew that the “bodily
injury” or “property damage” had occurred, in whole or in part.
The Policy defines “occurrence,” “bodily injury,” “property damage,” and “coverage
territory.” As used throughout the Policy, an “occurrence” is “an accident, including continuous
or repeated exposure to substantially the same general harmful conditions.”
(Id. at 17).
“Bodily injury” means “bodily injury, sickness or disease sustained by a person, including death
resulting from any of these at any time.” (Id. at 15). “Property damage” is “[p]hysical injury to
tangible property, including all resulting loss of use of that property” as well as “[l]oss of use of
tangible property that is not physically injured.” (Id. at 17-18). “Coverage territory” is defined
in three subparagraphs — one of which has three subparts of its own — but the full definition
does not bear repeating here as it unquestionably includes Mobile, Alabama. (Id. at 15).
National Trust contends that the Second Amended Complaint filed in the Underlying
Action alleges “only purposeful and intentional acts” and, therefore, that Walton Construction’s
alleged conduct cannot possibly constitute an “occurrence.” (Doc. 50-2 at 6-8). The Court finds
fault with the premise of National Trust’s argument. As the Alabama Supreme Court has held
repeatedly, purposeful and intentional acts can provide the basis for an “occurrence” where those
acts have unintended consequences. See, e.g., U.S. Fid. & Guar. Co. v. Armstrong, 479 So. 2d
1164, 1166-67 (Ala. 1985) (discharge of raw sewage resulting from contractor’s intentional
crushing of sewer line during construction project was an “occurrence” within meaning of CGL
policy where contractor did not specifically intend for sewage to back up in the line and flow
onto adjacent private property); Moss v. Champion Ins. Co., 442 So. 2d 26 (Ala. 1983)
(unintended water damage resulting from contractor’s purposeful removal of roof was an
“occurrence” within the terms of CGL policy). Put differently, an accident can occur even
though the initiating force was deliberate rather than the result of a loss of control. In any event,
National Trust has failed to cite any legal authority that would compel the Court at this stage in
the proceedings and on the record before it to find that the alleged dispersion of material on the
State Court Plaintiffs’ land could not have been accidental, even presuming volitional acts by
National Trust and Walton Construction both urge the Court to consider that an insurer’s
duty to defend is determined by the factual allegations asserted against the insured, not by the
“legal phraseology” employed in the underlying complaint. See Doc. 50 at 7 (citing Am. Safety
Indem. Co. v. T.H. Taylor, Inc., No. 2:10cv48–MHT, 2011 WL 1188433, at *4-5 (M.D. Ala.
Mar. 29, 2011); Doc. 52 at 5 (citing Hartford Cas. Ins. Co. v. Merchs. & Farmers Bank, 928 So.
2d 1006, 1011-13 (Ala. 2005)). In accordance with the holdings of those cases, it matters not
that the State Court Plaintiffs chose to label the first count of the Second Amended Complaint
“Trespass” and the second count “Nuisance.”
The Second Amended Complaint must be
“liberally construed in favor of the insured,” Ladner & Co. v. S. Guar. Ins. Co., 347 So. 2d 100,
103 (Ala. 1977), and, in such light, the Court cannot find that the facts alleged therein fail to state
an “occurrence.” However, even if the bare allegations of the Second Amended Complaint were
insufficient, the Court could find that National Trust has a duty to defend based on the sworn
affidavit of Hall, Walton Construction’s on-site job superintendent, who avers that “[i]f any dirt
was placed outside of the [City’s] right of way [i.e., on private property], it was not [Walton
Construction’s] intention to place it there or to cause any harm or damage to the adjoining
property owners or businesses.” (Doc. 53-4 at 3). See Hartford Cas., 928 So. 2d at 1011
(“presupposing a negative answer to the first inquiry [of whether the facts alleged in complaint
state an ‘occurrence’], we must determine whether the ‘facts which may be proved by admissible
evidence’ state an ‘occurrence’”).
Accordingly, National Trust is not entitled to summary judgment on the question of
whether the Second Amended Complaint has alleged an “occurrence.”
National Trust also has failed to establish the absence of a material dispute as to whether
the bodily injury and property damage alleged in the Second Amended Complaint occurred
between December 31, 2006 and December 31, 2007, while the Policy was in effect.7 Though
the Second Amended Complaint is ambiguous as to when the alleged bodily injury and property
damage occurred,8 Walton Construction has come forward with admissible evidence and made a
sufficient showing that at least some of the State Court Plaintiffs’ alleged injuries occurred
within the policy period. For example, Bill T. Kaller (“Kaller”), one of the State Court Plaintiffs,
testified at his deposition that trucks that belonged to either the City, Walton Construction or
another construction firm parked in his parking lot, damaged the lot, damaged his fence, and
damaged his sod sometime in 2007. (Doc. 53-7 at 6-8).
National Trust’s argument on reply, that it is entitled to summary judgment because
Kaller’s testimony does not prove that Walton Construction — as opposed to Volkert or the City
— accidentally damaged Kaller’s property, fails to appreciate the applicable standard of review
National Trust concedes that the Second Amended Complaint does, in fact, allege “property
damage” and “bodily injury,” as those terms are defined in the Policy. (Doc. 50 at 8 & n.2).
The Second Amended Complaint, which was filed on May 6, 2009, alleges that Walton
Construction’s tortious conduct began “months ago.” (Doc. 53-2 at 9, ¶ 39). The initial
complaint, which was filed on February 1, 2008, made the same allegation. See Doc. 53-3 at 9, ¶
27 (“The nuisance created by Defendants, months ago, still exists and is continuing in
nature . . . .”).
that the Court must apply. On summary judgment, National Trust bears the burden of proving
that there is no dispute as to any material issue of fact. Celotex, 477 U.S. at 323. To defeat
summary judgment, Walton Construction need not show that it was one of its trucks that
accidentally caused the damage of which Kaller and his co-plaintiffs complain; rather, to prevail
on its motion, National Trust must direct the Court to those portions of the record that show
Walton Construction could not have caused any of the State Court Plaintiffs’ injuries within the
policy period. Ultimately, that may well be proved by the evidence introduced in the Underlying
Action, but, at this point, on the record before the Court, the matter is genuinely disputed, and
National Trust cannot be relieved of its duty to defend. Cf. Ladner, 347 So. 2d at 102 (“If the
allegations of the injured party’s complaint show an accident or occurrence which comes within
the coverage of the policy, the insurer is obligated to defend regardless of the ultimate liability of
Finally, there is presently before the Court insufficient evidence to support a finding that
Walton Construction, Volkert, or the City expected or intended to injure any of the State Court
Plaintiffs. Armstrong and Moss are particularly instructive, whereas the CGL policies in those
cases, like the Policy in this case, excluded from coverage bodily injury and property damage
“expected or intended from the standpoint of the insured.” (Doc. 1-1 at 5). In Armstrong,
Alabama Supreme Court reiterated that, in order to “activate” an expected or intended injury
exclusion, the insured must have acted with specific intent to do harm:
There is a presumption in tort law that a person intends the natural and probable
consequences of his intentional acts. However, this presumption has no
application to the interpretation of the terms used in the “neither expected nor
intended from the standpoint of the insured” coverage clause and the policy term
“expected or intended injury” cannot be equated with foreseeable injury. This
Court has recently made it clear that the legal standard to determine whether the
injury was either expected or intended within this context is a purely subjective
standard. The insured must have possessed specific intent to inflict the damage to
activate this policy exclusion.
Armstrong, 479 So. 2d at 1167 (internal citations omitted). Whereas the question of whether an
insured subjectively intended to injure another person is a “question of fact for the jury or
judge,” Ala. Farm Bureau Mut. Cas. Ins. Co. v. Dyer, 454 So. 2d 921, 924 (Ala. 1984), and
whereas Hall stated no fewer than three times in his affidavit that Walton Construction did not
intend to cause any harm or damage to the businesses on Florida Street (Doc. 53-4 at 3-4), the
Court cannot find that the expected or intended injury exclusion eliminates coverage under the
In accordance with the foregoing, it is ORDERED that Plaintiff’s Motion for Summary
Judgment (Doc. 49) is DENIED.
DONE and ORDERED this the 6th day of February 2012.
/s/ Kristi K. DuBose
KRISTI K. DuBOSE
UNITED STATES DISTRICT JUDGE
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