S. Cleaning Serv., Inc. v. Essex Ins. Co., 1140870
| Decision Date | 19 February 2016 |
| Docket Number | 1140870,1140918. |
| Citation | 209 So.3d 446 |
| Parties | SOUTHERN CLEANING SERVICE, INC. v. ESSEX INSURANCE COMPANY and Genesee General Agency, Inc. Essex Insurance Company and Genesee General Agency, Inc. v. Southern Cleaning Service, Inc. |
| Court | Alabama Supreme Court |
John M. Bergquist of Parsons, Lee & Juliano, P.C., Birmingham, for appellant/cross–appellee Southern Cleaning Service, Inc.
F. Lane Finch, Jr., of Swift, Currie, McGhee & Hiers, LLP, Birmingham; and Megan Brooks Comer of Hand Arendall LLC, Mobile, for appellees/cross–appellants Essex Insurance Company and Genesee General Agency, Inc.
In appeal no. 1140870, Southern Cleaning Service, Inc. ("SCSI"), appeals the summary judgment entered by the Montgomery Circuit Court in favor of Essex Insurance Company ("Essex") and Genesee General Agency, Inc. ("Genesee") (hereinafter referred to collectively as "the insurance defendants"), on SCSI's claims stemming from Essex's refusal to provide SCSI coverage under a commercial general-liability policy ("the Essex policy") based on the alleged failure to timely notify Essex of the facts leading to the claim for coverage.1 In appeal no. 1140918, the insurance defendants cross-appeal the trial court's denial of their requests for costs. With regard to appeal no. 1140870, we reverse the summary judgment entered in favor of the insurance defendants and remand the cause for further proceedings. Because the insurance defendants' claim for costs in appeal no. 1140918 is dependent upon the affirmance of the summary judgment now being reversed, we dismiss that appeal as moot.
In August 2006, Winn–Dixie Montgomery, LLC ("Winn–Dixie"), entered into a contract with SCSI that obligated SCSI to provide floor-care and general janitorial services to multiple Winn–Dixie grocery stores in central Alabama. In February 2009, SCSI entered into a subcontract with Phase II Maintenance Systems, LLC ("Phase II"), whereby Phase II became responsible for providing those services. That subcontract required Phase II to carry a minimum level of liability insurance and to list both SCSI and Winn–Dixie as "additional insureds" on such policies. In accordance with that requirement, Phase II contacted an independent insurance agency in Prattville—The Dennis Group, Inc., doing business as Alabama Auto Insurance Center ("Alabama Auto")—to procure a policy providing the coverage required by the subcontract. Alabama Auto in turn contacted Genesee, a managing general agency located in Georgia that connected independent agents like Alabama Auto with different insurance companies that provide the type of coverage being sought by the independent agent's customer. Ultimately, Genesee sent Alabama Auto a quote for a commercial general-liability policy issued by Essex that would meet Phase II's needs, and Alabama Auto presented that quote to Phase II. Phase II accepted the quote; Alabama Auto transmitted notice of that acceptance to Genesee; and Genesee, which held issuing authority for Essex, then issued Phase II the desired policy on behalf of Essex.2 Under the terms of the Essex policy, Essex generally obligated itself to pay any sums that the insureds became "legally obligated to pay as damages because of 'bodily injury' or 'property damage' " and to defend the insureds against "any 'suit' seeking those damages."
Phase II also had certain obligations under the policy, however, including the obligation to keep Essex apprised of any facts that might result in a claim upon the Essex policy. Specifically, the Essex policy provided:
The Essex policy further provided that no "person or organization" had the right to sue for coverage under the Essex policy "unless all of [its] terms have been fully complied with." Phase II also paid an additional premium for an endorsement naming SCSI and Winn–Dixie as "additional insureds" covered by the Essex policy; that endorsement provided that "[w]here no coverage shall apply herein for [Phase II], no coverage or defense shall be afforded to the additional insured[s]."
Phase II thereafter began fulfilling its duties under the terms of the subcontract by providing floor-care and general janitorial services to the Winn–Dixie grocery stores listed in the subcontract. On Saturday, March 5, 2011, Beverly Paige was shopping at a Phase II-serviced Winn–Dixie in Montgomery when she allegedly slipped on a wet floor, fell, and was injured. A Phase II employee on duty at the store at the time of the fall reported the incident to Phase II's owner and president, William Wedgeworth, that same day, and Wedgeworth has given sworn testimony indicating that he separately notified both SCSI and Alabama Auto of the incident on Monday, March 7, 2011, and further specifically asked Alabama Auto to notify Genesee of the incident.
Thereafter, Paige retained counsel and notified Winn–Dixie that she would be pursuing a claim based on her fall. Winn–Dixie accordingly notified Sedgwick Claims Management Services, Inc. ("Sedgwick"), Winn–Dixie's claims administrator. On April 19, 2011, Sedgwick sent SCSI a letter notifying it of Paige's claim and requesting acknowledgment that SCSI would "assume the handling of this matter." SCSI acknowledges receiving that letter from Sedgwick no later than May 2, 2011, and, on May 13, 2011, SCSI sent Phase II a letter informing it of Paige's claim. That letter further provided:
"[SCSI] is tendering this claim to you and your insurance carrier given your contractual agreement to defend and indemnify [SCSI] and Winn–Dixie for your floor cleaning activities, and given [SCSI's] and Winn–Dixie's status as additional insureds under your policy of insurance referenced above."
SCSI's letter indicates that a copy of the letter was also being sent to Alabama Auto, and Wedgeworth states that he telephoned Alabama Auto upon receiving SCSI's letter and that he also sent Alabama Auto a copy of the letter.
Sometime in approximately May 2012, Paige began sending pre-suit settlement demands to Phase II, SCSI, and Winn–Dixie. On May 17, 2012, Alicia McGuffie from SCSI began contacting Alabama Auto trying to get information about Paige's claim; however, she was repeatedly unable to speak with the Alabama Auto employee assigned to the matter, and her telephone calls were not returned. Finally, on approximately June 9, 2012, an Alabama Auto employee referred McGuffie to Genesee, and, upon telephoning Genesee, McGuffie was told that Genesee had no record of Paige's claim. Genesee accordingly told McGuffie to contact Essex and, in a conversation with Essex that same day, McGuffie learned that it had no record of Paige's claim. Thus, on June 9, 2012, McGuffie initiated a claim with Essex regarding Paige's fall.
Upon receiving notice of Paige's claim, Essex sent the claim to an affiliated company, Markel Service, Inc. ("Markel"), for investigation and, on June 11, 2012, Markel provided Genesee with notice of the claim. Thereafter, Markel investigated the circumstances surrounding Paige's claim. Eventually, Markel asked its outside counsel to evaluate Essex's coverage responsibilities related to Paige's claim and counsel ultimately determined that Essex was not obligated to provide a defense or indemnification for Paige's claim because Essex had not been notified of the claim until approximately 15 months after Paige's fall, notwithstanding the fact that the Essex policy obligated the insureds to notify it "as soon as practicable" of any occurrence "which may result in a claim." On August 9, 2012, Markel informed Sedgwick via letter that Essex would not provide a defense or indemnification to Winn–Dixie for Paige's claim because of the late notice. Markel also stated in that letter that coverage was likewise being denied SCSI and Phase II, which were presumably notified of that denial of coverage at approximately this same time.
On September 25, 2012, Paige sued Phase II, SCSI, and Winn–Dixie, alleging that their negligence and wantonness was responsible for the injuries she sustained in her March 5, 2011, fall. Phase II, SCSI, and Winn–Dixie again asked Essex to provide them with a defense and indemnity under the terms of the Essex policy; however, their requests were denied. On March 4, 2013, Phase II filed a third-party complaint against Alabama Auto, its owner Bobby Dennis, and the insurance defendants, asserting various claims stemming from Essex's refusal to provide coverage for Paige's claim. On June 28, 2013, SCSI and Winn–Dixie asserted similar third-party claims against Alabama Auto, Dennis, and the insurance defendants, as well as cross-claims against Phase II.
Thereafter, Paige, Phase II, SCSI, and Winn–Dixie...
To continue reading
Request your trial