Ajdarodini v. State Auto Mut. Ins. Co.
| Citation | 628 So.2d 312 |
| Parties | Javad A. AJDARODINI d/b/a Winner Team Construction Company a/k/a Winner Team Construction Company, Inc. v. STATE AUTO MUTUAL INSURANCE COMPANY. 1911827. |
| Decision Date | 04 June 1993 |
| Court | Supreme Court of Alabama |
Danny D. Henderson of Spurrier, Rice & Henderson, Huntsville, for appellant.
Gary K. Grace of Grace & Shaw, Huntsville, for appellee.
State Auto Mutual Insurance Company (hereinafter "State Auto") filed a declaratory judgment action against Javad Ajdarodini, doing business as Winner Team Construction Company (hereinafter "Winner Team"); Edna Ragland; and Houston Ragland. State Auto sought a determination of whether a general liability policy it had issued to Winner Team required State Auto to defend and indemnify Winner Team in a lawsuit alleging breach of contract and fraud brought by the Raglands. The trial court entered summary judgment in favor of State Auto, holding that its policy did not require a defense and indemnity; Winner Team appeals.
The record reveals these facts: State Auto issued a general liability policy insuring Winner Team for one year beginning December 4, 1987. In September 1989, the Raglands sued Winner Team, alleging breach of contract and fraud arising out of a construction contract they had entered into with Winner Team in July 1987; the Raglands did not seek damages for mental anguish. Winner Team thereafter submitted a claim to State Auto for coverage under the general liability policy. State Auto denied the claim.
The Raglands amended their complaint against Winner Team in June 1990 to seek damages for mental anguish based on each of their allegations of fraud and breach of contract. The Raglands' case was tried in October 1991, and the jury returned a verdict against Winner Team on the breach of contract claims only. In November 1991, Winner Team filed an amended claim with State Auto, seeking coverage under the general liability policy based on the Raglands' June 1990 additional claims against Winner Team. State Auto again denied coverage and State Auto thereafter filed this declaratory action.
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 the insured. American States Insurance Co. v. Cooper, 518 So.2d 708 (Ala.1987). If the allegations accuse the insured of actions for which the insurance company has provided protection, the insurance company is obligated to defend the insured. American States.
The policy contained the following provisions:
to which this insurance applies, caused by an occurrence, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage....
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