Marcus v. St. Paul Fire and Marine Ins. Co., 79-2904
| Decision Date | 23 July 1981 |
| Docket Number | No. 79-2904,79-2904 |
| Citation | 651 F.2d 379 |
| Parties | John H. MARCUS, Plaintiff-Appellant, v. ST. PAUL FIRE AND MARINE INSURANCE COMPANY, Defendant-Appellee. . Unit B |
| Court | U.S. Court of Appeals — Fifth Circuit |
Donald L. Collins, Gadsden, Ala., Ira De Ment, Montgomery, Ala., for plaintiff-appellant.
Rushton, Stakely, Johnston & Garrett, Charles A. Stakely, Jr., Robert A. Huffaker, Montgomery, Ala., for defendant-appellee.
Appeal from the United States District Court for the Middle District of Alabama.
Before GODBOLD, Chief Judge, MORGAN and HENDERSON, Circuit Judges.
The plaintiff-appellant John H. Marcus, appeals from the district court's grant of summary judgment in favor of St. Paul Fire & Marine Insurance Company (hereinafter referred to as "St. Paul") in an action based on a professional liability insurance policy. We reverse.
Marcus filed suit against his malpractice insurer, St. Paul, for breach of the insurance contract. The policy afforded protection against professional liability in connection with his legal practice. The pertinent provision in the policy touching this controversy reads:
To pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages arising out of the performance of professional services for others in the Insured's capacity as a lawyer and caused by the Insured or any other person for whose acts the Insured is legally liable (the performance of professional services shall be deemed to include the Insured's acts as an administrator, conservator, executor, guardian, trustee or in any similar fiduciary capacity, but only to the extent for which in the usual attorney-client relationship the Insured would be legally responsible as attorney for a fiduciary)....
Marcus contends that St. Paul wrongfully refused to defend and did not, in fact, appear in several suits filed against him in the Circuit Court of Chilton County, Alabama by six former clients.
Certain of Marcus' clients turned over to him various amounts of money for investment purposes. These sums were to be paid back with interest, at fixed times in the future. The six state suits charged him with failure to repay the money. Judgments were entered against him in each of these actions. Because Marcus could not pay the awards, however, the former clients were forced to institute parallel actions in state court against St. Paul directly on the professional liability policy at issue in this case. St. Paul was granted summary judgments for the stated reason that the obligations did not arise out of the performance of professional legal services as covered by the policy. All but one of the claimants appealed the adverse decisions to the Supreme Court of Alabama.
In the meantime, Marcus sued St. Paul in the United States District Court for the Middle District of Alabama for breach of its duty to defend, alleging (1) breach of the contract, (2) negligent failure to perform the contractual duty owed under the insurance policy, (3) wanton and wrongful breach of the contract of insurance and (4) willful, tortious and bad faith breach of the insurance policy. Prior to a decision by the Alabama Supreme Court on the clients' cases against St. Paul, the district court granted St. Paul's motion for summary judgment against Marcus on grounds of "stare decisis and collateral estoppel, if not res judicata". (Record at 251). According to the reasoning of the district court, it was bound by the state court's determination that the policy did not cover the insured's default in debtor-creditor relationships, even if those arrangements were with former clients. With the transactions and coverage so classified, the district court concluded that there were no material facts in dispute and summary judgment was proper as a matter of law. Nevertheless, Marcus was granted the right to refile his suit in the event that the Alabama Supreme Court reversed and held that the policy did afford coverage in suits of this nature.
Shortly thereafter the state supreme court did reverse judgment on one appeal, relying on the Alabama "scintilla rule" which precludes summary judgment when there is slight evidence to support the opposing position. Watkins v. St. Paul Fire & Marine Insurance Co., 376 So.2d 660 (Ala.1979). The defending party need only furnish the smallest trace of evidence to insure a trial on the merits. Wilson v. Liberty National Life Insurance Co., 331 So.2d 617, 620 (Ala.1976). The glimmer found by the court in Watkins was Marcus' testimony by deposition that his relationship with Watkins was always that of attorney-at-law acting in a fiduciary capacity.
In light of Watkins, Marcus sought reconsideration of the prior adverse district court decision. 1 Rather than changing his prior determination, the district judge adhered to his estoppel ruling and expanded the basis for the summary judgment against Marcus with an additional independent finding that the actions for which Marcus had been held liable were not within the policy coverage as a matter of law. 2
The Supreme Court of Alabama continued to strengthen its opposite stance. After this appeal was lodged, it reversed St. Paul's summary judgments in four of the other actions in the state trial court. The court said:
It is undisputed that Mr. Marcus solicited clients which he represented in a legal capacity to invest in his "attorney-client trust fund". This is activity which the policy insured against. We reverse because we are convinced that the trial court's conclusion to the contrary is palpably erroneous.
Miles v. St. Paul Fire & Marine Insurance Co., 381 So.2d 13, 14 (Ala.1980). The opinion's forceful language leaves no doubt that the court found much more than a scintilla of evidence that the policy provided coverage.
As stated earlier, the sole issue in this appeal is the propriety...
To continue reading
Request your trial
-
Pinney Dock and Transport Co. v. Penn Cent. Corp.
...See, e.g., United States v. Merchants National Bank of Mobile, 772 F.2d 1522, 1524 (11th Cir.1985); Marcus v. St. Paul Fire & Marine Ins. Co., 651 F.2d 379, 382 (5th Cir.1981); McLain v. Meier, 612 F.2d 349, 356 (8th Cir.1979). The difference in the standards of review has been explained as......
-
Hicks v. City of Tuscaloosa
...v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). The evidence supporting a claim must be "substantial," Marcus v. St. Paul Fire and Marine Ins. Co., 651 F.2d 379 (5th Cir., Unit B, 1981); a mere scintilla of evidence is not enough to create a genuine issue of fact. Young v. City of Palm Bay......
-
U.S. v. Savaiano
... ... to sever Savaiano's case from those of his co-defendants for purposes of trial; whether it was ... 's house they found paper smoldering from a fire in a wastebasket placed on the kitchen counter ... ...
-
Hill v. Madison Cnty. Sch. Bd.
...574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The evidence supporting a claim must be “substantial,” Marcus v. St. Paul Fire and Marine Ins. Co., 651 F.2d 379 (5th Cir., Unit B, 1981); a mere scintilla of evidence is not enough to create a genuine issue of fact. Young v. City of Palm Bay......
-
Matsushita at Thirty: Has the Pendulum Swung Too Far in Favor of Summary Judgment?
...261, 271 (4th Cir. 2009); Lind v. United Parcel Serv ., 254 F.3d 1281, 1285 (11th Cir. 2001); Marcus v. St. Paul Fire & Marine Ins. Co ., 651 F.2d 379, 382 (5th Cir. 1981); Luckett v. Bethlehem Steel Corp ., 618 F.2d 1373, 1382–83 (10th Cir. 1980); McClain v. Meier , 612 F.2d 349, 356 (8th ......