St. Paul Fire & Marine Ins. Co. v. Britt

Citation203 So.3d 804
Decision Date29 January 2016
Docket Number1140423.
Parties ST. PAUL FIRE & MARINE INSURANCE COMPANY v. Willis BRITT, as conservator of the Estate of Michael D. Britt.
CourtSupreme Court of Alabama

Brenen G. Ely and Devona J. Segrest of Ely & Isenberg, LLC, Birmingham, for appellant.

Leah O. Taylor and Rhonda P. Chambers of Taylor & Taylor, Birmingham, for appellee.

BRYAN, Justice.

St. Paul Fire & Marine Insurance Company ("St. Paul") appeals from a summary judgment entered by the Chilton Circuit Court ("the trial court"). That judgment, among other things, granted the motion for a partial summary judgment filed by Willis Britt ("Britt"), as conservator of the estate of Michael D. Britt ("Michael"), and denied St. Paul's motion for a summary judgment.

Facts and Procedural History

The facts of this case are undisputed. In 2004, Michael purchased a Beneteau brand sailboat ("the sailboat"). Although it is unclear when Michael first obtained insurance for the sailboat, the record indicates that, during the events giving rise to this case, Michael had insured the sailboat with St. Paul pursuant to a Seahorse Underwriters Boat Insurance Policy ("the policy") that provided coverage limits of $85,000 for "accidental direct physical loss of or damage to [the sailboat] ... except as specifically stated or excluded in this policy."

From 2004 onward, the sailboat served as Michael's residence in Florida; Michael had no other established residence. In early September 2011, Michael telephoned Britt, Michael's father, and told Britt that he had accepted a job driving a commercial truck and that he had to attend orientation for the new job in Oklahoma City, Oklahoma. Michael informed Britt that he planned to sail the sailboat from West Palm Beach, Florida, to Jacksonville, Florida, store the boat in Jacksonville, and rent a car in Jacksonville to drive to Oklahoma City for the orientation.

On or around September 11, 2011, Michael set sail for Jacksonville. On September 15, 2011, the United States Coast Guard boarded the sailboat approximately one mile off the coast of Cape Canaveral, Florida, for a "cold hit" inspection. That inspection revealed that the sailboat was seaworthy as of September 15, 2011. There is no evidence of any severe weather in the Cape Canaveral area on September 15, 2011, or in the days immediately thereafter. Also on September 15, 2011, Michael telephoned Britt and informed Britt that, given a lack of wind, he would arrive in Jacksonville later than anticipated but that he would telephone Britt when he arrived. That telephone call never came, and, to the parties' knowledge, no one has seen Michael or the sailboat since September 15, 2011, despite search efforts by Britt and his family, the United States Coast Guard, and Florida authorities.

The Coast Guard's reports from its investigation into Michael's disappearance indicate that Michael last used his cellular telephone on September 17, 2011, at 11:58 p.m. to call a debt-collection agency that had a lien on the sailboat. The Coast Guard's efforts to speak to someone at the debt-collection agency about the nature of that call were fruitless. The Coast Guard's reports indicate that the last "hit" on Michael's cellular telephone, which was on September 17, 2011, when he placed that last call, indicated that Michael was traveling in a southerly direction, away from Jacksonville, his stated destination. There is no record of Michael ever making an S.O.S. call or sending another distress signal.

Coast Guard reports also indicate that Michael had "a history of not checking in with family for weeks at a time" and that he had been involved "in an unreported ... case previously, during which he was found far outside his expected area of operation." That happened in July 2011, and, although Britt corroborated the Coast Guard's report, he stated that the reason Michael had not contacted his family during that time was that his cellular telephone had gotten wet. Although Michael had been missing over two years when Britt commenced the action underlying this appeal, Britt stated in his answers to interrogatories that, as of September 2, 2014, no federal, state, or local governmental agency had declared Michael dead.

In October 2011, Britt contacted St. Paul to report the sailboat as lost. On February 14, 2012, Britt was appointed conservator of Michael's estate by the Chilton Probate Court. Shortly thereafter, Britt filed a claim with St. Paul for the lost sailboat.1 On June 7, 2012, after conducting its own investigation into Michael's disappearance, St. Paul sent Britt a letter in which it declined coverage for the sailboat. That letter states, in pertinent part:

"Based upon the facts we have learned to date, we must respectfully decline coverage at this time. We refer you to [Michael's] insuring agreement, the ... Policy, which provides in relevant part:
" ‘Coverage Provided: We will pay for accidental direct physical loss of or damage to your boat or boating equipment except as specifically stated or excluded in this policy.
" ‘....
" ‘Exclusions: We will not provide Boat and Boating Equipment Coverage for any loss or damage caused by or resulting from ... mysterious disappearance....’
"Based on our investigation, we cannot at this time find any evidence of ‘accidental direct physical loss or damage’ to the vessel that would trigger coverage. Further, the circumstances surrounding the disappearance of the vessel appear to fall under the ‘mysterious disappearance’ exclusion in [Michael's] insuring agreement. For these reasons, we have concluded that there is no coverage under the Policy for the disappearance of the vessel."

(Capitalization in original.)

On January 2, 2014, Britt filed in the trial court a complaint against St. Paul asserting claims of breach of contract, bad faith, and fraud.2 St. Paul filed a motion to dismiss the fraud claim. Britt did not respond to St. Paul's motion, and the trial court dismissed the fraud claim on August 7, 2014. On September 5, 2014, St. Paul filed its answer to Britt's complaint.

On September 15, 2014, St. Paul filed a motion for a summary judgment on Britt's breach-of-contract and bad-faith claims; Britt filed a motion for a partial summary judgment on the breach-of-contract claim only. On October 6, 2014, each party filed a response in opposition to the other party's summary-judgment motion. After a hearing on the motions, the trial court entered a judgment on October 14, 2014, that stated, in pertinent part:

"The ‘Boat and Boating Equipment Coverage’ section of the policy states St. Paul ‘will pay for accidental direct physical loss of or damage to your boat.’ The policy also provides that [i]f your boat is totally destroyed or lost for more than thirty (30) days, we will pay the amount of Boat and Boating Equipment Coverage shown on the Declarations Page.’ The limits of coverage on the declarations page was $85,000. [Britt] also asserts a claim against St. Paul for its bad faith failure to pay the claim.
"The Court concludes [Britt's] motion for partial summary judgment is GRANTED, and summary judgment is entered in favor of [Britt] on his breach-of-contract claim against St. Paul. [St. Paul's] motion for summary judgment is DENIED. [Britt's] bad faith claim is MOOT."

(Capitalization in original.) In addition to entering a judgment for Britt on the breach-of-contract claim and ruling that the bad-faith claim was thus rendered moot, the trial court's October 14, 2014, judgment also awarded Britt $74,950 in damages, with interest.

On November 12, 2014, St. Paul filed a motion to alter, amend, or vacate the trial court's October 14, 2014, judgment; on December 12, 2014, Britt filed a response in opposition to St. Paul's motion. After hearing arguments on St. Paul's motion, the trial court denied the motion on December 16, 2014. St. Paul timely appealed.

On appeal, St. Paul raises four issues: (1) Whether Britt carried his burden of showing that his insurance claim fell within the coverage provided by the policy; (2) whether an exclusion in the policy exempted Britt's claim from coverage; (3) whether the trial court erred in relying on allegedly inapplicable provisions of the policy in determining that the policy provided coverage for Britt's claim; and (4) whether the trial court erred in calculating the interest due on any damages to which Britt was entitled.

Standard of Review
"We review a summary judgment pursuant to the following standard:
" This Court's review of a summary judgment is de novo. Williams v. State Farm Mut. Auto. Ins. Co., 886 So.2d 72, 74 (Ala.2003). We apply the same standard of review as the trial court applied. Specifically, we must determine whether the movant has made a prima facie showing that no genuine issue of material fact exists and that the movant is entitled to a judgment as a matter of law. Rule 56(c), Ala. R. Civ. P.; Blue Cross & Blue Shield of Alabama v. Hodurski, 899 So.2d 949, 952–53 (Ala.2004). In making such a determination, we must review the evidence in the light most favorable to the nonmovant. Wilson v. Brown, 496 So.2d 756, 758 (Ala.1986). Once the movant makes a prima facie showing that there is no genuine issue of material fact, the burden then shifts to the nonmovant to produce "substantial evidence" as to the existence of a genuine issue of material fact. Bass v. SouthTrust Bank of Baldwin County, 538 So.2d 794, 797–98 (Ala.1989) ; Ala.Code 1975, § 12–21–12.’
" Dow v. Alabama Democratic Party, 897 So.2d 1035, 1038–39 (Ala.2004)."

Tender Care Veterinary Hosp., Inc. v. First Tuskegee Bank, 168 So.3d 33, 37 (Ala.2014). "When a trial court interprets an insurance policy as a matter of law, that interpretation is subject to a de novo review." Hartford Cas. Ins. Co. v. Merchants & Farmers Bank, 928 So.2d 1006, 1009 (Ala.2005).

I. The Policy

Before addressing the parties' arguments, it is necessary to set forth some pertinent details of the policy. It...

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