Acceptance Ins. Co. v. Brown
| Decision Date | 29 June 2001 |
| Parties | ACCEPTANCE INSURANCE COMPANY v. Gloria BROWN. Gloria Brown v. Acceptance Insurance Company. |
| Court | Alabama Supreme Court |
Douglas L. Brown, Rodney R. Cate, and Mary Carol Ladd of Armbrecht, Jackson, DeMouy, Crowe, Holmes & Reeves, L.L.C., Mobile; and James M. Barnes, Jr., Marion, for appellant/cross appellee Acceptance Insurance Company.
Kenneth W. Hooks and Chris T. Hellums of Pittman, Hooks, Dutton & Hollis, P.C., Birmingham; and Clarence T. Hellums, Jr., of Hellums & Johnson, Centreville, for appellee/cross appellant Gloria Brown.
These consolidated appeals concern a commercial general-liability insurance policy ("CGL") that Acceptance Insurance Company issued to Leo Brown d/b/a G & L Grocery. Leo Brown and his wife Gloria Brown, who was also an "insured" under the policy, sued Acceptance, alleging that it had breached its contract to provide insurance when it refused to defend and indemnify them in a civil action and that Acceptance had breached its contract in bad faith. Only Gloria Brown's claims went to trial. The jury found for Gloria Brown, and the trial court entered a judgment based on the jury verdict. Acceptance appeals. Gloria Brown cross-appeals the trial court's order requiring a remittitur of the jury's awards of compensatory and punitive damages. We affirm conditionally.
In February 1995, Leo and Gloria Brown opened G & L Grocery, a convenience store, in Perry County.1 Leo purchased a commercial general-liability policy from Acceptance, through the Stoney Vintson Agency.2
The policy's "Commercial General Liability Coverage Form" provides, in pertinent part:
Attached to the CGL form was an endorsement containing this "assault-and-battery exclusion":
"It is agreed that the insurance does not apply to Bodily Injury, including death, and/or Property Damage arising out of assault and/or battery or out of any act or omission in connection with the prevention or suppression of such acts, whether caused by or at the instigation or direction of you, your employees, patrons or any other person."
By its terms, the endorsement was made part of the Browns' insurance policy.3
On March 27, 1995, the Browns were told that R.G. and M.D. were planning to burglarize their store that night. R.G. and M.D. had been in the store that day to trade a tire, a jack, and a tire tool in exchange for a half case of beer and $5.00 worth of gasoline. The record indicates that, at the time the Browns were warned about the possible burglary, there had been previous unsolved incidents of vandalism and stealing at the store.4
After closing the store at 7:00 p.m., the Browns went to their home in Maplesville. Over dinner, the Browns decided to return to the store to possibly apprehend any burglars. When the Browns arrived at the store that evening, around 8:30 p.m., they hid their truck in a wooded area several hundred yards from the store. They hid in the pumphouse near the store; Leo was armed with a .30-30 rifle and Gloria was armed with a .32 caliber pistol. According to Leo, they took the guns because they thought R.G. and M.D. might be dangerous. While in the pumphouse, Leo drank three beers.
Around 11:30 p.m., the Browns heard the sound of an automobile engine being started at a house next door to the store and heard voices yelling "whoopy, whoopy." They heard the car being driven from the house over a gravel lot to the store, where the driver stopped and parked it. Leo then left the pumphouse, armed with the .30-30 rifle, and walked around to the front of the store. Before leaving the pumphouse, Leo released the safety mechanism on Gloria's pistol and told her to stay in the pumphouse.
As Leo left the pumphouse, Gloria heard the store's burglar alarm sound. When Gloria heard the alarm, she left the pumphouse and walked toward the highway in front of the store. She testified that she saw Shaun Scott's car and recognized it before she saw either Leo or Scott.5
Ultimately, as a result of this encounter, Scott filed a tort action against the Browns. Scott secured a judgment in that action. Then, the Browns filed their action against Acceptance, based on Acceptance's failure to defend and indemnify the Browns in regard to Scott's action against them.
In the Browns' action against Acceptance, Gloria testified that she saw Scott standing with the store's padlock in his hand and that he appeared to be "messing with the front door."6 Leo called out, "Shaun, what in the hell are you trying to do?" When Scott did not respond, Leo fired two shots that he called "warning shots." The record indicates that the first shot passed behind Scott and hit an ice machine. Leo stated that he fired the first shot to scare Scott away. According to Leo, Scott acted as if he had not heard anything and Leo therefore fired a second warning shot.7
After Leo fired the second "warning shot," Scott turned toward Leo and ran to his car. As Scott was getting into his car, Leo approached and tried to hit Scott with the rifle. Instead, Leo hit the frame of the car and broke the stock of the rifle in half. Leo then began poking Scott in the face with the barrel of the rifle. Leo stated that he poked Scott in the face because he thought Scott was trying to reach something under his seat. When Scott tried to get out of his car, Leo hit him on the back of the head with the barrel of the rifle. Leo used a downward swing that almost knocked Scott to the ground. Gloria stood at the corner of the store and saw the fight between Scott and Leo. After Leo hit Scott on the head with the rifle, Scott "came up" and started running, with his arms out, toward the corner of the store where Gloria stood. Leo stated that Scott "charged at" Gloria; Gloria testified that she did not see a weapon in Scott's outstretched hands as he ran toward her. Gloria testified that she closed her eyes and "drew up," thinking that Scott was going to attack her. She fired the pistol and shot Scott in the abdomen, below his navel.8 After being shot, Scott ran past Gloria to the neighbor's house, where his car had been before he drove it to the store. An ambulance took Scott to a hospital.9
The following morning, Leo and Gloria went to the sheriff's department to give a written statement of the previous night's events. Scott also gave a written statement.
In April 1995 (a month before Scott sued the Browns), the Browns submitted a "claim of loss" to Acceptance. Mary Anderson, a "litigation manager" for Acceptance Insurance Company, testified that, at the time of the Browns' claim, "she understood that the date of loss was March 27, 1995, and that the allegations were that someone named Shaun Scott had been shot by the insured during an attempted break-in of the store." Acceptance's general agent, NAI Excess & Surplus Lines, had assigned the investigation of the claim to an independent adjuster, Capitol Adjustment Company, Inc. ("Capitol Adjustment"). When Anderson received notice of the claim, she says, she reviewed the insurance policy covering the Browns and determined that the policy had an "intentional-acts" exclusion and an assault-and-battery exclusion. According to Anderson, in light of the preliminary facts provided from the loss notice and the intentional-acts and assault-and-battery exclusions in the policy, she sent a "reservation-of-rights" letter to Leo Brown on April 14, 1995.10 In the meantime, Willard Smith, an investigator for Capitol Adjustment, investigated the Browns' claim, on behalf of Acceptance. Smith interviewed Leo and Gloria Brown on April 10, 1995. Gloria stated that Scott came running at her "like a wild man" and that she did not aim the gun at him. She told him she did not know immediately that she had pulled the trigger: On April 12, 1995, Smith forwarded to Acceptance transcribed versions of Leo and Gloria Brown's statements.
Smith also determined that the Perry County Sheriff's Department had investigated the beating and shooting of Scott and was treating the incident as a criminal offense of aggravated assault or assault in the first degree. Smith obtained the Perry County Sheriff's Department's report of the incident and, on April 17, 1995, forwarded the report to Acceptance. Acceptance asked Smith to continue his investigation, to clarify the incident.
On May 1, 1995, Smith took photographs of the G & L Grocery premises. At that time, he again spoke with Leo Brown, who told him that a grand jury had met and had indicted him and Gloria on charges of criminal assault. Leo Brown also told Smith that they had hired an attorney to defend them at an upcoming hearing.11 On May 3, 1995, Smith reported this information to Acceptance.
On May 26, 1995, Scott sued the Browns, alleging that Leo and Gloria Brown had "negligently and/or wantonly injured him by shooting and beating him without provocation, justification and/or legitimate excuse."
On June 1, 1995, the Browns'...
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