Aetna Life & Cas. Co. v. Atlantic & Gulf Stevedores

• Decision Date: 06 September 1991
• Parties: AETNA LIFE & CASUALTY COMPANY, et al. v. ATLANTIC & GULF STEVEDORES. 1900969.
• Court: Alabama Supreme Court

Page 205

590 So.2d 205

AETNA LIFE & CASUALTY COMPANY, et al. v. ATLANTIC & GULF STEVEDORES.

1900969.

Supreme Court of Alabama.

Sept. 6, 1991.

Rehearing Denied Nov. 22, 1991.

David A. Hamby and Thomas Nolan, Jr. of Brown, Hudgens, P.C., Mobile, for appellants.

Joe E. Basenberg and Brian P. McCarthy of Hand, Arendall, Bedsole, Greaves & Johnston, Mobile, for appellee.

HOUSTON, Justice.

David Turk was injured when he was hit by a piece of metal that had fallen from a crane at the Alabama State Docks in Mobile ("the State Docks"). ¹ At the time of his accident, Turk, a longshoreman for Atlantic & Gulf Stevedores ("Atlantic & Gulf"), was working as a member of a "gang" unloading aluminum ingots from the ship. Atlantic & Gulf had leased the crane from the State Docks pursuant to a written lease agreement. Fred C. Daniels, Audie L. O'Farrell, J.C. Lundy, E.G. Browning, Clarence Sheldt, W.M. McCrary, A.B. McKenzie, and William Moody were all employed at the State Docks at the time of Turk's accident and had various responsibilities in connection with the unloading of the ship. (These employees are hereinafter collectively referred to as "the State Docks employees.") Turk sued the State Docks employees and Aetna Casualty & Surety Company ("Aetna"), the insurance carrier for the State Docks, seeking damages under theories of negligence and wantonness. Turk sued Aetna under Ala.Code 1975, § 33-1-25, which authorizes a direct action against the insurance carrier of the State Docks. ² Aetna and the State Docks employees filed a third-party complaint against Atlantic & Gulf, seeking indemnity based on the lease agreement between the State Docks and Atlantic & Gulf. ³ Because of the insolvency of Atlantic & Gulf's insurance carrier, Midland Insurance Company, and while the claims of Turk, Aetna, and the State Docks employees were pending, the Alabama Insurance Guaranty Association ("the Association") filed a declaratory judgment action against Turk, Aetna, the State Docks employees, and Atlantic & Gulf, seeking a ruling that it was not obligated under the Midland policy to defend Atlantic & Gulf or to otherwise provide coverage in connection with the indemnity claims brought against Atlantic & Gulf. ⁴ The trial court stayed further proceedings in the original suit until a determination of the Association's obligations to Atlantic & Gulf under the Midland policy could be made. Thereafter, the trial court entered a summary judgment for Atlantic & Gulf in the declaratory judgment action, ruling that the indemnity claims filed against Atlantic & Gulf were "covered" claims under the Alabama Insurance Guaranty Association Act ("the Act"). Atlantic & Gulf prevailed in the declaratory judgment action, at least in part because it took the position that Aetna was not an "insurer" within the meaning of § 27-42-5. ⁵ The Association did not appeal from the judgment entered in the declaratory judgment action. Subsequently, Aetna and the State Docks employees settled with Turk, but continued to prosecute their indemnity claims against Atlantic & Gulf. Atlantic & Gulf moved for a summary judgment on the indemnity claims, arguing that the State Docks employees had suffered no monetary loss that would support their claims and that Aetna's claim was barred because Aetna was an "insurer" within the meaning of § 27-42-5. ⁶ The trial court granted Atlantic & Gulf's motion, and Aetna and the State Docks employees appealed. We reverse and remand.

The summary judgment was proper if there was no genuine issue of material fact and Atlantic & Gulf was entitled to a judgment as a matter of law. Rule 56, A.R.Civ.P. The burden was on Atlantic & Gulf to make a prima facie showing that no genuine issue of material fact existed and that it was entitled to a judgment as a matter of law. If that showing was made, then the burden shifted to Aetna and the State Docks employees to present evidence creating a genuine issue of material fact, so as to avoid the entry of a judgment against them. In determining whether there was a genuine issue of material fact, we must view the evidence in the light most favorable to Aetna and the State Docks employees and we must resolve all reasonable doubts against Atlantic & Gulf. Leighton Avenue Office Plaza, Ltd. v. Campbell, 584 So.2d 1340 (Ala.1991). Because this case was pending on June 11, 1987, the applicable standard of review is the "scintilla of evidence" rule. Ala.Code 1975, § 12-21-12.

The dispositive issues in this case are as follows:

1. Whether the summary judgment for Atlantic & Gulf was proper with respect to the claims of the State Docks employees seeking indemnity for attorney fees allegedly expended in connection with defending Turk's suit; and,

2. Whether Atlantic & Gulf was estopped from taking the position in its motion for summary judgment against Aetna that Aetna was an insurer within the meaning of the Act, when in the declaratory judgment action it had taken a contrary position in its motion for summary judgment against the Association.

Citing King v. Capitol Amusement Co., 222 Ala. 115, 130 So. 799 (1930), Atlantic & Gulf contends that the indemnity claims of the State Docks employees were without merit, because, it argues, none of them was required to pay any attorney fees in connection with defending Turk's suit. The State Docks employees concede that Aetna bore the entire financial burden of the settlement with Turk; however, they argue that there are still questions to be resolved as to which of them had to pay attorney fees, as well as questions as to the amount that had to be paid. It may be true, as Atlantic & Gulf contends, that Aetna assumed full financial responsibility for the defense of the State Docks employees. However, the record, confusing as it is, does indicate that the State Docks employees were represented at various stages of the litigation by attorneys who apparently were not hired by Aetna. It is certainly reasonable to assume that those attorneys charged for their respective services. Atlantic & Gulf correctly points out, and again the employees concede, that there is no evidence in the record showing that the employees actually paid any attorney fees in connection with their defense of Turk's claim. The State Docks employees correctly point out, however, that Atlantic & Gulf did not make a prima facie showing that they had paid no attorney fees in connection with the litigation. Therefore, because Atlantic & Gulf failed to make this prima facie showing, the burden never shifted to the employees to show that they had paid attorney fees in connection with defending Turk's suit. With the case in this posture (i.e., with the State Docks employees claiming indemnity for attorney fees paid in connection with defending Turk's suit, and no evidence showing that they paid no attorney fees), we have no alternative under our standard of review but to reverse the summary judgment with respect to the indemnity claims of the State Docks employees and remand the case for a determination as to whether any of the employees have an indemnity claim against Atlantic & Gulf for attorney fees allegedly paid in connection with defending Turk's suit.

With regard to the second issue, Aetna contends that Atlantic & Gulf was estopped under the "doctrine of inconsistent positions" from taking the position that it was an "insurer" within the meaning of § 27-42-5, and, thus, that the Act barred its indemnity claim. The thrust of Aetna's argument is that the issue concerning whether it was an "insurer" within the meaning of § 27-42-5 was fully adjudicated in the declaratory judgment action and, therefore, that Atlantic & Gulf was barred from relitigating that issue by taking a position contrary to the one that it had...