Allstate Indem. Co. v. Lewis

• Decision Date: 18 November 1997
• Docket Number: No. CIV. A. 96-T-1028-N.,CIV. A. 96-T-1028-N.
• Citation: 985 F.Supp. 1341
• Parties: ALLSTATE INDEMNITY COMPANY, Plaintiff, v. Frances LEWIS, etc., et al., Defendants.
• Court: U.S. District Court — Middle District of Alabama

985 F.Supp. 1341

ALLSTATE INDEMNITY COMPANY, Plaintiff, v. Frances LEWIS, etc., et al., Defendants.

No. CIV. A. 96-T-1028-N.

United States District Court, M.D. Alabama, Northern Division.

November 18, 1997.

COPYRIGHT MATERIAL OMITTED

Michael Baird Beers, Christopher Joseph Hughes, Beers, Anderson, Jackson, Hughes & Patty, PC, Montgomery, AL, for Allstate Indem. Co.

Donald R. Harrison, Harrison & Edmondson, LLC, Dadeville, AL, for Francis Lewis.

Tyrone Carlton Means, Launice P. Sills, Paul C. Williams, Thomas, Means & Gillis, P.C., Montgomery, AL, for Michael Doak Nesbitt.

MEMORANDUM OPINION

MYRON H. THOMPSON, Chief Judge.

Pursuant to the Declaratory Judgment Act, 28 U.S.C.A. § 2201, plaintiff Allstate Indemnity Company filed this lawsuit against defendant administratrix of the estate of Walter Lewis, Jr., and defendant Michael Doak Nesbitt, seeking a declaration that Allstate has no duty, under a homeowner's insurance policy, to defend or indemnify Nesbitt in an underlying state-court action the administratrix has against Nesbitt.

Allstate has invoked this court's diversity-of-citizenship jurisdiction under 28 U.S.C.A. § 1332. By agreement of the parties, this lawsuit has been submitted to the court for final judgment on the pleadings, the jointly-submitted evidentiary record, and the briefs of the parties. For the reasons that follow, the court declares that Allstate has a duty to defend Nesbitt against claims of negligence and assault in the underlying lawsuit, and has no duty to defend claims of wantonness and conspiracy to kill.

I. BACKGROUND

On January 9, 1994, Nesbitt and Lewis drove to the Top Flight Disco, a nightclub in Montgomery, Alabama.¹ As Nesbitt idled the car in the street, Lewis exited the car and began talking to William² Hayes in front of the club.³ Nesbitt remained in the car and observed Hayes and Lewis as they engaged in a verbal altercation.⁴ This verbal confrontation escalated, and Hayes began pointing a gun toward Lewis.⁵

At this point, Nesbitt retrieved a handgun from a compartment in the car and approached Hayes and Lewis.⁶ Lewis was positioned between Hayes and Nesbitt.⁷

The parties dispute the following events. Allstate claims that Nesbitt drew his weapon and pointed it toward Hayes;⁸ that Hayes fired at Nesbitt, and Nesbitt returned the fire;⁹ and that Lewis, being trapped between the gunmen, was shot and subsequently died of his injuries.¹⁰ Nesbitt also shot and killed Hayes during the gun fight.¹¹

Lewis's administratrix and Nesbitt claim that Lewis asked Nesbitt for the weapon and then attempted to grab the gun;¹² and that, during Lewis's struggle with Nesbitt for the weapon, the gun accidentally discharged, and a bullet struck Lewis.¹³

Nesbitt was arrested and charged with the deaths of Lewis and Hayes.¹⁴ During the trial, Nesbitt testified that he did not fire at Hayes until after Lewis was injured by the accidental discharge.¹⁵ Nesbitt was found not guilty in the criminal trial.¹⁶

After Nesbitt's criminal trial, Lewis's mother, as his administratrix, brought a lawsuit against Nesbitt in the Circuit Court of Montgomery County, raising claims related to the shooting and subsequent death of her son. Allstate filed this federal lawsuit seeking a declaratory judgment of its duty to defend and indemnify Nesbitt under his parents' homeowner insurance policy.

At the time of the shooting, Nesbitt resided with his parents who were insured by Allstate.¹⁷ Nesbitt was covered under his parents' policy.¹⁸ The policy provides that, "Allstate will pay damages which an insured person becomes legally obligated to pay because of bodily injury or property damage arising from an occurrence" that is covered under the policy.¹⁹ The policy, however, contains a number of exclusions, including an exclusion for bodily injury or property damage that results from an insured's intentional or criminal acts or omissions.²⁰

II. DUTY TO DEFEND

Allstate argues that it has no duty to defend Nesbitt in the underlying state-court lawsuit because the allegations in the state-court complaint fall outside the scope of the insurance policy's coverage. The court disagrees in part and agrees in part.

A.

An insurance company's duty to defend its insured from suit is determined by the language of the insurance policy and by the allegations in the complaint filed against the insured. Alfa Mutual Ins. Co. v. Morrison, 613 So.2d 381, 382 (Ala.1993); Ladner & Co. v. Southern Guar. Ins. Co., 347 So.2d 100, 102 (Ala.1977). "If the allegations of the injured party's complaint show an accident or occurrence which comes within the coverage of the policy, the insurer is obligated to defend regardless of the ultimate liability of the insured." Chandler v. Alabama Mun. Ins. Co., 585 So.2d 1365, 1367 (Ala.1991) (internal quotations omitted) Where the allegations of the complaint show that no injury alleged is within the coverage of the policy, however, "the court is not limited to the bare allegations of the complaint ... but may also look to facts which may be proved by admissible evidence." Id. See also Perkins v. Hartford Ins. Group, 932 F.2d 1392 (11th Cir.1991).

Under Alabama law, the insured bears the burden of establishing coverage by demonstrating that a claim falls within the policy, Colonial Life & Accident Ins. Co. v. Collins, 280 Ala. 373, 194 So.2d 532, 535 (Ala.1967), while the insurer bears the burden of proving the applicability of any policy exclusion. U.S. Fidelity & Guar. Co. v. Armstrong, 479 So.2d 1164, 1168 (Ala.1985). If an insurance policy is ambiguous in its terms, the policy must be construed liberally in favor of the insured, and exceptions to coverage must be interpreted as narrowly as possible in order to provide maximum coverage to the insured. Altiere v. Blue Cross & Blue Shield, 551 So.2d 290, 292 (Ala.1989). However, if there is no ambiguity, an insurance contract must be enforced as written, and courts should not defeat express provisions in a policy, including exclusions from coverage, by making a new contract for the parties. Id.

Lewis's administratrix raises the following allegations in the underlying state-court lawsuit:

• In count one, the administratrix claims that Nesbitt and others assaulted her son.²¹

• In count two, she claims that Nesbitt and others negligently and wantonly caused the death of her son.²²

• In count three, she alleges that Nesbitt and others conspired to kill her son.²³

• Finally, in counts four and five, she claims that Nesbitt wantonly caused the death of her son.²⁴

In sum, Lewis's administratrix seeks to recover under the following state-law theories: (1) negligence, (2) assault, (3) wantonness, and (4) conspiracy to kill.

As stated, the policy provides that Allstate would defend Nesbitt for amounts that he was legally obligated to pay for "bodily injury" or "property damage" due to an "occurrence."²⁵ The policy offers the standard definition of an "occurrence" within the context of insurance law: "an accident, including continuous or repeated exposure to substantially the same general harmful conditions during the policy period, resulting in bodily injury or property damage."²⁶ The policy, however, excludes "any bodily injury or property damage intended by, or which may reasonably be expected to result from the intentional or criminal acts or omissions of, any insured person."²⁷ Relying on the exclusion, Allstate maintains that, because the administratrix's underlying state-court complaint alleges injury from `intentional' acts, it has no duty to defend Nesbitt on these claims.²⁸ The question for the court, therefore, is whether any of the theories of recovery is based on intentional conduct and thus falls within the exclusion.

B.

In Universal Underwriters Ins., Co. v. Stokes Chevrolet, Inc., 990 F.2d 598 (11th Cir.1993), the Eleventh Circuit Court of Appeals addressed the issue of coverage when a policy precludes coverage based on language which uses "intentional" terminology. The court made clear that the coverage issue turns on the specific policy terminology or wording at issue. There, two parts of the policy, with critically different wording, were at issue. The first part addressed the broad question of liability coverage and provided for coverage "caused by an OCCURRENCE arising out of GARAGE OPERATIONS or AUTO HAZARD." 990 F.2d at 602. The policy then defined an "occurrence" as "an accident, including continuous or repeated exposure to conditions, which results in INJURY during the Coverage Part neither intended nor expected by the INSURED." Id. (emphasis added). The court held that, because this wording limited coverage to injuries `neither intended nor expected by the insured,' coverage was afforded "except where the insured subjectively intended to cause the injury for which it is found liable." Id. (emphasis added). The court explained that, with such wording, "a subjective standard" should be applied "in interpreting the policy's coverage limitation." Id. at 603.

The second part of the policy, which provided for exclusions, also used "intentional" terminology. It excluded from coverage "INJURY, PRODUCT RELATED DAMAGES or LEGAL DAMAGES, if caused by any dishonest, fraudulent, intentional or criminal act committed by any INSURED." Id. at 604 (emphasis added). However, because the critical language, `neither intended nor expected by the insured,' was missing, the court concluded that "the policy exclusion unambiguously excludes from coverage all intentional acts giving rise to liability regardless of whether the insured subjectively intended the resulting damages or injuries." Id. (emphasis added). The subjectivity of the insured was immaterial. Id.

Admittedly, the phrase "all intentional acts" — without the `intended by insured' or any other modifier — could be viewed as encompassing even negligent or reckless acts, for even these latter acts usually involve some volitional, and in that sense intentional, conduct. See ...