American Cas. Co. v. Wright

• Decision Date: 09 November 1989
• Court: Alabama Supreme Court
• Parties: AMERICAN CASUALTY COMPANY v. Calvin W. WRIGHT, d/b/a Wright & Sons Trucking Company, et al. 88-253.

Page 1015

554 So.2d 1015

AMERICAN CASUALTY COMPANY v. Calvin W. WRIGHT, d/b/a Wright & Sons Trucking Company, et al.

88-253.

Supreme Court of Alabama.

Nov. 9, 1989.

Rehearing Denied Dec. 22, 1989.

Ritchie Tipton of deGraffenried, Tipton & Donaldson, Tuscaloosa, for appellees.

HOUSTON, Justice.

American Casualty Insurance Company, Inc. ("American Casualty"), filed a declaratory judgment action against Calvin W. Wright, d/b/a Wright & Sons Trucking Company ("Wright"), Ralph Williams & Associates ("Williams"), and John Green ("employee"), seeking to have its workmen's compensation insurance policy construed to determine whether there was coverage for Wright during an alleged period of lapse in that coverage. The trial court heard ore tenus evidence and found that American Casualty, by its conduct after knowledge of all the relevant facts, had waived its right to claim forfeiture of coverage under the policy for nonpayment of the renewal premium. American Casualty appealed.

Under the ore tenus rule, the trial court's decision, where supported by the evidence, is presumed correct and should be reversed only if the judgment is found to be plainly and palpably wrong, after a consideration of all the evidence and after making all inferences that can logically be drawn from the evidence. See City of Birmingham v. Sansing Sales of Birmingham, Inc., 547 So.2d 464 (Ala.1989); King v. Travelers Ins. Co., 513 So.2d 1023 (Ala.1987); Robinson v. Hamilton, 496 So.2d 8 (Ala.1986). The trial court's judgment will be affirmed if there is credible evidence to support the judgment. City of Birmingham v. Sansing Sales of Birmingham, Inc., supra; McCrary v. Butler, 540 So.2d 736 (Ala.1989); Jones v. Jones, 470 So.2d 1207 (Ala.1985).

The issue before us is whether the trial court's finding that American Casualty's conduct, after it had received late payment of the renewal premium, constituted a waiver of its right to claim forfeiture was plainly and palpably erroneous. We hold that the trial court's finding was not plainly and palpably wrong.

Judge J.B. Baird's order concisely presented the reasons for his decision; therefore, we adopt his order as part of our opinion:

"The plaintiff, American Casualty Company, Inc., having filed its complaint for declaratory judgment in the above-styled cause, the case was heard by this Court, sitting without a jury, on August 30, 1988, at which time the parties presented evidence in the form of testimony, exhibits and deposition transcripts with attached exhibits.

"The Court having heard the evidence, reviewed the exhibits and deposition transcripts with attached exhibits, makes the following findings of fact:

"1. American Casualty Company, Inc., issued a workmen's compensation insurance policy to Calvin W. Wright, d/b/a Wright and Sons Trucking Company ("Wright") on August 19, 1986, effective through August 19, 1987.

"2. American Casualty Company, Inc., offered to renew the policy if the renewal premium was received by August 19, 1987.

"3. The premium was received by American Casualty Company, Inc., on September 1, 1987.

"4. American Casualty Company, Inc., retained the premium payment.

"5. John Green, an employee of Wright, was injured on August 25, 1987.

"6. American Casualty Company, Inc., received actual notice of the injury on September 22, 1987.

"7. On September 22, 1987, American Casualty Company, Inc., hired Rehabilitation Consultants, Inc. to perform medical services for the injured employee.

"8. Rehabilitation Consultants, Inc., performed medical services for the benefit of the injured employee at the request of American Casualty Company, Inc. for approximately one (1) month.

"9. By providing medical services to the injured employee, American Casualty Co., Inc., performed a duty required under the workmen's compensation insurance policy it issued to Wright.

"10. On October 21, 1987, American Casualty Company, Inc., mailed notice informing Wright that it intended to apply the renewal premium payment prospectively from September 1, 1987.

WHEREFORE, the above premises considered, it is the finding of this Court that American Casualty Company, Inc., by its conduct after knowledge of all the relevant facts, waived its right to claim forfeiture of coverage under the policy for non-payment of the renewal premium.

"It is therefore the ORDER and JUDGMENT of this Court that American Casualty Company, Inc., owes coverage to Wright under its workmen's compensation insurance policy for the injury to Wright's employee which occurred on August 25, 1987.

"DONE this the 11th day of October, 1988."

American Casualty contends that, because it accepted the renewal payment before it learned that the loss had occurred, it could not have waived its right to claim forfeiture of coverage, regardless of its subsequent conduct. Wright contends that American Casualty's conduct, after it had knowledge of all pertinent facts concerning the employee's injury, manifested an intent not to exercise its right to claim a forfeiture of coverage.

Whether there was a waiver by American Casualty is a matter of intent.

"Probably there is no principle of insurance law more firmly settled, nor better grounded in justice and reason, than that an insurer, who receives and retains premiums, the very consideration for carrying the insurance risk, with knowledge of facts which, under stipulations for his benefit, would, in the absence of such knowledge, empower him to treat the policy as having never been in force, or as being no longer in force, will be held to have waived such stipulations. Waiver, strictly speaking, is a matter of intent. But, in such case, no proof of actual intent is required. Any other intent, in such case, would work a positive wrong or fraud on the insured. The law charges the insurer with the intent to waive under the doctrine of estoppel." (Emphasis added.)

Washington National Insurance Co. v. Scott, 231 Ala. 131, 132, 164 So. 303, 305 (1935); see Alabama Farm Bureau Mutual Casualty Ins. Co. v. Hicks, 272 Ala. 574, 133 So.2d 221 (1961).

"Waiver ... has been defined as the 'voluntary and intentional surrender or relinquishment of a known right.' Dominex, Inc. v. Key, 456 So.2d 1047, 1058 (Ala.1984); see, also, City of Montgomery v. Weldon, 280 Ala. 463, 195 So.2d 110 (1967). An intention to waive a right may be found where one's course of conduct indicates such an intention or is inconsistent with any other intention. Braswell Wood Co. v. Fussell, 474 So.2d 67 (Ala.1985); see, also, 28 Am.Jur.2d Estoppel and Waiver, §§ 158, 160 (1966)."

Ford v. Jackson Square, Ltd., 548 So.2d 1007 (Ala.1989).

In Central National Insurance Group of Omaha v. Grimmett, 340 So.2d 767 (Ala.1976), we recognized the rule set out in Hicks, supra, that when an insurance company accepts payment for a premium on a lapsed policy with knowledge that an accident has occurred during the period of lapse, three options are available to the insurer. The insurer may: 1) return the premium for the lapsed period; 2) apply the premium from the date received forward; or 3) retain the premium and cover the loss. Before an insurance company can avail itself of the second option, however, the intent to apply the premium prospectively must be clearly conveyed to the insured before the premium is accepted. In both Grimmett and Hicks, we were dealing with cases in which the insurer had knowledge of the injury at the time it accepted payment of the past-due premium. In the instant case, however, it is undisputed that...