Baughman v. Harbor Ins. Co.

• Decision Date: 04 May 1984
• Citation: 450 So.2d 1090
• Parties: Bruce BAUGHMAN v. HARBOR INSURANCE COMPANY, et al. 82-1034.
• Court: Alabama Supreme Court

Page 1090

450 So.2d 1090

Bruce BAUGHMAN v. HARBOR INSURANCE COMPANY, et al.

82-1034.

Supreme Court of Alabama.

May 4, 1984.

J. Paul Whitehurst of Henley, Whitehurst & Shirley, Northport, for appellant.

James J. Jenkins of Phelps, Owens, Jenkins, Gibson & Fowler, Tuscaloosa, for appellees Harbor Ins. Co. and Great American Ins. Co.

J. Fred Wood, Jr. and Terry McElheny of Dominick, Fletcher, Yeilding, Wood & Lloyd, Birmingham, for appellee Stonewall Ins. Co.

Wayne L. Williams of Williams & Pradat, Tuscaloosa, for appellees Chubb, Pacific Indem. Group and Federal Ins. Co.

BEATTY, Justice.

This is an appeal by plaintiff from an order made final under Rule 54(b), A.R.Civ.P., dismissing four insurance company defendants as parties in a lawsuit which also named their insureds as defendants. We affirm.

The facts are not complicated. Plaintiff owns a parcel of land in Tuscaloosa County. He filed a complaint against Warrior River Coal Company and Lloyd Wood Coal Company, Inc., claiming that they damaged his land by causing silt and sediment to be deposited thereon as a result of their strip-mining operations.

Plaintiff later amended his complaint by stating claims against the four insurance companies alleged to have furnished certificates of liability insurance in order that the other defendants might comply with the compulsory insurance requirements of the Surface Mining Reclamation Act, Code of 1975, § 9-16-43 (now § 9-16-83). Motions to dismiss were filed on behalf of the defendant insurers, and, in due course, these defendants were dismissed

"without prejudice to plaintiff's right to recover from any [such] defendant ... in the event that plaintiff shall recover a money judgment against any defendant remaining in the case after the entry of this order. This judgment shall also be without prejudice as to the right of any defendant named herein to contest at a later date the question of whether or not insurance coverage exists for any claim asserted by plaintiff or which might hereinafter be asserted by plaintiff in this suit."

This appeal followed.

The question presented is whether or not a person not named as an insured in a liability insurance policy nevertheless may bring a direct action against the insurance carrier before a final judgment of liability against the insured.

Maness v. Alabama Farm Bureau Mutual Casualty Ins. Co., 416 So.2d 979 (Ala.1982), contains an analysis of Alabama cases decided under the predecessors to Code of 1975, §§ 27-23-1 and -2. Section 27-23-2 states:

"Upon the recovery of a final judgment against any person, firm or corporation by any person, including administrators or executors, for loss or damage on account of bodily injury, or death or for loss or damage to property, if the defendant in such action was insured against the loss or damage at the time when the right of action arose, the judgment creditor shall be entitled to have the insurance money provided for in the contract of insurance between the insurer and the defendant applied to the satisfaction of the judgment, and if the judgment is not satisfied within 30 days after the date when it is entered, the judgment creditor may proceed against the defendant and the insurer to reach and apply the insurance money to the satisfaction of the judgment."

Concerning the effect of the predecessor statutes, this Court quoted with approval from Employers Ins. Co. of Alabama v. Johnston, 238 Ala. 26, 30, 189 So. 58 (1939):

"We have held along with the generally accepted view that the right and remedy provided for in sections 8376 and 8377, Code [1923] (not influenced by other provisions of law or contract), did not extend to plaintiff a primary claim as a contractee of such policy of insurance with a power to sue to enforce it independent of the status created between the assured, against whom judgment had been rendered, and his insurance carrier...."

This Court in Maness, supra, at 981, stated:

"Once an injured party has recovered a judgment against the insured, the injured party may compel the insurer to pay the judgment. The injured party, however, can bring an action against the insurer only after he has recovered a judgment against the insured and only if the insured was covered against the loss or damage at the time the injured party's right of action arose against the insured tortfeasor...." (Citation omitted.)

Plaintiff's principal argument in his brief is summarized as follows:

"The Alabama Surface Mining Reclamation Act of 1975 was passed by the legislature in response to growing outcry of the public to be protected from the hazards which had been historically associated with unregarded surface mining in this state. The protection of the public from injury by the operation of surface mines was an express purpose of the statute. Ala.Code (1975), § 9-16-32(a), (b), (c), (d), (e), (f), and (i). In order to secure this purpose, compulsory liability insurance was required under the act for all licensed operators. The law in this state has historically recognized the right of an injured party to proceed directly against an insuror who provides a liability policy pursuant to a compulsory insurance statute enacted for the protection of the public at large...."

Our attention has been directed to an annotation contained in 20 A.L.R.2d at 1097, entitled "Joinder of insurer and insured under policy of compulsory indemnity or liability insurance in action by injured third person." Section 2 of that annotation, at 1099, is helpful here:

"The question of the propriety of joining an insurer under a compulsory insurance policy with the insured in the same action by an injured or damaged person depends upon two considerations: (1) the terminology of the statute or ordinance requiring the insurance, and (2) the provisions of the particular policy. Ordinarily when a liability or indemnity policy is taken voluntarily, the contract is one by which the insurer undertakes to indemnify or save harmless the insured (and no one else) from any liability or loss which may be legally imposed upon the latter by reason of the risks insured against. There is no privity of contract between the insurer and the third person injured or damaged by the acts of the insured to enable such person to sue the insurer either directly in a separate action or jointly in the same action with the insured. The insurance contract is procured by the insured for his own protection, and not for the protection of a third person who may sustain an injury. In the absence of an enabling statute, therefore, or a policy provision having that effect, the latter may not proceed against the insurer, at least not until he has secured a judgment against the insured with an execution thereon returned unsatisfied...."

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