Canal Ins. Co. v. Old Republic Ins. Co.
| Decision Date | 29 May 1998 |
| Citation | 718 So.2d 8 |
| Parties | CANAL INSURANCE COMPANY v. OLD REPUBLIC INSURANCE COMPANY. 1961478. |
| Court | Alabama Supreme Court |
Jack J. Hall and Patrick R. Norris of McDaniel, Hall & Conerly, P.C., Birmingham, for appellant.
Charles E. Sharp and Robert H. Sprain, Jr., of Sadler, Sullivan, Sharp, Fishburne & Van Tassel, P.C., Birmingham, for appellee.
Canal Insurance Company appeals from a judgment declaring that Canal and Old Republic Insurance Company owed concurrent liability coverage to the insured, Kenney Wilson, a defendant in a wrongful death action. Canal argues that it owes no liability coverage to Wilson under the facts of the underlying wrongful death action. The question is whether Wilson's automobile policy with Canal covered his trailer, under the circumstances of the accident that led to the wrongful death action.
On June 7, 1994, a logging truck owned by 7K Logging, Inc., and driven by a 7K employee, was towing a trailer owned by Wilson. A wheel came off the trailer and struck a vehicle, killing its driver, Waymon Williams. At the time of the accident, Wilson owned two Canal automobile insurance policies that provided primary and excess coverage to Wilson. The first page of the primary coverage policy described the vehicles covered as "1987 FREIGHTLINER TRACTOR AND ANY TRAILER SINGULARLY ATTACHED TO THE ABOVE-DESCRIBED TRACTOR," and it listed the vehicle identification number of the Freightliner tractor. The excess coverage policy stated that it provided coverage to Wilson only if the primary policy provided coverage.
In March 1995, Williams's widow filed a wrongful death action against 7K Logging, the 7K driver, Wilson, and Alfa Mutual Insurance Company (Williams's insurance carrier). In May 1995, Canal denied Wilson's claim for coverage under his Canal policy, and Wilson filed a complaint seeking a judgment declaring that he had insurance coverage with regard to the wrongful death action. Wilson named as defendants Canal Insurance Company, Williams's widow, 7K Logging, Inc., 7K's employee/driver, and Alfa Insurance Company. By amendment, Wilson added Old Republic Insurance Company as a defendant and sought coverage under an Old Republic policy issued to 7K Logging. Old Republic admitted that its policy provided coverage to Wilson, and it assumed the defense of Wilson in the wrongful death action.
In the declaratory judgment action, Old Republic filed a cross-claim against Canal, alleging that Canal had a duty to defend and indemnify Wilson and that Canal's coverage of Wilson was primary to, or at least was concurrent with, Republic's coverage of Wilson. Canal denied that its policy covered Wilson at all under these facts.
In May 1996, Old Republic funded a $750,000 settlement of the wrongful death action and obtained a full release on behalf of Wilson and all of the other defendants. On February 4, 1997, the trial court in the declaratory judgment action granted Wilson's motion to be dismissed as a plaintiff.
Old Republic and Canal filed cross motions for summary judgment in the declaratory judgment action. On February 24, 1997, the trial court denied both motions and entered the following order:
Canal filed a motion to "reconsider" that order. Following a hearing, the trial court denied the motion and certified the February 24, 1997, order as final, pursuant to Rule 54(b), Ala. R. Civ. P. 1 Canal argues that the policy it issued to Wilson does not cover Wilson's trailer that was involved in the accident, that it does not require Canal to defend Wilson in the wrongful death action, and that it does not require Canal to indemnify Old Republic for the coverage it provided Wilson or for the settlement it funded on Wilson's behalf in the wrongful death action.
Old Republic argues that the trial court's judgment of concurrent coverage is correct because, it argues, the Canal policy is ambiguous and, therefore, must be construed to provide coverage for Wilson. Old Republic claims that an ambiguity arises when the "declarations" section and the definitions of "automobile" and "owned automobile" are read together.
The Canal policy reads, in pertinent part:
(Emphasis added.)
Item 3 of the declarations section of the Canal policy clearly provides coverage for specifically identified vehicles: one tractor (its make, year, and VIN number are listed) and "any trailer singularly attached to the above-described tractor." In Paragraph I of Section A, Canal agrees to pay damages caused by an occurrence arising out of the use of "an owned automobile." Paragraph VI defines "automobile" to include a trailer; however, Paragraph VII defines an "owned automobile" as "an automobile which is owned by the named insured and described in the declarations " (emphasis added).
Old Republic argues that ambiguity arises from the use of the phrase "any trailer" in Item 3 of the Declarations and from the definition of "Automobile" in Paragraph VI of Section A. However, the phrase "any trailer" is limited by the succeeding phrase, "singularly attached to the above-described tractor." The trailer was not attached to Wilson's Freightliner tractor at the time of the collision with Williams's vehicle, so the Canal policy did not provide coverage for it under the circumstances of that collision. The definition of "automobile" does not supersede the definition of "owned automobile" so as to cause the policy to cover all trailers owned by Wilson; rather, the definition of "owned automobile" must be applied to the coverage provision in Paragraph I of Section A, and that definition requires that the automobile be "described in the declarations." The only trailer described in the declarations is one attached to Wilson's Freightliner tractor, so the trailer in question was not an "owned automobile" within the terms of the Canal policy as it applies to the facts in question.
While limitations on coverage are to be interpreted as narrowly as possible so as to provide the maximum allowable coverage to the insured (American States Ins. Co. v. Martin, 662 So.2d 245 (Ala.1995)), parties' conflicting constructions of otherwise unambiguous policy language do not necessarily render the disputed language ambiguous. Upton v. Mississippi Valley Title Insurance Co., 469 So.2d 548 (Ala.1985); Watkins v. United States Fid. & Guar. Co., 656 So.2d 337 (Ala.1994). Courts may not rewrite the terms of a policy or interpret unambiguous policy language so as to provide coverage that was not intended by the parties. Altiere v. Blue Cross & Blue Shield of Alabama, 551 So.2d 290 (Ala.1989). See, also, Home Indemnity Co. v. Employers National Insurance Corp., 564 So.2d...
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