Cincinnati Ins. Co. v. Nelson
| Decision Date | 07 July 1995 |
| Parties | The CINCINNATI INSURANCE COMPANY v. James A. NELSON, Jr., et al. 1931701. |
| Court | Alabama Supreme Court |
Appeal from Mobile Circuit Court, No. CV-93-948; Robert E.L. Key, Judge.
Norman E. Waldrop, Jr., M. Kathleen Miller and Tara T. Bostick, Mobile, for Appellant.
Joseph M. Brown, Jr. and Mitchell K. Shelley of Cunningham, Bounds, Yance, Crowder & Brown, Mobile, for James A. Nelson.
Fred W. Killion III of Killion & Vollmer, P.C., Mobile, for State Farm Mut. Auto. Ins. Co.
Michael P. Windom of Prince, McKean, McKenna & Broughton, Mobile, for Motors Ins. Co.
James A. Nelson, Jr., was involved in an accident when the vehicle he was driving collided with a 1989 Dodge Dakota truck driven by Gregory E. Morris, an employee of D.M. Kennedy and Associates, Inc. ("Kennedy and Associates"). Nelson sued Morris, Kennedy and Associates, and State Farm Mutual Automobile Insurance Company ("State Farm"), Nelson's automobile liability insurer. In that action Nelson alleged claims of negligence and wantonness against Morris and Kennedy and Associates, and an underinsured motorist claim against State Farm.
Nelson later brought a declaratory judgment action against The Cincinnati Insurance Company ("Cincinnati"), which provided liability coverage for motor vehicles owned by Kennedy and Associates. Nelson contended that Kennedy and Associates owned the truck driven by Morris and that, pursuant to the Cincinnati policy with Kennedy and Associates, Cincinnati was required to provide coverage for the accident. Cincinnati argued that the truck was owned by Morris; if it was, then Cincinnati would have no liability under the policy. State Farm and Motors Insurance Corporation ("Motors"), a company providing underinsured motorist liability coverage on the "loaner car" Nelson was driving at the time of the accident, filed third-party complaints for a declaratory judgment against Cincinnati, also contending that Cincinnati's policy provided coverage for the accident. After conducting an ore tenus proceeding, the trial court determined that Kennedy and Associates owned the truck and that the Cincinnati policy provided coverage for the accident. It entered a judgment against Cincinnati on the declaratory actions filed by Nelson, State Farm, and Motors. Cincinnati appeals.
The dispositive issue is whether Morris or Kennedy and Associates was the owner of the truck for purposes of determining Cincinnati's liability under Kennedy and Associates' insurance policy.
A presumption of correctness attaches to a trial court's judgment based on findings of fact after the court has heard oral testimony without a jury; this is the "ore tenus" rule. However, that rule has no application in this case, because the facts are not in dispute. Therefore, the trial court's judgment is not entitled to any presumption of correctness. Parker v. Barnes, 519 So.2d 945 (Ala.1988).
In 1989, Kennedy and Associates purchased the truck from Chrysler Finance Corporation ("Chrysler"). The truck was used in Kennedy and Associates' business. In June 1992, D.M. Kennedy, the president of Kennedy and Associates, offered to sell the truck to Morris, who was an electrician employed by Kennedy and Associates. Morris agreed to purchase the truck by taking up the payments remaining on Kennedy and Associates' note to Chrysler. Morris made the payments to Kennedy and Associates, which in turn sent the payments to Chrysler. From July 1992 until December 1992, Morris made the payments; however, in January and February 1993, Morris did not make the payments, because of financial problems arising after his January 8, 1993, accident with Nelson. Kennedy and Associates made the January and February payments for Morris, and Morris paid Kennedy for the missed payments through "[c]ash and hours worked." After the accident, Morris sold the truck for scrap and used a portion of the proceeds to make a final payment to Kennedy and Associates.
Although Morris was in possession of the truck from July 1992 until the accident, Kennedy and Morris never executed a bill of sale. Kennedy and Associates remained listed as the...
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