Cincinnati Ins. Co. v. Lee Anesthesia, P.C.
| Decision Date | 18 March 1994 |
| Citation | 641 So.2d 247 |
| Parties | CINCINNATI INSURANCE COMPANY v. LEE ANESTHESIA, P.C., et al. 1930019. |
| Court | Alabama Supreme Court |
Mike Brock and N. Wayne Simms, Jr. of Rushton, Stakely, Johnston & Garrett, P.A., Montgomery, for appellant.
W.F. Horsley of Samford, Denson, Horsley, Pettey and Martin, Opelika, for appellee Lee Anesthesia, P.C.
G. William Gill of McPhillips, Shinbaum & Gill, Montgomery, for appellee Dr. Donald A. Perry.
Cincinnati Insurance Company ("Cincinnati") sought a judgment declaring that it had no obligation to cover certain of its insureds in an underlying legal action. The trial court held that Cincinnati was required to defend its insured in the underlying action. Specifically, the trial court held that the claim made by the plaintiff in the underlying action against Cincinnati's insureds did not arise out of and in the course of his employment and therefore was not subject to the insurance policy exclusion that Cincinnati sought to invoke.
The facts giving rise to this declaratory judgment action are as follows: In May 1989, Dr. Donald A. Perry sued Lee Anesthesia, P.C., and Dr. G. Earle Fuller, individually and as president of Lee Anesthesia (hereinafter referred to collectively as "Lee Anesthesia"). Dr. Perry alleged that Lee Anesthesia had breached a contract under which it had agreed to pay him a certain amount of money for professional services and that it had failed to provide all of the employee benefits they had agreed upon. Additionally, Dr. Perry stated a fraud count against Lee Anesthesia, claiming that it made various false representations concerning Dr. Perry's benefits and compensation and that he had relied on these representations to his detriment. Specifically, Dr. Perry claimed to have suffered severe mental anguish because of the alleged fraud.
Lee Anesthesia is a named insured under a business owner's insurance policy issued by Cincinnati Insurance Company. Under this policy, Cincinnati agreed to pay on behalf of its insureds all sums that the insureds became legally obligated to pay as damages because of bodily injury or property damage caused by an occurrence arising from the ownership, maintenance, or use of the insured premises. Among other limitations and exclusions, the policy provides that the insurance does not apply:
"(a) to bodily injury to any employee of the insured arising out of and in the course of his employment by the insured for which the insured may be held liable as an employer or in any other capacity."
We note that the parties have stipulated that Dr. Perry's claim is for bodily injury and that the act complained of does constitute an "occurrence" as defined by the policy in question.
The dispositive issue on this appeal is whether the bodily injury exclusion, as set out above, relieves Cincinnati of its obligation to defend Lee Anesthesia. In other words, when did Dr. Perry's injury occur--before or after his employment with Lee Anesthesia began?
An insurance company's duty to defend its insured is...
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