Cool Temp, Inc. v. Pa. Nat'l Mut. Cas. Ins. Co.

• Decision Date: 31 December 2013
• Docket Number: 2120245.
• Citation: 148 So.3d 448
• Parties: COOL TEMP, INC. v. PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY.
• Court: Alabama Court of Civil Appeals

148 So.3d 448

COOL TEMP, INC.

v.PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY.

2120245.

Court of Civil Appeals of Alabama.

Dec. 31, 2013.

Benjamin H. Farrow of The Anderson Law Firm, L.L.C., Montgomery, for appellant.

Steve R. Burford and Lindsay P. Hembree of Simpson, McMahan, Glick & Burford, PLLC, Birmingham, for appellee.

Opinion

DONALDSON, Judge.

Cool Temp, Inc. (“Cool Temp”), appeals from a summary judgment entered by the Jefferson Circuit Court, Bessemer Division (“the trial court”), holding that Pennsylvania National Mutual Casualty Insurance Company (“PNMCIC”) was not obligated under a policy of insurance to defend Cool Temp in an action in tort and contract brought against Cool Temp by Gregory L. Pilkerton, a Cool Temp employee. We affirm.

Facts

On October 24, 2007, Pilkerton sustained injuries when he fell through an attic while servicing a heating, ventilation, and air-conditioning (“HVAC”) system installed by Cool Temp at a residence in Bessemer. At the time of the incident, Pilkerton was an employee of Cool Temp. Shortly following the accident, Pilkerton began receiving worker's compensation benefits from Cool Temp as a result of the incident.

On October 26, 2009, Pilkerton filed suit (“the underlying suit”) in the trial court against Cool Temp, three named employees of Cool Temp, and various fictitiously named parties.¹ In his complaint initiating the underlying suit, Pilkerton asserted both tort and contract claims against Cool Temp and the fictitiously named parties, including claims of negligence and wantonness in the design, installation, sale, and distribution of the HVAC system; breach of the Alabama Extended Manufacturer's Liability Doctrine; and breach of warranty. Pilkerton also alleged that three named employees of Cool Temp and the fictitiously named parties breached a duty to provide Pilkerton with a safe workplace. The record reveals that at least one of the three named employees had been served with the summons and complaint before the entry of the summary judgment at issue in this appeal and that Pilkerton never substituted actual parties for the fictitiously named parties. In his complaint, Pilkerton acknowledged that he had been an employee of Cool Temp on the date of the accident.

Cool Temp had a general-liability insurance policy (“the policy”) with PNMCIC that was in effect at the time of the incident. The pertinent portion of the policy concerning coverage for bodily injury and property damage states:

“SECTION I—COVERAGES

“COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY

“1. Insuring Agreement

“a. We will pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies....

“2. Exclusions

“This insurance does not apply to:

“....

“d. Workers' Compensation and Similar Laws

“Any obligation of the insured under a workers' compensation, disability benefits or unemployment compensation law or any similar law.

“e. Employer's liability ‘Bodily injury’ to:

“(1) An ‘employee’ of the insured arising out of and in the course of:

“(a) Employment by the insured; or

“(b) Performing duties related to the conduct of the insured's business; or ...

“This exclusion applies:

“(1) Whether the insured may be liable as an employer or in any other capacity; and

“(2) To any obligation to share damages with or repay someone else who must pay damages because of the injury.

“....

“SECTION V—DEFINITIONS:

“....

“3. ‘Bodily injury’ means bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time.”

(Capitalization in original.)

On November 8, 2009, Cool Temp notified PNMCIC of the underlying suit, requested legal representation under the policy, and provided PNMCIC with a copy of Pilkerton's complaint. PNMCIC subsequently declined Cool Temp's request to provide it with a defense to the underlying suit and for indemnification as to Pilkerton's claims on the basis that the terms of the policy excluded claims asserted against Cool Temp by an employee. On December 17, 2009, Cool Temp filed a motion to dismiss the underlying suit, arguing that the exclusivity provisions of § 25–5–52, Ala.Code 1975, precluded Cool Temp from being held liable to Pilkerton for tort and contract claims because Pilkerton's remedies were solely governed by the Alabama Workers' Compensation Act (“the Act”), § 25–5–1 et seq., Ala.Code 1975.² In response to the motion to dismiss, Pilkerton asserted that Cool Temp was liable under the “dual capacity” doctrine, under which an employer normally shielded from civil liability pursuant to § 25–5–52 “may become liable in tort to his own employee if he occupies, in addition to his capacity as employer, a second capacity that confers on him obligations independent of those imposed on him as employer.” 2A Arthur Larson, The Law of Workmen's Compensation § 72.80, p. 14–112 (1976). On April 6, 2010, the trial court denied Cool Temp's motion to dismiss.

On April 19, 2010, Pilkerton filed a separate action against Cool Temp in the trial court, in which he sought worker's compensation benefits. Pilkerton alleged in his complaint initiating the worker's compensation action that the October 24, 2007, accident arose out of and in the course of his employment with Cool Temp. The trial court consolidated Pilkerton's two lawsuits against Cool Temp for discovery purposes only.

On March 1, 2011, Cool Temp, through counsel, again submitted a written request to PNMCIC to provide Cool Temp with a defense and indemnity as to Pilkerton's tort and contract claims pursuant to the policy. On April 7, 2011, PNMCIC again declined the request.

On October 13, 2011, Cool Temp filed a third-party complaint against PNMCIC in the underlying suit in which it alleged a claim of “bad-faith breach of contract” against PNMCIC based on PNMCIC's refusal to provide Cool Temp with a defense and indemnity as to Pilkerton's claims in the underlying suit. In its third-party complaint, Cool Temp requested compensatory damages, punitive damages, and an award of attorney fees for prosecuting the third-party action.

Cool Temp filed a motion for a summary judgment as to Pilkerton's claims in the underlying suit, asserting that Pilkerton's tort and contract claims were barred by the exclusivity provisions of the Act. On May 27, 2012, the trial court entered a summary judgment in favor of Cool Temp on all of Pilkerton's claims against it in the underlying suit. In its judgment, the trial court stated:

“The gravamen of [Pilkerton's] position is that he is entitled to recover from Cool Temp in tort despite the exclusivity of Workers' Compensation as a remedy under ... § 25–5–52 [, Ala.Code 1975,] because either Cool Temp acted with wantonness or it acted in a ‘dual capacity’ in which its involvement with [Pilkerton's] injuries was so far removed from the employer-employee relationship between the parties that the relationship should not be considered. The facts as stipulated by the parties do not support either theory.

“On the facts as stipulated by the parties, Cool Temp has presented in its defense the stipulated employer-employee relationship with [Pilkerton] and § 25–5–52's bar to claims in tort. After completing discovery in this case, [Pilkerton] is unable to offer, or even proffer, sufficient evidence of wantonness or such a remove between Cool Temp's role in [Pilkerton's] accident and its role as his employer that a fair minded trier of fact could conclude that § 25–5–52 should not apply.”

The summary judgment did not address Pilkerton's claims against the Cool Temp employees named as defendants in his complaint, including the employee who had been served with process, nor did it mention the claims against the fictitiously named parties. Because Pilkerton's claims against Cool Temp had been resolved in Cool Temp's favor and were no longer pending, the issue whether PNMCIC was obligated to indemnify Cool Temp was moot. PNMCIC and Cool Temp filed cross-motions for a summary judgment in the third-party action on the issue of whether PNMCIC was obligated to reimburse Cool Temp in the amount of $27,121.50 for the litigation expenses Cool Temp had incurred as a result of providing its own defense in the underlying suit until it received a judgment in its favor. The trial court held a hearing on the motions on September 6, 2012. On October 10, 2012, the trial court entered a summary judgment in favor of PNMCIC in the third-party action. On November 13, 2012, Cool Temp filed a notice of appeal to our supreme court. The supreme court transferred the appeal to this court, pursuant to § 12–2–7(6), Ala.Code 1975.

Because neither of the trial court's summary-judgment orders addressed Pilkerton's claims against other defendants in the underlying suit, this court questioned whether the appeal had been taken from a final, appealable judgment. This court requested that the parties submit letter briefs concerning whether the judgment was final. Counsel for Cool Temp and PNMCIC asserted that the third-party claims of Cool Temp against PNMCIC had been severed from Pilkerton's claims against the other defendants in the underlying suit and that the summary judgment had disposed of all the claims by all parties. After a review of the record, however, this court concluded that Pilkerton's claims against the other defendants in the underlying suit remained pending and that there was nothing in the record establishing that the third-party claims had been severed from the remaining claims in the underlying action.³ Although, under Rule 4(f), Ala. R. Civ. P., the summary-judgment orders in this case would constitute a final judgment for purposes of appellate review if there had been no other served defendants, the record reveals that service of process had been obtained on one of the employees of Cool Temp named as a defendant. Because the claims against that employee of Cool Temp had not been adjudicated, the judgment could not be...