Crook v. Allstate Indem. Co.

Citation314 So.3d 1188
Decision Date26 June 2020
Docket Number1180996
Parties Kevin CROOK v. ALLSTATE INDEMNITY COMPANY, The Barker Agency, and Allstate Insurance Company
CourtAlabama Supreme Court

Jeffrey E. Holmes of Boles Holmes Parkman White LLC, Birmingham, for appellant.

Thomas E. Bazemore III and Gordon J. Brady III of Huie, Fernambucq & Stewart, LLP, Birmingham, for appellees.

MENDHEIM, Justice.

Kevin Crook appeals a summary judgment entered by the Tuscaloosa Circuit Court in favor of Allstate Indemnity Company ("Allstate Indemnity"), Allstate Insurance Company ("Allstate Insurance"), and The Barker Agency (hereinafter collectively referred to as "the defendants"). We affirm the summary judgment.

Facts and Procedural History

Crook owns lake-front property in Tuscaloosa County. The property consists of a house, a bathhouse, a garage, a deck, and a boat dock. The deck is not directly connected to the house; an exterior stairway connects the house to the deck. The boat dock is, in turn, connected to the side of the deck opposite the stairway and house.1 A portion of the boat dock is covered with a roof supported by pilings, but the boat dock has no walls.

In 2006, Crook, through The Barker Agency,2 obtained property insurance on the house and other structures from Allstate Indemnity. Allstate Indemnity issued a policy to Crook ("the policy") and provided uninterrupted insurance coverage of Crook's house from 2006 through 2015. Crook's deposition testimony indicates that, during that time, although Crook was sent a renewal policy each year with the details of the policy and specific instructions to read the renewal policy and determine if the policy limits were sufficient, Crook was not aware of the actual policy limits provided by Allstate Indemnity and did not read the renewal notices. Crook answered in the affirmative when asked if he "simply trust[ed] that the limits supplied by [Allstate Indemnity were] exactly what [he] need[ed]."

The policy provided that the "limits of insurance" for "Coverage A Dwelling Protection" ("Coverage A") was $56,049 and for "Coverage B Other Structure Protection" ("Coverage B") was $11,455. The policy stated, in pertinent part:

"Property we cover under Coverage A:
"1. Your dwelling including attached structures. Structures connected to your dwelling by only a fence, utility line, or similar connection are not considered attached structures.
"Property we cover under Coverage B:
"1. Declarations separated from your dwelling by clear space.
"2. Structures attached to your dwelling by only a fence, utility line, or similar connection."

The term "dwelling" is defined in the policy as "a one, two, three or four family building structure, identified as the insured property on the Policy Declarations, where you reside and which is principally used as a private residence." The term "building structure" is defined in the policy as "a structure with walls and a roof."

On February 12, 2015, Allstate Indemnity conducted an inspection of the property for underwriting purposes. After the inspection, on February 23, 2015, The Barker Agency sent Crook the following letter (Allstate Insurance's name was also on the letter):

"Re: Property Inspection Results
"As you may recall, we previously informed you of an upcoming inspection of [the property's] exterior. We have completed the inspection and want to share the results with you.
"Congratulations! We did not find any issues that impact your current coverage* and you do not need to do anything further. If you have any questions about the inspection, please give us a call at the number below.
"We value your business and hope you are satisfied with the insurance coverage we provide. Thank you for giving us the opportunity to help protect what's important to you.
"*We want you to know that our inspection of your property is limited. It focused only on identifying certain types of hazards or conditions that might impact your future insurance coverage. It may not have identified some other hazards or conditions on your property."

On April 14, 2015, a storm damaged the deck and the boat dock; the amount of the damage caused "was at or greater than the coverage provided by" Coverage B. Crook reported the storm-caused damage. On April 24, 2015, Kevin Smith, a "claims service analyst" employed by Allstate Insurance, inspected the damage reported by Crook. Smith concluded that the deck and the boat dock had been damaged by the storm and that the damage was covered under Coverage B, rather than Coverage A. Accordingly, on April 28, 2015, Allstate Indemnity paid Crook the Coverage B policy limit of $11,455.

On June 7, 2016, Crook sued the defendants, asserting claims of breach of contract, bad-faith failure to pay a claim, negligent/wanton procurement of insurance, and estoppel.3 Concerning Crook's breach-of-contract and bad-faith claims, Crook alleged that the damage to the deck and the boat dock should have been covered under Coverage A, which has a higher limit of insurance in the amount of $56,049. Concerning Crook's negligent/wanton-procurement-of-insurance claim, Crook alleged that he relied upon the defendants to provide adequate coverage for the property and that the defendants "knew or should have known that [Coverage B] ... would be insufficient to cover damages to [the] deck and [the] boat [dock]." Concerning his estoppel claim, Crook alleged that the defendants, in the February 23, 2015, letter set forth above, "assur[ed] [Crook] that his insurance coverage was sufficient" and that the defendants should have known that the alleged assurances in the February 23, 2015, letter "would cause [Crook] to not take further actions to procure additional or different insurance coverage." Crook asserted that the defendants "are estopped from asserting a position inconsistent with the representations in the February 23, 2015, letter."

On October 9, 2017, Allstate Indemnity and The Barker Agency filed separate motions for a summary judgment, and on September 27, 2018, Crook filed a response. Following a hearing, the circuit court entered a summary judgment in favor of Allstate Indemnity and The Barker Agency as to all claims against them on February 27, 2019.

On April 10, 2019, Allstate Insurance filed a motion for a summary judgment, and on July 24, 2019, Crook filed a response. Following a hearing, the circuit court entered a summary judgment in favor of Allstate Insurance as to all claims against it on July 29, 2019. The circuit court incorporated its February 27, 2019, order into the July 29, 2019, order and further stated that the policy "was issued by Allstate Indemnity ..., not Allstate Insurance ...; and that Allstate Indemnity ... ultimately investigated and issued payments on [Crook's] claim." Crook appealed.

Standard of Review

Our standard of review of a summary judgment is well settled:

" ‘The standard of review applicable to a summary judgment is the same as the standard for granting the motion....’ McClendon v. Mountain Top Indoor Flea Market, Inc., 601 So. 2d 957, 958 (Ala. 1992).
" ‘A summary judgment is proper when there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law. Rule 56(c)(3), Ala. R. Civ. P. The burden is on the moving party to make a prima facie showing that there is no genuine issue of material fact and that it is entitled to a judgment as a matter of law. In determining whether the movant has carried that burden, the court is to view the evidence in a light most favorable to the nonmoving party and to draw all reasonable inferences in favor of that party. To defeat a properly supported summary judgment motion, the nonmoving party must present "substantial evidence" creating a genuine issue of material fact -- "evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." Ala. Code 1975, § 12–21–12 ; West v. Founders Life Assurance Co. of Florida, 547 So. 2d 870, 871 (Ala. 1989).’
" Capital Alliance Ins. Co. v. Thorough–Clean, Inc., 639 So. 2d 1349, 1350 (Ala. 1994). Questions of law are reviewed de novo. Alabama Republican Party v. McGinley, 893 So. 2d 337, 342 (Ala. 2004)."

Pritchett v. ICN Med. Alliance, Inc., 938 So. 2d 933, 935 (Ala. 2006).


First, Crook argues that the circuit court erred in entering a summary judgment in favor of Allstate Indemnity on Crook's breach-of-contract claim. Crook argues that "[t]he plain language of the policy provides that the deck [and] boat [dock are] covered under Coverage A," rather than Coverage B. Crook's brief, p. 34.

This Court applies the following principles of construction in interpreting an insurance contract:

"The rules of contract interpretation are well settled. ‘The issue whether a contract is ambiguous or unambiguous is a question of law for a court to decide.’ State Farm Fire & Cas. Co. v. Slade, 747 So. 2d 293, 308 (Ala. 1999).
" ‘ "If a word or phrase is not defined in [an insurance] policy, then the court should construe the word or phrase according to the meaning a person of ordinary intelligence would reasonably give it. The court should not define words it is construing based on technical or legal terms."
" ‘ Safeway Ins. Co. of Alabama, Inc. v. Herrera, 912 So. 2d 1140, 1143 (Ala. 2005) (citations omitted).’
" Travelers Cas. & Sur. Co. v. Alabama Gas Corp., 117 So. 3d 695, 700 (Ala. 2012).
" ‘ " ‘When analyzing an insurance policy, a court gives words used in the policy their common, everyday meaning and interprets them as a reasonable person in the insured's position would have understood them. Western World Ins. Co. v. City of Tuscumbia, 612 So. 2d 1159 (Ala. 1992) ; St. Paul Fire & Marine Ins. Co. v. Edge Mem'l Hosp., 584 So. 2d 1316 (Ala. 1991). If, under this standard, they are reasonably certain in their meaning, they are not ambiguous as a matter of law and the rule of construction in favor of the insured does not apply. Bituminous Cas.

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