DRC, INC. v. Great American Ins. Companies

• Decision Date: 19 November 2004
• Citation: 901 So.2d 710
• Parties: DRC, INC. v. GREAT AMERICAN INSURANCE COMPANIES.
• Court: Alabama Supreme Court

901 So.2d 710

DRC, INC. v. GREAT AMERICAN INSURANCE COMPANIES.

1031495.

Supreme Court of Alabama.

November 19, 2004.

Clifford C. (Kip) Sharpe, Mobile, for appellant.

Joseph C. Sullivan, Jr., and Brian Thomas Pugh of Hamilton, Butler, Riddick, Tarlton & Sullivan, P.C., Mobile, for appellee.

WOODALL, Justice.

DRC, Inc., appeals from an order dismissing its complaint against Great American Insurance Companies for failure to state a claim. We reverse and remand.

On August 5, 2003, DRC sued Great American and Hertz Equipment Rental Corporation ("Hertz"). DRC's complaint as last amended stated in toto:

"COUNT ONE

"1. On or about May 7, 2001, [Hertz] generated a Rental Agreement for a Case 850 bulldozer in the name of DRC.

"2. Thereafter, said bulldozer was used in Willow Fork, TX on a job which DRC had the contractual duty to complete and which job was under DRC's care, custody and control.

"3. DRC contends that the rental of the subject bulldozer was terminated in late May or early June 2001. DRC contends that the custom and practice at the time of the lease termination was for Hertz to be informed that the bulldozer was no longer needed, Hertz would remove the equipment from the running rental charge upon being so informed, and Hertz would thereafter pick up the bulldozer. Hertz was informed that the subject bulldozer was no longer needed in late May or early June 2001, but Hertz did not immediately pick up the bulldozer as a matter of its convenience. Hertz, upon information and belief, contends that the rental agreement only terminated upon its actual pick-up of the bulldozer and/or that the rental agreement was otherwise in force at the time the bulldozer was stolen.

"4. The evidence is conflicting as to whether Hertz actually picked up the subject bulldozer or whether it was stolen.

"5. On or about August 10, 2001, Hertz reported to authorities that the subject bulldozer was stolen by unknown parties.

"6. Hertz has made a demand on DRC for $53,042.50, being what Hertz contends to be the value of the allegedly stolen bulldozer. Hertz contends that DRC is liable for the alleged stolen bulldozer.

"7. DRC has made a demand on its insurance carrier, Great American, based on the alleged theft of the bulldozer, which claim was denied. Said claim was due to be paid under the insurance contract if the subject bulldozer was, as Hertz contends, being rented by DRC at the time it was stolen.

"8. If the subject dozer was stolen while being rented by DRC, Great American should pay the claim under the insurance contract. If the bulldozer was not stolen or was not being rented by DRC at the time it was stolen, DRC should not owe Hertz for the same.

"WHEREFORE, DRC demands judgment against Great American for $53,042.50 plus interest for breach of contract and court costs.

"COUNT TWO

"9. DRC adopts and incorporates the allegations of Count One.

"10. A justiciable controversy exists between the parties as to their rights and remedies under the Rental Agreement, the insurance policy and/or other agreements between the parties.

"WHEREFORE, DRC petitions the court to declare whether or not the subject bulldozer was being rented by DRC after late May or early June 2001; whether or not the subject bulldozer was stolen; and, if it was stolen while DRC was renting the same, declare that Great American is liable for the damages incurred; and if it was not stolen or was not being rented by DRC at the time of the theft, declare that DRC is not liable to Hertz for the value thereof; DRC requests such further and different relief, the premises considered."

Great American moved, pursuant to Ala. R. Civ. P. 12(b)(6), to dismiss the complaint for "failure to state a claim upon which relief can be granted." The trial court granted the motion and certified its order as a final judgment, pursuant to Ala. R. Civ. P. 54(b). The order stated, in part: "The court hereby expressly determines that there is no just reason for delay [of] entry of this order in that [DRC's] remaining claims against [Hertz] are intertwined in [DRC's] claims against Great American." DRC appealed.

On appeal, DRC contends that the complaint states a claim upon which relief can be granted, in that it both alleges breach of contract and seeks declaratory relief. Great American, however, contends that "[t]here is no justiciable controversy between DRC and Great American because," it argues, "they are in agreement on the controlling issue, that the bulldozer was taken off rental months prior to any alleged loss." Great American's brief, at 11 (emphasis added). Great American insists that "[t]he position of Hertz is irrelevant to the issue of whether a justiciable controversy exists between DRC and Great American." Id. at 12 (emphasis added). Thus, Great American contends, DRC can prove no set of facts establishing any liability on the part of Great American. We disagree with Great American.

"In considering whether a complaint is sufficient to withstand a motion to dismiss, this Court must accept the allegations of the complaint as true." Creola Land Dev., Inc. v. Bentbrooke Housing, L.L.C., 828 So.2d 285, 288 (Ala.2002). "`Motions to dismiss should be granted sparingly, and a dismissal is proper only when it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim which would entitle the plaintiff to relief.'" Gilliland v. USCO Power Equip. Corp., 631 So.2d 938, 939 (Ala.1994) (quoting Hill v. Kraft, Inc., 496 So.2d 768, 769 (Ala.1986)).

"A controversy is justiciable where present `legal rights are thwarted or affected [so as] to warrant proceedings under the Declaratory Judgment [Act, Ala. Code 1975, §§ 6-6-220 to -232].'" Creola Land Dev., Inc., 828 So.2d at 288 (quoting Town of Warrior v. Blaylock, 275 Ala. 113, 114, 152 So.2d 661, 662 (1963)). Under the Declaratory Judgment Act, parties are not "`compelled to wait until the events giving rise to liability have occurred before having a determination of their rights and obligations.'" 828 So.2d at 288 (quoting City of Dothan v. Eighty-Four West, Inc., 738 So.2d 903, 908 (Ala.Civ.App.1999)).

Section 6-6-223 authorizes "[a]ny person... whose rights, status, or other legal relations are affected by ... a contract ... [to] have determined any question of construction or validity...