Employers Ins. Co. of Alabama, Inc. v. Jeff Gin Co.

• Decision Date: 21 November 1979
• Citation: 378 So.2d 693
• Parties: EMPLOYERS INSURANCE COMPANY OF ALABAMA, INC. v. JEFF GIN COMPANY, a Cooperative Association, et al. 78-520.
• Court: Alabama Supreme Court

Page 693

378 So.2d 693

EMPLOYERS INSURANCE COMPANY OF ALABAMA, INC. v. JEFF GIN COMPANY, a Cooperative Association, et al.

78-520.

Supreme Court of Alabama.

Nov. 21, 1979.

Rehearing Denied Dec. 21, 1979.

William T. Mills, II of Dunn, Porterfield, Scholl & Clark, Birmingham, for appellant.

George A. Moore of Johnston, Johnston & Moore, Huntsville, for Jeff Gin Co., a Cooperative Assn., John W. Vandiver, individually and d/b/a Jeff Gin Co. EMBRY, Justice.

Employers Insurance Company of Alabama, Inc., brought this action seeking a declaratory judgment to determine its obligations to Jeff Gin Company, a cooperative association, under a policy of insurance it had issued to Jeff Gin. From the judgment declaring that Jeff Gin was entitled to coverage, and to be afforded a defense, Employers takes this appeal. We affirm.

Issue For Review

The parties agree the sole issue presented for review is whether the trial court committed reversible error in holding that Employers was required to defend, under its standard workmen's compensation and employer liability policy, an action based entirely on negligence filed in Texas by a former employee of Jeff Gin for an accidental injury arising out of and in the course of his employment in Alabama. We hold the trial court without error in finding Employers had a duty to defend Jeff Gin and therefore affirm.

The Facts

The parties stipulated before trial to the following concise statement of facts:

"1. On September 29, 1977, an individual named Eliseo Castaneda was employed by Jeff Gin Company in Madison County, Alabama. Mr. Castaneda was actively engaged in his employment in Madison County, Alabama, when an on the job accident occurred where he was injured.

"2. At the time of said accident, Jeff Gin Company had in full force and effect a policy of insurance with Employers Insurance Company of Alabama, Inc. * * *.

"3. The injured person, Eliseo Castaneda, filed suit against Jeff Gin Company in the District Court of El Paso County, Texas, 41st Judicial Circuit. Said suit is styled Eliseo Castaneda versus Jeff Gin Company and is case No. 78-4679. This suit was filed on August 11, 1978. In the suit, Eliseo Castaneda seeks damages for bodily injury he received as a result of the accident of September 29, 1977. * * *.

"4. Jeff Gin Company gave timely notice of this suit to the Plaintiff. The Plaintiff refused to defend the Texas suit on the ground that the policy did not afford coverage for this claim.

"5. Jeff Gin Company has employed its own attorney to defend the suit.

"6. There has been no payment of Workmen's Compensation benefits by any person or corporation to Eliseo Castaneda. No suit has been filed by Eliseo Castaneda seeking Workmen's Compensation benefits."

The relevant provisions of the insurance policy are:

"Item 3. Coverage A of this policy applies to the workmen's compensation law and any occupational disease law of each of the following states: ALABAMA

"INSURING AGREEMENTS

"I. Coverage A Workmen's Compensation: To pay promptly when due all compensation and other benefits required of the insured by the workmen's compensation law.

"Coverage B Employers' Liability: To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury by accident or disease, including death at any time resulting therefrom,

"(a) sustained in the United States of America, its territories or possessions, or Canada by any employee of the insured arising out of and in the course of his employment by the insured either in operations in a state designated in Item 3 of the declarations or in operations necessary or incidental thereto, or

"(b) sustained while temporarily outside the United States of America, its territories or possessions, or Canada by any employee of the insured who is a citizen or resident of the United States or Canada arising out of and in the course of his employment by the insured in connection with operations in a state designated in Item 3 of the declarations; but this insurance does not apply to any suit brought in or any judgment rendered by any court outside the United States of America, its territories or possessions, or Canada or to an action on such judgment wherever brought.

"II. Defense, Settlement, Supplementary Payments: As respects the insurance...