Ex parte Alfa Mut. Ins. Co.
| Decision Date | 27 April 2001 |
| Citation | 799 So.2d 957 |
| Parties | Ex parte ALFA MUTUAL INSURANCE COMPANY. (Re Ronald M. Poarch v. Alfa Mutual Insurance Company). |
| Court | Alabama Supreme Court |
Steve A. Baccus of Almon, McAlister, Baccus & Hall, L.L.C., Tuscumbia, for petitioner.
Robert L. Gonce of Gonce, Young, Sibley, Moreau & Collum-Butler, Florence, for respondent.
On this certiorari review, we consider the question of how to deal with an inconsistent verdict.
Ronald M. Poarch sued Alfa Mutual Insurance Company ("Alfa"), alleging breach of contract and bad-faith failure to pay an insurance claim, both claims arising out of Alfa's handling of a claim Poarch had made under his homeowner's insurance policy. After a trial in the Lauderdale Circuit Court, the jury returned a verdict in favor of Alfa on the breach-of-contract claim, but in favor of Poarch on the bad-faith claim. It awarded Poarch $6,000 in compensatory damages. The circuit court entered a judgment on that verdict. Both Alfa and Poarch appealed the verdict. This Court transferred the appeal to the Court of Civil Appeals.
The Court of Civil Appeals, finding the jury's verdict inconsistent, reversed the judgment and remanded the cause. Poarch v. Alfa Mut. Ins. Co., 799 So.2d 949 (Ala.Civ.App.2000). This Court granted Alfa's petition for certiorari review.
Ronald M. Poarch and his wife Linda Poarch were the named insureds under an Alfa homeowner's policy insuring their home in Lauderdale County. The policy contained a "replacement cost endorsement," which, for an additional premium, provided the following additional coverage:
"Loss to the following property shall be settled at replacement cost without deduction for depreciation: [listing of property omitted]."
Thus, the policy was a "replacement-cost" policy, a policy that promised insurance, without deduction for depreciation, sufficient to replace any covered property damaged by fire.
A fire severely damaged the Poarches' home on October 29, 1993. Linda Poarch submitted a claim under the homeowner's policy, and on November 1, 1993, Alfa paid the Poarches $3,000 as an advance payment in compensation for clothing and personal articles. Alfa also located a temporary residence for the Poarches and their two children while repairs were being made to their house.
On November 3, 1993, Barry Youngblood, the Alfa insurance adjuster assigned to the Poarches' claim, arranged for the Poarches to meet with Kenneth Butler, a local contractor. Butler testified at trial that he had had extensive experience in working as a contractor doing insurance repairs for Alfa. The Poarches obtained an estimate from Butler for the cost of the repairs to their home—in the amount of $31,377.21. The Poarches testified that they noticed that the estimate did not include a cost for replacing the walls, and they testified that they were informed by Butler that Alfa had determined that it would pay only for repainting the walls, which would be much less expensive than replacing them.
Butler testified at trial that the walls of the Poarches' house were "burnt pretty bad" and that he had raised a question with the Alfa adjuster in the beginning about whether the walls could be saved by cleaning, sealing, and painting them or whether the walls needed to torn out and replaced. Butler testified that replacing the walls would cost Alfa about twice as much as cleaning, sealing, and painting them would cost. According to Butler, the Alfa adjuster "wanted us to try to save them." Butler's job superintendent, Rick Corum, also testified that the degree of damage sustained to the walls was pointed out to the Alfa adjuster and that the adjuster made the decision to clean, seal, and paint them, rather than to replace them. However, neither Butler nor Corum told Youngblood that the walls could not be saved; they simply informed Youngblood that the walls were "real questionable."
Poarch testified that Youngblood never informed him or his wife that they had any option other than to contract with Butler to perform the repairs; on November 4, 1993, they contracted with Butler for Butler to perform the repairs. On December 22, 1993, Butler issued a supplemental estimate that increased the amount of his original estimate to $34,385.32. Butler completed the repairs on January 6, 1994, without replacing any walls, and Alfa paid Butler the amount of his supplemental estimate.
Poarch testified that about six months after the repairs were completed he noticed that the paint on the walls was cracking and peeling away and that the walls were cracked. The Poarches contacted Butler, who inspected the walls and informed the Poarches that the walls would have to be replaced because they had sustained too much heat damage to allow the paint to adhere. However, Butler denied any responsibility for making the necessary repairs. Poarch testified that Butler instructed him to contact Alfa regarding the peeling of the paint and the cracking of the walls.
The Poarches contacted Alfa and discussed the situation with Kyle Rushing, the adjuster who had taken over their claim from Youngblood. The Poarches testified that Rushing initially denied their requests for relief, but that he became willing to discuss possible repairs after the Poarches had telephoned Alfa's home office. Rushing confirmed that the plasterboard on the walls in the Poarches' home had been too damaged by heat to be repainted and that it needed to be replaced. He instructed the Poarches to obtain three estimates for removing and replacing the plasterboard. However, when the Poarches submitted their estimates to Alfa, Rushing rejected each of them as too expensive. These estimates included amounts for repairing damage to the hardwood floors and for replacing damaged carpets—every contractor the Poarches contacted indicated that replacing the walls would damage the floors and the carpets and thus would necessitate repairs to the hardwood floors and replacement of the carpets.
After rejecting the estimates obtained by the Poarches, Rushing sent out another contractor, John Johnson. According to Rushing, Johnson had had no previous experience doing insurance repair work for Alfa but had done personal work for Rushing and Rushing had been satisfied with his work. Johnson submitted the lowest estimate for the repairs and the Poarches testified that Rushing informed them that Alfa would pay only that amount to whatever contractor the Poarches selected to do the job. However, Johnson's estimate did not include any amounts for repairs to the hardwood floors or for replacing carpet. Johnson's written estimate indicated that he was licensed and bonded.
After the Poarches determined that no other contractor would do the work for Johnson's price, they contracted for him to perform the repairs. Johnson informed them he would complete the work in approximately four weeks.
Although the homeowner's policy issued by Alfa to the Poarches included coverage for additional living expenses, Alfa's adjuster denied the Poarches' request for approval to move out of the home while the repairs were underway. As a result of this denial, the Poarches and their two children arranged to live in one bedroom, part of the living room, and the kitchen of their house while Johnson worked in their house.
However, Johnson did not complete the repairs within four weeks. After approximately four months of intermittent work, Johnson left, leaving the job incomplete. The Poarches testified that Johnson refused to return, telling them that he could not complete the repairs for the amount of his estimate and that he was going to "cut his losses." The Poarches testified that not only were Johnson's repairs unfinished, but that he had damaged the hardwood floors and some of the furniture in the house and had damaged the yard. Moreover, after Johnson refused to finish the work, the Poarches discovered that he was neither licensed nor bonded, as he had represented on his contract.
The Poarches testified that they again informed Alfa no other contractor would perform the work for Johnson's price. The Poarches testified that they asked Alfa to pay another contractor to complete the work, but that Alfa refused. The Poarches later attempted to use the money remaining on Johnson's contract to complete the work themselves; they were unsuccessful. The Poarches testified that Alfa refused their request for any further assistance, but finally agreed to pay an additional $1,453 conditioned on the requirement that they sign a release.
After Linda Poarch executed a document purporting to be general release, Alfa sent a final payment of $1,453.60 by a check payable to her, which she deposited into the Poarches' joint checking account. Ronald Poarch never executed the purported release document. The release document, entitled "RELEASE OF ALL LIABILITY," reads, in pertinent part:
"I, Linda Poarch, in consideration of the payment to me of $90,671.97 by the company, receipt of which is hereby acknowledged, do hereby release and forever discharge said company and any other persons, firm or corporation chargeable with liability for the acts of said company from either expressed provisions or duty implied by law under and by virtue of policy number H285514 and issued to Ronnie Poarch & Linda Poarch by said company for injuries or damages sustained by Ronnie Poarch & Linda Poarch due to Fire Loss on or about the 29th day of October, 1993, in Lauderdale County, Alabama."
The Poarches testified that they were informed by Alfa, and that they understood, that the release was a statement to the effect that they would not request any further payment from Alfa concerning Johnson's work. They also testified that they had informed Alfa that they expected Alfa to fulfill its obligation to complete the repairs on their house.
On April 18, 1997, Ronald Poarch sued Alfa, seeking compensatory and punitive damages, alleging fraud...
To continue reading
Request your trial
-
Nat'l Sec. Fire & Cas. Co. v. DeWitt
...and (4) damages.’ Southern Med. Health Sys., Inc. v. Vaughn, 669 So.2d 98, 99 (Ala.1995) (citations omitted)." Ex parte Alfa Mut. Ins. Co., 799 So.2d 957, 962 (Ala.2001). The pivotal issue in this case is the alleged nonperformance by National Security. National Security concedes that ACV i......
-
Major Millworks, Inc. v. MAE Hardwoods, Inc.
...’ " Cool Temp, Inc. v. Pennsylvania Nat'l Mut. Cas. Ins. Co., 148 So.3d 448, 455 (Ala.Civ.App.2013) (quoting Ex parte Alfa Mut. Inc. Co., 799 So.2d 957, 962 (Ala.2001), quoting in turn Southern Med. Health Sys., Inc. v. Vaughn, 669 So.2d 98, 99 (Ala.1995) ). MAE Hardwoods, thus, had the bur......
-
Cool Temp, Inc. v. Pa. Nat'l Mut. Cas. Ins. Co.
...intentional failure to determine whether there is a legitimate or arguable reason to refuse to pay the claim.’ ”Ex parte Alfa Mut. Ins. Co., 799 So.2d 957, 962 (Ala.2001) (quoting National Security Fire & Cas. Co. v. Bowen, 417 So.2d 179, 183 (Ala.1982) ) (emphasis omitted).“The tort of bad......
-
Cpt v. John Deere Health Care
...two conflicting views of the evidence would necessarily produce some speculation about the intent of the jury. See Ex parte Alfa Mut. Ins. Co., 799 So.2d 957, 962 (Ala.2001) ("`Where a jury verdict is the result of confusion or is inconsistent in law, the trial court should grant a new tria......