Ex parte Clarke

• Decision Date: 11 December 1998
• Parties: Ex parte Patricia CLARKE, individually and as executrix of the estate of Stanley Clarke, deceased (Re Patricia Clarke, individually and as executrix of the estate of Stanley Clarke, deceased v. Allstate Insurance Company et al.)
• Court: Alabama Supreme Court

728 So.2d 135

Ex parte Patricia CLARKE, individually and as executrix of the estate of Stanley Clarke, deceased

(Re Patricia Clarke, individually and as executrix of the estate of Stanley Clarke, deceased v. Allstate Insurance Company et al.)

1970242.

Supreme Court of Alabama.

December 11, 1998.

Joseph C. Sullivan, Jr., and David A. Boyett III of Hamilton, Butler, Riddick, Tarlton & Sullivan, P.C., Mobile, for petitioner.

Louis Braswell of Hand Arendall, L.L.C., Mobile, for respondents Allstate Ins. Co., Wesley Mayfield, and Tommy Land.

ALMON, Justice.

The principal questions presented by this certiorari review are whether a purported endorsement was properly made a part of the plaintiffs' insurance policy; whether the summary judgment for the defendant insurer could properly be based on the insurer's arguments that the plaintiffs had breached their duty to cooperate with the insurer; and whether the plaintiffs supported their allegations that the insurer's requests were part of a "plan or scheme to intimidate or discourage insureds from pursuing legitimate claims by requiring insureds who filed a claim to submit to examination under oath by [the insurer's] attorneys and/or to produce or release extensive personal and financial information which had no relevance to the claim."

Stanley Clarke and his wife Patricia Clarke commenced this action against Allstate Insurance Company, alleging that Allstate had breached its contract with them and had acted tortiously by requiring them to submit to an examination under oath and to produce extensive personal and financial records as a prerequisite to Allstate's paying an insurance claim submitted by the Clarkes. The Clarkes also named as defendants Wesley Mayfield, the Allstate agent who had sold them their automobile insurance policy, and Tommy Land, the Allstate adjuster who investigated their claim. We shall refer to the defendants collectively as "Allstate." Stanley Clarke died after he and his wife had filed their complaint. Subsequently, Patricia, as the executrix of his estate, was substituted for him as a plaintiff.

The circuit court granted Allstate's motion for a summary judgment as to all claims. The Court of Civil Appeals affirmed the summary judgment, without an opinion. Clarke v. Allstate Ins. Co., 723 So.2d 118 (Ala.Civ. App.1997) (table). Mrs. Clarke petitioned for certiorari review. We issued the writ to determine whether the affirmance by the Court of Civil Appeals conflicts with earlier decisions of this Court.

In July 1995, the Clarkes reported to police that their 1987 Chevrolet Blazer had been stolen. They filed a proof of loss with Allstate, their automobile insurer. A few weeks later, Patricia Clarke informed police and Allstate that she had found the Blazer in the parking lot of a Mobile apartment complex. The Clarkes filed with Allstate a second proof-of-loss form, claiming that their Blazer had been damaged during the time that it was allegedly stolen. Tommy Land, an Allstate adjuster, inspected the Clarkes' Blazer after it was recovered. In his deposition, he stated that the locks on the Blazer had not been broken and that none of the vehicle's electrical wires had been cut. Also, a police report indicated that the driver-side window on the Blazer had been broken from the inside. On the basis of these facts, Land concluded that whoever had taken the Blazer had done so with a key.

On September 14, 1995, Allstate, acting through one of its attorneys, mailed the Clarkes a letter informing them that, because of "the nature and circumstances of [their] loss," they were "requested ... to appear before [the attorney at a stated day and time] for the purpose of giving oral testimony under oath." Allstate requested that the Clarkes bring with them the following documents:

"INSURANCE POLICIES

"1. The subject insurance policy.

"2. Copies of other insurance policies covering any property which is the subject of this loss or claim; and if such policy is not available, then such information with respect to these policies, including the name of the insurer and the amount and nature of the coverage.

"DEEDS AND PROPERTY INFORMATION

"3. The instrument of conveyance pursuant to which you obtained title to the subject property.

"4. All mortgages, liens or other encumbrances on the subject property or upon any other property you may own or have an interest in.

"5. All appraisals on the subject property, before or after the loss, and before or after your purchase or acquisition of the property.

"6. Any listings, agreements or any documentation reflecting offers to buy or sell the subject property within the last five years before this loss.

"7. All photographs of the subject property, contents or other property which is the subject of this claim which may be in your possession, whether taken before or after the loss.

"8. All estimates or proposals for repairs.

"9. All documentation, forms and papers reflecting any information concerning any prior loss.

"[The letter contained no item 10.]

"TAX AND FINANCIAL INFORMATION

"11. Your income tax returns for the three years preceding this loss.

"12. Copies of all monthly bank statements, cancelled checks and all work and financial records kept by you in your behalf for the three years preceding this loss, including checking accounts and savings accounts.

"13. If employed, your withholding statements or check stubs, which reflect your income and withholding deductions.

"14. Any and all books of account or ledgers kept on behalf of any business in which you were an owner, part-owner or partner for the years 1991 through 1994, plus copies of monthly bank statements, cancelled checks, [and] tax returns filed on behalf of these businesses for the same years.

"15. All documents reflecting any debts owed by you within six months preceding the date of this loss.

"OTHER

"16. Any and all other documents of any kind which you may have or which you can obtain to verify the claim which you have filed for this loss, including, but not limited to, any cancelled checks, sales receipts, bills of sale, credit card records, or other documents reflecting purchase of the individual items of personal property set forth in the inventory submitted by you."

The letter represented to the Clarkes that their insurance policy included this provision:

"PART VI —PROTECTION AGAINST LOSS TO THE AUTO

"What You Must Do After a Loss

"(1) As soon as possible any person making a claim must give us written proof of loss, including all details reasonably required by us. We have the right to inspect the damaged property.

"(2) Protect the auto from further loss. We will pay reasonable expenses to guard against further loss. If you don't protect the auto, further loss is not covered.

"(3) Report all theft losses promptly to the police."

The Clarkes did not appear for the scheduled oral examination. Allstate rescheduled the examination twice, but the Clarkes did not appear on either of the two later dates that Allstate selected. On October 18, 1995, Land mailed the Clarkes a letter informing them that Allstate assumed that they were not interested in pursuing their claim, because they had not submitted to an examination under oath. He enclosed with the letter a release document, and he asked the Clarkes to execute and return that document if they were indeed no longer interested in pursuing their claim. In the alternative, Land asked the Clarkes to contact Allstate to arrange another time for an oral examination. Like the previous letter from Allstate's attorney, Land's letter represented to the Clarkes that their policy provided:

"PART VI PROTECTION AGAINST LOSS TO THE AUTO

"What You Must Do After a Loss

"(1) As soon as possible any person making a claim must give us written proof of loss, including all details reasonably required by us. We have the right to inspect the damaged property.

"(2) Protect the auto from further loss. We will pay reasonable expenses to guard against further loss. If you don't protect the auto, further loss is not covered.

"(3) Report all theft losses promptly to the police."

Again, the Clarkes did not reply to Allstate's correspondence, and Allstate did not pay the Clarkes' claim. On October 27, 1995, the Clarkes initiated this action. In their complaint, the Clarkes alleged that Allstate had breached its contract with them and had committed the torts of bad-faith failure to pay a claim, fraudulent misrepresentation, suppression, and the tort of outrage. Moreover, the Clarkes alleged that the defendants had engaged in a civil conspiracy against numerous Allstate policyholders, including the Clarkes.

We have no indication that Mrs. Clarke argued to the Court of Civil Appeals that the summary judgment was erroneous as to the bad-faith, outrage, and conspiracy claims. Her certiorari petition raises no issue regarding the affirmance of the judgment as to those claims, and she makes no argument in her brief for a reversal as to those claims. Therefore, the judgment will be affirmed as to the bad-faith, outrage, and conspiracy claims.

In support of its motion for a summary judgment, Allstate submitted the affidavit of Noble Tinnea, an Allstate staff claims analyst. Tinnea attached to his affidavit an exhibit he stated was "a true and correct copy of the complete declaration page, policy jacket, and endorsements that were effective from July 25, 1995 through January 25, 1996, for Allstate Automobile Policy No. XXXXXXXXX, issued to Patricia and Stanley Clarke." Included in that exhibit is an endorsement, designated AU1372-7. The Clarkes' policy had been in effect since 1987, apparently with semiannual renewals. Allstate asserts that endorsement AU1372-7 was added to their policy in 1992. That endorsement provides:

"IV. Part VI, Protection Against Loss To The Auto, is amended as follows:

"A. ....

"B. Point 1 of the `What You Must Do If There Is A Loss' provision is replaced by the following:

"`What You Must Do If There Is A

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