Holloway v. Nationwide Mut. Ins. Co.

• Decision Date: 28 September 1979
• Citation: 376 So.2d 690
• Parties: Maxie R. HOLLOWAY et al. v. NATIONWIDE MUTUAL INSURANCE COMPANY et al. 77-739.
• Court: Alabama Supreme Court

Page 690

376 So.2d 690

Maxie R. HOLLOWAY et al. v. NATIONWIDE MUTUAL INSURANCE COMPANY et al.

77-739.

Supreme Court of Alabama.

Sept. 28, 1979.

Rehearing Denied Nov. 9, 1979.

Jack Clarke of Henley & Clarke, Northport, for appellants.

William J. Donald, III, of Zeanah, Donald & Hust, Tuscaloosa, for appellees, Nationwide Mutual Insurance Co., and Aubrey Noland.

ALMON, Justice.

The plaintiffs have appealed from an adverse judgment of the Circuit Court. We reverse.

The appellee, Nationwide Mutual Insurance Company (hereinafter referred to as Nationwide), insured certain vehicles belonging to one of the appellants, Moses and Holloway Heating and Air Conditioning Company, Inc. (hereinafter Moses & Holloway) under a "fleet policy." Moses & Holloway, an Alabama corporation is the named insured in this fleet policy. The appellant M. R. Holloway owned over 95% Of the stock of this corporation and his wife owned the rest of the stock.

On May 1, 1975, Paul Edward Holloway, the son of the appellant M. R. Holloway, sustained fatal injuries in a two-car automobile accident in Tuscaloosa County. The other car involved in this accident was driven by James Lee Hatter. Hatter, an uninsured motorist, also sustained fatal injuries in this accident. At the time of this accident, Paul Edward Holloway was driving a 1973 AMC Hornet which was insured under the fleet policy issued to Moses & Holloway. Paul Edward Holloway attended high school and worked in the afternoon for Moses & Holloway. The wreck occurred sometime after 11 p. m., when Paul was returning home from a date with Karen Burkhalter.

Thereafter, the appellant M. R. Holloway filed this action against Nationwide, Robert V. Wooldbridge, the administrator of the estate of James Lee Hatter, and Moses & Holloway. Subsequent to the filing of the original complaint, Moses & Holloway was realigned as a party plaintiff and Aubrey Noland, as insurance agent for Nationwide, was added as a defendant. The complaint, as last amended alleged, inter alia, as follows:

1. James Lee Hatter negligently, wilfully or wantonly used, maintained, drove or operated his uninsured motor vehicle so as to cause his motor vehicle to collide with the automobile driven by Paul Edward Holloway and that as a result of this conduct, Paul Edward Holloway suffered fatal injuries.

2. The fleet policy issued to Moses & Holloway covered nine vehicles including the vehicle driven by Paul Edward Holloway at the time of the fatal accident and two trucks which were automatically covered by an "automobile inclusion" clause in the fleet policy, even though these two trucks were, in fact, not added to the policy until after the fatal accident.

3. Aubrey Noland, acting as authorized agent for the defendant, Nationwide, represented to the plaintiff that the fleet policy would cover M. R. Holloway, individually, his spouse and relatives living in his household just as if the policy was issued to M. R. Holloway personally instead of Moses & Holloway.

4. The parties intended that M. R. Holloway and the members of his family would be the "named insureds" or the "designated insureds" on the fleet policy.

5. The policy was issued in its present form, (with Moses & Holloway as the named insured), through the unilateral mistake of one party, (Holloway), which the other party, (Noland and/or Nationwide) knew or should have known, or in the alternative through a mutual mistake, so that the insurance policy, as issued, did not express the true intent of the parties.

6. The plaintiff, M. R. Holloway, reasonably expected to have family automobile coverage on all of the vehicles covered by the policy.

7. The insurance policy was an adhesion contract, ambiguous, confusing or conflicting in its terms and should be construed most strongly against Nationwide.

8. The defendants, Noland and Nationwide, solicited and undertook to procure or furnish insurance to M. R. Holloway personally, his spouse and relatives who were residents in his household; the defendants assured M. R. Holloway that no separate or individual insurance would be necessary on the automobiles or vehicles owned or used by him, his spouse, or relatives who were relatives in his household and that theretofore, M. R. Holloway made no effort to procure other insurance to cover these vehicles.

9. The defendants negligently or wantonly, or through error or omission failed to procure the insurance coverage for M. R. Holloway.

The relief sought in the appellants' complaint included: a claim for damages against the estate of James Lee Hatter, a claim for damages against Noland and Nationwide, and a claim against Nationwide on the fleet policy seeking to "stack" the uninsured motorist coverage for all of the vehicles covered by the fleet policy. The plaintiffs also sought a declaratory judgment as to the rights and status of the parties under the fleet policy and reformation of the insurance policy so as to make M. R. Holloway, individually, a named or designated insured.

The trial court disposed of the appellants' claim with respect to the "stacking" issue by granting Nationwide's motion for partial summary judgment. An Ore tenus trial, with an advisory jury, was conducted. The trial court subsequently entered a final judgment setting out certain findings of fact and ordering that the plaintiffs recover $10,000 from the estate of James Lee Hatter and $11,000 from Nationwide Mutual Insurance Company. The trial court further found that the plaintiffs were not entitled to recover damages from the defendant Aubrey Noland and they were not entitled to reformation of the insurance policy.

The plaintiffs filed numerous post-trial motions to no avail; hence this appeal. Basically, there are seven contentions for reversal.

1. The trial court erred in granting the appellees' motion for partial summary judgment on the stacking issue.

2. The trial court abused its discretion in refusing to grant the appellants' motion to sever the claims of insurance coverage and reformation from the claims of negligence and wantonness.

3. The appellants' right to a jury trial, on certain issues, was abridged.

4. The trial court erred in submitting certain verdict forms to the jury.

5. The trial court made erroneous oral charges to the jury.

6. The trial court erred in implicitly granting the appellees' motion for a directed verdict on certain issues.

7. The trial court erred in stating that the appellants had only claimed $10,000 against the estate of Hatter.

This suit is somewhat complicated because of the several causes of action on different theories of recovery asserted in one complaint. The record on appeal consists of over 1600 pages. The appellants demanded a jury trial of the issues involved. The trial judge did not grant a jury trial as such, but instead impanelled an advisory jury. The court had previously granted partial summary judgment as to the stacking issue, but nevertheless submitted this issue along with all the other issues, including reformation, to the advisory jury. After the trial concluded, the court entered a final judgment deciding all of the issues.

For the sake of clarity, we think it advisable to set out in a general way the causes of action involved. The appellants sought a declaratory judgment on insurance coverage and the stacking of uninsured motorist coverage on the several vehicles in the fleet. The appellants also sought reformation of the insurance policy so that M. R. Holloway would be a named insured along with the corporation, Moses and Holloway, or reformed at least to the extent that M. R. Holloway would be a designated insured. This relief, if granted, would aid the appellants in their quest to stack the uninsured motorist coverages. There was also a cause of action against Nationwide and Nolan for negligently, or wantonly, failing to provide adequate insurance coverage. And finally, of course, there was the wrongful death action against Hatter, which formed the foundation for the other causes of action, because if Hatter, the uninsured motorist, was not liable then the other causes of action are moot.

We are of the opinion that the trial court committed reversible error in denying appellants a jury trial on some of the issues involved. The appellants were clearly entitled to a jury trial on the death action, and the action for negligently failing to insure. When a party seeks reformation of an instrument, or contract, he is not entitled to a jury. Only a court of equity can reform an instrument. Boyland v. Wilson, 202 Ala. 26, 79 So. 364 (1918). On the other hand, in an action for declaratory judgment a party may or may not be entitled to a jury trial, depending on the issues involved. Reed v. Hill, 262 Ala. 662, 80 So.2d 728 (1975).

One of the complicating factors in this case is that the causes of action for a declaratory judgment, reformation and negligent failure to insure are somewhat interdependent. The stacking issue could depend on the outcome of the reformation decision, and the reformation decision could, but not necessarily, depend upon the resolution of the claims for negligent failure to insure. We think that it was this complicity and...