Home Indem. Co. v. Anders

• Decision Date: 14 September 1984
• Citation: 459 So.2d 836
• Parties: The HOME INDEMNITY COMPANY, a Corp., et al. v. Pauline A. ANDERS, et al. Pauline A. ANDERS, et al. v. CITY OF MOBILE, a Municipal Corp., et al. The INSURANCE COMPANY OF NORTH AMERICA, as Subrogee of Springdale Stores v. CITY OF MOBILE, a Municipal Corp., et al. BROWN & BROWN OF DELAWARE, INC., et al. v. CITY OF MOBILE, a Municipal Corp., et al. PLEASANT VALLEY ASSEMBLY OF GOD v. CITY OF MOBILE, a Municipal Corp., et al. Frances N. ALDRIDGE, Individually, and Frances N. Aldridge, et al., as Executors of the Estate of Henri M. Aldridge, Deceased v. CITY OF MOBILE, a Municipal Corp., et al. 82-902, 82-1162, 82-1195, 82-1196, 82-1204, and 82-1205.
• Court: Alabama Supreme Court

Page 836

459 So.2d 836

The HOME INDEMNITY COMPANY, a Corp., et al. v. Pauline A. ANDERS, et al.

Pauline A. ANDERS, et al. v. CITY OF MOBILE, a Municipal Corp., et al.

The INSURANCE COMPANY OF NORTH AMERICA, as Subrogee of Springdale Stores v. CITY OF MOBILE, a Municipal Corp., et al.

BROWN & BROWN OF DELAWARE, INC., et al. v. CITY OF MOBILE, a Municipal Corp., et al.

PLEASANT VALLEY ASSEMBLY OF GOD v. CITY OF MOBILE, a Municipal Corp., et al.

Frances N. ALDRIDGE, Individually, and Frances N. Aldridge, et al., as Executors of the Estate of Henri M. Aldridge, Deceased v. CITY OF MOBILE, a Municipal Corp., et al.

82-902, 82-1162, 82-1195, 82-1196, 82-1204, and 82-1205.

Supreme Court of Alabama.

Sept. 14, 1984.

Rehearing Denied in 82-902

Nov. 9, 1984.

William H. Brigham, Mobile, for City of Mobile.

G.B. McAtee, of Stokes & McAtee, Mobile, for Mr. and Mrs. Jeffery Watt, Mr. & Mrs. Ron Barrett, Mr. & Mrs. Danny Whitehead, and Mr. & Mrs. Robert Turberville.

Fred W. Killion, Jr. and Robert E. Clute, Jr., of Reams, Vollmer, Philips, Killion, Brooks & Schell P.C. Mobile, for Andrew and Lila Giardina.

Fred W. Killion, Jr. and Lucian Gillis, of Reams, Vollmer, Philips, Killion, Brooks & Schell, P.C., Mobile, for Big Three Motors, Inc.

Robert A. Beckerle, Mobile, for George Hayward Walker and George Ann Walker.

Vaughan Drinkard, Jr., of Drinkard & Sherling, Mobile, for William J. and Joan Glisson.

John W. Parker, Mobile, for Cleve and Laura Jackson, et al.

Irvin Grodsky, of Grodsky & Mitchell, Mobile, for Emory K. Johnson, Bernice Johnson and Willie Mae Parker.

Eugene De Martenson and Rebecca L. Shows of Huie, Fernambucq & Stewart, Birmingham, for The Home Indemnity Company, et al.

Robert H. Smith, of Collins, Galloway & Smith, Mobile, for The Ins. Co. of North America, etc.

Russell S. Terry, Mobile, for Brown and Brown of Delaware, Inc., et al.

Thomas S. Rue and W. Alexander, of Johnstone, Adams, May, Howard & Hill, Mobile, for Pleasant Valley Assembly of God.

Joel F. Danley and Ralph G. Holberg III, of Holberg, Tully, Holberg & Danley, Mobile, for Frances N. Aldridge, et al.

John W. Parker, of McFadden, Riley & Parker, Mobile, for Jeremiah Lowney, Joe and Yanira Logan, Cleve and Laura Jackson.

Joe H. Little, Jr. and Mary Beth Mantiply, of Gaillard, Little, Hume & Sullivan, Mobile, for amicus curiae The Board of Water and Sewer Commissioners of the City of Mobile.

TORBERT, Chief Justice.

In 1980 and 1981, several large storms passed over the City of Mobile (City). Widespread flooding caused extensive property damage. Hundreds of lawsuits were filed against the City. Most of the suits alleged that the City had been negligent in the design, construction, and maintenance of its sewer and drainage system. The City was insured by the Home Indemnity Company (Home). Disputes arose between the flood victims and the City and between the City and Home as to the extent of the City's potential liability to the flood victims and the extent of Home's coverage of the City under the insurance policy.

The City filed a declaratory judgment action on February 1, 1982, seeking in part a determination of what an "occurrence" was, both under the statute at issue, 1977 Ala.Acts, No. 673 (codified at Code 1975, § 11-93-1 through § 11-93-3) and under the facts in this case. Several defendants in the suit counterclaimed, contending § 11-93-2 was not applicable, or that if it was applicable it was unconstitutional, and that it did not contain an aggregate limitation on the recovery of property damage.

Defendants filed a motion for summary judgment on the counterclaim. On January 21, 1983, the trial court entered an order holding that § 11-93-2 was applicable, was constitutional, and contained an aggregate limitation on property damage of $100,000 for all judgments arising out of an "occurrence." This order was made final pursuant to A.R.Civ.P. 54(b) on July 15, 1983.

The "occurrence" issue was tried in March of 1983, and an order, made final pursuant to A.R.Civ.P. 54(b), was entered on May 6, 1983. The court concluded in effect that each property owner who obtained a judgment against the City was injured as the result of a separate "occurrence."

Home appeals from the order of May 6, 1983, and several flood victims cross appeal from the order of January 21, 1983, made final on July 15, 1983. The appeals of the various parties have been consolidated. We will address the issues raised on the cross appeals first, since they concern some threshold questions needing resolution before we address the "occurrence" issue.

Applicability

The flood victims contend that § 11-93-2 does not apply to this case. Their complaints seek recovery against the City on the grounds that there was a defect in a public improvement. They correctly argue that this is the second of two grounds under Code 1975, § 11-47-190, for suing a municipality in tort, the first ground being that the City has vicarious liability for the neglect, carelessness, or unskillfulness of some agent, officer, or employee. See, e.g., Bailey v. City of Mobile, 292 Ala. 436, 296 So.2d 149 (1974); Hillis v. City of Huntsville, 274 Ala. 663, 151 So.2d 240 (1963). They argue that for the purposes of § 11-93-2 the definition of "claim" contained in § 11-93-1(5) ¹ only describes claims arising under the vicarious liability provision of § 11-47-190.

The first part of § 11-47-190 makes a municipality responsible for the negligent acts of certain classes of people who act for the municipality. The second part of § 11-47-190 codified common law decisions that a municipality was liable for damages caused by defects in public improvements, City of Prichard v. Kelley, 386 So.2d 403 (Ala.1980), even though the defect was not created by the negligence of the municipality's employee. City of Tallassee v. Harris, 431 So.2d 1177 (Ala.1983). However, the municipality is responsible only if it has actual or constructive notice of the defect and fails to remedy it. Code 1975, § 11-47-190; City of Scottsboro v. Johnson, 436 So.2d 859 (Ala.1983).

A corporation can act only through its servants, agents, or employees. Martin v. Anniston Foundry Co., 259 Ala. 633, 68 So.2d 323 (1953). While § 11-47-190 refers to notifying "the council or other governing body," it is that body's culpable omission in failing to correct the defect once actual or constructive notice is given that creates liability in the municipality for damages that result. The definition of "employee" for purposes of § 11-93-2 includes officers, officials, employees, or servants. Code 1975, § 11-93-1(2). Therefore, the definition of "claim" in § 11-93-1(5) encompasses a situation, like that alleged in this case, where an official's omission causes damages.

Constitutionality

The flood victims also contend that Act 673 is unconstitutional. The right to maintain a tort action against a local governmental entity has undergone a gradual expansion. Act 673 was passed in response to the gradual abolition of immunity. Roberts v. Meeks, 397 So.2d 111 (Ala.1981) (Maddox, J., concurring specially).

The abolition of immunity was not the result of this Court's totally abolishing the immunity recognized at common law, but instead reflected this Court's attempt to give effect to the Legislature's intent, as set forth in several statutes, to waive immunity in certain circumstances. Parton v. City of Huntsville, 362 So.2d 898 (Ala.1978); Enterprise City Bd. of Education v. Miller, 348 So.2d 782 (Ala.1977). This Court has acknowledged that the Legislature has authority to provide any limitations or protections it deems necessary in this field, Jackson v. City of Florence, 294 Ala. 592, 320 So.2d 68 (1975), unless prohibited by the Constitution. Enterprise City Bd. of Education v. Miller, 348 So.2d 782 (Ala.1977).

In determining whether the act is constitutional, we are bound by the following presumption:

"[I]n passing upon the constitutionality of a legislative act, the courts uniformly approach the question with every presumption and intendment in favor of its validity, and seek to sustain rather than strike down the enactment of a coordinate branch of the government. All these principles are embraced in the simple statement that it is the recognized duty of the court to sustain the act unless it is clear beyond reasonable doubt that it is violative of the fundamental law."

Alabama State Federation of Labor v. McAdory, 246 Ala. 1, 9, 18 So.2d 810, 815 (1944).

With this background in mind, we find no constitutional impediment to the Legislature's limiting the liability of local governmental entities. We note initially that while numerous grounds are advanced on appeal for finding the Act unconstitutional, our search of the record reveals that the only grounds raised both at trial and on appeal were the assertions that the Act violates the remedy provisions of Article I, § 13, and denies equal protection as guaranteed in Article I, § 1. This Court will not consider constitutional questions not raised below. Smith v. State, 280 Ala. 241, 192 So.2d 443 (1966).

The flood victims argue that § 11-93-2 is offensive because it limits tort liability of local governmental entities without doing the same for natural persons. The standard to be applied in determining whether § 11-93-2 will withstand an equal protection challenge is set forth in Reese v. Rankin Fite Memorial Hospital, 403 So.2d 158, 161 (Ala.1981), as follows:

"[T]he court need only find that the classification made by the legislature is not arbitrary or unreasonable. As this court recently held in Tyson v. Johns-Manville Sales Corporation, 399 So.2d 263 (Ala.1981):

'A statutory discrimination between classes is held to be relevant to a permissible legislative purpose if any state of facts reasonably may be conceived to justify it.' "

The City and Home contend that the statute was designed to protect the financial solvency of local governmental entities, while at the same time affording...