Lary v. Valiant Ins. Co.

• Court: Alabama Court of Civil Appeals
• Writing for the Court: PITTMAN.
• Citation: Lary v. Valiant Ins. Co., 864 So.2d 1105 (Ala. Civ. App. 2002)
• Decision Date: 15 November 2002
• Parties: John H. LARY, Jr. v. VALIANT INSURANCE COMPANY.

864 So.2d 1105

John H. LARY, Jr. v. VALIANT INSURANCE COMPANY.

2010775.

Court of Civil Appeals of Alabama.

November 15, 2002.

Rehearing Denied January 10, 2003.

John H. Lary, Jr., pro se.

Ruth Ann Hall of Spurrier, Rice, Wood & Hall, Huntsville, for appellee.

PITTMAN, Judge.

This appeal is from the trial court's judgment in a case involving the total loss of two automobiles from flood damage.

On January 18, 2000, John Lary, acting pro se, sued Valiant Insurance Company alleging breach of contract and bad-faith failure to pay an insurance claim. Lary alleged that Valiant had failed to fix his two flood-damaged vehicles, that the vehicles should have been considered total losses, and that Lary should have been compensated for the total loss of the vehicles. Valiant filed an answer denying the allegations. On November 20, 2000, Valiant filed a motion seeking a summary judgment as to Lary's bad-faith claim. The trial court, receiving no response from Lary, granted Valiant's motion and entered a partial summary judgment for Valiant.

Valiant had previously invoked an appraisal clause in the insurance policy purchased by Lary, which allowed the parties to submit to an umpire any disagreement about the amount of loss covered by the policy. The parties did so, and on January 2, 2002, Valiant filed a "motion to enforce settlement and/or appraisal clause provisions." Lary responded by filing a motion for a summary judgment. The matter was then submitted to the trial court upon the stipulations and briefs of the parties. The trial court entered its judgment on February 7, 2002, awarding Lary the value determined by the umpire on both vehicles, minus the policy deductible, and awarding Valiant title to and possession of the vehicles. Lary appealed to the Alabama Supreme Court. Pursuant to § 12-3-10, Ala. Code 1975, the supreme court transferred this case to this court.

I.

Lary contends that the trial court erred by entering a summary judgment for Valiant on his bad-faith claim.

"A party moving for summary judgment has the burden of clearly showing that there is an absence of a genuine issue as to any material fact and that the moving party must be entitled to the summary judgment as a matter of law. Butler v. Michigan Mutual Insurance Co., 402 So.2d 949 (Ala.1981). Once a motion for summary judgment has been made and supported as required by Rule 56, Alabama Rules of Civil Procedure, the motion is to be granted unless the adverse party makes an evidentiary or factual showing that there is a genuine issue of fact for trial. Butler, supra."

Denniston & Co. v. Jackson, 468 So.2d 170, 174 (Ala.Civ.App.1985). In the instant case the exhibits, affidavits, and pleadings establish that Valiant had not committed the tort of bad-faith refusal to pay a claim. The record clearly indicates that Lary filed no response to Valiant's motion for a partial summary judgment.

"Once a prima facie showing is made that there is no [genuine] issue of material fact, it then becomes the burden of the opposing party to produce evidence to the contrary. Holliyan v. Gayle, 404 So.2d 31 (Ala.1981). An opposing party may not rest upon the mere allegations or denials of the pleadings. Butler [v. Michigan Mut. Ins. Co., 402 So.2d 949 (Ala.1981)]. When no evidence is offered to contradict, or the opposing party fails to respond to a motion for summary judgment, the trial court has no alternative but to consider the evidence presented by the moving party as uncontradicted; and, if warranted by such evidence, summary judgment may be entered against the nonmoving party. Butler v. Michigan Mut. Ins. Co., supra."

Denniston, 468 So.2d at 174.

Valiant filed its motion for a summary judgment, outlining the elements of the tort of bad-faith failure to pay an insurance claim. In order to set forth a claim for bad faith, an insured must show (1) an intentional refusal by the insurer to pay the claim, (2) coupled with the absence of any reasonably legitimate or arguable reason for that refusal and (3) the insurer's actual knowledge of the absence of an arguable or debatable reason for denying the claim. Chavers v. National Sec. Fire & Cas. Co., 405 So.2d 1 (Ala.1981). As a result, the courts have stated that the insured must show more than mere nonpayment and prove a bad-faith nonpayment, that is, the insured is required to show that there was a nonpayment and that there was no reasonable ground for dispute under the policy. National Sec. Fire & Cas. Co. v. Bowen, 417 So.2d 179 (Ala. 1982).

The evidence before the trial court showed that Valiant did not refuse to pay a claim filed by Lary. Valiant paid the repair claims presented by Lary for both vehicles damaged by the flood. This alone negates the first element of bad faith. Lary, in his complaint, alleged Valiant was guilty of bad faith because, Lary alleged, Valiant paid for repairs on the vehicles knowing that the vehicles could not be repaired and that they were damaged beyond their market value. The evidence before the trial court showed that Valiant had both vehicles repaired, and that, after one of the vehicles exhibited additional problems, Valiant had it appraised. The appraiser reported the vehicle was a total loss, given the cost of the additional repairs. Valiant paid the costs of the repairs to both vehicles, and when the additional repairs to the second vehicle placed it in the category of a total loss, Valiant offered to pay the loss. The only remaining dispute between the parties was the actual cash value of the vehicles. Based on the evidence before the trial court, the summary judgment on the bad-faith claim was proper. We therefore affirm the partial summary judgment for Valiant.

II.

Lary's remaining issues on appeal are concerned with the judgment of the trial court regarding his breach-of-contract claims. The trial court took the pleadings and submissions of the parties on the undisputed evidence and rendered a judgment. Nothing in the record indicates that the trial court heard any evidence; in fact, the trial court denied a request for oral argument.

"Normally, a trial court's judgment is accorded great weight where that court hears evidence ore tenus. Copeland v. Richardson, 551 So.2d 353 (Ala.1989); Cale v. City of Bessemer, 393 So.2d 959 (Ala.1980). However, as in this case, when a trial court sits in judgment on facts that are undisputed, an appellate court will determine whether the trial court misapplied the law to those undisputed facts. Home Indemnity Co. v. Reed Equipment Co., 381 So.2d 45 (Ala. 1980). Furthermore, where the trial court sits without a jury and hears evidence in the form of stipulations, briefs, and writings of the parties, then an appellate court will sit in judgment on the evidence. Hacker v. Carlisle, 388 So.2d 947 (Ala.1980). See, also, Ex parte British Steel Corp., 426 So.2d 409 (Ala. 1982)."

Craig Constr. Co. v. Hendrix, 568 So.2d 752, 756 (Ala.1990). In the instant case, the trial court decided this case without a jury and based upon written submissions; therefore, this Court sits in judgment on the evidence.

Lary's first contention is that the trial court erred when it ordered Lary to transfer title of the damaged vehicles to Valiant. In his submissions to the trial court, the only argument made by Lary is that § 32-8-87, Ala.Code 1975, allows either Valiant or him to forward the titles on a car declared a total loss to the Department of Revenue; therefore, he argues, Valiant has no automatic right to the vehicles and their titles. Section 32-8-87(b) reads, in pertinent part, as follows:

"(b) When the frame or engine is removed from a motor vehicle and not immediately replaced by another frame or engine, or when an insurance company has paid money or made other monetary settlement as compensation for a total loss of any motor vehicle, the motor vehicle shall be considered to be salvage. The owner of every motor vehicle in which total loss or salvage has occurred shall, within 72 hours after the total loss or salvage occurs, make application for a salvage certificate of title and forward to the department the certificate of origin or certificate of title to the motor vehicle, whereupon the department shall process the certificate of origin or certificate of title in a manner prescribed by law or regulation. An insurance company which pays money or makes other monetary settlement as compensation for total loss of a motor vehicle shall at the time of payment or monetary settlement obtain the vehicle's certificate of origin or certificate of title and, as soon as practicable after receiving them, shall forward them along with their application for a salvage certificate, to the department for processing."

Valiant, on the other hand, argues that the statute mandates that Valiant acquire the vehicles and the titles to those vehicles so it can forward those titles to the Department of Revenue.

The statute clearly says any insurance company that pays money or compensation for the total loss of a vehicle must acquire the title to the vehicle. However, the statute does not address whether the insurer has a right to possession of the actual vehicles. More importantly, § 32-8-87(b), which is a part of the Alabama Uniform Certificate of Title and Anti Theft Act, § 32-8-1 et seq., Ala.Code 1975 ("the Act"), is not concerned with right of possession of salvage vehicles, but instead with tracing title and deterring theft, hence the title of the Act.

Having nothing more than that argument before it, the trial court ordered Lary to...