HARWOOD, Justice.
Nobel Insurance Company (hereinafter referred to as "Nobel") appeals the summary judgment for The First National Bank of Brundidge (hereinafter referred to as "the Bank"), J.T. Ramage III, Henry T. Strother, Jr., William F. Hamrick, and Palomar Insurance Corporation (hereinafter referred to as "Palomar")(case no. 1001351). The Bank and Ramage appeal to preserve certain claims dismissed by the summary judgment, in the event this Court reverses that judgment (case no. 1001421). The two appeals have been consolidated. We reverse and remand.
Nobel first sued the Bank in the United States District Court for the Middle District of Alabama to enforce certain letters of credit issued by the Bank. The letters of credit were issued by order of the Bank's customers, Strother and Hamrick, both of whom were insurance brokers for Palomar. The letters of credit were signed by Ramage, the Bank's president, and issued in favor of Western American Specialized Transportation Service, Inc. (hereinafter referred to as "Western American"), one of Hamrick's clients who sought insurance coverage from Nobel. The federal district court aptly described the facts underlying this lawsuit in a May 12, 1999, memorandum opinion and order:
"Nobel insured [Western American] from August 1, 1995[,] through August 1, 1997. The Western American policy had a per claim deductible of $25,000.00 for the policy period from August 1, 1995[,] through August 1, 1996, and a per claim deductible of $10,000.00 for the policy period August 1, 1996[,] through August 1, 1997. Nobel required that `deductible collateral' be held by it in case of non-payment of any deductible amounts, and Western American provided Nobel three [l]etters of [c]redit at the order of [Strother] and [Hamrick]. When the Western American account expired, Western American owed a large sum of money to Nobel for uncollected deductibles. Therefore, in December 1998, Nobel drew upon the [l]etters of [c]redit, but Defendant Bank refused to honor same.
"Plaintiff Nobel commenced this action (`federal action') on March 9, 1999[,] by filing a two-count [c]omplaint against [the] Bank, wherein [Nobel] alleges that [the] Bank: (1) wrongfully dishonored letters of credit (Count I); and (2) breached its contract with Plaintiff Nobel (Count II). On April 6, 1999, [the Bank] filed a Motion to Join Parties, wherein [the Bank] sought to join Strother and Hamrick to the instant action because they are [the] Bank's clients who ordered the issuance of the [l]etters of [c]redit. The court granted said motion by Order entered May 10, 1999. Discovery has yet to commence in this action.
"On April 9, 1999, Hamrick commenced a declaratory judgment action in the Circuit Court of Montgomery County, Alabama (`state action') against the following defendants: Nobel, Western American, [the] Bank, J.T. Ramage, III, and Strother. Hamrick largely bases the state action on the same facts as in the federal action, yet alleges additional contentions. Nobel insured Western American, and Nobel required Western American to provide [l]etters of [c]redit. Hamrick contends that it was Ramage who `agreed on behalf of [the] Bank to issue the required letter of credit.' (State Compl. ¶ 11.) Further, Hamrick contends that `[i]t was never intended that Hamrick would be liable to the Bank on any letter of credit,' and `Hamrick never signed a note, request, loan agreement, guaranty agreement, or any other document with the Bank relating to the Nobel letter of credit.' (Id. ¶ 12.)
"Hamrick seeks the following relief in the state action: a declaration that he is not liable to [the] Bank or, if he is liable to [the] Bank, a declaration that Strother, Rammage, and/or Western American are liable to him; a determination of the liability of Western American to Nobel under the 1995 and 1996 policies; and a determination of the liability of [the] Bank to Nobel under the letters of credit...."
(Footnote omitted.)
On October 26, 1999, the federal district court entered a memorandum opinion and order dismissing Nobel's lawsuit without prejudice, and placing the case on the federal district court's administrative docket. The opinion and order stated, in pertinent part, that "the state action contains additional [p]arties and issues necessary for the complete resolution of this case that are not contained in the federal action," and that "this action is completely governed by state law and involves several novel or complex state law issues that the state court is best suited to resolve."
All of the parties filed answers and other responsive pleadings to Hamrick's complaint for a declaratory judgment. The answer filed by the Bank included a counterclaim against Hamrick, crossclaims against Strother, Nobel, and Western American, and a third-party complaint against Palomar. On March 30, 2001, after all parties involved had filed motions for a summary judgment, the trial court entered the following order:
"This matter is before the Court on the joint motion for summary judgment filed by the defendants [the Bank], [Ramage], [Strother], and [Palomar] dated March 28, 2000, which was joined in by plaintiff [Hamrick] by separate pleading dated April 5, 2000. The only party opposing the joint motion for summary judgment is the defendant and cross-claim plaintiff [Nobel]. Nobel has filed its own motion for summary judgment, dated November 10, 1999, as well as a submission in opposition to the joint motion for summary judgment dated May 12, 2000.
"This is a declaratory judgment action filed to determine the relative rights and obligations of the parties with respect to certain letters of credit. Briefly stated, Nobel issued two insurance policies to [Western American]. Under the policies, Western American was liable to Nobel for the per claim deductible. The insurance agent for this policy was Hamrick, who was employed at that time by Palomar. Nobel was unwilling to issue the policy without `deductible collateral' in the form of letters of credit, and Western American was unable or unwilling to provide such collateral for its deductible obligation. Strother, another Palomar agent, agreed to assist Hamrick in obtaining the required collateral. After meeting with Hamrick and Strother, Ramage, on behalf of the Bank, issued letters of credit to Nobel, with the letters of credit providing that they were issued at the `order' of Hamrick and/or Strother.
"The joint motion for summary judgment is based on general principles of suretyship law, including Ala.Code § 8-3-13, which, in pertinent part provides:
"`(a) A surety upon any contract for the payment of money or for the delivery or payment of personal property may require the creditor or anyone having the beneficial interest in the contract, by notice in writing, to bring an action thereon against the principal debtor or against any cosurety to such contract.
"`(b) If an action is not brought thereon in three months after the receipt of such notice and prosecuted with diligence according to the ordinary course of law, the surety giving such notice is discharged from all liability as surety or his aliquot proportion of the debt, as the case may be.
"`(c) One surety may give notice in behalf of his cosureties.'
"The motion also cites the general principle of suretyship law that if the surety is discharged for any reason, the collateral of the surety is also discharged and released. See 74 Am.Jur.2d Suretyship § 38 and the cases cited therein.
"The joint motion contends that these legal principles, when applied to the undisputed material facts, bar Nobel's cross-claim under the letters of credit. Specifically, the joint motion asserts that the `contract for the payment of money,' in the words of the statute, is the deductible obligation owed by Western American to Nobel under the insurance policies (Joint Motion, Ex. 1), that the creditor is Nobel, the principal debtor is Western American, that the surety is Strother, and that the collateral for the surety was the letters of credit (Joint Motion, Exs. 2, 3, 4). The notice in writing was the September 30, 1998, memorandum faxed to Nobel by Strother (Joint Motion Ex. 7). It is undisputed that no action was brought by Nobel against Western American within three months, as required by § 8-3-13. Moreover, Nobel does not dispute the receipt or the sufficiency of the notice sent by Strother.
"Nobel has not shown by affidavit or otherwise that there is a genuine issue concerning these material facts. Nobel's submission simply provides `if the court determines that there is no issue of fact as to the "suretyship" status of Strother and Hamrick' that Noble be allowed `to conduct adequate discovery to further oppose this assertion.' While there is a fact question about whether or not Hamrick was a surety for Western American, there is no fact question about whether Strother is a surety. Indeed, Strother has filed his own affidavit stating, `I met with Ramage and requested that letters of credit be issued by the Bank to Nobel as deductible collateral so that insurance would be issued to Western [American].' The Court sees no reason to delay summary judgment for discovery on whether or not Strother is a surety for Western American. Generally, a surety is one who contracts to answer for the debt of another. See, e.g., City of Birmingham v. Trammell, 267 Ala. 245 (1958). Moreover, it is undisputed that the principal debt here is the deductible obligation
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