Parker Towing Co. v. Triangle Aggregates, Inc.

• Decision Date: 13 December 2013
• Docket Number: 1100510.
• Parties: PARKER TOWING COMPANY, INC. v. TRIANGLE AGGREGATES, INC.
• Court: Alabama Supreme Court

143 So.3d 159

PARKER TOWING COMPANY, INC.

v.TRIANGLE AGGREGATES, INC.

1100510.

Supreme Court of Alabama.

Dec. 13, 2013.

Hamp Uzzelle of Hand Arendall LLC, Mobile, for appellant.

Bert P. Taylor and Abigail Lounsbury Morrow of Taylor Ritter, P.C., Orange Beach, for appellee.

MURDOCK, Justice.

Parker Towing Company, Inc. (“Parker Towing”), appeals from a judgment of the Clarke Circuit Court denying Parker Towing's cross-claim for indemnity from Triangle Aggregates, Inc. (“Triangle”). We affirm the judgment in part and reverse it in part.

I. Facts and Procedural History

Parker Towing owned a 40–acre parcel of property in Clarke County, which it mined for sand and gravel. Parker Towing's property is adjacent to property owned by Betty Jo Haynie, Wynona Belle G. Crosby, Mary Allison Haynie, Elizabeth Haynie Wainstein, and Joe Mills (collectively “the landowners”). In 1996, 1998, and 2002, Parker Towing entered into a series of lease agreements whereby it leased various parcels of real property from the landowners (“the leased properties”).¹ The purpose of the leases, each of which by its terms was for a period of two years, was to enable Parker Towing to mine sand and gravel from the leased properties.

After each lease expired, Parker Towing continued mining on the property covered by the respective leases with the knowledge, permission, and consent of the landowners. Parker Towing also continued to make payment to the landowners as otherwise would have been required under the relevant leases. According to Parker Towing, it is a common practice that sand and gravel leases continue after their stated termination date with the permission and consent of the property owners, but without extending the leases in writing. Each of the lease agreements provided that Parker Towing would perform reclamation of the property covered thereby upon the expiration of the lease, with such reclamation to include the planting of pine seedlings within one year after Parker Towing had ceased its mining operations on each parcel.

In May 2005, Parker Towing entered into an agreement to sell its 40–acre parcel of property and its machinery and equipment and related assets to Triangle. Terah Huckabee, who was a vice president of Parker Towing, and Benny Chinnis, who was a vice president of Triangle, negotiated the sales agreement between Parker Towing and Triangle. The agreement provided, in pertinent part, for the transfer of “any remaining interest” Parker Towing held in the landowners' leases, and the agreement further provided:

“Buyer [Triangle] agrees to perform any requirements remaining open under said lease including but not limited to reclamation of all previously mined and un-reclaimed property. Buyer agrees to indemnify and hold Seller [Parker Towing] harmless from any claims, demands or actions made against Seller for performance of said requirements even if they are deemed non-transferable under the now expired lease.”

After the sale to Triangle, Parker Towing discharged all of its employees who had been assigned primarily to the mining operation on the leased properties. Triangle then hired all the discharged Parker Towing employees. Thereafter, Triangle continued to mine the leased properties, and it also continued certain reclamation work on the leased properties that had been initiated by Parker Towing. After the sale, Parker Towing conducted no further operations on the leased properties, and none of its employees or agents went to the properties except Huckabee, who went twice to conclude matters relating to the sale to Triangle.

In addition to mining on the leased properties and on the land it had purchased from Parker Towing, Triangle apparently also mined certain property owned by the landowners that was not included in the lease agreements between the landowners and Parker Towing (“the nonleased property”).

In October 2006, the landowners sued Parker Towing, Triangle, Triangle Land, LLC (“Triangle Land”),² Chinnis, and fictitiously named defendants. Count one of the complaint was based upon obligations arising under the lease agreements and stated:

“[The landowners] ... entered into a lease agreement for defendants or some of them to remove sand and gravel from a portion of the above described real estate. As a part of the consideration, defendants agreed to put the real property back into substantially its original condition for growing timber. Defendants have failed and refused to do so and have breached the agreement.”

Counts two through eight of the landowners' complaint asserted claims against Parker Towing, Triangle, Triangle Land, Chinnis, and fictitiously named defendants, jointly and severally, based upon various torts they allegedly committed on the nonleased property.³ Count two alleged that the aforesaid defendants “trespassed” because they had

“intentionally, willfully and unlawfully entered and conducted a sand and gravel operation upon a portion of the real property described above, not included in the lease agreement, with knowledge that they had no right to mine on said real property.”

(Emphasis added.) Count three alleged that the defendants had “negligently or wantonly entered upon real property belonging to the [landowners] on which defendants had no lease agreement” and that this property was damaged as a proximate result of such negligence and wantonness. Count four alleged that the defendants “unlawfully bulldozed the real property, cut and cleared trees, and unlawfully occupied the subject real property.” Count five alleged that the defendants had “intentionally, willfully and unlawfully taken a portion of [the landowners'] real property without [the landowners'] consent and against [the landowners'] will.” Count six alleged that the defendants had committed “outrageous conduct” as to the landowners' legal rights. Count seven included a claim for damages for mental anguish based on the defendants' trespass, and count eight alleged that the defendants “independently and through imputation, were wanton, willful and grossly negligent, the proximate result of which [the landowners] have suffered actual damages.”

Parker Towing filed a cross-claim against Triangle seeking indemnity for any losses it might incur as a result of any failure by Triangle to have reclaimed the leased properties as alleged in count one of the landowners' complaint, including all costs and expenses incurred by Parker Towing in defending against the landowners' claims. Parker Towing also filed a motion for a summary judgment on its cross-claim against Triangle in which it asserted that Triangle was contractually obligated to indemnify Parker Towing against any losses, including attorney fees and expenses, Parker Towing might incur as a result of any failure by Triangle to have performed the reclamation of the leased properties in a timely manner.

As to the nonleased property and counts two through eight of the complaint, Parker Towing filed a motion for a partial summary judgment against the landowners. The landowners filed a response to that motion, arguing that

“it appears that Parker's position is that it is not liable for any intentional or negligent acts on the part of Triangle with respect to Triangle's activities on [the landowners'] land not included in the [the landowners'] lease with Parker. In its Motion, Parker contends that it is not liable for any actions on the part of Triangle after it sold its land to Triangle and Triangle began its activities on [the landowners'] land. Parker, however, overlooks the extent of its duties and responsibilities to [the landowners] upon the assignment of its lease to Triangle.

“....

“In the instant case, Parker simply assigned its rights and duties to Triangle without any notice to [the landowners]. Parker's employees became employees of Triangle, and the activities on [the landowners'] property continued. During this period, Triangle began to trespass on additional property owned by [the landowners] without the [the landowners'] consent. From [the landowners'] perspective, Triangle and Parker are one in the same—Triangle has the same employees as Parker and Triangle continued doing the same work as Parker. When Triangle trespassed onto land not included in the lease between Parker and [the landowners], Parker remained liable to [the landowners] along with Triangle.

“....

“Parker ... remains liable to [the landowners] for the actions of Triangle, its assignee. It cannot escape liability for the torts of Triangle by hiding behind the assignment. Parker is, in essence, one and the same with Triangle with respect to any torts committed by Triangle against [the landowners], and is jointly and severally liable for Triangle's torts.”

(Emphasis added.)

The trial court denied both of Parker Towing's summary-judgment motions. Thereafter, Parker Towing amended its cross-claim against Triangle to add a claim for indemnity in the event Parker Towing were to be held liable for actions of Triangle with respect to the nonleased property.

Sometime after depositions were taken in June 2008, Triangle paid the landowners, collectively, between $50,000 and $100,000 for the sand and gravel it had mined and removed. Triangle had not paid the landowners anything before that time.

In September 2008, Parker Towing's liability-insurance carrier, Employers Mutual Casualty Company (“EMC”), filed a motion to intervene in the landowners' action “for the limited purpose of determining whether there is insurance coverage for the claims alleged by the [landowners] against [Parker Towing].” In October 2008, the trial court entered an order granting EMC's motion to intervene.⁴EMC had issued two reservation-of-rights letters to Parker Towing, one dated November 2, 2006, and one dated September 21, 2007. The two letters contained similar language as to EMC's proffering an attorney to defend Parker Towing against the landowners' claims and as to EMC's reservation of the right to deny coverage for...