Safeway Ins. Co. of Alabama v. Herrera, 1031115.

• Court: Supreme Court of Alabama
• Writing for the Court: See
• Citation: 912 So.2d 1140
• Parties: SAFEWAY INSURANCE COMPANY OF ALABAMA, INC. v. Gregorio HERRERA. Gregorio Herrera v. Safeway Insurance Company of Alabama, Inc.
• Docket Number: 1031165.,1031115.
• Decision Date: 13 May 2005

Page 1140

912 So.2d 1140 SAFEWAY INSURANCE COMPANY OF ALABAMA, INC.
v.
Gregorio HERRERA.
Gregorio Herrera
v.
Safeway Insurance Company of Alabama, Inc. 1031115. 1031165. Supreme Court of Alabama. February 18, 2005. Rehearing Denied May 13, 2005.

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J. Mark Hart and Allen R. Trippeer, Jr., of Haskell Slaughter Young & Rediker, LLC, Birmingham, for appellant/cross-appellee Safeway Insurance Company of Alabama, Inc.

Myron K. Allenstein and Rose Marie Allenstein of Allenstein & Allenstein, LLC, Gadsden, for appellee/cross-appellant Gregorio Herrera.

SEE, Justice.

The trial court entered a summary judgment in favor of Gregorio Herrera in a declaratory-judgment action brought by Safeway Insurance Company of Alabama, Inc., to determine whether Herrera's claim was covered under his automobile insurance policy with Safeway and on his counterclaim alleging breach of contract. The trial court entered a summary judgment in favor of Safeway on Herrera's counterclaim alleging bad-faith refusal to pay an insurance claim. Safeway appeals (case no. 1031115), and Herrera cross-appeals (case no. 1031165). We consolidated the appeals for purposes of issuing one opinion. We affirm in case no. 1031165 and reverse and remand in case no. 1031115.

I.

The parties do not dispute the main facts in this case. Herrera obtained an automobile insurance policy from Safeway. The policy provided coverage for "direct and accidental loss to [Herrera's] covered auto."

On December 25, 2002, Herrera and his family were at a Christmas gathering at a restaurant owned by a relative of Herrera's. Herrera's wife drove the family to the restaurant in Herrera's minivan, a 1996 Plymouth Grand Voyager, which was insured under the Safeway policy. At the end of the party, Mrs. Herrera moved the minivan to the front of the restaurant to pick up the family. She left the minivan running to warm it up and went inside the restaurant to get the family. During the

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time Mrs. Herrera was in the restaurant, the minivan was unlocked, the key was in the ignition, and the minivan was unattended. While the Herrera family was inside, the minivan was stolen. It was later recovered in Rainbow City; the minivan had been wrecked and abandoned. The total damage to the minivan amounted to $4,746.98; the $500 deductible under the policy is included in this amount.

Herrera reported the incident to Safeway and requested payment under the policy of the amount of the damage less the $500 deductible. Safeway refused to pay based on one of the exclusions in the insurance policy, which states that the insurance policy does not cover theft of a covered vehicle if "forcible entry" was not required to access the vehicle.¹ The insurance policy does not define "forcible entry."

On March 13, 2003, Safeway filed a complaint seeking a judgment declaring that Herrera's insurance policy with Safeway does not cover the damage to Herrera's vehicle. Herrera answered and also counterclaimed, alleging breach of an insurance contract and bad-faith refusal to pay an insurance claim. Safeway answered Herrera's counterclaim.

Both Herrera and Safeway moved for a summary judgment. Herrera requested additional time to respond to Safeway's motion and to conduct discovery regarding the bad-faith-refusal-to-pay counterclaim. The trial court did not grant any additional time for discovery — although at the hearing on the summary-judgment motions the trial court indicated that it might allow additional discovery if it later thought it necessary.

On October 31, 2003, the trial court entered a summary judgment for Herrera, finding that the exclusion did not apply and that the vehicle was covered under the policy because the language of the exclusion was ambiguous. The trial court entered a summary judgment in favor of Safeway on Herrera's bad-faith-refusal-to-pay counterclaim. On January 23, 2004, Herrera moved for a summary judgment on his breach-of-insurance-contract counterclaim, requesting that judgment be entered in the amount of $4,746.98 minus the $500 deductible. On February 4, 2004, the trial court ruled that his summary-judgment motion was moot, implying that the trial court's October 31, 2003, order also disposed of that counterclaim in Herrera's favor.

On November 20, 2003, Herrera filed a motion to alter, amend, or vacate the summary judgment for Safeway on his bad-faith-refusal-to-pay counterclaim.² Herrera's motion was denied as a matter of law

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after 90 days. On March 17, 2004, the trial court entered a judgment for Herrera in the amount of $4,246.98.

Safeway appeals the trial court's summary judgment for Herrera on his counterclaim alleging breach of contract and against Safeway on its claim for a declaratory judgment to exclude Herrera's insurance claim. Herrera cross-appeals the trial court's summary judgment for Safeway on Herrera's bad-faith-refusal-to-pay counterclaim. We have consolidated the appeals for purposes of issuing one opinion. We reverse the trial court's judgment on the coverage issue and on Herrera's counterclaim alleging breach of contract, and we remand the case for further proceedings. We affirm the trial court's judgment on the bad-faith-refusal-to-pay counterclaim.

II.

We review a summary judgment de novo. Mobile Airport Auth. v. HealthSTRATEGIES, Inc., 886 So.2d 773, 779 (Ala.2004). We accord the lower court's legal conclusions no presumption of correctness. Id.

III.

General rules of contract law govern an insurance contract. Twin City Fire Ins. Co. v. Alfa Mut. Ins. Co., 817 So.2d 687, 691 (Ala.2001). The court must enforce the insurance policy as written if the terms are unambiguous, id.; Liggans R.V. Ctr. v. John Deere Ins. Co., 575 So.2d 567, 569 (Ala.1991). Whether a provision of an insurance policy is ambiguous is a question of law. Turvin v. Alfa Mut. Gen. Ins. Co., 774 So.2d 597, 599 (Ala.Civ.App.2000). To the extent the language of an insurance policy provision is ambiguous, all ambiguities must be resolved against the insurance company. Twin City Fire Ins. Co., 817 So.2d at 692. However, the parties cannot create ambiguities by setting forth different interpretations or "[by inserting] ......