Williams v. Allstate Ins. Co.

Decision Date27 November 1991
Citation591 So.2d 38
PartiesRance H. WILLIAMS v. ALLSTATE INSURANCE COMPANY. 1900439, 1901479.
CourtAlabama Supreme Court

Joseph J. Boswell, P.C., Mobile, for appellant.

Mark E. Spear and Mark J. Upton of Richardson, Daniell, Spear & Upton, P.C., Mobile, for appellee.

MADDOX, Justice.

Two major issues are presented for our review in this case between an insured and his insurer: (1) whether the trial court erred in denying a series of motions made by the insured 1 and (2) whether the trial court erred by refusing to give a requested jury instruction. On both points, we find no error; therefore, we affirm the judgment of the trial court.

Rance H. Williams and his wife owned a number of apartments in the Prichard area of Mobile County. On January 21, 1989, at approximately 8:30 p.m., a fire broke out at a duplex apartment owned by them. The duplex was insured by Allstate for $20,000. Several days after the fire, Williams and his wife both made claims to the insurance money. Independent investigators hired by Allstate determined that arson was the cause of the fire. Citing indications that Williams might have set the fire, Allstate denied his claim, but Allstate paid the claim of Williams's wife on the same policy, even though, according to Williams, he and his wife were together at the time of the fire.

In April 1989, Allstate filed a declaratory judgment action against Williams, seeking to have the court determine whether it was liable on the insurance contract. Allstate denied liability, based on an arson defense. Williams counterclaimed, seeking damages based on an alleged breach of contract, and bad faith refusal to pay a claim. After substantial discovery, Williams moved for a summary judgment as to Allstate's declaratory judgment action, and as to his breach of contract claim. Allstate moved for a partial summary judgment as to Williams's bad faith claim. After hearing argument and reading submissions, the trial court denied both Williams's and Allstate's summary judgment motions and the case proceeded to trial.

After Allstate presented its case-in-chief, Williams moved for directed verdicts on Allstate's declaratory judgment action, on his breach of contract claim, and on the question of liability on his bad faith refusal to pay claim. The court denied all of Williams's motions for directed verdicts.

Williams then presented his case to the jury. Both parties submitted written, proposed jury instructions. The judge refused to give Williams's requested instruction number 12. Williams objected, and argues here that the refusal was error.

The case was then submitted to the jury. The jury returned a verdict for Allstate on all claims; the trial court entered a judgment on that verdict and Williams appealed.

Williams's Series of Motions

Williams filed a series of pre-trial, trial, and post-trial motions to test the sufficiency and weight of Allstate's evidence. We address each motion in turn.

(1) Motion for Summary Judgment

Williams moved for a summary judgment on Allstate's declaratory judgment action and on his breach of contract claim. Williams asserted that: 1) a contract existed, the insurance policy; 2) a destruction of the covered property took place, the fire; 3) a refusal to honor the contract occurred, Allstate's refusal to pay the claim; and 4) Allstate lacked a valid defense to liability under the policy. See, Coleman, Summary Judgment In Alabama: The Nuances of Practice under Rule 56, 20 Cumb.L.Rev. 1, 13 (1989). Williams was asserting, then, that no genuine issue of material fact existed, that he was entitled to a judgment as a matter of law, and that Allstate did not have enough evidence to substantiate its arson defense. Id. See, A.R.Civ.P. Rule 56(c) and Tripp v. Humana, Inc., 474 So.2d 88 (Ala.1985). Williams's initial burden in regard to his summary judgment motion was carried when he introduced the insurance policy, affidavits concerning the fire, and Allstate's failure to pay the claim. The burden then shifted to Allstate to establish its arson defense by substantial evidence. 2

A prima facie case of arson can be shown when the insurer introduces evidence that proves: 1) "arson by someone"; 2) "motive by the insured" (Williams); and 3) "unexplained surrounding circumstantial evidence implicating the insured" (Williams). Bush v. Alabama Farm Bureau Mutual Casualty Insurance Co., 576 So.2d 175 (Ala.1991); Great Southwest Fire Insurance Co. v. Stone, 402 So.2d 899 (Ala.1981).

Allstate produced evidence at the summary judgment stage that would substantiate its claim of "arson by someone." Specifically, a "cause and origin" investigator found debris samples that, when tested, showed that an accelerant (specifically, gasoline) had been used in one of the duplex apartments. Also, a rather neat, square hole had been cut in the wall connecting the apartments' back bedrooms. Affidavits and depositions show that this hole was probably intended to vent and spread the flames of the fire. We are convinced that Allstate showed the "arson by someone" element.

Allstate also had to show "motive by the insured." Allstate produced affidavits that revealed that the Williamses were in Chapter 11 bankruptcy. Although the Williamses did not attempt to keep the bankruptcy a secret, we are convinced that Allstate met its burden of showing motive by establishing that the Williamses were in financial need.

Finally, Allstate had to show "unexplained surrounding circumstantial evidence implicating the insured." Allstate produced a witness who saw Mr. Williams leave the apartment building a few hours before the fire. Allstate established that gasoline was poured on the apartment's floor, that the apartment's gas line control valve was broken into an "on" position, and that some form of paper was stuffed into the gas line, supposedly to keep the line open. Also, Allstate showed that the apartment was locked at the time of the fire, and that Williams had the only key. Altogether, this can be taken as "unexplained surrounding circumstantial evidence implicating the insured." Therefore, because Allstate substantiated its arson defense, and, thus, rebutted Williams's initial showing, the trial court did not err by denying Williams's motion for summary judgment.

(2) Motions for Directed Verdict

At the close of Allstate's case-in-chief, Williams moved for directed verdicts on Allstate's declaratory judgment action on the insurance policy, on his breach of contract claim, and on his bad faith claim. As noted above, at the summary judgment stage the declaratory judgment action and the breach of contract claim both hinged on whether Allstate substantiated its arson defense. The same was true at the directed verdict stage. Also, the motion for a directed verdict on the bad faith claim, to the extent that the motion was not premature, was tied to the question of contract liability, and thus to the arson defense.

In reviewing a motion for a directed verdict, we must view all the evidence in the light most favorable to the nonmovant, here, Allstate. Adams v. Travelers Ins. Co., 494 So.2d 401, 403 (Ala.1988); Walker-Waddell Realty, Inc. v. Kresge, 533 So.2d 573, 575 (Ala.1988); Ex parte Hicks, 537 So.2d 486, 488 (Ala.1988). Also, we must entertain such reasonable inferences as the jury would be free to draw from the evidence. Walker-Waddell, 533 So.2d at 575. Additionally, there is a presumption favoring the denial of a motion for directed verdict. Adams, 494 So.2d at 403. Finally, we must uphold a denial of a directed verdict, "if, by any interpretation, the evidence can support a conclusion favoring the [nonmovant]," Hicks, 537 So.2d at 488.

Given these standards, and based upon an examination of Allstate's case-in-chief, and viewing the evidence in a light most favorable to Allstate, we are convinced that Williams was not entitled to a directed verdict. The testimony of Allstate's investigator, the eyewitness who saw Williams leave the apartment just hours before the fire, and Williams's own testimony concerning his bankruptcy all serve to substantiate Allstate's arson defense. Substantiating the arson defense, in turn, entitled Allstate to get to the jury on the declaratory judgment action and the breach of contract claim.

The trial court also allowed the bad faith claim to go to the jury. In light of our holding on the declaratory judgment action and breach of contract claim (i.e., the arson defense), this action was proper. See, National Savings Life Insurance Co. v. Dutton, 419 So.2d 1357, 1362 (Ala.1982). 3 Thus, the trial court did not err in denying Williams's motions for directed verdict.

(3) Motion for J.N.O.V.

After the jury had returned a verdict for Allstate, Williams filed a motion for J.N.O.V. The trial court denied the motion; Williams argues that this denial was reversible error. We disagree.

A motion for J.N.O.V. is...

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