Appeal from Jackson Circuit Court. (CV-91-172). Robert L. Hodges, Trial Judge.
Rehearing Denied March 24, 1995. Released for Publication August 8, 1995.
Almon, Shores, Kennedy, Ingram, and Cook, JJ., concur. Houston, J., concurs in part and Dissents in part.
The opinion of the court was delivered by: Almon
David Woodall appeals from a summary judgment entered for Alfa Mutual Insurance Company on both Alfa's claims in its declaratory judgment action and on Woodall's counterclaim. Alfa, which had issued Woodall a commercial general liability insurance policy for his business and a homeowner's insurance policy for his residence, brought this declaratory action for a determination of whether it was obligated to defend or indemnify Woodall in a wrongful death action brought against him based on an allegation that his business had furnished alcohol to a minor. Woodall counterclaimed, alleging fraud, breach of contract, and bad faith refusal to defend. The issues are: (1) whether Woodall's commercial general liability policy provided coverage for his possible liability; (2) whether his homeowner's policy provided coverage for his possible liability; (3) whether the circuit court correctly entered the summary judgment for Alfa on Woodall's claim alleging a bad faith refusal to pay; and (4) whether the circuit court correctly entered the summary judgment for Alfa on Woodall's fraud claim alleging misrepresentations by Alfa agents concerning the coverage that would be provided under Woodall's commercial general liability policy.
Woodall owns and manages a convenience store in Scottsboro, doing business as Woodall's Quick-Stop. Woodall's minor son, Tom Woodall, occasionally works at the store. On December 17, 1989, Tom, Matthew Spain, and Sandy Keller, all minors, were involved in an automobile accident. Keller died as a result of injuries she sustained in the accident. After the accident, Spain, the driver, was tested and was found to have a blood alcohol level of .05%. Spain testified in his deposition that they had been drinking beer before the accident, that it came from Woodall's Quick-Stop, and that it had been provided, either by a sale or as a gift, by Tom. Keller's parents brought a wrongful death action against Woodall, d/b/a Woodall's Quick-Stop, alleging that he or his employees at the Quick-Stop had illegally provided alcohol to a minor, Spain, and had thereby proximately caused Keller's death.
The Kellers' amended complaint was limited to a claim alleging a wrongful death arising from an alleged sale or gift of alcohol from Woodall or his agent to Spain. The parties here treat the Kellers' case as an action under the Dram Shop Act, Ala. Code 1975, § 6-5-71; see also the Civil Damages Act, § 6-5-70. Alfa argued that the commercial general liability policy it had issued to Woodall insuring the Quick-Stop excluded coverage for claims based on the Dram Shop Act.
The commercial general liability policy issued to Woodall included the following:
"This insurance does not apply to:
"c. 'Bodily injury' or 'property damage' for which any insured may be held liable by reason of:
"(1) Causing or contributing to the intoxication of any person;
"(2) The furnishing of alcoholic beverages to a person under the legal drinking age or under the influence of alcohol; or
"(3) Any statute, ordinance or regulation relating to the sale, gift, distribution or use of alcoholic beverages.
"This exclusion applies only if you are in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages."
Alfa argues that subparagraphs (1), (2), and (3) of paragraph (2)(c) of the policy exclude coverage for Sandy Keller's death, because, it argues, if Woodall is liable for her "bodily injury," it is by reason of his causing or contributing to Spain's intoxication, by reason of furnishing Spain, a minor, with alcoholic beverages, or by reason of the statute prohibiting the sale or gift of alcoholic beverages to a minor, Ala. Code 1975, § 28-3A-25(a)(3).
To overcome this argument, Woodall argues first that the exclusion provided in the subparagraphs of paragraph (2)(c) does not apply to him, because by its terms, he argues, it unambiguously provides that it does not include his type of business. He argues that the clause "in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages" does not apply to him, because, he says, he is "in the business of" running a grocery or convenience store, not in the business of selling alcoholic beverages. This argument unduly strains the plain meaning of the exclusion.
"Insurance companies are entitled to have their policy contracts enforced as written, rather than risking their terms either to judicial interpretation or the use of straining language, and the fact that different parties contend for different constructions does not mean that the disputed language is ambiguous."
Gregory v. Western World Ins. Co., 481 So. 2d 878, 881 (Ala. 1985) (citation omitted). The clause cannot reasonably be read to apply only to an insured that is exclusively in the business of selling, etc., alcoholic beverages, because virtually all businesses that sell alcoholic beverages sell other products as well. The plain meaning of this exclusion and its limiting language is that the commercial general liability policy does not provide coverage for injury or damage resulting from the furnishing of alcohol unless the sale, etc., of alcohol is not in the usual course of the insured's business. The sale of beer and wine is in the usual course of the business of Woodall's Quick-Stop, so Woodall was, in the plain meaning of the phrase, "in the business of ... selling ... alcoholic beverages," and the exclusion applies.
Woodall alternatively argues that even if the Quick-Stop is not unambiguously outside the exclusion, the exclusion is ambiguous and so should be construed in favor of the insured.
Whether a clause in an insurance policy is ambiguous is a question of law for the trial court, and this Court reviews the ruling on that question de novo. First Mercury Syndicate, Inc. v. Franklin County, 623 So. 2d 1075, 1076 (Ala. 1993). Courts are not empowered to insert ambiguities "'by strained and twisted reasoning, into contracts where no ambiguities exist.'" Commercial Union Insurance Co. v. Rose's Stores, Inc., 411 So. 2d 122, 124 (Ala. 1982) (quoting Michigan Mutual Liability Co. v. Carroll, 271 Ala. 404, 123 So. 2d 920, 924 (1960)). See St. Paul Mercury Insurance Co. v. Chilton-Shelby Mental Health Center, 595 So. 2d 1375, 1377 (Ala. 1992). The language in an exclusion should be given the same meaning "that a person of ordinary intelligence would reasonably give it." Western World Insurance Co. v. City of Tuscumbia, 612 So. 2d 1159, 1160 (Ala. 1992). The terms in an insurance policy are to be given a "rational and practical construction." Anderson v. Brooks, 446 So. 2d 36, 38 (Ala. 1984). For the reasons stated above, we hold that there is no ambiguity in the phrase "in the ...