Travelers Home & Marine Insurance Co.
Dianne Gray and Martin Gray
As Corrected August 14, 2015.
Appeal from Elmore Circuit Court. (CV-12-900062). John B. Bush, Trial Judge.
For Appellant: Carol Ann Smith, Smith & Pace, P.C., Birmingham.
For Appellees: Kenneth J. Mendelsohn, Jemison & Mendelsohn, P.C., Montgomery.
MURDOCK, Justice. Stuart, Bolin, Parker, Shaw, Wise, and Bryan, JJ., concur. Moore, C.J., concurs in the result.
Travelers Home and Marine Insurance Company (" Travelers" ) appeals a summary judgment entered by the Elmore Circuit Court in favor of Dianne Gray and Martin Gray in the Grays' action arising from injuries Dianne suffered as the result of a motor-vehicle accident. We reverse the judgment of the trial court.
I. Facts and Procedural History
On February 14, 2010, Lawana Levirt Williams Coker and Dianne were involved in a motor-vehicle accident in Elmore County; Coker was without motor-vehicle insurance at the time of the accident. On February 7, 2012, the Grays filed in the trial court a three-count complaint naming as defendants Coker and Travelers and a fictitiously named defendant. In count I, Dianne alleged that Coker's negligent and/or wanton operation of her motor vehicle caused the accident and that, Dianne said, as a result of the accident, she suffered, " among other things, numerous serious physical injuries; substantial medical expenses including multiple bills to Baptist Hospital; future medical bills; past and future physical pain and mental anguish; permanent disability and diminished ability to do things that she could do before the collision." In count II, Dianne alleged that she was owed uninsured-motorist (" UM" ) benefits from Travelers, her motor-vehicle insurer. In count III, Martin alleged a claim of loss of consortium. Travelers answered the complaint, denying the material allegations therein and asserting certain affirmative defenses. Coker, however, failed to answer the complaint.
On January 25, 2013, the trial court entered the following order:
" Plaintiff is given 15 days to file Motion for Default against Defendant Lawana Coker. Plaintiff shall submit an evidentiary affidavit in support of damages and proposed order via 'proposed order' que[ue]. The affidavit may be submitted as a supplement to the motion for default. In the event that this order is not complied with, Lawana Coker will be dismissed as a Defendant."
On February 7, 2013, the Grays moved the trial court to enter a default judgment in their favor and against Coker, requesting
that the trial court assess damages in the amount of $500,000 for Dianne and $50,000 for Martin. The Grays supported their motion for a default judgment with Dianne's affidavit, in which Dianne alleged that, among other things, the accident had caused her to suffer numerous physical injuries; caused her to be unable to sleep; caused her to suffer from depression; and caused a breakdown of her marriage to Martin. The Grays' February 7, 2013, motion requested no relief as to Travelers.
On February 8, 2013, the trial court entered a default judgment in favor of the Grays and against Coker for the amounts requested by the Grays in their motion for a default judgment.
On April 8, 2013, the Grays filed a new summary-judgment motion in which, for the first time, they sought relief against Travelers. The Grays did not base their summary-judgment motion against Travelers on the ground that there was no genuine issue of fact as to whether tortious conduct on the part of an uninsured third party, Coker, had caused them to suffer injury. Instead, they based their summary-judgment motion against Travelers solely on the fact that they previously had obtained a default judgment against Coker. In this regard, the Grays argued that they were entitled to a judgment as a matter of law against Travelers because, they said, " Travelers as a party defendant had notice and adequate opportunity to intervene and present any defenses and arguments necessary to protect its position with respect to the entry of or the amount of damages in the Default Judgment. By failing to do so, Defendant Travelers legally is bound by the judgment." The Grays argued as follows:
" The law is well settled that when plaintiffs join their own liability insurer as a party defendant in a suit against the uninsured motorist 'the insurer would be bound by the factfinder's decisions on the issues of liability and damages.' Lowe v. Nationwide Ins. Co., 521 So.2d 1309, 1310 (Ala. 1988) .... The law is also clear that the UM-insurer is bound by a Default Judgment so long as 'it had full notice and adequate opportunity to intervene and present any defenses and arguments necessary to protect its position.' Champion Ins. Co. v. Denney, 555 So.2d 137, 139-40 (Ala. 1989). Here, Travelers had 'had full notice and adequate opportunity' but chose to do nothing to 'protect its position.' Accordingly Travelers is bound by the Default Judgment."
On May 15, 2013, Travelers responded to the Grays' summary-judgment motion, arguing that it was not bound by the default judgment, which had been entered against only Coker. Specifically, Travelers argued:
" Champion [Insurance Co. v. Denney,555 So.2d 137 (Ala. 1989),] stands for the proposition that a UM insurance carrier is bound by a default judgment only if the carrier is provided notice of the insured's action against the tortfeasor and it elects not to participate in the action.
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