United States District Court, M.D. Alabama, Northern Division
MICHAEL L ROSENBERG; HEIDI M. CHRISTIE; T.H. TAYLOR, INC. and TERRY H. TAYLOR, Plaintiffs,
TIG INSURANCE COMPANY, as successor by merger to American Safety Indemnity Company, a California corporation, Defendant.
MEMORANDUM OPINION AND ORDER
HAROLD ALBRITTON, SENIOR UNITED STATES DISTRICT JUDGE.
cause is before the court on a Motion for Summary Judgment
(Doc. #18) filed by Defendant TIG Insurance Company, as
successor by merger to American Safety Indemnity Company
(“TIG”), together with supporting and opposing
briefs and exhibits.
winning an arbitration award against Plaintiffs T.H. Taylor,
Inc. and Terry H. Taylor (collectively,
“Taylor”), Plaintiffs Michael L. Rosenberg and
Heidi M. Christie (“Homeowners”) filed a
complaint in this court on December 12, 2016 to recover their
award from TIG, Taylor's liability coverage provider.
(Doc. #1). In the complaint, the Homeowners seek to recover
$1 million from TIG via Ala. Code § 27-23-2, a statutory
provision that permits creditors like the Homeowners to
recover against insurance providers when they have a judgment
against an insured. (Doc. #9).
September 5, 2017, TIG moved for summary judgment, arguing
that Taylor's actions were not covered under the policy
because they did not constitute an “occurrence”
within the terms of the policy, and alternatively, that any
damages suffered by the Homeowners were not covered damages
within the meaning of the insurance policy. (Doc. #19). For
reasons to be discussed, the Motion for Summary Judgment is
due to be GRANTED.
SUMMARY JUDGMENT STANDARD
Rule 56 of the Federal Rules of Civil Procedure, summary
judgment is proper if “there is no genuine issue as to
any material fact and . . . the moving party is entitled to a
judgment as a matter of law.” Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986).
party asking for summary judgment “always bears the
initial responsibility of informing the district court of the
basis for its motion, ” relying on submissions
“which it believes demonstrate the absence of a genuine
issue of material fact.” Id. at 323. Once the
moving party has met its burden, the nonmoving party must
“go beyond the pleadings” and show that there is
a genuine issue for trial. Id. at 324.
the party “asserting that a fact cannot be, ” and
a party asserting that a fact is genuinely disputed, must
support their assertions by “citing to particular parts
of materials in the record, ” or by “showing that
the materials cited do not establish the absence or presence
of a genuine dispute, or that an adverse party cannot produce
admissible evidence to support the fact.” Fed.R.Civ.P.
56 (c)(1)(A), (B). Acceptable materials under Rule
56(c)(1)(A) include “depositions, documents,
electronically stored information, affidavits or
declarations, stipulations (including those made for purposes
of the motion only), admissions, interrogatory answers, or
avoid summary judgment, the nonmoving party “must do
more than show that there is some metaphysical doubt as to
the material facts.” Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 586 (1986).
On the other hand, the evidence of the nonmovant must be
believed and all justifiable inferences must be drawn in its
favor. See Anderson v. Liberty Lobby, 477 U.S. 242,
the nonmoving party has responded to the motion for summary
judgment, the court shall grant summary judgment if the
movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a
matter of law. Fed.R.Civ.P. 56(a).
submissions of the parties establish the following facts,
construed in a light most favorable to the Homeowners:
The Underlying Dispute and Arbitration
December 2007, Taylor entered into an agreement with the
Homeowners to build a house in Montgomery, Alabama for $756,
099.00, and the Homeowners entered into a loan agreement with
Regions Bank to borrow $805, 400.00 to build the house. (Doc.
#9 at ¶¶11-12). In accordance with the terms of the
construction agreement, Taylor received periodic payments (or
disbursements) from the bank to finance the construction of
the house. (Doc. #11-12). When collecting disbursements to
finance the construction, Taylor agreed that “the
proceeds of the requested advance will be used to pay the
bills currently due and for no other purposes.” (Doc.
the Homeowners' house was never completed as Taylor's
business suffered from a stagnant economy. Three unpaid
materialmen filed suits in state court against Taylor and the
Homeowners, and the Homeowners filed a crossclaim against
Taylor. See Am. Safety Indem. Co. v. T.H. Taylor,
Inc., 513 Fed.Appx. 807, 810 (11th Cir. 2013)
[hereinafter ASIC II]. The Homeowners subsequently
filed an arbitration complaint against Taylor on February 23,
2010, seeking $2 million in damages. (Doc. #20-3). The claims
were presented for arbitration on April 23, 2014, and the
arbitrator issued a decision on March 24, 2015. (Doc. #24).
reviewing the financial documentation related to the
disbursements, the arbitrator found that by October 15, 2008,
Regions had paid Taylor approximately 90% of the loan amount,
even though the construction was only 78.5% completed. (Doc.
#20-4 at 3). In total, Regions ...