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McCullough v. Allstate Property and Casualty Insurance Co.

Alabama Court of Civil Appeals

October 27, 2017

Jerry K. McCullough
v.
Allstate Property and Casualty Insurance Company

         Appeal from Limestone Circuit Court (CV-15-27)

          MOORE, Judge.

         Jerry K. McCullough appeals from a summary judgment entered by the Limestone Circuit Court ("the trial court") in favor of Allstate Property and Casualty Insurance Company ("Allstate"). We affirm the judgment in part and reverse it in part.

         Facts and Procedural History

         In 2011, Allstate issued a policy of automobile insurance ("the policy") to McCullough, insuring, among other vehicles, his 2002 Dodge Ram 1500 pickup truck ("the truck"). McCullough loaned the truck to an acquaintance, who returned it to McCullough in September 2012 in a damaged condition. In January 2013, McCullough filed a claim on the policy. After an Allstate adjuster inspected the truck, finding multiple points of damage, Allstate took the position that the truck had been damaged in more than one accident. Allstate advised McCullough that it would treat his claim as involving multiple different claims, each of which would be subject to the policy deductible of $250. McCullough objected, contending that the damage had resulted from one accident for which only one deductible should be applied. Based on that disagreement, McCullough filed a lawsuit against Allstate in the United States District Court for the Northern District of Alabama ("the federal lawsuit") in March 2013.

         On July 16, 2013, McCullough and Allstate tentatively agreed to settle the federal lawsuit for $8, 000. McCullough subsequently learned that Allstate had reported to LexisNexis Comprehensive Loss Underwriting Exchange ("CLUE") and Verisk Analytics Automobile Property Loss Underwriting Service ("A-PLUS")[1] that it had opened multiple claims regarding the damage to the truck. Expressing concern that the reports would inflate his future automobile-insurance costs, McCullough informed Allstate's attorney that he would not settle the federal lawsuit unless Allstate arranged to have the reports corrected to reflect that he was making only one insurance claim with a date of loss of September 3, 2012. McCullough also informed Allstate's attorney that he did not consider the $8, 000 to be a payment on the claim, and he wanted Allstate either to report to CLUE and A-PLUS that it had paid nothing on the claim or to delete its reports altogether. According to McCullough, on August 2, 2013, Allstate's attorney sent McCullough an e-mail message indicating that Allstate had reported to CLUE that it had paid nothing on the claim.

         Later on August 2, 2013, McCullough executed a "Release and Settlement Agreement" ("the release"). The pertinent terms of the release were as follows:

"For and in consideration of the payment to [McCullough], the sum of EIGHT THOUSAND AND NO/100 DOLLARS ($8, 000.00), and other good and valuable consideration, [McCullough] has released and discharged, [Allstate], its owners, officers, directors, stockholders, employees, agents, attorneys, representatives, subsidiaries, affiliated companies, parent companies, successors, and assigns, and all others, of and from any and all actions, causes of action, choses in action, rights of recovery, theories of recovery, and claims or demands for damages, costs, including, but not limited to, claims for insurance policy benefits and 'bad faith, ' as well as damage claims seeking policy benefits, property damage, mental anguish damages, or punitive damages, or any other thing whatsoever on account of, or in any way arising out of, the claims and matters described in [the federal lawsuit].
"....
"[McCullough] agrees, understands and acknowledges that acceptance of the payment sum pursuant to this settlement agreement is a full, complete, final and binding compromise of matters involving disputed issues regardless of whether too much or too little may have been paid. As part of the bargained-for consideration for this Release ..., Allstate agrees to put forth its best effort to revise its reporting to [CLUE], and/or any other Index Bureau, to reflect that there was only one occurrence giving rise to the claims made the basis of this lawsuit, and only one date of loss, i.e., September 3, 2012.
"....
"This Settlement Agreement contains the entire agreement between [McCullough] and the released parties with regard to the matters set forth herein. There are no understandings or agreements, verbal or otherwise, between the parties except as expressly set forth."

         Based on the release, the federal lawsuit was dismissed with prejudice. By September 8, 2013, McCullough informed Allstate's attorney in an e-mail message that he was satisfied from correspondence he had received from CLUE and A-PLUS that the claim reports had been deleted.

         In November 2014, McCullough applied for automobile insurance with a different insurer. McCullough learned that, in October 2013, Allstate had reported to CLUE and A-PLUS that it had paid $8, 000 to McCullough on the September 3, 2012, claim. McCullough disputed the reports. CLUE eventually deleted the claim report after Allstate did not respond to its inquiries. A-PLUS, on the other hand, maintained the claim report based on its correspondence with Allstate, which had confirmed that it had reported paying $8, 000 on the claim. McCullough thereafter informed Allstate on multiple occasions that he disputed the A-PLUS report, but Allstate maintained its position that it had validly reported the $8, 000 payment.

         McCullough filed a complaint against Allstate in the trial court on August 17, 2015, seeking equitable relief and damages for "breach of settlement agreement, " bad faith, negligence, misrepresentation, violations of the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq., fraudulent inducement, defamation, harassment, and invasion of privacy. Allstate filed a timely answer, asserting multiple affirmative defenses.

         On November 4, 2015, Allstate moved for a summary judgment, asserting that all of McCullough's claims arose out of the same matters set forth and settled in the federal lawsuit; that McCullough's claims were barred by waiver, estoppel, accord and satisfaction, and release; that "any discussions or e-mails leading up to the consummation of the final settlement agreement are merged into the Release which specifically states that it is the 'entire agreement between [McCullough] and [Allstate] with regard to the matters set forth herein'"; and that Allstate had complied with the terms of the release. Allstate submitted the affidavit of Heath Harmon, the "Casualty Claims Service Leader" for Allstate, in support of its motion, pursuant to Rule 56(c), Ala. R. Civ. P. On November 7, 2015, McCullough filed a motion to compel Allstate to produce discovery and requested that the trial court impose discovery sanctions on Allstate. On November 19, 2015, McCullough filed a response to the motion for a summary judgment and a motion for a partial summary judgment on his claims alleging "breach of settlement agreement, " negligence, misrepresentation, and fraudulent inducement. He filed, pursuant to Rule 56(c), his own affidavit and other evidentiary materials in support of the response and motion. That same day, he also filed an amendment to his motion to compel discovery and to impose discovery sanctions. On November 20, 2015, Allstate responded to McCullough's motion to compel discovery and for discovery sanctions. On November 30, 2015, McCullough filed an addendum to his response to Allstate's summary-judgment motion and to his motion for a partial summary judgment. That same day, Allstate responded to McCullough's amendment to his motion to compel discovery and for discovery sanctions.

          On December 8, 2015, Allstate filed a reply to McCullough's response to Allstate's summary-judgment motion, as well as a motion to strike portions of McCullough's Rule 56(c) affidavit. On December 11, 2015, McCullough filed an addendum to his amendment to his motion to compel discovery and to impose discovery sanctions.

         On December 14, 2015, McCullough filed a motion for a judgment declaring that "the purpose of the $8, 000 paid to [McCullough] by Allstate was to purchase his agreement to dismiss the [federal] lawsuit." On December 18, 2015, Allstate responded to that motion.

         On December 21, 2015, McCullough filed an amendment to his motion for a partial summary judgment. On December 28, 2015, McCullough filed a motion to compel Allstate to produce the documents he had requested in a subpoena; as an exhibit to that motion, he attached his own affidavit, which was filed pursuant to Rule 56(f), Ala. R. Civ. P. On January 6, 2016, McCullough filed a response to the motion to ...


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