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Alabama Municipal Insurance Corp. v. Scottsdale Insurance Co.

United States District Court, N.D. Alabama, Middle Division

November 8, 2017

ALABAMA MUNICIPAL INSURANCE CORPORATION, Garnishor,
v.
SCOTTSDALE INSURANCE COMPANY, Garnishee.

          MEMORANDUM OPINION

          VIRGINIA EMERSON HOPKINS United States District Judge.

         This action is a removed garnishment[1], originally filed by the Garnishor, Alabama Municipal Insurance Corporation (“AMIC”), against the Garnishee, Scottsdale Insurance Company (“Scottsdale”), in the Circuit Court of St. Clair County, Alabama. (Doc. 1-3 at 4-8). It was removed to this Court on May 25, 2017. (Doc. 1). AMIC seeks to garnish insurance proceeds it contends that Scottsdale owes, as indemnity for its insured, in connection with a state court judgment entered against its insured.

         The case is now before the Court on the Cross-Motions for Summary Judgment filed by the parties. (Docs. 21, 22). For the reasons stated herein, summary judgment will be GRANTED in favor of Scottsdale, and against AMICO.

         I. STANDARD

         Under Federal Rule of Civil Procedure 56, summary judgment is proper if there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 2265 (1986) (“[S]ummary judgment is proper if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.”) (internal quotation marks omitted). The party requesting summary judgment always bears the initial responsibility of informing the court of the basis for its motion and identifying those portions of the pleadings or filings that it believes demonstrate the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323, 106 S.Ct. at 2553. Once the moving party has met its burden, Rule 56(c) requires the non-moving party to go beyond the pleadings in answering the movant.[2] Id. at 324, 106 S.Ct. at 2553. By its own affidavits - or by the depositions, answers to interrogatories, and admissions on file - it must designate specific facts showing that there is a genuine issue for trial. Id.

         The underlying substantive law identifies which facts are material and which are irrelevant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d. 202 (1986). All reasonable doubts about the facts and all justifiable inferences are resolved in favor of the non-movant. Chapman v. AI Transport, 229 F.3d 1012, 1023 (11th Cir. 2000). Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Anderson, 477 U.S. at 248, 106 S.Ct. at 2510. A dispute is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. If the evidence presented by the non-movant to rebut the moving party's evidence is merely colorable, or is not significantly probative, summary judgment may still be granted. Id. at 249, 106 S.Ct. at 2511.

         How the movant may satisfy its initial evidentiary burden depends on whether that party bears the burden of proof on the given legal issues at trial. Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115 (11th Cir. 1993). If the movant bears the burden of proof on the given issue or issues at trial, then it can only meet its burden on summary judgment by presenting affirmative evidence showing the absence of a genuine issue of material fact - that is, facts that would entitle it to a directed verdict if not controverted at trial. Id. (citing United States v. Four Parcels of Real Property, 941 F.2d 1428, 1438 (11th Cir. 1991)). Once the moving party makes such an affirmative showing, the burden shifts to the non-moving party to produce “significant, probative evidence demonstrating the existence of a triable issue of fact.” Id. (emphasis added). For issues on which the movant does not bear the burden of proof at trial, it can satisfy its initial burden on summary judgment in either of two ways. Id. at 1115-16. First, the movant may simply show that there is an absence of evidence to support the non-movant's case on the particular issue at hand. Id. at 1116. In such an instance, the non-movant must rebut by either (1) showing that the record in fact contains supporting evidence sufficient to withstand a directed verdict motion, or (2) proffering evidence sufficient to withstand a directed verdict motion at trial based on the alleged evidentiary deficiency. Id. at 1116-17. When responding, the non-movant may no longer rest on mere allegations; instead, it must set forth evidence of specific facts. Lewis v. Casey, 518 U.S. 343, 358, 116 S.Ct. 2174, 2183, 135 L.Ed.2d 606 (1996). The second method a movant in this position may use to discharge its burden is to provide affirmative evidence demonstrating that the non-moving party will be unable to prove its case at trial. Fitzpatrick, 2 F.3d at 1116. When this occurs, the non-movant must rebut by offering evidence sufficient to withstand a directed verdict at trial on the material fact sought to be negated. Id.

         “The standard of review for cross-motions for summary judgment does not differ from the standard applied when only one party files a motion, but simply requires a determination of whether either of the parties deserves judgment as a matter of law on the facts that are not disputed.” S. Pilot Ins. Co. v. CECS, Inc., No. 1:11 CV 3863 AT, 2014 WL 4977805, at *2 (N.D.Ga. Sept. 12, 2014) (citing Am. Bankers Ins. Group v. United States, 408 F.3d 1328, 1331 (11th Cir.2005)). “The Court must consider each motion on its own merits, resolving all reasonable inferences against the party whose motion is under consideration.” Id. “The Eleventh Circuit has explained that ‘[c]ross-motions for summary judgment will not, in themselves, warrant the court in granting summary judgment unless one of the parties is entitled to judgment as a matter of law on facts that are not genuinely disputed.'” Id. (quoting United States v. Oakley, 744 F.2d 1553, 1555 (11th Cir.1984)). “Cross-motions may, however, be probative of the absence of a factual dispute where they reflect general agreement by the parties as to the controlling legal theories and material facts. Id. (quoting Oakley, 744 F.2d at 1555-56).

         II. FACTS

         A. Stipulated Facts

         The parties have stipulated as follows:

         1. On November 9, 2015, the City of Pell City, Alabama (“the City”) and Phoenix Services of Alabama, LLC (“Phoenix”) entered into a contract (“the Contract”) wherein Phoenix agreed “to remove or demolish [a] smokestack from [the City's] property” and to “remove all debris, trash, and other materials resulting from the demolition of the smokestack.” A copy of the Contract appears in the record as document 10-1.

         2. Timothy Manley Phifer (“Phifer”), as “Member/Manager” of the “Timothy Manley Phifer Trust, ” signed the Contract on behalf of Phoenix.

         3. On November 24, 2015, Phifer was performing the work under the Contract.

         4. The City loaned Phifer a 2014 Komatsu tractor (“the tractor”) for use in performing the work.

         5. The work that Phifer performed included using explosives in an effort to demolish the smokestack.

         6. After using explosives, most of the smokestack was still standing. Phifer then used the tractor to perform work on the smokestack. While Phifer was in the cab of the tractor and operating the tractor, the smokestack collapsed onto and damaged the tractor. Phifer was unhurt.

         7. The accident described in ¶ 6 was filmed and can be seen in the YouTube videos titled “Pell City implodes historic Avondale Mills smokestack” (https://youtu.be/e-slDDFNdx8) and “Pell City smokestack collapses on excavator” (https://youtu.be/Nql7apYXl5k).

         8. The City's insurer, AMIC, paid $123, 750 for the damage to the tractor.

         9. On May 18, 2016, AMIC, as subrogee of the City, filed suit against Phifer, the Timothy Manley Phifer Trust (“Phifer Trust”), and Phoenix in the Circuit Court of St. Clair County, Alabama (hereafter “the state court”), alleging that AMIC paid the City for the damage to the City's tractor and that AMIC was entitled to recover against Phifer, Phifer Trust, and Phoenix for their negligence or wantonness in causing the damage and/or for their failure to indemnify the City for the damage. A copy of AMIC's complaint appears in the record as document 10-2.

         10. On February 23, 2017, the state court entered a default judgment in favor of AMIC against Phifer, Phifer Trust, and Phoenix for $123, 750 in compensatory damages and $1, 320.62 in costs. A copy of the state court's order rendering the default judgment appears in the record as document 10-3.

         11. Scottsdale issued a policy of commercial general liability insurance (policy no. CPS2362764) to “Timothy Phifer d/b/a Phoenix Services of Alabama, ” effective November 13, 2015, until it was canceled on December 28, 2015 (“the Policy”). The Policy was in effect at the time of the accident described in ¶ 6 above and shown in the videos referenced in ¶ 7 above. A copy of the Policy appears in the record as document (doc. 10-4).

         12. At the time of the accident described in ¶ 6 above and shown in the videos referenced in ¶ 7 above, the tractor was loaned by the City to Phifer.

         13. At the time of the accident described in ¶ 6 above and shown in the videos referenced in ¶ 7 above, the tractor was in Phifer's care, custody, or control.

         14. At the time of the accident described in ¶ 6 above and shown in the videos referenced in ¶ 7 above, the tractor was “mobile equipment” as defined in the Policy.

         B. Relevant Policy Language

         The Policy states that Scottsdale agrees to “pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury' or ‘property damage' to which this insurance applies.” (Doc. 10-4 at 8, ¶1.a.). The “insured” in this case is “Timothy Phifer d/b/a Phoenix Services of Alabama.” (Doc. 10-4 at 3). The Policy defines “property damage” as including “[p]hysical injury to tangible property.” (Doc. 10-4 at 22, ¶17). The Policy only covers property damage “caused by an ‘occurrence.'” (Doc. 10-4 at 8, ¶1.b. (1)). The Policy defines ...


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