Jimmy Larry Beddingfield et al.
Mullins Insurance Company et al.
from Madison Circuit Court (CV-11-900877)
plaintiffs below, Jimmy Larry Beddingfield
("Larry"), his wife, Rebecca M. Beddingfield
("Rebecca"), and their adult son, James Cody
Beddingfield ("Cody") (hereinafter referred to
collectively as "the Beddingfields"), appeal from a
summary judgment in favor of the defendants below, Mullins
Insurance Company, Mullins & Company Insurance, Rand
Mullins, and David Mullins (hereinafter referred to
collectively as "Mullins"), on the
Beddingfields' claims stemming from Mullins's alleged
failure to properly procure insurance coverage. We affirm the
trial court's judgment in part, reverse it in part, and
and Procedural History
Insurance Company and Mullins & Company Insurance are
"licensed insurance brokerage[s] or agenc[ies]"
operating in Huntsville; Rand Mullins and David Mullins are
licensed insurance or brokerage agents employed by those
entities. In 1997, Larry and Rebecca purchased a $300, 000
homeowners' liability-insurance policy from Rand Mullins
that protected Larry and Rebecca's primary residence. In
2001, Larry and Rebecca purchased a second
liability-insurance policy in the amount of $100, 000 that
provided coverage for a rental house located in Florence;
they later constructed another house in Guntersville and, in
2003, purchased an additional $100, 000 liability-insurance
policy from Rand Mullins for that property. All three
policies Rand Mullins procured for Larry and Rebecca were
initially obtained from Vesta Insurance Corporation; they
were later replaced by policies issued by The Shelby
Insurance Company ("SIC").
2003, Mullins canceled the insurance policy on the Florence
house allegedly based on a belief that "the policy was
issued in duplicate." Allegedly unbeknownst to Larry and
Rebecca, however, the requested cancellation left the
Florence house uninsured. One month later, pursuant to a
mortgage refinance on the Beddingfields' residence, Larry
and Rebecca paid $1, 629 to Mullins, representing one
year's insurance premium on that residence; the check was
endorsed and deposited into Mullins's account. In March
2004, the policy on the Beddingfields' residence was
canceled because of nonpayment of the premium; neither Larry
nor Rebecca, however, was able to recall receiving notice of
the cancellation. After those two events, Larry and Rebecca
were without insurance on their residence and the Florence
house, leaving them with liability insurance only on their
Guntersville house in the amount of $100, 000.
2004, a minor guest at the Beddingfields' Guntersville
house, Trace Rex Linam, suffered a serious eye injury in a
fireworks-related incident. In 2008, Linam and his father,
Charles Gary Linam, sued the Beddingfields, alleging that
they, and particularly Cody, who was a minor at the time,
were responsible for the injury (this action is hereinafter
referred to as "the Linam litigation").
Because SIC had been placed into receivership in Texas in
2006, the Alabama Insurance Guaranty Association
("AIGA") covered the Beddingfields'
legal-defense costs in the Linam litigation;
however, the maximum amount of liability coverage available
was limited to $100, 000 -- the amount of the
liability-insurance policy Larry and Rebecca had obtained
from Mullins to insure that property -- and not $500, 000,
the amount they say would have been available had the other
two policies not been canceled. See § 27-42-8(a)(1),
Ala. Code 1975 (obligating AIGA to cover "claims
existing prior to the determination of [an insurer's]
insolvency and arising within 30 days after the determination
of insolvency, or before the policy expiration date if less
than 30 days after the determination" but limiting
AIGA's obligation to the amount of "the obligation
of the insolvent insurer under the policy from which the
claim arises"). In February 2011, a judgment was entered
on a $600, 000 jury verdict against the Beddingfields in the
Linam litigation. The Beddingfields appealed that
decision to this Court. Because, however, AIGA did not post
the requisite supersedeas bond -- allegedly because SIC was
in receivership -- and the Beddingfields were allegedly
unable to obtain a bond, execution of the judgment was not
stayed during the pendency of the appeal.
2011, while their appeal was pending, the Beddingfields sued
Mullins in the Madison Circuit Court. The complaint alleged
numerous counts of negligence and wantonness with relation to
Mullins's handling of the various insurance policies.
Specifically, Counts I and II, which related to the Florence
house, alleged that Mullins had negligently and/or wantonly
"failed to reasonably review coverages provided by"
the insurance policy on that property. More specifically, it
"[Mullins] negligently cancelled the insurance policy
which provided liability insurance coverage in the amount of
$100, 000.00, and instead continued in force and effect an
insurance policy providing no liability insurance coverage.
"... Had said coverage been in force and effect it would
have provided additional insurance monies for settlement on
behalf of the Beddingfields, or payment of a judgment against
the Beddingfields [in the Linam litigation]."
III and IV of the complaint, which related to the
Beddingfields' residence, alleged that Mullins had
negligently and/or wantonly failed to pay the premium for the
homeowners' insurance coverage despite having received
the premium and that, as a result, the policy had been
canceled, resulting in alleged mental anguish and property
loss. Counts V and VI related to Mullins's decision to
procure the Beddingfields' coverage from SIC and alleged
that Mullins had negligently and/or wantonly failed to warn
the Beddingfields of SIC's precarious financial
situation, its poor risk rating, and the potential
consequences of obtaining insurance from such an insurance
company. Counts VII and VIII alleged that Mullins had
negligently and/or wantonly "appropriated the insurance
premiums provided by the Beddingfields for their residence,
" resulting in the lapse of the Beddingfields'
homeowners' policy and a corresponding reduction in
available liability-insurance coverage. Finally, Counts IX
and X of the complaint alleged that Mullins had negligently
and/or wantonly "failed to advise the Beddingfields of
their need to obtain personal umbrella liability insurance
coverage to protect their substantial assets from potential
risks of loss." The Beddingfields sought unspecified
damages in connection with each of the above-described
claims. Mullins filed an initial answer generally denying
liability and asserting numerous affirmative defenses to the
2013, this Court issued its decision in the appeal in the
Linam litigation. See Beddingfield v.
Linam, 127 So.3d 1178 (Ala. 2013). Specifically, this
Court reversed the trial court's judgment and, as to the
Linams' claims of negligent entrustment, negligent
supervision, and wanton supervision, rendered a judgment in
favor of Larry and Rebecca. 127 So.3d at 1191. Thus the
claims against Larry and Rebecca in the Linam
litigation were concluded in their favor. The Court also
rendered judgment in favor of Cody on the Linams'
strict-liability claim, but remanded the matter for a new
trial on their negligence, wantonness, and assault claims
against him. Id. Following that remand, the
remaining claims were apparently settled and the action was
2016, Mullins filed a motion for a summary judgment. Mullins
attached to its motion, among other things, a notice dated
March 4, 2004, which reflected the cancellation of the
liability policy on the Beddingfields' residence
effective March 19, 2004, and which was allegedly mailed to
Larry and Rebecca at the address of their residence. Also
attached was a follow-up "confirmation of cancellation,
" which was allegedly mailed to Larry and Rebecca on
March 31, 2004.
motion, Mullins argued that it was entitled to a summary
judgment on all of the Beddingfields' claims, both
because the claims were allegedly filed after the expiration
of the applicable two-year limitations period and because the
Beddingfields had allegedly "sustained no damages."
More specifically, Mullins alleged:
"1. The Beddingfields knew as early as at least 2008,
that there were potential coverage gaps in their insurance
because the AIGA, and not [SIC], provided the[ir] defense.
"2. Following an appeal by the Beddingfields ... [in the
Linam litigation], the Alabama Supreme Court on
March 8, 2013 reversed and rendered the verdict as to [Larry
and Rebecca] and remanded the claims against Cody back to the
trial court for a retrial.
"3. In April 2016, all of [the] remaining claims against
Cody [in the Linam litigation] were settled and
there is no longer any threat of any Judgement against ...