Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Nationwide Mutual Fire Insurance Co. v. The David Group, Inc.

Supreme Court of Alabama

May 24, 2019

Nationwide Mutual Fire Insurance Company
v.
The David Group, Inc.

          Appeal from Jefferson Circuit Court, Bessemer Division (CV-08-902856)

          SHAW, JUSTICE.

         Nationwide Mutual Fire Insurance Company ("Nationwide"), the defendant in a declaratory-judgment action below, appeals from a judgment entered in favor of the plaintiff below, The David Group, Inc. ("TDG"), holding that TDG was entitled to coverage and indemnification under a commercial general-liability ("CGL") insurance policy issued by Nationwide. We reverse and remand.

         Facts and Procedural History

         In January 2004, TDG, a construction company that specializes in custom-built houses, remodeling, and construction services, purchased a CGL policy from Nationwide. Under the terms of that CGL policy, Nationwide agreed 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." According to the policy, its coverage applied to "bodily injury" and "property damage" only if "[t]he 'bodily injury' or 'property damage' is caused by an 'occurrence.'"

         In October 2006, while TDG's CGL policy with Nationwide was in effect, Saurin and Valerie Shah purchased a newly built house from TDG. After they moved in, the Shahs began experiencing problems with their new house. Despite TDG's efforts at correcting the problems, however, in February 2008, the Shahs sued TDG.

         In their complaint, the Shahs alleged that the house had "severe structural issues" and that they had discovered "numerous and substantial construction defects in the residence including, but not limited to, serious defects resulting in health and safety issues, building code violations, poor workmanship, misuse of construction materials, and disregard of proper installation methods." They also asserted claims of rescission, breach of contract, breach of express and implied warranties, negligence and wantonness, negligent supervision and training, misrepresentation and fraud, suppression, and "gross negligence" and "incompetence." As a result of the purported defects in the house, the Shahs alleged that they "suffered and/or are continuing to suffer damages including, but without limitation[, ] repair, and/or replacement costs, loss of the use and enjoyment of areas of their home, loss of market value in their home, mental anguish and emotional distress damages."

         Although Nationwide initially defended TDG against the Shahs' action, Nationwide withdrew its defense after conducting its own investigation into the Shahs' allegations. Nationwide explained in a letter to TDG that, based on its investigation, it concluded that it had no duty either to defend or to indemnify TDG because, according to Nationwide, the damage the Shahs complained of did not constitute an "occurrence" so as to trigger coverage under the CGL policy.

         In September 2008, TDG initiated an action against Nationwide seeking a judgment declaring that Nationwide was obligated to defend TDG in the Shahs' action and to indemnify TDG for any judgment entered against it. TDG also requested that all fees and expenses it incurred in defending against the Shahs' action be paid by Nationwide. Finally, TDG sought a preliminary injunction to prevent the Shahs' action from going forward until TDG's case against Nationwide had been resolved.

         Despite that request, however, the Shahs' case against TDG proceeded to arbitration, and TDG's case against Nationwide was stayed pending the results of the arbitration proceeding. On October 20, 2009, the arbitrator issued an award in favor of the Shahs in the amount of $12, 725.

         In July 2011, Nationwide filed a motion for a summary judgment on TDG's claims. In its motion, Nationwide argued, among other things, that TDG's alleged faulty workmanship in constructing the Shahs' house did not constitute an "occurrence" so as to trigger coverage under the CGL policy. In December 2011, Nationwide filed a renewed motion for a summary judgment, to which TDG responded, and later filed supplemental evidence in support of that motion.

         On January 29, 2015, the Jefferson Circuit Court ("the trial court") issued an order denying Nationwide's motion for a summary judgment. In that same order, the trial court also entered a partial summary judgment in favor of TDG on the issue of coverage. Based on the allegations in the Shahs' complaint and the findings in the arbitrator's award, the trial court, applying the reasoning found in this Court's decision in Owners Insurance Co. v. Jim Carr Homebuilder, LLC, 157 So.3d 148 (Ala. 2014), held that the complaint alleged, and the arbitration award indicated, that there was damage to the Shahs' house that resulted from or was caused by TDG's faulty work. The trial court thus concluded that TDG was entitled to coverage and indemnification under the CGL policy not only for the damages awarded against it in the Shahs' action but also for its attorney fees and expenses incurred in defending the Shahs' action. The specific amount of damages to which TDG was entitled was not covered in that order.

         Between February 2015 and April 2017, the parties filed various motions with the trial court related to damages. On April 19, 2017, the trial court entered a judgment in favor of TDG and assessed damages. Nationwide filed a motion to alter, amend, or vacate that judgment, arguing several grounds. On August 17, 2017, the trial court granted Nationwide's motion and withdrew its April 2017 order after finding, among other things, that it had miscalculated the prejudgment interest it had awarded to TDG. On February 15, 2018, the trial court entered a new final judgment awarding damages. Thereafter, Nationwide appealed.

         Standard ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.