Title: Shane Traylor Cabinetmaker, L.L.C. v. American Resources Insurance Company, Inc.

State: alabama

Issuer: Alabama Supreme Court

Document:

Rel: 5/3/13 
Notice: T h i s o p i n i o n i s s u b j e c t t o f o r m a l 
r e v i s i o n b e f o r e p u b l i c a t i o n i n 
t h e 
advance 
s h e e t s o f 
Southern Reporter. 
R e a d e r s a r e r e q u e s t e d t o 
n o t i f y t h e 
Reporter of 
Decisions, 
Alabama A p p e l l a t e C o u r t s , 300 D e x t e r Avenue, Montgomery, Alabama 36104-3741 ((334) 229¬
0 6 4 9 ) , o f 
any 
t y p o g r a p h i c a l o r o t h e r e r r o r s , i n 
o r d e r t h a t c o r r e c t i o n s may 
be 
made b e f o r e 
t h e o p i n i o n i s 
p r i n t e d i n 
Southern Reporter. 
SUPREME COURT OF ALABAMA 
OCTOBER TERM, 2012-2013 
1110418 
Shane Traylor Cabinetmaker, L.L.C., and 
Michael Shane 
Traylor 
v. 
American Resources Insurance Company, Inc. 
Appeal from Mobile C i r c u i t Court 
(CV-08-2178) 
BRYAN, J u s t i c e . 
Shane T r a y l o r Cabinetmaker, L.L.C. ("STC"), and M i c h a e l 
Shane T r a y l o r sued American Resources I n s u r a n c e Company, I n c . 
("American R e s o u r c e s " ) , a l l e g i n g b r e a c h o f c o n t r a c t and bad 
f a i t h , based on American R e s o u r c e s ' r e f u s a l t o d e f e n d o r t o 
1110418 
i n d e m n i f y STC and T r a y l o r on c o u n t e r c l a i m s 
f i l e d a g a i n s t them 
by 
R o b e r t 
L. 
Barbee 
and 
R.L. 
Barbee 
B u i l d e r s , 
I n c . 
( h e r e i n a f t e r 
c o l l e c t i v e l y 
r e f e r r e d t o as 
" B a r b e e " ) , 
i n a 
s e p a r a t e a c t i o n . 
The c i r c u i t c o u r t e n t e r e d a summary judgment 
i n f a v o r o f American R e s o u r c e s , and STC and T r a y l o r a p p e a l e d . 
We a f f i r m . 
F a c t s and P r o c e d u r a l 
H i s t o r y 
In 2005 and 2006, Barbee h i r e d STC t o p e r f o r m 
c a b i n e t r y 
and woodworking on homes Barbee was b u i l d i n g i n B a l d w i n County 
("the s u b j e c t p r o p e r t i e s " ) . One of the s u b j e c t p r o p e r t i e s was 
R o b e r t L. Barbee's p e r s o n a l 
r e s i d e n c e . 
In June 2007, STC 
and 
T r a y l o r 
sued 
Barbee, 
a l l e g i n g b r e a c h 
of 
c o n t r a c t , 
open 
a c c o u n t , 
work 
and 
l a b o r 
p e r f o r m e d , 
u n j u s t 
e n r i c h m e n t , 
m i s r e p r e s e n t a t i o n , 
and 
f o r e c l o s u r e on a m a t e r i a l m a n ' s 
l i e n 
r e l a t e d t o the c a b i n e t r y and woodworking STC had done on the 
s u b j e c t p r o p e r t i e s . 
STC and T r a y l o r a l s o r e q u e s t e d a judgment 
d e c l a r i n g whether R o b e r t L. Barbee had an ownership i n t e r e s t 
i n STC 
and, 
i f so, a judgment d e c l a r i n g t h a t STC had been 
e f f e c t i v e l y d i s s o l v e d on March 28, 2007.
1 
1STC and T r a y l o r argue t h a t , i n December 2006, a f t e r much 
u r g i n g by R o b e r t L. Barbee, T r a y l o r e x e c u t e d an "Assignment of 
I n t e r e s t , " 
t r a n s f e r r i n g a 50% ownership 
i n t e r e s t i n STC 
t o 
R o b e r t L. Barbee. 
T r a y l o r a l s o e x e c u t e d a r e l a t e d 
o p e r a t i n g 
2 
1110418 
Barbee f i l e d an answer and c o u n t e r c l a i m , a l l e g i n g b r e a c h 
of c o n t r a c t , money l e n t , money p a i d by m i s t a k e , 
n e g l i g e n c e , 
m i s r e p r e s e n t a t i o n , s l a n d e r of t i t l e based on a l i e n p l a c e d 
on 
one 
of 
the 
s u b j e c t 
p r o p e r t i e s , 
u n j u s t 
e n r i c h m e n t , 
and 
c o n v e r s i o n . 
Barbee a l s o sought a judgment d e t e r m i n i n g 
the 
r e s p e c t i v e 
ownership 
r i g h t s 
i n 
STC 
and 
r e q u e s t e d 
the 
d i s s o l u t i o n 
of 
STC. 
In 
J u l y 
2008, 
Barbee 
amended i t s 
c o u n t e r c l a i m , 
a d d i n g 
a d d i t i o n a l c l a i m s 
f o r 
i n t e r e s t 
and 
s e e k i n g m e n t a l - a n g u i s h damages on i t s s l a n d e r - o f - t i t l e c l a i m . 
STC 
and 
T r a y l o r n o t i f i e d A m e r i c a n R e s o u r c e s , w i t h whom 
t h e y had a b u s i n e s s - l i a b i l i t y i n s u r a n c e p o l i c y ("the 
p o l i c y " ) , 
of Barbee's c l a i m s a g a i n s t them a s s e r t e d i n i t s c o u n t e r c l a i m 
agreement, w h i c h had been p r e p a r e d 
by Barbee's a t t o r n e y . 
A c c o r d i n g 
t o STC 
and 
T r a y l o r , R o b e r t L. Barbee d i d 
not 
e x e c u t e the assignment of i n t e r e s t or the o p e r a t i n g agreement 
u n t i l March 28, 2007. 
STC 
and 
T r a y l o r argued t h a t s e v e r a l 
t i m e s 
between December 2006 
and 
March 
28, 
2007, 
T r a y l o r 
i n f o r m e d R o b e r t L. Barbee t h a t he was r e v o k i n g h i s d e c i s i o n t o 
t r a n s f e r 
ownership 
t o R o b e r t L. 
Barbee and 
t h a t 
the 
o n l y 
b u s i n e s s r e l a t i o n s h i p 
between STC and Barbee was 
the one 
t h a t 
had 
e x i s t e d p r i o r 
t o T r a y l o r ' s e x e c u t i o n 
of the 
o p e r a t i n g 
agreement and the assignment of i n t e r e s t . 
On March 29, 2007, 
T r a y l o r 
f i l e d i n the M o b i l e P r o b a t e C o u r t a " D e c l a r a t i o n of 
Membership and S t a t u s " on b e h a l f of STC, 
d e c l a r i n g t h a t he 
had 
r e v o k e d h i s 
i n t e n t i o n t o 
t r a n s f e r ownership 
t o R o b e r t 
L. 
Barbee 
and 
t h a t 
STC 
was 
s t i l l 
a 
single-member 
l i m i t e d -
l i a b i l i t y company. 
A c c o r d i n g 
t o STC 
and T r a y l o r , R o b e r t L. 
Barbee never f i l e d the assignment of i n t e r e s t or the o p e r a t i n g 
agreement w i t h the p r o b a t e c o u r t . 
3 
1110418 
and r e q u e s t e d t h a t American Resources d e f e n d and i n d e m n i f y STC 
and T r a y l o r a g a i n s t t h o s e c l a i m s under the p o l i c y . 
American 
Resources 
r e f u s e d , 
a r g u i n g t h a t 
Barbee's 
c l a i m s were 
not 
c o v e r e d by the p o l i c y . 
STC and T r a y l o r a g a i n r e q u e s t e d t h a t 
American Resources i n d e m n i f y and d e f e n d them p u r s u a n t t o the 
terms of the p o l i c y ; American Resources a g a i n r e f u s e d . 
In November 2008, STC and T r a y l o r sued American Resources 
i n t h e M o b i l e C i r c u i t C o u r t , a l l e g i n g b r e a c h of c o n t r a c t and 
bad f a i t h . 
American Resources moved the c i r c u i t c o u r t f o r a 
summary judgment, a r g u i n g , among o t h e r t h i n g s , t h a t STC 
and 
T r a y l o r had not i d e n t i f i e d an " o c c u r r e n c e " t h a t would have 
t r i g g e r e d 
coverage 
under 
the 
p o l i c y 
and 
t h a t 
American 
Resources had 
a c t e d 
on the a d v i c e of c o u n s e l i n d e n y i n g 
coverage. 
The 
c i r c u i t 
c o u r t 
d e n i e d American 
R e s o u r c e s ' 
m o t i o n . 
I n F e b r u a r y 2011, STC and T r a y l o r moved the 
c i r c u i t 
c o u r t 
f o r a 
p a r t i a l summary judgment on 
t h e i r b r e a c h - o f -
c o n t r a c t c l a i m . 
American Resources 
f i l e d a response and a 
s u p p l e m e n t a l " c r o s s - m o t i o n " f o r a summary judgment on b o t h 
c l a i m s . 
In 
May 
2011, 
American 
Resources 
amended i t s 
s u p p l e m e n t a l summary-judgment m o t i o n . 
4 
1110418 
The 
c i r c u i t c o u r t h e l d o r a l argument on t h e motions f o r 
a summary judgment, and, on September 6, 2011, t h e c i r c u i t 
c o u r t g r a n t e d American R e s o u r c e s ' motion and e n t e r e d a summary 
judgment i n i t s f a v o r on STC and T r a y l o r ' s 
c l a i m s . 
The 
c i r c u i t 
c o u r t found, among o t h e r t h i n g s , t h a t "the e v i d e n c e 
shows t h a t t h e r e has been no o c c u r r e n c e , and an o c c u r r e n c e was 
n e c e s s a r y t o t r i g g e r p o t e n t i a l coverage under t h e terms o f 
t h e 
p o l i c y d e s c r i b e d i n t h e C o m p l a i n t . " 
The c i r c u i t c o u r t 
a l s o 
found t h a t " i f t h e r e had been an o c c u r r e n c e , 
then t h i s C o u r t 
would h o l d t h a t [STC and T r a y l o r ' s ] a l l e g e d c l a i m s [ w e r e ] a l s o 
e x c l u d e d 
from coverage by [ v a r i o u s e x c l u s i o n p r o v i s i o n s ] i n 
the r e l e v a n t p o l i c y , and f u r t h e r , by t h e f a c t t h a t [ A m e r i c a n 
R e s o u r c e s ] a t a l l t i m e s r e l i e d upon t h e a d v i c e o f c o u n s e l i n 
a d d r e s s i n g t h e c l a i m made by [STC and T r a y l o r ] . " 
STC and T r a y l o r moved t h e c i r c u i t c o u r t t o a l t e r , amend, 
or v a c a t e i t s judgment. 
A f t e r a d d i t i o n a l o r a l argument, t h e 
c i r c u i t 
c o u r t d e n i e d STC and T r a y l o r ' s m o t i o n s , and STC and 
T r a y l o r a p p e a l e d . 
I s s u e s 
STC and T r a y l o r p r e s e n t 
t h r e e 
i s s u e s f o r t h i s 
C o u r t ' s 
r e v i e w on a p p e a l : 
(1) whether "Barbee's [ c o u n t e r c l a i m i n STC 
5 
1110418 
and T r a y l o r ' s a c t i o n a g a i n s t B a r b e e , as amended,] a l l e g e [ d ] an 
o c c u r r e n c e f o r w h i c h 
[American R e s o u r c e s ] was 
r e q u i r e d 
t o 
p r o v i d e ... a d e f e n s e and coverage under 
[the] p o l i c y " ; 
(2) 
whether 
"Barbee's 
[ c o u n t e r c l a i m , as amended,] 
a l l e g e [ d ] 
a 
cause of a c t i o n a g a i n s t [STC and] T r a y l o r f o r which [American 
R e s o u r c e s ] was r e q u i r e d t o p r o v i d e [them] w i t h a d e f e n s e and 
coverage under the ' P r o d u c t s -- c o m p l e t e d o p e r a t i o n s h a z a r d ' 
coverage p r o v i s i o n s " ; and 
(3) whether 
" [ A m e r i c a n Resources] 
[was] e n t i t l e d t o r e l y upon [ v a r i o u s ] ... p u r p o r t e d e x c l u s i o n s 
[ i n the p o l i c y ] or the a d v i c e of c o u n s e l d e f e n s e t o deny [STC 
and] 
T r a y l o r 
a 
d e f e n s e 
and 
coverage 
f o r 
Barbee's 
[ c o u n t e r c l a i m ] . " 
S t a n d a r d o f Review 
" T h i s C o u r t ' s r e v i e w of a summary judgment i s de 
novo. W i l l i a m s v. S t a t e Farm Mut. A u t o . I n s . Co., 
886 So. 2d 72, 74 
( A l a . 2003) 
. 
We a p p l y the same 
s t a n d a r d 
of 
r e v i e w as 
the 
t r i a l 
c o u r t 
a p p l i e d . 
S p e c i f i c a l l y , we must d e t e r m i n e whether the movant 
has made a p r i m a f a c i e showing t h a t no genuine i s s u e 
of 
m a t e r i a l 
f a c t 
e x i s t s 
and 
t h a t 
the movant i s 
e n t i t l e d t o a judgment as a m a t t e r of law. 
R u l e 
5 6 ( c ) , A l a . R. C i v . P.; B l u e C r o s s & B l u e S h i e l d of  
Alabama v. H o d u r s k i , 899 So. 2d 949, 952-53 ( A l a . 
2004). 
In making 
such a d e t e r m i n a t i o n , we 
must 
r e v i e w the e v i d e n c e i n the l i g h t most f a v o r a b l e t o 
the nonmovant. 
W i l s o n v. Brown, 496 So. 2d 756, 758 
( A l a . 1986). 
Once the movant makes a p r i m a 
f a c i e 
showing t h a t t h e r e i s no genuine i s s u e of m a t e r i a l 
f a c t , 
the burden 
then 
s h i f t s t o the nonmovant t o 
6 
1110418 
produce ' s u b s t a n t i a l e v i d e n c e ' 
as t o the 
e x i s t e n c e 
of 
a 
genuine 
i s s u e 
of 
m a t e r i a l 
f a c t . 
Bass 
v. 
 
S o u t h T r u s t 
Bank of B a l d w i n County, 538 
So. 
2d 
794, 
797-98 
( A l a . 1989); 
A l a . Code 
1975, 
§ 
12-21-12. 
' [ S ] u b s t a n t i a l e v i d e n c e i s e v i d e n c e of such w e i g h t 
and q u a l i t y t h a t f a i r - m i n d e d p e r s o n s i n the e x e r c i s e 
of 
i m p a r t i a l judgment 
can 
r e a s o n a b l y 
i n f e r 
the 
e x i s t e n c e of the f a c t sought t o be p r o v e d . ' " 
Dow 
v. Alabama D e m o c r a t i c P a r t y , 
897 
So. 
2d 
1035, 
1038-39 
( A l a . 
2004) 
( q u o t i n g West v. 
Founders 
L i f e 
A s s u r . 
Co. 
of 
F l o r i d a , 547 
So. 2d 870, 
871 
( A l a . 1989)). 
A n a l y s i s 
STC and T r a y l o r f i r s t argue t h a t the c i r c u i t c o u r t e r r e d 
i n e n t e r i n g a summary judgment i n f a v o r of American Resources 
because, 
t h e y 
argue, 
Barbee's 
c o u n t e r c l a i m , 
as 
amended, 
a l l e g e s an o c c u r r e n c e t h a t t r i g g e r s a d u t y t o p r o v i d e coverage 
under the p o l i c y . 
The 
p o l i c y p r o v i d e s , i n p e r t i n e n t p a r t : 
"a. We 
w i l l 
pay 
those sums t h a t the 
i n s u r e d 
becomes l e g a l l y o b l i g a t e d t o pay as damages because 
of 
' b o d i l y i n j u r y ' , 
p r o p e r t y damage' or 
' p e r s o n a l 
and 
a d v e r t i s i n g i n j u r y ' 
t o w h i c h 
t h i s 
i n s u r a n c e 
a p p l i e s . 
We 
w i l l have the r i g h t and d u t y t o d e f e n d 
the 
i n s u r e d 
a g a i n s t 
any 
' s u i t ' 
s e e k i n g 
t h o s e 
damages. 
However, we 
w i l l have no d u t y t o d e f e n d 
the i n s u r e d a g a i n s t any 
' s u i t ' s e e k i n g damages f o r 
' b o d i l y i n j u r y ' , 
' p r o p e r t y damage' or ' p e r s o n a l 
and 
a d v e r t i s i n g 
i n j u r y ' , 
t o w h i c h t h i s 
i n s u r a n c e 
does 
not 
a p p l y . 
We 
may 
a t our 
d i s c r e t i o n , i n v e s t i g a t e 
any 
' o c c u r r e n c e ' 
and s e t t l e any c l a i m or ' s u i t ' t h a t 
may 
r e s u l t . 
... 
7 
1110418 
"  
"b. 
T h i s i n s u r a n c e a p p l i e s : 
"(1) To ' b o d i l y i n j u r y ' and ' p r o p e r t y 
damage' o n l y i f : 
r 
an 
"(a) The ' b o d i l y i n j u r y ' o  
' p r o p e r t y damage' i s caused by a  
' o c c u r r e n c e ' 
t h a t t a k e s p l a c e i n  
the 'coverage 
t e r r i t o r y ' ; 
"(b) The ' b o d i l y i n j u r y ' or 
' p r o p e r t y damage' o c c u r s 
d u r i n g 
the p o l i c y p e r i o d ; and 
(c) 
P r i o r 
t o t h e 
p o l i c y 
p e r i o d , no i n s u r e d 
l i s t e d under 
P a r a g r a p h C.1. Who I s An I n s u r e d 
and no 'employee' a u t h o r i z e d by 
you t o g i v e o r r e c e i v e n o t i c e of 
an 
' o c c u r r e n c e ' 
or c l a i m , knew 
t h a t 
the 
' b o d i l y 
i n j u r y ' 
o r 
' p r o p e r t y damage' had 
o c c u r r e d , 
i n whole o r i n p a r t . ... 
" 
(Emphasis added.) 
An " o c c u r r e n c e " i s 
d e f i n e d i n 
t h e p o l i c y as "an a c c i d e n t , 
i n c l u d i n g c o n t i n u o u s or r e p e a t e d exposure t o s u b s t a n t i a l l y t h e 
same g e n e r a l h a r m f u l 
c o n d i t i o n s . " 
In i t s summary judgment, 
the c i r c u i t c o u r t s t a t e d : 
"Where t h e r e has been no o c c u r r e n c e , t h e r e can be no 
coverage and t h e r e can be no d u t y t o defend. 
T h i s 
i s 
because 
' i t i s t h e 
f a c t s , 
n o t t h e 
l e g a l 
p h r a s e o l o g y , 
t h a t d e t e r m i n e whether an i n s u r e r has 
a 
d u t y 
t o d e f e n d 
i t s i n s u r e d 
i n t h e a c t i o n . ' 
[ H a r t f o r d Cas. I n s . 
Co. v. Merchants & Farmers Bank, 
8 
1110418 
928 So. 2d 1006, 
1012 
( A l a . 2005).] 
A c c o r d i n g l y , i n 
o r d e r 
t o 
p r e v a i l 
a t 
t r i a l 
and 
t o 
r e c o v e r , 
as 
a 
t h r e s h o l d m a t t e r , 
[STC 
and T r a y l o r ] must e s t a b l i s h 
t h a t t h e r e has been an o c c u r r e n c e 
as d e f i n e d by 
the 
p o l i c y 
of 
i n s u r a n c e 
d e s c r i b e d 
i n 
the 
C o m p l a i n t . 
[STC and T r a y l o r ] cannot meet t h i s burden. 
"  
"The 
d e f i n i t i o n 
of 
o c c u r r e n c e 
found 
i n 
the 
p o l i c y i n the case a t b a r i s c l e a r on i t s f a c e 
and 
r e q u i r e s an a c c i d e n t , and t h a t term has been c l e a r l y 
d e f i n e d by the c o u r t s i n t h i s s t a t e . [
2 ] 
What 
[STC 
and T r a y l o r ] d e s c r i b e i s not an a c c i d e n t , but r a t h e r 
a b u s i n e s s 
d i s p u t e between 
[STC 
and 
T r a y l o r ] 
and 
[Barbee] and n o t h i n g t h a t [STC and T r a y l o r ] c o n t e n d 
2 T h i s C o u r t has 
s t a t e d : 
"Merchant[ 
& 
Farmers 
Bank's] 
p o l i c y 
w i t h 
H a r t f o r d 
[ C a s u a l t y 
I n s u r a n c e Company] 
d e f i n e s 
an 
' o c c u r r e n c e ' 
as 'an a c c i d e n t . ' 
The term 
' a c c i d e n t ' 
i s not d e f i n e d i n the p o l i c y , but i t i s a commonly 
used word i n the l e g a l p r o f e s s i o n . 
In S t . P a u l 
F i r e  
& M a r i n e 
I n s u r a n c e . 
Co. 
v. 
C h r i s t i a n s e n 
M a r i n e ,  
I n c . , 893 So. 2d 1124, 
1136 
( A l a . 2004), t h i s C o u r t 
a p p l i e d the f o l l o w i n g d e f i n i t i o n of ' a c c i d e n t ' found 
i n 
B l a c k ' s 
Law 
D i c t i o n a r y 15 
(7th ed. 
1999): 
'An 
u n i n t e n d e d 
and 
u n f o r e s e e n 
i n j u r i o u s 
o c c u r r e n c e ; 
something t h a t does not occur i n the u s u a l course 
of 
e v e n t s or t h a t c o u l d be r e a s o n a b l y a n t i c i p a t e d . ' 
In 
U n i t e d 
S t a t e s 
F i d e l i t y 
& Guaranty 
Co. 
v. 
B o n i t z 
 
I n s u l a t i o n Co. of Alabama, 424 So. 2d 569, 572 
( A l a . 
1982), t h i s C o u r t , c i t i n g Employers I n s u r a n c e Co. 
of  
Alabama 
v. 
R i v e s , 
264 
A l a . 
310, 
87 
So. 
2d 
653 
(1955), s t a t e d : 'The term [ ' a c c i d e n t ' ] 
has 
... been 
v a r i o u s l y 
d e f i n e d 
as 
something 
u n f o r e s e e n , 
u n e x p e c t e d , or 
u n u s u a l . ' " 
H a r t f o r d Cas. I n s . Co. v. Merchants & Farmers Bank, 928 So. 
2d 
1006, 
1011 
( A l a . 2005). 
9 
1110418 
can 
t r a n s f o r m 
t h a t 
b u s i n e s s 
d i s p u t e 
i n t o 
an 
o c c u r r e n c e h e r e . " 
STC and T r a y l o r argue t h a t "Barbee's c o u n t e r c l a i m 
a l l e g e d 
t h a t T r a y l o r ' s c a b i n e t work and wood w o r k i n g a t [the s u b j e c t 
p r o p e r t i e s ] 
were 
d e f e c t i v e 
and 
d e f i c i e n t 
i n 
s e v e r a l 
p a r t i c u l a r s and had t o be r e p a i r e d o r r e p l a c e d . " 
STC and 
T r a y l o r ' s 
b r i e f , 
a t 41. 
They go on t o argue 
t h a t 
such 
a l l e g a t i o n s c o n s t i t u t e an " a c c i d e n t " under t h i s C o u r t ' s c a s e -
law. 
However, i n 
Town & C o u n t r y P r o p e r t y , LLC v. A m e r i s u r e 
I n s u r a n c e Co., [Ms. 1100009, October 21, 
2011] 
So. 3d 
, 
( A l a . 2011) ("Town & C o u n t r y I " ) , t h i s C o u r t made c l e a r 
t h a t " f a u l t y workmanship i t s e l f " s i m p l y does n o t c o n s t i t u t e an 
a c c i d e n t o r " o c c u r r e n c e " w i t h i n t h e 
meaning of 
a comprehensive 
g e n e r a l - l i a b i l i t y i n s u r a n c e 
p o l i c y ("a CGL p o l i c y " ) , such as 
the p o l i c y h e r e . 
See a l s o Town & C o u n t r y P r o p e r t y , LLC v. 
A m e r i s u r e I n s . Co., [Ms. 1100009, November 2, 2012] 
So. 
3d 
( A l a . 
2012) 
( o p i n i o n 
on 
a p p l i c a t i o n f o r 
r e h e a r i n g 
f o l l o w i n g o p i n i o n on r e t u r n t o remand). 
In Town & C o u n t r y I , 
we e x p l a i n e d t h a t " [ t ] h i s C o u r t has 
p r e v i o u s l y c o n s i d e r e d cases r e q u i r i n g i t t o d e t e r m i n e whether 
damage a l l e g e d t o be t h e r e s u l t of f a u l t y workmanship i s 
c o v e r e d under a CGL p o l i c y , and, i n each case, i t s d e c i s i o n 
10 
1110418 
has h i n g e d on the n a t u r e of t h e damage caused by t h e f a u l t y 
workmanship." 
So. 3d a t 
(emphasis added). 
T h i s 
C o u r t 
went on t o c o n t r a s t two 
c a s e s : 
U n i t e d 
S t a t e s 
F i d e l i t y 
& 
 
Guarantee Co. v. Warwick Development Co., 446 So. 2d 1021 
( A l a . 1984) ("Warwick"), and Moss v. Champion I n s u r a n c e 
Co., 
442 So. 2d 26 ( A l a . 
1983). 
Town & C o u n t r y I , 
So. 3d a t 
. 
I t n o t e d t h a t the C o u r t i n Warwick h e l d t h a t no r e c o v e r y 
was a v a i l a b l e under a CGL p o l i c y f o r t h e c o s t of r e p a i r i n g or 
r e p l a c i n g 
the 
p o r t i o n s 
of 
a 
new 
house 
t h a t 
had 
been 
d e f e c t i v e l y c o n s t r u c t e d by the i n s u r e d . I n c o n t r a s t , we n o t e d 
t h a t " i n 
Moss we h e l d t h a t t h e r e had been an o c c u r r e n c e f o r 
CGL 
p o l i c y purposes when t h e c o n t r a c t o r ' s poor workmanship 
r e s u l t e d i n not m e r e l y a p o o r l y c o n s t r u c t e d r o o f b u t damage t o 
the p l a i n t i f f ' s 
a t t i c , 
i n t e r i o r 
c e i l i n g s , and a t l e a s t some 
f u r n i s h i n g s . " Town & C o u n t r y I , 
So. 3d a t 
. 
T h i s C o u r t then e x p l a i n e d : 
"Reading Moss and Warwick t o g e t h e r , we may 
c o n c l u d e 
t h a t f a u l t y workmanship i t s e l f i s not an 
o c c u r r e n c e 
but 
t h a t 
f a u l t y 
workmanship 
may 
l e a d 
t o 
an 
o c c u r r e n c e i f 
i t 
s u b j e c t s p e r s o n a l p r o p e r t y or o t h e r 
p a r t s of t h e s t r u c t u r e t o ' c o n t i n u o u s 
or 
r e p e a t e d 
e x p o s u r e ' t o some o t h e r ' g e n e r a l h a r m f u l c o n d i t i o n ' 
(e.g., t h e r a i n i n Moss) and, as a r e s u l t o f t h a t 
e x p o s u r e , p e r s o n a l p r o p e r t y o r o t h e r p a r t s of t h e 
s t r u c t u r e a r e damaged." 
11 
1110418 
Town & C o u n t r y I , 
So. 3d a t 
. 
As 
STC 
and 
T r a y l o r 
t h e m s e l v e s 
argue, 
Barbee's 
c o u n t e r c l a i m 
a l l e g e d " t h a t t h e 
work by [STC and] T r a y l o r 'was 
not p e r f o r m e d i n 
a workmanlike manner ... r e q u i r i n g R o b e r t L. 
Barbee t o r e p a i r and/or r e p l a c e t h e 
work p e r f o r m e d by [STC 
and 
 
T r a y l o r ] . " 
STC and T r a y l o r ' s b r i e f , a t 51 (emphasis added). 
N e i t h e r t h e c o u n t e r c l a i m nor t h e 
amended c o u n t e r c l a i m 
a l l e g e d 
damage t o t h e s u b j e c t p r o p e r t i e s as a r e s u l t o f t h e a l l e g e d 
f a u l t y workmanship, a d d i t i o n a l r e p a i r s or r e m o d e l i n g t o t h e 
s u b j e c t p r o p e r t i e s n e c e s s i t a t e d by STC and T r a y l o r ' s a l l e g e d l y 
f a u l t y work, or any l o s s of use of t h e s u b j e c t 
p r o p e r t i e s . 
Nor d i d 
t h e c o u n t e r c l a i m o r t h e amended c o u n t e r c l a i m 
a l l e g e 
damage r e s u l t i n g from " ' c o n t i n u o u s or r e p e a t e d e x p o s u r e ' t o 
some o t h e r 
' g e n e r a l 
h a r m f u l c o n d i t i o n ' " 
( i . e . , a c o n d i t i o n 
o t h e r than STC and T r a y l o r ' s a l l e g e d l y d e f e c t i v e w o r k ) . 
Town 
 
and C o u n t r y I , 
So. 3d a t 
. 
STC and T r a y l o r attempt t o argue t h a t , " [ b ] y 
r e a s o n a b l e 
i n f e r e n c e , t h e Barbee c o u n t e r c l a i m 
s e t [ s ] 
f o r t h 
c l a i m s f o r 
damage[] t o o t h e r p r o p e r t y , " STC and T r a y l o r ' s b r i e f , a t 50, 
i n c l u d i n g damage f o r l o s s o f use. 
They c i t e U n i t e d 
S t a t e s 
 
F i d e l i t y & Guaranty Co. v. A n d a l u s i a Ready Mix, 
I n c . , 436 So. 
12 
1110418 
2d 868 (1983), i n s u p p o r t o f t h i s argument. 
A n d a l u s i a Ready  
Mix a l s o i n v o l v e d a CGL p o l i c y , w h i c h , l i k e t h e p o l i c y h e r e , 
d e f i n e d an " o c c u r r e n c e " as an " a c c i d e n t , i n c l u d i n g c o n t i n u o u s 
or r e p e a t e d exposure t o c o n d i t i o n s . " 
436 So. 2d a t 870. The 
CGL p o l i c y i n 
A n d a l u s i a Ready M i x i n c l u d e d a p r o d u c t s - h a z a r d 
p r o v i s i o n , w h i c h p r o v i d e d , among o t h e r t h i n g s , coverage f o r 
" b o d i l y i n j u r y and p r o p e r t y damage a r i s i n g out o f [ A n d a l u s i a 
Ready M i x ' s ] p r o d u c t s or r e l i a n c e upon a r e p r e s e n t a t i o n o r 
w a r r a n t y made a t any time w i t h r e s p e c t t h e r e t o . " 
436 So. 2d 
a t 870. 
A n d a l u s i a Ready M i x r e q u e s t e d coverage under i t s 
CGL 
p o l i c y a f t e r i t 
was sued by W i l l M. Gregory, I n c . ("Gregory"), 
f o r damage a l l e g e d l y caused by d e f e c t i v e g r o u t A n d a l u s i a Ready 
Mix 
had 
s o l d 
t o 
Gregory, 
w h i c h 
Gregory 
had 
used i n 
c o n s t r u c t i n g a w a t e r - t r e a t m e n t p l a n t . 
Gregory argued 
t h a t 
"'due t o t h e d e f e c t i v e q u a l i t y of s a i d g r o u t , i t [had been] 
n e c e s s a r y t o do e x t e n s i v e 
r e p a i r i n g and r e m o d e l i n g o f s a i d  
Waste Water Treatment P l a n t ... which i n c l u d e d t h e 
p u r c h a s e o f 
a d d i t i o n a l g r o u t and m a t e r i a l s and t h e 
payment by [Gregory] t o 
mechanics and l a b o r e r s who p e r f o r m e d t h e c o r r e c t i v e work and 
i n s t a l l e d t h e new m a t e r i a l s . ' " 
A n d a l u s i a Ready M i x , 436 So. 
13 
1110418 
2d a t 870. 
A n d a l u s i a Ready Mix 
f i l e d a 
d e c l a r a t o r y - j u d g m e n t 
a c t i o n a g a i n s t U n i t e d S t a t e s F i d e l i t y & Guaranty Company 
("USF 
& G"), s e e k i n g a defense and i n d e m n i t y on Gregory's 
c l a i m s . 
A f t e r 
r e v i e w i n g 
the 
language 
of 
the 
p r o d u c t s - h a z a r d 
p r o v i s i o n 
i n the CGL 
p o l i c y and 
the r e l e v a n t c a s e l a w , 
the 
C o u r t i n A n d a l u s i a Ready Mix 
c o n c l u d e d : 
"USF 
& G has conceded t h a t the c o m p l a i n t i n the 
u n d e r l y i n g 
a c t i o n 
a l l e g e s 
t h a t 
the 
p r o d u c t 
i n 
q u e s t i o n f a i l e d t o p e r f o r m as w a r r a n t e d . 
Moreover, 
Gregory's 
r e l i a n c e upon the p r o d u c t 
as 
w a r r a n t e d 
c l e a r l y was 
a l l e g e d , and has not been q u e s t i o n e d by 
[USF 
& G]. 
Hence, we 
c o n c l u d e 
t h a t t h e r e was 
an 
' o c c u r r e n c e ' w i t h i n the terms of the p o l i c y . " 
436 
So. 
2d a t 871 
( c i t i n g 
C o t t o n 
S t a t e s Mut. 
I n s . Co. 
v. 
N o r r e l l H e a t i n g & A i r C o n d i t i o n i n g Co., 
370 
So. 2d 270, 
275 
( A l a . 1 9 7 9 ) ) . 
The C o u r t went on t o s t a t e : 
"Though the c o m p l a i n t c o n t a i n s no e l a b o r a t i o n of the 
r e s u l t a n t d e f e c t s of the [ w a t e r - t r e a t m e n t ] p l a n t , i t 
does i n c l u d e f u r t h e r a l l e g a t i o n s t h a t the d e f e c t i v e 
c o n d i t i o n 
of the p l a n t , 
as opposed t o the 
g r o u t , 
n e c e s s i t a t e d ' e x t e n s i v e r e p a i r i n g and r e m o d e l i n g of 
[the] Water Treatment P l a n t ... which i n c l u d e d the 
purchase 
of 
a d d i t i o n a l 
g r o u t 
and 
m a t e r i a l s 
(emphasis added). 
Based on t h i s language, 
we 
h o l d 
t h a t the t r i a l c o u r t r e a s o n a b l y c o u l d have c o n c l u d e d 
t h a t i n j u r y might have been done t o p r o p e r t y o t h e r 
than the i n s u r e d ' s p r o d u c t , 
f o r which 
USF 
& G i s 
r e q u i r e d t o p r o v i d e a defense and t o pay damages." 
A n d a l u s i a Ready Mix, 436 So. 2d a t 871. 
14 
1110418 
STC 
and 
T r a y l o r 
argue 
t h a t , 
l i k e 
t h e 
c o m p l a i n t i n 
A n d a l u s i a Ready Mix, 
"Barbee's c o u n t e r c l a i m 
a l l e g e d s p e c i f i c 
d e f e c t s i n 
[STC and] T r a y l o r ' s p r o d u c t or work t h a t g i v e 
r i s e 
t o t h e i n f e r e n c e the such d e f e c t s caused damage[] t o 
o c c u r t o 'other 
p r o p e r t y ' 
a t Barbee's home. 
The 
c o u n t e r c l a i m 
s p e c i f i c a l l y a l l e g e d t h a t t h e work by 
[STC 
and] 
T r a y l o r 
'was 
not 
p e r f o r m e d 
i n 
a 
workmanlike manner ... r e q u i r i n g R o b e r t L. Barbee t o 
r e p a i r and/or r e p l a c e t h e work p e r f o r m e d by [STC and 
T r a y l o r ] . ... 
' 
"By r e a s o n a b l e i n f e r e n c e , Barbee's r e p a i r and/or 
r e p l a c e m e n t 
of 
[STC and] 
T r a y l o r ' s 
work i n the 
k i t c h e n a r e a a t [Robert L.] Barbee's home r e n d e r e d 
the 
k i t c h e n 
a r e a u n u s e a b l e f o r such time as t h e 
r e m e d i a l work was underway. 
The d e l a y s caused t h e 
i n a b i l i t y t o use t h e k i t c h e n i n t h e Barbees' 
new 
home due t o t h e r e m e d i a l work caused by [STC and] 
T r a y l o r ' s 
a l l e g e d 
b r e a c h 
of d u t y 
of workmanlike 
performance and a r i s i n g out of 
[ t h e i r ] 
p r o d u c t or 
work. 
Such 
a l l e g a t i o n s 
s u p p o r t 
t h e 
r e a s o n a b l e 
i n f e r e n c e 
t h a t 
damage 
would 
l i k e l y 
be 
done 
t o 
c a b i n e t s , 
[ S ] h e e t r o c k , 
k i t c h e n 
c o u n t e r 
t o p s , 
f l o o r i n g and o t h e r p r o p e r t y i n [Robert L.] Barbee's 
home due t o t h e r e p a i r and r e m e d i a t i o n 
of [STC and] 
T r a y l o r ' s p r o d u c t or work." 
STC and T r a y l o r ' s b r i e f , a t 51-53. 
However, u n l i k e Barbee's c o u n t e r c l a i m , 
t h e c o m p l a i n t i n 
A n d a l u s i a Ready Mix e x p r e s s l y a l l e g e d damage t o p r o p e r t y 
o t h e r 
than 
a 
d e f e c t 
i n 
A n d a l u s i a 
Ready 
Mix's 
own 
p r o d u c t . 
S p e c i f i c a l l y , t h e c o m p l a i n t a l l e g e d t h a t A n d a l u s i a Ready M i x ' s 
d e f e c t i v e 
g r o u t 
had 
damaged 
t h e 
w a t e r - t r e a t m e n t 
p l a n t , 
15 
1110418 
r e q u i r i n g 
r e p a i r s 
t o and r e m o d e l i n g 
of t h e p l a n t . 
I n 
c o n t r a s t , Barbee's c o u n t e r c l a i m a l l e g e d t h a t STC and T r a y l o r ' s 
d e f e c t i v e work " r e q u i r [ e d ] R o b e r t L. Barbee t o r e p a i r and/or 
r e p l a c e t h e work p e r f o r m e d by T r a y l o r and STC." 
I t d i d n o t 
a l l e g e damage t o o t h e r 
p r o p e r t y 
r e s u l t i n g from t h a t work. 
A n d a l u s i a Ready M i x i s d i s t i n g u i s h a b l e i n t h a t r e g a r d , and we 
d e c l i n e t o i n f e r 
l o s s o f use o r o t h e r 
i n j u r i e s 
based on 
s p e c u l a t i o n 
as t o damage 
t h a t 
was n o t a l l e g e d 
i n t h e 
c o u n t e r c l a i m 
or t h e amended c o u n t e r c l a i m . 
Thus, STC and 
T r a y l o r have n o t d e m o n s t r a t e d t h e e x i s t e n c e of an " o c c u r r e n c e " 
i n t h a t r e g a r d t h a t would t r i g g e r American R e s o u r c e s ' d u t y t o 
d e f e n d o r t o i n d e m n i f y them under t h e p o l i c y . 
STC 
and 
T r a y l o r 
a l s o 
argue 
t h a t 
" [ t ] h e 
Barbee 
c o u n t e r c l a i m 
a l l e g e d 
c o v e r e d 
' b o d i l y 
i n j u r y . ' " STC and 
T r a y l o r ' s 
b r i e f , a t 47. 
" B o d i l y i n j u r y " i s d e f i n e d i n 
t h e 
p o l i c y as " b o d i l y i n j u r y , s i c k n e s s or d i s e a s e 
s u s t a i n e d by a 
p e r s o n , i n c l u d i n g d e a t h r e s u l t i n g from any o f t h e s e a t any 
t i m e . " 
Barbee d i d 
a l l e g e i n 
t h e c o u n t e r c l a i m 
t h a t R o b e r t L. 
Barbee had s u f f e r e d " e m o t i o n a l d i s t r e s s and m e n t a l a n g u i s h " as 
a r e s u l t o f STC and T r a y l o r ' s a l l e g e d r e p r e s e n t a t i o n s 
" t h a t 
[ T r a y l o r ] would a s s i g n a 50% i n t e r e s t i n [STC] [ t o 
R o b e r t L. 
16 
1110418 
Barbee] i n exchange f o r 
payments made by R o b e r t L. Barbee ... 
and 
t h a t 
T r a y l o r and STC would complete t h e c a b i n e t s and 
woodworking f o r [the 
s u b j e c t p r o p e r t i e s ] . " Barbee a l s o added 
a 
r e q u e s t 
i n t h e amended c o u n t e r c l a i m f o r "mental 
a n g u i s h 
damages on b e h a l f o f R o b e r t Barbee" on Barbee's s l a n d e r - o f -
t i t l e c l a i m a g a i n s t STC and T r a y l o r . 
STC and T r a y l o r argue 
t h a t t h i s C o u r t has r e c o g n i z e d 
t h a t c l a i m s a l l e g i n g "mental 
a n g u i s h " 
f a l l w i t h i n the d e f i n i t i o n of " b o d i l y i n j u r y " as 
s e t 
f o r t h i n 
the p o l i c y , c i t i n g American S t a t e s v. Cooper, 518 So. 
2d 708, 710 ( A l a . 
1987) 
( q u o t i n g 
w i t h 
a p p r o v a l 
the 
t r i a l 
c o u r t ' s 
judgment i n which i t c o n c l u d e d 
t h a t " i n t h e ... 
p o l i c y , 
' b o d i l y i n j u r y ' 
i n c l u d e s s i c k n e s s or d i s e a s e 
w h i c h 
i n c l u d e s m e n t a l 
a n g u i s h " ) . 
Assuming w i t h o u t d e c i d i n g t h a t m e n t a l a n g u i s h i s i n c l u d e d 
w i t h i n t h e d e f i n i t i o n o f " b o d i l y i n j u r y " i n the p o l i c y , STC 
and 
T r a y l o r have 
n e v e r t h e l e s s 
f a i l e d 
t o demonstrate t h e 
e x i s t e n c e o f an o c c u r r e n c e as d e f i n e d i n the p o l i c y because 
R o b e r t L. Barbee's c l a i m s f o r 
m e n t a l - a n g u i s h damages d i d 
n o t 
a r i s e from STC and T r a y l o r ' s a l l e g e d l y d e f e c t i v e work or some 
o t h e r 
g e n e r a l 
h a r m f u l 
c o n d i t i o n 
r e s u l t i n g 
from t h a t work. 
I n s t e a d , the a l l e g e d m i s r e p r e s e n t a t i o n s 
j u s t i f y i n g 
m e n t a l -
17 
1110418 
a n g u i s h damages 
r e l a t e d 
t o R o b e r t L. Barbee's 
ownership 
i n t e r e s t i n STC and STC and T r a y l o r ' s i n t e n t i o n t o complete 
the work under t h e c o n t r a c t , and, i n 
t h e case o f t h e s l a n d e r -
o f - t i t l e c l a i m , STC and T r a y l o r ' s placement o f a l i e n on one 
of t h e s u b j e c t p r o p e r t i e s . 
Thus, STC and T r a y l o r have n o t 
d e m o n s t r a t e d t h a t Barbee's c l a i m s f o r 
m e n t a l - a n g u i s h damages 
a r o s e from an o c c u r r e n c e as d e f i n e d i n t h e p o l i c y or our 
c a s e l a w . 
STC 
and 
T r a y l o r 
a l s o 
argue 
t h a t 
" [ t ] h e 
Barbee 
c o u n t e r c l a i m a l l e g e d coverage f o r [STC and] T r a y l o r under the 
' p r o d u c t s - - c o m p l e t e d o p e r a t i o n s 
h a z a r d ' coverage p r o v i s i o n s . " 
STC and T r a y l o r ' s b r i e f , a t 43. W i t h c e r t a i n e x c e p t i o n s , 
t h e 
" p r o d u c t s - - c o m p l e t e d 
o p e r a t i o n s h a z a r d " p r o v i s i o n s 
i n t h e 
p o l i c y 
c o n t e m p l a t e coverage f o r p r o p e r t y damage or b o d i l y 
i n j u r y 
" a r i s i n g 
out of 
'your 
p r o d u c t ' o r 
'your 
work,'" 
r e f e r r i n g t o t h e i n s u r e d ' s p r o d u c t o r work. 
The 
p o l i c y 
d e f i n e s b o t h 
"your p r o d u c t " and "your work" as 
i n c l u d i n g 
" w a r r a n t i e s 
and r e p r e s e n t a t i o n s 
... 
w i t h 
r e s p e c t t o t h e 
f i t n e s s , 
q u a l i t y , 
d u r a b i l i t y , 
performance 
o r use o f " t h e 
p r o d u c t or work. 
In l i g h t o f t h e s e p r o v i s i o n s , STC and 
T r a y l o r attempt t o c o n s t r u c t an argument based on A n d a l u s i a 
18 
1110418 
Ready Mix and C o t t o n 
S t a t e s , two cases i n which t h i s 
C o u r t 
h e l d t h a t s i m i l a r p r o d u c t s - h a z a r d 
c l a u s e s a f f o r d e d coverage 
f o r 
l o s s e s 
r e s u l t i n g 
from 
b r e a c h e s 
of 
w a r r a n t y 
and 
m i s r e p r e s e n t a t i o n s . 
However, STC and T r a y l o r have n o t i d e n t i f i e d any b r e a c h -
o f - w a r r a n t y 
c l a i m s 
a l l e g e d i n Barbee's 
c o u n t e r c l a i m , 
as 
amended. 
Moreover, t h e m i s r e p r e s e n t a t i o n s 
a l l e g e d i n t h e 
c o u n t e r c l a i m r e l a t e t o R o b e r t L. Barbee's ownership 
i n t e r e s t 
i n STC and t o STC and T r a y l o r ' s p r o m i s e t o complete t h e work 
on t h e s u b j e c t p r o p e r t i e s under t h e c o n t r a c t . 
They do not 
r e l a t e t o "the f i t n e s s , 
q u a l i t y , 
d u r a b i l i t y , performance or 
use o f " 
STC and T r a y l o r ' s work. The r e p r e s e n t a t i o n s here a r e 
d i s t i n g u i s h a b l e i n 
t h a t r e g a r d from those i n 
C o t t o n S t a t e s and 
A n d a l u s i a Ready M i x , w h i c h r e l a t e d , a t l e a s t t o some e x t e n t , 
t o t h e q u a l i t y o f t h e 
work p e r f o r m e d by t h e i n s u r e d s i n those 
c a s e s
3 and f a l l o u t s i d e t h e scope o f t h e " p r o d u c t s - - c o m p l e t e d 
o p e r a t i o n s h a z a r d " 
p r o v i s i o n s i n t h e p o l i c y . 
Thus, STC and 
T r a y l o r 
have n o t d e m o n s t r a t e d 
t h a t t h e c o u n t e r c l a i m , 
as 
3The a l l e g e d m i s r e p r e s e n t a t i o n s i n C o t t o n S t a t e s i n c l u d e d , 
among o t h e r t h i n g s , r e p r e s e n t a t i o n s as t o t h e n e c e s s i t y and 
q u a l i t y of c l e a n i n g p e r f o r m e d on c o i l s i n 
an 
a i r - c o n d i t i o n i n g 
u n i t . 
The a l l e g e d m i s r e p r e s e n t a t i o n i n A n d a l u s i a Ready Mix 
r e l a t e d t o t h e f i t n e s s and q u a l i t y o f t h e g r o u t f o r 
use 
i n 
c o n s t r u c t i n g a w a t e r - t r e a t m e n t p l a n t . 
19 
1110418 
amended, a l l e g e s p r o p e r t y damage or b o d i l y i n j u r y " a r i s i n g out 
of ' [ t h e i r ] p r o d u c t ' or ' [ t h e i r ] work'"; t h e r e f o r e , t h e y are 
not e n t i t l e d t o coverage under the p o l i c y i n t h a t 
r e g a r d . 
C o n c l u s i o n 
For the f o r e g o i n g r e a s o n s , we 
h o l d t h a t STC 
and 
T r a y l o r 
have not p r e s e n t e d s u b s t a n t i a l e v i d e n c e of an 
" o c c u r r e n c e " 
t h a t would t r i g g e r American R e s o u r c e s ' d u t y under the p o l i c y 
t o d e f e n d 
or 
t o 
i n d e m n i f y 
STC 
and 
T r a y l o r 
on 
the 
c l a i m s 
a s s e r t e d 
a g a i n s t them i n Barbee's c o u n t e r c l a i m 
and amended 
c o u n t e r c l a i m , 
nor have t h e y p r e s e n t e d 
s u b s t a n t i a l e v i d e n c e 
t h a t American Resources was 
r e q u i r e d t o p r o v i d e them w i t h 
a 
d e f e n s e and t o i n d e m n i f y them under the 
" p r o d u c t s - - c o m p l e t e d 
o p e r a t i o n s h a z a r d " p r o v i s i o n s i n the p o l i c y . 
T h e r e f o r e , 
t h e y 
have not r e b u t t e d American R e s o u r c e s ' p r i m a f a c i e showing t h a t 
t h e r e 
i s no genuine i s s u e of m a t e r i a l 
f a c t , and 
the summary 
judgment i n f a v o r of American Resources i s due t o be 
a f f i r m e d . 
Our 
d e c i s i o n i n t h i s r e g a r d 
p r e t e r m i t s 
c o n s i d e r a t i o n of 
STC 
and T r a y l o r ' s arguments r e g a r d i n g the a p p l i c a b i l i t y of v a r i o u s 
e x c l u s i o n 
p r o v i s i o n s 
of 
the 
p o l i c y 
or 
the 
v i a b i l i t y 
of 
American R e s o u r c e s ' a d v i c e - o f - c o u n s e l 
d e f e n s e . 
AFFIRMED. 
20 
1110418 
Moore, C.J., and S t u a r t , B o l i n , P a r k e r , Shaw, Main, and 
Wise, J J . , c o n c u r . 
Murdock, J . , c o n c u r s 
s p e c i a l l y . 
21 
1110418 
MURDOCK, J u s t i c e ( c o n c u r r i n g 
s p e c i a l l y ) . 
I concur i n the main o p i n i o n . 
I w r i t e 
s e p a r a t e l y 
t o 
comment on what I p e r c e i v e t o be an a p p a r e n t l a c k of p r e c i s i o n 
i n t h i s C o u r t ' s assessment i n Town & C o u n t r y P r o p e r t y , L.L.C. 
v. A m e r i s u r e I n s u r a n c e Co., 
[Ms. 1100009, Oct. 
21, 2011] 
So. 3d 
, 
( A l a . 2011) 
(an o p i n i o n i n w h i c h I 
c o n c u r r e d ) , 
of whether f a u l t y workmanship i s c o v e r e d under the terms of 
t o d a y ' s s t a n d a r d form comprehensive g e n e r a l - l i a b i l i t y p o l i c y . 
The main o p i n i o n a c c u r a t e l y quotes t h i s C o u r t ' s d e c i s i o n 
i n Town & C o u n t r y as f o l l o w s : 
"'[W]e may 
c o n c l u d e t h a t f a u l t y workmanship 
i t s e l f 
i s not an o c c u r r e n c e but t h a t f a u l t y workmanship 
may 
l e a d 
t o 
an 
o c c u r r e n c e 
i f 
i t 
s u b j e c t s 
p e r s o n a l 
p r o p e r t y 
or 
o t h e r 
p a r t s 
of 
the 
s t r u c t u r e 
t o 
" c o n t i n u o u s 
or 
r e p e a t e d 
e x p o s u r e " 
t o some 
o t h e r 
 
" g e n e r a l h a r m f u l c o n d i t i o n " (e.g., the r a i n i n Moss  
[v. 
Champion I n s u r a n c e 
Co., 
442 
So. 
2d 
26 
( A l a . 
1983)]) and, 
as a r e s u l t of t h a t exposure, 
p e r s o n a l 
p r o p e r t y 
or 
o t h e r 
p a r t s 
of 
the 
s t r u c t u r e 
are 
damaged.'" 
So. 3d a t 
( q u o t i n g Town & C o u n t r y , 
So. 3d a t 
) 
(emphasis added). 
In r e t r o s p e c t , I q u e s t i o n the p r e c i s i o n of 
the 
quoted passage, 
p a r t i c u l a r l y 
the 
emphasized 
p o r t i o n s . 
C o n s i s t e n t w i t h the o p i n i o n i s s u e d t o d a y , I would s t a t e 
the 
r u l e as f o l l o w s : 
" f a u l t y workmanship i t s e l f " i s not 
" p r o p e r t y 
damage" "caused by" or " a r i s i n g out o f " an " o c c u r r e n c e . " 
That 
i s , 
the f a c t t h a t the c o s t of r e p a i r i n g or r e p l a c i n g 
f a u l t y 
22 
1110418 
workmanship i t s e l f i s 
n o t 
t h e 
i n t e n d e d o b j e c t o f 
t h e 
i n s u r a n c e 
p o l i c y does n o t n e c e s s a r i l y mean t h a t , i n 
an a p p r o p r i a t e c a s e , 
a d d i t i o n a l damage t o 
a c o n t r a c t o r ' s work r e s u l t i n g from f a u l t y 
workmanship might n o t 
p r o p e r l y be c o n s i d e r e d " p r o p e r t y 
damage" 
"caused by" or " a r i s i n g out o f " 
an " o c c u r r e n c e . " 
Of c o u r s e , where a "your work" e x c l u s i o n
4 i s a p p l i c a b l e , 
the 
f o r e g o i n g r e f i n e m e n t o f our s t a t e m e n t i n Town & C o u n t r y 
would make no d i f f e r e n c e . 
4Among o t h e r t h i n g s , t h e "your work" e x c l u s i o n i n 
t h e 
s t a n d a r d comprehensive g e n e r a l - l i a b i l i t y p o l i c y p r o v i d e s t h a t 
" ' p r o p e r t y damage' t o 'your work' a r i s i n g out o f i t 
or any 
p a r t o f i t 
and i n c l u d e d i n 
t h e 
p r o d u c t s - - c o m p l e t e d o p e r a t i o n s 
h a z a r d " 
i s e x c l u d e d 
from 
coverage. 
The 
s t a n d a r d 
form 
comprehensive g e n e r a l - l i a b i l i t y p o l i c y , however, e x c e p t s from 
t h i s e x c l u s i o n 
( i . e . , t h e p o l i c y c o v e r s ) s u b s e q u e n t l y 
damaged 
work when t h a t work, o r t h e work out o f w h i c h t h e subsequent 
damage a r i s e s , has been p e r f o r m e d by a s u b c o n t r a c t o r . 
23