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IN THE UNITED STATES DISTRICT COURT 

FOR THE MIDDLE DISTRICT OF ALABAMA 

GREAT SOUTHERN WOOD ) 

PRESERVING, INC. ) 

 ) 

 Plaintiff, ) 

 ) 

vs. ) CV: 1:06CV708 

 ) 

 ) 

AMERICAN HOME ASSURANCE ) 

COMPANY; AIG; AMERICAN ) 

INTERNATIONAL UNDERWRITERS ) 

CORPORATION; AMERICAN ) 

INTERNATIONAL MARINE AGENCY ) 

 ) 

Defendants ) 

ANSWER OF AMERICAN HOME ASSURANCE COMPANY, 

AIG, AMERICAN INTERNATIONAL UNDERWRITERS CORPORATION,

AMERICAN INTERNATIONAL MARINE AGENCY TO COMPLAINT OF 

GREAT SOUTHERN WOOD PRESERVING, INC.

COME NOW, the Defendants, American Home Assurance Company, AIG, American 

International Underwriters Corporation, and American International Marine Agency (hereinafter 

“Defendants”), by and through its undersigned counsel, responds to the Complaint of Great 

Southern Wood Preserving, Inc., as follows: 

PARTIES

1. Defendants are without sufficient information to admit or deny the allegations 

contained in this paragraph and, therefore, denies all said allegations. 

2. Defendants admit that American Home Assurance Company is a corporation 

which is organized under the laws of and maintains its principal place of business in a state other 

than Alabama. 

3. Defendants deny that “AIG” is a corporate entity. 

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4. Defendants admit that American International Underwriters Corporation is a 

corporation which is organized under and maintains its principal place of business in a state other 

than Alabama. 

5. Defendants admit that American International Marine Agency is a corporation 

which is organized under and maintains its principal place of business in a state other than 

Alabama. 

JURISDICTION AND VENUE

6. Defendants are without sufficient information to admit or deny the allegations of 

this paragraph of the complaint and, therefore, all said allegations are denied. 

7. Defendants are without sufficient information to admit or deny the allegations of 

this paragraph of the complaint and, therefore, all said allegations are denied. 

8. Defendants are without sufficient information to admit or deny the allegations of 

this paragraph of the complaint and, therefore, all said allegations are denied. 

FACTUAL ALLEGATIONS

9. Defendants admit that American Home Assurance Company issued a marine open 

cargo policy No. 88590C to Plaintiff, but are without sufficient information to admit or deny the 

remaining allegations of this paragraph of the complaint and, therefore, all said allegations are 

denied. 

10. Denied. 

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11. To the extent this paragraph alleges that the policy covered any losses or damage 

to the goods and/or merchandise which were the subject of the claims made herein, said 

allegations are denied. 

12. To the extent this paragraph alleges that the policy covered any losses or damage 

to goods and/or merchandise which were the subject of the claims made herein, said allegations 

are denied. 

13. To the extent this paragraph alleges that the policy covered any losses or damage 

to goods and/or merchandise which were the subject of the claims made herein, said allegations 

are denied. 

14. Admitted. 

15. Defendants are without sufficient information to admit or deny the allegations of 

this paragraph of the complaint and, therefore, all said allegations are denied. 

16. Defendants are without sufficient information to admit or deny the allegations of 

this paragraph of the complaint and, therefore, all said allegations are denied. 

17. Denied. 

18. Defendants are without sufficient information to admit or deny the allegations of 

this paragraph of the complaint and, therefore, all said allegations are denied. 

19. Defendants are without sufficient information to admit or deny the allegations of 

this paragraph of the complaint and, therefore, all said allegations are denied. 

20. Denied. 

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COUNT ONE

21. Defendants adopt and incorporate by reference the preceding paragraphs 1-20 of 

its Answer. 

22. Defendants admit that a policy of insurance existed between Plaintiff and 

Defendants. To the extent this paragraph alleges that the policy covered losses or damages to 

goods and/or merchandise which were the subject of the claims made herein, said allegations are 

denied. As to the remaining allegations Defendants are without sufficient evidence to admit or 

deny the allegations of this paragraph of the complaint. 

23. Denied. 

24. Denied. 

COUNT TWO

25. Defendants adopt and incorporate by reference the preceding paragraphs 1-24 of 

its Answer. 

26. Defendants admit that a policy of insurance existed between Plaintiff and 

Defendants. As to the allegations “at all times relevant to this action,” Defendants are without 

sufficient evidence to admit or deny said allegation. 

27. Denied. 

28. Denied. 

29. Denied. 

30. Denied. 

31. Denied. 

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AFFIRMATIVE DEFENSES

1. Under the terms of the insurance policy at issue, Plaintiff is not entitled to 

coverage for the damages claimed. 

2. Plaintiff’s damages, if any, were due to a loss excluded under the insurance policy 

at issue. 

3. Plaintiff has failed to meet conditions precedent to recovery under the policy. 

4. Plaintiff has breached one or more warranties under the subject policy. 

5. Plaintiff’s claim is barred by its failure to give timely notice of the loss. 

6. Plaintiff’s claim is barred by its spoliation of the evidence. 

7. Plaintiff’s claim is barred by waiver and/or estoppel. 

8. Plaintiff has failed to mitigate its damages. 

9. Venue is improper. 

10. Defendant pleads insufficiency of process and/or service of process. 

11. Defendant denies that it has been guilty of any conduct that would support an 

award of punitive damages. 

12. Any award of punitive damages in this case would be in violation of the 

constitutional safeguards provided to Defendant under the Constitution of Alabama. 

13. Any award of punitive damages in this case would be in violation of the 

constitutional safeguards provided to Defendant under the Constitution of the United States. 

14. The punitive damages sought are in excess of comparable maximums established 

for criminal fines by the Alabama Legislature in '' 13A-5-11 and 13A-5-12, Code of Ala. 

(1975), jointly and separately. 

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15. Each claim for punitive damages, on its face and/or as applied in this case, is in 

violation of the Fifth Amendment of the Constitution of the United States; of the right to counsel 

provided by the Sixth Amendment of the Constitution of the United States; of the right to trial by 

jury of the Seventh Amendment of the Constitution of the United States; of the proportionality 

principles contained in the Eighth Amendment of the Constitution of the United States; the Due 

Process Clause of the Fourteenth Amendment of the Constitution of the United States; and 

Article 1, Sections 1, 6, 9, 11, 13, 15, and 35 of the Constitution of Alabama, and is improper 

under the common law and public policies of the State of Alabama and under applicable court 

rules and statutes for the following reasons, jointly and separately: 

(A) The standards provided by Alabama law for the imposition of punitive 

damages are insufficiently specific, and therefore, the defendant has not 

been put on notice and given the opportunity to anticipate punitive liability 

and/or the potential size of an award and to modify or conform its conduct 

accordingly; 

(B) The procedures to be followed permit an award of punitive damages upon 

the satisfaction of a burden of persuasion (standard of proof) less than that 

applicable to the imposition of criminal sanctions for equal culpability; 

(C) The procedures to be followed permit the award of multiple punitive 

damages for the same act or omission; 

(D) There are insufficient provisions or standards for clear and consistent 

appellate review of any award of punitive damages under present Alabama 

law; 

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(E) The standards of conduct upon which punitive damages are sought are 

vague and ambiguous; 

(F) The procedures used by Alabama courts and the guidelines given to the 

jurors, jointly and separately, are vague and ambiguous; 

(G) The procedures used by Alabama courts and guidelines given to jurors, 

jointly and separately, are vague and ambiguous and, thus, impermissibly 

allow jurors broad, unlimited, and undefined power to make 

determinations based on their notions of what the law should be instead of 

what it is; 

(H) The procedures under which punitive damages are awarded and 

instructions used in Alabama courts, jointly and separately, are vague and 

ambiguous and, thus, fail to eliminate the effects of, and to guard against, 

impermissible juror passion; 

(I) Present Alabama law does not provide for sufficiently objective and 

specific standards to be used by the jury in its deliberations on whether to 

award punitive damages and, if so, on the amount to be awarded; 

(J) Present Alabama law does not provide a meaningful opportunity for 

challenging the rational basis for, and any excessiveness of, any award of 

punitive damages; 

(K) Present Alabama law does not provide for adequate and independent 

review by the trial court and the appellate court of the imposition of 

punitive damages by a jury or of the amount of any punitive damages 

awarded by a jury; 

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(L) The present Alabama procedures fail to provide a constitutional and 

reasonable limit on the amount of any punitive award against this 

defendant; 

(M) The present Alabama procedures permit the imposition of joint and several 

judgments against multiple co-defendants for different acts or degrees of 

wrongdoing or culpability; 

(N) An award of punitive damages provides compensation for elements of 

damage not otherwise recognized by Alabama law. 

(O) Present Alabama procedures permit awards of punitive damages that 

constitute excessive fines. 

(P) An award of punitive damages in this case would permit punishment other 

than by virtue of a law established and promulgated prior to the alleged 

offense in this case. 

(Q) The present Alabama procedures fail to require any rational, objective or 

logical relationship between either the award of or the amount of punitive 

damages awarded and the alleged conduct of the Defendant or the 

compensatory damages awarded to the Plaintiff, if any. 

16. The imposition of punitive damages deprives this defendant of the right to equal 

protection under the laws provided in the Fifth and Fourteenth Amendments of the Constitution 

of the United States and in Article 1, Sections 1 and 6, of the Constitution of Alabama of 1901 

for the following reasons, jointly and separately: 

(A) Punitive damages are sought in excess of the respective maximums 

established by the Alabama Legislature in '' 13A-5-11 and 13A-5-12, 

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Code of Ala. (1975), jointly and separately, whereas those charged under 

the Criminal Code for similar or identical culpability have the benefit of 

the cited code provisions; 

(B) The procedures to be followed permit the awarding of punitive damages 

upon the satisfaction of a burden of persuasion (standard of proof) less 

than the applicable standard in criminal cases for criminal sanctions 

involving similar or identical levels of culpability; 

(C) The absence of sufficiently specific and objective standards for the 

imposition of punitive damages fails to insure the equality of treatment 

between and among similarly situated civil defendants; 

(D) Punitive damages are penal in nature, and the Defendant, without 

procedural protections, is compelled to disclose documents and/or other 

evidence without constitutional safeguards against self-incrimination 

whereas persons charged under criminal provisions for acts or omissions 

of similar culpability are protected from being compelled to disclose 

documents and/or other evidence by constitutional procedures and 

safeguards available in criminal cases. 

(E) The assessment and adjudication against this defendant of any punitive 

damages other than those measured according to its sole, individual 

conduct would be improper and impermissible. 

17. The imposition of punitive damages in this case is unconstitutional under the due 

process clause of the Fourteenth Amendment of the Constitution of the United States for the 

following reasons, jointly and severally: 

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(A) The punitive damages sought in this case are vastly disproportionate to the 

actual damages allegedly sustained by the plaintiffs; 

(B) The imposition of punitive damages in this case constitutes an arbitrary 

and capricious taking of the defendant’s property with no rationally stated 

purpose; and 

(C) Allowing a jury to award punitive damages with unfettered discretion is 

inconsistent with due process. 

18. The imposition of punitive damages in this case is unconstitutional under the Fifth 

and Fourteenth Amendments of the Constitution of the United States and Article 1, Sections 5 

and 6 of the Constitution of Alabama because punitive damages are penal in nature, and the 

defendant is compelled to disclose documents and/or other evidence without constitutional 

safeguards against self-incrimination. 

19. Present Alabama punitive damages procedures allow the jury to punish 

defendants for conduct occurring outside of the state constituting unlawful state regulation of 

Interstate Commerce and violation of the Interstate Commerce Clause of the Constitution of the 

United States. 

20. Plaintiff’s claim for punitive damages is barred to the extent that it seeks the 

admission into evidence of defendant's financial worth in determining the amount of punitive 

damages to be awarded because punitive damages are a form of punishment grounded in 

Defendant’s status rather than specific misconduct and, thus, have the effect of treating classes of 

citizens unequally in violation of the equal protection clause of the Fifth and Fourteenth 

Amendments of the Constitution of the United States and Article I, Sections 1, 6, 13 and 22 of 

the Constitution of Alabama. 

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21. The imposition of punitive damages in this case is unconstitutional under the due 

process clause of the Fourteenth Amendment of the Constitution of the United States because the 

standards for such damages are vague and ambiguous and are not rationally related to any 

legitimate government interest. 

22. The imposition of punitive damages in this case is an unconstitutional deprivation 

of property without the due process of law guaranteed by the Fifth and Fourteenth Amendments 

of the Constitution of the United States and Article 1, Section 6 of the Constitution of Alabama. 

23. Any award of punitive damages to the Plaintiff in this case would be in violation 

of Article 1, Section 10, Clause 1 of the Constitution of the United States and Article 1, Section 

22 of the Constitution of Alabama prohibiting laws which impair the obligation of contracts. 

24. The imposition of punitive damages in this case violates the double jeopardy 

clause of the Fifth Amendment of the Constitution of the United States as incorporated into the 

Fourteenth Amendment of the Constitution of the United States. 

25. Any award of punitive damages cannot exceed the maximum award allowed 

pursuant to Alabama Code 6-11-21. 

26. Plaintiff cannot recover for mental pain and suffering, emotional distress, or 

similar damages, if any, in that there is not fixed, objective and/or clear and consistent standard 

under Alabama law for ascertaining the amount thereof, such that any award of said damages 

against Defendant would violate the Fifth and Fourteenth Amendments to the Constitution of the 

United States and Article I, Section VI of the Constitution of Alabama, which prohibit 

deprivation of life, liberty, or property, except by due process. 

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 s/Blane H. Crutchfield 

 BLANE H. CRUTCHFIELD (CRUTB4243) 

 Attorney for Defendants 

 American Home Assurance Company, AIG, 

 American International Underwriters Corporation, 

 American International Marine Agency 

OF COUNSEL: 

HAND ARENDALL, L.L.C. 

P. O. Box 123 

Mobile, AL 36601-0123 

Tel: (251) 432-5511 

Fax: (251) 694-6375 

bcrutchfield@handarendall.com

CERTIFICATE OF SERVICE

I hereby certify that I have on this 12th day of September, 2006, electronically filed the 

foregoing pleading with the Clerk of the Court using the CM/ECF system which will send 

notification of such filing to the following: 

Kenneth A. Dowdy 

kad@lusklaw.com

Leslie Ann Caldwell 

lac@lusklaw.com

 s/Blane H. Crutchfield 

 BLANE H. CRUTCHFIELD (CRUTB4243) 

527496_1 

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