Opinion ID: 1807004
Heading Depth: 1
Heading Rank: 6

Heading: ( FAB v. PRUDENTIAL )

Text: Prudential filed a cross-claim against FAB, seeking full and complete protection, indemnification and right to be held harmless by [FAB]. The thrust of its claim is that FAB breached its duty to honor the preauthorized draft written by Prudential against a nonexistent account. Therefore, it alleged that if Prudential was required to pay the proceeds of the policy to Tindal (and the jury found it was), then in equity and good conscience FAB should be required to make Prudential whole. The trial court agreed and granted Prudential's post-trial motion for summary judgment and denied that of FAB. The effect of the court's order was to indemnify Prudential. In Alabama, a joint wrongdoer may claim indemnity when he has not been guilty of any fault, except technically or constructively, or where both parties are at fault but the fault of the party from whom indemnity is claimed was the efficient cause of the injury. See Crigler v. Salac, 438 So.2d 1375 (Ala.1983). The theory of indemnity holds the defendant liable for the whole damage (joint tortfeasors in pari delicto) flowing from the contract.... [I]ndemnity seeks to transfer the entire loss of one tortfeasor to another who, in equity and justice should bear it. Sherman Concrete Pipe Machinery, Inc. v. Gadsden Concrete & Metal Pipe Co., 335 So.2d 125, 126 (Ala.1976). Here, the full amount of the policy (the extended term rider) was not paid because an employee of FAB did not change the account number on Prudential's preauthorized draft (for June 1986), as it had done monthly for over two years, and pay the draft out of an active account. The trial court, sitting without a jury, determined that in equity and fairness FAB should bear the liability for the damages. Where a trial court has received ore tenus evidence, its judgment, based upon that evidence, is presumed correct and will be reversed only if the judgment is found to be plainly and palpably wrong. Knox Kershaw, Inc. v. Kershaw, 552 So.2d 126 (Ala. 1989). We hold that FAB, through its actions and custom for over two years, created a duty to Prudential to exercise ordinary care to pay the preauthorized drafts presented by Prudential against Mr. Badners's account in a reasonably prudent manner. We find no error in the trial court's entry of the summary judgment in favor of Prudential. Likewise, we conclude that the trial court correctly denied FAB's summary judgment motion for indemnity against Prudential. The evidence is undisputed that Prudential followed the same course of conduct that it had followed for over 25 months after the closing of the account against which it was authorized to issue preauthorized drafts. The evidence was undisputed that Prudential's draft in June 1986 was against the closed account. FAB admitted that the check should have been paid and that if Ms. Bruhn, an assistant vice president, had known about the draft in June, it would have been paid. She had no excuse or explanation for FAB's failure to pay the check. Mr. Badners died before the breakdown in the system was corrected. The trial court found that in equity and good conscious FAB should bear the responsibility for its conduct and should indemnify Prudential from the damages awarded by the jury. The judgment in this case is due to be affirmed. AFFIRMED. HORNSBY, C.J., and ALMON, ADAMS and STEAGALL, JJ., concur.