Opinion ID: 1688734
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Heading Rank: 3

Heading: The Suppression Claim Against Lloyd's

Text: Lloyd's argues that the judgment of the Court of Civil Appeals conflicts with Baker v. State Farm General Insurance Co., 585 So.2d 804, 808 (Ala.1991). While Lloyd's argues in its petition that the Deflerons have actually pleaded a cause of action for fraudulent deceit, based on § 6-5-104, Ala.Code 1975, and that the Court of Civil Appeals misconstrued the claim as one of fraudulent suppression, the claim against Lloyd's can be resolved by an analysis of the relationship between Lloyd's and the Deflerons. Quite simply, there was no relationship. The Deflerons never communicated with Lloyd's, and Lloyd's never had any direct contact with the Deflerons. Unlike Ballard, this case involves no policy of insurance that contained terms of art that reasonably could be misunderstood by the insured. Nichols tried to procure insurance for the Deflerons, which was ultimately to be underwritten by a syndicate at Lloyd's. Although Gulf initially issued a certificate of insurance on behalf of Lloyd's, no policy was forthcoming, because, when the application was more closely examined, Gulf recognized that the house did not meet the specified underwriting guidelines established by Lloyd's. The Deflerons presented no evidence and certainly not the requisite substantial evidenceindicating that Lloyd's suppressed any material fact. It is undisputed that the underwriting guidelines were provided to Nichols and the Badger-Stonewall Agency and to Gulf. The undisputed evidence indicates that Nichols was acting as the Deflerons' agent. The only communication Lloyd's had with any party provided nothing less than full and frank disclosure. We therefore conclude that, as a matter of law, Lloyd's is not liable for fraudulent suppression. Although the trial court applied a different rationale, it reached the correct result, and the Court of Civil Appeals should have affirmed its judgment. See Ex parte Ryals, 773 So.2d 1011, 1013 (Ala.2000); Smith v. Equifax Servs., Inc., 537 So.2d 463, 465 (Ala.1988). Lloyd's was entitled to the summary judgment on the fraudulent-suppression claim. The judgment of the Court of Civil Appeals is reversed insofar as it reversed the summary judgment as to that claim.