Court Opinion

ID: 9665935
Source: CourtListenerOpinion
Date Created: 2023-08-24 01:00:05.868254+00
Date Added: 2024-06-11T18:15:20.927626
License: Public Domain

*311EMBRY, Justice.
Appeal by Utica Mutual Insurance Company from adverse decisions in two declaratory judgment actions consolidated for trial. Utica was Tuscaloosa Motor’s garage liability insurance carrier until 1 June 1970; on that date Auto-Owners Insurance Company became Tuscaloosa Motor’s garage liability insurance carrier.
The facts: Tuscaloosa Motor Company made repairs to the respective cars of Annie Nuckols and Lloyd Johnson. It was stipulated at trial that these repairs were made during the period the Utica policy was in effect. On 1 July 1970 the Nuckols automobile was involved in an accident that resulted in damage to it and bodily injury to Nuckols; on 7 August 1970 the Johnson auto was involved in an accident resulting in damage to it. In each instance damage and injury occurred during the period Auto-Owners policy was in effect. Nuckols filed an action for damages against Tuscaloosa Motor alleging that proximate cause of the bodily injury and property damage was negligence of Tuscaloosa Motor in making repairs. Johnson filed an action for damage to an automobile on the same theory of negligence of Tuscaloosa Motor Company.
Utica’s agent, E. Cecil Carver, received notice of Johnson’s claim on 10 August 1970 and Nuckols’ claim on 18 November 1970. Utica initially undertook to investigate and defend these claims. On 29 September 1971 Utica notified Tuscaloosa Motor of its intent to withdraw from defense of the Johnson case and on 10 February 1972 of its same intent as to the Nuckols case.
Subsequently, Auto-Owners Insurance Company and Tuscaloosa Motor Company filed an action seeking declaration that Utica was required to defend against and be liable for any judgment arising out of lohnson’s suit. Utica filed a declaratory judgment action seeking a determination that it was not required to defend against nor be liable for any judgment arising out of Nuckols1 suit. The trial court found Utica liable to defend against and pay any judgments rendered in both the Johnson and Nuckols suits. It found Auto-Owners liable only for any “excess” damages over and above the limits of liability of the Utica policy.
The only issue essential to a decision is: (1) Does the Utica policy cover a liability for negligent repairs performed during the policy period when bodily injury *312or property damage occurs after expiration of the policy period?
The insuring clause in Utica’s policy reads:
“The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of
G. bodily injury or
H. property damage
to which this insurance applies, caused by an occurrence and arising out of garage operations * * * ”
An “occurrence” is defined in the Utica policy as:
“ * * * an accident * * * which results, during the policy period, in bodily injury or property damage neither expected not intended from the standpoint of the insured;”
In the “Policy Period; Territory” section, the Utica policy reads:
“This insurance applies only to bodily injury, property damage or loss which occurs during the policy period * * * ”
“Loss” is defined in the policy as “direct and accidental loss of or damage to property.”
The trial court found the Utica policy covered a liability for negligent repairs performed during the policy period when bodily injury or property damage occurred after expiration of the policy. To reach this result the trial court first determined that there was an ambiguity in the policy. Necessary to an understanding of how the trial court reached this conclusion are certain provisions of its order and judgment.1 In part, findings in that judgment read:
“ ‘Occurrence’ is defined in the definitions section of the Utica policy as : ‘(An) accident . . . which results, during the policy period, in bodily injury or property damage neither expected not intended from the standpoint of the insured.’ The Alabama Courts have consistently held that the term ‘accident’ in a liability insurance policy is broad enough to afford coverage when the negligence occurs during the policy period — though the actual damage resulting from that negligence may not arise until after the policy expires. Thus, in viewing the term ‘accident’ in the definition of ‘occurrence’ in Utica’s policy, this Court concluded that the Alabama Courts have interpreted this terminology as broad enough to provide coverage in situations such as those in the two damage suits. However, the Court had next to determine whether the accident resulted during the policy period in bodily injury or property damage.
“Paragraph IV of ‘Policy Period; Territory,’ of Utica’s policy provides that: ‘This insurance applies to bodily injury, property damage or loss (emphasis added) which occurs during the policy period.’ It is uncontroverted that no bodily injury or property damage was incurred by either customer during Utica’s policy period. Thus, the issue was reduced to whether or not the term ‘loss’ as defined in Utica’s policy was ambiguous such that Utica’s conduct under its policy was relevant to a determination of the meaning of the term.
* * * * * *
“First of all, by Utica’s employment of the term ‘accidental’ in its definition of ‘loss’ an ambiguity was created because of the fact that the Alabama Courts have interpreted the word ‘accident’ as broad enough to encompass prior negligence which results in subsequent damage (see the discussion supra). Secondly, the Alabama Courts have consistently given the term ‘loss’ a broad meaning, includ*313ing a connotation broad enough to encompass an ‘injury’. E. g., Mason v. City of Albertville, 276 Ala. 68, 71; 158 So.2d 924 (1963). And it is axiomatic that a person incurs a legal injury at the time a person who owes him a duty commits a negligent act, rather than at the time the resultant damages accrue. Thus, the question became whether Utica, •by its conduct, had indicated the intention that this was the meaning the term ‘loss’ was to be given in its policy.
“IT IS, THEREFORE, THE ORDER, JUDGMENT AND DECREE OF THE COURT that on trial the Court finds that the actions of Utica in assuming the responsibility for investigating and defending, for a period of months with no reservation of rights, the possible liability of Motor Co. clearly shows that it interpreted its policy to cover the incidents in question. The Court thus holds and declares that Utica is responsible for investigating and defending the suits in question and that Utica should bear any liability which Motor Co. might incur as a result of its negligence causing the two accidents.
“IT IS THE FURTHER ORDER, JUDGMENT AND DECREE OF THE COURT that Auto-Owners is only liable for any ‘excess’ damages over and above the limits of liability of Utica’s policy.
“The Court finds it unnecessary to reach the issues of waiver and estoppel because these actions can be resolved based on the rationale discussed above. * Sfc »
We cannot agree that the policy language is ambiguous. The trial court recognized that no bodily injury or property damage occurred during the policy period. However the trial court found ambiguity in the policy because the term “loss” was included in the “Policy Period; Territory” clause but was not included in the definition of “occurrence.” In the trial court’s view ambiguity was created because one clause predicated Utica’s liability under the policy on bodily injury or property damage occurring during the policy period while another clause predicated liability on bodily injury, property damage or loss occurring during the policy period.
The clear meaning of the policy language is that coverage is afforded only when bodily injury, or damage to or loss of property is suffered during the policy period irrespective of when the negligent act was performed which later resulted in such bodily injury, or damage to or loss of property. See Mut v. Newark Insurance Co., 289 So.2d 237 (La.App.1973) (reaching same result). Since there is no ambiguity, we need not construe the term “accident” as used in the policy. The determinative factor is not when the “accident” (negligent act) took place, rather, it is whether or not the bodily injury, or damage to or loss of property happened during the policy period.
Based upon this conclusion we must enforce the policy as written and may not indulge in construction favorable to the insured. Green v. Merrill, 293 Ala. 628, 308 So.2d 702 (1975); Aetna Insurance Co. v. Pete Wilson Roofing & Heating Co., Inc., 289 Ala. 719, 272 So.2d 232 (1973). Since the bodily injury and loss of or damage to the property did not occur during the policy period, Utica’s policy does not afford coverage.
Appellees argue in brief that Utica is estopped to deny coverage. Like the learned trial judge, we find it unnecessary to reach the question of estoppel. There is no ambiguity in Utica’s policy; Utica is not liable under it to defend against and pay any judgments resulting from the Nuckols and Johnson actions.
Understandably the result in this case will appear harsh to the insured. It is the opinion of the author of this opinion that the law of Alabama under the issues presented on this appeal will permit no other result.
*314Insureds are not without remedy however. Code of Ala., Tit. 28A, § 321, provides for filing with and approval by the Alabama Commissioner of Insurance of insurance policy forms. Such forms are deemed approved at the expiration of thirty days from filing unless prior thereto there has been affirmative approval or disapproval. Under the provisions of § 322(5) of the same Code Title the Commissioner may disapprove or withdraw previous approval of a policy form if it:
“Contains provisions which are unfair or inequitable or contrary to the public policy of this state, or which would because such provisions are unclear or deceptively worded, encourage misrepresentation.”
If, in the future, the Commissioner of Insurance because of limitations of manpower and time is not able to cause filed forms of policies of insurance to be scrutinized under the standards set out in § 322 and in particular § 322(5) this court may be compelled to declare the public policy of this State per the views expressed by Justices Jones and Shores in their dissent in this case.
REVERSED AND REMANDED.
MADDOX and ALMON, JJ., concur.
MERRILL and FAULKNER, JJ., concur in result.
HEFLIN, C. J., and BLOODWORTH, JONES and SHORES, JJ., dissent.

. We do not necessarily approve or disapprove of any statement of law expressed in the judgment of the trial court, and upon which we do not rule. His decree is reproduced merely to facilitate understanding by a reader of this opinion.