Sentinel Insurance Co. v. Alabama Municipal Insurance Corp.

Summary

The Alabama Supreme Court reviewed a declaratory judgment concerning whether Sentinel Insurance Company or Alabama Municipal Insurance Corporation provided primary automobile-liability coverage for an accident involving a City of Opelika street sweeper operated by an ESG employee. The court held that the AMIC policy provided primary coverage and the Sentinel policy provided excess coverage because the liability was not assumed under an insured contract. The court reversed the trial court’s judgment and remanded the case.

Holdings

1. The AMIC policy provided primary coverage because the street sweeper was a covered auto owned by the City and was being used by Vaughan, an insured under the policy; the Sentinel policy provided excess coverage under its other-insurance provision.
2. The insured-contract exception did not apply because ESG and Vaughan were directly liable for their own tortious conduct and had not assumed the liability of another.
3. The trial court erred in concluding that Sentinel's policy provided primary coverage; its judgment for AMIC was reversed and the case was remanded.

Questions Presented

1. Whether the AMIC commercial-auto policy or the Sentinel policy provided primary coverage for ESG and Vaughan in connection with the underlying automobile accident.
2. Whether the Sentinel policy's provision making liability coverage primary for liability assumed under an insured contract applied to the settlement liability of ESG and Vaughan.
3. Whether the trial court erred in entering summary judgment and declaratory relief in favor of AMIC.

Disposition

reversed_and_remanded