James v. Assurance Am. Ins. Co.

347 So.3d 1221

Melvin JAMES

v.ASSURANCE AMERICA INSURANCE COMPANY

1200462

Supreme Court of Alabama.

August 20, 2021

Darron C. Hendley, Montgomery, for appellant.

Jarrod B. Bazemore of Smith, Spires, Peddy, Hamilton & Coleman, P.C., Birmingham, for appellee.

WISE, Justice.

Melvin James, one of the defendants below, appeals from an order of the Montgomery Circuit Court entering a summary judgment in favor of Assurance America Insurance Company ("Assurance"), the plaintiff below, on its complaint for a declaratory judgment. We reverse and remand.

Facts and Procedural History

On February 17, 2019, Bernardino Mejia and James were involved in a motor-vehicle accident in Montgomery. Mejia was driving a 2003 Chrysler Town and Country minivan, and James was driving a 2004 Toyota Camry automobile. As a result of the accident, Mejia's three children were ejected from the Town and Country. One of Mejia's children died, and the other two were seriously injured. James was also injured as a result of the accident. Mejia was arrested, and, on September 23, 2019, he was indicted for one count of reckless murder and four counts of first-degree assault as a result of the accident. He remains incarcerated on those charges.

On April 30, 2019, James sued Mejia, ALFA Insurance Corporation, USAA Casualty Insurance Company, and various fictitiously named defendants in the Montgomery Circuit Court. The complaint stated claims of negligence, negligence per se, wantonness, and breach of contract. On February 3, 2020, citing his Fifth Amendment privilege against self-incrimination, Mejia filed a motion to stay the civil proceeding until the accident-related criminal proceedings against him were concluded. On that same date, the trial court granted the motion for a stay.

On February 17, 2020, Assurance filed a complaint for a declaratory judgment against Mejia and James in the Montgomery Circuit Court. In its complaint, Assurance included the following factual allegations:

"5. An actual controversy of a judicable nature exists between the parties involving claims for injuries and damages claimed by Melvin Alphonsa James and the possibility of coverage available under [an] Assurance America insurance Company policy ... under which Edgar Perez Domingo was the named insured. Defendant Bernardino Mejia was not listed on said policy; however, the 2003 Chevrolet Town & Country LX ... involved in the subject accident was listed on said policy.

"6. Defendant Melvin Alphonsa James has filed suit against Bernardino Mejia, USAA, and ALFA Mutual Insurance Company in the Circuit Court of Montgomery County, Alabama, under Civil Action No.: CV-2019-900770.

"7. Bernardino Mejia was not the named insured under the Assurance America insurance policy ... nor was he an individual listed on said policy. At the time of the accident giving rise to the aforementioned civil action, Bernardino Mejia did not have any valid driver's license."

Assurance also asserted that the policy that covered the Town and Country that Mejia was driving excludes coverage for injury or damage caused by an insured vehicle when driven by a person who is not listed as a driver on the declarations page of the policy and who does not have a valid driver's license. Assurance requested a judgment declaring the following:

"a. That [the] Assurance America insurance policy ... with an effective coverage period of November 9, 2018 - May 9, 2019 does not afford liability coverage to Bernardino Mejia for the February 17, 2019, motor vehicle accident which is the basis of Melvin James['s] claims against Mr. Mejia in the aforementioned civil action pending in Montgomery, Alabama;

"b. That in addition to the foregoing, ... the Court declare that the subject policy excludes all awards for punitive damages which may be awarded against Bernardino Mejia to Melvin Alphonsa James in the aforementioned civil action; and

"c. That Assurance America does not owe defense or indemnification to any of the parties in the Circuit Court civil action pending in Montgomery County under case number CV-2019-900770 in which Melvin Alphonsa James is the plaintiff and Bernardino Mejia is one of the defendants."

On February 26, 2020, James filed an answer to the complaint. On April 14, 2020, Assurance moved for the entry of a default against Mejia. On April 16, 2020, James filed a response in opposition to Assurance's motion for the entry of a default against Mejia.

On May 26, 2020, James served discovery requests on Assurance. Assurance served its responses and/or objections to the discovery requests on June 25, 2020.

On August 23, 2020, Assurance filed a motion for a summary judgment. Among other things, it argued that, "because Bernardino Mejia was an unlicensed driver and was not listed on [the] insurance policy[, he] is therefore excluded from coverage for the subject vehicle accident." In support of its contention that Mejia did not have a valid driver's license, Assurance submitted an unofficial copy of an Alabama Uniform Traffic Crash Report regarding the accident, a screenshot of the results from a purported database search for a driver's license for Bernardino Francisco Mejia, and an affidavit from Annekje Van de Water.

In her affidavit, Van de Water stated:

"1. My name is Annekje Van de Water, and I am over the age of majority and competent to testify as to the matters contained herein based on my own personal knowledge.

"2. I hold the title of Liability Supervisor for Assurance America Insurance Company. I am the assigned claims supervisor for a February 17, 2019 motor vehicle accident occurring in Montgomery County, Alabama involving Bernardino Mejia and Melvin Alphonsa James. ...

"3. At the time of the accident, Mr. Mejia was driving a 2003 Chrysler Town and Country which was listed on [an] Assurance America Insurance Company [policy] under which Edgar Perez Domingo was Named Insured and Edgar Perez Domingo and Everilda Mejia Domingo were listed drivers. Bernardino Mejia was neither a Named Insured under said policy nor a listed driver. A true and correct reproduced copy of said policy is attached hereto as Attachment 1.

"4. Assurance America received the Alabama Uniform Traffic Crash Report which is attached hereto as Attachment 2, and this report noted that Bernardino Mejia did not have a driver's license at the time of the accident.

"5. Assurance America also employed additional effort to confirm whether or not Bernardino Mejia had a valid driver's license at the time of the subject accident. Assurance America hired an independent adjuster to make contact with Bernardino Mejia and said adjuster traveled to the address listed on the Alabama Uniform Traffic Crash Report. This occurred on March 26, 2019. The independent adjuster was unable to establish communications with Mr. Mejia as Mr. Mejia had been arrested on February 26, 2019 and charged with assault first degree and reckless murder. Mr. Mejia remains incarcerated in the Mac Sim Butler Detention Facility.

"6. Assurance America has also searched a reputable database for the existence of any valid driver's license for Bernardino Mejia. Said database is named TLOxp TransUnion. Attachment 3 is a screenshot of the result from Assurance America's search on the aforementioned database, which shows that there were no results found for a driver's license for anyone named Bernardino Francisco Mejia born on February 22, 1988.

"7. Assurance America retained counsel to assist in the coverage investigation and repeated attempts were made with Mr. Mejia's assigned public defender attorney for a meeting with Mr. Mejia for purposes of further discussing whether he had a license at the time of the accident. Mr. Mejia later changed attorneys, and Mr. Mejia's new attorney will not allow Mr. Mejia to speak with anyone regarding the subject accident.

"8. Mr. Mejia's criminal prosecution for reckless murder is pending in the Circuit Court of Montgomery County, Alabama. Melvin Alphonsa James filed suit against Bernardino Mejia, USAA, and Alfa Mutual Insurance Company in the Circuit Court of Montgomery County, Alabama under Civil Action Number CV-2019-900770. Assurance America Insurance Company filed a Complaint for Declaratory Judgment on February 17, 2020 in the Circuit Court of Montgomery County under case number CV-2020-900265. Bernardino Mejia was duly served by Deputy Sheriff with the Summons and Complaint in the Declaratory Judgment action on February [19], 2020. Bernardino Mejia never filed a responsive pleading or otherwise appeared in the Declaratory Judgment action, and a Motion for Entry of Default was filed on April 14, 2020.

"9. Based on Assurance America's coverage investigation, it was determined that Bernardino Mejia did not have a valid driver's license at the time of the subject accident which occurred on February 17, 2019. Moreover, Bernardino Mejia was not a Named Insured under the subject policy ... and was not a listed driver on said policy. Said policy contains the following exclusions:

" ‘Exclusions

" ‘Coverage for Liability to Others and our duty to defend do not apply to:

" ‘13. Bodily injury or property damage caused by an insured car when it is driven by any person who:

" ‘a. Is not a listed driver on the Declarations Page; and

" ‘b. Does not have a valid driver's license.

" ‘21. Punitive damages of any kind other than Punitive damages awarded pursuant to the Alabama Wrongful Death Act.’ "

On September 8, 2020, James filed a response in opposition to Assurance's motion for a summary judgment. He argued, in part, that Assurance had failed to prove that Mejia did not have a driver's license. Specifically, James contended that both the accident report and the computer screenshot were hearsay, that neither was admissible evidence, and that neither established that Mejia did not have a driver's license.

On September 15, 2020, the trial court conducted a hearing on the motion for a summary judgment and the opposition thereto.¹ Afterward, the trial court allowed the parties to...