 |
 |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|
|
|
|
EBSCO Industries6/9/2000
e find no evidence that both Luxor and Royal made a mistake. On the contrary, both Luxor and Royal appear to have agreed that Luxor would no longer be covered by this policy. Royal concedes that its own error caused Luxor to remain named as an insured on the policy. Because Royal was the only party that made the mistake, the mistake was unilateral and not mutual.
This Court dealt with a situation not materially different from the present one in American & Foreign Insurance Co. v. Tee Jays Manufacturing Co., 699 So. 2d 1226 (Ala. 1997). In that case, we held that a unilateral mistake cannot form the basis for reformation of a contract. Id., at 1229. Both American & Foreign Insurance Co. and the present case concern a unilateral mistake, and, for purposes of reformation, " unilateral mistake will not suffice." Id. at 1229. Therefore, under § 8-1-2, the circuit court had no basis upon which to reform this policy, and it erred in doing so.
Furthermore, § 27-23-1, Ala. Code 1975, also prohibits the reformation of this policy. That section provides:
"No such contract of insurance shall be cancelled or annulled by any agreement between the insurer and the insured after the insured has become responsible for such loss or damage, and any such cancellation or annulment shall be void."
To reform this policy would annul the coverage after Luxor had become responsible for paying damages based on Timothy Page's death. Therefore, any reformation would violate § 27-23-1.
Next, we must determine whether the National Liability Policy was "existing coverage" at the time of the sale. The National Liability Policy was an occurrence policy renewed on a yearly basis, with the policy period beginning on January 24 of each year. The sale of Luxor's assets was closed on July 2, 1992. Consequently, the existing coverage under the National Liability Policy would be for the year from January 24, 1992, to January 24, 1993. Timothy Page's death occurred on December 14, 1992; therefore, the claim arising from his death would be against the coverage of the policy for the same year as the sale. The coverage provided by the National Liability Policy for the year in which the death occurred was clearly an "existing coverage" at the time of the sale.
At the time of Timothy Page's death, Luxor was covered under a policy issued by Royal; therefore, under the Asset Purchase Agreement, Luxor's insurer, Royal, is liable up to its policy limits. Furthermore, as Luxor correctly asserts, any liability above the policy limits would be the responsibility of EBSCO, not Luxor. However, the National Liability Policy has a $1 million limit. Therefore, the entire $450,000 falls within the policy limits, and Royal is responsible for the entire amount.
REVERSED AND REMANDED.
Hooper, C.J., and See, Brown, and England, JJ., concur.
Page 1 2 3 Alabama Personal Injury Attorneys
Personal Injury Lawyers
|
| |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|