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Williams v. State Farm Mutual Automobile Insurance Co.12/19/2003
an attempt to repair the tractor-trailer because the tractor-trailer was a total loss and could not be repaired. The parties could not agree as to the amount of lost profits, and Williams sued State Farm in the Jefferson Circuit Court, alleging bad-faith failure to pay. State Farm filed a motion for a summary judgment, which the trial court granted. This appeal followed.
II. Standard of Review
Our review of a summary judgment is de novo, and we apply the following principles:
"The standard of review applicable to a summary judgment is the same as the standard for granting the motion, that is, we must determine whether there was a genuine issue of material fact and, if not, whether the movant was entitled to a judgment as a matter of law. Our review is further subject to the caveat that this Court must review the record in a light most favorable to the non-movant and resolve all reasonable doubts against the movant. Wilson v. Brown, 496 So. 2d 756, 758 (Ala. 1986); Harrell v. Reynolds Metals Co., 495 So. 2d 1381 (Ala. 1986). See also Hanners v. Balfour Guthrie, Inc., 564 So. 2d 412 (Ala. 1990).
"... Ala. Code 1975, § 12-21-12, mandates that the [non-movant] meet burden by 'substantial evidence.' Bass v. SouthTrust Bank of Baldwin County, 538 So. 2d 794, 797-98 (Ala. 1989). Under the substantial evidence test the non-movant must present 'evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved.' West v. Founders Life Assurance Co. of Florida, 547 So. 2d 870, 871 (Ala. 1989)."
Brewer v. Woodall, 608 So. 2d 370, 372 (Ala. 1992).
III. Analysis
In Howton v. State Farm Mutual Automobile Insurance Co., 507 So. 2d 448, 450 (Ala. 1987), we acknowledged "the fundamental and well-established general principle that an accident victim (a third party to a liability insurance contract) cannot maintain a direct action against the insurer for the alleged liability of the insured where the legal liability of the insured has not been determined by judgment." However, we also held that a third party could bring a direct action against an insurer under such circumstances "where the insurer undertakes a new and independent obligation directly with a nonparty to the insurance contract in its efforts to negotiate a settlement of the third party's claim." 507 So. 2d at 450-51 (emphasis added). A "new and independent obligation" exists when "the insurer, acting independently of its insured, enters into a contract with, or commits a tort against, a third party-claimant." 507 So. 2d at 450.
Williams claims that his action is not a direct action against State Farm based on the alleged liability of Shaw; instead, Williams asserts that in refusing to pay the amount Williams demanded for his alleged lost use of his tractor- trailer, State Farm has committed the tort of bad-faith refusal to pay an insurance claim under Alabama's statute prohibiting such a refusal to pay, codified at Ala. Code 1975, § 27-12-24. That section provides:
"No insurer shall, without just cause, refuse to pay or settle claims arising under coverages provided by its policies in this state and with such frequency as to indicate a general business practice in this state, which general business practice is evidenced by:
"(1) A substantial increase in the number of complaints against the insurer received by the insurance department;
"(2) A substantial increase in the number of lawsuits against the insurer or its insureds by claimants; and
"(3) Other relevant evidence."
Williams contends that
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