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Shelter Mutual Insurance Company v. Barton9/7/2001
) that the insurer breached the contract for insurance coverage with the insured when it refused to pay the insured's claim. This Court also recognized in Slade that 'extraordinary' cases have been limited to those instances in which the plaintiff produced substantial evidence showing that the insurer (1) intentionally or recklessly failed to investigate the plaintiff's claim; (2) intentionally or recklessly failed to properly subject the plaintiff's claim to a cognitive evaluation or review; (3) created its own debatable reason for denying the plaintiff's claim; or (4) relied on an ambiguous portion of the policy as a lawful basis to deny the plaintiff's claim. 747 So. 2d at 306-07.
"In Slade, this Court recognized that contractual liability is a prerequisite for liability for bad faith. Therefore, one who cannot prove she was entitled to benefits under an insurance policy cannot recover on a bad-faith claim. See id. at 318 (noting that bad-faith liability is limited to those cases in which the insured is entitled to benefits under the policy)." ___ So. 2d at ___.
As the main opinion correctly notes, Barton alleges only a "normal" bad-faith claim. Because a jury question existed as to whether Vaden's negligence caused the accident, thereby making it inappropriate to grant a preverdict judgment as a matter of law for Barton, I concur in the result reached in the main opinion that the bad-faith claim arising from the Vaden-related breach of contract should never have gone to the jury.
III.
Turning now to Barton's claims against Shelter Mutual related to Walters's alleged negligence, Barton is not an insured unless it can be established that Walters is an uninsured motorist. The main opinion correctly recognizes that this contract must be construed according to Missouri law; it further correctly notes that Missouri has no guest statute. This Court, in Hogan v. State Farm Mutual Automobile Insurance Co., 730 So. 2d 1157 (Ala. 1998), overruled on other grounds, Williamson v. Indianapolis Life Insurance Co., 741 So. 2d 1057 (Ala. 1999), held that an insured has a claim against his UM carrier when his claim against the driver of the vehicle in which he is a passenger is defeated by the operation of the guest statute (ยง 32-1-2, Ala. Code 1975). I dissented in Hogan and I remain convinced that Hogan was incorrectly decided. However, I do not think that Hogan applies in this case, in view of the applicability of Missouri law.
In order to treat Walters as an uninsured motorist, we must first determine whether to apply Alabama's guest statute to a contract governed by Missouri law. Because Walters's liability is a question of tort, and not contract, law and because the automobile accident occurred in Alabama, the Alabama rule recognizing the applicability of the law of the place of the tort should control the issue of Walters's liability. Fitts v. Minnesota Mining & Mfg. Co., 581 So. 2d 819 (Ala. 1991). Under the guest statute, Walters is not liable to Barton because Barton has failed to allege or prove anything beyond simple negligence. We should then apply Missouri contract law to Barton's Walters-related claims asserting 1) that Shelter Mutual is liable to Barton for breach of the contract of insurance covering the automobile in which she was a passenger and 2) that Barton, therefore, was an insured. As the main opinion points out, in Byrn v. American Universal Insurance Co., 548 S.W.2d 186 (Mo. App. 1977), a Missouri appellate court rejected the theory this Court embraced in Hogan. In fact, in my dissenting opinion in Hogan, I noted that the result reached by the majority in that case was contrary to the law of other states, and I cited, among other authoritie
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