The law firm of Jones, Morrison, Womack & Dearing, P.C., an Atlanta, Georgia, law firm; the law firm of Stokes, Clinton, Fleming & Sherling, and its successor firm, Stokes & Clinton, P.C., a Mobile law firm; and Paul Clinton, a partner in Stokes, Clinton, Fleming & Sherling and Stokes & Clinton, P.C., separately petitioned this Court for certiorari review of the Court of Civil Appeals' holding that SouthTrust Bank's appeal of a summary judgment in their favor would not be dismissed as moot. We granted the writ of certiorari initially to address the petitioners' argument that the Court of Civil Appeals' decision conflicts with Allstate Insurance Co. v. Amerisure Insurance Cos., 603 So.2d 961 (Ala.1992) ("Amerisure II"). We find that this case is distinguishable from Amerisure II; therefore, we quash the writ as having been improvidently granted.
Facts and Procedural History
SouthTrust, represented by the law firm of Jones, Morrison, Womack & Dearing, P.C.; by the law firm of Stokes, Clinton, Fleming & Sherling, and its successor firm, Stokes & Clinton, P.C.; and by Paul Clinton, obtained a judgment against Neal Greene and took certain actions to collect that judgment; those actions resulted in economic harm to Greene. Because Greene was not legally liable for the debt that gave rise to SouthTrust's collection action, the judgment against him was set aside,
SouthTrust brought a third-party complaint against the law firms and the lawyer that had represented SouthTrust in the collection proceeding — the law firms of Jones, Morrison, Womack & Dearing, P.C., and Stokes, Clinton, Fleming & Sherling, and its successor firm, Stokes & Clinton, P.C., and the lawyer Paul Clinton (hereinafter sometimes referred to collectively as "the lawyers") — seeking indemnity for any liability SouthTrust might have to Greene arising out of the malicious-prosecution action. The lawyers moved for a summary judgment, arguing that SouthTrust, as a joint tortfeasor, was not entitled to indemnity from them. On September 25, 2003, the trial court entered a summary judgment in favor of the lawyers.
At the time the summary judgment for the lawyers was entered, the malicious-prosecution case had been scheduled for mediation to begin on October 1, 2003. The lawyers notified the mediator that they would not attend the mediation. The mediation went forward without the lawyers' participation, and without success.
Greene's malicious-prosecution case was scheduled for trial, which was to begin on October 27, 2003. On October 24, 2003, SouthTrust settled Greene's claim for $325,000. On November 13, 2003, Greene and SouthTrust filed a "stipulation of dismissal" of Greene's action against SouthTrust. On the same day, by notation on the case-action summary, the trial court dismissed the case. SouthTrust thereafter sought two-thirds of the settlement amount from the lawyers, but the lawyers refused to pay. On December 4, 2003, SouthTrust filed in the Court of Civil Appeals its notice of appeal from the trial
The lawyers moved the Court of Civil Appeals to dismiss SouthTrust's appeal, arguing that, by settling with Greene, SouthTrust had lost any rights it might have had to seek indemnity from the lawyers; thus, they argued, SouthTrust had effectively mooted its appeal. In support of that argument, the lawyers cited Amerisure II. The Court of Civil Appeals denied the lawyers' motion to dismiss and decided the substantive issues raised by SouthTrust on appeal. The Court of Civil Appeals reversed the summary judgment in favor of the lawyers and remanded the case to the trial court for further proceedings. The lawyers filed two petitions in this Court for a writ of certiorari, asserting several grounds for review. We granted certiorari review to consider only the issue whether the decision of the Court of Civil Appeals conflicts with Amerisure II.
Analysis
In addressing the lawyers' motions to dismiss SouthTrust's appeal, the Court of Civil Appeals distinguished Amerisure II on the basis that Amerisure II is a subrogation case, not an indemnity case, and because, it concluded, the notice that was lacking in Amerisure II is not lacking in this case. As the Court of Civil Appeals noted, this Court in Amerisure II alternately used the terms "indemnity," "equitable subrogation," and "reimbursement" to describe the basis for Amerisure's counterclaim against Allstate. We also note that this Court indicated that its holding in Amerisure II that the claim had not been preserved would have remained the same whether the claim for reimbursement — to use the more general term — was based on a claim for indemnity or on one of subrogation. 603 So.2d at 966. However, we do not find it necessary to distinguish Amerisure II on the ostensible basis that its holding depends on its being a subrogation case as opposed to an indemnity case.
The alternative basis on which the Court of Civil Appeals distinguished Amerisure II from the case before us is that the notice that was lacking in Amerisure II is not lacking in this case. The court wrote:
SouthTrust Bank v. Jones, Morrison, Womack & Dearing, P.C., 939 So.2d 885, 895 (Ala.Civ.App.2005). Thus, the Court of Civil Appeals held that "Amerisure II is not authority for precluding [SouthTrust] from pursuing its third-party claims against the lawyers," and it denied the lawyers' motions to dismiss the appeal as moot and reversed the summary judgment. Id.
We recently reiterated that an indemnitee must give timely notice to the indemnitor in order to preserve an indemnity claim. See Burkes Mech., Inc. v. Ft. James-Pennington, Inc., 908 So.2d 905 (Ala.2004). "To be sure, in order to preserve an indemnity claim, the indemnitee must timely notify the indemnitor of the action against the indemnitee." Burkes Mech., 908 So.2d at 911. We continued, however, that "`timely notice' is a relative term, that is, it depends on the facts and circumstances of each case." 908 So.2d at 911 (citing Cochrane Roofing & Metal Co. v. Callahan, 472 So.2d 1005, 1008 (Ala. 1985)). "`"The notice must be timely in that it must not come so late that the indemnitor is prejudiced in preparing the defense."'" Burkes Mech., 908 So.2d at 911 (quoting Stone Building Co. v. Star Elec. Contractors, Inc., 796 So.2d 1076, 1091 (Ala.2000), quoting in turn Restatement (Second) of Judgments § 57, cmt. e). "`Conversely, tardiness without prejudice provides no defense.'" Burkes Mech., 908 So.2d at 911 (quoting Stone, 796 So.2d at 1091).
Given the facts and circumstances of this case, we agree with the Court of Civil Appeals that this case is not like Amerisure II and that this Court's holding in Amerisure II does not preclude SouthTrust from pursuing its third-party indemnity claim against the lawyers. We cannot agree with the lawyers' contention that they were deprived of notice of SouthTrust's intention to seek indemnity from them, as the Court concluded Allstate had been deprived in Amerisure II.
In Amerisure Insurance Cos. v. Allstate Insurance Co., 582 So.2d 1100 (Ala.1991) ("Amerisure I"), Morris Sherrill, an employee of Wadsworth Contractors, Inc., was involved in an accident in which one of Wadsworth's trailers, which was attached to Sherrill's personal truck, came unhitched
Allstate brought a separate action against Wadsworth's insurer, Amerisure Insurance Companies, seeking a judgment declaring that it had no obligation to defend or to indemnify Sherrill in Demo's personal-injury action. Amerisure answered the complaint, admitting that it had primary coverage for Wadsworth. The trial court entered a summary judgment in favor of Allstate, holding that "Allstate owed no coverage to Sherrill with regard to this accident." 582 So.2d at 1101. Amerisure appealed.
On May 30, 1991, while the Amerisure I appeal was pending (that is, Amerisure's appeal of the judgment declaring that Allstate owed no coverage to Sherrill for the accident), Amerisure settled Demo's personal-injury action against Wadsworth and Sherrill. Amerisure gave notice to Allstate of the proposed settlement, but did not give any indication that it would seek to hold Allstate liable for the settlement amount.
On June 21, 1991, this Court released its opinion in Amerisure I, holding that Sherrill's policy with Allstate covered the trailer. That is, the Court reversed the summary judgment in favor of Allstate. 582 So.2d 1102. The Court did not determine whether Allstate's or Amerisure's policy provided the primary coverage for the accident.
On remand to the trial court, Amerisure filed a counterclaim against Allstate seeking reimbursement for the amount it had paid Demo in settlement of his claims against Sherrill, arguing that Allstate was legally obligated to pay Sherrill's obligation to Demo. The trial court entered a summary judgment in favor of Amerisure, and Allstate appealed. Amerisure II, 603 So.2d at 963. This Court reversed the summary judgment in favor of Amerisure, stating:
Amerisure II, 603 So.2d at 964. The Court stated, without citing authority, that, if Amerisure wanted to "preserve its right to seek indemnification for the settlement in the event of a reversal of the declaratory judgment," it could have done so (1) by notifying Allstate that Amerisure intended to seek indemnification if this Court reversed the summary judgment on appeal, (2) by requesting a continuance of the trial of Demo's personal-injury action,
Amerisure II, 603 So.2d at 966.
We do not agree with the lawyers in this case that they were deprived of notice that SouthTrust was seeking indemnity from them so that SouthTrust failed to preserve its indemnity claim, thus rendering its appeal moot. In Amerisure II, the declaratory-judgment action involving the liabilities of Amerisure and Allstate was a case separate from the underlying action giving rise to liability — Demo's personal-injury action. In that separate declaratory-judgment action, Amerisure did not at the outset bring an indemnity claim against Allstate. Only after the case had proceeded to final judgment in favor of Allstate, after Amerisure had settled Demo's personal-injury case, and after Amerisure had appealed and obtained a reversal of that judgment, did Amerisure assert a counterclaim against Allstate for indemnity. In addition, Allstate was not a party in Demo's personal-injury suit.
In contrast, in the case before us, SouthTrust brought at the outset — and in Greene's action giving rise to the indemnity claim — a third-party complaint seeking indemnity from the lawyers. We cannot conclude that the lawyers were not on notice that SouthTrust would seek indemnity from them.
This Court apparently found it significant in Amerisure II that "Amerisure settled at a time when there was a declaratory judgment holding that Allstate's policy did not provide coverage for this accident" and therefore concluded that "Amerisure effectively mooted its appeal by settling as it did without attempting to preserve its right to proceed against Allstate on the settlement." 603 So.2d at 966.
On October 24, 2003, when SouthTrust settled with Greene, the summary judgment in favor of the lawyers was subject to revision. No party had sought from the trial court a certification of finality under Rule 54(b), Ala. R. Civ. P. The summary judgment became final only when the case was finally disposed of on November 13, 2003. The declaratory judgment on which the Court focused in Amerisure II was final at the time the settlement was reached; it disposed of the only claim in that action. See Rule 54(b), Ala. R. Civ. P. The lawyers' argument that they could rely on that judgment in declining to protect their interests by further participating in the case, for example, by attending the October 1, 2003, mediation, is unpersuasive.
For the foregoing reasons, we conclude that Amerisure II is distinguishable from the case before us. We agree with the Court of Civil Appeals that Amerisure II does not dictate that when SouthTrust settled with Greene it lost or failed to preserve its indemnity claim against the lawyers. Thus, Amerisure II did not require the Court of Civil Appeals to dismiss SouthTrust's appeal. Finding no conflict with Amerisure II, we quash the writ as improvidently granted.
WRIT QUASHED.
LYONS, HARWOOD, WOODALL, STUART, SMITH, and BOLIN, JJ., concur.
PARKER, J., concurs in the result.
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