document 17 electronically filed 11/1/2017 12:38 pm 25-cv ...€¦ · cv no. cv-2017-900404 jury...

IN THE CIRCUIT COURT OF CULLMAN COUNTY, ALABAMA

0BKIM DUNCAN, as the ADMINISTRATRIX of THE ESTATE of ERIN ELIZABETH DUNCAN, deceased; ASHLEY RICHEY as the ADMINISTRATRIX of THE ESTATE OF LANCE RICHEY, deceased Plaintiff, vs. CHARLES OUSLEY, individually; CULLMAN COUNTY COMMISSION, D/B/A/ STONEY LONESOME OHV PARK a Governmental Entity; CULLMAN COUNTY COMMISSION CHAIRMAN KENNETH WALKER; COMMISSIONER KERRY WATSON; COMMISSIONER GARRY MARCHMAN, CULLMAN COUNTY PARKS AND RECREATION DIRECTOR, DOUG DAVENPORT; MIDWEST MOTORSPORTS, LLC A/K/A STR8UP SXS SERIES; and Fictitious Defendants “A”, “B”, “C” or “D”, whether singular or plural, those persons, corporations, partnerships or other entities, whose negligence and/or wantonness caused or contributed to the death of Erin Elizabeth Duncan and Lance Richey. Defendants.

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

CV NO. CV-2017-900404

JURY DEMAND

PLAINTIFFS’ FIRST AMENDED COMPLAINT

COMES NOW the Plaintiffs, by and through counsel, and amends their complaint

previously filed herein by adding defendant, Charles Ousley, and shows unto the Court as

follows:

ELECTRONICALLY FILED11/1/2017 12:38 PM

25-CV-2017-900404.00CIRCUIT COURT OF

CULLMAN COUNTY, ALABAMALISA MCSWAIN, CLERK

DOCUMENT 17

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STATEMENT OF THE PARTIES

1. Kim Duncan is over the age of 19 years and a resident of Washington County,

Arkansas. Also, she is related to Erin Elizabeth Duncan the deceased and the personal

representative, and has been appointed the Administratrix of the Estate of Erin Elizabeth Duncan,

deceased.

2. Ashley Richey is over the age of 19 years and a resident of Warren County,

Kentucky. Also, she is related to Lance Richey, the deceased, and the personal representative, and

has been appointed the Administratrix of the Estate of Lance Richey, deceased.

3. Defendant Charles Ousley is over the age of 19 years and resides in Vinton County,

Ohio, and is sued in his individual capacity.

4. Defendant Cullman County Commission D/B/A Stoney Lonesome OHV Park

(hereinafter referred to as “Stoney Lonesome” is a governmental entity tasked with the legal duty

to maintain Stoney Lonesome OHV Park.

5. Defendants, Cullman County Commissioners (hereinafter “Commissioners”)

Kenneth Walker, Kerry Watson and Garry Marchman are employees of the Cullman County

Commission which is a governmental entity.

6. Defendant Cullman County Parks & Recreations Director, Doug Davenport, is an

employee of the County of Cullman, Alabama a governmental entity.

7. Defendant MIDWEST MOTORSPORTS, LLC D/B/A STR8UP SXS Series is a

domestic entity with its principle place of business in Indiana, and does business in Cullman

County, Alabama.

8. Fictitious Defendants “A”, “B”, “C”, or “D”, whether singular or plural, those

persons, corporations, partnerships or other entities, whose negligence and/or wantonness caused

DOCUMENT 17

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or contributed to the death of Erin Elizabeth Duncan and Lance Richey.

STATEMENT OF FACTS

9. On April 22, 2017, Erin Elizabeth Duncan and Lance Richey were spectators at the

off-road racing event sanctioned by the STR8UP SXS Series and held at Stoney Lonesome OHV

Park in Cullman County, Alabama.

10. As Duncan and Richey watched the sponsored race at the park, Defendant Charles

M. Ousley, a racer entered in the competition, negligently and/or wantonly drove his vehicle into

the crowd of spectators.

11. During the time of the event, there were no barriers, walls, or other physical means

by which to keep the racers on course.

12. During the time of the event, there were no warnings or signs present directing

spectators where to safely watch the races.

13. As a result of the collision Erin Elizabeth Duncan and Lance Richey were killed.

COUNT ONE

(NEGLIENCE/WANTONNESS)

14. Plaintiffs re-allege paragraphs 1 through 13 of the Complaint as if set out here in full.

15. At the said time and place Defendant Ousley negligently and/or wantonly operated

the off-road vehicle which he drove into the crowd of spectators which included Duncan and

Richey, deceased.

16. As a proximate result of the Defendant’s negligent and wantonness, and combined

and concurred negligence and wantonness of the other Defendants, Erin Elizabeth Duncan and

Lance Richey died.

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WHEREFORE, Plaintiffs Duncan and Richey demand judgment against Defendant Ousley

and a reasonable amount of punitive damages in an amount to be determined by a jury under the

provisions of law in this state.

COUNT TWO (NEGLIGENCE/WANTONESS)

17. Plaintiffs re-allege paragraphs 1 through 16 of the Complaint as if set out here in full. 18. Defendant Cullman County Commission D/B/A Stoney Lonesome OHV Park

failed to have barriers between the race course and spectator areas.


failed to exercise ordinary care by inadequately maintaining safe conditions in and around said

premises.


failed to have warnings or signs directing spectators where to safely watch the races.

21. Some or all of the conditions at Stoney Lonesome OHV Park and/or claims against

Cullman County, Alabama, or its agents, servants, and/or employees, being the direct and

proximate cause of the deaths of Erin Duncan and Lawrence Richey.

WHEREFORE, Plaintiffs Duncan and Richey demand judgment against Defendant Stoney

Lonesome in an amount of punitive damages as a jury to punish and deter the Defendant plus the

cost and expenses of this action.

COUNT THREE (NEGLIGENCE/WANTONESS)

22. Plaintiffs re-allege paragraphs 1 through 21 of the Complain as if set out here in

full.

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23. Defendants Kenneth Walker, Kerry Watson, Garry Marchman, the County

Commissioners for Cullman County, sued in their individual capacity, were responsible for

maintenance, upkeep, and oversite of the Stoney Lonesome OHV park.

24. Defendant Doug Davenport, Director of Cullman County Parks and Recreation,

sued in his individual capacity, was responsible for maintenance, upkeep, and oversite of the

Stoney Lonesome OHV Park.

25. Defendants Walker, Watson, Marchman, and Davenport were negligent, wanton,

willful, malicious, fraudulent, beyond his authority or under mistaken interpretation of the law in

one or more of the following ways:

a. They failed to have barriers between the race course and spectator areas.

b. They failed to exercise ordinary care by inadequately maintaining safe

conditions in and around said premises.

c. They failed to have warnings or signs directing spectators where to safely

watch the races.

WHEREFORE, Plaintiffs demand judgment against the defendants and fictitious

defendants for punitive damages in an amount to be determined by a jury under the provisions of

this State.

COUNT FOUR (NEGLIGENCE/WANTONESS)


27. Defendants had a duty to Plaintiff to act reasonably.

28. Defendants breached that duty.

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29. The subject premises was inadequately monitored and maintained by Defendant

being the direct and proximate cause of the deaths of Erin Duncan and Lawrence Richey.

30. All of the above damages were directly and approximately caused by the

aforementioned negligence and wantonness of Defendants, and were incurred without contributory

negligence or assumption of the risk on the part of Plaintiff, or an opportunity for Plaintiff, to avoid

the accident.



this State.

COUNT FIVE

(NEGLIGENCE/WANTONESS)


32. Defendant Midwest Motorsports LLC D/B/A/ STR8T SXS Series, failed to have

barriers between the race course and spectator areas.

33. Defendant Midwest Motorsports LLC D/B/A/ STR8T SXS Series failed to exercise

ordinary care by inadequately maintaining safe conditions in and around the race course.

34. Defendant Midwest Motorsports LLC D/B/A/ STR8T SXS Series failed to ensure

drivers entered into the race were competent.

35. Defendant Midwest Motorsports LLC D/B/A/ STR8T SXS Series failed to have

warnings or signs directing spectators where to safely watch the races.

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36. Some or all of the actions of Defendant Midwest Motorsports LLC D/B/A/ STR8T

SXS Series were the direct and proximate cause of the deaths of Erin Elizabeth Duncan and

Lawrence Richey.



this State.

COUNT SIX (COMBINED AND CONCURRING NEGLIGENCE AND/OR WANTONNESS)

37. Plaintiffs re-allege paragraphs 1 through 36 of the Complaint as if set out here in

full.

38. Defendants and Fictitious Defendants negligence, wantonness, and/or wrongful

conduct combined and concurred to cause the injuries and death of Erin Duncan and Lance Richey.

39. As a proximate consequence of the Defendants negligence, wantonness, and

wrongful conduct, Erin Duncan and Lance Richey died as a result of injuries suffered in the

collision.



this State.

_/s/ Evan G. Allen________ EVAN G. ALLEN (ALL103)

OF COUNSEL: BEASLEY, ALLEN, CROW, METHVIN, PORTIS & MILES, P.C. P.O. Box 4160 Montgomery, AL 36103-4160 (334) 269-2343 [email protected]

DOCUMENT 17

mailto:[email protected]

8

ADDITIONAL DEFENDANT MAY BE SERVED AT THE FOLLOWING ADDRESS: Charles Ousley 31793 Circle Drive

McArthur, OH 45651

DOCUMENT 17


KIM DUNCAN, as administratrix ) of the Estate of Erin Duncan, deceased; ) ASHLEY RICHEY as administratrix ) of the Estate of Lance Richey, deceased, ) ) Plaintiffs, ) ) VS. ) CIVIL ACTION NO.: CV-2017-900404 ) CHARLES OUSLEY, individually; ) CULLMAN COUNTY COMMISSION ) D/B/A STONEY LONESOME OHV ) PARK, et al., ) ) Defendants. )

ANSWER

COME NOW the Defendants designated as the Cullman County Commission d/b/a Stony

Lonesome OHV Park, Cullman County Commission Chairman Kenneth Walker, Cullman

County Commissioners Kerry Watson and Garry Marchman, and Cullman County Parks &

Recreation Director, Doug Davenport in the above-styled cause (hereinafter the Cullman County

Defendants), and with full reservation to amend and/or supplement upon the discovery of

additional facts or defenses, and responds to the Plaintiffs’ Complaint as follows:

STATEMENT OF THE PARTIES

1. The Cullman County Defendants are without sufficient information, knowledge or

belief, to either admit or deny the allegations contained in paragraph 1 of the Plaintiffs’

Complaint, and the same are therefore respectfully denied, with strict proof thereof demanded.







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4. The Cullman County Defendants deny the allegations contained in paragraph 4 of

the Plaintiffs’ Complaint, with strict proof thereof demanded.



6. The Cullman County Defendants admit the allegations contained in paragraph 6

of the Plaintiffs’ Complaint.






STATEMENT OF FACTS

9. Upon information and belief, the allegations contained in paragraph 9 of the

Plaintiffs’ Complaint are admitted.







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COUNT ONE (NEGLIGENCE/WANTONNESS)

14. The Cullman County Defendants adopt and incorporate herein by reference, as if

set fully set forth herein, their previous responses to paragraphs 1 through 13 of the Plaintiffs’

Complaint.




16. The Cullman County Defendants deny the allegations contained in paragraph 16

of the Plaintiffs’ Complaint, with strict proof thereof demanded.

FURTHERMORE, the Cullman County Defendants specifically deny that the Plaintiffs

are entitled to any of the relief requested in the Ad Damnum clause in Count One of the

Plaintiffs’ Complaint including, but not limited to, any and all claims for compensatory and/or

punitive damages.

COUNT TWO (NEGLIGENCE/WANTONNESS)



Complaint.

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are entitled to any of the relief requested in the Ad Damnum clause in Count Two of the


punitive damages.

COUNT THREE (NEGLIGENCE/WANTONNESS



Complaint.







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are entitled to any of the relief requested in the Ad Damnum clause in Count Three of the


punitive damages.

COUNT THREE (MISNUMBERED) (NEGLIGENCE/WANTONNESS)



Complaint.










are entitled to any of the relief requested in the Ad Damnum clause in Count Three

(MISNUMBERED) of the Plaintiffs’ Complaint including, but not limited to, any and all claims

for compensatory and/or punitive damages.

COUNT FOUR (NEGLIGENCE/WANTONNESS)

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Complaint.
















are entitled to any of the relief requested in the Ad Damnum clause in Count Four of the


punitive damages.

COUNT FIVE (COMBINED AND CONCURRING NEGLIGENCE AND/OR WANTONNESS)

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Complaint.






are entitled to any of the relief requested in the Ad Damnum clause in Count FIVE of the


punitive damages.

AFFIRMATIVE DEFENSES

First Defense

The Plaintiff’s Complaint, separately and severally fails to state a cause of action against the

Cullman County Defendants upon which relief may be granted.

Second Defense

The Cullman County Defendants deny that they, or any agent, servant, or employee thereof,

was guilty of any negligence, wantonness, recklessness, carelessness, or unskillfulness in the design,

construction, maintenance, repair, operation, signing, and/or warning of the Stony Lonesome OHV

Park in Cullman County at any time material to the allegations of the Plaintiff’s Complaint.

Third Defense

The Cullman County Defendants deny that they were guilty of negligence, wantonness,

recklessness, carelessness, and/or unskillfulness in the design, construction, maintenance, repair,

DOCUMENT 32

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operation, signing or warning of a park within the County’s public park system at or near where the

accident occurred in this case.

Fourth Defense

The Cullman County Defendants submit that the accident in this case was caused by a

superseding, intervening cause over which The Cullman County Defendants had no control that was

sufficient to break any causal connection between any alleged negligence and/or wantonness of The

Cullman County Defendants and the accident made the basis of the Plaintiff’s Complaint.

Fifth Defense

The Cullman County Defendants assert that the Plaintiff’s injuries were caused by the

negligence and/or wantonness of individuals or entities over which the Cullman County Defendants

had absolutely no control or authority.

Sixth Defense

The Cullman County Defendants assert that on the occasion complained of, the Plaintiffs

were guilty of negligence and/or wantonness which proximately caused or contributed to their own

injuries, therefore barring any recovery by the Plaintiff in this lawsuit.

Seventh Defense

The Plaintiffs have not complied with all requirements under Alabama law necessary as a

condition precedent to the maintenance of this lawsuit.

Eighth Defense

The Cullman County Defendants deny that they failed to keep a portion of a park under its

control in a reasonably safe condition for use by the general public.

Ninth Defense

The Cullman County Defendants assert that they are not liable in any manner to the Plaintiff

regarding the allegations contained in the complaint.

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Tenth Defense

The Cullman County Defendants plead the defense of assumption of the risk.

Eleventh Defense

The Cullman County Defendants assert all pre-conditions, limitations and qualifications

to County liability and for the institutions of actions, injury, and execution of judgment against

counties and their employees as may be provided for or required by Alabama law.

Twelfth Defense

The Cullman County Defendants assert and plead the privileges, qualified immunities,

absolute immunities, defenses, and good faith immunities given to governmental entities and

their employees or otherwise in the above-styled cause.

Thirteenth Defense

The Cullman County Defendants submit the defense of discretionary function immunity.

Fourteenth Defense

The Cullman County Defendants assert that they are immune from the Plaintiffs’ claims in

this case under Alabama law.

Fifteenth Defense

The Cullman County Defendants assert the defense of last clear chance.

Sixteenth Defense

The Cullman County Defendants submit that the Plaintiff is not entitled to punitive damages

against them.

Seventeenth Defense

The Cullman County Defendants plead the defense of release.

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Eighteenth Defense

The Cullman County Defendants please the defense of indemnification.

Nineteenth Defense

The Cullman County Defendants assert that neither they nor any of their agents, servants or

employees breached any legal duty to the Plaintiff relative to the accident made the basis of the

Plaintiff’s Complaint in this case.

Twentieth Defense

The Plaintiffs have not complied with all requirements under Alabama law necessary as a

condition precedent to the maintenance of this lawsuit.

Twenty-first Defense

The Cullman County Defendants assert that they are not liable in any manner to the

Plaintiffs regarding the allegations contained in the complaint.

Twenty-second Defense

The accident at issue was not proximately caused by any act or omission of the Cullman

County Defendants or their agents, servants, or employees.

Twenty-third Defense

Punitive damages are not recoverable in this action against the Cullman County Defendants.

Twenty-fourth Defense

Wantonness is not a viable cause of action in Alabama against a governmental entity.

Twenty-fifth Defense

The Cullman County Defendants plead the defense of last clear chance.

Twenty-sixth Defense

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The Cullman County Defendants assert and plead the privileges, qualified immunities,

absolute immunities, discretionary function immunities, and good faith immunities given to

governmental entities or otherwise in the above-styled cause.

Twenty-seventh Defense

The Cullman County Defendants reserve the right to plead and assert by amended answer

any other affirmative or other defenses which after discovery may be appropriate.

Twenty-eighth Defense

The Plaintiffs’ claims are barred by the doctrines of waiver, estoppels, laches, release, res

judicata, lack of standing, contributory negligence, unclean hands, statute of limitations and/or

statute or rule of repose.

Twenty-ninth Defense

The Cullman County Defendants assert the defense of sudden emergency.

Thirtieth Defense

The Cullman County Defendants aver that they are entitled to credit or set-off against the

damages claimed, the settlement (and any monies paid pursuant thereto) between the Plaintiffs and

any other person or entity, whether pursuant to pro tanto settlements or otherwise.

Thirty-first Defense

To the extent any of the claimed damages have been or will be indemnified in whole or in

part from any collateral source, any verdict or judgment against the Cullman County Defendants

must be reduced by those amounts.

Thirty-second Defense

If it is established that the Cullman County Defendants are in any manner legally

responsible for any of the damages claimed and that such damages were proximately contributed to

and/or caused by other persons or entities, the Cullman County Defendants are entitled to equitable

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and applied indemnity (contribution from each of said other person or entities in an amount in direct

proportion to the culpable conduct of said other persons or entities).

Thirty-third Defense

The Cullman County Defendants adopt in full all defenses raised by or available to any Co-

Defendants regarding alleged liability for the accident at issue in this case.

Thirty-fourth Defense

The Cullman County Defendants say that the imposition of punitive damages under

Alabama law is arbitrary and capricious inasmuch as there are no standards for fair and objective

calculation of such damages and as the same are penal in nature, Plaintiffs must show entitlement to

the same by evidence beyond a reasonable doubt; further imposition of punitive damages under

Alabama law is contrary to the due process and equal protection clauses of both the Constitution of

the United States of America and the State of Alabama Constitution, and that imposition of punitive

damages under Alabama law, even with Green Oil and Hammonds guidelines, is arbitrary and

capricious, leading to “grossly excessive” punitive damage awards inasmuch as a jury is provided

neither guidelines and reaching some rational ratio between compensatory and punitive damages,

nor some rational relation between the Defendants’ alleged conduct and the legitimate interest of the

State to punish willful conduct and deter its repetition.

Thirty-fifth Defense

Unless the Cullman County Defendants’ liability for punitive damages in the appropriate

amount of such damages is required to be established by clear and convincing evidence, any award

of such damages would violate the Defendants’ due process rights as guaranteed by the Fourteenth

Amendment of the Constitution of the United States of America and by the due process provisions of

the State of Alabama Constitution.

Thirty-sixth Defense

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The imposition of punitive damages in this case in the absence of a showing of malicious

intent to cause harm to the Plaintiffs would violate the due process clauses of the Fifth and

Fourteenth Amendments to the United States Constitution.

Thirty-seventh Defense

The imposition of punitive damages in this case would violate the due process clauses of the

Fifth and Fourteenth Amendments to the United States Constitution, because the standards of

liability for punitive damages in Alabama re unduly vague and subjective, and permit retroactive,

random, arbitrary and capricious punishment that serves no legitimate governmental interest.

Thirty-eighth Defense

The Cullman County Defendants deny that they have been guilty of any conduct which

warrants the issue of punitive damages being submitted to the jury or which allows the Plaintiffs

to recover punitive damages.

Thirty-ninth Defense

Any award of punitive damages to the Plaintiffs in this case would be a violation of the

constitutional safeguards provided to the Cullman County Defendants under the Constitution of

the State of Alabama.

Fortieth Defense

The claim for punitive damages, on its face and/or as applied in this case is in violation of

the Fifth Amendment of the Constitution of the United States, of the right of counsel provided by

the Sixth Amendment of the Constitution of the United States; of the right to trial by jury of the

Seventh Amendment of the Constitution of the United States; of the proportionality principles

contained in the Eighth Amendment of the Constitution of the United States; and Article I,

Sections 1, 2, 6, 11, 13, 15, 27, and 35 of the Constitution of Alabama of 1901, and is improper

DOCUMENT 32

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under the common law and public policies of the State of Alabama and under applicable court

rules and statutes for the following reasons, jointly and separately:

a. There are no standards provided by Alabama law for the imposition of

punitive damages, and therefore, the Cullman County Defendants have not been put on notice

and given the opportunity to anticipate punitive liability and/or the potential size of the award

and to modify or conform their conduct accordingly.

b. The procedures to be followed would permit an award of punitive

damages against the Cullman County Defendants upon the satisfaction of a burden of persuasion

(standard of proof) less than that applicable to the imposition of criminal sanctions for equal

culpability.

c. The procedures to be followed would permit the award of multiple

punitive damages for the same act or omission.

d. There are no provisions or standards for clear and consistent appellate

review of any award of punitive damages against the Cullman County Defendants under present

Alabama law.

e. The standards of conduct upon which punitive damages are sought against

the Cullman County Defendants are vague and ambiguous.

f. The procedures used by Alabama courts and the guidelines given by the

jurors, jointly and severally, are vague and ambiguous.

g. The procedures used by Alabama courts and guidelines given to jurors,

jointly and separately, are vague and ambiguous and, thus, impermissibly allow jurors broad,

unlimited, and undefined power to make determinations on their notions of what the law should

be, instead of what it is.

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h. The procedures under which punitive damages are awarded and the

instruction used in Alabama courts, jointly and separately, are vague and ambiguous and, thus

fail to eliminate the effects of, and to guard against, impermissible juror passion.

i. Present Alabama law does not provide for sufficiently objective and

specific standards to be used by the jury in its deliberations on whether to award punitive

damages and, if so, on the amount to be awarded.

j. Present Alabama law does not provide a meaningful opportunity for

challenging the rational basis for, and any excessiveness of, any award of punitive damages.

k. Present Alabama law does not provide for adequate and independent

review by the trial court and the appellate court of the imposition of punitive damages by a jury

or of the amount of any punitive damages award by a jury.

l. Present Alabama procedures fail to provide a constitutional reasonable

limit on the amount of any punitive damages award against the Cullman County Defendants.

m. Present Alabama procedures may permit the admission of evidence

relative to punitive damages in the same proceeding during which liability is determined.

n. Present Alabama procedures permit the imposition of joint and several

judgments against multiple co-defendants for different acts or degrees of wrongdoing or

culpability.

o. An award of punitive damages would compensate Plaintiffs for elements

of damages not otherwise recognized by Alabama law.

Forty-first Defense

The Cullman County Defendants reserve the right to supplement this answer as discovery

progresses in this case.

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Forty-second Defense

The Cullman County Defendants assert that they are absolutely immune from punitive

damages.

Forty-third Defense

The Plaintiffs’ claims are barred by the doctrines of waiver, estoppels, laches, release, res

judicata, lack of standing, contributory negligence, unclean hands, statute of limitations and/or

statute or rule of repose.

Forty-fourth Defense

The Cullman County Defendants aver that they are entitled to credit or set-off against the

damages claimed, the settlement (and any monies paid pursuant thereto) between the Plaintiffs and

any other person or entity, whether pursuant to pro tanto settlements or otherwise.

The Cullman County Defendants reserve the right to amend their answer and to assert

additional defenses which may arise as discovery progresses or otherwise in the course of this

litigation.

Dated this the 9th day of November, 2017.

/s/ Craig S. Dillard CRAIG S. DILLARD, Bar Number: DIL002

WEBB & ELEY, P.C. 7475 HALCYON POINTE DRIVE P. O. BOX 240909 MONTGOMERY, AL 36124-0909 (334) 262-1850 FAX (334) 262-1772 E-mail: [email protected] Attorney for the Cullman County Defendants

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CERTIFICATE OF SERVICE

I hereby certify that on this the 9th day of November, 2017, I electronically filed the foregoing with the Clerk of the Court using AlaFile and served the following by U.S. Mail: Attorney for Plaintiffs: Evan G. Allen Beasley, Allen, Crow, Methvin, Portis & Miles, P.C. P. O. Box 4160 Montgomery, AL 36103-4160 [email protected] s/Craig S. Dillard OF COUNSEL

DOCUMENT 32

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AMERICAN STANDARD ) INSURANCE COMPANY OF OHIO, ) And AMERICAN FAMILY ) INSURANCE COMPANY, ) ) Proposed Intervenor Plaintiffs, ) ) v. ) Case No. CV-2017-900404 ) CHARLES OUSLEY, ) KIM DUNCAN, as the Administratrix of ) the Estate of Erin Elizabeth Duncan, ) ASHLEY RICHEY, as the Administratix ) of the Estate of Lance Richey, ) ) Proposed Intervenor Defendants. )

RESPONSE TO OBJECTIONS TO MOTION TO INTERVENE

COMES NOW, the Proposed Intervenors, American Standard Insurance

Company of Ohio and American Family Insurance Company (Movants), and

respond as follows to the objections to intervention filed by Charles Ousley and

Midway Motorsports, LLC a/k/a STR8UP SXS (the Objectors):

1. The Court previously granted Movants’ motion to intervene so that this

Court may enter a judgment declaring that Movants owe no duty to defend and

indemnify the Charles Ousley (Ousley) in this suit. (Docs. 67 & 68.) The Court gave

the other parties 14 days to object to the order.

2. The Objectors responded arguing intervention should not be allowed

or, if allowed, it should be governed by the bifurcation procedure outlined in




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Universal Underwriters Insurance v. East Central Alabama Ford-Mercury, Inc.,

574 So. 2d 716 (Ala. 1991).1 In general, Universal Underwriters Insurance, outlines

a procedure where the insurer is allowed to permissively intervene under Rule 24(b)

of the Alabama Rules of Civil Procedure. The issues of the insured’s liability and

coverage are bifurcated and tried separately.

3. Universal Underwriters is distinguishable on one significant point that

would make intervention as of right under Rule 24(a) proper as well as permissive

intervention under Rule 24(b).2

A. Intervention as a matter of right is proper in this case.

1 As the Motion to Intervene and attached complaint make clear, Movants are seeking a coverage determination from this Court, not the opportunity to propose special interrogatories to the jury. 2 Rule 24 reads in relevant part:

(a) Intervention of right. Upon timely application, anyone shall be permitted to intervene in an action: (1) when a statute confers an unconditional right to intervene; or (2) when the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant’s ability to protect that interest, unless the applicant’s interest is adequately represented by existing parties. (b) Permissive intervention. Upon timely application anyone may be permitted to intervene in an action: (1) when a statute confers a conditional right to intervene; or (2) when an applicant’s claim or defense and the main action have a question of law or fact in common. When a party to an action relies for ground of claim or defense upon any statute or executive order administered by a federal or state governmental officer or agency or upon any regulation, order, requirement or agreement issued or made pursuant to the statute or executive order, the officer or agency upon timely application may be permitted to intervene in the action. In exercising its discretion the court shall consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties. ...

Ala. R. Civ. P. 24 (a) & (b).

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4. This Court should find that Movants are entitled to intervene as a matter

of right under Rule 24(a) because the Movants contend there is not duty to defend

in addition to no duty to indemnify Ousley. (Doc. 68, Pars. 17 & 25.)

5. The bifurcation procedure outlined in Universal Underwriters is

grounded in its initial holding that the insured was not entitled to intervene as a

matter of right under Rule 24(a). Universal Underwriters, 574 So. 2d at 722-

23. This holding was based on a unique factual scenario that is not present in this

case: the insurer in Universal Underwriters admitted that coverage might have

existed for some of the alleged claims. Id. at 718 (“Universal contends that some of

the claims might be covered by Universal's policy and some might not be.”) There

was no dispute regarding the insurer’s duty to defend the insured because at least

some of the claims might be covered. See Hartford Cas. Ins. Co. v. Merchants &

Farmers Bank, 928 So.2d 1006, 1012 (Ala. 2005) (finding if the facts alleged in a

complaint could reasonably support a legal theory of recovery that is an insured risk

under the policy, the insurer has a duty to defend the claim). The court in Universal

Underwriters went on to hold that the question of indemnity was contingent on a

judgment being entered against the insured; therefore, the insured could not

intervene as a matter of right: “This Court has held that an insurer does not have an

interest when that interest is contingent upon the recovery in another action....In light

of the foregoing authority, we find that Universal does not have a direct, substantial,

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and protectable interest. Because Universal lacks such an interest under Rule

24(a)(2), it may not intervene as of right.” Id. at 723.

6. This rationale speaks only to the “interest” an insurer has in a

determination of whether the insurer has a duty to indemnify the insured from a

judgment. Critically, it is silent with respect to the insured’s duty to defend the

insured, which was not at issue in Universal Underwriters.

7. Here, Movants contend there is no duty to indemnify or defend the

Ousley from any of the alleged claims. (Doc. 68, Pars. 17 & 25.) The Movants are

not contending that some claims may be covered, unlike the insurer in Universal

Underwriters. (See Ex. 1 to Motion to Intervene). The Movants are defending the

insured (Ousley) under a reservation of rights. They are currently paying for lawyers

to defend the insured even though the issue of coverage is highly questionable. The

insurers’ interest in having a coverage determination on the issue of the duty to

defend is in fact immediate and not contingent on any future event – the Movants

are incurring defense fees and costs on behalf of the insured now. This factual

distinction from Universal Underwriters shows the Movants have an existing, direct,

substantial, and protectable interest in having the Court determine now that there is

no duty to defend. A ruling in Movants’ favor on the issue of the duty to defend

would relieve the Movants of the existing responsibility for fees and expenses under

its reservation of rights.

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8. Universal Underwriters is silent on the issue of whether an insurer may

intervene as a matter of right when it contends there is not duty to defend its insured.

Based on the above, this Court should find the Movants may intervene as a matter

of right under Rule 24(a) based on the existing coverage controversy over the duty

to defend.3

B. Permissive Intervention is also proper.

9. Even if the Court does not find that intervention as a matter of right is

proper in this case, permissive intervention is still proper. Indeed, none of the

objectors dispute that the requirements for permissive intervention under Rule 24(b)

are met in this case.

10. In seeking permissive intervention, Movants do not concede that any

language in Universal Underwriters would prevent Movants from making a motion

for summary judgment or judgment on the pleadings on the issues of the duty to

defend and/or the duty to indemnify prior to trial on the issue of Ousley’s liability.

Movants expressly reserve their rights under the Alabama Rules of Civil Procedure

to make any pretrial motions, including dispositive motions on the issue of the duty

to defend and the duty to indemnify. See n.3.

3 The distinction between intervention as a matter of right and permissive intervention is (and by extension the duty to defend and the duty to indemnify), is no small thing. The Court in Universal Underwriters found that because the duty to indemnify (the basis for permissive intervention in that case) only arose after a judgment was entered against the insured, “[t]he judge would consider the coverage issue only if he or she rendered a judgment for the plaintiff in the first [liability] phase.” Universal Underwriters, 574 So. 2d. at 724. In this case, reserving a determination on the issue of the duty to defend until after a trial on liability would deprive the Movants of any meaningful relief. Movants would have already paid considerable fees and expenses to retained counsel for taking the case to a final judgment.

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/s/ J. Evans Bailey J. EVANS BAILEY (BAI062)

Attorneys for Proposed Intervenor Plaintiffs OF COUNSEL: RUSHTON, STAKELY, JOHNSTON & & GARRETT, P.A. Post Office Box 270 Montgomery, AL 36101 (334) 206-3114 Telephone (334) 481-0848 Facsimile [email protected]

CERTIFICATE OF SERVICE

I hereby certify that I electronically filed the foregoing with the Clerk of the Court through AlaFile, and have also provided a copy of same to all counsel of record via electronic transmission and/or by placing a copy of same in the United States Mail, postage prepaid on this the 9th day of February, 2018.

Evan G. Allen

Beasley Allen Crow Methvin Portis & Miles, PC Post Office Box 4160

Montgomery, Alabama 36103-4160 [email protected]

Craig Shelby Dillard

Webb & Eley Post Office Box 240909

Montgomery, Alabama 36124 [email protected]

Robert Merrill Girardeau

Huie, Fernambucq & Stewart, LLP 2801 Highway 280 S, Suite 200 Birmingham, Alabama 35223

[email protected]

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Thomas Marvin Little Todd Neal Hamilton

Smith, Spires, Peddy, Hamilton & Coleman, PC 2015 Second Avenue North, Suite 200

Birmingham, Alabama 35203 [email protected]

[email protected]

Doug Davenport Cullman County Park & Recreation

1544 Sportsman Lake Road NW Cullman, Alabama 35055

Kenneth Walker Kerry Watson

Gary Marchman 500 2nd Avenue SW, Room 105

Cullman, Alabama 35055

/s/ J. Evans Bailey Of Counsel

DOCUMENT 78

document 17 electronically filed 11/1/2017 12:38 pm 25-cv ...€¦ · cv no. cv-2017-900404 jury...

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