"It is well settled `that [an] insurer's duty to defend is more extensive than its duty to [indemnify]. United States Fid. Guar. Co. v. Armstrong, 479 So.2d 1164, 1168 (Ala. 1985) (citations omitted). Whether an insurance company owes its insured a duty to provide a defense in proceedings instituted against the insured is determined primarily by the allegations contained in the complaint.
However, the district court noted that Alabama courts have interpreted virtually identical policy provisions which limit coverage to injuries not "intended or expected from the standpoint of the insured" as affording coverage except where the insured subjectively intended to cause the injury for which it is found liable. See U.S. Fidelity Guar. Co. v. Armstrong, 479 So.2d 1164, 1167 (Ala. 1985); Alabama Farm Bureau Mut. Cas. Ins. Co. v. Dyer, 454 So.2d 921, 925 (Ala. 1984). The district court found this interpretation of the policy's coverage provisions to be consistent with its duty to resolve policy ambiguities in favor of the insured.
However, because the decision on whether to provide a defense must be made at a preliminary stage in the proceedings, Alabama holds that an insurer's duty to defend may be broader than its duty to indemnify. See Universal Underwriters Ins. Co. v. Stokes Chevrolet, Inc., 990 F.2d 598, 602 (11th Cir. 1993); Universal Underwriters Ins. Co. v. Youngblood, 549 So.2d 76, 78 (Ala. 1989) U.S. Fidelity Guar. Co. v. Armstrong, 479 So.2d 1164, 1168 (Ala. 1985); Lawler Machine Foundry Co. v. Pacific Indem. Ins. Co., 383 So.2d 156, 157 (Ala. 1980). The insurer's duty to defend at this preliminary stage "must be determined primarily from the allegations of the complaint."
The inexplicable failure of Holman to include a statement therein that the court was bound by its past (and recent) pronouncements of the proper standard to be used to interpret the homeowner's policy exclusion there under consideration is simply a legal mystery, the solution for which can only be provided by that court. Another Alabama Supreme Court opinion rendered on September 20, 1985 which reaffirmed the rationale, reasoning and pronouncements of Dyer, Watson and North River Ins. Co. is U.S. Fidelity Guar. Co. v. Armstrong, 479 So.2d 1164 (Ala. 1985), which construed a USF G policy of general liability insurance providing in pertinent part: "The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of
‘It is well settled "that [an] insurer's duty to defend is more extensive than its duty to [indemnify]." United States Fid. & Guar. Co. v. Armstrong , 479 So.2d 1164, 1168 (Ala. 1985) (citations omitted). Whether an insurance company owes its insured a duty to provide a defense in proceedings instituted against the insured is determined primarily by the allegations contained in the complaint.
The pollution exclusion clause at issue appears to be standard in the insurance industry and commonly contained in commercial general liability insurance policies. The Supreme Court of Alabama previously has considered whether sewage is pollution under a qualified pollution-exclusion clause, and concluded, under the facts of that case, that it was not, see United States Fidelity and Guar. Co. v. Armstrong, 479 So. 2d 1164 (Ala. 1985), but has not considered whether sewage is pollution under an absolute pollution-exclusion clause. Evanston's position in this case is that the injuries claimed in the two underlying suits fit within the policy exclusion for property damage or bodily injury caused by pollutants, which by policy definition includes "waste," which is further qualified as including materials to be recycled, reconditioned, or reclaimed. (Doc. #82-4 at p.13).
Tanner v. State Farm Fire & Cas. Co., 874 So. 2d 1058, 1063 (Ala. 2003) (citing Porterfield v. Audubon Indem. Co., 856 So. 2d 789, 791-92 (Ala. 2002)). While ordinarily the two duties "must be analyzed separately," id. at 1066 (quoting U.S. Fid. & Guar. Co. v. Armstrong, 479 So. 2d 1164, 1167 (Ala. 1985)), because the duty to defend is broader, no duty to indemnify exists where there is no duty to defend, id. at 1063. For this reason, the court begins by analyzing Indian Harbor's purported duty to defend.
Ajdarodini v. State Auto Mut. Ins. Co., 628 So.2d 312, 313 (Ala. 1993); Ladner Co. Inc. v. SouthernGuar. Ins. Co., 347 So.2d 100, 102 (Ala. 1977). Under Alabama law, the insured bears the burden of establishing coverage by demonstrating that a claim falls within the insurance policy, Colonial Life Accident Ins. Co. v. Collins, 280 Ala. 373, 194 So.2d 532, 535 (1967), while the insurer bears the burden of proving the applicability of any policy exclusions. Universal Underwriters Ins. Co. v. Stokes Chevrolet, 990 F.2d 598, 605 (11th Cir. 1993) (citing United States Fidelity Guar. Co. v. Armstrong, 479 So.2d 1164, 1168 (Ala. 1985)); see also Jordan v. National Accident Ins. Underwriters, Inc., 922 F.2d 732, 735 (11th Cir. 1991). According to the Alabama Supreme Court, "insurance companies have the right to limit the coverage offered through the use of exclusions in their policies, provided that those exclusions do not violate a statute or public policy."
"It is well settled `that [an] insurer's duty to defend is more extensive than its duty to [indemnify].' United States Fid. Guar. Co. v. Armstrong, 479 So.2d 1164, 1168 (Ala. 1985) (citations omitted). Whether an insurance company owes its insured a duty to provide a defense in proceedings instituted against the insured is determined primarily by the allegations contained in the complaint.
Ajdarodini v. State Auto Mut. Ins. Co., 628 So.2d 312, 313 (Ala. 1993). See also Tanner v. State Farm Fire & Cas. Co., 874 So.2d 1058, 1063 (Ala. 2003); U.S. Fid. & Guar. Co. v. Armstrong, 479 So.2d 1164, 1168 (Ala. 1985) (“[T]he duty to defend arises when the original complaint alleges a state of facts within the coverage of the policy.”). When read in context, however, none of the cases cited by Frankemuth address whether the duty to defend could arise before the filing of a complaint.