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INTERPLEADER & CONSTRUCTION OF INSURANCE POLICY - PHARMACISTS MUTUAL INS. CO. V. ADVANCED SPECIALTY PHARMACY LLC

Pharmacists Mutual Ins. Co. v. Advanced Specialty Pharmacy LLC, [Ms. 1140046, Nov. 18, 2016] __ So. 3d __ (Ala. 2016). The Court reverses a judgment of the Jefferson Circuit Court which held in the context of an interpleader action that a commercial general liability insurer owed an additional $3 million in liability insurance coverage under its policies' products/completed work-hazard aggregate limit to afford coverage for 17 injuries and 9 deaths attributable to serious bloodstream infections from administrations in Alabama hospitals of total parenteral nutrition injections. The issue of the amount of liability insurance coverage owed came before the Supreme Court upon review of the Jefferson Circuit Court's entry of summary judgment. Because the circuit court interpreted the insurance policy as a matter of law, its interpretation is subject on appeal to de novo review. Ms. *16.

The basic rules concerning interpretation of insurance policies are as follows:

"'When analyzing an insurance policy, a court gives words used in the policy their common, everyday meaning and interprets them as a reasonable person in the insured's position would have understood them. Western World Ins. Co. v. City of Tuscumbia, 612 So. 2d 1159 (Ala. 1992); St. Paul Fire & Marine Ins. Co. v. Edge Mem'l Hosp., 584 So. 2d 1316 (Ala. 1991). If, under this standard, they are reasonably certain in their meaning, they are not ambiguous as a matter of law and the rule of construction in favor of the insured does not apply. Bituminous Cas. Corp. v. Harris, 372 So. 2d 342 (Ala. Civ. App. 1979). Only in cases of genuine ambiguity or inconsistency is it proper to resort to rules of construction. Canal Ins. Co. v. Old Republic Ins. Co., 718 So. 2d 8 (Ala. 1998). A policy is not made ambiguous by the fact that the parties interpret the policy differently or disagree as to the meaning of a written provision in a contract. Watkins v. United States Fid. & Guar. Co., 656 So. 2d 337 (Ala. 1994). A court must not rewrite a policy so as to include or exclude coverage that was not intended. Upton v. Mississippi Valley Title Ins. Co., 469 So. 2d 548 (Ala. 1985).'

"B.D.B. v. State Farm Mut. Auto. Ins. Co., 814 So. 2d 877, 879-80 (Ala. Civ. App. 2001). However, if a provision in an insurance policy is found to be genuinely ambiguous, 'policies of insurance should be construed liberally in respect to persons insured and strictly with respect to the insurer.' Crossett v. St. Louis Fire & Marine Ins. Co., 289 Ala. 598, 603, 269 So. 2d 869, 873 (1972)."

State Farm Mut. Auto. Ins. Co. v. Brown, 26 So. 3d 1167, 1169-70 (Ala. 2009).

Ms. *16-17. Here, the Court concludes the Jefferson Circuit Court erred in construing the language of the products/completed-work-hazard aggregate limit such that its judgment was due to be reversed.

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