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BREACH OF INSURANCE CONTRACT - WAIVER - ANTICIPATORY BREACH - THOMAS V. SAFEWAY INSURANCE CO. OF ALABAMA, INC.

Thomas v. Safeway Insurance Co. of Alabama, Inc., [Ms. 260613, Aug. 4, 2017] __ So. 3d __ (Ala. Civ. App. 2017). In a unanimous decision by Presiding Judge Thompson (Pittman, Thomas, Moore, and Donaldson, JJ., concur), the court affirms a summary judgment for Safeway in a breach of contract and bad faith action arising from Thomas’s claim for benefits under a medical payments provision of an automobile insurance policy. Despite repeated requests that the insured sign a proof-of-loss form, which among other things, sets out the insured’s obligation to protect Safeway’s right to subrogate against the at-fault party, the insured did not sign a proof-of-loss form prior to settling her liability claim against the at-fault driver. The circuit court granted summary judgment on the breach of contract and bad faith claims. The circuit court concluded the insured had failed to comply with conditions precedent in the policy, and that Safeway had never denied the claim because it had never been presented to Safeway by a proof of loss required by the policy.

On appeal, Thomas contended that Safeway should be liable under the doctrine of anticipatory breach/repudiation. However, the court noted that:

“Merely because a given act or course of conduct of one party to a contract is inconsistent with the contract is not sufficient; it must be inconsistent with the intention to be … bound by it.”

“Repudiation, among other things, means rejection, disclaimer, renunciation, or even abandonment.”

Ms. At 16-17, quoting Draughon’s Business College v. Battles, 35 Ala. App. 587, 590, 50 So. 2d 788, 790 (1951) (internal quotation marks omitted). The court did not reach the merits of the anticipatory breach/repudiation argument, as it concluded that Thomas did not “advance [ ] the argument of anticipatory breach before the trial court.” Ms. At 18. The court held:

“‘ The trial court cannot be reversed on any ground or argument not presented for or against the motion [for a summary judgment].’ Ex parte Ryals, 773 So. 2d 1011, 1013 (Ala. 2000). ‘It is well settled that an appellate court may not hold a trial court in error in regard to theories or issues not presented to that court.’ Allsopp v. Bolding, 86 So. 3d 952, 962 (Ala. 2011).”

Ms. At 18.

The court also rejected Thomas’s argument that her refusal to sign the proof-of-loss containing subrogation language was justified because such would amount to an assignment of her claim against the tortfeasor robbing her of standing to pursue the tortfeasor. The court held that it agreed with the trial court’s reading of Broadnax v. Griswold, 17 So. 3d 656, 659-60 (Ala. Civ. App. 2008), that the language in the proof-of-loss did not amount to an assignment of the claim against the tortfeasor because it contained language limiting the assignment to Safeway “to the extent of the payment made or advanced under this policy.” Ms. At 20.

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