Ex parte National Trust Insurance Company, [Ms. SC-2023-0515, May 24, 2024] __ So. 3d __ (Ala. 2024). The Court (Wise, J.; Parker, C.J., and Shaw, Sellers, Mendheim, Stewart, Mitchell, and Cook, JJ., concur) denies in part and grants in part National Trust Insurance Company’s (“National Trust”) motion to dismiss a third-party complaint filed against it by Whaley Construction Company, Inc. (“Whaley”) based on the prior pending action statute.
National Trust had filed a declaratory judgment in the United States District Court for the Middle District of Alabama against its insured Whaley and others alleging that due to delay in providing notice of the occurrence, National Trust did not have a duty to indemnify Whaley and certain additional insureds in connection with this litigation filed in the Pike Circuit Court asserting claims for personal injury and wrongful death on behalf of Timothy Bozeman who was injured and subsequently died as a result of injuries he suffered when he fell through a hole in a roof while working on a construction project at Lockheed Martin. Whaley was the general contractor on the project.
The Court issues the writ and concludes that Whaley’s “breach-of-contract and bad-faith claims in the state-court action that were based on National Trust’s refusal to indemnify Whaley for the amount it had paid to settle Lockheed Martin’s indemnity claim against it are compulsory counterclaims in the federal-court action. Because the federal-court action had been commenced and was pending at the time Whaley filed its third-party complaint in the state-court action, National Trust has a clear legal right to the dismissal of Whaley’s breach-of-contract and bad-faith claims in the state-court action that were based on National Trust’s refusal to indemnify Whaley for the amount it had paid to settle Lockheed Martin’s indemnity claim against it pursuant to § 6-5-440, Ala. Code 1975.” Ms. *26. This was so because Whaley’s claims in this regard had accrued before it filed its third-party complaint against National Trust in the state-court action. Ms. *25.
The Court denies the writ seeking dismissal pursuant to § 6-5-440 of Whaley’s contract claim based on National Trust’s refusal to indemnify Whaley for any judgment against it in the state-court action. The Court explains that because no judgment had been entered or no settlement reached on the claims against Whaley, “those contingent claims would not constitute compulsory counterclaims in the federal-court action.” Ms. *29.