Alabama Counties’ Insurance Fund Not Liable for its Own Actions in Deadly Dock Fire

Insurers and authorities self-insurance swimming pools must be respiration a sigh of reduction after the Alabama Supreme Court docket absolved a county commissions’ fund of direct legal responsibility in a marina fireplace that killed eight folks and destroyed three dozen boats.

The courtroom overturned a call by a circuit decide in Jackson County and ordered the decide to dismiss the Affiliation of County Commissions’ Legal responsibility Self-Insurance coverage Fund from a lawsuit introduced by victims and households of the folks killed within the 2020 fireplace. The excessive courtroom held that state legislation exempts the fund from legal responsibility aside from what the fund is obligated to pay to the insured county.

The assertion got here regardless of the conflicting wording of the state legislation.

“We agree with the plaintiffs that the primary sentence of (Statute) 11-30-7 doesn’t entitle the Fund to immunity from claims based mostly by itself alleged torts,” Justice Sarah Stewart wrote for almost all.

The second line of the statute, nonetheless, does seem to grant the Fund immunity from third-party claims, the courtroom determined.

The plaintiffs within the case employed a considerably uncommon tactic, charging that the Fund itself was at fault as a result of it didn’t correctly examine the county-owned dock and marina, and to observe a security program. The lawsuit alleges that the dock had electrical issues that ought to have been flagged in an inspection and repaired.

The Nationwide Transportation Security Board’s investigation of the fireplace additionally faulted the county for not having a pre-fire plan in place, and for not having life jackets, floatation rings, or a skiff on the dock for emergencies. Boats and the dock have been cluttered with chairs, tables, grills and propane tanks, contributing gasoline to the fireplace and making escape troublesome.

The hearth, on the Tennessee River in Scottsboro, in northeast Alabama, was described as a horrific scene when it blazed uncontrolled on the evening of Jan. 27. The reason for the fireplace was not clear, however the investigation mentioned it appeared to originate close to one boat’s electrical panel, in keeping with information stories and the NTSB report.

The hearth shortly unfold to the dock and different boats, trapping folks as they slept and blocking some from reaching the shore. Plenty of boats on the crowded marina have been inoperable and couldn’t be moved to security. Others caught fireplace and drifted into different vessels, spreading the conflagration.

“That is completely devastating and definitely in my expertise, one of the crucial devastating issues I’ve ever seen,” Scottsboro Hearth Chief Gene Necklause, mentioned the morning after, in keeping with the New York Instances.

The Supreme Court docket ruling didn’t point out how a lot the county fee self-insurance fund and different insurers have paid out on claims from the fireplace, or if the county will likely be allowed sovereign immunity for a few of the damages. Officers and attorneys for the fund couldn’t be reached Wednesday, however the Fund’s temporary within the case notes that state legislation caps the Fund’s protection at $300,000.

The case will now proceed towards the county and different defendants, as soon as the circuit courtroom dismisses the Fund from the go well with.

The excessive courtroom’s opinion seems to vary a bit from its personal 1987 determination in Howton vs. State Farm Mutual Auto Insurance coverage Co. That opinion held that the rule barring tort actions towards an insurer doesn’t apply when an insurer, “appearing independently of its insured, commits a tort towards a third-party claimant.”

Within the Scottsboro fireplace case, the courtroom famous that the statute authorizing the legal responsibility pool features a broad assertion of immunity, aside from for what the fund had contracted for with the insured counties. The plaintiffs’ attorneys argued that the part merely limits the contractual legal responsibility {that a} self-insurance pool might incur.

Related difficulty: Ought to Coverage Pay for an Ounce of Prevention, Not Simply Losses?

The trial decide within the county the place the fireplace occurred agreed and refused to dismiss the go well with in late 2021.

“The trial courtroom reasoned that, as a result of the primary sentence of that statute signifies that an LSIF could possibly be liable to a 3rd occasion if the motion isn’t based mostly on a declare towards a member county, the legislature wouldn’t negate the primary sentence with the inclusion of a second sentence granting such broad immunity,” the Supreme Court docket justices defined.

The justices mentioned that one other part of Alabama legislation, which created danger administration cooperatives for native college districts, accommodates related language granting legal responsibility immunity to the cooperatives. That statute, nonetheless, features a notable clarification. The final line of the part reads that it doesn’t prohibit actions because of fraud introduced towards the cooperatives.

The Legislature might have determined that the immunity granted danger cooperatives and county insurance coverage swimming pools is required to guard taxpayers, the Supreme Court docket mentioned.

“… We acknowledge that the legislature might have decided that immunizing LSIFs from tort legal responsibility would serve to guard these public funds and the general public function served by LSIFs. Certainly, this Court docket has lengthy acknowledged the legislature’s means to increase immunity from tort legal responsibility to counties, municipalities, and different governmental entities.”

Picture: The charred stays of the dock fireplace in January 2020. (AP Picture/Jay Reeves, File)

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Alabama