Alabama Municipal Insurance Corporation v. Willie Allen

REL: 9/26/2014

Notice: This opinion is subject to formal revision before publication in the advance

sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,

Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-

0649), of any typographical or other errors, in order that corrections may be made before

the opinion is printed in Southern Reporter.

SUPREME COURT OF ALABAMA

SPECIAL TERM, 2014

____________________

1121006

____________________

Alabama Municipal Insurance Corporation

v.

Willie Allen

Appeal from Madison Circuit Court

(CV-08-901036)

____________________

1121014

____________________

Alabama Municipal Insurance Corporation

v.

Amber Holmes

Appeal from Madison Circuit Court

(CV-09-901297)

____________________

1121038

____________________

City of Madison

v.

Amber Holmes

Appeal from Madison Circuit Court

(CV-09-901297)

___________________

1121039

____________________

City of Madison

v.

Willie Allen

Appeal from Madison Circuit Court

(CV-08-901036)

PER CURIAM.

The issue in these four appeals is whether the $100,000

statutory cap of § 11-47-190, Ala. Code 1975, applies when a

peace officer, acting outside his employment, is sued in the

officer's individual capacity.

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1121006; 1121014; 1121038; 1121039

Facts and Procedural History

On January 6, 2008, Amber Holmes and Willie Allen were

injured in an automobile accident when the car they were in

was struck by a police patrol car driven by Richard Alan

Beard. At the time of the accident, Beard, who was employed

by the City of Madison Police Department as a patrol officer,

was on his way to work and was late for his shift. The City of

Madison ("the City") allows its police officers to drive their

patrol cars to their homes, to work, and to gym facilities

(the City pays officers for the time they spend exercising).

Beard was traveling 103 miles per hour in a 45-mile-per-hour

zone at the time of the accident. A drug test performed on

Beard after the accident indicated the presence of marijuana

in his system.

The City had an automobile-insurance policy with Alabama

Municipal Insurance Corporation ("AMIC"). The patrol car

assigned to Beard was included in the policy. The policy

provides:

"1. Who is an Insured

"The following are 'insureds':

"a. You for any covered 'auto'.

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1121006; 1121014; 1121038; 1121039

"b. Anyone else while using with your permission

a covered 'auto' you own, hire or borrow ...."

On October 28, 2008, Allen sued Beard individually,

alleging negligence and wantonness. Allen sued State Farm

Mutual Insurance Company ("State Farm"), seeking

uninsured/underinsured-motorist benefits because the car

driven by Allen and owned by Holmes was insured by State Farm.

Allen also sued his car insurer, Government Employee Insurance

Corporation, seeking uninsured/underinsured-motorist benefits.

On November 30, 2009, Holmes sued Beard individually, alleging

negligence and wantonness.1 Holmes also sued her insurer,

State Farm, seeking uninsured/underinsured-motorist benefits.2

On December 30, 2009, State Farm filed a cross-claim

against Beard and purported o file a cross-claim against the

City seeking reimbursement and subrogation for medical

benefits paid to Allen. On November 22, 2010, the City filed

a motion to dismiss the cross-claim, asserting that it was not

named in the complaint and that, therefore, no cross-claim

1

Neither Allen's nor Holmes's complaint alleged that Beard

was acting in the line of duty at the time of the accident.

2

These proceedings were stayed while criminal charges

against Beard were pursued. Subsequently, the stay was

lifted.

4

1121006; 1121014; 1121038; 1121039

could be filed against it. On January 14, 2011, the trial

court granted the City's motion to dismiss the cross-claim.

On September 20, 2011, Beard filed a motion for a partial

summary judgment (on the issue of damages in both actions,

arguing that the $100,000 damages cap of § 11-47-190, Ala.

Code 1975, and § 11-93-2, Ala. Code 1975, read in conjunction

with the indemnification provisions of § 11-47-24, Ala. Code

1975, applied because he was on duty when the accident

occurred. On November 7, 2011, the trial court consolidated

the actions for trial. The trial court denied Beard's

summary-judgment motion seeking to apply the damages cap.

Beard filed a renewed motion for a partial summary judgment

before trial, again arguing that the $100,000 damages cap

applied in both Allen's and Holmes's actions against him. The

trial court denied the renewed motion for a partial summary

judgment.

Following ore tenus proceedings, the trial court, on

September 25, 2012, entered a judgment in favor of Allen and

against Beard in the amount of $700,000 and a separate

judgment in favor of Holmes and against Beard in the amount of

$1,100,000. In both orders, the trial court stated:

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1121006; 1121014; 1121038; 1121039

"Ala. Code 1975, Section 11-93-2, limits the

recovery of damages against a governmental entity to

$100,000.00 for bodily injury for one person in any

single occurrence. However, under the language of

the statute and the facts of this case, the

limitation on recovery does not apply to this

judgment against the individual defendant, Richard

Alan Beard."

On November 6, 2012, the City and AMIC filed a joint

motion to intervene in the consolidated action. In their

motion, the City and AMIC argued that both the City and AMIC

were the real parties in interest relating to the collection

of the judgment because Beard was employed by the City and, at

the time of the accident, was driving a car issued to him by

the City and insured by AMIC. AMIC admitted that Beard was an

insured under its policy with the City. That same day, the

City filed a motion to deposit $100,000 with the court to

satisfy the judgment entered in favor of Allen and $100,000 to

satisfy the judgment entered in favor of Holmes.

Specifically, the City stated:

"The Final Judgment entered against Defendant

Beard was based on his negligence while acting

within the scope of his duties and operating a motor

vehicle as a police officer for the City of Madison.

Thus, pursuant to § 11-47-24, [Ala. Code 1975,] the

City of Madison is required to indemnify Defendant

Beard for the judgment entered against him based

upon his negligence while operating a motor vehicle

engaged in the course of his employment. However,

6

1121006; 1121014; 1121038; 1121039

pursuant to § 11-47-190, [Ala. Code 1975,] when

indemnifying an employee for a judgment entered

against him pursuant to § 11-47-24, the City cannot

be required to pay an amount in excess of $100,000

per injured person. See Ala. Code [1975,] § 11-47-

190; Benson v. City of Birmingham, 659 So. 2d 82

(Ala. 1995). Therefore, the cap in § 11-47-190

applies, and the City of Madison can only be

required to pay up to $ 100,000 of the final

judgment entered against Defendant Beard.

"Furthermore, the cap on damages in § 11-47-190

applies to the judgment entered against Defendant

Beard. As previously stated, § 11-47-190 provides,

'no recovery may be had under any judgment or

combination of judgments, whether direct or by way

of indemnity under Section 11-47-24, or otherwise,

arising out of a single occurrence against a

municipality, and/or any officer or officers, or

employee or employees, or agents thereof, in excess

of a total of $100,000.' Ala. Code [1975,] § 11-47-

190. As the Alabama Supreme Court explained in

Benson v. City of Birmingham, '[t]he need to

preserve the public coffers does not disappear

simply because the plaintiff has proceeded against

a negligent employee of the municipality rather

than, or in addition to, proceeding directly against

the municipality.' 659 So. 2d at 86. The legislature

affirmed this principle when it passed § 11-47-190,

capping damages against municipalities as well as

the officers, employees, and agents of

municipalities. See id. at 87. Defendant Beard was

acting as a City of Madison police officer at the

time of the incident made the basis of this cause of

action. Therefore, the $100,000 cap contained in §

11-47-190 applies to the Final Judgment entered

against Defendant Beard.

"On October 25, 2012 the City tendered the sum

of $100,000.00 payable to Willie Allen to satisfy

this judgment. Counsel for Allen rejected this

payment and refused the tender. Attached hereto,

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1121006; 1121014; 1121038; 1121039

labeled as Exhibit A hereof and made a part hereof

by reference, is a copy of the hand-delivered letter

with attached check.

"Therefore, the City of Madison wishes to

deposit with this Court the sum of $100,000.00 in

damages as full and final satisfaction of this

judgment.

"Pursuant to Rule 67 of the Alabama Rules of

Civil Procedure, the City of Madison, Alabama,

requests that this Court enter an order authorizing

the deposit into the Registry of the Court, the sum

of $100,000.00, and that such sum be deposited by

the Clerk into an interest bearing account with the

Court's authorized banking institution at the rate

of interest prevailing on the date of the deposit.

The City of Madison further requests that the money

not be released to the Plaintiff, except upon full

and final satisfaction of this judgment."

Both Allen and Holmes objected to the joint motion to

intervene. On November 8, 2012, AMIC filed motions for a

declaratory judgment in both actions, arguing that the City

was required to provide Beard with defense counsel under § 11-

47-24 and to indemnify him for any judgment rendered against

him. AMIC further argued that the judgment collected by Allen

or Holmes against Beard is limited to $100,000 under § 11-47-

190.

On December 26, 2012, the trial court granted the joint

motion to intervene but denied the City's motion to deposit

money to satisfy the judgments. On December 27, 2012, Allen

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1121006; 1121014; 1121038; 1121039

filed a response to AMIC's declaratory-judgment motion and

asserted additional defenses, including res judicata,

collateral estoppel, statute of limitations, failing to issue

a "reservation of rights," and Beard's failure to appeal the

trial court's order on the application of the $100,000 cap.

Allen also filed a counterclaim pursuant to §§ 27-23-1 and

27-23-2, Ala. Code 1975, seeking to apply AMIC's insurance

policy to satisfy the judgment. On January 13, 2013, Holmes

filed a response to AMIC's motion for a declaratory judgment

and asserted the same additional defenses asserted by Allen,

along with an argument that § 11-93-2, § 11-47-24, and § 11-

47-190 do not apply to a suit against a governmental employee

in his individual capacity. Holmes also asserted a direct-

action counterclaim against AMIC pursuant to §§ 27-23-1 and

27-23-2.

On January 28, 2013, the City filed a motion "to alter,

amend, or vacate" the trial court's order denying its motion

to deposit money to satisfy the judgments. On February 1,

2013, Beard filed a motion to substitute the City as the real

party in interest.

9

1121006; 1121014; 1121038; 1121039

On March 19, 2013, Allen filed a summary-judgment motion,

arguing that Beard was sued in his individual capacity, that

the City was never sued, that Beard failed to appeal the trial

court's findings that he was not engaged in the performance of

his duties or engaged in work for the City at the time of the

accident, and that, therefore, the municipal-damages cap did

not apply. Allen further argued that because the $100,000

municipal-damages cap did not apply, AMIC as the insurer for

the vehicle operated by Beard was obligated to pay the entire

judgment. On March 26, 2013, Holmes filed a summary-judgment

motion, also arguing that the statutory cap of § 11-47-190

does not apply to an action against a government employee who

is sued in his individual capacity.

On April 12, 2013, the trial court held a hearing on all

pending motions. On April 24, 2013, the trial court entered

an order denying the City's motion to alter, amend, or vacate

its judgment of December 26, 2012, in which the trial court

had denied the City's motion to deposit funds. The trial court

also denied Beard's motion for substitution and entered a

summary judgment in favor of Allen and Holmes and against

AMIC. The City and AMIC appealed separately.

10

1121006; 1121014; 1121038; 1121039

Discussion

The dispositive issue in this case is whether the

$100,000 statutory cap of § 11-47-190 applies when a municipal

peace officer, acting outside his employment with the

municipality, is sued in his individually capacity.

The City argues in case no. 1121038 and case no. 1121039

that the trial court erred in not allowing it to deposit

$100,000 to satisfy the judgment in favor of Allen and

$100,000 to satisfy the judgment in favor of Holmes because

the second sentence of § 11-47-190 uses the phrase "no

recovery of any judgment." The City argues that this phrase

includes a judgment obtained against a municipal peace officer

who has been sued in his individual capacity. The City

further argues that § 11-47-24 requires the City to indemnify

its employees for their negligent actions, regardless of

whether the employee is sued in his or her official capacity

or individual capacity. The City argues that, under § 11-47-

24, it is the real party in interest, because it is obligated

to defend and indemnify its employees. Lastly, the City

argues that the trial court should have allowed it to deposit

money to satisfy the judgments because the City's liability is

11

1121006; 1121014; 1121038; 1121039

limited under the statutory cap, and, even if the cap is not

applicable, the City should have been allowed to deposit the

money to stop the accrual of interest on the final judgment.

AMIC argues in case no. 1121006 and case no. 1121014 that

§ 11-47-190 applies to "any judgment" against a municipal

employee. AMIC argues that § 11-47-190 has no field of

operation if it applies only to claims against municipal

employees sued in their official capacity or as a result of

acts occurring within the line of their duty. AMIC further

argues that the historical context of the amendment to § 11-

47-190 and Benson v. City of Birmingham, 659 So. 2d 82, 87

(Ala. 1995), indicate that § 11-47-190 applies to reduce the

collection of "any judgment." AMIC contends that neither

Allen nor Holmes specifically stated that Beard was being sued

in his individual capacity. AMIC argues that Holmes and Allen

do not have standing to challenge the City's indemnification

of Beard under § 11-47-24. Lastly, AMIC argues that § 11-47-

190 is a collections cap and serves to limit the amount Holmes

and Allen can collect against AMIC as the City's insurer.

Section 11-93-2 provides a $100,000 cap for recovery

against "a governmental entity," which, as defined in § 11-93-

12

1121006; 1121014; 1121038; 1121039

1(1), Ala. Code 1975, includes both municipalities and

counties. Under § 11-47-24(a), municipal corporations are

required to indemnify their employees under certain

situations:

"Whenever any employee of a municipal corporation of

the State of Alabama shall be sued for damages

arising out of the performance of his official

duties, and while operating a motor vehicle or

equipment engaged in the course of his employment,

such government agency shall be authorized and

required to provide defense counsel for such

employees in such suit and to indemnify him from any

judgment rendered against him in such suit. In no

event shall a municipal corporation of the state be

required to provide defense and indemnity for

employees who may be sued for damages arising out of

actions which were either intentional or willful or

wanton."

Section 11-47-190 provides:

"No city or town shall be liable for damages for

injury done to or wrong suffered by any person or

corporation, unless such injury or wrong was done or

suffered through the neglect, carelessness, or

unskillfulness of some agent, officer, or employee

of the municipality engaged in work therefor and

while acting in the line of his or her duty, or

unless the said injury or wrong was done or suffered

through the neglect or carelessness or failure to

remedy some defect in the streets, alleys, public

ways, or buildings after the same had been called to

the attention of the council or other governing body

or after the same had existed for such an

unreasonable length of time as to raise a

presumption of knowledge of such defect on the part

of the council or other governing body and whenever

the city or town shall be made liable for damages by

13

1121006; 1121014; 1121038; 1121039

reason of the unauthorized or wrongful acts or

negligence, carelessness, or unskillfulness of any

person or corporation, then such person or

corporation shall be liable to an action on the same

account by the party so injured. However, no

recovery may be had under any judgment or

combination of judgments, whether direct or by way

of indemnity under Section 11-47-24, or otherwise,

arising out of a single occurrence, against a

municipality, and/or any officer or officers, or

employee or employees, or agents thereof, in excess

of a total $100,000 per injured person up to a

maximum of $300,000 per single occurrence, the

limits set out in the provisions of Section 11-93-2

notwithstanding."

Both the City and AMIC cite Suttles v. Roy, 75 So. 3d 90

(Ala. 2010). In Suttles, a pedestrian sued the City of

Homewood and one of its police officers, who was driving a

motorcycle that struck her. The police officer was sued in

both his official and individual capacities. Homewood and the

officer argued that the officer was immune from suit in his

individual capacity because, they argued, he was acting within

the line and scope of his employment. This Court noted that

a sheriff and municipal peace officers are protected from

suits seeking damages from them in their individual capacity

by two different forms of immunity: Sheriffs are protected by

State immunity under Ala. Const. 1901, art. I, § 14, and

municipal peace officers are protected by State-agent immunity

14

1121006; 1121014; 1121038; 1121039

under the principles set out in Ex parte Cranman, 792 So. 2d

392 (Ala. 2000). We noted that it appeared that the trial

court had not yet addressed whether the facts would support a

finding that the officer was entitled to State-agent immunity.

In Suttles, Homewood and the officer argued that if the

pedestrian could sue the officer in his individual capacity,

then the recoverable damages against the officer were capped

at $100,000 under § 11-47-190. This Court stated that,

although the statutory cap on recovery against "a governmental

entity" set forth in § 11-93-2 applied to a suit against a

municipal employee in his official capacity, it did not apply

to a suit against a municipal employee who is sued in his

individual capacity. With regard to § 11-47-190, this Court

noted:

"[The officer] and Homewood also state in the

'summary of argument' and the 'conclusion' portions

of their brief that the plain language of § 11-47-

190 provides that no recovery may be had against an

employee of a municipality in excess of $100,000,

regardless of whether the employee is sued in his

individual or official capacity. No explanation or

elaboration on this argument is found in the initial

brief, and no authority is cited supporting their

interpretation of the Code section. Therefore, we

decline to address this issue."

15

1121006; 1121014; 1121038; 1121039

75 So. 3d at 99 n.5. Additionally, when this Court overruled

the officer and Homewood's application for rehearing, Justice

Shaw concurred specially, stating:

"In the third issue in their brief on rehearing,

Homewood and [the officer] contend that, if [the

pedestrian] is able to assert individual-capacity

claims against [the officer], then any damages award

must be capped at $100,000 by Ala. Code 1975, §

11–47–190. As noted in the opinion on original

submission, we have refused to address this issue

based on the lack of argument regarding it in

Homewood and [the officer's] initial brief. Because

we do not address this issue, it must wait to be

resolved on another day."

75 So. 2d at 104 (emphasis added).

While the appeals in the present case were pending, the

issue whether claims against a municipal employee sued in his

individual capacity are subject to the statutory cap of § 11-

47-190 when those claims fall within the "willful and wanton"

exceptions to the doctrine of State-agent immunity under Ex

parte Cranman, 792 So. 2d 392 (Ala. 2000), was before this

Court in Morrow v. Caldwell, [Ms. 1111359, March 14, 2014]

So. 3d (Ala. 2014). This Court stated in Morrow:

"The first sentence of § 11-47-190 recognizes

the principle that municipalities are generally

immune from suit ('No city or town shall be liable

for damages ....') and then provides an exception

for actions seeking damages for the negligent acts

of the agents or employees of municipalities

16

1121006; 1121014; 1121038; 1121039

('unless such injury or wrong was done or suffered

through the neglect, carelessness, or unskillfulness

of some agent, officer, or employee'). There is no

exception in the statute allowing an action against

a municipality for the wanton or willful conduct of

its agents or employees. Cremeens v. City of

Montgomery, 779 So. 2d 1190, 1201 (Ala. 2000)('A

municipality cannot be held liable for the

intentional torts of its employees. See Ala. Code

1975, § 11-47-190 ....'); Town of Loxley v. Coleman,

720 So. 2d 907, 909 (Ala. 1998) ('This Court has

construed § 11–47–190 to exclude liability for

wanton misconduct.').

"Further, this Court has interpreted the first

sentence of § 11-47-190 as serving

"'to limit municipality liability to two

distinct classes. In the first

classification, the municipality may be

liable, under the doctrine of respondeat

superior, for injuries resulting from the

wrongful conduct of its agents or officers

in the line of duty. In the second

classification, the municipality may be

liable for injuries resulting from its

failure to remedy conditions created or

allowed to exist on the streets, alleys,

public ways, etc., by 'a person or

corporation not related in service to the

municipality.' Isbell v. City of

Huntsville, 295 Ala. 380, 330 So. 2d 607,

609 (1976); City of Birmingham v. Carle,

191 Ala. 539, 542, 68 So. 22, 23 (1915).

The municipality must have actual or

constructive notice of the condition. If

the claim is predicated under the second

classification, then the third party shall

also be liable. Isbell, supra, 330 So. 2d

at 609, Carle, 191 Ala. at 541-42, 68 So.

at 23.'

17

1121006; 1121014; 1121038; 1121039

"Ellison v. Town of Brookside, 481 So. 2d 890, 891-

92 (Ala. 1985).

"The second sentence of § 11-47-190, which

provides a cap on any recovery on a judgment

resulting therefrom, begins with the word 'however.'

The use of the sentence adverb (or conjunctive

adverb)3 'however' indicates that the second sentence

modifies the preceding sentence. Thus, it sets a

limit on the 'recovery' stemming from a 'judgment'

or 'judgments' that result from the liability

allowed by the exception contained in the first

sentence. So, while the first sentence provides

that a municipality may be liable for the negligent

acts of its agents or employees, the second

sentence, by starting with the word 'however,'

limits the 'recovery' from any such resulting

'judgment.' In other words, the 'recovery' that is

capped to $100,000 by the second sentence is the

recovery for any liability in a negligence action

allowed by the first sentence. Thus, when the

second sentence of § 11-47-190 is read in light of

the first sentence, it is clear that the second

sentence is meant to be a limitation on the amount

of damages a person or corporation may recover from

a municipality in those limited situations in which

the municipality may be held liable.

"Morrow advances a different reading of the

second sentence of § 11-47-190. Specifically, he

points to the language that 'no recovery may be had

under any judgment ... against ... any ... employee

... in excess of' $100,000 and contends that this

provides a blanket cap on any damages awarded

against any municipal agent or employee in any

action. In other words, he would interpret the

second sentence as limiting recovery from actions

that are different from the actions allowed by the

first sentence, including recovery in actions

alleging wanton or willful conduct against municipal

employees in their individual capacity. This

reading of § 11-47-190 improperly disconnects the

18

1121006; 1121014; 1121038; 1121039

second sentence from the context of the entire

section and fails to acknowledge the conjunctive

adverb 'however' that links the second sentence to,

and causes it to modify, the first sentence.

"Further, it is clear that the reference to

judgments against 'any officer or officers, or

employee or employees, or agents' in the second

sentence is made because of the need to be clear

that municipal liability is limited to $100,000 even

where that liability is a function of an action

against one of those persons in their official

capacity or of the special statutory indemnity

imposed on a municipality by 11-47-24, Ala. Code

1975. As to the former, in Smitherman v. Marshall

County Commission, 746 So. 2d 1001, 1007 (Ala.

1999), this Court held that 'claims against county

commissioners and employees in their official

capacity are, as a matter of law, claims against the

county and subject to the $100,000 cap contained in

§ 11-93-2[, Ala. Code 1975, capping damages against

governmental entities at $100,000].' Similarly,

claims that are brought against municipal employees

in their official capacity are also, as a matter of

law, claims against the municipality.

"By the same token, because of the need to be

clear that municipal liability is limited to

$100,000 even where that liability is a function of

an action against a municipal employee in his or her

official capacity or of the special statutory

indemnity imposed on the city by 11-47-24, the

second sentence of § 11-47-190 specifically

addresses 'judgments ... by way of indemnity under

Section 11-47-24' that arise from judgments against

'any officer or officers, or employee or employees,

or agents' of a municipality.

"Section 11-47-24, Ala. Code 1975, provides:

"'(a) Whenever any employee of a

municipal corporation of the State of

19

1121006; 1121014; 1121038; 1121039

Alabama shall be sued for damages arising

out of the performance of his official

duties, and while operating a motor vehicle

or equipment engaged in the course of his

employment, such government agency shall be

authorized and required to provide defense

counsel for such employees in such suit and

to indemnify him from any judgment rendered

against him in such suit. In no event shall

a municipal corporation of the state be

required to provide defense and indemnity

for employees who may be sued for damages

arising out of actions which were either

intentional or willful or wanton.

"'(b) All municipal corporations of

the State of Alabama are hereby authorized

to contract at governmental expense for

policies of liability insurance to protect

employees in the course of their

employment.'

"As this Court noted in Benson v. City of

Birmingham, 649 So. 2d 82, 87 (Ala. 1995), by

amending § 11-47-190 in 1994 to add the second

sentence, the legislature clarified the fact that

the limitation on recovery against a municipality

also limits the amount for which a municipality may

indemnify a negligent employee.

"Finally, no language in § 11-47-190 suggests

that it is intended to apply to claims against

municipal employees who are sued in their individual

capacities. Rather, when the statute is read as a

whole, it is clear that the limitation on recovery

in the second sentence of § 11-47-190 is intended to

protect the public coffers of the municipality, not

to protect municipal employees from claims asserted

against them in their individual capacity.4

20

1121006; 1121014; 1121038; 1121039

"3A sentence or conjunctive adverb 'is a word

that modifies a whole previous statement. Frederick

Crews, The Random House Handbook 403 (6th ed. 1992).

"4Under § 11–47–24(a), the City would not be

required to indemnify Morrow for any judgment

against him that was based on damage resulting from

his intentional, willful, or wanton conduct."

Morrow, So. 3d at .

In the present case, the City's and AMIC's arguments that

the second sentence of § 11-47-190, which provides that no

recovery from a municipality may be had under "any judgment,"

whether direct or by way of indemnification under § 11-24-74,

includes "judgments" against an employee, ignore the placement

of the second sentence as a limitation on the "recovery"

stemming from the "judgments" that result from the liability

allowed by the first sentence in § 11-47-190. The first

sentence provides that a municipality may be liable for the

negligent acts of its agents or employees. The second

sentence, by starting with the word "however," limits the

"recovery" from any "judgment" resulting from that liability.

In other words, the "recovery" that is capped to $100,000 by

the second sentence is a recovery against a municipality in a

negligence action, as contemplated by the first sentence (as

well as a recovery against a municipality in an indemnity

21

1121006; 1121014; 1121038; 1121039

action, as also referenced in the second sentence). The City

and AMIC would interpret the second sentence as limiting

recovery from actions that are different from the actions

allowed by the first sentence, including actions against a

municipal employee in his or her individual capacity where

that employee was acting outside the line of his or her duty.

This reading disconnects the second sentence from the first.

It also ignores the language in the second sentence referring

to indemnification under § 11-47-24, which provides that an

employee's actions must "aris[e] out of the performance of his

official duties" in order for the municipality to have

liability when an employee is sued individually, and it

conflicts with Morrow.

The City argues that § 11-47-24 requires it to indemnify

its employees for their negligent actions, regardless of

whether the employee is sued in his or her individual or

official capacity. The City ignores the language in § 11-47-

24 that such conduct has to "aris[e] out of the performance of

his official duties" and "while the employee is engaged in the

course of his employment" with the municipality. Although

obligated under § 11-47-24 to defend and indemnify its

22

1121006; 1121014; 1121038; 1121039

employees when they are sued in their individual capacity,

that obligation arises only in reference to alleged misconduct

occurring in the performance of official duties.

The City argues that it is the "real party in interest"

under Rule 17, Ala. R. Civ. P., and § 11-47-24 because it is

obligated to defend and indemnify its employees. Rule 17

requires that "[e]very action shall be prosecuted in the name

of the real party in interest." (Emphasis added.) This Court

has stated that "'the real party in interest principle is a

means to identify the person who possesses the right sought to

be enforced.'" State v. Property at 2018 Rainbow Drive, 740

So. 2d 1025, 1027 (Ala. 1999)(quoting Dennis v. Magic City

Dodge, Inc., 524 So. 2d 616, 618 (Ala. 1988)). However, the

City would not supplant Beard as the real party in interest.

The fact remains that Allen and Holmes have sued Beard,

individually, and he is personally liable to them under the

judgments that have been entered. Even if the City had an

obligation under § 11-47-24 to indemnify Beard (which it does

not because his acts were found by the trial court in un-

appealed judgments to be outside the scope of his employment),

the City intervened, arguing that it was "the real party in

23

1121006; 1121014; 1121038; 1121039

interest relating to the collection of the judgment[s]"

because it had a duty to indemnify Beard, and it argued that

the judgments were limited to $100,000. Rule 17 applies to

ensure that an action is being "prosecuted" by the proper

plaintiff, and it serves to protect a defendant against a

subsequent action by the party actually entitled to relief.

The City has not cited any authority to support applying Rule

17 to an intervenor seeking to satisfy the judgments against

a defendant.

Lastly, the City argues that the trial court erred in not

allowing it to deposit $200,000 to satisfy both Allen's and

Holmes's judgments because § 11-47-24 requires it to indemnify

its employees. As discussed above, § 11-47-24 does not

require a municipality to indemnify those employees who are

acting outside the performance of official duties. In

conjunction with its argument regarding depositing the money

with the court, the City argues that it should have been

allowed to deposit the money in order to stop the accrual of

interest on any amount owed under the judgments. However, the

City did not raise this argument in the trial court. The

City's arguments at the trial court level were limited to

24

1121006; 1121014; 1121038; 1121039

depositing $200,000 to satisfy both judgments. It is well

settled that this Court will not reverse a trial court's

judgment based on arguments not presented to the trial court.

Lloyd Noland Hosp. v. Durham, 906 So. 2d 157 (Ala. 2005).

AMIC argues that § 11-47-190 has no field of operation if

it applies only to cases brought against a municipal employee

in his official capacity or for acts occurring within the line

of his duty. AMIC argues that, because § 11-93-2 (capping

damages at $100,000) is a cap on damages against a

governmental entity (which must necessarily be paid out of

public coffers), § 11-47-190 must also cover individual-

capacity claims against municipal employees (which would

otherwise be paid out of the employee's individual assets), or

there would be no distinction between the damages cap in § 11-

93-2 and the cap in § 11-47-190 because both would place a cap

on damages against municipal employees only in their official

capacity. In short, AMIC is arguing that § 11-93-2 and § 11-

47-190 would cover the same claims unless § 11-47-190 did not

also pertain to claims against municipal employees sued in

their individual capacity. However, AMIC ignores the language

25

1121006; 1121014; 1121038; 1121039

in § 11-47-190 that the City's obligation to indemnify an

employee is limited.

We agree that municipal liability is limited to $100,000

even where that liability is a function of an action against

a municipal employee in his or her official capacity or of the

special statutory indemnity imposed on the municipality by §

11–47–24. The second sentence of § 11–47–190 specifically

addresses judgments by way of indemnity under § 11–47–24 that

arise from judgments against any officer or officers, or

employee or employees, or any agent or agents of the

municipality. When § 11-47-190 is read as a whole, it is

clear that the limitation on recovery in the second sentence

is intended to protect the public coffers of the municipality,

not to protect municipal employees from claims asserted

against them in their individual capacity.

Next, AMIC argues that the historical context of the 1994

amendment to § 11-47-190 and Benson v. City of Birmingham, 659

So. 2d 82, indicates that § 11-47-190 applies to reduce the

collection of "any judgment." First, we note that Benson

involved a judgment where the peace officer was acting within

the line of his duty for the purposes of imposing liability on

26

1121006; 1121014; 1121038; 1121039

the municipality under the doctrine of respondeat superior.

The present case involves actions arising outside the

employee's line of duty. Second, as already discussed, in

Morrow and Suttles we explained why the language used in § 11-

47-190 is not applicable to "any" judgment.

AMIC argues that Beard was not actually sued in his

"individual capacity" because neither Allen's nor Holmes's

complaints contain the phrase "individual capacity." Both

complaints allege facts indicating that Beard was acting

outside his employment as a police officer when the accident

occurred. The language of the complaint as a whole is

determinative of whether a municipal employee is being sued in

his or her individual or official capacity. Ex parte Alabama

Dep't of Mental Health, 837 So. 2d 808, 811-12 (Ala. 2002).

AMIC argues that Allen and Holmes do not have standing to

challenge the City's indemnification of Beard under § 11-47-24

because, it says, there is no authority expressly prohibiting

the City from indemnifying Beard. The question before us is

not whether there is any statute that prohibits a municipality

from voluntarily indemnifying an employee in Beard's position,

and we decline to address that issue. The question before us

27

1121006; 1121014; 1121038; 1121039

is whether there is a statute that obligates the City to do

so. For the reasons discussed above, we conclude that there

is not.

Lastly, AMIC argues that § 11-47-190 is a collection cap

and limits the amount Allen and Holmes can collect against

AMIC as the City's insurer. In support of this argument AMIC

cites St. Paul Fire & Marine Insurance Co. v. Nowlin, 542 So.

2d 1190 (Ala. 1988). In Nowlin, the plaintiff recovered a

$500,000 malpractice verdict against the Druid City Hospital

Board. The trial court, relying on § 11-93-2, reduced the

verdict to $100,000. This Court reinstated the verdict.

After remand, the trial court reinstated the original verdict

and entered a judgment thereon. The plaintiff, pursuant to §

27-23-2, obtained a writ of garnishment to collect $400,000

(the hospital board's insurer had paid the $100,000 reduced

verdict). The insurer and the hospital board objected to the

garnishment on the ground that, because § 11-93-2 limited the

hospital board's liability to $100,000, the insurer's

liability was also limited to $100,000. The trial court

ordered the garnishment to issue. This Court reversed the

trial court's judgment and held that § 11-93-2 was not

28

1121006; 1121014; 1121038; 1121039

unconstitutional, that § 11-93-2 limited the liability of the

insurer to $100,000, the liability of the hospital board, and

that § 11-93-2, therefore, limited the plaintiff's rights

under § 27-23-2 against the insurer.

Nowlin is distinguishable because in Nowlin the

municipality's liability was limited by the statutory damages

cap and, in turn, the municipality's insurer's liability was

also limited by the cap. In the present case, the statutory

damages cap does not apply to Allen's and Holmes's judgments

against Beard individually.

We note that it would be unlikely that a municipal

employee would by covered by insurance paid for by the

municipality for acts outside the employee's employment. Here,

however, the City obtained an insurance policy for its police

cars. The City opted to have its police officers' vehicles

insured for activities outside the officers' employment, and

AMIC accepted premiums for such coverage and has admitted that

Beard was an insured under its policy with the City.3

Conclusion

3

AMIC does not raise any argument as to whether the City

had the authority under § 11-47-24(b) to purchase insurance

for activities outside employment.

29

1121006; 1121014; 1121038; 1121039

The $100,000 statutory cap of § 11-47-190 does not apply

when a peace officer, acting outside his employment, is sued

in his individual capacity. The limitation on recovery in the

second sentence of § 11-47-190 is intended to protect the

public coffers of the municipality, not to protect municipal

employees from claims asserted against them in their

individual capacity. The cap on damages for claims against

a municipality does not limit the recovery on a claim against

a municipal employee, acting outside his employment, when he

is sued in his individual capacity. We recognize that

municipal employees were not the intended subject of the

legislature's enactment of § 11-17-190,4 and we also recognize

4

"[T]he fact and amount of liability by a municipal

employee in his or her individual capacity were not and are

not proper, or intended, subjects of the legislature's

enactment of §§ 11–47–190 and –191 and their predecessors.

Instead, employees, officers, and agents of a municipality

find themselves referenced in the last sentence of § 11–47–190

simply because of the need to be clear that governmental

liability is limited to $100,000 even where that liability is

a function of an action against one of those persons in his or

her official capacity or of the special statutory indemnity

obligation imposed on the municipality by § 11–47–24, Ala.Code

1975. The legislature's use of the word 'however' to introduce

the second sentence of § 11–47–190, and the relationship

between the first and second sentences of § 11–47–190 that, as

discussed in the main opinion, it reflects, simply reinforces

this understanding." Morrow, So. 3d at . (Murdock, J.,

concurring specially) (emphasis omitted).

30

1121006; 1121014; 1121038; 1121039

that the legislature is better suited to speak comprehensively

on the individual liability of municipal employees. Based on

the foregoing, the judgment in favor of Allen and against AMIC

is affirmed; the judgment in favor of Holmes and against AMIC

is affirmed; the judgment in favor of Holmes and against the

City is affirmed; and the judgment in favor of Allen and

against the City is affirmed.

1121006 –- AFFIRMED.

1121014 –- AFFIRMED.

1121038 –- AFFIRMED.

1121039 –- AFFIRMED.

Moore, C.J., and Stuart, Bolin, Parker, Shaw, Main, Wise,

and Bryan, JJ., concur.

Murdock, J., concurs in the rationale in part and concurs

in the result.*

*Although Justice Murdock did not attend oral argument in

this case, he has viewed a video recording of that oral

argument.

31

1121006; 1121014; 1121038; 1121039

MURDOCK, Justice (concurring in the rationale in part and

concurring in the result).

I concur in the main opinion with the exception of its

comment regarding the latter of the two issues addressed in

this writing. First, I wish simply to reiterate my

understanding that the $100,000 cap expressed in § 11-47-190,

Ala. Code 1975, would be inapplicable to a claim against

Richard Alan Beard in his individual capacity, even if the

claim had arisen from acts or omissions by Beard while acting

within the line and scope of his employment or, in the

language of § 11-47-24, Ala. Code 1975, "out of the

performance of his official duties." As explained in Morrow

v. Caldwell, [Ms. 1111359, March 14, 2014] ___ So. 3d ___

(Ala. 2014), and reconfirmed here, § 11-47-190 is intended to

protect municipal coffers; the cap on municipal liability

expressed therein is only that -- a cap on municipal

governmental liability (whether for payment of damages to a

third party or of indemnity to its own employee). The cap is

simply inapposite to a judgment against any other entity,

32

1121006; 1121014; 1121038; 1121039

including a municipal employee sued in his or her individual

capacity.5

The main opinion comments that "the legislature is better

suited to speak comprehensively on the individual liability of

municipal employees." ___ So. 3d at ___. First, our existing

statutory and caselaw jurisprudence arguably already speaks

comprehensively to the question. State-agent immunity, as

developed extensively in our caselaw, will apply in most cases

involving municipal law-enforcement officials, particularly

when they are acting within the line and scope of their

duties; it will apply in many cases to non-law-enforcement

municipal employees. In addition, there may be instances in

which municipal employees are sued where, notwithstanding the

filing of a lawsuit by a third party, the nature of the

employee's obligations to his or her municipal employer do not

in fact also create a duty on the part of an employee to the

5

The nature of the employee's conduct may serve to relieve

a municipality from any indemnity obligation at all (if the

tortious conduct does not arise out of the performance of

official duties), or it may leave the municipality with up to

a $100,000 obligation (if the tortious conduct does arise out

of the performance of official duties). Either way, it does

not apply to limit the amount of any underlying damages

verdict rendered against the employee personally, rather than

in his or her official capacity.

33

1121006; 1121014; 1121038; 1121039

third party. See generally, e.g., Morrow v. Caldwell, ___

So. 3d at ___ (Murdock, J., concurring specially) ("[T]he

question before us in this permissive appeal is limited to

whether, if an employee of a municipality is personally liable

for a tort he or she commits in the course of his or her

employment by a municipality, that liability can exceed the

$100,000 cap referenced in § 11–47–190. Any such liability,

however, would of course depend as a threshold matter on the

existence of a duty that was personal to the employee (not

merely a duty of his or her employer) and that ran to the

plaintiff (and not merely from the employee to his or her

employer). This and other questions concerning the

prospective liability of a municipal employee in Wayne

Morrow's position are not before us, and the main opinion

should not be understood as implying any answer to them.").

As to any circumstances outside the foregoing, i.e., where the

employee is not considered a State agent and has breached some

individual duty owed by him or her to a third party,

provisions of the Alabama constitution appear to present an

obstacle to a legislative prescription of limits on individual

liability. Id. (citing Garner v. Covington Cnty., 624 So. 2d

34

1121006; 1121014; 1121038; 1121039

1346 (Ala. 1993), and Home Indem. Co. v. Anders, 459 So. 2d

836 (Ala. 1984), for the proposition that, it is only because

"[t]he common-law doctrine of governmental immunity for

municipal and county governments predates ... the adoption of

the 1901 Constitution, that [that] doctrine survived the

adoption of that Constitution, including §§ 11 and 13 thereof

... and is subject to modification by the legislature"); see

also Smith v. Schulte, 671 So. 2d 1334 (Ala. 1995).

35