United States District Court,

S.D. Alabama,

Southern Division.

S & S TRUCKING, LLC, Plaintiff,

v.

CANAL INSURANCE COMPANY, et al., Defendants.

Civil Action No. 09-715-CG-B.

 

June 18, 2010.

 

ORDER

 

CALLIE V.S. GRANADE, District Judge.

 

This matter is before the court on the report and recommendation of the magistrate judge (Doc. 24) and the objection of defendants, Deas Insurance Agency, Inc. (“Deas”) and Don Wright (“Wright”), and accompanying brief (Doc. 26). The magistrate judge recommended that this action be remanded to state court because the plaintiff and the two objecting defendants are citizens of the State of Alabama and the defendants failed to establish that the individual defendants were fraudulently joined. Upon a de novo review of those portions of the report and recommendation to which the objection is made, the court agrees with the findings of the magistrate judge and finds that this civil action should be remanded to the Circuit Court of Conecuh County, Alabama.

 

FACTS

 

On September 28, 2009, S & S Trucking, LLC (hereinafter referred to as “S & S Trucking” or the “Plaintiff”) filed an action against Canal Insurance Company (“Canal”), Deas, and Wright in the Circuit Court of Conecuh County, Alabama. (Doc. 1, pp. 22-28). The plaintiff alleges that it contacted Wright and Deas, who are agents of Canal, in order to obtain insurance for multiple power units (“tractors”) and trailers operated by the plaintiff. The plaintiff asserts that Wright and Deas were advised that it needed coverage for the tractors and trailers and also for the trailers and cargo when the trailers were detached from the power units, and the plaintiff maintains that the defendants agreed to provide the requested insurance. However, when the plaintiff filed a claim following the theft of a trailer and its cargo while the trailer was detached from the tractor, the defendants refused to honor the claim for the cargo. (Id.).

 

The plaintiff asserts five counts in its complaint. In the first count, the plaintiff maintains that by refusing to pay benefits under the policy, the defendants are in breach of the insurance contract. In the second count, the plaintiff alleges that the defendants negligently failed to include a variety of information and coverage in the application and/or policy concerning insurance coverage for cargo while on trailers not connected to the tractors. In the third count, the plaintiff argues that the defendants wantonly failed to include the same information as stated in count two. In the fourth count, the plaintiff alleges that the defendant, Canal, engaged in bad faith. In the fifth count, the plaintiff alleges, in part, that the defendants fraudulently misrepresented that the policy would cover cargo which was on trailers that were not attached to a tractor. (Id., pp. 23-28).

 

On October 30, 2009, the defendant, Canal, filed a notice of removal in this court asserting that Deas and Wright were fraudulently joined in this action. (Id., p. 5). Once these defendants are deemed improperly joined by this court and therefore disregarded, Canal asserts that this court would have diversity of jurisdiction under 28 U.S.C. § 1332(a) because each plaintiff would then be completely diverse from the remaining defendants. The notice was timely filed and recites that Canal jointly gave notice of removal and that Deas and Wright jointly consent to the removal. (Id., p. 4). Canal attached an affidavit of Wright in support of its notice of removal. (Doc. 1-1, Ex. E, p. 142). In the affidavit, Wright avers that he is president of Deas, that he is the independent insurance agent that procured the policy in question, and that neither he nor Deas is a party to the policy. Wright also maintains that he did not agree to procure coverage for the loss alleged in the plaintiff’s complaint, that the plaintiff never raised with him the issue of procuring insurance for the loss alleged in the complaint, and that neither he nor Deas played any part in the decision to deny the claim. (Id.).

 

On November 6, 2009, Deas and Wright filed a motion for summary judgment or, in the alternative, to dismiss the plaintiff’s case against them for the same reasons stated in the notice of removal. (Doc. 10). On November 25, 2009, the plaintiff filed a motion to remand the action back to the Circuit Court of Conecuh County, Alabama, because the matter was improperly removed due to the lack of complete diversity between the plaintiff and all of the defendants. (Doc. 15). The plaintiff attached an affidavit of Donald Salter, who is the president of S & S Trucking, to its motion to remand. (Doc. 15-1, Salter Aff. (1), p. 3). The plaintiff thereafter filed a response to the motion for summary judgment on December 16, 2009 (Doc. 20), and the plaintiff attached a second affidavit of Donald Salter. (Doc. 20-1, Salter Aff. (2)). The magistrate judge properly summarized the two affidavits as follows:

 

Salter avers that he is president of S & S, and that he contacted Don Wright and Deas Insurance in order to obtain insurance coverage for trucks and trailers operated by S & S Trucking. According to Salter, S & S Trucking already had “bobtail insurance,” which provides insurance coverage for cargo and trailers when they are not attached to a tractor, through another carrier. Salter avers that he discussed with Wright that, because of the type of loads hauled by S & S Trucking, the drivers for S & S Trucking had a standard location (Bolton’s Service Station) to leave a trailer and load when the drivers had to unhook and drive the tractor home. (Doc. 20-1). Salter alleges that Wright and Deas Insurance agreed that “bobtail” coverage was needed, and that Wright and Deas Insurance would procure the necessary coverage for Plaintiff. Salter further avers that he paid the premiums for the insurance, and that the policy was issued by Canal Insurance Company on August 6, 2008; however, he did not receive the policy until a few days before the loss on August 31, 2009. Salter asserts that the policy included a business auto declarations page that included the trailers owned and used by S & S Trucking as scheduled vehicles, and that entire policy, with all the declarations, endorsements and provisions, consists of approximately 147 pages. According to Salter, at the request of S & S Trucking, Wright and Deas Insurance prepared certificates of coverage for the truck cargo brokers with whom Plaintiff did business, and the certificates listed all trailers owned by S & S as scheduled vehicles and also listed cargo coverage. Salter also asserts that when he filed a claim for loss after a trailer and load that were not attached to a tractor were stolen, Canal Insurance paid the claim for the trailer, but denied the claim for the load on the ground that S & S did not have such coverage under the policy procured by Wright and Deas Insurance. (Docs. 15-1, Ex. 3; 20-1).

 

(Doc. 24, pp. 5-6).

 

On May 13, 2010, the magistrate judge recommended that the plaintiff’s motion to remand the case be granted. Specifically, the magistrate judge held that S & S could not recover against Deas or Wright on its breach of contract claim because they were not parties to the contract, but found that there was a possibility that S & S could recover on its negligence and wantonness claims, thus precluding a finding of fraudulent joinder. (Doc. 24, pp. 10-11). In regard to the defendants’ arguments that “Plaintiff’s negligence claim is barred due to the contributory negligence of S & S Trucking”, the magistrate judge concluded that this alleged contributory negligence does not bar the plaintiff’s wanton and negligence claims “as a matter of law” because “Plaintiff has alleged that the policy consisted of approximately 147 pages, that the policy was not received until a couple of days before the loss, that Defendants represented that ‘bobtail’ coverage was included, and at Plaintiff’s request, Defendants provided certificates of insurance for Plaintiff’s cargo brokers which reflect that Plaintiff had automobile coverage and cargo coverage procured through Canal Insurance.” (Id., pp. 12-13). On May 27, 2010, the defendants, Deas and Wright, objected to the report and recommendation in one core respect, asserting that the magistrate judge erred in finding “that the record does not establish that Plaintiff, S & S Trucking, LLC, was contributorily negligent as a matter of law where Plaintiff failed to review and raise concerns with the insurance policy at issue.” (Doc. 25, p. 1).

 

LEGAL DISCUSSION

 

The defendants do not dispute the legal standard governing fraudulent joinder. The Eleventh Circuit has stated that “a court must remand the matter back to state court if any of the properly joined parties in interest are citizens of the state in which the suit was filed.” To avoid this remand, a defendant may prove that a co-defendant was fraudulently joined, and if proven, the Eleventh Circuit stated that a “district court must [then] ignore the presence of the non-diverse defendant and deny any motion to remand …” To prove this, the defendant “must demonstrate either that: ‘(1) there is no possibility the plaintiff can establish a cause of action against the resident defendant; or (2) the plaintiff has fraudulently pled jurisdictional facts to bring the resident defendant into state court.” ‘ Furthermore, “[t]he defendant must make such a showing by clear and convincing evidence.” Henderson v. Washington Nat’l Ins. Co., 454 F.3d 1278, 1281 (11th Cir.2006)(quoting Crowe v. Coleman, 113 F.3d 1536, 1538 (11th Cir.1997)).

 

The defendants also do not contest that an insurance agent or broker who procures insurance for a client and negligently fails to do so can be liable for the damages arising from said negligence. Furthermore, the defendants do not disagree with the magistrate judge’s finding that “Plaintiff has alleged facts sufficient to establish a negligence claim against Defendants, Wright and Deas Insurance.” (Doc. 24, p. 11) (citation omitted). The magistrate is correct that under Alabama law, “a claim in tort alleging a negligent failure of an insurance agent to fulfill a voluntary undertaking to procure insurance … requires demonstration of the classic elements of a negligence theory, i.e., ‘(1) duty, (2) breach of duty, (3) proximate cause, and (4) injury. [’]” (Id., pp. 10-11)(quoting Kanellis v. Pac. Indem. Co., 917 So.2d 149, 155 (Ala.Civ.App.2005) (citations omitted)); see Bryan v. Lexington Ins. Co. and Orange Beach Ins. Agency, 2006 WL 2052524, at (S.D.Ala July 20, 2006) (“Alabama law is clear that ‘when an insurance agent or broker, with a view to compensation, undertakes to procure insurance for a client and unjustifiably or negligently fails to do so, he becomes liable for any damage resulting therefrom .” (citations omitted). The magistrate judge was also correct that the plaintiff alleged facts in its complaint and accompanying affidavits which are sufficient to establish a negligence claim against Deas and Wright.

 

However, the defendants contest the magistrate judge’s finding that the facts do not establish that the plaintiff was contributorily negligent as a matter of law. (Doc. 25, p. 1). Under Alabama law, “contributory negligence is a complete defense to a claim based on negligence.” (Doc. 24, p. 12)(citing Kanellis, 917 So.2d at 155). The defendants assert that since the plaintiff “was charged with constructive knowledge of the policy’s provisions and terms” and since the plaintiff failed to review and raise concerns about the insurance policy prior to the theft, the court should find the plaintiff to be contributorily negligent. (Doc. 26, pp. 5-8).

 

The defendants are correct that “[t]he right of reliance [or an agent’s representations] comes with a concomitant duty on the part of the plaintiffs to exercise some measure of precaution to safeguard their interests”, thus insureds have a duty to read their insurance policies. Foremost Ins. Co. v. Parham, 693 So.2d 409, 433 (Ala.1997). Furthermore, the defendants are right that “an insurance agent cannot be held liable due to plaintiff’s own negligent failure to ensure they received the policy they expected.” BDB, L.L.C. v. James River Ins. Co., Civ. 6:07-cv-01985-SLB, at(N.D.Ala. Sept. 30, 2008) or (Doc. 17, p. 17). However, contrary to the defendants’ assertions otherwise, a plaintiff is not contributorily negligent as a matter of law merely because it failed to review the insurance policy the moment the plaintiff received it. Rather, as stated clearly in BDB, L.L.C., a trier of fact must determine that a plaintiff was negligent in its failure to read the insurance policy and only then shall a plaintiff be deemed contributory negligent.

 

BDB, LLC v. James River Ins. Co., 6:07-cv-01985-SLB, at(N.D.Ala. Sept. 30, 2008) is clearly distinguishable to the present case because the plaintiff in that case received the insurance policy approximately a year prior to the alleged loss and not approximately two days before the alleged loss as in this case.

 

The Alabama Supreme Court maintains that a question of contributory negligence is generally for the jury, and it is only when the facts are such that all reasonable men must draw the same conclusion does contributory negligence become a question of law for the court. Jones Food Co. v. Shipman, 981 So.2d 355, 369-370 (Ala.2006) (citations omitted). Therefore, this court does not need to reach a definite pronouncement of whether the plaintiff’s failure to review the policy in the present case constituted negligence, because in reviewing a motion to remand in light of a fraudulent joinder claim, the precise contours of the plaintiff’s failure are not relevant. The Eleventh Circuit has made it clear that this court may deny a motion to remand only if the defendants have proved by clear and convincing evidence that there is “no possibility ” that the plaintiff “can establish a cause of action against the [ ]resident defendant …” Henderson, 454 F.3d at 1283 (emphasis in original) (citations omitted). In other words, remand must be granted if “after drawing all reasonable inferences from the record in the plaintiff’s favor and then resolving all contested issues of fact in favor of the plaintiff, there need only be ‘a reasonable basis for predicting that the state law might impose liability on the facts involved.” Crowe, 113 F.3d at 1541-1542(emphasis in original) (citation omitted)(“In the remand context, the district court’s authority to look into the ultimate merit of the plaintiff’s claims must be limited to checking for obviously fraudulent or frivolous claims. Although we have said that district courts may look beyond the face of the complaint, we emphasize that the district court is to stop short of adjudicating the merits of cases that do not appear readily to be frivolous or fraudulent.”). As a result, if, after examining the plaintiff’s complaint and accompanying affidavits in this case, this court is able to say that there is any possibility, no matter how small, that an Alabama state court might find that the plaintiff was not negligent in its failure to review the insurance policy prior to the theft, then the Eleventh Circuit has mandated that this court shall grant the plaintiff’s motion to remand.

 

It is undisputed that the plaintiff failed to review the insurance policy prior to the theft, but the magistrate judge properly concluded that this failure, in light of all the facts from the record, is not negligent as a matter of law. (See Doc. 24 pp. 12-16). A trier of fact could conclude from the facts of this case that the plaintiff was not negligent in its failure to review the policy and raise concerns before the theft, especially since the plaintiff has alleged that the policy consists of approximately 147 pages, that the policy was not received until a couple of days before the loss, and that the defendants represented that the “bobtail” coverage was included. The defendants’ arguments-that the plaintiff had constructive notice of the terms of the policy upon receipt and that the plaintiff had three days to read the policy which it should have read immediately upon receipt -may ultimately be victorious in establishing contributory negligence at trial, but this court is unable to say at this stage that there is no possibility that the plaintiff has colorable claims of negligence and wantonness against Deas and Wright. See Crowe, 113 F.3d at 1538 (“When considering a motion for remand, federal courts are not to weigh the merits of a plaintiff’s claim beyond determining whether it is an arguable one under state law.”). The decision as to contributory negligence is for the state court, “and for the federal court to interpose its judgment would fall short of the scrupulous respect for the institutional equilibrium between the federal and state judiciaries that our federal system demands.” Henderson, 454 F.3d at 1284.

 

(See Doc. 26, pp. 9-13)

 

Since the defendants have not shown by clear and convincing evidence that Deas and Wright were fraudulently joined, this potential liability is sufficient to establish the lack of complete diversity between plaintiffs and defendants and thus this court’s lack of jurisdiction over the action. Florence v. Crescent Resources, LLC, 484 F.3d 1293, 1299 (11th Cir.2007)(“[I]f there is any possibility that the state law might impose liability on a resident defendant under the circumstances alleged in the complaint, the federal court cannot find that the joinder of the resident defendant was fraudulent, and remand is necessary.”); Coker v. Amoco Oil Co., 709 F.2d 1433, 1440-41 (11th Cir.1983)(“If there is even a possibility that a state court would find that the complaint states a cause of action against any one of the resident defendants, the federal court must find that joinder was proper and remand the case to state court.”) superseded by statute on other grounds as stated in Georgetown Manor, Inc. v. Ethan Allen, Inc., 991 F.2d 1533 (11th Cir.1993).

 

CONCLUSION

 

After due and proper consideration of all portions of this file deemed relevant to the issues raised, and a determination of those portions of the report and recommendation to which objection is made, the report and recommendation of the magistrate judge is ADOPTED as the opinion of this court. It is ORDERED that this case be and is hereby REMANDED to the Circuit Court of Conecuh County, Alabama. The court having granted the plaintiff’s motion to remand, finds that the defendants’ motion for summary judgment (Doc. 10) is MOOT.

 

Because the court has determined that this case should be remanded to state court, this court then does not have subject matter jurisdiction to determine any other motions. See Univ. of S. Ala. v. Am. Tobacco Corp., 168 F.3d 405, 411 (11th Cir.1999).

 

 

DONE and ORDERED.

Supreme Court of Alabama.

JONES EXPRESS, INC.

v.

Edward E. JACKSON, Sr., and Jacqueline F. Jackson, individually and as custodial parents of Joshua L. Jackson, a minor, deceased.

1070066.

 

June 30, 2010.

 

Appeal from Morgan Circuit Court (CV-04-296).

 

PER CURIAM.

 

Jones Express, Inc. (“Jones Express”), the defendant below, appeals from a judgment entered on a jury verdict in favor of the plaintiffs, Edward E. Jackson, Sr., and Jacqueline F. Jackson (“Jackie”), both individually and as custodial parents of Joshua L. Jackson, deceased, in this action seeking damages for negligent hiring, retention, and supervision and for wrongful death. We reverse the judgment for the plaintiffs and render a judgment for Jones Express.

 

Facts and Procedural History

 

During the early morning hours of March 30, 2004, Joshua L. Jackson was driving a motor vehicle on County Road 35 in Morgan County. Edward, his father, was a passenger in the vehicle. Charles D. Quada, an employee of Jones Express, was driving on Highway 67 in a tractor-trailer truck owned by Jones Express. The intersection of Highway 67 and County Road 35 is controlled by a traffic light. At the intersection, Quada’s truck and Joshua’s vehicle collided.

 

Both Joshua and Edward were injured in the accident. On April 7, 2004, Edward and Jackie, both individually and as custodial parents of Joshua, filed a complaint seeking damages from Quada and Jones Express stemming from the collision. Joshua died on May 15, 2004, of injuries he sustained in the collision.

 

The Jacksons amended their complaint several times. The last amended complaint alleged that Quada, who at the time of the accident “was on the job and acting as an agent for Jones Express,” failed to stop at a red traffic light before entering the intersection of Highway 67 and County Road 35 and colliding with Joshua’s vehicle. The complaint sought damages against Quada for negligence and wantonness and sought damages from Jones Express under a theory of respondeat superior, for negligent entrustment, and for negligent hiring, retention, and supervision. Additionally, the Jacksons sought damages against Quada and Jones Express for wrongful death. Finally, the Jacksons alleged a claim against their insurer, Alfa Mutual Insurance Company (“Alfa”), for uninsured- and for underinsured-motorist benefits.

 

After discovery, the case proceeded to trial. The defendants moved for a judgment as a matter of law (“JML”) at the close of the Jacksons’ case and again at the close of the evidence. Both motions were denied.

 

The trial court instructed the jury on three claims: (1) negligence by Quada; (2) negligent hiring, retention, and supervision on the part of Jones Express; and (3) negligent entrustment by Jones Express. As to the negligent hiring, retention, and supervision claim, the jury was instructed as follows:

 

“Jones Express owed a duty to Edward Jackson and Joshua Jackson to avoid inflicting injuries upon them by using reasonable care and diligence in the hiring, supervision and retention of employees who would be driving its trucks on the public roadways of this state. Reasonable care and diligence means such care and diligence as a reasonably prudent employer would use under the same or similar circumstances.

 

“To prevail on this negligence claim, the plaintiffs must prove to your reasonable satisfaction the following elements:

 

“Number one, that Mr. Quada was an incompetent driver.

 

“Number two, that Jones Express knew or reasonably should have known through the exercise of due diligence that Mr. Quada was an incompetent driver.

 

“And number three, that Jones Express failed to exercise reasonable care in … hiring, supervising or retaining Mr. Quada after being placed on notice that he was an incompetent driver .”

 

As to causation for all three claims, the trial court instructed in pertinent part:

“If, after you consider all of the evidence, you are reasonably satisfied that [Quada and Jones Express] were negligent in one or more of the respects that have been claimed by the [Jacksons] in this case, then the next thing you must do is to decide whether or not such negligence on the part of [Quada and Jones Express] was the legal or proximate cause of injuries suffered by Edward Jackson and injuries to and the death of Joshua Jackson.”

 

The trial court also submitted two verdict forms to the jury: one to be completed if the jury found for the Jacksons, and one to be completed if it found for Quada and Jones Express. The first form, titled “Plaintiff’s Verdict,” stated:

 

“If, after a full and fair consideration of all the evidence, you find for the plaintiffs on one or more of their claims, then you should use the following verdict form:

 

“CLAIM 1: THAT THE DEFENDANTS, CHARLES QUADA AND JONES EXPRESS, INC., WERE NEGLIGENT IN OPERATING THE TRUCK AND PROXIMATELY CAUSED THE PLAINTIFFS’ INJURIES.

 

“We, the jury, find in favor of the plaintiffs on this claim and against the defendants, Charles Quada and Jones Express, Inc.

 

____________________

 

Foreperson

 

“CLAIM 2: THAT THE DEFENDANT, JONES EXPRESS, INC., WAS NEGLIGENT IN THE HIRING, SUPERVISION OR RETENTION OF CHARLES QUADA AND PROXIMATELY CAUSED THE PLAINTIFFS’ INJURIES.

 

“We, the jury, find in favor of the plaintiffs on this claim and against the defendant, Jones Express, Inc.

 

____________________

 

Foreperson

 

“CLAIM 3: THAT THE DEFENDANT, JONES EXPRESS, INC. NEGLIGENTLY ENTRUSTED ITS VEHICLE TO CHARLES QUADA AND PROXIMATELY CAUSED THE PLAINTIFFS’ INJURIES.

 

“We, the jury, find in favor of the plaintiffs on this claim and against the defendant, Jones Express, Inc.

 

____________________

 

Foreperson”

 

(Capitalization in original.) The trial court further instructed the jury that, as to each claim, if it was satisfied of the truthfulness of the claim, or if that was its verdict, the foreperson should sign his or her name under the applicable claim. The verdict form also provided a space for the jury to designate an award of damages.

 

As to the second form, titled “Defendants’ Verdict,” the trial court instructed:

 

“Now, ladies and gentlemen, after a full and fair consideration of all of the evidence, if you find for the defendants on all claims, then you would use the separate verdict form that says Defendants’ Verdict and reads: ‘We, the jury, find in favor of the defendants and against the plaintiffs on all claims. And it would be signed by your foreperson, and you would be ready to report your verdict.’ “

 

Unlike the plaintiff’s verdict form, this form did not provide the jury the opportunity to render a verdict in favor of the defendants on each individual claim or in favor of an individual defendant.

 

After deliberations, the jury returned the “Plaintiffs Verdict” form with the foreperson’s signature under the negligent hiring, retention, and supervision claim, as well as an award of $600,000 in compensatory damages and $100,000 in punitive damages. On April 25, 2007, the trial court entered a judgment in favor of the Jacksons and against Jones Express based on this verdict. Jones Express filed a renewed motion for a JML; a motion to alter, amend, or vacate the judgment entered on the jury’s verdict; and a motion for a new trial. The trial court denied these motions, and Jones Express appealed.

 

On June 26, 2008, this Court, noting that the record did not indicate that a judgment had been entered with respect to Quada or Alfa and, thus, that the judgment appealed from appeared to be nonfinal, remanded the case for the trial court (1) to certify the judgment in favor of the Jacksons against Jones Express as a final judgment pursuant Rule 54(b), Ala. R. Civ. P.; (2) to adjudicate the remaining claims, thus making the judgment final and appealable; or (3) to do nothing, in which case the appeal would be dismissed as being from a nonfinal judgment.

 

On July 2, 2008, the trial court entered a judgment restating its April 25, 2007, judgment in favor of the Jacksons and against Jones Express on the negligent hiring, retention, and supervision claim. The trial court also entered a judgment in favor of Quada, Jones Express, and Alfa on all of the Jacksons’ remaining claims.

 

The last brief on appeal was filed in this Court on July 15, 2008. It appears from the materials before us that on August 1 the Jacksons filed a motion in the trial court. That motion does not appear in the record; however, it is described in the materials before us as a motion to alter, amend, or vacate or for a new trial, and it appears to be directed to the trial court’s July 2, 2008, judgment entered in response to this Court’s remand order. On August 4, 2008, Jones Express filed in this Court a motion to stay the appeal pending resolution of the Jacksons’ motion, contending that a cross-appeal by the Jacksons may result or that the issues raised by Jones Express on appeal may be impacted.

 

On August 22, 2008, the trial court issued an order purporting to vacate its July 2, 2008, order and asserting that no other orders were to be issued in response to this Court’s June 26, 2008, remand order. After a hearing, the trial court issued an order on November 12, 2008, finding, specifically, that Alfa was not liable to the Jacksons and then stating:

 

“Under the circumstances as shown by the disputed evidence presented during the trial of this case, the question of liability on the part of the defendant, Charles D. Quada, the driver of the tractor-trailer, hinged on the jury’s answer to these simple questions: did he run the red light or did Joshua Jackson run the red light at the intersection where the collision occurred? Having considered its instructions to the jurors, the separate and independent claims they were allowed to consider during their deliberations and their verdict, it is ordered that the Judgment entered in this case on April [25], 2007, constitute an adjudication of liability against the defendant, Charles D. Quada, as well as against his employer, Jones Express, Inc., with damages assessed only against the latter.

 

“For the reasons stated above, the undersigned determines that no claims, rights or liabilities remain to be adjudicated in this case and that a final judgment be, and hereby is, entered.”

 

This Court again remanded the case, holding that it was unclear how the trial court’s November 12 order disposed of the claim against Quada. In an order dated January 26, 2010, the trial court entered the following judgment:

 

“(1) A judgment is entered in favor of the defendant, ALFA Mutual Insurance Company (‘ALFA’), and against the plaintiffs, separately and severally, on all of their claims against ALFA for uninsured or underinsured motorist benefits.

 

“(2) A judgment is entered in favor of the defendant, Charles D. Quada (‘Quada’), and against the plaintiffs, separately and severally, on their claim of damages alleged against Quada, individually, for negligence.

 

“(3) A judgment is entered in favor of the defendant, Jones Express, Inc. (‘Jones Express’), and against the plaintiffs, separately and severally, on their claim of damages against Jones Express under a theory of respondeat superior in connection with the claim of negligence against Quada.

 

“(4) A judgment is entered in favor of the defendant, Jones Express, and against the plaintiffs, separately and severally, on their claim of damages alleged against Jones Express for negligent entrustment.

 

“(5) A judgment is entered in favor of the plaintiffs, Edward E. Jackson, Sr., and Jackie Jackson, and against the defendant, Jones Express, for compensatory damages in the amount of $600,000.00 and for punitive damages in the amount of $100,000.00, awarding total damages in the sum of $700,000.00, plus costs, on the plaintiffs’ claim of damages alleged against Jones Express for negligent hiring, retention and supervision.”

 

The Jacksons have not cross-appealed the judgment in favor of Quada on their negligence claim.

 

Discussion

 

On appeal, Jones Express contends that the verdict is inconsistent because it has been found liable for negligently hiring, retaining, and supervising Quada, despite the fact that Quada has been “exonerated” of any wrongdoing.

 

A verdict has been described as “inconsistent” when the jury “inconsistently resolved the same issue in two separate counts,” State Farm Fire & Cas. Co. v. Slade, 747 So.2d 293, 319 (Ala.1999), when the verdict appears to be “the result of confusion” City of Bessemer v. Foreman, 678 So.2d 759, 760 (Ala.1996), or when the record in a case does not reveal a situation in which the jury’s decisions can coexist, Ex parte Alfa Mut. Ins. Co., 799 So.2d 957, 962 (Ala.2001). See also Smith v. Richardson, 277 Ala. 389, 391, 171 So.2d 96, 97 (1965) (stating that differing verdicts on separate but identical claims filed by separate parties were “clearly inconsistent, having been rendered at the same time by the same jury, on identical facts, [and having] render[ed] speculative what the jury intended by its verdicts. Patently, the verdicts indicate confusion on the part of the jury.”). When a jury verdict is inconsistent, the proper remedy is a new trial. Bessemer, 678 So.2d at 760. This is because “any attempt to reconcile the inconsistencies in a verdict must be based on mere speculation about the jury’s intent.” Id.; see also A .L. Williams & Assocs., Inc. v. Williams, 517 So.2d 596, 598 (Ala.1987) (“Where the jury verdict is the result of confusion or is inconsistent in law, the trial court should grant a new trial. A new trial is necessary, because once the jury is dismissed any attempt to reconcile the inconsistencies in a verdict amounts to mere speculation about the jury’s intent.” (citation omitted)).

 

It has been stated generally that, in order for an employer to be liable for the negligent hiring, training, retention, and supervision of its employee, the plaintiff must also prove “wrongful conduct” on the part of the employee.   University Fed. Credit Union v. Grayson, 878 So.2d 280, 291 (Ala.2003) (“[A] party alleging negligent supervision and hiring must prove the underlying wrongful conduct of the defendant’s agents”); Voyager Ins. Cos. v. Whitson, 867 So.2d 1065, 1073 (Ala.2003) (“A party alleging negligent or wanton supervision and hiring must also prove the underlying wrongful conduct of employees.”); see also Stevenson v. Precision Standard, Inc., 762 So.2d 820 (Ala.1999) (holding that a jury verdict against an employer based on negligent training and supervision of a supervisor who allegedly sexually harassed a fellow employee could not stand where the jury also exonerated the supervisor); Smith v. Boyd Bros. Transp., Inc., 406 F.Supp.2d 1238, 1248 (M.D.Ala.2005) (“Under Alabama law, the finding of underlying tortious conduct is a precondition to invoking successfully liability for the negligent or wanton training and supervision of an employee.”); and Thrasher v. Ivan Leonard Chevrolet, Inc., 195 F.Supp.2d 1314, 1320 (N.D.Ala.2002) (“In order to establish a claim against an employer for negligent supervision, training, and/or retention, the plaintiff must establish that the allegedly incompetent employee committed … [a] tort.”).

 

Jones Express, citing Stevenson v. Precision Standard, Inc., supra, alleges that the jury’s failure to find Quada liable for negligence conflicts with the verdict in favor of the Jacksons on their negligent hiring, retention, and supervision count against Jones Express. In Stevenson, the plaintiff, Stevenson, brought an action against her employer, Pemco, and her former supervisor at Pemco, Windsor, alleging invasion of privacy and negligence and/or wantonness based upon Windsor’s alleged sexual harassment. The jury returned a verdict against Pemco but exonerated Windsor from any liability.

 

On appeal, Pemco contended that the verdict was inconsistent and due to be set aside. Stevenson countered that a verdict for an employee and against an employer is inconsistent only when the employer’s liability is based solely on the theory of respondeat superior. In her case, Stevenson argued that she asserted “independent claims” against Pemco alleging negligence and wantonness, specifically, that Pemco had acted negligently or wantonly in supervising or training its employees, a cause of action that was recognized in Big B, Inc. v. Cottingham, 634 So.2d 999 (Ala.1993). This Court distinguished Big B, however, noting that the cause of action in that case “was predicated on the underlying tortious conduct of an employee … who at trial admitted wrongdoing.” 762 So.2d at 824. This Court further noted the holding in Potts v. BE & K Construction Co., 604 So.2d 398 (Ala.1992), that an employer could be liable for the intentional torts of its agent if the employer participated in, authorized, or ratified the wrongful acts, but that to prove such liability one must demonstrate, among other things, “the underlying tortious conduct of an offending employee ….“ 762 So.2d at 824. We concluded:

 

“Under this Court’s holdings in Big B and Potts, the only means of attaching liability to Pemco would be to prove wrongful conduct by Windsor as its agent. But, Pemco simply cannot be held liable for authorizing or ratifying conduct that, according to the jury, did not occur. Accordingly, a verdict against Pemco based on a finding of negligent training and supervision would be inconsistent with a verdict exonerating Windsor.”

 

Stevenson, 762 So.2d at 824-25.

 

As Stevenson and Big B demonstrate, and as the additional authorities cited above indicate generally, implicit in the tort of negligent hiring, retention, training, and supervision is the concept that, as a consequence of the employee’s incompetence, the employee committed some sort of act, wrongdoing, or tort that caused the injury to the plaintiff. Humana Med. Corp. of Alabama v. Traffanstedt, 597 So.2d 667, 669 (Ala.1992) (holding that it was “inherently inconsistent from a proximate cause standpoint” for a jury to hold that a physician was not negligent in performing surgery but to also hold the hospital liable based on its “independent negligence” in failing to supervise and monitor that physician). Cf. Bonds v. Busler, 449 So.2d 244, 245 (Ala.Civ.App.1984) (“We find it settled law in this state that though an entrustor may be guilty of negligent entrustment of a vehicle to an incompetent driver, he may not be held liable for such negligence unless the injury is proximately caused by the incompetence of the entrustee.”); Lane v. Central Bank of Alabama, N.A., 425 So.2d 1098, 1100 (Ala.1983) (noting that, in a cause of action against a master based upon the incompetence of the servant, the plaintiff must show, among other things, that he has been damaged by the acts of the servant and that the damage occurred because of incompetency on the servant’s part); and First Nat’l Bank of Montgomery v. Chandler, 144 Ala. 286, 307, 39 So. 822, 828 (1905) (“ ‘It is understood, of course, that the incompetency of the servant in all cases, in order to charge the master, was the proximate cause of the injury.’ “ (quoting Bailey on Master’s Liability for Injuries to Servant, 47, 54, 70)).

 

The Jacksons argue that their negligent hiring, retention, and supervision claim is an “independent” tort that did not depend on a finding of negligence in the underlying tort claim against Quada. Further, the Jacksons correctly note that the jury was presented with substantial evidence for each element of the negligent hiring, retention, and supervision claim as instructed by the trial court: (1) that Quada was an incompetent driver, (2) that Jones Express knew or reasonably should have known that Quada was an incompetent driver, (3) that Jones Express failed to exercise reasonable care in hiring, retaining, or supervising Quada after being placed on notice that he was an incompetent driver and (4) that Jones Express’s negligence was the legal or proximate cause of injuries suffered by Edward and Joshua.

 

However, the issue presented on appeal is not whether there was a failure to prove the elements of the negligent hiring, retention, and supervision claim as instructed by the trial court; instead, the issue is whether the jury’s verdict against Jones Express is inconsistent with its failure to find Quada liable for negligence in the very same factual situation that caused Joshua’s injury. In other words, does the verdict indicate that the jury inconsistently resolved the same issue in two different counts or that it was otherwise confused?

 

The dispositive question presented to the jury in this case, according to the parties and the trial court, was whether Quada ran the red light at the intersection or whether Joshua ran the red light. As the trial court noted in its order denying Jones Express’s postjudgment motions, “the [Jacksons] and Jones Express recognize that liability in this case centered on the jury’s factual determination as to whether Quada or Joshua ran the red light.”  Further, the trial court instructed the jury that “it is negligence as a matter of law for a motor vehicle to run a red light that is exhibited by a traffic control device.”

 

Thus the inconsistency in this case arises because of the jury’s apparently unreconcilable resolution of this dispositive issue: whether Quada ran the red light. This was the sole act of negligence alleged against Quada and the sole act of incompetency or wrongdoing on Quada’s part as an employee of Jones Express that allegedly caused the Jacksons’ damage under their claim of negligent hiring, retention, and supervision. It is inconsistent for the jury to conclude, on the one hand, that Quada ran the red light for purposes of the negligent hiring, retention, and supervision claim against Jones Express, but then not to render a verdict in favor of the Jacksons on their negligence claim against Quada.

 

Both sides attempt to resolve this inconsistency. Jones Express argues that the jury’s failure to find that Quada was negligent indicates that it did not find that he ran the light (Jones Express’s brief, at 28); the Jacksons, on the other hand, argue that Quada “was necessarily found guilty of running the red light in this case because the jury rejected contributory negligence.” While both are reasonable theories by which to reconcile the inconsistency in the jury’s decision, both theories engage in speculation as to the jury’s intent.  The jury could have found that Quada was negligent but failed to indicate that on the jury form, or the jury could have found that he acted negligently but attempted to impose liability only on Jones Express. As this Court once stated in a case discussing an inconsistent verdict in which a jury exonerated an employee’s conduct but also attempted to find the employer liable for that conduct: “Such a verdict on its face discloses that the jury has misconceived the issues, or was prompted by bias against the employer or in favor of the employee.” Carter v. Franklin, 234 Ala. 116, 118, 173 So. 861, 863 (1937). Instead of engaging in speculation in an attempt to reconcile the jury’s decision, we simply hold that it is inconsistent.

 

In its order denying Jones Express’s postjudgment motions, the trial court relied on Luker v. City of Brantley, 520 So.2d 517, 518 (Ala.1987), and held that the negligent hiring, retention, and supervision claim was an “independent” tort and that, under Luker, the trial court needed only to “resolve the question of whether the evidence supported a claim against [Jones Express] for its independent negligence. Only if such a claim was not sustained by the evidence could [it] grant a new trial for the apparent inconsistency.” 520 So.2d at 523.

 

In Luker, the plaintiff, Luker, sued the City of Brantley (“the City”) and two police officers employed by the City, Ennis and Armstrong, for releasing an automobile to an intoxicated driver, Patrick, who later killed the plaintiff’s decedent in an automobile accident. Luker sued Ennis and Armstrong on claims of negligence and negligent entrustment and sued the City alleging that it “had negligently failed to instruct these officers as to the proper manner in which to enforce the laws regarding intoxicated individuals.” Luker, 520 So.2d at 518. The jury returned a verdict against the City but in favor of the officers. The City moved for a judgment notwithstanding the verdict (“JNOV”), which the trial court granted, setting aside the verdict against the City. Luker appealed from the JNOV.

 

On appeal, the City argued that its JNOV was proper because, it said, the jury’s verdict was inconsistent. This Court reversed the JNOV in favor of the City, reasoning that a JNOV was not appropriate because the employer was not entitled to a directed verdict at the conclusion of the evidence based on jury issues as to vicarious liability. Further, despite the jury’s verdict in favor of the officers, this Court appeared to assume that the officers acted negligently:

 

“Our decision that the actions of [the officers,] in and of themselves, constitute negligence … pretermits discussion of whether, in a particular case, the actions of the officers’ superiors in failing to enroll them in the required minimum standards training programs could be considered the proximate cause of injury. Whether or not [the officers] had this training, it is clear that they acted negligently in allowing Patrick, under the circumstances of this case, to operate the automobile in an intoxicated state.”

 

520 So.2d at 520.

 

On rehearing, this Court attempted to clarify the scope of its remand for determining whether a new trial was appropriate based on alleged inconsistent verdicts. The Court stated:

 

“We held that there was evidence that the officers were negligent while acting in the line and scope of their duty and, thus, that the City could have been held vicariously liable; therefore, the City’s judgment notwithstanding the verdict was reversed. The jury verdict for the officers and against the City could not be reconciled if the only claim against the City was predicated on the underlying negligence of the officers. Apparently, however, the plaintiff also pursued a claim against the City for its independent negligence in improperly training the officers.

 

“Before the trial court can grant a new trial based upon the apparent inconsistency of the verdicts, it must resolve the question of whether the evidence supported a claim against the City for its independent negligence. Only if such a claim was not sustained by the evidence could the trial court grant a new trial for the apparent inconsistency ….

 

“If the trial court resolves these two issues favorably to the plaintiff, the appropriate action will be the reinstatement of the verdict and the judgment entered thereon. Otherwise, the trial court will grant a new trial, specifying the grounds made the basis of its new trial order.”

 

Luker, 520 So.2d at 523.

 

Luker appears to hold that a new trial based on the inconsistency of the verdict was warranted in that case only if the evidence did not support the improper-training claim. If such evidence had been presented, then the trial court was required to enter a judgment against the City alone based on the jury verdict. Id.

 

This analysis differs from our subsequent holding in Stevenson, supra. There, we examined whether the evidence, under the employee’s “independent” claims against the employer, Pemco, could support the judgment against Pemco “while simultaneously absolving” the supervisor, Windsor, “of any wrongdoing.” Stevenson, 762 So.2d at 824. We held, as noted above, that Pemco could not be liable for conduct that, according to the jury, did not occur. Further, the evidence did “not support a judgment against Pemco on any theory other than respondeat superior.” 762 So.2d at 827. However, the judgment entered on the jury’s verdict in favor of Windsor was not appealed and became final; “therefore, the doctrine of res judicata bar [red] a new trial on the issue of Windsor’s liability.” Stevenson, 762 So.2d at 827. Because Windsor, as the employee, could no longer be held liable for the tort claims alleged against him, Pemco could not be held liable under the doctrine of respondeat superior  and was thus entitled to a judgment in its favor:

 

“[B]ecause Stevenson did not appeal from the judgment in favor of Windsor, that judgment has become final; therefore, the doctrine of res judicata bars a new trial on the issue of Windsor’s liability. Because the judgment against Windsor must stand, a judgment must be entered in favor of Pemco. See de Feliciano v. de Jesus, 873 F.2d 447 (1st Cir.1989)(in light of an inconsistent verdict, corporate codefendant was held entitled to a judgment, where plaintiffs did not appeal from judgment in favor of codefendant president of corporation); see, also, United Steelworkers of America AFL-CIO-CLC v. O’Neal, 437 So.2d 101, 103 (Ala.198) (on a claim directly against an agent, and against the principal solely on the theory of respondeat superior, ‘a verdict in favor of the agent works an automatic acquittal of the principal so that [the] verdict against [the principal] must be set aside’); and Perry v. Costa, 97 A.D.2d 655, 469 N.Y.S.2d 193 (1983) (doctrine of res judicata barred new trial on question of employer’s liability, based on final judgment in favor of employee; judgment against employer reversed).”

 

762 So.2d at 827 (footnote omitted).

 

The plaintiff in Luker did not appeal the judgment entered on the verdict in favor of the employees/officers; however, the Luker Court failed to recognize the significance of this omission. Had the Court done so it would have been obliged to affirm the trial court’s order granting a JNOV in favor of the employer based on the alternative ground that the failure of proof on the essential element of negligence of the employee had become res judicata on that issue. If an appeal had been taken from the JNOV in favor of the employer and the judgment entered on the verdict in favor of the employees, the proper course of action would have been reversal of the JNOV in favor of the employer with instructions to order a new trial only if the verdict in favor of the employees was against the weight of the evidence. Instead, the Luker Court recognized a right to a jury verdict against the employer for improper training in terms consistent with an independent action against the employer, regardless of the fact that the jury rendered a verdict in favor of the employees/officers on the negligence claim against them. Such a result is erroneous and inconsistent with Stevenson, which sub silentio overruled Luker.

 

Having determined that the jury’s verdict here was inconsistent, we must decide the correct disposition of this appeal. As noted above, the law normally requires a new trial in such circumstance. However, a new trial on the negligence count against Quada is not possible; the trial court entered a final judgment in favor of Quada, and the Jacksons have not appealed that judgment. Jones Express, citing Stevenson, argues that it is thus entitled to a judgment in its favor.

 

In Stevenson, this Court determined that the employee’s failure to appeal from the judgment exonerating Windsor of liability barred relitigation of both Windsor’s liability and a new trial on the negligent-failure-to-supervise claim against Pemco. We stated:

 

“We must consider the question of the appropriate disposition of these appeals. Ordinarily, in a civil case involving two inconsistent jury verdicts-one on a direct claim and one on a derivative claim, or one on a direct claim and one on a claim based on vicarious liability-on a proper motion both must be set aside. However, because Stevenson did not appeal from the judgment in favor of Windsor, that judgment has become final; therefore, the doctrine of res judicata bars a new trial on the issue of Windsor’s liability. Because the judgment against Windsor must stand, a judgment must be entered in favor of Pemco. See de Feliciano v. de Jesus, 873 F.2d 447 (1st Cir.1989) (in light of an inconsistent verdict, corporate codefendant was held entitled to a judgment, where plaintiffs did not appeal from judgment in favor of codefendant president of corporation); see, also, United Steelworkers of America AFL-CIO-CLC v. O’Neal, 437 So.2d 101, 103 (Ala.1983) (on a claim directly against an agent, and against the principal solely on the theory of respondeat superior, ‘a verdict in favor of the agent works an automatic acquittal of the principal so that [the] verdict against [the principal] must be set aside’); and Perry v. Costa, 97 A.D.2d 655, 469 N.Y.S.2d 193 (1983) (doctrine of res judicata barred new trial on question of employer’s liability, based on final judgment in favor of employee; judgment against employer reversed).”

 

Stevenson, 762 So.2d at 827 (citation and footnote omitted). Similarly, on January 26, 201,, the trial court in the instant case entered a final judgment in favor of Quada on the negligence claim. Because the Jacksons did not appeal from the judgment in favor of Quada, that judgment has become final; therefore, the doctrine of res judicata bars a new trial on the issue of Quada’s liability. Id. Because the judgment against Quada must stand, a judgment must be entered in favor of Jones Express on the negligent hiring, retaining, and supervision claim.

 

Conclusion

 

The judgment in favor of the Jacksons and against Jones Express on their claim of negligent hiring, retention, and supervision is reversed, and a judgment is rendered in favor of Jones Express.

 

REVERSED AND JUDGMENT RENDERED.

 

COBB, C.J,, and LYONS, WOODALL, STUART, SMITH, BOLIN, PARKER, MURDOCK, and SHAW, JJ., concur.

 

Jacqueline F. Jackson is also referred to as “Jackie Jackson” in the record below.

 

That motion to stay was granted September 2, 2008.

 

We express no opinion as to whether the trial court correctly instructed on the elements of a claim of negligent hiring, retention, and supervision.

 

Jones Express contends: “At issue before the jury was the determination as to which of the vehicles had the right of way at the traffic light at the time of the collision, and which of the vehicles did not.” (Jones Express’s brief, at 9); see also the Jacksons’ brief, at 25 (quoting same).

 

The trial court engaged in similar speculation in apparently concluding in its November 12, 2008, order that the verdict on the negligent hiring, retention, and supervision claim amounted to a finding by the jury of liability against both Quada and Jones Express, but that the jury intended to assess damages against only Jones Express.

 

A motion for a JNOV is now designated, under Rule 50(b), Ala. R. Civ. P., as a renewed motion for a JML. Vaughan v. Oliver, 822 So.2d 1163, 1170 (Ala.2001).

 

Under the doctrine of respondeat superior, “a principal is liable for the tort of his agent if the agent commits the tort while acting within the scope of his employment. If the agent is not liable for any tort, the principal is also absolved” Latham v. Redding, 628 So.2d 490, 495 (Ala.1993) (citation omitted).

 

Because of our resolution of this issue, we pretermit discussion of the remaining issues raised on appeal.