Townsend ford inventory trial#

'`It is axiomatic that a corporate employee's individual defense of lack of intent does not of itself end the inquiry with respect to the corporation's requisite intent to defraud. 'The Alabama Supreme Court has declared in a number of fraud cases that a culpable intent by any of the corporate agents involved in a transaction amounts to corporate fraud, regardless of the fact that other corporate agents, participating in the transaction or otherwise, had no such fraudulent intent.

Townsend ford inventory trial#

The trial court held that while this policy provision requires an individualized analysis of the separate personal intent of each insured named as a defendant, because Townsend Ford is a corporation rather than a natural person its intent is deemed to have been the same as that of its salesperson. Separately to each insured against whom claim is made or `suit' is brought.' As if each Named Insured were the only Named Insured and 'Except with respect to the Limits of Insurance, and any rights or duties specifically assigned in this Coverage Part to the first Named Insured, this insurance applies: Townsend Ford contends that the trial court did not correctly apply the 'Separation of Insureds' provision of the policy, which reads:

The trial court reasoned that this provision excluded coverage of the claims of intentional fraud filed against Townsend Ford. `Bodily injury' or `property damage' expected or intended from the standpoint of the insured.' The 'intentional act exclusion' provision of the policy reads as follows: Townsend Ford brought this declaratory judgment action to establish that its insurer, Auto-Owners, was obligated under its policy to cover and defend claims of intentional fraud, fraudulent suppression, and breach of warranty.

The customers allege that salespeople employed by Townsend Ford represented either that these program cars had been driven only by Ford managers under the constant ownership of Ford Motor Company and were being sold as 'demonstrators' or that the salespeople failed to disclose that these cars had been used previously as rental cars. After *362 it buys back the cars, Ford sells them to franchise dealers for resale. Program cars are cars that Ford Motor Company sells to rental car agencies with an obligation to buy them back. The plaintiffs in the two underlying actions had purchased 'program' cars from Townsend Ford. The insurer, Auto-Owners Insurance Company, cross appeals from the trial court's ruling that the policy covered the claims alleging suppression of a material fact, reckless misrepresentation, and breach of an express warranty. The insured, Townsend Ford, Inc., appeals from the trial court's ruling that the policy excluded coverage for the claims that its salespeople committed intentional fraudulent misrepresentation. The issue is whether the trial court properly interpreted the insurance policy. The insured brought this declaratory judgment action to determine whether the insurer has a duty to defend and indemnify the insured with regard to two actions brought against the insured by its customers alleging intentional fraudulent misrepresentation, fraudulent suppression of material facts, reckless misrepresentation, and breach of an express warranty in connection with the sale of a used motor vehicle. The opinion of March 25, 1994, is withdrawn and the following opinion is substituted therefor. Larry Bradford of Bradford & Associates, P.C., Birmingham, for appellee/cross appellant. of Zeanah, Hust, Summerford & Davis, Tuscaloosa, for appellant/cross appellee.