Mt. Hebron District Missionary Baptist Association of Alabama, Inc. v. Landon Alexander, Sr.

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT
________________________

No. 20-11664
Non-Argument Calendar
________________________

D.C. Docket No. 3:16-cv-00658-ECM-SRW

MT. HEBRON DISTRICT MISSIONARY BAPTIST ASSOCIATION OF
ALABAMA, INC.,

Plaintiff-Appellee,

versus

LANDON ALEXANDER, SR.,
Defendant-Appellant.
________________________

Appeal from the United States District Court
for the Middle District of Alabama
________________________

(November 3, 2020)

Before JORDAN, GRANT, and LUCK, Circuit Judges.
PER CURIAM:
In 2016, a tornado came through Alabama and destroyed one of the
buildings on the property of the Mt. Hebron District Missionary Baptist
USCA11 Case: 20-11664 Date Filed: 11/03/2020 Page: 1 of 6

2

Association of Alabama. Landon Alexander, Sr., a former board member of Mt.
Hebron, had helped construct the building. After the insurance company issued a
check payable to both Mt. Hebron and Alexander, Mt. Hebron sued to recover the
full proceeds. The insurance company asked the district court to determine who
had a right to the proceeds, and Mt. Hebron filed a motion for summary judgment.
The district court granted Mt. Hebron’s motion and, after careful review, we
affirm.
I.
Mt. Hebron, an association of multiple churches, began building a new
facility on its land sometime in 2005-2006. The plan was to use the facility for
social gatherings and other functions. Running low on capital, Mt. Hebron enlisted
the help of some of its members to finish construction. Alexander, a pastor and (at
the time) board member of the association, contributed his time, money, and
physical labor to the construction; Mt. Hebron agreed to compensate him in return.
The parties dispute the amount owed: Mt. Hebron contends that it agreed to pay
Alexander $148,000 for his work, but Alexander claims the amount is closer to
$500,000. To date, Mt. Hebron has paid Alexander approximately $160,000.
USCA11 Case: 20-11664 Date Filed: 11/03/2020 Page: 2 of 6

3

Alexander described himself as the “general contractor” of the project, but he was
not a licensed contractor in the state of Alabama.
Construction finished, and Mt. Hebron purchased an insurance policy from
Sentinel Insurance Company in 2010 to cover the building. The policy listed Mt.
Hebron as the insured party, and, at times, included Alexander as having an
“additional interest” as a “mortgagee.” Mt. Hebron renewed the policy annually
through 2016. Alexander apparently paid some of the premiums, but the parties
dispute how many and whether he was reimbursed.
Then, the storm. A tornado destroyed Mt. Hebron’s building, and Sentinel
issued a check payable to both Mt. Hebron and Alexander to cover the loss. After
unsuccessfully attempting to deposit the check without Alexander’s endorsement,
Mt. Hebron initiated this action against Sentinel to recover the full proceeds.
Sentinel, denying any wrongdoing, asserted a counterclaim against Alexander and
a complaint in interpleader, asking the district court to adjudicate the competing
claims to the policy proceeds. For his part, Alexander brought counterclaims
against Mt. Hebron for not paying him money owed for his work on the
construction. Mt. Hebron then moved for summary judgment as to the interpleader
claim and Alexander’s counterclaims.
The district court granted summary judgment for Mt. Hebron with respect to
the interpleader claim, finding that Alexander had no insurable interest in the
USCA11 Case: 20-11664 Date Filed: 11/03/2020 Page: 3 of 6

4

building because of an Alabama law voiding contracts with unlicensed general
contractors. It then declined to exercise supplemental jurisdiction over
Alexander’s state law counterclaims and dismissed them without prejudice to his
right to pursue them in state court. Alexander now contends that the district court
erred in granting summary judgment to Mt. Hebron on the interpleader claim,
arguing on appeal that his contract with Mt. Hebron and his work constructing the
building gave rise to an insurable interest. We disagree, and therefore affirm the
district court’s judgment.
II.
We review a district court’s grant of summary judgment de novo, applying
the same standards as the district court. McKnight Constr. Co., Inc. v. Dep’t of
Def., 85 F.3d 565, 569 (11th Cir. 1996). Summary judgment is appropriate “if the
movant shows that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a).
Our consideration of the central issue here—whether Alexander had an
insurable interest in the building—is controlled by Alabama law. Hanna v.
Plumer, 380 U.S. 460, 465 (1965). In Alabama, an insured must have “an
insurable interest in the insured property” at the time of loss to receive benefits
under a property insurance contract. Hunter v. State Farm Fire & Cas. Co., 543
So. 2d 679, 680 (Ala. 1989) (citation and internal quotation marks omitted). An
USCA11 Case: 20-11664 Date Filed: 11/03/2020 Page: 4 of 6

5

insurable interest is “any actual, lawful and substantial economic interest in the
safety or preservation of the subject of the insurance free from loss, destruction or
pecuniary damage or impairment.” Ala. Code § 27-14-4(b). A fee title is not
required, but the insured must suffer “economic disadvantage” upon the
destruction of the property. Hunter, 543 So. 2d at 680–81 (citation omitted).
Here, Alexander’s construction contract with Mt. Hebron could not establish
an insurable interest because it was void and unenforceable. Alabama law defines
a general contractor as someone who undertakes to construct a building for a fee
where the cost of the undertaking is $50,000 or more. Ala. Code § 34-8 -1 (a). And
Alabama law is clear that a contract with an unlicensed general contractor to
provide general contracting services is void. Cooper v. Johnston, 219 So. 2d 392,
396 (Ala. 1969). To determine whether a person was performing general
contracting services, Alabama courts consider, among other factors, the intent of
the parties and the type of work performed. Allstate Ins. Co. v. Hugh Cole Builder,
Inc., 127 F. Supp. 2d 1235, 1238 (M.D. Ala. 2001).
Under Alabama’s framework, Alexander fits squarely within the definition
of a general contractor: he helped construct a building for a fixed fee, and the cost
of the undertaking was more than $50,000. Ala. Code § 34-8 -1(a). What’s more,
the evidence shows that the parties intended for him to act as a general contractor;
in fact, he identified himself at his deposition as a “general contractor.” Although
USCA11 Case: 20-11664 Date Filed: 11/03/2020 Page: 5 of 6

6

Alexander appears to have changed his position in recent briefing, he cannot point
to evidence in the record supporting his new argument that he was not a general
contractor.
Alexander also admits that he did not hold a general contractor’s license in
the state of Alabama. That matters, because a license is required for a contract
with a general contractor to be enforceable. Alexander’s contract with Mt. Hebron,
therefore, was unenforceable and void as a matter of public policy under Alabama
law. And a void contract such as this one cannot give rise to an insurable interest.
Pope v. Glens Falls Ins. Co., 34 So. 29, 30 (Ala. 1903).
In addition, Alexander did not have an insurable interest merely from
contributing time and labor to the construction. He needed to show that he would
suffer financial loss if the building were destroyed. Hunter, 543 So. 2d at 680.
But even if Alexander invested substantial time and labor into constructing the
property, and even if he was still owed money for that work, that does not show
that he would suffer financial loss from the property being destroyed. Alexander
needed to demonstrate that he had an actual, lawful, and substantial economic
interest in the preservation of the facility, which he could not do.
In sum, even after resolving all doubts in Alexander’s favor, no reasonable
jury could find that he had an insurable interest in the property. Accordingly, the
judgment of the district court is AFFIRMED.
USCA11 Case: 20-11664 Date Filed: 11/03/2020 Page: 6 of 6