What happened: An Alabama boat dealer alleges its insurance agent kept roughly $75,000 in premium payments that never reached the wholesale broker.
Who's involved: Gulf Shores Power Sports (marine dealership), McCarron Insurance Group (retail agent), Maritime Program Group (wholesale broker).
What's at stake: At least $75,368 in allegedly misapplied premiums, plus interest and damages for negligence, wantonness, recklessness, and fraud.
Why it matters: Alabama's Supreme Court has confirmed that agents cannot use a procedural deposit-and-dismiss maneuver to sidestep independent liability claims - a ruling with direct implications for agency E&O exposure.
Where it stands: The Supreme Court granted the writ on October 23, 2026. The case returns to Baldwin Circuit Court, where the underlying claims have not been tried.
Seventy-five thousand dollars in insurance premiums, and nobody can say where the money went.
That is the question at the center of a dispute between an Alabama Gulf Coast boat dealership and its insurance agent - a dispute that just reached the state's highest court after the agent tried a procedural move to exit the case entirely.
The Supreme Court of Alabama was not persuaded. In a ruling released October 23, 2026, the court ordered the lower court to bring the agent back into the litigation.
Gulf Shores Power Sports, a marine-equipment dealer, renewed its commercial insurance policies through McCarron Insurance Group in April 2023. McCarron, a retail agent, obtained the coverage through Maritime Program Group, a wholesale broker. The premium quote totaled $279,968.
According to the complaint, Gulf Shores Power Sports paid McCarron $196,462.60 through October 2023 before canceling the policies effective November 1, 2023. Maritime Program Group calculated the unearned-premium refund at $15,114.17 and sent that amount to McCarron to pass along.
But the dealership alleges it paid $75,368 more in premiums than McCarron ever forwarded to the wholesale broker. That money, the complaint says, was never applied to the policies - and has never been returned.
Gulf Shores Power Sports sued McCarron, alleging negligence, wantonness, recklessness, and fraud in "wrongfully retaining the additional premium payments and failing to repay them." The complaint alleged that McCarron owed "strict duties and fiduciary duties" to forward the premiums and "did not pay those required amounts." As the filing put it: "It is unclear what ... McCarron did with GSPS paid premium funds."
McCarron's response was to ask the Baldwin Circuit Court to let it deposit the $15,114.17 refund with the court - a procedural tool that lets a party hand over disputed money and step aside - and be dismissed from the case entirely.
The circuit court agreed. It let McCarron deposit the funds, awarded McCarron $2,500 in attorney's fees out of the deposit, and dismissed McCarron from the action.
Gulf Shores Power Sports objected: "McCarron Insurance Group cannot simply offer to interplead a lesser amount ... and be entitled to dismissal as a matter of law."
The Supreme Court found that the conditions for this kind of deposit-and-dismiss procedure were missing. The $15,114.17 was not genuinely in dispute - everyone agreed the dealership was entitled to it. There were no competing claims to the same fund, and no risk that McCarron would have to pay the same money twice.
More critically, the court held that a defendant cannot use this procedure to escape a lawsuit where it faces independent claims beyond the deposited amount. Gulf Shores Power Sports had alleged that McCarron owed far more than the $15,114.17 - and those claims had never been addressed. The court could not simply wipe them out by accepting a deposit that did not cover them.
"GSPS's claims allege that McCarron is independently liable for damages in addition to the amount of the interpleaded funds," the court wrote. "The ruling on McCarron's interpleader request does not address those claims."
One justice agreed with the result but on narrower grounds, arguing the court only needed to decide whether the dismissal was proper - not whether the deposit procedure itself was appropriate. A single dissent would have denied the petition, arguing the dealership had other ways to challenge the ruling.
The case now returns to Baldwin Circuit Court. McCarron has not filed an answer to the complaint, and no court has made findings of fact on any of the claims.
The ruling draws a bright line for agents and brokers: handing back part of what a client says is owed does not settle claims that go well beyond the refunded amount, and a procedural deposit is not an exit ramp from independent liability.
