Supreme Court of Alabama Slip Opinions

General Information

The Supreme Court generally releases opinions on Fridays. This page contains links to the full text of each opinion released this month, plus a list of all the cases decided each week, whether or not an opinion was released. If the case summary interests you, click on the name of the case and you should see the full text of the opinion, which you can save to your computer.

Elsewhere, we have included opinions and summaries of cases from the Alabama Court of Civil Appeals, the Alabama Court of Criminal Appeals, and the United States Court of Appeals for the Eleventh Circuit.

June 4

Decisions Announced by the Supreme Court of Alabama on Friday, June 4, 2004
Summary: A list of all decisions released, including those without opinion, and a list of the attorneys in the reported decisions.

Ex parte State of Alabama (In re: J.L.N. v. State), No. 1020651 (Ala. June 4, 2004)
Summary: criminal; standing; sex offenders; constitutionality of Ala. Code §15-20-26(b), which prohibits an adult criminal sex offender from establishing a residence within 1000 feet of the victim's residence; On April 10, 2000, J.L.N. was convicted of second-degree rape, or "statutory rape," a violation of Ala. Code §13A-6-62(a)(1). At the time of his arrest, J.L.N. was 28 years old and the victim, L.N.P., had just turned 15 years old. The trial court sentenced J.L.N. to 6 years' imprisonment but, pursuant to the Split Sentence Act, Ala. Code §15-18-8, split the sentence, ordering J.L.N. to serve 90 days' imprisonment and to serve the remainder of the sentence on probation. After his convictions, he was classified as an adult criminal sex offender under the Community Notification Act, Ala. Code §15-20-20 et seq. After J.L.N. was released from jail, but apparently while he was still on probation, L.N.P. and her mother moved into J.L.N.'s house. J.L.N. was arrested and was charged with and convicted of violating Ala. Code §15-20-26(b), a part of the Community Notification Act, because he, an adult criminal sex offender, established a residence or another living accommodation within 1,000 feet of the property on which the victim or any of her immediate family members resided. J.L.N. entered a negotiated guilty plea and reserved his right to challenge the constitutionality of §15-20-26(b). J.L.N. appealed to the Court of Criminal Appeals, which reversed his conviction for violating §15-20-26(b), holding that §15-20-26(b) impinges on J.L.N.'s right to marry and is therefore unconstitutional. HOLDING: The Supreme Court reversed the Court of Criminal Appeals. The Court noted that while the Court of Criminal Appeals' opinion notes that L.N.P., the victim, purportedly stated in an unverified witness-statement form transcribed by a police officer, that she and J.L.N. were "engaged," J.L.N. and the victim are not married and they have not attempted to marry. Instead, the Court noted, J.L.N. was arrested and convicted of cohabiting with the minor victim in violation of §15-20-26(b). The Court noted that "J.L.N. does not have a constitutional right merely to cohabit with his minor statutory-rape victim in this case." Thus, the Court held that J.L.N. has not demonstrated what, if any, legally protected right of his has actually been violated, and he has failed to show that he has standing to challenge Ala. Code §15-20-26(b). The Court noted that, at most, J.L.N. alleges that, if in the future he should attempt to marry L.N.P., §15-20-26(b) would violate his constitutional right to marry. The Court held that this allegation is insufficient to demonstrate that J.L.N. has actually suffered an injury and that that injury was to a constitutionally protected right.

Ex parte State Farm Mut. Auto. Ins. Co., No. 1021378 (Ala. June 4, 2004)
Summary: venue; uninsured-motorist insurance; Carl R. Robinson and his wife, Teresa Ann Robinson, residents of Bibb County, were involved in an automobile accident with Jamie Denise Corley, also a resident of Bibb County. The Robinsons sued Corley in the Bessemer Division of the Jefferson Circuit Court, alleging that Corley's negligence and/or wantonness caused the accident and seeking damages. The complaint recites that the accident occurred in Bibb County. The complaint named State Farm, the Robinsons' insurer, as a defendant and sought uninsured-/underinsured-motorist insurance benefits. The Robinsons purchased their policy from State Farm in Bessemer. State Farm filed a motion to transfer the action to the Bibb Circuit Court, arguing that venue was improper in the Bessemer Division of the Jefferson Circuit Court. Corley filed a similar motion. The Robinsons filed an opposition to the motions to transfer, arguing that venue was proper in the Bessemer Division of the Jefferson Circuit Court and that the accident actually occurred in Tuscaloosa County, not Bibb County. On November 15, 2002, the trial court entered an order granting the motions to transfer and directing the court clerk to transfer the action to the Bibb Circuit Court. The Robinsons' counsel requested the trial court to reconsider its order transferring the case. On December 6, 2002, the trial court entered an order setting aside its November 15 order and denying the motions to transfer. On June 18, 2003, State Farm and Corley petitioned the Supreme Court for a writ of mandamus directing the trial court to vacate its order setting aside its earlier order and denying the motions to transfer. HOLDING: The Supreme Court granted the petition and issued the writ. The Court held that although the petition was filed outside of the presumptively timely time, the Petitioners had included a statement providing an explanation and the Respondents did not challenge the timeliness of the petition or argue that the Petitioners failed to show good cause under Ala.R.App.P. 21(a). Thus, the Court agreed to consider the petition. The Court held that because this cause of action did not "arise" in the Bessemer Division of the Jefferson Circuit Court, venue in the Bessemer Division is improper. The Court noted that there can be no breach of an insurance contract providing uninsured-motorist coverage until the insureds prove that they are legally entitled to recover. Because, in order to recover benefits from State Farm, the Robinsons must prove that they are "legally entitled to recover" damages stemming from the accident, the Court concluded that the "omission" or "wrongful act" underlying this action occurred at the place of the accident, which is not in the Bessemer Division of the Jefferson Circuit Court. The Court held that State Farm and Corley have demonstrated that the Bessemer Division of the Jefferson Circuit Court is an improper venue; therefore, they are entitled to a transfer of this case to the Bibb Circuit Court.

Ex parte J.R., No. 1021965 (Ala. June 4, 2004)
Summary: termination of her parental rights; viable custodial alternative; relative placement; hearsay; The record reveals that J. and J.R. had one child, J.L.R., a daughter, born to the marriage. J.R.'s daughter M.H. was also a member of the household unit, and the older of the two girls. In 1993, as a result of an automobile accident, J.R. became a quadriplegic. At the time of the accident, J.L.R. was a newborn and M.H. was approximately eight years old. As a result of that accident, M.H.'s responsibilities around the household increased dramatically and over time she became the primary caregiver for both J.R. and J.L.R. Her duties included feeding, washing, bathing, and clothing her half sister, and also taking care of household chores. The record indicates that by the time M.H. was 13 she was also responsible for driving the family's vehicle whenever that need arose. it was alleged that J. had sexually abused M.H., beginning when she was nine years old, approximately three to four times a month. It was also alleged that the abuse sometimes took place in front of J.L.R. On December 4, 1998, J. admitted to sexually abusing M.H. and was charged with rape, sodomy, sexual abuse, and incest. That same day, J.L.R. and M.H. were placed in the temporary custody of DHR pending the outcome of a 72-hour hearing. J. subsequently pleaded guilty to three counts of sexual abuse in the first degree and was sentenced to three years in the state penitentiary. Because J. was to be incarcerated, the court returned J.L.R. and M.H. to J.R.'s custody on December 14, 1998. The next day M.H. overdosed on Valium while at school. Methadone was also found in her possession. M.H. indicated that the reason for taking the Valium was that she remembered "feeling that if I would have kept my mouth shut that none of it would have happened, and we still would have had the family together." M.H. was asked if her mother told her that, and after she did not answer was asked if she had told the DHR worker that her mother had told her that, and M.H. said, "I believe so." Shortly thereafter, DHR removed both children from the household, placing J.L.R. in foster care and M.H. with her father. J.L.R. was reunited with J.R. in January 1999. The reunification took place in the home of J.R.'s parents, who lived "across the road" and "up the hill" from J.R.'s house. Also living at that residence was J.R.'s mentally handicapped younger sister. J.R., J.L.R., and J.R.'s younger sister all shared one room while J.R. and J.L.R. lived with J.R.'s parents. On May 6, 1999, DHR allowed J.R. and J.L.R. to return to J.R.'s house, but mandated that an adult, other than J.R., be present at all times. DHR subsequently received a report from J.L.R.'s school that she was coming to school unkempt and that her clothes were not clean. Shortly after receiving that report, DHR removed J.L.R. from J.R.'s custody and placed her back in foster care. Because J.R.'s mother wanted to sleep in her own bed, she started leaving J.R. and J.L.R. alone and unattended at night. On July 6, 1999, J.R. was evaluated by Patrick Dunne, a psychologist at Altamount Counseling Associates. In his report, which came into evidence as a part of the challenged DHR Exhibit #3, he concluded that J.R. appeared to be incapable of placing her children's needs above her own. In September 1999, DHR conducted a home evaluation of the residence of J.R.'s parents to determine whether it was a suitable environment for J.L.R. The report of this home evaluation, entered into evidence also as a part of DHR Exhibit #3, concluded that it was not. On April 3, 2000, J.R. was seen by Dr. Donald Garcia. According to a lengthy "consultation" report he authored, which came into evidence as a part of DHR Exhibit #3, he was asked to perform a psychiatric evaluation of J.R. because of rectal and vaginal injuries she had sustained during "consensual sex" with a boyfriend. Dr. Garcia concluded in his report that J.R. was mentally and emotionally unable to make sound decisions, finding that "[t]he patient has a habit of minimizing her responsibility for problems, minimizing the poor choices she has made, and has not shown very much responsibility or good judgment in handling her injury and subsequent needs," and that "[t]he patient has demonstrated an inability to make sound judgments which has affected not only her own health but the health and welfare of her children." Soon after Dr. Garcia's report, J.R.'s parents decided they could no longer take care of her needs and placed her in a nursing home. Meanwhile, beginning in 2000, Darrell R. and Lisa R., the child's paternal uncle and his wife, began expressing interest in being considered as a viable family resource. Darrell was in the United States Army and they were based in North Carolina at the time. The North Carolina counterpart to DHR approved them as a relative resource through the Interstate Compact on the Placement of Children ("ICPC"). Later that year, however, Darrell was transferred to Alabama. He requested a home study be done on his residence, which, according to his testimony, was denied because "[DHR social worker Akridge] petitioned the Court that I not get to see [J.L.R.] again and that I couldn't get visitation at that time." Darrell contacted the Cullman County DHR again in March 2002, requesting he be allowed to visit J.L.R. and take her on a trip to Walt Disney World. DHR denied this request because, it says, there was a lack of substantial relationship between Darrell and J.L.R. At the time of the August 2002 termination hearing, J.R. was in need of 24-hour care and admitted to the court that she was not physically able to care for herself or J.L.R. After the hearing, the court entered a final judgment terminating J.R.'s parental rights as to J.L.R. Although J.R.'s parental rights were terminated, she is not the one seeking to regain custody of J.L.R.; rather, she challenges the termination on the ground that Darrell and Lisa were a viable family resource and, therefore, that there were less drastic measures for the court to take than terminating her parental rights. J.R., along with Darrell and Lisa, insisted in their briefs to the Court of Civil Appeals that "[d]uring the trial both the uncle and aunt and the maternal grandparents of the minor child presented themselves to the Court as ready[,] willing and able to take custody of [J.L.R.]..." Akridge testified that there were two main reasons DHR did not consider Darrell and Lisa a viable family resource. First, DHR was concerned with the amount of contact Darrell would have with his brother J., J.L.R.'s father, who had been convicted of sexually abusing J.L.R.'s half sister, M.H. Akridge's second reason for rejecting Darrell and Lisa for custody consideration as a viable alternative less drastic than the termination of J.R.'s parental rights was based on the alleged lack of efforts by Darrell and Lisa to establish and maintain a relationship with J.L.R. HOLDING: The Supreme Court reversed. The Court noted that DHR, by Akridge's admission, did not fully investigate Darrell and Lisa's potential as a viable family resource before deciding that they did not qualify as a viable resource. The Court held that DHR presented no evidence that clearly indicated why Darrell and Lisa were "unsuitable" as an alternative family resource, a decision far less drastic than terminating J.R.'s parental rights. Because the Court remanded the case, it also addressed briefly the hearsay issue. The Court noted that a parental-rights-termination hearing is an adjudicatory proceeding at which hearsay evidence is inadmissible. The Court held that the trial court should consider in connection with the further proceedings to be conducted on remand in this case whether Akridge's testimony was sufficient to lay the proper predicate under Rule 803(6) for admission of all of the reports contained in DHR Exhibit #3.

Ex parte Peraita, No. 1021974 (Ala. June 4, 2004)
Summary: criminal; capital murder; stipulations; prior convictions; expert testimony; double jeopardy; Cuhuatemoc Hinricky Peraita is an inmate in Holman Correctional Facility. At the time of the incident resulting in the capital murder convictions, he was serving a sentence of life imprisonment as the result of earlier convictions for murder. At some time during his incarceration, he broke off a homosexual relationship with fellow inmate Quincy Lewis and began another homosexual relationship with inmate Michael Castillo. After Peraita began his relationship with Castillo, Lewis often threatened Peraita and Castillo. In the early hours of December 11, 1999, Peraita and Castillo were sitting on or near Castillo's bunk bed in a dormitory-like room housing several inmates. Lewis walked toward Castillo's bed and sat on a bed across from Castillo's, facing Castillo and Peraita. Peraita stood to leave and walk back to his bunk bed. As he did, Lewis stood up and slapped Peraita on his face. Peraita did not respond, but continued walking to his bed. Minutes later, Peraita returned to Castillo's bed. Lewis was still sitting on the bed across from Castillo's, Peraita sat down, remained seated for a few minutes, then stood to leave. However, instead of leaving, Peraita grabbed Lewis's head and snapped it back. Castillo then drew a knife and stabbed Lewis multiple times in the neck and other areas; he also accidentally stabbed Peraita. Lewis died later that morning. Peraita was charged with two counts of capital murder. Count one alleged a violation of Ala. Code 1975, § 13A-5-40(a)(6), which classifies as a capital offense "[m]urder committed while the defendant is under sentence of life imprisonment." His indictment on that count stated that he committed intentional murder while "under a sentence of life imprisonment imposed by the Circuit Court of Etowah County, Alabama." Count two alleged a violation of Ala. Code 1975, § 13A-5-40(a)(13), which classifies as a capital offense "[m]urder by a defendant who has been convicted of any other murder in the 20 years preceding the crime." His indictment on this count stated that he committed intentional murder "after having been convicted of murder within the preceding twenty years in the Circuit Court of Etowah County, Alabama." Before trial, Peraita agreed to stipulate to his six prior convictions that resulted in his sentence of life imprisonment, and his counsel drafted a proposed stipulation. For each count, the stipulation tracked the language of the capital-offenses statute, Ala. Code 1975, §§ 13A-5-40(a)(6) and (13), respectively. The State refused to accept Peraita's proposed stipulations, stating that they were "factually incomplete and inaccurate." The State proposed six stipulations, which, for each prior conviction, recounted the date, the name of the offense, the sentence imposed, and the case number and indicated the circuit court that had imposed the sentence. The stipulations proposed by the State contained no facts concerning the nature of the underlying crimes or the events surrounding them. Peraita rejected the State's proposed stipulations. The trial court allowed the State to introduce documents evidencing Peraita's prior convictions for purposes of proving the capital offenses. Those documents were heavily redacted, detailing no facts concerning the nature of Peraita's past offenses. Most pages were either case-action summaries, jury verdict forms, or similar "housekeeping" documents. The court determined that the documents were relevant for the State to meet its burden of proof, and that the probative value of the documents outweighed any unfair prejudice that might be generated by their introduction. After the State rested its case, Peraita's attorneys attempted to introduce the testimony of Dr. Craig Haney, a psychologist. Dr. Haney was called for the stated purpose of discussing the theory of "institutionalization," whether Peraita had undergone institutionalization, and whether institutionalization could have affected Peraita's state of mind so as to validate his claim that he killed Lewis in self-defense. The court excluded Dr. Haney's testimony. Peraita also attempted to introduce evidence indicating that Lewis had a reputation for being violent. The trial court struck Harden's testimony and instructed the jury to disregard it also. The jury, however, was allowed to hear Best's and Harden's testimony that Lewis had a reputation for being "violent" and "sexually violent." Peraita was convicted of both counts of capital murder. He appealed his conviction to the Court of Criminal Appeals, which affirmed his conviction. HOLDING: The Supreme Court affirmed. The Court held that, given Dr. Haney's bare familiarity with Holman Correctional Facility, the long period of time between Peraita's crime and his interview with Dr. Haney, and the confusion that this evidence might cause the jury, it could not say that the trial judge exceeded his discretion in excluding Dr. Haney's testimony. The Court held that Harden's testimony that Lewis had a reputation for violence was certainly within the bounds of Rule 404(a)(2)(A)(i). The Court held that the remainder of Best's and Harden's testimony was properly excluded for two reasons. First, the Court held that the suggested character traits conveyed by that testimony fall outside the bounds of what it considered to be "pertinent" under Rule 404(a)(2)(A)(i). Second, the Court held that "the excluded statements addressed specific conduct by Lewis, rather than general opinion or reputation evidence." The Court further noted that the State offered its own stipulations, which differed little from the stipulations submitted by Peraita, yet Peraita rejected the stipulations proposed by the State. The State then carefully sought direction from the trial court, which itself sought to fairly assess the proper evidence for the State to admit. The State followed the directions of the trial court, introducing little substantive information, but enough to prove the allegations in the capital-murder indictment. The Court held that, because the trial court is vested with significant discretion, because little or no binding precedent existed to guide that court on this issue, and because the court carefully considered every argument submitted, it must afford the trial court the benefit of the doubt in this difficult decision. Thus, it held that the trial court did not exceed its discretion in allowing evidence of Peraita's prior convictions. Finally, the Court held that Peraita's right to be free from double jeopardy was not violated by his having been tried and convicted of two counts of capital murder for the killing of one individual.

Philadelphia Am. Life Ins. Co. v. Bender, No. 1022141 & 1030029 (Ala. June 4, 2004)
Summary: arbitration; DeJurnitte Bender and his wife Peggy Bender completed an application for health insurance with Philadelphia American Life Insurance Company ("Philadelphia American"). The application was provided by Ray Jenks of The Jenks Insurance Agency. Peggy was listed as the applicant/proposed insured, and DeJurnitte was listed as a spouse/proposed insured. Along with the application, Jenks also provided the Benders with a document entitled "Alabama Arbitration Agreement Endorsement." This document (hereinafter "the arbitration endorsement") contained an arbitration provision. The arbitration endorsement contained only one signature line for the "applicant," and Peggy signed on that line and inserted the date July 22, 1999. Jenks signed on a line reserved for a witness. DeJurnitte did not sign the document. Jenks sent the application and arbitration endorsement to American Health Underwriters, Inc. ("AHU"), Philadelphia American's general agent, along with a check from the Benders for the initial premium. AHU then forwarded the application and check to Philadelphia American for underwriting. Philadelphia American contacted the Benders by telephone on August 7, 1999, to verify certain information. Philadelphia American ultimately issued a policy to insure DeJurnitte but rejected Peggy as an insured because it was unable to obtain her medical records. According to Philadelphia American, in correspondence dated November 22, 1999, it mailed DeJurnitte a policy, which had an effective date of November 5, 1999. DeJurnitte, however, claims that he did not receive a copy of the policy in November 1999. After the policy was issued, DeJurnitte and his health-care providers made numerous claims under the policy for the payment of various medical expenses. On January 18, 2002, Philadelphia American denied certain claims related to the treatment of DeJurnitte's heart/circulatory condition. In February 2003, DeJurnitte sued Philadelphia American, AHU, The Jenks Insurance Agency, and Ray Jenks, alleging, among other things, breach of contract, fraud, and bad faith failure to pay an insurance claim. Philadelphia American filed a "Motion to Dismiss for Lack of Jurisdiction," in which it argued that DeJurnitte's claims against Philadelphia American were due to be arbitrated. AHU filed a motion to compel arbitration in which it argued that it was entitled to compel arbitration under the arbitration endorsement. DeJurnitte filed an opposition to the motions to compel arbitration, arguing that he had not consented to arbitration. In an order filed August 29, 2003, the trial court denied the motions to compel arbitration. HOLDING: The Supreme Court reversed. The Court held that although DeJurnitte did not sign the arbitration endorsement, it is part of the insurance contract to which he is a party and thus he is required to submit his claims to arbitration. The Court noted that DeJurnitte is relying on the policy, which contains an arbitration provision, to support his claim for damages. The Court held that DeJurnitte cannot arbitrarily pick and choose the provisions in the policy that he wants to apply; instead, if DeJurnitte wants to recover for a breach of the policy, he must pursue his claims under the terms of that contract, which include an agreement to arbitrate. Additionally, the Court concluded, based on DeJurnitte's conduct, that he accepted the policy and its arbitration provision.

Ex parte Fidelity Bank, No. 1030483 (Ala. June 4, 2004)
Summary: personal jurisdiction; waiver; On September 12, 2001, Allen Austin sued several defendants in the Shelby Circuit Court seeking damages he claimed as the result of failed investment plans; Austin alleged that the defendants had engaged in an international Ponzi scheme. On September 27, 2001, Austin amended his complaint to add Fidelity Bank f/k/a Fidelity National Bank ("Fidelity"), a bank located in Georgia, as a defendant. The amended complaint named as plaintiffs two Alabama residents who claimed to be damaged as a result of investing in self- directed individual retirement accounts ("SDIRA") held by Fidelity. On October 9, 2001, several codefendants filed a notice of removal to the United States District Court for the Northern District of Alabama. Fidelity did not join in the notice. On October 29, 2001, Fidelity filed in the federal court its answer to Austin's complaint. As to the paragraphs of the complaint asserting jurisdiction, Fidelity responded that it was "without knowledge or information sufficient to form a belief as to the truth of the averments." On November 27, 2001, Fidelity filed a motion to join the notice of removal in the federal court. In January 2002, the federal court remanded the case to the Shelby Circuit Court, where the action had been filed originally. Fidelity amended its answer to assert as an affirmative defense the lack of personal jurisdiction. Austin did not object to the amendment or move to strike the answer. Fidelity then filed a motion to dismiss for lack of personal jurisdiction. Fidelity argued that it did not have minimum contacts with Alabama to subject it to general jurisdiction nor did it have sufficient contacts with the Alabama plaintiffs to subject it to specific jurisdiction. Austin argued that Fidelity had waived its opportunity to contest personal jurisdiction because, he says, Fidelity did not make the claim in its initial responsive pleading or in a Rule 12(b), Ala. R. Civ. P., motion before its initial responsive pleading. Austin also argued that Fidelity has maintained "systematic and continuous contacts" with the State since 1997. Austin included documents establishing that Fidelity maintained 1,248 accounts for Alabama residents in 1997; 1,576 accounts for Alabama residents in 1998; 1,916 accounts for Alabama residents in 1999; 2,150 accounts for Alabama residents in 2000; 1,986 accounts for Alabama residents in 2001; 1,962 accounts for Alabama residents in 2002; and 2,118 accounts for Alabama residents in 2003. Austin also included documents establishing that Fidelity made 515 loans to Alabama residents in 1997 to purchase vehicles; 894 loans to Alabama residents in 2001 to purchase vehicles; and 894 loans to Alabama residents in 2003 to purchase vehicles. The trial court denied Fidelity's motion. Fidelity sought a writ of mandamus ordering the trial court to grant its motion to dismiss it as a defendant for lack of personal jurisdiction. Fidelity argued that it has not waived its right to assert the defense of lack of personal jurisdiction and that it does not have sufficient contacts to be subject to either specific jurisdiction or general jurisdiction in Alabama. HOLDING: The Supreme Court denied the petition. The Court noted that Fidelity filed an answer as its initial response to the complaint and in that answer Fidelity averred that it was "without knowledge or information sufficient to form a belief as to the truth of the averments" relating to jurisdiction, and that such a response constitutes a denial. Consequently, the Court held that Fidelity did not waive the defense of lack of jurisdiction over the person when it filed its initial response. The Court also concluded that there is no clear connection between Fidelity's minimal contacts with the plaintiffs and the claims the Alabama plaintiffs assert against Fidelity in this action and that, therefore, the contacts do not rise to the level that Fidelity would reasonably anticipate being haled into court in Alabama to defend against an action brought by these plaintiffs and involving these contacts. As such, the Court held that specific jurisdiction does not exist under the facts presented. The Court noted that Fidelity does not dispute that it has maintained separate accounts for Alabama residents over the past several years in the following amounts: 1,248 accounts for Alabama residents in 1997; 1,576 accounts for Alabama residents in 1998; 1,916 accounts for Alabama residents in 1999; 2,150 accounts for Alabama residents in 2000; 1,986 accounts for Alabama residents in 2001; 1,962 accounts for Alabama residents in 2002; and 2,118 accounts for Alabama residents in 2003. The Court noted that Fidelity does not dispute that it has extended vehicle loans to Alabama residents over the past several years in the following amounts: 515 vehicle loans to Alabama residents in 1997; 894 vehicle loans to Alabama residents in 2001; and 894 vehicle loans to Alabama residents in 2003. The Court held that it would not be unreasonable for Fidelity, whose practice of accepting Alabama customers from third-party referrals was continuous and systematic, to anticipate facing litigation in Alabama, and therefore, that Fidelity should be subject to general jurisdiction under Alabama's long-arm provision, Rule 4.2(a)(2)(I).

Ex parte City of Brundidge, No. 1030490 (Ala. June 4, 2004)
Summary: workers' compensation; credit for settlement of third-party claim; Alabama Insurance Guaranty Association Act; On May 5, 1999, Coston Collier ('the employee') was injured in an automobile accident while working in the line and scope of his employment with the City of Brundidge. At the time of the accident, the employee was 47 years old, and he had been employed with the City of Brundidge ('the employer') for 19 years. The accident caused two vertebral disks in the employee's neck to bulge and a disk in his lower back to herniate. Those injuries have prevented the employee from returning to work. The employee's treating physician opined that, as a result of the employee's injuries, the employee was permanently and totally disabled from employment. To avoid protracted litigation, the employer and the employee reached a settlement agreement whereby the employee would receive a payment every two weeks in the amount of $531.98 as workers' compensation benefits resulting from his permanent, total disability. The settlement agreement provided that "the City of Brundidge, Alabama, and/or its insurance carrier, the Municipal Worker's Compensation Fund, Inc., and/or its worker's comp. administrator, Millennium Risk Managers, Inc. reserve any and all rights to recover and be reimbursed for any amount of compensation benefits paid to Employee/Plaintiff on account of any recovery from any third party as a result of this accident." The employee's injuries were caused when an automobile driven by Deborah Berry collided with the rear of Collier's vehicle. The employee pursued an action against Berry. At the time of the accident, Berry was insured under an automobile-liability insurance policy issued by Reliance Insurance Company ('Reliance'); her single-incident liability limit under the policy was $1,000,000. In June 2001, Reliance filed for protection under Chapter 11 of the United States Bankruptcy Code. As a result of Reliance's bankruptcy, [the Alabama Insurance Guaranty Association ('AIGA')] assumed the obligations of Reliance with respect to the employee's claim against Berry. Pursuant to the Guaranty Association Act, AIGA's liability is capped at the amount of $150,000 per incident. Eventually, the employee accepted $124,900 from AIGA to settle his claim against Berry. The employer and its workers' compensation carrier, Municipal Worker's Compensation Fund, Inc., petitioned the trial court for the award of a credit against the employer's workers' compensation liability in the same amount that the employee had received from AIGA. The employee opposed the petition. On August 29, 2002, the trial court entered a judgment granting the employer's petition. Collier appealed to the Court of Civil Appeals. The Court of Civil Appeals reversed the judgment of the trial court and remanded the case, holding that "the definition of a 'covered claim' in Ala. Code §27-42-5(4) specifically prevents the employer in this case from receiving a credit for workers' compensation benefits that are or will be paid." HOLDING: The Supreme Court reversed the judgment of the Court of Civil Appeals. The Court adopted the reasoning of Judge Murdock's dissent and held that the Court of Civil Appeals erred because it applied §27-42-5(4) in a setting where the statute, which does not admit of a post hoc application, does not apply. The Court noted that the rationale of the Court of Civil Appeals depends on authority relevant to a determination of the status of the claim as a covered claim before any payment is either made by or determined to be due from AIGA, and that the definition of covered claim in §27-42-5(4) deals only with the process of determining eligibility for the payment of the claim before it is made. The Court held that §27-42-5(4) is a restriction on payments by AIGA to insurance companies and related organizations but that no such payment was made by AIGA in the present case. Instead, the Court noted, AIGA made a payment directly to the injured employee. The Court held that nothing in the statute prevents an employer (or other third party) from seeking reimbursement or "subrogation" from an amount already paid to a claimant by AIGA or from any other moneys that may come into the possession of the claimant. The Court concluded that the plain meaning of the statute, therefore, supports the judgment of the trial court. The Court also noted that the purpose of §27-42-5(4) is to protect the financial reserves of AIGA from solvent insurers so that those reserves will be available to aid the policyholders of insolvent insurers. The Court noted that this case, however, involves a payment that has already been made by AIGA and that no ruling by this court will make that payment recoverable by AIGA. The Court reasoned that denying the employer its reimbursement and subrogation rights would be at odds with the Workers' Compensation Act, without advancing the policy objectives of the Guaranty Association Act.

Ex parte Fort James Operating Co., No. 1030607 (Ala. June 4, 2004)
Summary: workers' compensation; setoff for sickness-and-accident benefits; award of "other" benefits; William Irby was employed by Fort James Operating Company ("Fort James") for 32 years. In July 1997, while practicing with the Fort James fire-prevention department on a riverbank, Irby stepped onto a rock, the rock moved, and he fell and seriously injured his ankle. He underwent numerous surgeries to repair the damage. His doctors allowed him to return to work, but under certain restrictions limiting his activities. When Irby was physically able to return to Fort James, Fort James told him that it had no job that fell within the restrictions under which Irby could work. Irby then decided that he would retire. From April 23, 1998, just after Irby applied for disability benefits, until June 21, 1998, the date he retired, Irby received $335 per week in sickness-and-accident benefits. Those benefits totaled $2,823.57. The benefits were administered by Aetna Life Insurance Company ("Aetna") but were paid from Fort James's funds. Irby eventually sued Fort James seeking workers' compensation benefits. Fort James pleaded several affirmative defenses, one of which was that it was "entitled to a credit against its compensation liability for all payments made to [Irby] due to his ankle injury out of the sickness and accident benefit plan provided by [Fort James]." On September 20, 2002, the trial court for the workers' compensation action entered a judgment finding Irby permanently and totally disabled and awarding him the corresponding disability benefits, as well as future medical expenses and "other benefits as provided by the workers' compensation law of Alabama existing on July 10, 1997," which was the date that Irby was injured. The court also found that Fort James was not entitled to a setoff for any sickness-and-accident benefits it may have provided to Irby. Fort James then appealed to the Court of Civil Appeals, which affirmed in part and reversed in part the judgment of the trial court. HOLDING: The Supreme Court reversed and remanded. The Court noted that the party bearing the burden of proof must meet that burden by a preponderance of the evidence, yet the trial court found that Fort James had not proven by "clear and convincing evidence" that Fort James had paid Irby sick pay. Thus, the Court held that the trial court erred in requiring Fort James to prove by "clear and convincing evidence" that it had paid Irby sick pay. The Court found that Irby was paid under a "Temporary Disability Benefit" plan maintained by Fort James that covered any "time lost from work" as the result of an injury and that, therefore, Fort James is allowed the setoff for any plan contemplated by Ala. Code §25-5-57(c)(1), including one that merely provides "sick pay." The Court held that a decision providing for "other" unnamed benefits lacks a conclusive nature; it implies that further proceedings must take place to determine just what those "other benefits" are. The Court held that the Court of Civil Appeals erred in affirming the trial court's order awarding "other benefits" to Irby.

June 11

Decisions Announced by the Supreme Court of Alabama on Friday, June 11, 2004
Summary: A list of all decisions released, including those without opinion, and a list of the attorneys in the reported decisions.

Birmingham News Co. v. Horn, Nos. 1020552 et al. (Ala. June 11, 2004)
Summary: arbitration; appeal; timeliness of appeal; duplicative damages; This opinion addresses the appeals by The Birmingham News Company ("the News") of approximately $20 million in awards made by arbitrators to Sherry Horn, Hugh Stewart, Kameron Hyde, Jesse Glass, James McLendon, and Teresa McLendon ("the plaintiffs"). The plaintiffs are individuals who at one time had "dealer agreements" (hereinafter the "agreement") with the News to sell and distribute its newspapers to the public. The arbitration awards were based upon the plaintiffs' claims that the News wrongfully and illegally terminated those agreements. Each agreement contained in paragraph 10 the following language concerning arbitration: "It is agreed, however, that if either party shall terminate this contract by reason of the alleged breach thereof by the other party, the sole issues for determination shall be whether or not the termination was valid, whether or not either party shall be entitled to money damages, and, if so, the amount thereof, which issues only shall be submitted to arbitration. It is expressly agreed that in case of such termination neither party shall be entitled to have this Agreement reinstated nor to be restored to his or its status thereunder, notwithstanding the fact that it may be determined that the termination by the other party was not warranted. In any event, [the plaintiff] shall not claim any additional compensation for good will, but acknowledges that his entire compensation under this agreement is the difference between the wholesale and resale price of newspapers purchased and sold by him.... The award shall be effective and binding upon the parties if executed by two of the arbitrators." The panel issued its 49-page decision on December 30, 2002. The panel determined that in 1959, the News instituted a "franchise" system pursuant to which its newspapers were sold to the public through a network of over 200 independent contractors, most of whom were known as "dealers." The dealers bought the newspapers from the News at a certain price and sold them to home subscribers or through vending machines or other retail outlets for a higher price, retaining the difference, which reimbursed them for their expenses and provided a profit. With the exception of the specifics of the dealership territory, the agreements were standardized. Although the agreements were renewed annually, for the most part those renewals were automatic, and new agreements were executed only when a new provision, such as the arbitration provision, was added to the agreement. When it wanted to add a new provision to an agreement, it was the practice of the News to inform the dealer of the change and to give the dealer the choice between accepting the change or having the dealership terminated. The panel also noted that a manager with the News, Jim Craig, who had handled hundreds of agreements, including those of the plaintiffs, testified that he regularly represented to dealers that the dealer's franchise would be renewed automatically so long as the dealer performed satisfactorily. The panel also determined that the News evaluated a dealer's performance based upon an assessment of the dealer's performance in three areas: sales, i.e., maintaining circulation levels; service, i.e., delivering the customers' newspapers in a timely fashion; and collections, i.e., paying the News fully for the newspapers sold by the dealer. The panel determined that the News's business relationships with the dealers had been consistent with its representations to them until its management changed and new policies were implemented. Toby Pearson began work as the News's circulation director in December 1996, and he hired Jim Keeble as assistant circulation director in November 1997. The two managers were primarily responsible for the News's business relationships with the dealers. The panel found that Pearson and Keeble began to implement changes in the distributorship system with an aim of immediately increasing the News's profits. In that regard, the panel found, Pearson and Keeble, by maintaining that the dealers had no property interest in their franchises, took a position contrary to the position the News had always taken. In the panel's view, Pearson and Keeble began to attempt to coerce dealers into changing routes and delivery procedures to increase the News's profits, without regard to the additional costs imposed on the dealers by those changes. The panel concluded that there was convincing evidence indicating that Pearson and Keeble's ultimate objective was to eliminate the dealers so that the News could obtain directly the profits the dealers were realizing. The panel also found that the News had made representations to the plaintiffs concerning the automatic renewal of the plaintiffs' dealership franchises that it did not intend to meet at the time it made the statement and that Pearson's and Keeble's testimony to the contrary was not credible. Among the steps implemented by the News that negatively impacted the dealers was the decision to require the dealers to choose between "single copy" and "home delivery" distribution for their areas. This policy effectively forced most dealers to relinquish a significant portion of their business. In most cases, a dealer would retain either the "single copy" portion or the "home delivery" portion and sell or trade the other portion of his or her business to another dealer. Although the panel found that the policy of splitting the two delivery categories had a profound effect upon a dealer's business, the News did not compensate the dealers for the losses caused by this new policy. In accord with their belief that dealers had no property interest in their dealership franchises, Pearson and Keeble drafted a change to paragraph 8 of the agreement. The new provision stated: "This Agreement shall be from ______, and shall expire on ______, unless renewed by mutual agreement of the parties. Provided, however, the Agreement may be immediately terminated by either party in the event of the failure of either party to perform any of its obligations under this Agreement, subject to the provisions of Paragraph 10 herein." This change was implemented in July or August 1999. Keeble acknowledged in his testimony that he implemented the change without considering the dealers' earlier agreements or the dealers' expectations, and that no alternatives to the provision were considered. The agreements were presented to the dealers on a "take-it-or-leave-it" basis; the dealer's choice was either to sign the agreement or to lose the dealership. Plaintiffs Horn, Glass, James McLendon, and Teresa McLendon refused to execute the new agreements; their dealerships were terminated on the anniversary dates of their agreements without compensation, and their branches were taken over by the News. The panel concluded that each plaintiff had suffered significant mental anguish. The panel found "that the record supports by clear and convincing evidence that the News consciously, deliberately, systematically, intentionally and without just cause or excuse set about to dismantle, destroy and nullify the franchise-dealership territories, contracts and agreements which had existed between the parties and that the actions and conduct of the News were deliberately calculated to permanently eliminate the dealerships and take the property owned by the dealers without just compensation." The panel found that the "change in the term provision of the dealer agreement, coupled with Toby Pearson and Jim Keeble's management style, had the effect of abruptly destroying the market value for plaintiffs' dealerships. In essence, The News changed its delivery system without compensating the dealers for the loss of their businesses. The unfairness of this change is further exacerbated by the fact that the changes in the delivery system, as embodied in the contract changes was never the subject of bargaining or negotiations." The panel concluded that the plaintiffs' dealerships were franchises, that the News had wrongfully and intentionally terminated and converted each of them, and that the News had breached fiduciary duties it owed to the plaintiffs as franchisees. The panel found further that the agreements were ambiguous concerning automatic renewal; by resorting to the News's past practices the panel determined that the agreements were to be automatically renewed unless terminated by either party for good cause. The panel found that the News had terminated the plaintiffs' agreements without good cause, primarily as a result of the wrongful management practices on the part of Pearson and Keeble. The panel also held that the News's conduct toward the plaintiffs was so dramatically inconsistent with its practices during the preceding 40 years that the News should be equitably estopped from implementing and invoking the termination provisions it sought to apply to the plaintiffs. Additionally, the panel concluded that the News had defrauded the plaintiffs by intentionally and falsely representing to them that their dealership franchises would be renewed so long as they performed their work satisfactorily. The panel held that the News's actions were wrongful and intentional; that the plaintiffs were entitled to recover damages for the loss of their investments, for the loss of their income streams, and for their mental anguish; and that there was clear and convincing evidence that the News's actions had been oppressive and malicious, warranting an award of punitive damages. The provisions in paragraph 10 of the agreements purporting to limit the scope of "compensation" that could be recovered were held by the panel to be invalid as contrary to public policy, on the basis of five cases cited by the panel. The panel determined that an appropriate punitive-damages award for each plaintiff was an amount 2.5 times the amount of compensatory damages due that plaintiff. The panel noted an exception to that approach in Hyde's case, where it applied a multiple of two times gross annual revenues in establishing franchise value. The panel was of the opinion that each plaintiff had had a viable business that was reasonably expected to produce income and profits for a period of at least 20 years, with the exception of Horn, who, because of her age (she was 55 years old when her agreement was terminated), had a business interest that would be expected to continue for only 10 years. The panel held that the "loss of future profits is a separate and distinct element of compensatory damages, particularly in light of the fact that the Panel is without the power to order these dealerships returned to the plaintiffs." Having found in favor of each plaintiff on his or her claims of breach of contract, breach of fiduciary duty, conversion, and fraud, and deeming the damages due under each of those claims to be the same, the panel made one award for each plaintiff for all of those claims. The panel awarded Glass $285,000 "for loss of franchise value"; $848,603, representing the present value of the "loss of future profits for 20 years"; $200,000 for mental anguish; and $3,334,007.50 in punitive damages, for a total award of $4,667,610.50. The panel; awarded the McLendons $285,000 for "loss of franchise value"; $975,955, representing the present value of the loss of future profits for 20 years; $200,000 each for mental anguish; and $4,152,387 in punitive damages, for a total award of $5,813,342. The panel awarded Horn $200,000 for "loss of franchise value"; $305,170, representing the present value of the loss of future profits for 10 years; $300,000 for mental anguish; and $2,012,925 in punitive damages, for a total award of $2,818,095. The panel awarded Stewart $175,000 for "loss of franchise value"; $533,580, representing the present value of the loss of his future profits for 20 years; $200,000 for mental anguish; and $2,271,450 in punitive damages, for a total award of $3,180,030. The panel awarded Hyde $160,000 for "loss of franchise value"; $496,912, representing the present value of the loss of his future profits for 20 years; $200,000 for mental anguish; and $2,142,280 in punitive damages, for a total award of $2,999,192. On January 8, 2003, the News filed notices of appeal in the cases with the circuit clerk of Jefferson County and also filed "Motion[s] to Vacate and Set Aside Arbitration Award." On January 13, 2003, the circuit clerk entered the arbitrators' awards as the judgments of the court. The trial court did nothing further, so that on January 23, 2003, under Ala. Code §6-6-15, the judgments became final. The News did not file any subsequent notice of appeal. HOLDING: The Supreme Court mostly affirmed but reduced some of the damages. The Court noted that the News filed its notices of appeal in compliance with the requirements of Ala. Code §6-6-15. As such, the Court concluded that the notices of appeal filed by the News pursuant to §6-6-15 became effective when the judgment on the arbitrators' award was entered and were thus timely filed, and the Court denied the plaintiffs' motion to dismiss the appeal as untimely. The Court held that, to the extent that the limited grounds listed in Ala. Code §6-6-14 (fraud, partiality, or corruption) might arguably govern judicial review of an arbitrator's award resulting from a post-dispute agreement to arbitrate when the parties have voluntarily opted for arbitration with full knowledge of the contours and significance of their dispute, those grounds do not provide adequate review of arbitrators' decisions in the numerous and varied commercial- and consumer-transaction disputes now being channeled to arbitration in this State through predispute agreements for arbitration. The Court held that, "[a]lthough §10 of the FAA facially is applicable only to the federal district courts, a number of other state appellate courts have adopted the same approach as this Court by recognizing the applicability of the §10 standards in appeals in state courts from arbitration awards." Additionally, the Court joined the majority of other state appellate courts that have considered the matter in now recognizing "manifest disregard of the law" as a ground available for reviewing an arbitration award. The Court held that a party seeking to vacate an arbitration award on the basis of manifest disregard of the law must establish that "(1) the arbitrators knew of a governing legal principle yet refused to apply it or ignored it altogether, and (2) the law ignored by the arbitrators was well defined, explicit, and clearly applicable to the case." The Court held that it cannot say that the arbitrators exceeded their powers in consolidating the cases for purposes of holding one hearing; in doing so they were exercising their discretion in structuring arbitration procedures. The Court held that, constrained by the limited reach of its review under the "exceeded powers" ground, it cannot say that the arbitration panel exceeded its authority by holding the provisions of paragraph 10 invalid and void as unconscionable. The Court held that the arbitration panel should not have awarded each plaintiff both the "loss of franchise value" experienced by each plaintiff and the present value of the "loss of future profits" of each plaintiff because an award of both future lost profits and the lost value of each of the plaintiffs' businesses is duplicative. Therefore, the Court disallowed and vacated that portion of each award providing damages for the smaller separate component of "loss of franchise value." The Court found no instance where the News has successfully identified a manifest disregard by the panel of the law of punitive damages. Because the Court upheld the award of compensatory and punitive damages made as a result of a finding for the plaintiffs on the fraud claim, as adjusted to eliminate duplication of damages, it pretermited consideration of the challenges to the award of the same damages under the breach-of-contract, conversion, and breach-of-fiduciary-duty claims.

Isom v. St. Paul Fire & Marine Ins. Co., No. 1021699 (Ala. June 11, 2004)
Summary: The Supreme Court affirmed without opinion. Justice Johnstone wrote an opinion dissenting from affirming the summary judgment on the plaintiff-appellant's contract claim, but concurring in affirming the summary judgment on all of the other claims.

Ex parte Cruitt, No. 1022118 (Ala. June 11, 2004)
Summary: The Supreme Court quashed the petition for writ of certiorari, but noted that in quashing the writ, it did not wish to be understood as approving all the language, reasons, or statements of law in the Court of Criminal Appeals' opinion.

St. Paul Fire & Marine Ins. Co. v. Christiansen Marine, Inc., No. 1030014 (Ala. June 11, 2004)
Summary: marine insurance; implied warranty of seaworthiness; estoppel; deductible; "accident" and "occurrence"; trip-risk endorsement; This dispute arises out of a barge accident that occurred in the Gulf of Mexico. Christiansen Marine, Inc. is a marine towing company. Dogwood Management Services, Inc., although now out of business, was a corporation affiliated with Upchurch, Inc.; Upchurch, Inc., was engaged in the lumber and pulpwood business. In early 1995, Dogwood entered into a contract with Christiansen Marine to tow from Mobile to Williamston, North Carolina, seven hopper barges Dogwood was negotiating to purchase. The barges were 20 to 25 years old. Dogwood was arranging financing for the purchase and insurance on the barges. In March 1995, Dogwood, through one of its principals, Tuck McConnell, hired Perry Beebe, a licensed marine surveyor, to provide a "condition and valuation" survey on the barges it was considering purchasing. Beebe issued surveys on all seven barges; those surveys revealed, by way of Beebe's comments and by way of photographs, that the barges leaked and were in need of repairs. Beebe's surveys indicated that certain repairs to the barges were "considered compulsory for insurance underwriting purposes." However, after receiving the surveys in draft form, McConnell contacted Beebe and asked if certain of the repairs could be deferred until the next maintenance scheduled for the barges. Beebe agreed that those repairs could be deferred but he advised that certain other repairs be completed immediately. He amended the recommendations section of his surveys to reflect that the repairs listed "should be completed at the next regular servicing/maintenance period." In each draft survey and in each amended survey, Beebe concluded by stating "[i]n the opinion of this undersigned, subject vessel is considered suitable for its intended purpose and a satisfactory risk for interested underwriters. ... In accepting this report it is understood that this survey was performed for condition and valuation purposes only and that no warranty as to the condition, seaworthiness or marketability of subject vessel is expressed or implied." In April 1995, Dogwood contacted its insurance broker, Lee Wimberly of Rollins Hudig Hall, regarding Dogwood's need for a marine-insurance policy on the barges. Wimberly provided Travitz a copy of a letter from Dogwood; this letter indicated that "all repairs necessary to make the vessels seaworthy have been performed." Travitz faxed a "quote sheet" to Wimberly on that same date. After receiving the quote sheet from Travitz, Wimberly issued Dogwood a binder of coverage with St. Paul. The binder specifically indicated that the barges were covered for the trip from Mobile to North Carolina. This binder was then faxed to John Christiansen, the principal of Christiansen Marine, to notify him that the barges were insured and that he could depart from Mobile with the barges. Also on April 12, Wimberly sent Travitz copies of Beebe's amended surveys on the barges. After receiving and reviewing the surveys, Travitz took no further action regarding the coverage St. Paul issued to Dogwood. On April 23, 1995, two tugboats belonging to Christiansen Marine left Mobile with the seven barges bound together into a single tow. Approximately four miles from the mouth of Mobile Bay in the Gulf of Mexico, the tow of barges broke apart as a result of taking on water. As a result, Christiansen Marine incurred various damages. Christiansen Marine sought to recover those damages from Dogwood. Dogwood reported the incident with the barges to St. Paul, and St. Paul conducted an investigation. However, at the time of the incident St. Paul had not yet issued a formal policy of insurance to Dogwood. St. Paul did not issue the policy of insurance until May 12, 1995, after it had concluded its investigation of the loss. When St. Paul issued a formal "paper" policy, it issued the standard form policies referenced on the quote sheet and the binder; however, St. Paul also included a "Trip Risk Endorsement," which provided: "It is in condition of this extention [sic] that the barges are confined to the Intercoastal Waterway of the U.S. (where present) and the Okeechobee Barge Canal, otherwise not to exceed 3 miles off shore. Furthermore, the barges shall be in control of two tugs at all times." St. Paul's quote sheet did not indicate that a trip-risk endorsement would be included in Dogwood's insurance coverage for the barges; the binder issued by Rollins Hudig Hall did not mention a trip-risk endorsement. On June 2, 1995, St. Paul notified Dogwood that it intended to deny the claim. On June 13, St. Paul filed a declaratory-judgment action against Dogwood in the United States District Court for the Middle District of Florida; St. Paul sought a determination that it owed no coverage for the April 23 incident because the barges were unseaworthy, because the trip-risk endorsement contained in the policy was violated when the barges went beyond the three-mile provision, and because the damages did not arise out of a covered peril. St. Paul did not name Christiansen Marine as a party to the declaratory-judgment action. On September 25, 1995, Dogwood sued Christiansen Marine in the Mobile Circuit Court, claiming damages as a result of the April 23 casualty. Christiansen Marine counterclaimed, asserting a breach-of-contract claim and seeking damages as a result of the April 23 loss. In 1997, St. Paul and Dogwood entered into a settlement agreement in the declaratory-judgment action; in this settlement agreement, St. Paul agreed to pay Dogwood $25,000 in return for a release of all claims for insurance coverage under the policy. St. Paul and Dogwood then entered into a consent judgment, which was submitted to and approved by the federal district court on May 21, 1997. In the consent judgment, Dogwood acknowledged that at the time of the loss its barges were outside the three-mile navigational limitation stated in the trip-risk endorsement. The parties stipulated that because Dogwood's barges were outside the three-mile limit in the trip-risk endorsement, Dogwood's policy with St. Paul was "null and void at all times relevant, including but not limited to the time of the occurrence on April 23, 1995," as a result of Dogwood's violation of the trip-risk endorsement. As a result of this consent judgment, the district court dismissed, with prejudice, Dogwood's counterclaim seeking coverage under the policy and money damages. Although St. Paul raised the issue of the seaworthiness of the barges in its complaint for a declaratory judgment, the consent judgment did not address that issue. However, St. Paul included in the consent judgment language that purported to reserve to St. Paul the right to assert "any and all further defenses to coverage under the subject combined policy including any future lawsuit commenced by Dogwood and/or any other third party, including but not limited to Christiansen Marine, Inc." Christiansen Marine was not a party to the declaratory-judgment action, was not a party to the consent judgment, and was not a party to the settlement agreement. On August 24, 2001 (over four years after the declaratory-judgment action was settled), a jury in Dogwood's action against Christiansen Marine in the Mobile Circuit Court returned a verdict against Dogwood on its claims against Christiansen Marine and in favor of Christiansen Marine on its counterclaim. The jury awarded Christiansen Marine $457,415.79 in damages. In response to special interrogatories submitted to the jury, the jury indicated that Christiansen Marine had not been negligent and that therefore Christiansen Marine's negligence could not have been a proximate cause of Dogwood's damages, and that Dogwood's barges had been unseaworthy as claimed by Christiansen Marine and that that unseaworthiness was a proximate cause of Christiansen Marine's loss. The trial court entered a judgment on the jury's verdict. Dogwood did not appeal, and the judgment for Christiansen Marine and against Dogwood became final. After the expiration of 30 days, the judgment against Dogwood remained unsatisfied. On November 6, 2001, Christiansen Marine sued St. Paul and Dogwood in the Mobile Circuit Court; Christiansen Marine alleged that, pursuant to Ala. Code §27-23-2, it was entitled to the proceeds of the St. Paul policy issued to Dogwood in order to satisfy its judgment against Dogwood. Christiansen Marine's action against St. Paul was assigned to the same judge who presided over Dogwood's action against Christiansen Marine. In its answer to the complaint, St. Paul admitted that it had issued the binder of coverage for the barges, that the binder made no mention of a trip-risk endorsement, and that the formal policy was not issued until after the April 23, 1995, incident. However, St. Paul asserted, among other things, that the policy was void ab initio because the barges were unseaworthy at the inception of the policy; that Christiansen Marine was bound by the consent judgment issued by the federal district court in which Dogwood admitted that it had violated the navigational limits of the policy; that in the settlement agreement Dogwood had released St. Paul from any and all liability under the insurance policy; and that because Christiansen Marine's loss occurred beyond the navigational limits of the St. Paul policy, St. Paul owed no coverage for the damage. After a bench trial during which the trial court received evidence ore tenus, the trial court entered a judgment in favor of Christiansen Marine and against St. Paul. In its order, the trial court held that St. Paul was obligated to provide coverage to Christiansen Marine for certain of the damage suffered by Christiansen Marine in the April 23 loss. The trial court concluded that, because St. Paul had actual and constructive knowledge of the condition of the barges before the loss occurred, St. Paul was estopped to rely on the unseaworthiness of the barges as a reason for denying coverage; the trial court also concluded that the terms of the policy as negotiated by St. Paul and Dogwood's broker did not include a trip-risk endorsement or a navigational limit. The trial court further determined that Christiansen Marine was not bound by the consent judgment entered by the federal district court because Christiansen Marine was not a party to that declaratory-judgment action; therefore, the judgment entered in that action could not bind Christiansen Marine or prejudice Christiansen Marine's rights. Additionally, the trial court concluded that Dogwood had not withheld material information from St. Paul by failing to provide both versions of Beebe's surveys to St. Paul and therefore that Dogwood had not violated any duty uberrimae fidei (of utmost good faith) to St. Paul. The trial court also heard testimony from St. Paul's director of global marine claims, who acknowledged that, if the policy was not void, certain of the damage Christiansen Marine suffered would be covered by Dogwood's insurance policy. Based on that testimony and on its own reading of the insurance policy, the trial court awarded Christiansen Marine $293,151.53 in damages and postjudgment interest. HOLDING: The Supreme Court affirmed the judgment in favor of Christiansen Marine insofar as it relates to the trial court's finding that St. Paul is obligated to provide coverage under the policy issued to Dogwood. The Court reversed the trial court's judgment insofar as it relates to the amount of damages awarded to Christiansen Marine. The Court held that the absolute nature of the implied warranty of seaworthiness, if it is such, does not insulate an insurer from the legal ramifications of its own conduct. The Court held that the trial court did not clearly err in finding that St. Paul was estopped from relying on the unseaworthiness of the barges as a defense to coverage. The Court held that whether the language originally contained in Beebe's surveys was material to St. Paul's decision to insure Dogwood's barges was a question of fact to be determined by the trial court, and because the trial court's determination is not plainly or palpably wrong or against the preponderance of the evidence, it must affirm the judgment on this issue. The Court held that if St. Paul is estopped from relying on unseaworthiness as a defense to coverage, it is also estopped from arguing that because the barges were unseaworthy, a particular item of loss is not covered under the policy. The Court held that under the facts and procedural history of this case, St. Paul is estopped from asserting the unseaworthiness as a defense to a claim for damages. The Court held that the trial court did not err in including the $62,514 in the amount of damages awarded to Christiansen Marine. However, the Court held that the trial court should have applied a deductible to Christiansen Marine's recovery of damages. That is, the Court held that the deductible due for the April 23 loss is $2,500 and that Christiansen Marine's recovery of damages under Ala. Code §27-23-2 should be reduced by that deductible.

Ex parte Shaver, No. 1030205 (Ala. June 11, 2004)
Summary: criminal; search and seizure; unlawful manufacture of a controlled substance in the second degree; Brian Shaver, his wife Joyce Lawler Shaver, and a friend, Catherine Aaron, stopped at a Wal-Mart store in Russellville. While at the store, each of them bought multiple packages of an over-the-counter cold medication containing pseudoephedrine. A Wal-Mart employee became suspicious of the customers; the employee followed the three individuals into the parking lot where she, pursuant to established store policy, obtained the license plate number and a description of the vehicle in which the three were traveling. She observed that the vehicle had an out-of-county tag. The Russellville Police Department was contacted by Wal-Mart personnel regarding the purchases, and the police department notified its patrol officers to be on the lookout for the Shaver vehicle. Officer Harold Washington of the Russellville Police Department spotted the vehicle and detained the occupants in the parking lot of a nearby Kentucky Fried Chicken restaurant, until Deputy Hargett of the Franklin County Sheriff's Department arrived. When Deputy Hargett arrived and walked over to the vehicle, he immediately noted pseudoephedrine tablets in plain view inside the vehicle. Based on Deputy Hargett's knowledge of the suspicious nature of the pseudoephedrine purchases via police radio dispatch, and statements made by the parties after the three were read their Miranda rights, Deputy Hargett arrested Shaver and the two females and charged them with the possession of precursor substances with the intent to manufacture a controlled substance. Shaver made the following statement after his arrest: "Today me and Joyce Shaver and Catherine Aaron came to Russellville. We went to Wal-Mart and I went in and bought three boxes of pills and a tube of Carmex [brand medicated lip balm]. My wife and Catherine also bought three boxes of pills. We then were going on. I wasn't going to cook meth with these today, but sooner or later I'm sure that's what they would be used for, meth." Aaron also gave a statement indicating that the pills might ultimately be used to make "meth." Investigator Hargett stated three times during the suppression hearing that the basis for the stop was a telephone call 'from Wal-Mart' indicating that several boxes of pseudoephedrine pills had been purchased. On cross-examination of Investigator Hargett, he stated that he could not testify as to who that phone call came from and that he couldn't testify as to what reasonable suspicion that Harold Washington used to pull over the vehicle other than the phone call from Wal-Mart. At his guilty-plea hearing, Shaver reserved the right to appeal the issues of the propriety of the trial court's denial of his motion to suppress certain evidence and the constitutionality of Ala. Code §13A-12-217. The Court of Criminal Appeals affirmed. HOLDING: The Supreme Court reversed. The Court noted that the only basis the police had for detaining Shaver's vehicle, established by Deputy Hargett's testimony, was a telephone call from an unknown individual who was purportedly calling from the Wal-Mart discount department store at which the pseudoephedrine had been purchased and that the record does not supply any information concerning the telephone call to the police from the Wal-Mart store other than Deputy Hargett's testimony that he heard the Russellville police officers giving information about a telephone call they had received from Wal-Mart. The Court held that the transcript of the suppression hearing contains no evidence to support the conclusion that the caller was in any way reliable. The Court concluded that the scant evidence provided by Deputy Hargett concerning the nature of the Wal-Mart telephone call provides insufficient indicia of reliability to establish the requisite "reasonable suspicion" required under Terry for an investigative stop. Accordingly, the Court held that the trial court erred when it denied Shaver's motion to suppress the evidence.

Ex parte Alabama State Personnel Bd., No. 1031173 (Ala. June 11, 2004)
Summary: The Supreme Court denied the petition for writ of certiorari without opinion, but it noted that in denying the petition, it did not wish to be understood as approving all the language, reasons, or statements of law in the Court of Civil Appeals' opinion.

June 18

Decisions Announced by the Supreme Court of Alabama on Friday, June 18, 2004
Summary: A list of all decisions released, including those without opinion, and a list of the attorneys in the reported decisions.

Ex parte Serio, No. 1021443 (Ala. June 18, 2004)
Summary: construction payment and performance bonds; insurance; insolvency; stay; counterclaims; Uniform Insurers Liquidation Act; FACTS & PROCEEDINGS: The plaintiffs in the underlying action -- Schillinger Place, L.L.C., Crestview, L.L.C., and the Trotman Company, Inc. -- entered into a contract with Cay-Chel, Inc., for the construction in Mobile, Alabama, of a commercial-development project known as Schillinger Place. In April 1997, the parties entered into another contract for the construction of a commercial-development project known as Crestview Market Place, in Crestview, Florida. For each project Cay-Chel executed with Frontier Insurance Company, a corporation domiciled in New York, both a performance bond and a payment bond. Under the terms of the bonds, Frontier would become responsible for the performance of the construction contracts and for Cay-Chel's debts if Cay-Chel defaulted on its contracts with the plaintiffs. By December 1997, Cay-Chel was in default on both the Schillinger Place and the Crestview Market Place contracts. The plaintiffs demanded performance by and payment from Frontier; however, the plaintiffs allege, Frontier refused to perform in accordance with the terms of the bonds. In November 1998, the plaintiffs sued Cay-Chel and Frontier in the Mobile Circuit Court. Frontier asserted counterclaims against the plaintiffs, and the parties thereafter engaged in discovery. During discovery, Frontier became insolvent. On August 27, 2001, a New York state court appointed Gregory V. Serio, the superintendent of insurance of the State of New York, as Frontier's temporary rehabilitator. On September 28, the Mobile Circuit Court placed Schillinger Place, L.L.C., et al. v. Cay-Chel, Inc., et al. on its administrative docket pending a final order from the New York court regarding Frontier's status. On October 15, the New York court issued its permanent "Order of Rehabilitation." The order enjoined and restrained all persons "from commencing or prosecuting any actions, lawsuits, or proceedings against Frontier, or the Superintendent as Rehabilitator." Schillinger Place remained on the administrative docket of the Mobile Circuit Court until April 2003, when Frontier moved the court to reinstate Frontier's counterclaims to the court's active docket. In the same motion, Frontier requested that the court continue to stay the plaintiffs' claims against it in the same case. In May, the trial court granted in part and denied in part Frontier's motion and reinstated the entire case to its active trial docket. Frontier then petitioned the Supreme Court for a writ of mandamus directing the trial court (1) to issue an injunction staying all claims against Frontier in Schillinger Place, and (2) to permit Serio, as the rehabilitator of Frontier, to pursue Frontier's counterclaims in the same case. HOLDING: The Supreme Court held that Frontier has established that it has a clear legal right under the Alabama UILA to a stay of all claims against it in Alabama. Therefore, the Court held that the trial court's decision to return Schillinger Place to its active trial docket was in error. However, the Court also concluded that Frontier has not shown a clear legal right to require that its counterclaims against the plaintiffs be placed on the active trial docket. The Court held that although Frontier is entitled to maintain its counterclaims, it has no clear legal right, superior to the trial court's interests in avoiding piecemeal and possibly inconsistent dispositions of intertwined claims, to have those counterclaims moved off of the administrative docket pro tanto.

Wilson v. Athens-Limestone Hospital, No. 1030013 (Ala. June 18, 2004)
Summary: medical malpractice; wrongful death; duty; judgment as a matter of law; FACTS & PROCEEDINGS: Stacia Lynn P. Wilson, individually and as mother and next friend of Starsha L. Wilson, a minor, deceased, brought a medical-malpractice wrongful-death action against Athens-Limestone Hospital ("the hospital") and Dr. Bibi L. Teng, who was at the time a pediatrician employed by the hospital, alleging that Dr. Teng wrongfully caused the death of her four-year-old daughter, Starsha Wilson, by not providing proper care while Starsha was a patient in the emergency room of the hospital and by allowing her to be discharged when she still needed medical care. Starsha was diagnosed with sickle-cell anemia when she was approximately 14 months old. Dr. Teng first treated Starsha several months after she was diagnosed and some time thereafter she became Starsha's regular pediatrician. Dr. Teng had instructed Wilson to take Starsha to the emergency room of the hospital and to telephone Dr. Teng whenever Starsha had a fever of 101 degrees or higher. On the morning of May 19, 1994, after checking Starsha's temperature and finding that it was 105 degrees, Wilson rushed Starsha to the emergency room, arriving at the emergency room around 6:15 a.m. Upon their arrival, the emergency-room nurses checked Starsha's vital signs, and Dr. Patrick Tucker, an emergency-room doctor at the hospital, performed an initial assessment. Dr. Tucker ordered medication for pain and fever, an IV, blood work, a renal profile, a urinalysis, oxygen, and a chest X-ray. At 7:00 a.m. Dr. Tucker went off duty, and Dr. Diana Osborn took over in the emergency room. After discussing Starsha's case with Dr. Tucker, Dr. Osborn began providing care to Starsha. Shortly after 7:00 a.m., Wilson telephoned Dr. Teng's answering service and requested that Dr. Teng come by the hospital to see Starsha before she went to work that morning. Dr. Teng testified that she did not receive a message from her answering service concerning Starsha on that morning. However, Dr. Teng did visit the hospital that morning. Dr. Teng testified that as she was leaving the hospital, she was informed that Starsha was in the emergency room, and she decided to stop by the emergency room on the way out of the hospital. When Dr. Teng arrived at the emergency room, she briefly talked to both Wilson and Starsha. Wilson informed Dr. Teng that Starsha had had a high fever and that she had not urinated despite having drunk several glasses of water. Dr. Teng then told Wilson that she would talk to Dr. Osborn and get back with Wilson before she left the hospital. After briefly discussing Starsha's case with Dr. Osborn, Dr. Teng returned to speak with Wilson; she told her that "everything looked good" and that Dr. Osborn would take good care of Starsha. Dr. Teng also told Wilson that Starsha had a mild infection but that she would probably be released from the hospital. Dr. Teng testified that she spent approximately 5 to 10 minutes talking to Wilson in the emergency room. Dr. Teng did not take any steps to generate a bill for the time she spent in the emergency room that morning. Dr. Osborn discharged Starsha from the hospital at 10:50 a.m. that same day. At 12:40 p.m., Starsha returned to the emergency room in an ambulance; she was in full cardiac arrest. Upon being informed of Starsha's condition, Dr. Teng returned to the emergency room. Dr. Teng and Dr. Osborn attempted to resuscitate Starsha, but they were unsuccessful, and Starsha died. The cause of death was a pneumococcal blood infection, a complication of sickle-cell anemia. Dr. Teng testified that on Starsha's first visit to the emergency room on the day she died Dr. Teng did not have a physician-patient relationship with Starsha. Dr. Teng further testified that it would have been improper for her to take over Starsha's care from Dr. Osborn because Starsha was an emergency-room patient and Dr. Osborn was the emergency-room physician when Starsha was admitted. Dr. Osborn testified that she was Starsha's doctor on that morning and that all decisions concerning Starsha's care, including the decision to discharge Starsha, were made either by her or by Dr. Tucker. The trial court entered a summary judgment on all of Wilson's claims, except her claim against the hospital for vicarious liability based on Dr. Teng's alleged acts or omissions. The Supreme Court affirmed that summary judgment without opinion in Wilson v. Athens-Limestone Hospital, No. 1020262 (Ala., May 16, 2003) (table). At trial, several pediatricians testified regarding Dr. Teng's duty to Starsha during Starsha's first visit to the emergency room on the day she died. At trial, at the close of Wilson's case, the hospital moved for a judgment as a matter of law ("JML"). The trial court granted the motion and entered a JML for the hospital. HOLDING: The Supreme Court affirmed. The Court concluded that the undisputed facts show that Dr. Teng did not treat or diagnose Starsha during Starsha's first visit to the emergency room on the day Starsha died and did not prescribe any medication or give any medical advice on that first visit. The Court noted that the emergency-room doctors, Dr. Osborn and Dr. Tucker, retained control over Starsha's course of treatment at all times during that first visit and that there is no evidence showing that their medical treatment of Starsha was such that Dr. Teng had a duty to override their independent medical judgment. The Court held that as a matter of law Dr. Teng did not have a duty to intervene in Starsha's treatment by Dr. Osborn.

Ex parte Ederer, No. 1030110 (Ala. June 18, 2004)
Summary: domestic relations; alimony; standard of review; sufficient evidence to support trial court's judgment; FACTS & PROCEEDINGS: Donell B. Ederer and Michael P. Ederer were divorced in September 1997. The trial court ordered Michael, an anesthesiologist, to pay child support for the couple's three minor children, $800 per month in alimony, one-half of the mortgage payment on the marital residence, which was owned jointly by Michael and Donell, and the taxes and insurance on the residence. In 1998, Michael's income had decreased and he sought and received a reduction of $200 in his monthly alimony payments. In 2001, he petitioned the trial court to reduce his child-support obligation, to terminate or reduce his alimony obligation, and to order the sale of the marital residence. Donell, a kindergarten teacher who works part-time as a salesclerk in a retail store, answered and counter-petitioned, asking the trial court to increase Michael's alimony payment. At the time of the trial on Michael's petition, Donell was living in the marital residence with the couple's minor son, one of their two daughters, and one grandchild. The evidence indicated that Michael's monthly income had increased by approximately $7,500 since the trial court lowered his alimony payments in 1998; at the time of the trial, his monthly income was approximately $18,000. Donell's monthly income had increased by approximately $1,000; she reported her gross monthly income, including her teaching job, alimony payments, and her part-time sales job, as $4,648. Donell reported average monthly expenses of $4,650. Michael testified that he paid $800 per month for their minor son to attend private school, that he had bought the three children cars and paid the insurance and maintenance expenses for the cars, that he paid for the younger daughter's college expenses that were not covered by the prepaid college-tuition plan, that he paid for books for the older daughter, who had returned to college, and that he gave the older daughter $200 per month and the younger daughter $400 per month. Because of Donell's financial situation, she states, she is often late in making the mortgage payments on the marital residence. Further, both parties acknowledge that significant repairs to the marital home are necessary, including repairs to the roof and the replacement of the furnace. Donell testified that she cannot afford to have those repairs made. The trial court denied both Michael's petition seeking a decrease in alimony and child-support payments and Donell's petition seeking an increase in alimony payments. Donell appealed, and the Court of Civil Appeals held that the evidence indicated that she is unable to meet her financial obligations and that in denying her petition the trial court exceeded its discretion. The Court of Civil Appeals reversed the trial court's order denying her petition and remanded the cause to the trial court. HOLDING: The Supreme Court remanded the case to the Court of Civil Appeals. The Court noted that it does not appear that the Court of Civil Appeals determined whether there was sufficient evidence to support the trial court's judgment denying Donell's motion for increased alimony. The Court directed the Court of Civil Appeals to clarify its opinion as to whether it determined that the evidence was sufficient to support the trial court's judgment.

Ex parte State of Alabama (In re: State v. Nelson), No. 1030180 (Ala. June 18, 2004)
Summary: criminal; The Supreme Court quashed the petition for writ of certiorari without opinion, but the Court stated that, in quashing the petition, the Court does not wish to be understood as approving all the language, reasons, or statements of law in the Court of Criminal Appeals' opinion.

Childersburg Bancorporation, Inc. v. Alabama Dep't of Envtl. Mgt., No. 1030409 (Ala. June 18, 2004)
Summary:  interpleader; summary judgment; environmental; FACTS & PROCEEDINGS: In 1985, the First National Bank of Childersburg ("FNBC") issued an irrevocable letter of credit on behalf of Alabama Plating, Inc. ("Alabama Plating"), and in favor of the Alabama Department of Environmental Management ("ADEM"). The letter of credit was intended to provide financial assurance in the event an environmental cleanup at Alabama Plating's facilities ever became necessary. Childersburg Bancorporation, Inc. ("CBI") owned FNBC at the time the letter of credit was issued and at all relevant times until 1999, when it sold FNBC. Alabama Plating was to provide additional financial assurance that it could handle any environmental cleanup that became necessary. However, problems arose getting Alabama Plating to provide that assurance, and ADEM ultimately required that a trust agreement be executed; Alabama Plating was the grantor, FNBC the trustee, and ADEM the beneficiary of the trust created by the agreement. The trust was funded by the entire amount pledged in the letter of credit. Following an environmental cleanup of Alabama Plating's facilities, ADEM attempted several times to access the funds held in the trust to cover a portion of the cleanup costs. However, FNBC maintained that it had neither a valid letter of credit nor a trust agreement with Alabama Plating. In 1999, CBI sold FNBC to Marion Lowery and Peoples State Bank of Commerce ("Peoples"). After FNBC was sold, disputes arose between CBI and FNBC, prompting CBI to file a declaratory-judgment action against FNBC and Lowery. The parties successfully negotiated the dispute and entered into a settlement agreement and release (the "settlement agreement"). The settlement agreement specifically addressed the 1985 letter of credit used to fund the trust created by the trust agreement. The settlement agreement set up an escrow account that was to terminate on August 6, 2003. On June 20, 2003, Peoples filed a complaint for interpleader, naming CBI and ADEM as parties, and deposited with the court $40,000, the amount placed in an escrow account established pursuant to the settlement agreement. The complaint stated that ADEM had demanded payment pursuant to the letter of credit, which preceded the trust agreement, and that Peoples intended to comply with ADEM's demand. CBI answered the complaint and asserted a counterclaim against Peoples alleging a breach of the settlement agreement. Thereafter, Peoples moved to be dismissed from the action, but the trial court denied its motion. ADEM then moved for a summary judgment, claiming ownership of the interpleaded funds. In response, CBI moved for a summary judgment, also claiming ownership of the interpleaded funds. The trial court granted ADEM's motion and entered a summary judgment in its favor. CBI's counterclaim against Peoples is still pending. The summary judgment in favor of ADEM was made final pursuant to Rule 54(b), Ala.R.Civ.P. CBI appealed. HOLDING: The Supreme Court affirmed. The Court held that CBI's argument that it is entitled to the interpleaded funds under the settlement agreement, while potentially viable against Peoples, is without merit when applied to ADEM. The Court found that ADEM submitted sufficient evidence indicating that it was entitled to payment under first the letter of credit and then the trust agreement and that CBI does not dispute that fact. Therefore, the Court held that CBI failed to meet its burden to present substantial evidence of the existence of a genuine issue of material fact, and the trial court properly granted ADEM's motion for a summary judgment.

June 25

Decisions Announced by the Supreme Court of Alabama on Friday, June 25, 2004
Summary: A list of all decisions released, including those without opinion, and a list of the attorneys in the reported decisions.

Brown v. Denson, No. 1020430 (Ala. June 25, 2004)
Summary: arbitration; existence of agreement to arbitrate; nonsignatory; FACTS & PROCEEDINGS: On February 17, 2000, Sheila Denson completed an enrollment form for a group disability-insurance policy issued by Unum Life Insurance Company of America. Curtis Brown sold Denson the disability policy. He signed Denson's enrollment form next to the words "Signature of Agent." However, according to a document entitled "Broker Licensing and Selling Agreement" between Brown and Mass Group Marketing, Inc. ("MGM"), Brown was an independent broker and sold the products of various insurance carriers. Brown specifically acknowledged in that agreement that he had "no contractual relationship with the Carriers [to be specified by MGM] and that [he was] not, and that [he would] refrain from holding [himself] out as an Employee, Representative, Partner, Joint Venture or Associate of the Carriers." Denson's disability coverage, for which she paid monthly premiums of $59.84, became effective on March 1, 2000. In her complaint, Denson says that she did not receive a copy of the insurance policy when she purchased the insurance. Instead, she says, she received a document entitled "Education Salary Protection Plan § 39592-AL2-4C." Denson alleged in her complaint that before she purchased the Unum disability policy, she told Brown that she suffered from "lupus," a disease "which causes multiple problems," and that she "was under a doctor's care." She alleged that Brown told her that "it didn't matter if [she] had any health problems, because within a year the policy would pay." On October 27, 2000, Denson was admitted to the hospital, and she was unable to work for a short time. She briefly returned to work in November, but thereafter was unable to return to work. In January 2001, Denson filed a claim with Unum under the disability-insurance policy for long-term disability benefits. Unum denied Denson's claim on the basis that her disability was caused by, was contributed to by, or resulted from a preexisting condition. On March 12, 2002, Denson sued Curtis Brown and Brown Solutions, Inc., a corporation of which Brown and his wife Janet are the officers, alleging that Brown's representations to her that Unum would pay her disability benefits regardless of her preexisting medical condition were false. Brown and Brown Solutions moved to compel arbitration pursuant to an arbitration clause contained in Denson's disability-insurance policy with Unum. The trial court denied Brown and Brown Solutions' motion to compel arbitration. HOLDING: The Supreme Court affirmed. The Court said it could not agree with the characterization of Brown as Unum's agent because, according to his broker-licensing agreement with MGM, Brown specifically acknowledged that he had no contractual relationship with any of the insurance carriers for which he solicited applications from prospective insureds and that he was not an employee of any of those carriers. The Court also noted that because under Brown's broker-licensing agreement with MGM he is not Unum's agent. The Court noted that Denson does not rely upon the terms of the disability-insurance policy containing the provision for arbitration in making her claims against Brown and Brown Solutions.

General Motors Acceptance Corp. v. City of Red Bay, No. 1021294 (Ala. June 25, 2004)
Summary: class actions; class certification; Alabama Taxpayers' Bill of Rights and Uniform Revenue Procedures Act, Ala. Code §40-2A-1 et seq. ("the TBOR"); FACTS & PROCEEDINGS: This is the second class-certification order the trial court has entered in this case. The Supreme Court vacated the first order and remanded the cause for further proceedings. General Motors Acceptance Corp. v. City of Red Bay, 825 So.2d 746 (Ala. 2002). General Motors Acceptance Corporation ("GMAC") engages in financing automobile purchases and leases. GMAC Leasing Corporation is a wholly owned subsidiary of GMAC that leases General Motors vehicles to GMAC. The City of Red Bay and Franklin County filed this action against GMAC Leasing Corporation and GMAC Financial Corporation on behalf of themselves and others similarly situated, alleging that the defendants had entered into lease agreements with consumers for the leasing of automobiles and trucks and that the lease agreements were negotiated and signed by automobile dealerships on behalf of the defendants. The City and the County further alleged that local taxing jurisdictions are authorized by ordinances to levy sales and/or rental taxes, and that the defendants are required by law to collect, in connection with the leases issued by GMAC, local sales or rental taxes and to remit those taxes to the various local taxing jurisdictions, including the City and the County; the City and the County alleged that GMAC has failed to collect such taxes on its leases and to remit those taxes to the local taxing jurisdictions. After the first class-certification order by the trial court, the Supreme Court concluded that the trial court had not conducted the rigorous analysis required by Ala. Code §6-5-641(e) to determine whether the City and the County had met their burden of proving that the requirements of Rule 23, Ala.R.Civ.P., had been satisfied. The Supreme Court therefore vacated the class-certification order and remanded the case for the trial court to conduct the required rigorous analysis. After further proceedings, the trial court again entered a class-certification order certifying the following two classes: (1) a declaratory-judgment claim against all local taxing jurisdictions in the State of Alabama that levy a sales tax on the sale of automobiles and that do not have an auto lease or rental tax; and (2) a claim for money due and owing against all local taxing jurisdictions in the State of Alabama that (a) levy a sales tax on the sale of automobiles, (b) were not paid sales tax in connection with automobiles sold to GMAC under the Smart Lease and Smart Lease Plus programs, and (c) did not have at the time of the transaction an auto lease or rental tax. On appeal, GMAC argues that the City and the County are subject to the TBOR. Therefore, it argues, before the City and the County can seek to collect the sales and rental taxes they claim GMAC owes them, they must first comply with the TBOR by providing a written statement to GMAC of its procedural rights, including the right to administrative review of a preliminary assessment; by providing a written description of the basis for their claim to the taxes owed; and by issuing a preliminary and a final assessment. HOLDING: The Supreme Court reversed, vacated the class-certification order, and remand the case for the trial court to enter an order of dismissal. The Court held that the failure of the City and the County to comply with the provisions of the TBOR deprived the trial court of jurisdiction to consider the class action filed by the City and the County. The Court noted that it is undisputed that the City and the County have not taken any action required by the TBOR. The Court held that the TBOR applies to local taxing jurisdictions. The Court held that compliance with the TBOR is jurisdictional.

Mayflower Nat'l Life Ins. Co. v. Thomas, No. 1021383 & 1021461 (Ala. June 25, 2004)
Summary: class actions; class certification; rigorous analysis; FACTS & PROCEEDINGS: The Supreme Court has reviewed class-certification orders from the trial court in this case on two prior occasions: Ex parte Mayflower Nat'l Life Ins. Co., 771 So.2d 459 (Ala. 2000) ("Heard I"), and Bill Heard Chevrolet Co. v. Thomas, 819 So.2d 34 (Ala. 2001) ("Heard II"). This litigation began when James E. Thomas sued Bill Heard Chevrolet Company ("Heard"); one of its employees, Bill Bratton; and a number of fictitiously named defendants, asserting several claims that arose from Thomas's purchase from Heard of a 1985 Cadillac DeVille automobile. Thomas subsequently added Dorothy L. Dixon as a plaintiff and substituted Mayflower National Life Insurance Company ("Mayflower") for one of the fictitiously named defendants. The plaintiffs, in the final version of their complaint, alleged 18 counts of wrongdoing by the defendants. Of those, 14 counts stated claims on behalf of Thomas and Dixon only, but 4 of the counts stated claims on behalf of a putative class. Thereafter, the plaintiffs moved for class certification of those four claims. The trial court conducted two hearings at which the plaintiffs' class-certification motion was discussed. At the first hearing, the plaintiffs offered no evidence in support of class certification; the issue was only briefly addressed. At the conclusion of that first hearing, the trial court instructed the parties to file briefs in support of their respective positions on the issue of class certification. The trial court conducted a second, abbreviated hearing on class certification; the only issue relating to certifying a class action that was discussed at that hearing was numerosity. Counsel for the plaintiffs orally argued for certifying the class but presented no evidence in support of class certification. Nevertheless, shortly after the second hearing, the trial court granted the motion for class certification. In Heard I, the Supreme Court held that the trial court's order failed to demonstrate that the trial court had conducted the rigorous analysis required under Rule 23, Ala.R.Civ.P., and failed to explain how the evidence supported the trial court's conclusion that the requirements of Rule 23(a) and (b) had been met. Following the decision in Heard I, the trial court vacated its order granting class certification and scheduled another hearing. At that hearing, plaintiffs' counsel submitted a nine-page proposed order granting the motion for class certification. Mayflower's counsel pointed out that there was no substantive evidence in the record to support the assertions made in the proposed order, and the trial court directed the plaintiffs to file a submission of proof, consisting of transcripts of the previous hearings and copies of depositions. The plaintiffs never filed the requested submission of proof; nevertheless, the trial court entered an order certifying the class. In Heard II, the Supreme Court directed the trial court to vacate its order granting class certification because the trial court failed to meet the rigorous-analysis requirements of §6-5-641, because the order "was entered without the benefit of a formal evidentiary hearing and without allowing the defendants an adequate opportunity to contest the proposed class-certification order," and because the order failed to identify the elements of the four claims being certified for class treatment and failed to discuss how the criteria set forth in Rule 23 are met with respect to those claims. Following the decision in Heard II, the trial court scheduled a formal evidentiary hearing at which the plaintiffs' motion for class certification would again be considered. Before the hearing, all the parties filed briefs and evidentiary material in support of their positions. Nearly six months after the hearing, the trial court directed both parties to submit proposed orders to the court and to one another. The trial court then gave the parties the opportunity to file responses to the proposed orders, which the plaintiffs and Mayflower did. On May 14, 2003, the trial court entered an order granting class certification; the order was the 38-page proposed order that had been submitted by the plaintiffs.HOLDING: The Supreme Court reversed the class-certification order yet again. The Court held that an examination of the class-certification order reveals "indicia of a lack of rigorous analysis." The Court held that the trial court's order goes far beyond a Rule 23 analysis and evaluates the merits of several of the plaintiffs' claims and fails to properly consider the defenses of the defendants. The Court remanded the case for the trial court to conduct its own rigorous analysis of the evidence.

Mayflower Nat'l Life Ins. Co. v. Thomas, No. 1021383 & 1021461 (Ala. June 25, 2004)
Summary: class actions; class certification; rigorous analysis; FACTS & PROCEEDINGS: The Supreme Court has reviewed class-certification orders from the trial court in this case on two prior occasions: Ex parte Mayflower Nat'l Life Ins. Co., 771 So.2d 459 (Ala. 2000) ("Heard I"), and Bill Heard Chevrolet Co. v. Thomas, 819 So.2d 34 (Ala. 2001) ("Heard II"). This litigation began when James E. Thomas sued Bill Heard Chevrolet Company ("Heard"); one of its employees, Bill Bratton; and a number of fictitiously named defendants, asserting several claims that arose from Thomas's purchase from Heard of a 1985 Cadillac DeVille automobile. Thomas subsequently added Dorothy L. Dixon as a plaintiff and substituted Mayflower National Life Insurance Company ("Mayflower") for one of the fictitiously named defendants. The plaintiffs, in the final version of their complaint, alleged 18 counts of wrongdoing by the defendants. Of those, 14 counts stated claims on behalf of Thomas and Dixon only, but 4 of the counts stated claims on behalf of a putative class. Thereafter, the plaintiffs moved for class certification of those four claims. The trial court conducted two hearings at which the plaintiffs' class-certification motion was discussed. At the first hearing, the plaintiffs offered no evidence in support of class certification; the issue was only briefly addressed. At the conclusion of that first hearing, the trial court instructed the parties to file briefs in support of their respective positions on the issue of class certification. The trial court conducted a second, abbreviated hearing on class certification; the only issue relating to certifying a class action that was discussed at that hearing was numerosity. Counsel for the plaintiffs orally argued for certifying the class but presented no evidence in support of class certification. Nevertheless, shortly after the second hearing, the trial court granted the motion for class certification. In Heard I, the Supreme Court held that the trial court's order failed to demonstrate that the trial court had conducted the rigorous analysis required under Rule 23, Ala.R.Civ.P., and failed to explain how the evidence supported the trial court's conclusion that the requirements of Rule 23(a) and (b) had been met. Following the decision in Heard I, the trial court vacated its order granting class certification and scheduled another hearing. At that hearing, plaintiffs' counsel submitted a nine-page proposed order granting the motion for class certification. Mayflower's counsel pointed out that there was no substantive evidence in the record to support the assertions made in the proposed order, and the trial court directed the plaintiffs to file a submission of proof, consisting of transcripts of the previous hearings and copies of depositions. The plaintiffs never filed the requested submission of proof; nevertheless, the trial court entered an order certifying the class. In Heard II, the Supreme Court directed the trial court to vacate its order granting class certification because the trial court failed to meet the rigorous-analysis requirements of §6-5-641, because the order "was entered without the benefit of a formal evidentiary hearing and without allowing the defendants an adequate opportunity to contest the proposed class-certification order," and because the order failed to identify the elements of the four claims being certified for class treatment and failed to discuss how the criteria set forth in Rule 23 are met with respect to those claims. Following the decision in Heard II, the trial court scheduled a formal evidentiary hearing at which the plaintiffs' motion for class certification would again be considered. Before the hearing, all the parties filed briefs and evidentiary material in support of their positions. Nearly six months after the hearing, the trial court directed both parties to submit proposed orders to the court and to one another. The trial court then gave the parties the opportunity to file responses to the proposed orders, which the plaintiffs and Mayflower did. On May 14, 2003, the trial court entered an order granting class certification; the order was the 38-page proposed order that had been submitted by the plaintiffs.HOLDING: The Supreme Court reversed the class-certification order yet again. The Court held that an examination of the class-certification order reveals "indicia of a lack of rigorous analysis." The Court held that the trial court's order goes far beyond a Rule 23 analysis and evaluates the merits of several of the plaintiffs' claims and fails to properly consider the defenses of the defendants. The Court remanded the case for the trial court to conduct its own rigorous analysis of the evidence.

Ex parte C.L.C., No. 1021541 (Ala. June 25, 2004)
Summary: adoption; paternity; Putative Father Registry; juvenile-court subject-matter jurisdiction; FACTS & PROCEEDINGS: On March 19, 2001, C.L.C., a high school student, hereinafter sometimes "the father," petitioned the Colbert County Circuit Court to adjudicate his paternity of a child and to declare his child legitimate. On March 21, 2001, in the St. Clair County Probate Court, D.W.R. and M.J.T.R., the prospective adoptive parents, petitioned to adopt the same child the father had petitioned to legitimize. The prospective adoptive parents filed documents showing that the birth mother had consented to their adoption of her newborn son. They alleged that the consent of the father, C.L.C., was not required or was implied by law. In April 2001, the father was served with a summons and the complaint filed by the prospective adoptive parents in the probate court. Contesting the adoption, the father answered and moved to dismiss the adoption petition. On June 21, 2001, the father moved to stay the adoption action pending an adjudication in his paternity action. In September 2001, the prospective adoptive parents moved to remove their adoption action to the St. Clair County Juvenile Court. On December 10, 2001, the St. Clair County Probate Court transferred the petition for adoption to the juvenile court "for the purpose of terminating parental rights" of C.L.C. and with instructions "that this cause be remanded to the Probate Court for final disposition." In the juvenile court, the prospective adoptive parents moved for a summary judgment on their adoption petition itself on the ground that the father had irrevocably impliedly consented to the adoption of his child by failing to register timely with the Putative Father Registry, see Ala. Code §26-10C-1. The prospective adoptive parents again moved for summary judgment on their adoption petition itself on the same ground. On March 19, 2002, the juvenile court entered an order granting the prospective adoptive parents' summary judgment motion and entering summary judgment granting the adoption petition itself. On May 29, 2002, the father moved to alter, to amend, or to vacate the judgment, or, in the alternative, for relief from the judgment, pursuant to Rule 60(b)(4), Ala.R.Civ.P., on the ground that the judgment was void because the juvenile court lacked jurisdiction to grant the adoption since the probate court had transferred the case to the juvenile court for the limited purpose of terminating parental rights under Ala. Code §26-10A-3. The father also claimed that the judgment of the juvenile court was contrary to "the statute." On June 4, 2002, the juvenile court denied the postjudgment motion. The Court of Civil Appeals affirmed the judgment of the juvenile court without opinion. HOLDING: The Supreme Court reversed. The Court held that a Rule 60(b)(4) motion that attack a putative judgment on the ground that it is void, may be filed at any time after entry of the putative judgment. The Court held that the primary jurisdiction over adoption proceedings is in the probate court and that unless a juvenile court acquires jurisdiction over a petition to adopt by the "transfer" mechanism found in Ala. Code §12-12-35, the juvenile court is without authority to grant an adoption. The Court held that in this case the probate court kept exclusive jurisdiction over the issue of whether or not to grant or deny the petition to adopt and that it sent the case to the juvenile court for the strictly limited purpose of addressing the issue of termination of parental rights. As such, the Court held that the juvenile court acquired only that limited jurisdiction over this particular case and that, in purporting to grant the petition to adopt, the juvenile court exceeded its jurisdiction and entered only a void judgment.

American Home Assurance Co. v. Gaylor, No. 1021565 (Ala. June 25, 2004)
Summary: probate; notice to creditors; reasonably ascertainable creditor; FACTS & PROCEEDINGS: On July 7, 2000, Charles Hillman was driving his sport-utility vehicle when he collided with the rear of an 18-wheel tractor-trailer truck driven by Thomas J. Wetherell and owned by J.B. Hunt Transport, Inc. Charles, his wife, Vicki, and their daughter, Katie, died as a result of the accident. On July 14, 2000, Gaylor, Charles's mother-in-law, was appointed personal representative of Charles's estate, and the court opened the estate for probate. On July 14, 2000, Gaylor, Charles's mother-in-law, was appointed personal representative of Charles's estate, and the court opened the estate for probate. Notice of Gaylor's appointment was published in the Mobile Press Register on July 27, 2000, August 3, 2000, and August 10, 2000. As a result of the accident, the tractor-trailer truck driven by Wetherell sustained approximately $14,000 of damage. J.B. Hunt filed a claim with Alfa Mutual Insurance Company, Hillman's automobile insurance carrier, and Alfa settled that claim. Although the accident report indicated that Wetherell had not been injured in the accident, he filed for and received workers' compensation benefits through his employer, J.B. Hunt. American Home Assurance Company ("American Home") was J.B. Hunt's workers' compensation carrier. On July 3, 2002, American Home sued Gaylor, as personal representative of Charles's estate, seeking reimbursement of sums paid for Wetherell's workers' compensation benefits. Gaylor argued that the claim was time-barred by Ala. Code §43-2-350, because it had not been filed within six months after Gaylor was granted letters testamentary. American Home argued that under Ala. Code §43-2-61, Gaylor had a duty to provide it with actual notice of the probate proceedings because, it says, it is a "reasonably ascertainable creditor." Gaylor moved for a summary judgment, which the trial court granted. HOLDING: The Supreme Court reversed. The Court held that the fact that the accident caused the deaths of three persons and approximately $14,000 in damage to the tractor-trailer truck driven by Wetherell and the fact that the administratrix was aware of the accident created a duty requiring Gaylor to inquire into the possibility of a claim against Charles's estate by Wetherell. The Court noted that the accident report listed Wetherell's name, address, and telephone number and held that Gaylor had a reasonable means of ascertaining the existence of a claim.

Kupfer v. SCI-Alabama Funeral Servs., Inc., No. 1022002 (Ala. June 25, 2004)
Summary: arbitration; Rule 60(b)(5); failure to appeal initial arbitration denial; FACTS & PROCEEDINGS: On October 20, 2001, Patricia M. Kupfer's son, Jeremy Youngman, died. On October 21, 2001, Kupfer contacted SCI-Alabama Funeral Services, Inc., d/b/a Ridout's Brown-Service Trussville Chapel ("SCI"), to arrange for the transportation and embalming of her son's body, and for visitation and burial of her son. Kupfer signed a purchase agreement with SCI pursuant which SCI was to provide all of the funeral arrangements for her son. The purchase agreement contained an arbitration provision. On October 15, 2002, Kupfer sued SCI, alleging negligence, negligent entrustment, negligent hiring and supervision, the tort of outrage, and breach of contract in connection with SCI's handling of the transportation, embalming, visitation, and burial of her son. Kupfer argues that SCI was to retrieve her son's body from the coroner's office on October 21, 2001. However, SCI did not pick her son's body up until October 22, 2001, and Kupfer argues that as a result of the delay the body was too decomposed to allow the open casket and visitation Kupfer says she had requested as part of the funeral arrangements. In addition, Kupfer alleges that early on the day of the funeral, she went to the funeral home to view her son's body; the body was in a "severely misshapen" state and it appeared that SCI had failed to take any action to prepare the body for burial. SCI moved to dismiss Kupfer's action or, in the alternative, to compel arbitration. On April 2, 2003, the trial court denied SCI's motion to compel arbitration, concluding that because SCI failed to demonstrate that its transaction with Kupfer "substantially affected" interstate commerce, SCI had failed to meet its burden of proof. On April 9, 2003, SCI moved the trial court to reconsider its April 2, 2003, order. The trial court denied that motion on April 15, 2003, and SCI did not appeal the trial court's denial of its motion to reconsider. On July 1, 2003, SCI again moved the trial court, apparently pursuant to Rule 60(b)(5), Ala.R.Civ.P., to reconsider its April 2, 2003, order in light of the June 2, 2003, decision of the Supreme Court of the United States in Citizens Bank v. Alafabco, Inc., 539 U.S. 52 (2003). On July 18, 2003, the trial court granted SCI's motion to reconsider and ordered Kupfer to arbitrate her claims against SCI. On August 22, 2003, Kupfer appealed the trial court's order granting SCI's Rule 60(b)(5), Ala.R.Civ.P., motion to reconsider and compelling arbitration. HOLDING: The Supreme Court reversed. The Court noted that the trial court's reasoning in its April 15, 2003, order that the Federal Arbitration Act does not apply to this case because the transaction did not substantially affect interstate commerce was erroneous. The Court held, however, that if SCI had appealed the trial court's April 2, 2003, order, SCI would have been able to argue, once the United States Supreme Court released Alafabco, that Alafabco had changed the law and that the trial court had erroneously determined that the transaction in issue did not fall within the scope of Congress's Commerce Clause power. The Court held that because SCI did not appeal, SCI cannot now argue that it is entitled to compel arbitration. The Court held that because SCI failed to appeal the trial court's April 2, 2003, order denying its motion to compel arbitration, the trial court exceeded its discretion in entering its July 18, 2003, order granting SCI's Rule 60(b)(5) motion and ordering Kupfer to arbitrate her claims against SCI.

Ex parte Alabama Dep't of Mental Health & Mental Retardation, Nos. 1022193 & 1030021 (Ala. June 25,
Summary: venue; FACTS & PROCEEDINGS: Defendants Alabama Department of Mental Health and Mental Retardation, Kathy Sawyer, Anne Evans, G. Allen Fortson, Ross Hart, Ronald Reed, and Judith Johnston, and defendants East Alabama Mental Health-Mental Retardation Board, Inc., Paul Walker, and Charlene McDaniel moved the Montgomery County Circuit Court to transfer the action filed by plaintiff Tommie Swindle as guardian for Tonetia Lewis from the Montgomery County Circuit Court to the Lee County Circuit Court. The trial court denied the motions to transfer, and both sets of defendants petitioned the Supreme Court for writs of mandamus directing the trial judge to vacate her order denying the motions to transfer and to enter an order granting the motions to transfer.HOLDING: The Supreme Court granted the writs. The Court held that this case is not materially distinguishable from Ex parte Sawyer, No. 1020888 (Ala. May 7, 2004), and Ex parte Sawyer, No. 1021194 (Ala. May 7, 2004).

Regions Bank v. Plott, No. 1030436 (Ala. June 25, 2004)
Summary: invasion of privacy; false light; FACTS & PROCEEDINGS: The underlying dispute arises out of the theft of 200 successively numbered checks bearing Amelia Kay Plott and James Edward Plott's names and the number of their joint checking account at Regions Bank's branch bank in Bessemer. The Plotts first learned of the theft on November 5, 1998, after three unidentified individuals attempted unsuccessfully to forge Mrs. Plott's name on one of the checks at a Wal-Mart discount department store in Gardendale. That same day, the Plotts reported the theft to the Jefferson County Sheriff's Department, and Mrs. Plott visited Regions. At Regions, she reported the theft to a customer-service representative, who placed a "no-debit hold" on the account to prevent the payment of any forged instrument. On November 16, 1998, after all checks written by the Plotts on the frozen account had been presented for payment, Regions closed that account. Meanwhile, the thieves were writing checks in various Southeastern states, including Mississippi, Alabama, Georgia, and North Carolina, and forging the Plotts' names. In a few instances, the thieves altered the account number on a check. In all, at least 130 forged checks were presented for payment on the frozen account. Those checks were returned to the presenting banks, and, in turn, to the merchants that had accepted them, stamped (1) "refer to maker," (2) "account closed," or (3) "account not found." Additionally, two checks were returned stamped "insufficient funds." When each check was returned, its holder contacted the Plotts by telephone, by mail, or by both, seeking payment. When the Plotts would explain that the check was forged, many of the merchants requested an affidavit of forgery. After they had procured the affidavit, the Plotts sent an affidavit and a copy of the sheriff's report of the theft in response to every payment request. However, the affidavit often failed to satisfy the holder or to end the demand for payment. The Plotts continued to receive demands by telephone and mail from merchants and collection agencies, threatening legal action and criminal prosecution. Although the Plotts were never arrested in connection with the forged checks, warrants were issued for the arrest of Mrs. Plott in Baldwin County, Limestone County, and Madison County. Additionally, many of the merchants referred the matter to credit bureaus and credit-reporting agencies. As a result, the Plotts' credit rating was adversely affected. The Plotts sued Regions and others. The complaint contained a count alleging "invasion of privacy," averring that the defendants "invaded the [Plotts'] privacy by placing [them] in a false, but not necessarily defamatory, position in the public eye" (hereinafter "false light"). The complaint sought compensation for (1) emotional distress, (2) damage to "credit and financial standing," and (3) lost time and inconvenience from the interruption of their ordinary business affairs, which included the necessity of "attempt[ing] to clear their credit record, [responding] to arrest warrants, [changing] their bank accounts, [and dealing] with credit agencies, attorneys and merchants." The case was tried before a jury on claims against Regions alleging an invasion of the right of privacy. At the close of the Plotts' case-in-chief, Regions moved for a judgment as a matter of law ("JML"). Regions renewed this motion at the close of all the evidence. The trial court denied Regions' motion for a JML. During the jury charge that followed, the trial court told the jury that the Plotts were claiming damages "for the violation of his and her right of privacy by intrusion upon [their] physical solitude or seclusion" (hereinafter "intrusion on seclusion") and for putting them "in a false but not necessarily defamatory position in the public eye." The trial court then charged the jury on the substantive elements of the false-light claim, but did not charge the jury on the claim of intrusion on seclusion. There was no objection to the charge. The jury returned a general verdict in favor of Mrs. Plott for $70,000 in compensatory damages and in favor of Mr. Plott for $15,000 in compensatory damages. The trial court entered a judgment on that verdict. On appeal, Regions contends that the trial court erred in denying its motion for a JML. HOLDING: The Supreme Court reversed. The Court held that Regions did not give publicity to any false information regarding the Plotts. The Court held that the stamp "Refer to maker" on the face of an instrument does not purport to assert any fact or contain any information. The Court held that the stamp "account not found" on the returned forged checks was a true statement because Regions used that stamp only on those of the Plotts' checks on which the account number had been altered by the thieves. Similarly, the Court held that the stamp "account closed" was a true statement. The Court noted that it is undisputed that only two of the forged checks were returned to the presenting bank stamped "insufficient funds" and that those checks were the first two checks returned after the account was frozen on November 5, 1998, and were returned on that date. The Court held that, even assuming for the sake of argument that this stamp provided false information regarding the Plotts' account to two presenting banks and two merchants, the "giving publicity" element of the false-light claim is not satisfied because "giving publicity" is "making a 'matter ... public, by communicating it to the public at large, or to so many persons that the matter must be regarded as substantially certain to become one of public knowledge.'" Therefore, the Court held that the trial court erred in refusing to enter a JML in favor of Regions on the false-light claim. As to the intrusion-on-seclusion claim, the Court held that because the claim was not presented to the jury or included in the verdict, or in the judgment entered on that verdict, Regions' challenge to the denial of a JML as to that claim is moot.

State Farm Mut. Auto. Ins. Co. v. Brown, No. 1030709 (Ala. June 25, 2004)
Summary: insurance; justiciable controversy; declaratory relief; direct action against an insurance company before a judgment has been entered against the insured/alleged tortfeasor; FACTS & PROCEEDINGS: Waylon Gant was involved in a motor-vehicle accident with Judy Brown, who sustained severe physical injuries. Gant is insured under an automobile liability policy issued by State Farm Mutual Automobile Insurance Company. The "liability" coverage section of Gant's State Farm policy provides, in part, that State Farm will "pay damages which an insured becomes legally obligated to pay because of ... bodily injury to others ...." The policy defines "bodily injury" as "bodily injury to a person and sickness, disease or death which results from it." The definition of "bodily injury" contains no words like "loss of services" or "loss of consortium" or any language similar to those words. The limits of Gant's liability coverage for bodily injury under the policy is $50,000 for "[e]ach [p]erson" and $100,000 for "[e]ach [a]ccident." On January 24, 2001, the Browns sued Gant in the Etowah Circuit Court, alleging that he had been negligent and/or wanton and that his negligence and/or wantonness had caused the November 29, 1999, accident. The complaint alleges that the injuries Judy sustained in the accident exceed $50,000. Judy's husband, Michael, who was not in the car at the time of the accident, claims to have "lost the services, comfort and consortium of his wife Judy Brown" as a result of the accident and claims that that loss exceeds $50,000 in damages. The Browns also asserted a direct claim, titled "Complaint for Declaratory Judgment," against State Farm as Gant's liability insurer seeking a declaration that the policy should be "interpreted so as to provide $50,000 coverage for Judy Brown's claims and an additional $50,000 coverage for Michael Brown's claims." On February 16, 2001, State Farm filed its answer to the Browns' declaratory-judgment complaint, asserting, among other things, the affirmative defenses that the Browns' claim against State Farm was a prohibited direct action against an adversary's liability insurer, and that the bodily-injury liability limits for "[e]ach [p]erson" under the language of Gant's State Farm policy "were not expanded by a derivative claim asserted by a person not having received any bodily injury [i.e., Michael Brown]." On March 26, 2001, the Browns filed a motion for partial summary judgment, supported by a certified copy of Gant's State Farm policy. On September 12, 2003, the trial court, relying on Tate v. Allstate Insurance Co., 692 So.2d 822 (Ala. 1997), and City of Lanett v. Tomlinson, 659 So.2d 68 (Ala. 1995), entered an order, stating: "The Court hereby declares that the total amount of coverage from the State Farm policy which affords coverage to defendant Gant is $50,000 for the claims of the [sic] Judy Brown, and an additional $50,000 for the claims of her husband Michael Brown, for a total of $100,000 in coverage." On October 9, 2003, State Farm filed a motion to vacate the judgment and to dismiss the claim against it or, in the alternative, to certify the partial summary judgment as final pursuant to Rule 54(b), Ala.R.Civ.P., arguing that the direct- action statute, Ala. Code §27-23-2, and Maness v. Alabama Farm Bureau Mutual Casualty Insurance Co., 416 So.2d 979 (Ala. 1982), precluded the Browns' direct declaratory-judgment claim against State Farm and that Tate and Weekly v. State Farm Mutual Automobile Insurance Co., 537 So.2d 477 (Ala. 1989) served to limit the liability coverage available under Gant's policy to the $50,000 "[e]ach [p]erson" limit, i.e., to $50,000 for "all damages due to bodily injury to one person." On December 15, 2003, the trial court denied State Farm's motion to vacate or dismiss but expressly certified the partial summary judgment as final for purposes of Rule 54(b), Ala.R.Civ.P. State Farm appealed. HOLDING: The Supreme Court reversed. The Court held that the specific direct-action statute acts as an exception to the general declaratory-judgment statute. The Court held that, by allowing the Browns to go forward with their claim against State Farm, the trial court allowed the Browns to pursue a direct action against an insurance company, something not permitted by Ala. Code §27-23-2. The Court held that there is no justiciable controversy because the Browns have yet to obtain a judgment against Gant that would obligate State Farm to the Browns in any way.

Ex parte Snyder, No. 1030871 (Ala. June 25, 2004)
Summary: criminal; The Supreme Court denied the petition for writ of certiorari without opinion, but the Court stated that in denying the petition for the writ of certiorari, it does not wish to be understood as approving all the language, reasons, or statements of law in the Court of Criminal Appeals' October 31, 2003, opinion on remand.

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