Justia Alabama Supreme Court Opinion Summaries

Articles Posted in Class Action
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Michael Howard appealed the grant of summary judgment entered against him in the action he commenced on behalf of himself and all other similarly situated taxpayers in Cullman County against Cullman County and its Revenue Commissioner Barry Willingham, in his official capacity. Howard sought a refund of property taxes he and other taxpayers paid in 2013. Howard sought a judgment declaring that, pursuant to former section 40-7-42, the Commission's levy of property taxes for October 1, 2012, through September 30, 2013, was invalid because it was done in May 2013 rather than at the Commission's first regular meeting in February 2013. He also sought the return of property taxes collected in 2013. The Supreme Court found that the trial court correctly concluded that the Commission's failure to follow the timing provision of former 40-7-42 did not invalidate its subsequent levy in 2013 of property taxes upon Howard and other property owners in Cullman County. Therefore, the Court affirmed summary judgment on all of Howard's claims in favor of Cullman County and the revenue commissioner. View "Howard v. Cullman County" on Justia Law

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In connection with a 1998 nationwide, securities-fraud class action initiated against MedPartners, Inc., a physician-practice-management/pharmacy-benefits-management corporation and the predecessor in interest to CVS Caremark Corporation, the Jefferson Circuit Court certified a class that included the plaintiffs in this case. Based on the alleged financial distress and limited insurance resources of MedPartners, the 1998 litigation was concluded in 1999 by means of a negotiated "global settlement," pursuant to which the claims of all class members were settled for an amount that purportedly exhausted its available insurance coverage. Based on representations of counsel that MedPartners lacked the financial means to pay any judgment in excess of the negotiated settlement and that the settlement amount was thus the best potential recovery for the class, the trial court, after a hearing, approved the settlement and entered a judgment in accordance therewith. Thereafter, MedPartners (now Caremark) allegedly disclosed, in unrelated litigation, that it had actually obtained (and thus had available during the 1998 litigation) an excess-insurance policy providing alleged "unlimited coverage" with regard to its potential-damages exposure in the 1998 litigation. In 2003, John Lauriello, seeking to be named as class representative, again sued Caremark and insurers American International Group, Inc.; National Union Fire Insurance Company of Pittsburgh, PA; AIG Technical Services, Inc.; and American International Specialty Lines Insurance Company in the Jefferson Circuit Court, pursuant to a class-action complaint alleging misrepresentation and suppression, specifically, that Caremark and the insurers had misrepresented the amount of insurance coverage available to settle the 1998 litigation and that they also had suppressed the existence of the purportedly unlimited excess policy. In case no. 1120010, Caremark and the insurers appealed the circuit court's order certifying as a class action the fraud claims asserted by Lauriello, James Finney, Jr.; Sam Johnson; and the City of Birmingham Retirement and Relief System. In case no. 1120114, the plaintiffs cross-appealed the same class-certification order, alleging that, though class treatment was appropriate, the trial court erred in certifying the class as an "opt-out" class pursuant to Rule 23(b)(3), Ala. R. Civ. P., rather than a "mandatory" class pursuant to Rule 23(b)(1), Ala. R. Civ. P. Finding no reversible error, the Supreme Court affirmed the circuit court in both cases. View "CVS Caremark Corporation et al. v. Lauriello et al." on Justia Law

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Baldwin Mutual Insurance Company appealed a circuit court order certifying the action filed against it by Gloria McCain as a class action. McCain owned a house in Montgomery on which she held a homeowner's insurance policy issued by Baldwin Mutual. That policy provided that any covered property losses would be settled "at actual cash value at the time of loss but not exceeding the amount necessary to repair or replace the damaged property." In July 2005, McCain's house was damaged as the result of a windstorm. She filed a claim with Baldwin Mutual, and Baldwin Mutual thereafter retained an independent adjuster to examine McCain's damaged property and to prepare an estimate to repair the damage. Baldwin Mutual paid McCain's claim in accordance with the estimate prepared by the adjuster. Pursuant to a work-authorization form signed by McCain, Baldwin Mutual paid the funds directly to McCain's contractor. In June 2006, McCain filed another claim after her house suffered damage as a result of a lightning strike. After the same adjuster prepared an estimate, Baldwin Mutual paid the new claim in accordance with the adjuster's estimate. The genesis of the claims underlying this suit was that Baldwin Mutual had wrongfully been reducing the amount paid on claims made on actual-cash-value polices inasmuch as its practice was to deduct some amount for depreciation not only of the damaged materials and the labor costs of initially installing those damaged materials (based on their condition prior to the covered damage and their expected life span), but also of the labor costs associated with the removal of the damaged materials. It was improper and impossible to depreciate those labor costs, McCain argued, because they had not previously been incurred at some defined time in the past; rather, they were being incurred at the time of the current repair. Noting that hundreds or thousands of Baldwin Mutual policyholders were likely negatively affected by Baldwin Mutual's practices in this regard, McCain sought class action certification of her claims. The Alabama Supreme Court reversed the class certification, finding that the trial court here exceeded its discretion with a definition proposed by McCain without giving Baldwin Mutual the opportunity to oppose the certification of the proposed class at a hearing conducted for that purpose pursuant to statute. The case was remanded for further proceedings. View "Baldwin Mutual Ins. Co. v. McCain" on Justia Law

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In case no. 1120010, CVS Caremark Corporation; American International Group, Inc.; National Union Fire Insurance Company of Pittsburgh, PA; AIG Technical Services, Inc.; and American International Specialty Lines Insurance Company appealed a trial court order certifying as a class action the fraud claims asserted by plaintiffs John Lauriello; James O. Finney, Jr.; Sam Johnson; and the City of Birmingham Retirement and Relief System. In case no. 1120114, the plaintiffs cross-appealed the same class-certification order, alleging that, though class treatment was appropriate, the trial court erred in certifying the class as an "opt-out" class pursuant to Rule 23(b)(3), Ala. R. Civ. P., rather than a "mandatory" class pursuant to Rule 23(b)(1), Ala. R. Civ. P. Finding no reversible error in either case, the Supreme Court affirmed in both. View "John Lauriello et al. v. CVS Caremark Corporation et al. " on Justia Law

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Plaintiffs Mary Hall, the personal representative of the estate of Adolphus Hall, Sr., and Anaya McKinnon, the personal representative of the estate of Wanzy Lee Bowman appealed the Jefferson Circuit Court's order dismissing their complaint filed against Environmental Litigation Group, P.C., a law firm ("ELG"). The plaintiffs filed a complaint in against ELG, requesting a declaratory judgment and alleging one count of unjust enrichment and one count of breach of contract. The plaintiffs asserted those claims on behalf of the estates they represented and on behalf of "others similarly situated as a class action pursuant to Rule 23," Ala. R. Civ. P. In the 1990s, ELG agreed to represent hundreds of clients who had been exposed to asbestos, including Adolphus Hall and Bowman; ELG entered into an attorney-employment agreement with each client; pursuant to that agreement, ELG agreed to "take all legal steps necessary to enforce the said tort claim," and in return ELG would receive 40% of amounts collected from any settlement or judgment as its fee; the agreement also permitted ELG to reimburse itself for reasonable expenses related to the clients' claims. The "crux" of the plaintiffs' claims is that ELG breached the attorney-employment agreement by allegedly taking as an attorney fee more than 40% of the settlement proceeds. ELG filed a motion to dismiss the plaintiffs' appeal, arguing that the Supreme Court did not have subject-matter jurisdiction over the plaintiffs' appeal because "[o]nly the Alabama State Bar has jurisdiction to resolve the dispute between the parties." The Supreme Court concluded the trial court erred in dismissing plaintiffs' complaint, and affirmed the denial of ELG's motion to dismiss. View "Hall v. Environmental Litigation Group, P.C. " on Justia Law

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Nationwide Retirement Solutions, Inc. ("NRS"), appealed a circuit court judgment awarding PEBCO,Inc. over a million dollars in attorney fees and $29,132.01 in expenses. In 2007, participants in the State of Alabama Public Employees Deferred Compensation Plan filed a class action against Nationwide Life Insurance Company ("NL"), NRS, the Alabama State Employees Association ("ASEA"), and PEBCO, Inc., alleging breach of fiduciary duty, conversion, and breach of contract in the administration of the Plan. The parties filed a "Stipulation of Settlement," which the trial court approved in its final order entered in 2011. Pursuant to the settlement, NL and NRS paid $15.5 million to the participants in the Plan and $2.9 million in attorney fees to settle class claims against all defendants, including ASEA and PEBCO. In its findings of fact, the trial court stated: "ASEA is being permitted to retain more than $12 million in sponsorship payments that it allegedly received unlawfully, and ASEA is receiving full release from any liability." A day before the parties filed their "Stipulation of Settlement," Nationwide moved for an order barring ASEA and PEBCO from filing any indemnification claims. The trial court granted the order except for claims for attorney fees and costs. "[I]n light of Nationwide's substantial contributions to the settlement," the court wrote that it was "fair and reasonable that ASEA and PEBCO be barred from pursuing any claims against Nationwide for reimbursement, indemnification, or contribution other than claims for attorney fees and costs ...." A month before entering its final order in the class action, the trial court ordered severance of ASEA and PEBCO's claim for fees and directed the Circuit Court clerk to docket that claim as "a separate and independent action," with ASEA and PEBCO as plaintiffs and NL and NRS as defendants. The trial court found that the indemnification clause in the agreement required that NRS pay the fees and costs incurred by ASEA and PEBCO in defending the class action. Noting that NRS "has contended, and still contends, that indemnification is improper based on the language of the agreement and the attending facts," the trial court stated that it "has held hearings on that issue and by prior order has ruled that indemnification is appropriate. The instant action was filed to enforce indemnification." The court ordered NRS to pay PEBCO $863,988.50 in attorney fees and $15,297.54 in expenses for the class-action litigation, and $210,039 in attorney fees and $13,834.47 in expenses for litigating the severed cross-claim. NRS timely appealed that decision to the Supreme Court. The Supreme Court reversed and remanded: "[b]ecause NRS did not fail to perform those duties under the agreement that ultimately gave rise to the class action, it did not, as a matter of law, breach the indemnification clause in the agreement. . . . Alabama does not permit a party to seek indemnification for defending against its own allegedly wrongful acts." View "Nationwide Retirement Solutions, Inc. v. PEBCO,Inc. " on Justia Law

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In consolidated appeals, defendants the Alabama Department of Corrections, various department officials, and Governor Robert Bentley, appealed in case no. 1111588, the trial court's determination limiting certain deductions from work-release earnings for inmates. In case no. 1120264, Jerry Mack Merritt (as sole representative of the plaintiff class) cross-appealed, raising numerous challenges to the trial court's final judgment. After its review, the Supreme Court dismissed the appeal in case no. 1120264 as untimely filed; in case no. 1111588, the Court reversed and remanded. The Court found that the department's interpretation of section 14-8-6 as permitting its collection of charges, which were not incident to the inmate's confinement, in excess of a 40% withholding cap established by that statute was both reasonable and consistent with the statutory language. View "Thomas v. Merritt" on Justia Law

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Alabama Mutual Insurance Corporation ("AMIC"), the defendant in an action pending at the Lamar Circuit Court filed by the City of Vernon on behalf of itself and other similarly situated entities, appealed the court's order that certified a class in that action. Vernon stated that it had reached an agreement with AMIC regarding individual claims and therefore no longer wished to pursue them. AMIC filed a response to Vernon's motion in which it argued that the Supreme Court should remand the case to the trial court with instructions to dismiss it because now the case was missing its named representative, and therefore the requirements for a class action could not be met. Vernon argued it had the right to withdraw from the pending litigation, but because the trial court certified the class, the litigation remains viable. Vernon requested time in which to allow the class to name a new representative. The Supreme Court agreed with Vernon that the trial court should have the opportunity to determine whether a new named plaintiff should be certified. "The trial court is the proper entity to decide whether to allow the class members to amend their complaint to substitute a new named plaintiff and to determine whether that plaintiff meets the adequacy requirements in Rule 23(a), Ala. R. Civ. P., so as to represent the class." As such, AMIC's appeal was dismissed, and the case remanded to the trial court for further proceedings. View "Alabama Mutual Insurance Corporation v. City of Vernon et al. " on Justia Law

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Immediately following the release of the Supreme Court's previous decision in this case, the Alabama Legislature passed Act No. 2012-198, Ala. Acts 2012, which repealed the statutory provision that underpinned the decision in "Perdue I." In the prior case, the Court vacated the circuit court's judgment that approved a settlement agreement that ended class-action litigation involving the Alabama Prepaid Affordable College Tuition (PACT) program. Class member Carol Perdue objected to the trial court's approval of the settlement; the Supreme Court originally rejected plaintiffs' argument that Ala. Code 16-33C-19 did not prohibit the PACT Board from entering into the settlement, and that the agreement was "clearly contrary to state law." The Legislature specifically repealed 16-33C-19 and caused the Court to revise its previous decision. The Court found that the trial court exceeded its discretion in finding the settlement was fair, adequate and reasonable, found the retroactive application of the 2012 Act constitutional, and remanded the case for further proceedings. View "Perdue v. Green" on Justia Law

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The Alabama Department of Corrections ("ADOC"), the Alabama Corrections Institution Finance Authority ("ACIFA"), and Kim Thomas, in his official capacities as the commissioner of ADOC and as ex officio vice president of ACIFA, petitioned the Supreme Court for a writ of mandamus to direct the Montgomery Circuit Court to vacate its May 2012 order denying their motion seeking a partial summary judgment and requested the court enter a new order granting their motion. In 2010, Albert Wilson, Rufus Barnes, Joseph Danzey, Bryan Gavins, and Donald Simmons, all of whom were employed by ADOC as correctional officers, sued ADOC and its then commissioner Richard Allen alleging that ADOC was violating its own regulations and state law in the manner in which it: (1) compensated correctional officers for overtime; (2) restricted the way correctional officers were allowed to use earned leave; and (3) paid correctional officers the daily subsistence allowance provided by law. The plaintiffs also sought class certification on behalf of all other similarly situated correctional officers employed by ADOC and requested injunctive relief, as well as money damages, to include backpay with interest, punitive damages, and litigation costs and expenses, including attorney fees. Because ADOC and Thomas, in his official capacity as commissioner of ADOC, were entitled to State immunity on those claims, the Court granted the petition as to ADOC and Thomas, in his capacity as commissioner of ADOC, and issued the writ. However, ACIFA and Thomas, in his official capacity as vice president of ACIFA, did not argue that they were entitled to State immunity on the claims asserted against them; rather, they argued that those claims lacked merit. That argument presented an insufficient basis upon which to issue a writ of mandamus, and the Supreme Court therefore denied the petition with regard to the those claims because ACIFA and Thomas had an adequate remedy on appeal. View "Wilson v. Thomas " on Justia Law