Case Title: Riscorp, Inc. v. Occupational Safety Ass'n of Alabama Workmen's Compensation Fund

Citation: 796 So. 2d 1062

Docket Number: 1980524, 1980691

State: alabama

Court: Alabama Supreme Court

Date: 2000-06-30T00:00:00Z

Document:
796 So. 2d 1062 (2000)
RISCORP, INC., and Riscorp National Insurance Company
v.
OCCUPATIONAL SAFETY ASSOCIATION OF ALABAMA WORKMEN'S COMPENSATION FUND.
Ex parte Riscorp National Insurance Company and Riscorp, Inc.
(Re Occupational Safety Association of Alabama Workmen's Compensation Fund v. Peter D. Norman et al.)
1980524 and 1980691.

Supreme Court of Alabama.
June 30, 2000.
Rehearing Denied May 4, 2001.
Warren B. Lightfoot, Mac M. Moorer, William H. Morrow, and Ivan B. Cooper of Lightfoot, Franklin & White, L.L.C., Birmingham, for appellants/petitioners Riscorp, *1063 Inc., and Riscorp National Insurance Company.
Kenneth J. Mendelsohn and Thomas E. James of Jemison & Mendelsohn, P.C., Montgomery; and William R. Chandler of Webb & Eley, P.C., Montgomery, for appellee/respondent Occupational Safety Association of Alabama Workmen's Compensation Fund.
ENGLAND, Justice.
Riscorp, Inc., and Riscorp National Insurance Company appeal from an order granting a preliminary injunction. Those parties also have filed a mandamus petition related to an arbitration order. We affirm the order granting the injunction and dismiss the petition for the writ of mandamus.
On August 20, 1997, the Occupational Safety Association of Alabama Workmen's Compensation Fund ("the Fund"), a self-insurance workers' compensation fund, established under § 25-5-9, Ala.Code 1975, filed a complaint against Riscorp National Insurance Company and Riscorp, Inc. (together hereinafter referred to as "Riscorp"), and Peter D. Norman. Later the Fund amended its complaint to add as defendants Norman's partner Thomas Albrecht; Independent Association Administrators, Inc. ("IAA"); and Sterling Capital Advisors, Inc. ("Sterling Capital"), and its managing director Gregory A. Weir. The complaint as last amended stated these counts: (1) breach of contract, (2) demand for an accounting, (3) fraud, (4) breach of fiduciary duty, (5) negligence/wantonness, and (6) suppression.
The Fund's claims against Riscorp arose from a contract entered into between the Fund and Riscorp entitled "Loss Portfolio Transfer Agreement" ("LPTA"). This agreement transferred the assets of the Fund to Riscorp; it was signed only by Riscorp and the Fund. The LPTA contains an arbitration provision, which reads:
On October 9, 1997, Riscorp filed a motion to compel arbitration and to stay proceedings, including discovery. Later, the nonsignatory defendants filed motions to compel arbitration as to the claims against them. These motions by the nonsignatories were denied by the trial court; this Court has today affirmed that denial. See Norman v. Occupational Safety Ass'n of Alabama Workmen's Compensation Fund 776 So. 2d 788 (Ala.2000).
The circuit judge entered an order on November 25, 1997, upon the stipulation of the parties, staying the case pending settlement negotiations and mediation between the parties. The order provided that "if, at the end of said 90 day period (from the date of November 25, 1997), the parties have not settled, arbitration shall commence, provided that any party may apply to the Court for a ruling on any motion referred to in paragraph 4." The motions referred to in paragraph 4 included the motions to compel arbitration filed by the nonsignatory defendants.
On July 13, 1998, pursuant to the terms of the arbitration agreement, the Fund gave Riscorp notice of a "demand" for arbitration and subsequently appointed an arbitrator. After Riscorp neglected to select an arbitrator within the time set out in the arbitration agreement, the Fund exercised its contractual right to select the second arbitrator.
On September 23, 1998, the trial judge granted Riscorp's motion to compel arbitration and denied the motions to compel arbitration with respect to the nonsignatory parties. On October 7, 1998, Riscorp informed the Fund that it denied receiving a proper notice of "demand" for arbitration, and Riscorp filed a "demand" for arbitration with the American Arbitration Association ("AAA"). The Fund characterizes Riscorp's demand to the AAA as a desperate attempt on its part to have the AAA exercise some form of "jurisdiction" over this arbitration, because Riscorp had neglected to timely appoint an arbitrator.
The Fund filed its own motion to compel arbitration, on October 6, 1998. In this motion, the Fund asked the trial judge to direct Riscorp to arbitrate before the properly appointed arbitrators. The trial judge held a hearing and, on November 5, 1998, he granted the Fund's motion to compel arbitration, ordering: "All of the requirements in the arbitration provision of the contract are required to be followed" and that "The Commercial Arbitration Rules will govern matters not contained or contemplated by the parties." Riscorp did not at that time or soon thereafter file a mandamus petition contesting this order.
On November 18, 1998, the Fund applied for a temporary restraining order and moved for a preliminary injunction to prohibit the AAA from administering the arbitration. The trial judge issued the TRO on November 18, 1998, and set the motion for a preliminary injunction for a *1065 hearing on November 24, 1998. The trial judge allowed Riscorp to intervene in the preliminary-injunction matter. In an order dated December 1, 1998, the trial court granted the Fund's motion for a preliminary injunction and prohibited the AAA from administering the arbitration. Riscorp appealed (No. 1980524).
On January 11, 1999, Riscorp filed in this Court an "emergency motion" to stay arbitration proceedings. The Fund objected, pointing out that Riscorp had not challenged the order of November 5, 1998, by seeking a writ of mandamus. The Fund contended that the trial court could not have abused its discretion in entering against a third party an injunction that merely carried out its prior order granting the Fund's motion to compel.
On January 27, 1999, Riscorp filed a petition for a writ of mandamus (No. 1980691), stating: "The Plaintiff has taken the position that Riscorp can only raise these issues by filing a petition for writ of mandamus. Riscorp files this petition to erase any doubt that all issues are properly before this Court." This Court stayed all arbitration proceedings pending resolution of the related cases before us (cases 1980524 and 1980691, dealt with in this opinion; and cases 1980076, 1980175, and 1980272, dealt with in the Norman opinion, supra).
We first consider whether the trial court abused its discretion in granting the Fund's motion for a preliminary injunction. A preliminary injunction will not be disturbed on appeal, absent an abuse of discretion. John Lloyd & Co. v. Stringer, 456 So. 2d 1076 (Ala.1984), citing Alabama Educ. Ass'n v. Board of Trustees of the Univ. of Alabama, 374 So. 2d 258 (Ala. 1979). The Fund contends that the trial court entered the injunction because of Riscorp's continued failure and refusal to comply with the arbitration agreement. When the trial court, on November 5, 1998, granted the Fund's motion to compel arbitration, it ruled on the issues Riscorp raises in the two appellate proceedings now before this Court. Riscorp's remedy at that time was to file a petition for a writ of mandamus, challenging the trial court's order granting the motion to compel. Long v. Industrial Dev. Bd., 619 So. 2d 1387, 1388 (Ala.1993). The petition for the writ of mandamus was not filed until January 27, 1999, some 83 days later.
After carefully studying the record, we cannot conclude that the trial judge abused his discretion in entering the injunction. This is a complicated matter requiring able management by the trial judge. The trial judge had ordered Riscorp to arbitrate under the arbitration agreement, and Riscorp had failed to do so. It was clearly the province of the trial judge to grant the injunction to enforce his order to arbitrate under the LPTA.
A trial judge assigned a case of the magnitude of the case out of which the proceedings now before us arise is entrusted with a monumental task in simply managing the case. Justice Lyons, writing specially in Med Center Cars, Inc. v. Smith, 727 So. 2d 9 (Ala.1998), spoke to a trial court's wide discretion in managing a case by either staying or not staying judicial proceedings involving both arbitrable and nonarbitrable issues:
Id. at 21. (Citations omitted.) We cannot say the trial judge abused his discretion in handling this matter.
We next consider Riscorp's petition for the writ of mandamus. The Fund argues that the petition must be dismissed on the basis that it was not timely filed. The Fund notes that the petition was filed 83 days after the trial court had entered the order on November 5, 1998, compelling Riscorp to arbitrate under the terms of the LPTA and only 19 days before the arbitration hearing was originally set.
The Fund cites Long v. Industrial Development Board, 619 So. 2d 1387 (Ala. 1993). In that case, Junius Long sued the Industrial Development Board of the Town of Vincent and H.L. Fuller Construction Company for the enforcement of a lien. The trial court granted Fuller's motion to compel arbitration and for a stay of the proceedings, pursuant to an arbitration agreement between the parties. Id. at 1387. Long did not take the necessary steps to comply with the arbitration order, and Fuller filed a motion to enforce the order compelling arbitration. In July 1992, the trial court granted Fuller's motion. Long appealed. This Court held that no appeal lies from the grant of a motion to compel arbitration. The proper procedure is to petition for a writ of mandamus:
Id. at 1388.
Thus, the question becomes whether Riscorp's petition was timely filed. Riscorp argues that a petition for the writ of mandamus must be filed within a reasonable time, and the Fund responds with the argument that an 83-day delay is not reasonable. In A.G. Edwards & Sons, supra, this Court stated:
558 So. 2d  at 360-61. While the specific issue in A.G. Edwards was the time for appealing from the denial of a motion to compel arbitration, the holding and the language of the opinion indicate that a party challenging the granting of a motion to compel arbitration has no greater time in which to challenge the trial court's order than one who has been denied the opportunity to arbitrate. Id.
The order granting the preliminary injunction is affirmed; the petition for the writ of mandamus is dismissed as untimely.
COOK and JOHNSTONE, JJ., concur.
SEE and LYONS, JJ., concur in the result.
HOOPER, C.J., dissents.