Title: Ex parte Sarah Hicks Stewart and Sarah Hicks Stewart, P.C. PETITION FOR WRIT OF MANDAMUS: CIVIL (In re: Furth, Fahrner & Mason, P.C., et al. v. Rayford L. Etherton et al.)

State: alabama

Issuer: Alabama Supreme Court

Document:

REL:11/2/07sarahhicksstewart
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter.  Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334)
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before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2007-2008
_________________________
1060628
_________________________
Ex parte Sarah Hicks Stewart and Sarah Hicks Stewart, P.C.
PETITION FOR WRIT OF MANDAMUS
(In re:  Furth, Fahrner & Mason, P.C., et al.
v.
Rayford L. Etherton et al.)
(Escambia Circuit Court, CV-99-338)
BOLIN, Justice.
Sarah Hicks Stewart and Sarah Hicks Stewart, P.C.
(hereinafter collectively referred to as "Stewart"), petition
1060628
2
this Court for a writ of mandamus directing the trial court to
enter a summary judgment in favor of Stewart because, Stewart
argues, the trial court lacks subject-matter jurisdiction over
a dispute involving the distribution of an attorney-fee award.
Facts and Procedural History
On September 11, 1996, members of a class who owned
interests in oil wells filed a class action in the Escambia
Circuit Court against several major oil companies who had
purchased oil from the wells in which the class members had an
interest. Lovelace v. Amerada Hess Corp. (CV-96-297).  The
class members alleged that the oil companies had conspired to
fix the price of crude oil in violation of the antitrust laws
of various states, and they sought certification of a national
class. Rayford Etherton, Michael Fincher, and William Stokes
were designated as lead counsel for the class.
In 1997, one of the oil companies, Mobil Oil Corporation,
entered into settlement negotiations with the class members.
The negotiations resulted in a settlement of $15,000,000 for
the underpayment of royalties and working interests. The
settlement agreement also provided that Mobil would make
payments in the future to its private royalty and working-
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3
interest owners in a different manner, which would result in
a benefit to the class members.  The present value to the
class 
members 
of 
the 
prospective 
relief 
was 
between
$19,464,000 and $35,800,000. 
On April 10, 1997, several of the attorneys for the class
members involved in the Lovelace litigation met in New
Orleans. Included in their discussions was a discussion
regarding managing the case. Sarah Stewart memorialized the
discussions from that meeting.
On May 14, 1997, the circuit court preliminarily approved
the settlement with Mobil. Following preliminary approval of
the settlement and distribution of class notice, the court
conducted a fairness hearing.  On October 3, 1997, lead class
counsel filed a motion to approve attorney fees. On October 6,
1997, the court held a hearing regarding attorney fees.   
On December 12, 1997, the circuit court entered a final
judgment approving the settlement and the attorney fees and
dismissing Mobil with prejudice. With regard to attorney fees,
the circuit court addressed the factors set forth in Peebles
v. Miley, 439 So. 2d 137 (Ala. 1983), to guide courts in
determining 
reasonable 
attorney 
fees 
in 
class-action 
lawsuits.
1060628
Stewart does not give us the names of any of the
1
appellants or any docket numbers of cases she says were
appealed to this Court.
4
The court approved an award of attorney fees in the amount of
$6,580,000 to lead class counsel. The circuit court's order
provided, in pertinent part, as follows:
"Without affecting the finality of this Final
Judgment in any way, the Court reserves exclusive
and continuing jurisdiction over the Class Action,
the Class Representatives, the Class, and Mobil for
the purposes of (a) supervising the implementation,
enforcement, construction and interpretation of the
Settlement 
Agreement, 
the 
Preliminary 
Approval
Order, and the Final Judgment; (b) hearing and
determining 
any 
application 
by 
the 
Class
Representatives and Class Counsel for an award of
attorneys' fees, costs, and expenses; (c) hearing
and determining whether the proposed Plan of
Allocation is fair, reasonable, and adequate to the
eligible Class Members pursuant to Rule 23 of the
Alabama Rules of Civil Procedure; (d) supervising
the 
administration 
and 
distribution 
of 
the
Settlement Fund and the Continuing Litigation Fund;
and (e) enforcing the Final Judgment."
According to Stewart's brief, following the December 12,
1997, judgment, several appeals were filed by class members
who objected to the terms of the settlement agreement.1
According to Stewart, this Court dismissed those pending
appeals on March 12, 1998. Subsequently, lead class counsel
allocated the attorney fees among the law firms involved and
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5
provided reimbursement checks to those law firms who had
provided funds for expenses.
On August 8, 1998, several of the out-of-state law firms
filed a motion entitled "Motion to Repay and Reallocate
Attorneys' fees or, in the Alternative, to order mediation"
in the Lovelace litigation (case no. CV-96-297). Included in
the out-of-state law firms dissatisfied with the apportionment
of the attorney fees was Stokes's law firm.  In their motion,
the law firms claimed that the disbursement of attorney fees
from the settlement was done without court approval, and they
asked the circuit court to resolve the fee dispute or, in the
alternative, to order mediation of the fee dispute.
According to Stewart's brief, in response, Etherton,
Fincher, and Stewart filed a motion to compel arbitration and
a motion to dismiss the law firms' motion.  Neither of those
motions is included in the appendix to Stewart's petition.  
The circuit court held a hearing on February 3, 1999, and
another hearing on March 16, 1999.  The transcript from the
March 16, 1999, hearing is included in the appendix to
Stewart's petition.  The circuit court took several matters
under advisement and asked the parties to submit additional
1060628
The complaining law firms in case no. CV-99-338 were:
2
Furth, Fahrner & Mason, P.C.; McKay, Burton & Thurman, P.C.;
Sperling & Slater, P.C.; Richard L. Coffman, P.C.; Langston &
Associates; and Towe, Ball, Enright, Mackey & Sommerfield,
P.L.L.P. 
6
authority.  The court never ruled on any of the pending
motions in case no. CV-96-297. According to Stewart's
petition, the remaining oil companies were dismissed on April
19, 2002.
On October 26, 1999, several of the out-of-state law
firms  filed a separate action in the Escambia Circuit Court
2
naming the following as defendants: Etherton; Etherton Smith,
Etherton's law firm; Fincher; Michael Fincher, P.C.; Scott A.
Powell; Hare, Wynn, Newell and Newton, P.C.; Sarah Stewart;
and Sarah Stewart, P.C.  Their complaint was designated as
case no. CV-99-338.  In their complaint, they alleged unjust
enrichment, quantum meruit, and  legal malpractice against all
the defendants.  The law firms claimed that Stewart had
breached a contract regarding how attorneys fees were to be
distributed.  Additional claims were filed against Etherton
and Fincher as lead class counsel.
According to Stewart, no discovery has occurred in case
no. CV-99-338.  In 2006, Stewart filed a motion for a summary
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7
judgment, arguing, among other things, that the trial court
lacked jurisdiction over the complaint filed in CV-99-338 and
that the lawsuit is an impermissible collateral attack on the
jurisdiction of the court in the Lovelace litigation (case no.
CV-96-297). The trial court denied Stewart's motion for a
summary judgment.  On January 24, 2007, Stewart filed her
petition for a writ of mandamus with this Court. 
Standard of Review      
"This Court's standard of review applicable to
a petition for a writ of mandamus is well settled:
"'"Mandamus is an extraordinary remedy
and requires a showing that there is '(1)
a clear legal right in the petitioner to
the order sought; (2) an imperative duty
upon the respondent to perform, accompanied
by a refusal to do so; (3) the lack of
another adequate remedy; and (4) properly
invoked jurisdiction of the court.'"'"
Ex parte Medical Assurance Co., 862 So. 2d 645, 649 (Ala.
2003) (quoting Ex parte Inverness Constr. Co., 775 So. 2d 153,
156 (Ala. 2000)).  The question of subject-matter jurisdiction
is reviewable by a petition for a writ of mandamus.  Ex parte
Flint Constr. Co., 775 So. 2d 805 (Ala. 2000).  
Analysis
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Stewart argues that the circuit court in case no. CV-99-
338 lacked  subject-matter jurisdiction because the law firms'
complaint is a collateral attack on the final judgment in case
no. CV-96-297. Stewart contends that the circuit court's final
judgment in case no. CV-96-297 approved the attorney-fee award
and that the law firms' complaint attempts to usurp the
discretion exercised by the circuit court in supervising the
class action in case no. CV-96-297.  Stewart further argues
that the circuit court in case no. CV-96-297 expressly
retained continuing jurisdiction over matters relating to the
settlement agreement, including the award of attorney fees. 
In Ex parte Liberty National Life Insurance Co., 888 So.
2d 478 (Ala. 2003), the plaintiffs sued their insurer in the
Choctaw Circuit Court, alleging breach of contract, unjust
enrichment, 
misrepresentation, 
and 
suppression. 
The 
plaintiffs
had been members of a class certified in a class action filed
in the Barbour Circuit Court. The settlement agreement in the
class action provided that the insurer was to offer class
members a special policy, which the insurer did.  The
settlement agreement in the class action provided that the
Barbour Circuit Court had reserved and maintained "'continuing
1060628
9
jurisdiction over all matters relating to the Settlement or
the consummation of the Settlement; the validity of the
Settlement; the construction and enforcement of the Settlement
and any orders entered pursuant thereto; ... and all other
matters pertaining to the Settlement or its implementation and
enforcement.'"  888 So. 2d at 480 (quoting Adams v. Robertson,
676 So. 2d 1265, 1307 (Ala. 1995)). The plaintiffs complained
that the special policies issued caused the premiums in those
policies to increase substantially.  
This Court in Ex parte Liberty National held that the
plaintiffs' action was an attempt to collaterally attack
portions of the settlement agreement.  We stated:
"This 
type 
of 
collateral 
attack 
is 
not
permitted. The boundary lines between courts of
concurrent 
jurisdiction 
must 
be 
preserved.
'"'[W]here two courts have equal and concurrent
jurisdiction, the court that first commences the
exercise of its jurisdiction in a matter has the
preference and is not to be obstructed in the
legitimate exercise of its powers by a court of
coordinate jurisdiction.'"'  Ex parte First Nat'l
Bank of Jasper, 717 So. 2d 342, 350 (Ala. 1997)
(quoting Ex parte Liberty Nat'l Life Ins. Co., 631
So. 2d 865, 867 (Ala. 1993), quoting in turn Ex
parte State ex rel. Ussery, 285 Ala. 279, 281, 231
So. 2d 314, 315 (1970)).
"The Barbour Circuit Court expressly retained
continuing jurisdiction over matters relating to the
Robertson settlement and the enforcement of that
1060628
10
settlement.  Therefore, the Choctaw Circuit Court
does not have jurisdiction to hear this action,
which is essentially an attack in another circuit
court on the Robertson settlement." 
888 So. 2d at 481.
When this Court released its opinion in Ex parte Liberty
National, the same plaintiffs in Ex parte Liberty National
filed in the Barbour Circuit Court a complaint identical to
the complaint they had filed in the Choctaw Circuit Court. See
Solomon v. Liberty Nat'l Life Ins. Co., 953 So. 2d 1211 (Ala.
2006).  The insurer filed a motion to dismiss, asserting,
among other things, that the most recent complaint was barred
by the pendency of the class action and by the Choctaw Circuit
Court's retention of continuing jurisdiction over all matters
relating to the settlement agreement as addressed in Ex parte
Liberty National.  Before that motion was ruled upon, however,
the insurer and the plaintiffs submitted a new proposed class
and class settlement to the Barbour Circuit Court for its
preliminary approval. The trial court entered an order
preliminarily approving the new class and ordered that notice
be sent to class members.  One of the new class members (who
had been a member of the previous class) objected on the
grounds 
that 
the 
trial 
court 
lacked 
subject-matter
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11
jurisdiction.  Subsequently, the trial court entered an order,
sua sponte, purporting to consolidate both class actions. On
appeal, this Court held that simply refiling in the Barbour
Circuit Court the complaint they had filed in the Choctaw
Circuit Court did not remove the jurisdictional bar imposed by
the final judgment in the original class-action settlement.
Rather than seeking to have the Barbour Circuit Court address
the claims asserted by the plaintiffs as matters related to
the original class and class-action settlement, the plaintiffs
attempted to certify a new class in an independent action.
However, this did not solve the jurisdictional problem created
by the plaintiffs' presenting their claims in an action
independent from the original class action.  
In the present case, we conclude that Stewart is entitled
to the relief sought. The court in case no. CV-96-297 approved
the class-action settlement agreement, and that court retained
jurisdiction 
over 
matters 
relating 
to 
the 
settlement
agreement, including attorney fees. Although the law firms
filed their complaint in case no. CV-99-338 in the same
circuit court, that court did not have subject-matter
jurisdiction over case no. CV-99-338 regarding the attorney
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12
fees awarded in the Lovelace class action; therefore, we order
the court to enter an order dismissing the law firms'
complaint in case no. CV-99-338. "Where 'the trial court ha[s]
no subject-matter jurisdiction, [it has] no alternative but to
dismiss the action.'"  Gulf Beach Hotel, Inc. v. State ex rel.
Whetstone, 935 So. 2d 1177, 1182 (Ala. 2006)(quoting State v.
Property at 2018 Rainbow Drive, 740 So. 2d 1025, 1029 (Ala.
1999)).  A dismissal for lack of subject-matter jurisdiction
does not operate as an adjudication on the merits.   Ex parte
Capstone Dev. Corp., 779 So. 2d 1216 (Ala. 2000).
PETITION GRANTED; WRIT ISSUED.
Lyons, Stuart, Smith, and Murdock, JJ., concur.
Cobb, C.J., recuses herself.