Title: Ex Parte DeArman

State: alabama

Issuer: Alabama Supreme Court

Document:

694 So. 2d 1288 (1997)
Ex parte Harry L. DeARMAN and Cherry F. DeArman.
In re Harry L. DeARMAN and Cherry F. DeArman
v.
LIBERTY NATIONAL LIFE INSURANCE COMPANY, Johnny Dollar, et al.
1951978.

Supreme Court of Alabama.
April 25, 1997.
*1289 Gary D. Hooper and R. Stephen Griffis of Hooper & Griffis, P.C., Birmingham, for petitioners.
Michael R. Pennington and George B. Harris of Bradley, Arant, Rose & White, Birmingham; and William J. Baxley of Baxley, Dillard, Dauphin & McKnight, Birmingham (Spain & Gillon, P.C., Birmingham, and Lightfoot, Franklin & White, L.L.C., Birmingham, of counsel), for Liberty National Life Insurance Company.
HOUSTON, Justice.
Harry L. DeArman and Cherry F. DeArman petition this Court for a writ of mandamus directing the trial court to set aside its order staying this action against Liberty National Life Insurance Company and others ("Liberty National"). The writ is granted.
On January 17, 1996, the DeArmans filed this action against Liberty National, alleging fraud, negligence, and wantonness in the sale of a life insurance policy. (The facts surrounding the transaction made the basis of this action are not pertinent to our consideration of this petition.) On February 21, 1996, Roger D. Lawson, Phyliss A. Lawson, and others filed a similar action against Liberty National Life Insurance Company in the Jefferson Circuit Court and sought to have their action certified as a class action. The Lawson action was conditionally certified as a class action on May 15, 1996. On June 17, 1996, Liberty National, relying on Ex parte First National Bank of Jasper, 675 So. 2d 348 (Ala.1995) (FNB of Jasper I), filed a motion to "abate the present action ... and [to] stay [it] pending a final order in the Lawson [class action]. On August 20, 1996, the trial court ruled as follows:
The DeArmans filed this mandamus petition in response to that ruling.
It is apparent from an examination of the petition and the briefs that the trial court ruled as it did on the basis of this Court's opinion in FNB of Jasper I, supra. Liberty National argues in its brief as follows:
(All emphasis is that of Liberty National.)
It appears that the trial court, relying on FNB of Jasper I, intended to stay proceedings in the present action pending a determination of the request for final certification in the Lawson class action and then to issue an order abating the present action if the final certification in the Lawson class action occurred. Although FNB of Jasper I, on its face, appears to support the trial court's ruling, a majority of this Court recently clarified the following statement in that opinion: "Once a certification occurs in any court, that certification abates all other pending actions and the named plaintiffs in the other actions would then become members of the certified class in the court in which the certification has occurred." 675 So. 2d  at 349. In First National Bank of Jasper v. Crawford, 689 So. 2d 43 (Ala.1997) (FNB of Jasper II,) the majority explained that the abatement of the first of two actions filed by the same plaintiff is neither self-executing nor mandatory:
"675 So. 2d  at 349 (emphasis added [in FNB of Jasper II]).
"This statement does not support the rule the Bank advocates, namely, that § 6-5-440 is self-executing. On the contrary, in stating that it would `reconsider' the Bank's motion to dismiss, stay, or abate the action after `certification' in one of the other actions, the Fayette Circuit Court expressly contemplated reconsidering the issue only whenand ifthe Bank renewed its motion to abate the action in Fayette County. We quoted the trial court's order as illustrating well the procedure § 6-5-440 requires.
689 So. 2d  at 45-46.
Therefore, contrary to Liberty National's contention, § 6-5-440 does not "mandate" the abatement of the present action, regardless of whether the Lawson class action receives final certification. The DeArmans filed this action before the Lawson class action was filed. Section 6-5-440 was not implicated until the Lawson action was conditionally certified as a class action. When that occurred, the DeArmans became parties in the Lawson class action and, as a result, they were instantly prosecuting two separate actions against Liberty National one individually and one as members of the plaintiffs' class in the Lawson class action. Based on this Court's interpretation of § 6-5-440 in FNB of Jasper II, supra, Liberty National can raise the present action as a defense to the DeArmans' participation in *1292 the Lawson class action. However, in the absence of an election on the DeArmans' part to pursue their claims in the Lawson class action, Liberty National has no legal basis upon which to insist that the present action has abated.
By issuing the writ in this case, we do not mean to impinge upon that authority every trial court possesses to stay an action under the appropriate circumstances. We hold only that unless the trial court has a basis, other than this Court's opinion in FNB of Jasper I, for granting Liberty National's motion to stay, the DeArmans have a clear legal right to proceed with the present action.
WRIT GRANTED.
HOOPER, C.J., and MADDOX, KENNEDY, and SEE, JJ., concur.
ALMON, J., concurs specially.
COOK, J., concurs in the result.
SHORES, J., recuses.
ALMON, Justice (concurring specially).
I agree that the writ of mandamus should issue to set aside the stay of this action based on the pendency of the Lawson class action. However, I think Ex parte Holland, 692 So. 2d 811 (Ala.1997), is more pertinent to this case than First National Bank of Jasper v. Crawford, 689 So. 2d 43 (Ala.1997).[1] In Ex parte Holland, this Court issued the writ of mandamus, holding that two circuit judges had abused their discretion: one for certifying a class action (the Anderson action) as a mandatory class action under Rule 23(b)(1)(B), Ala.R.Civ.P., and the other for staying the Hollands' individual action because of the pendency of the Anderson class action. Although there is no indication here that the Lawson class action was certified as a mandatory class action without opt-out rights, such a certification is the only arguable basis that I can see on which to stay the DeArmans' action because of the pendency of the Lawson class action.
The DeArmans filed their action on January 17, 1996, and the Lawson action was filed on February 21, 1996. The DeArmans could have dismissed their individual complaint and joined the Lawson class, but their failure to do so should be deemed a decision to opt out of the Lawson class unless Lawson is certified as a mandatory class action under Rule 23(b)(1)(B). The Court held in Holland that such a mandatory class action is not proper in cases such as these, except perhaps in limited circumstances where the defendant can make a particularized showing of how the limited fund doctrine should apply.
I would hold that, under this Court's holding in Holland, the stay of the DeArmans' action pending certification in Lawson was an abuse of discretion.
[1]  See also Ex parte State Mutual Ins. Co., [Ms. 1960410, April 4, 1997] ___ So.2d ___ (Ala. 1997), in which this Court held that the circuit court had correctly excluded from a mandatory class action individual plaintiffs who had filed their action before the class was certified; In re Temple, 851 F.2d 1269 (11th Cir.1988), in which the Eleventh Circuit Court of Appeals issued a writ of mandamus to set aside a district court's order certifying a mandatory class action and staying all pending actions.