Rel: 9/26/14

Notice: This opinion is subject to formal revision before publication in the advance

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the opinion is printed in Southern Reporter.

SUPREME COURT OF ALABAMA

SPECIAL TERM, 2014

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1130820

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Ex parte Electric Insurance Company

PETITION FOR WRIT OF MANDAMUS

(In re: Paul Nelson Bolt

v.

Electric Insurance Company and John Christopher Wilson)

(Marshall Circuit Court, CV-12-000072)

BRYAN, Justice.

Electric Insurance Company ("Electric") petitions this

Court for a writ of mandamus directing the Marshall Circuit
1130820

Court to allow Electric, an uninsured-motorist insurer, to

"opt out" of the trial of the underlying case. The issue

presented by this petition is whether Electric asserted its

right to opt out within a reasonable time. We conclude that

it did; thus, we grant the petition and issue the writ.

The facts giving rise to this action are as follows. An

automobile being driven by Paul Nelson Bolt was involved in an

accident with an automobile being driven by John Christopher

Wilson, an uninsured motorist. On April 4, 2012, Bolt sued

Wilson and Electric, Bolt's uninsured-motorist insurer,

alleging that he had sustained various injuries in the

accident and that the accident was caused by Wilson's

negligence and wantonness. On May 17, 2012, Electric answered

the complaint and served Bolt with interrogatories and a

request for production. On July 6, 2012, Bolt responded to

the discovery requests. Electric deposed Bolt on September

26, 2012. In the latter part of 2013 and early 2014, Bolt

deposed four physicians who had treated him following the

accident. Those depositions were taken on October 7, 2013,

October 17, 2013, November 7, 2013, and January 17, 2014.

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On December 3, 2013, the trial court ordered the parties

to submit a proposed scheduling order, which they did. On

February 4, 2014, the trial court adopted the scheduling order

submitted by the parties. The scheduling order provided that

the last day for Electric to amend its answer would be March

15, 2014, that discovery would be completed no later than

March 28, 2014, and that the trial would be held on May 12,

2014. 

On March 14, 2014 –– one day before the last day 

Electric could have freely amended its answer –– Electric

filed a motion seeking to opt out of the trial under Lowe v.

Nationwide Insurance Co., 521 So. 2d 1309 (Ala. 1988). Bolt

objected to Electric's attempt to opt out. Following a

hearing, the trial court denied Electric's motion, without

stating a reason. Electric then petitioned this Court for a

writ of mandamus directing the trial court to allow Electric

to opt out of the trial. We stayed the proceedings below

pending the resolution of the mandamus petition. 

"A writ of mandamus is an extraordinary remedy,

and it will be 'issued only when 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

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invoked jurisdiction of the court.' Ex parte United

Serv. Stations, Inc., 628 So. 2d 501, 503 (Ala.

1993)."

Ex parte Empire Fire & Marine Ins. Co., 720 So. 2d 893, 894

(Ala. 1998). "A petition for a writ of mandamus is the

appropriate means for challenging a trial court's refusal to

grant a[n uninsured-motorist] insurer the right to opt out of

litigation pursuant to Lowe. Ex parte Aetna Cas. & Surety

Co., 708 So. 2d 156 (Ala. 1998)." Ex parte Geico Cas. Co., 58

So. 3d 741, 743 (Ala. 2010). 

In Lowe, this Court discussed the rights of an

underinsured-motorist insurer when its insured is involved in

litigation. Although Lowe involved an underinsured motorist,

we noted in that case that the term "underinsured motorist" is

statutorily included within the term "uninsured motorist." 

521 So. 2d at 1309 n. 1 (citing § 32-7-23(b), Ala. Code 1975). 

Our analysis in Lowe and its progeny applies equally to

underinsured and uninsured motorists. See, e.g., Ex parte

Geico. In Lowe, this Court stated:

"A plaintiff is allowed either to join as a party

defendant his own liability insurer in a suit

against the underinsured motorist or merely to give

it notice of the filing of the action against the

motorist and of the possibility of a claim under the

underinsured motorist coverage at the conclusion of

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the trial. If the insurer is named as a party, it

would have the right, within a reasonable time after

service of process, to elect either to participate

in the trial (in which case its identity and the

reason for its being involved are proper information

for the jury), or not to participate in the trial

(in which case no mention of it or its potential

involvement is permitted by the trial court)." 

Lowe, 521 So. 2d at 1310 (some emphasis omitted; some emphasis

added).

"We stated in Lowe that the insurer has the option

to withdraw from the case, provided that it

exercises that option within a reasonable time after

service of process. It was also stated that whether

the insurer's motion to withdraw is timely made is

left to the discretion of the trial court, to be

judged according to the posture of the case.

Logically, the insurer would not want to withdraw

from the case too early, before it could determine,

through the discovery process, whether it would be

in its best interest to do so. On the other hand,

the insurer cannot delay, unnecessarily, in making

its decision whether to withdraw. We believe that

it would not be unreasonable for the insurer to

participate in the case for a length of time

sufficient to enable it to make a meaningful

determination as to whether it would be in its best

interest to withdraw."

Ex parte Edgar, 543 So. 2d 682, 685 (Ala. 1989). Although

Lowe was decided more than 25 years ago, there have been very

few opinions addressing whether an insurer timely asserted its

right to opt out. See Ronald G. Davenport, Alabama Automobile

Insurance Law § 33:4 (4th ed. 2013); see also Ex parte Geico,

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supra (concluding that the motion to opt out was timely when

it was filed five days after the insurer deposed its insured).

We must determine whether Electric asserted its right to

opt out of the trial within a reasonable time. In Ex parte

Edgar, we emphasized that such a determination must be made in

light of "the posture of the case." Given the posture of this

case, we conclude that Electric asserted its right to opt out

within a reasonable time. Significantly, Electric attempted

to opt out of the trial before the final day on which the

scheduling order allowed Electric to amend its answer. By

amending its answer, Electric could have complicated the case

by adding parties, defenses, or counterclaims, and those

changes may have delayed the trial. Conversely, Electric's

opting out of the trial would simplify and streamline the case

and would not delay the trial. It is inconsistent, on the one

hand, to allow Electric freely to amend its answer and, on the

other hand, to forbid Electric from exercising its right under

Lowe to opt out of the trial. 

We have noted that "the insurer would not want to

withdraw from the case too early, before it could determine,

through the discovery process, whether it would be in its best

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interest to do so." Ex parte Edgar, 543 So. 2d at 685. 

Electric sought to withdraw only after Bolt had deposed four

physicians who had treated him following the accident. Those

physicians testified regarding the extent of Bolt's various

alleged injuries and whether the accident may have caused

those injuries. Electric reasonably waited until after the

physicians had been deposed to fully assess the strength of

Bolt's personal-injury case and whether opting out would be in

its best interest. We recognize that Electric asserted its

right to opt out 56 days after the taking of the final

physician's deposition. Considering that Electric sought to

withdraw within the period in which it could have amended its

answer and only 38 days after the trial court adopted the

scheduling order submitted by the parties, such a delay was

reasonable.

Electric asserted its right to opt out of the trial

within a reasonable time. Accordingly, we grant the petition

for a writ of mandamus and direct the trial to grant

Electric's motion seeking to opt out of the trial.

PETITION GRANTED; WRIT ISSUED.

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Stuart, Bolin, Parker, Murdock, Shaw, Main, and Wise,

JJ., concur.

Moore, C.J., dissents.

 

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