Title: Ex parte Alfa Mutual Insurance Company.
Citation: N/A
Docket Number: 1141038
State: Alabama
Issuer: Alabama Supreme Court
Date: June 10, 2016

REL:06/10/2016 
Notice: This opinion is subject to formal revision before publication in the advance
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before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2015-2016
_________________________
1141038
_________________________
Ex parte Alfa Mutual Insurance Company
PETITION FOR WRIT OF MANDAMUS
(In re:  Ronald Gene Lang and Mary F. Lang
v.
Alfa Mutual Insurance Company)
(St. Clair Circuit Court, CV-13-900105)
SHAW, Justice.
Alfa Mutual Insurance Company ("Alfa"), the defendant
below, petitions this Court for a writ of mandamus directing
1141038
the St. Clair Circuit Court to vacate its order denying, and
to enter an order granting, Alfa's motion to strike the
amended complaint filed by the plaintiffs, Ronald Gene Lang
and Mary F. Lang, in connection with a dispute arising from a
farm-owner's policy of insurance issued to the Langs by Alfa. 
We grant the petition and issue the writ. 
Facts and Procedural History
In 1984, the Langs purchased a farm-owner's policy from
Alfa.  At the time the policy was originally issued, it
covered three structures identified in the policy:  a tenant
dwelling, a pump house, and a 1,000-square-foot barn. 
Following the purchase of the policy, the Langs demolished the
existing 1,000-square-foot barn and, in 1994, constructed a
new 1,600-square-foot "pole barn with a metal roof."  Pet.
Exh. L, at 4.  That same year, the pole barn sustained wind
damage for which the Langs submitted a claim and were paid by
Alfa under the policy.  
The Langs then rebuilt the damaged pole barn and, in 1994
or 1995, also constructed a second 3,500-square-foot barn. 
The Langs assert that, at or around that same time, they
orally requested that their Alfa agent, Jim Shigley, during
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1141038
one of his purportedly regular visits to the Langs' farm, add
both barns to the Langs' existing coverage and that Shigley
responded with a promise that he would "take care of it." 
Pet. Exh. O.  Also in 1995, the Langs completed an application
to renew their policy in which they requested that coverage
for the original 1,000-square-foot barn be deleted and 
coverage on the pump house be increased by $1,000; the
application, however, did not include a 
written 
request adding
coverage for the two new barns.  Similarly, the declaration
issued in 2001 in connection with the Langs' continued policy
renewal reflected coverage for only two structures on the
Langs' farm: the tenant dwelling and the pump house.  Although 
they were not specifically able to recall having received
renewed 
declarations 
with 
their 
corresponding 
billing
statements, the Langs do not appear to argue that they did
not. 
In 2002, the Langs again completed a written application
for renewal of their policy in which they requested that
coverage on the pump house be deleted and coverage on the
tenant 
dwelling 
increased. 
 
The 
corresponding 
declaration 
page
reflects those changes and indicates that the only remaining 
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structure covered by the policy was the tenant dwelling.  In
2006, the Langs sold the tenant dwelling.  In connection with
that sale, the Langs maintain that they telephoned Shigley to
orally request that the tenant dwelling be deleted from their
policy coverage; however, the Langs never received written
confirmation of the deletion and the amount of their premium
payments did not change.  The declaration pages issued in
connection with the Langs' policy renewals in the ensuing
years show that no change to the covered structures was ever
effected and that, instead, as of 2013, coverage in the amount
of $30,000 for the tenant dwelling –- and only the tenant
dwelling -- remained. 
In March 2013, both barns located on the Langs' farm 
allegedly suffered storm damage. Following the Langs'
notification of Alfa of the barn-related claim, Alfa denied
the request for payment.  Specifically, Alfa notified the
Langs' attorney by letter dated April 3, 2013, that a review
of the Langs' policy revealed "no record of coverage for the
barn in which [the Langs had] claimed damage."  Pet. Exh. O. 
Thereafter, a dispute arose between the Langs and Alfa as
to whether the Langs' policy afforded coverage for the two
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barns located on the Langs' farm.  On April 18, 2013, the
Langs sued Alfa, alleging bad-faith failure to pay, bad-faith
failure to investigate, and breach of contract.  In response,
Alfa moved to "dismiss" the Langs' complaint on the ground
that, pursuant to the language of the Alfa policy, "Barns,
Outbuildings and Other Farm Structures" were covered only
where "a Limit is shown in the Declarations for the
specifically described property."  Pet. Exh. B, at 3.  More
specifically, Alfa noted that the declarations in the Langs'
policy included neither a "limit" relating to nor a specific
description of any such farm structure excepting the tenant
dwelling; thus, 
Alfa argued, the barn-damage 
claim 
was clearly
not covered by the Alfa policy.  The trial court denied both
Alfa's motion and a subsequent request that the trial court
reconsider that denial.  Pet. Exh. D, at 1.  
According to Alfa, at the hearings conducted by the trial
court on the motion to dismiss, "counsel for the Langs argued
theories of liability that were not stated in the Complaint." 
Pet., at 2.  Therefore, in an e-mail message dated September
11, 2013, Alfa's counsel inquired of the Langs' attorney
whether the Langs planned to amend their original complaint
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1141038
and, if so, requested that such an amendment be "promptly"
filed so that Alfa might address the amendment in its answer. 
Pet. Exh. Q.  Apparently, the Langs' attorney did not respond,
and Alfa filed its answer to the original complaint. The
Langs' deposition testimony, subsequently taken in May 2014,
revealed the Langs' acknowledgment that the barns were not
included among the insured structures identified on the
declarations page and "[t]hat's what [they are] saying is the
problem."  Pet. Exh. Q.  
In September 2014, again via e-mail, Alfa inquired of the
Langs' attorney, in connection with its preparations to file
a motion seeking a summary judgment, whether the Langs
intended to depose Shigley.  The Langs' counsel responded in
the affirmative and promised to provide, by the following
week, 
possible 
dates 
for 
that 
deposition. 
Further
communications between the parties in October 2014, however,
revealed that Shigley's deposition was never scheduled. 
Apparently unbeknownst 
to 
Alfa, Shigley, who had retired, died
in September 2014.
In January 2015, Alfa notified the Langs' attorney that,
despite the fact that Shigley had not been deposed, it was, in
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1141038
light of the impending trial date,  proceeding with the filing
1
of its summary-judgment motion.  Thereafter, on January 19,
2015, Alfa filed a summary-judgment motion explaining the
foregoing facts and attaching, among other exhibits, all
policy-related 
documentation. 
 
In 
their 
response 
in 
opposition
to that motion, the Langs appeared to raise fraud-based claims
surrounding Shigley's alleged misrepresentation to them that
coverage for the barns had been added to the Langs' policy.  
The matter was set for trial and was continued on at
least four occasions.  Thereafter, in connection with further
discovery efforts by the Langs, Alfa again asked whether the
Langs intended to amend their original complaint and, again,
allegedly received no response from the Langs' attorney.  On
April 10, 2015 –- almost exactly two years from the filing
date of their original complaint -- the Langs filed an amended
complaint, which added a fictitiously named defendant
identified as the party "whose responsibility it was to
inspect the property of the Langs, to insure their farm policy
provide[d] adequate coverage and/or that the Langs were not
Alfa 
argues 
that 
this 
suggested 
that 
Shigley's 
deposition
1
was the only remaining discovery to be conducted before trial. 
Pet. Exh. T.
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1141038
paying for insurance to property which they did not own." 
Pet. Exh. P.  The Langs' complaint, as amended, added new
counts 
asserting 
negligence 
and 
fraudulent/reckless
misrepresentation and an additional breach-of-contract claim. 
In response, Alfa filed a motion to strike the amended
complaint on 
numerous 
grounds, including that it had allegedly
been filed in violation of Rule 15(a), Ala. R. Civ. P.; that,
in addition to having purportedly been filed after the
expiration of the statute of limitations applicable to the
newly added claims, the amended complaint was also filed
without first obtaining leave of the trial court; that the
amendment was prejudicial to Alfa in that it was filed after
the death of a key witness, namely, Shigley, the Langs' Alfa
agent, who had not been deposed before his death; and that the
newly asserted claims were ultimately "futile" in light of
"Alabama's strict duty to read" an insurance policy.  Pet.
Exh. Q.  
The Langs opposed Alfa's motion to strike, arguing that
their 
amended 
complaint 
was 
neither 
untimely, 
prejudicial, 
nor
"futile."  Thereafter, on May 27, 2015, the trial court
entered an order denying Alfa's summary-judgment motion and
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1141038
its motion to strike and allowing the Langs' amended complaint
on the ground that that court was unable to "conclude that ...
[the Langs] have not shown good cause to amend."  Pet. Exh. S. 
Alfa filed this petition for a writ of mandamus, and this
Court ordered answers and briefs.  
Standard of Review
"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
invoked jurisdiction of the court.'• Ex parte United
Serv. Stations, Inc., 628 So. 2d 501, 503 (Ala.
1993).  A writ of mandamus will issue to compel the
exercise of a trial court's discretion, but it will
not issue to control or to review a court's exercise
of its discretion unless an abuse of discretion is
shown.  Ex parte Auto-Owners Ins. Co., 548 So. 2d
1029 (Ala. 1989).  If the remedy by way of appeal is
adequate, as is usually the case with rulings
allowing or disallowing amendments, we will decline
to grant the writ; in those cases in which an appeal
does not provide an adequate remedy, we will issue
the writ.  Ex parte Miller, 292 Ala. 554, 297 So. 2d
802, 805 (1974).  See, also, Huskey v. W.B. Goodwyn
Co., 295 Ala. 1, 321 So. 2d 645 (1975)."
Ex parte Yarbrough, 788 So. 2d 128, 132 (Ala. 2000).  "A writ
of mandamus ... will issue to correct a trial court's ruling
regarding the amendment of pleadings ... when it is shown that
the trial court has exceeded its discretion."  Ex parte
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Liberty Nat'l Life Ins. Co., 858 So. 2d 950, 952 (Ala. 2003)
(citing Rector v. Better Houses, Inc., 820 So. 2d 75 (Ala.
2001)). 
Discussion
In its petition, Alfa argues that the trial court
exceeded its discretion in denying Alfa's motion to strike the
Langs' amended complaint for several reasons.  
With regard to amendments filed pursuant to Rule 15, this
Court has stated:
"'Rule 
15(a), 
Ala. 
R. 
Civ. 
P.,
reflects Alabama's liberal policy in favor
of allowing amendments to pleadings:
"'"Unless a court has ordered
otherwise, a party may amend a
pleading without leave of court,
but subject to disallowance on
the court's own motion or a
motion to strike of an adverse
party, at any time more than
forty-two (42) days before the
first setting of the case for
trial, and such amendment shall
be freely allowed when justice so
requires.  Thereafter, a party
may amend a pleading only by
leave of court, and leave shall
be given only upon a showing of
good cause...."
"'....
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1141038
"'We noted in Ex parte GRE Insurance
Group, 822 So. 2d 388, 390 (Ala. 2001),
that under Rule 15 amendments to pleadings
are to be "freely allowed" unless there
exists some valid reason to deny them, such
as "actual prejudice or undue delay[.]"
"'....
"'When, as here, the amendment is
sought within the 42-day window, the trial
court is free to deny a party leave to
amend his or her pleading unless the party
can 
demonstrate 
"good 
cause." 
 
... 
However, in light of the overarching
liberal 
policy 
of 
allowing 
amendments 
under
Rule 15, the appropriate way to view the
request for leave to amend, if a party
demonstrates "good cause," is as though the
request had been brought more than 42 days
before trial, when the trial court does not
have "unbridled discretion" to deny the
leave to amend, but can do so only upon the
basis of a "valid ground" as stated above.'
"Liberty National, 858 So. 2d at 953-54.
"In Blackmon v. Nexity Financial Corp., 953 So.
2d 1180, 1189 (Ala. 2006), this Court noted:
"'Rule 15[, Ala. R. Civ. P.,] "'is not
carte blanche authority to amend ... at any
time.'"  Burkett v. American Gen. Fin.,
Inc., 607 So. 2d 138, 141 (Ala. 1992)
(quoting 
Stallings 
v. 
Angelica 
Uniform 
Co.,
388 So. 2d 942, 947 (Ala. 1980))....  The
trial court can refuse to allow an
amendment if allowing it would result in
actual prejudice to the opposing party or
for reasons of "undue delay."  [Ex parte]
GRE Ins. Group, 822 So. 2d [388,] 390
[(Ala. 2001)].
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1141038
"'Undue delay can have two different
meanings in a case.  First, the trial court
has discretion to deny an amendment to a
pleading if allowing the amendment would
unduly delay the trial.  Second, an
unexplained undue delay in filing an
amendment when the party has had sufficient
opportunity 
to 
discover 
the 
facts 
necessary
to file the amendment earlier is also
sufficient grounds upon which to deny the
amendment.'
"The Court in Blackmon went on to say that the trial
court had not exceeded its discretion in denying
Blackmon's motion to amend his complaint because the
trial court had found that 'Blackmon was aware of
the facts justifying the amended complaint when he
filed his original complaint,' and because the trial
court had found that 'the amendment would require
additional discovery and would substantially delay
the trial setting.'• Id. at 1189-90." 
Ex parte DePaola, 46 So. 3d 884, 886-87 (Ala. 2010).
The parties appear to agree, and the trial court also
apparently concluded, that, because the Langs' amended
complaint was filed far later than 42 days before the date of
the initial trial setting, the Langs were required, in order
to obtain leave to amend their original complaint, to
demonstrate "good cause."  Pet. Exh. R.  Alfa argues that the
trial court erred in concluding that the Langs demonstrated
good cause for the purportedly "excessive[]" delay 
in 
amending
their complaint.  Pet., at 19.  It further contends that the
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claims added by the alleged untimely amendment are based on
facts that were undisputedly known to the Langs before the
Langs filed their original complaint and that the amendment is
"highly prejudicial to Alfa" in that it was filed after the
demise of a key witness to the claims asserted in the amended
complaint.  Pet., at 12.  Applying the DePaola factors of
actual prejudice and undue delay, we agree.  
As Alfa argues, the amended complaint is clearly
prejudicial to Alfa in that it alleges new claims to which a
recently deceased witness, namely Shigley, would indisputably
have been key to Alfa's successful defense.  See, e.g.,
Liberty National, 858 So. 2d at 954 ("'"In the context of a
[Rule] 15(a) amendment, prejudice means that the nonmoving
party must show that it was unfairly disadvantaged or deprived
of the opportunity to present facts or evidence which it would
have offered had the ... amendments been timely."'" (quoting
Ex parte GRE Ins. Grp., 822 So. 2d 388, 391 (Ala. 2001),
quoting in turn Heyl & Patterson Int'l v. F.D. Rich Hous. of
Virgin Islands, Inc., 663 F.2d 419, 426 (3d Cir. 1981))).  The
Langs go to great lengths to explain that they are not
complaining about actions or omissions on Shigley's part but,
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instead, by his successor or successors, who allegedly failed
to inspect the farm, which action, the Langs maintain, would
have led to the discovery that they were paying for insurance
on a structure that they no longer owned and that they did not
have coverage on structures that were obviously present. 
Regardless of who is responsible for the alleged error, it is
undisputed that the Langs received from Alfa written
notification that the barns were not included in the Langs'
coverage.  Moreover, although the Langs deny being aware of
their continued premium on the tenant dwelling, it is also
clear that their declarations page in the 2013 policy clearly
indicated that coverage. Further, as the Langs also
acknowledged, their premium never decreased after they
purportedly sought to delete coverage on the tenant dwelling. 
Thus, although discovery might have disclosed additional
purported omissions, including those the Langs maintain
occurred after Shigley's retirement, as Alfa observes, the
Langs knew or should have known, at the time they filed their
original complaint,  what coverage their policy afforded and,
more importantly, what coverage it did not.  See Blackmon,
supra; DePaola, supra.  As a result, the Langs' undue delay in
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amending their complaint appears inexplicable when they
clearly had sufficient opportunity to discover the facts that
were the basis of their claims.
The Langs dispute that Alfa was, as the petition alleges,
prejudiced by the late amendment.  As the Langs note, this
Court has concluded that an amendment that "merely changes the
legal theory of a case or adds an additional theory ... based
upon the same set of facts" already known to the opposing
party works "no prejudice ... upon the other party."  Bracy v.
Sippial Elec. Co., 379 So. 2d 582, 584 (Ala. 1980).  We see
nothing in Bracy, however, as is true in the present case, to
indicate that numerous earlier urgings to amend the complaint
occurred when an alternate theory of recovery originally
surfaced.  There is also nothing in Bracy suggesting that the
amendment occurred  after the death of an indispensable
witness.  As Alfa notes, Shigley appears to have been the only
person able to testify regarding, and, more specifically, to
refute, the Langs' assertion that they requested coverage
changes that were not reflected in the policy.  Thus, Bracy is
factually distinguishable.    
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The Langs failed to demonstrate good cause –- or, in
fact, any cause -- for the excessive delay in amending their
complaint when they knew or should have known of the claims
before or at the time they filed their original complaint. 
Further, the claims were actually suggested by 
Alfa's 
counsel. 
At the time the Langs filed their amendment, the case had been
set for trial on several occasions, and the amendment would
unduly prejudice Alfa, who, as a result of the Langs'
excessive delay, cannot fully and fairly defend against the
claims added by the amendment because a key witness has died.
Alfa has demonstrated a clear legal right to the
requested relief.  We conclude that the trial court exceeded
its discretion in allowing the Langs to amend their complaint
so near the trial date in order to add claims based on facts
that were or ought to have been known to the Langs well prior
to that date.  DePaola, supra.  We therefore grant Alfa's
petition and direct the St. Clair Circuit Court to vacate its
order denying Alfa's motion to strike the Langs' amended
complaint and to enter an order granting that motion and
striking the amended complaint.
PETITION GRANTED; WRIT ISSUED.
Stuart, Parker, Wise, and Bryan, JJ., concur.
16