Ex Parte Ala. State Pers. Bd.(in Re Nationwide Ret. Solutions Inc. v. Ala. State Pers. Bd.
| Decision Date | 30 June 2010 |
| Docket Number | 1090530. |
| Citation | 54 So.3d 886 |
| Parties | Ex parte ALABAMA STATE PERSONNEL BOARD(In re Nationwide Retirement Solutions, Inc.v.Alabama State Personnel Board, PEBCO, Inc., and the Alabama State Employees Association). |
| Court | Alabama Supreme Court |
OPINION TEXT STARTS HERE
C. Lee Reeves, David R. Mellon, and Jaime C. Erdberg of Sirote & Permutt, P.C., Birmingham; and Alice Ann Byrne, Alabama Sate Personnel Department, Montgomery, for petitioner.Sharon D. Stuart and Lynn S. Darty of Christian & Small LLP, Birmingham; and Charles C. Platt and David W. Bowker of Wilmer Cutler Pickering Hale & Dorr, LLP, New York City, New York, for respondent Nationwide Retirement Solutions, Inc.Joe Espy III and J. Flynn Mozingo of Melton, Espy & Williams, PC, Montgomery; and J. Mark White, Rebecca G. DePalma, and Hope Marshall of White, Arnold & Dowd, Birmingham, for respondents Alabama State Employees Association, PEBCO, Inc., Edwin McArthur, Steve Walkley, Glenn Parker, Ulysses Lavender, Diana McLain, Randy Hebson, and Robert Wagstaff.BOLIN, Justice.
The Alabama State Personnel Board, an agency of the State of Alabama (“the Board”), petitions this Court for a writ of mandamus directing the trial court to vacate its order referring the underlying case to a special master. We grant the petition and issue the writ.
On July 15, 2009, Nationwide Retirement Solutions, Inc. (“NRS”), filed an interpleader action against the Board, PEBCO, Inc., and the Alabama State Employees Association (“ASEA”), depositing $432,740 in the court. The complaint provided that future sums would also be added to the interpleaded amount. The moneys interpleaded by NRS involve a supplemental retirement plan available to State employees called the “Alabama State Employees Deferred Compensation Plan” (“the plan”), which is administered by NRS. The plan permits State employees to save for retirement on a tax-deferred basis, deferring a portion of their income in accordance with § 457 of the Internal Revenue Code. The Board sponsors the plan and is its fiduciary. Pursuant to § 36–26–14, Ala.Code 1975, the Board adopts the plan as recommended by State employees through ASEA. NRS alleged that the Board and ASEA both claimed a legal right to the moneys, and NRS was seeking direction from the court regarding the payment of the moneys and an order discharging NRS and its affiliated company, Nationwide Life Insurance Company, from liability.
On August 20, 2009, ASEA and PEBCO each filed a motion to dismiss the interpleader complaint, arguing that they had settled claims alleging that NRS and Nationwide had been paying “kickbacks” in the form of unauthorized commissions, expenses, and fees to ASEA and PEBCO, benefiting them at the expense of the plan and its participants. Both ASEA and PEBCO also asked that the Board be ordered to stop interfering with the Securities and Exchange Commission, which made the original allegations involving the kickback scheme.
On August 21, 2009, the Board filed its answer and filed cross-claims against ASEA and PEBCO and added claims against seven individuals, who are officers and employees of ASEA and PEBCO.1 The Board alleged that it recently discovered that improper payments had been made to ASEA and/or PEBCO from NRS and/or Nationwide and that the amounts due on those payments from 2009 were the funds that were the subject of the interpleader action. The Board further alleged that improper payments had been made each year since 2000. The Board asserted that it was entitled to the interpleaded funds and that there should be an accounting from ASEA, PEBCO, and the seven named individual defendants. The Board also asserted claims of breach of fiduciary duty, fraud, fraudulent suppression, and conspiracy. The Board demanded a jury trial on those claims triable of right by a jury.
On September 10, 2009, Twanna Brown, a State employee and a member of ASEA and of the plan, moved to intervene in the action. She also sought certification of a class action on behalf of all ASEA members and plan participants.2
On December 16, 2009, the trial court entered the following order:
“The special master shall have the rights, powers, and duties provided in Rule 53 and may adopt such procedures as are not inconsistent with that rule or with this or other orders of the Court.
“The special master shall make findings of fact, as necessary, and conclusions of law with respect to matters presented by the parties, and he shall report expeditiously to the Court.
On December 21, 2009, the Board filed an objection to the court's appointment of a special master and moved the court to vacate that order or, in the alternative, to modify the order appointing the special master so that the appointment was only for issues directly related to accounting work that may arise in the case. Brown also filed a motion objecting to the appointment.
On January 26, 2010, the Board filed this petition for a writ of mandamus. That same day, the Board amended its pleadings to add a new defendant, AON Consulting, Inc., and to add additional claims against ASEA, PEBCO, and the seven named individual defendants.
On January 28, 2010, the trial court held a status hearing. The trial court appears to have anticipated that the parties would have a contentious discovery process and that the special master would hear those issues, among others. The court also indicated that it would terminate the special master's appointment if the parties did not get into “a lot of fights.” Ultimately, the trial court stated that it would hold another status conference and then decide how to use the special master.
On February 4, 2010, the trial court entered an order amending its order appointing the special master:
“This matter is before the Court on the Objection of the Alabama State Personnel Board ... to the Appointment of a Special Master, and Motion to Vacate and/or Modify The Court's Order Appointing the Special Master.
PEBCO, Inc. (‘PEBCO’), and the Alabama State Employees Association (‘ASEA’) are named as defendants.
“Count 1: claim for the interpled funds, against ASEA, PEBCO, and Edwin J. McArthur, Steve Walkley, Glenn Parker, Ulysses Lavender, Diana McLain, Randy Hebson, and Robert Wagstaff (‘seven individual named defendants');
“Count 2: accounting, against ASEA, PEBCO, and seven individual named defendants;
“Count 3: breach of fiduciary duties, against ASEA, PEBCO, seven individual named defendants, and AON Consulting (‘AON’);
“Count 4: fraud, against ASEA;
“Count 5: fraudulent suppression, against ASEA;
“Count 6: conspiracy, against ASEA, PEBCO, and seven individual named defendants;
“Count 7: conspiracy, against AON;
“Count 8: breach of contract, against AON;
“Count 9: conspiracy, against ASEA, PEBCO, seven individual named defendants, and AON;
“Count 10: conversion, against ASEA, PEBCO, and seven individual named defendants;
“Count 11: unjust enrichment, against ASEA, PEBCO, seven individual named defendants, and AON;
“Count 12: declaratory judgment, against ASEA, PEBCO, and seven individual named defendants;
“Count 13: wrongful interference with contractual relationship, against ASEA, PEBCO, seven individual named defendants, and AON.
“Count 1: conspiracy;
“Count 2: breach of fiduciary duty;
“Count 3: declaratory and injunctive relief seeking the removal of officers and directors;
“Count 4: derivative claim.
“To clarify its previous order appointing the Special Master, this Court will preside over the trial of this case, determine all matters of the requested relief including, but not limited to, dispositive motions, monetary damages, equitable relief, injunctive relief, and determine all evidentiary issues.
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