Ala. Psychiatric Servs., P.C. v. Lazenby

• Citation: 292 So.3d 295
• Decision Date: 21 June 2019
• Docket Number: 1170856,1171150
• Parties: ALABAMA PSYCHIATRIC SERVICES, P.C., and Managed Health Care Administration, Inc. v. Sheri Lynn LAZENBY et al. Alabama Psychiatric Services, P.C., and Managed Health Care Administration, Inc. v. Sheri Lynn Lazenby et al.
• Court: Alabama Supreme Court

292 So.3d 295

ALABAMA PSYCHIATRIC SERVICES, P.C., and Managed Health Care Administration, Inc.

v.Sheri Lynn LAZENBY et al.

Alabama Psychiatric Services, P.C., and Managed Health Care Administration, Inc.

v.Sheri Lynn Lazenby et al.

1170856

1171150

Supreme Court of Alabama.

June 21, 2019

Rachel V. Barlotta of Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C., Birmingham, for appellants.

G. Rick DiGiorgio of Cory Watson, P.C., Birmingham; and Cary W. Fillingim, Mobile, for appellees.

BRYAN, Justice.

Several former employees of Alabama Psychiatric Services, P.C. ("APS"), filed a putative class action against APS and Managed Health Care Administration, Inc. ("MHCA"), an affiliate of APS, in the Jefferson Circuit Court. The complaint alleged that APS had not paid the former employees for unused vacation time after they lost their jobs when APS went out of business. APS and MHCA moved the circuit court to compel arbitration pursuant to arbitration agreements the plaintiffs had entered into with APS. APS and MHCA asked the circuit court to determine, as a threshold question, whether class arbitration is available in this case. The arbitration agreements did not expressly mention class arbitration. The circuit court issued an order granting the motion to compel arbitration. In that same order, the circuit court declined to decide whether class arbitration is available, concluding that that issue was to be decided by the arbitrator.

The case proceeded to arbitration, which was governed by the rules of the American Arbitration Association ("the AAA"). Under Rule 3 of the AAA's Supplementary Rules for Class Arbitration, a party may ask the arbitrator for a "clause-construction award" determining whether class arbitration is available; the plaintiffs here asked the arbitrator to issue such an award. The arbitrator subsequently issued a clause-construction award ("the award"), concluding that the relevant arbitration agreements authorize class arbitration in this case. Rule 3 also allows for the immediate judicial review of a clause-construction award. Accordingly, APS and MHCA sought review of the award in the circuit court.

Rule 71B, Ala. R. Civ. P., establishes the procedure for appealing an arbitration award to the circuit court. Under Rule 71B,

"(1) [a] party must file a notice of appeal with the appropriate circuit court within 30 days after service of the notice of the arbitration award; (2) the clerk of the circuit court shall promptly enter the award as the final judgment of the circuit court; (3) the aggrieved party may file a Rule 59, Ala. R. Civ. P., motion to set aside or vacate the judgment, and such filing is a condition precedent to further review by any appellate court; (4) the circuit court grants or denies the Rule 59 motion; and (5) the aggrieved party may then appeal from the circuit court's judgment to the appropriate appellate court."

Guardian Builders, LLC v. Uselton, 130 So. 3d 179, 181 (Ala. 2013).

This case has various procedural irregularities that initially must be sorted out. First, APS and MHCA, in appealing the award, did not file a document titled "notice of appeal" with the circuit court. Instead, on January 5, 2018, APS and MHCA filed with the circuit court a "motion to vacate" the award. This Court has considered a "motion to vacate" as a notice of appeal for purposes of Rule 71B when the motion was in substance a notice of appeal. Honea v. Raymond James Fin. Servs., Inc., 240 So. 3d 550, 559 (Ala. 2017). See also Guardian Builders, 130 So. 3d at 182 ; and J.L. Loper Constr. Co. v. Findout P'ship, LLP, 55 So. 3d 1152 (Ala. 2010). The motion to vacate was in substance a timely filed notice of appeal (in addition to being a motion to vacate); thus, the requirement in Rule 71B that a notice of appeal be filed with the circuit court was satisfied.

Under Rule 71B, the clerk of the circuit court, as a ministerial matter, should have promptly entered the award as the judgment of the circuit court. However, the award was not promptly entered as the judgment of the circuit court, but the appeal proceeded as if it had been. On April 11, 2018, the circuit court purported to deny the motion to vacate the judgment. Then, 42 days later, on May 23, 2018, APS and MHCA filed a notice of appeal to this Court from the order purporting to the deny the motion to vacate the judgment; that appeal was docketed as appeal no. 1170856. The problem here is that, because the award had not yet been entered as the judgment of the circuit court, there actually was no judgment that formed the basis for the motion to vacate. However, that problem is not fatal, because a postjudgment motion filed before the entry of a judgment quickens upon the entry of the judgment, New Addition Club, Inc. v. Vaughn, 903 So. 2d 68, 72 (Ala. 2004), and that is what happened here. On June 7, 2018, the clerk of the circuit court entered the arbitrator's award as the judgment of the circuit court. At that point, the motion to vacate quickened and was ripe for a decision by the circuit court under Rule 71B. Id. See also Ex parte Cavalier Home Builders, LLC, 275 So. 3d 1110, 1112 (Ala. 2018) (noting, in an appeal from an arbitration award, that a premature Rule 59(e), Ala. R. Civ. P., motion quickened when the circuit court later entered the award as the judgment of the circuit court). On July 17, 2018, the circuit court, perhaps realizing that its earlier motion purporting to deny the motion to vacate had been premature, entered an order denying the motion to vacate.

Complicating matters is the fact that APS and MHCA had filed a notice of appeal on May 23 (appeal no. 1170856), before the motion to vacate quickened on June 7. Rule 4(a)(4), Ala. R. App. P., provides that "[a] notice of appeal filed after the announcement of a decision or order but before the entry of the judgment or order shall be treated as filed after the entry and on the day thereof." In this case, the circuit court essentially announced its decision by purporting to deny the motion to vacate the first time around, on April 11. However, the motion to vacate did not actually quicken until June 7, when the circuit clerk performed the ministerial duty of entering the award as the judgment of the circuit court. The circuit court then denied the motion to vacate on July 17, and, under Rule 71B, that is the judgment from which the appeal lies. Under Rule 4(a)(4), the notice of appeal filed on May 23 was, in effect, suspended until the circuit court denied the motion to vacate on July 17. Pursuant to Rule 4(a)(4), we will treat the notice of appeal in appeal no. 1170856 as having been filed on July 17.

We now address another procedural irregularity regarding the notice of appeal in appeal no. 1170856. The notice of appeal listed the appellants as "Alabama Psychiatric Services, P.C., et al." and listed the appellees as "Sheri Lynn Lazenby, et al." Rule 3(c), Ala. R. App. P., was amended effective January 1, 2017, to provide that "[a]n appellant may not use the terms ‘et al.’ or ‘etc.’ to designate multiple appellants or appellees in lieu of naming each appellant or appellee." In light of that provision, this Court on June 20, 2018, ordered that appeal no. 1170856 be docketed only as to those parties specifically identified in the notice of appeal, i.e., APS as the sole appellant and Sheri Lynn Lazenby as the sole appellee. On July 16, 2018, APS filed a motion seeking to amend the notice of appeal to specifically list all the parties in this case, in compliance with Rule 3(c). This Court denied that motion by order on August 10, 2018. However, as explained above, when APS filed its motion to amend the notice of appeal on July 16, the notice of appeal not yet become effective; it would not become effective until the following day, July 17, when the circuit court denied the motion to vacate. Thus, in retrospect, APS should have been allowed to amend the notice of appeal in appeal no. 1170856. Accordingly, we rescind our order of June 20, 2018, which ordered that the appeal be docketed only as to those two parties specifically identified in the notice of appeal. Further, we amend the notice of appeal to include all the parties in this case. Accordingly, the appellants in appeal no. 1170856 are APS and MHCA, and the appellees are the plaintiffs, Sheri Lynn Lazenby, Robert Doyle, Latanya Renee Keith, Margie Dukes, January Simpson, Mary Ferdon, Lisa Marlowe, Anita Clark, Debra McAuliffe, Dolores Bray, Judith Madelyn Basham, Patricia Nowlin, and Elizabeth Wood.

On August 28, 2018, 42 days after the circuit court's July 17 order denying the motion to vacate, APS and MHCA filed a second notice of appeal, listing all the parties in this case, in compliance with Rule 3(c) ; this Court docketed that appeal as appeal no. 1171150. In the second appeal, like the first appeal, APS and MHCA challenge the circuit court's denial of the motion to vacate, and they present the same arguments. The second notice of appeal appears to have been filed out of uncertainty regarding the unusual procedural history in this case. However, as explained above, the second notice of appeal is redundant, given that the first notice of appeal has now been amended to include all the parties. Accordingly, we dismiss appeal no. 1171150.

APS and MHCA's first argument on appeal does not address any decision the circuit court made in its order denying the motion to vacate the arbitrator's award. Rather, APS and MHCA first argue that the circuit court, in its earlier order compelling arbitration, erred by declining to decide the threshold issue whether class arbitration is available. As noted, the circuit court concluded that the arbitrator, not the circuit court, should decide the availability of class arbitration. However, the issue whether the circuit court erred in this regard is not properly before us. Rule 4(d), Ala. R. App. P., provides:

"An order granting or denying a motion to compel arbitration is appealable as a matter of

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