BOSCHERT MERRIFIELD CONS. v. Masonite Corp.

• Decision Date: 24 September 2004
• Citation: 897 So.2d 1048
• Parties: BOSCHERT MERRIFIELD CONSULTANTS, INC. v. MASONITE CORPORATION et al.
• Court: Alabama Supreme Court

897 So.2d 1048

BOSCHERT MERRIFIELD CONSULTANTS, INC. v. MASONITE CORPORATION et al.

1031061.

Supreme Court of Alabama.

September 24, 2004.

Ross Diamond III of Diamond, Hasser, Frost & Luckie, Mobile, for appellant.

Sandy G. Robinson and Ian D. Rosenthal of Cabaniss, Johnston, Gardner, Dumas & O'Neal, Mobile; and Janice Vaughn Mock of Nossaman, Guthner, Knox & Elliott, LLP, San Francisco, California, for appellees.

WOODALL, Justice.

Boschert Merrifield Consultants, Inc. ("Boschert"), filed a notice of appeal from an order denying Boschert's motions to vacate and stay two interlocutory orders of a special master appointed to oversee the administration and enforcement of a class-action settlement agreement. We dismiss the appeal.

The underlying dispute began in December 1994, when Judy Naef filed a class action ("the Naef case") against Masonite Corporation and International Paper Company (hereinafter referred to collectively as "Masonite"). Ex parte Masonite Corp., 681 So.2d 1068, 1069 (Ala.1996).¹ The complaint alleged "that hardwood siding sold by the defendants was inherently defective and that the defendants had systematically misled their customers about the product." 681 So.2d at 1076 (Maddox, J., concurring in the result in part and dissenting in part). The trial court certified a nationwide class. The class was defined as "all persons who have owned, or own, property on which Masonite Hardwood Siding has been incorporated and installed in the United States ... from January 1, 1980, to the date of the Final Order and Judgment in this Action."

The Naef case was tried to a jury on the sole issue of liability. On September 13, 1996, the jury, on special interrogatories, found (1) that the hardwood siding "fail[ed] to meet the reasonable expectations of an ordinary customer," was "unreasonably prone to failure," was "not fit for the ordinary purposes for its intended use," and (2) that a "prudent company making exterior siding ... would not have put [the hardwood siding] on the market." Subsequently, the parties executed an agreement settling the claims. An "amended settlement agreement" was approved by the trial court in a "judgment, final order, and decree granting final approval to the class settlement and Rule 54(b)[, Ala. R. Civ. P.,] determination," dated January 21, 1998.

The court-approved settlement agreement provided for the selection of a firm to serve as an independent claims administrator, which was to "administer the relief provided by [the agreement]." The agreement also provided for the appointment of a "special master," who would "preside over implementation of the Settlement Agreement" and who would have the "power to make decisions in all matters pertaining to administration and enforcement of the Settlement Agreement, subject to review by the court upon request of any Party."

Subsequently, Boschert began doing business with class members as a "claims service." Boschert's business and its relationship with the claims administrator were described by the special master as follows:

"[Boschert] is a claims service that seeks out property owners who might be eligible to file claims in this class action. Its agents purport to advise their potential customers whether they might have an eligible claim for damage [] to their property. Their promise to the customer is to offer an assessment of the probability of success of the claim, to ensure that the necessary information is obtained to fulfill the requirements of the claims administrator, and to relieve the customer of further responsibility for going forward with administrative matters relating to the claim. Its fee is most often thirty per cent of any recovery attained.

"Some of the requirements to be met in presenting a proper claim include establishing proof of ownership of the subject property; whether the product was installed within a time which would bring it within the eligible class period; presenting a sample of the product taken from the property, or submitting a deposit of $100.00; ensuring that the relevant information regarding the customer is complete and correct; and seeing that any documents, such as powers of attorney and assignment of interests are authenticated properly. The correctness of all such matters [is] necessary in order for the claims administrator to validate the claim, and submit it for inspection so that damages if any, can be determined, and payment made.

"When these threshold matters are dealt with properly, [Boschert] then is expected to submit the claim. The claims administrator examines the material submitted by [Boschert]. If any of it is incomplete, or incorrect, the submission is returned for correction or for clarification. Obviously [,] considerable vital information, such as ownership of the property and the correctness of the authentication of documents, is uniquely within the purview of the customer, and its agent, [Boschert], not the claims administrator."

On March 12, 2003, Masonite "served" on Boschert an instrument styled as a "motion for order (1) prohibiting submission by and payment of claims to [Boschert] ... in the Masonite class action settlement program, and (2) placing a temporary hold on all further payments to [Boschert] and its affiliates until a final order has been entered on this motion." The motion, which bore the case style and case number of the Naef case, was directed to the special master, seeking to prohibit Boschert "from further participation in any Masonite Settlement Program." It alleged that Boschert had, among other things, submitted "bogus claims with fake siding samples" and claims from individuals who were not members of the settlement class.

Following a hearing on that motion, the special master issued an order dated June 2, 2003, granting in part and denying in part the relief requested by Masonite. More specifically, it declined to prohibit Boschert from "filing claims or representing claimants in [the] class action." However, the order required Boschert to submit $100 with each claim it filed, pending further orders from the special master. Additionally, it gave Masonite "30 days to establish the number of out-of-class claims [that had] been paid to [Boschert's] claimants, and the amount paid."

On January 30, 2004, the special master issued a second order, finding that Boschert had "improperly submitted" 35 claims and that the "amount paid by the claims administrator to [Boschert] on behalf of the claimants [was] $111,133.36." The special master also found that Masonite had incurred "$36,532.36 in legal fees and costs resulting from the need to have [the]...