Ex Parte Allianz Life Ins. Co.

• Decision Date: 05 December 2008
• Docket Number: 1070114.
• Citation: 25 So.3d 411
• Parties: Ex parte ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA (In re Mary-George D. Watson v. Allianz Life Insurance Company of North America and Jeffrey D. Fredrickson).
• Court: Alabama Supreme Court

25 So.3d 411

Ex parte ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA

(In re Mary-George D. Watson v. Allianz Life Insurance Company of North America and Jeffrey D. Fredrickson).

1070114.

Supreme Court of Alabama.

December 5, 2008.

Rehearing Denied June 12, 2009.

Michael L. Bell, Melody H. Eagan, Rachel M. Lary, and Haley A. Andrews of Lightfoot, Franklin & White, L.L.C., Birmingham, for petitioner.

Wilson F. Green and James E. Fleenor, Jr., of Battle Fleenor Green Winn & Clemmer LLP, Tuscaloosa: Harlan F. Winn III, Robert E. Battle, and Michael J. Clemmer of Battle Fleenor Green Winn & Clemmer LLP, Birmingham; and Lynn W. Jinks and Christina Crow of Jinks, Daniel & Crow, LLC, Union Springs, for respondent.

PARKER, Justice.

Allianz Life Insurance Company of North America ("Allianz") petitions for a writ of mandamus directing the Barbour Circuit Court to vacate its orders to compel production of certain discovery documents for an individual plaintiff in a fraud case involving the sale of an annuity. The requested documents were produced in class actions in California and in Minnesota, and Allianz alleges that the documents are patently irrelevant or duplicative. For the reasons discussed below, we deny the petition.

Background

In 2003, Mary-George D. Watson bought an Allianz BonusDex Elite Annuity policy for $14,397.66. She subsequently sued Allianz and Jeffrey D. Fredrickson,¹ the agent who sold her the policy, in the Barbour Circuit Court, alleging fraud based on representations allegedly made to her by Fredrickson at the point of sale.

The BonusDex Elite Annuity is a deferred annuity; it begins paying a stream of payments at a point in time after its purchase. Watson alleges that she told Fredrickson that she did not understand the sales literature provided by Allianz or the written contract and that she would rely on Fredrickson's explanation of the policy. She claims that he misrepresented the terms of the policy to her. In addition to her fraud claim, Watson alleges that Allianz negligently or wantonly hired, trained, or supervised Fredrickson, and that Allianz and Fredrickson failed to procure a suitable insurance product for her. She also alleges against both Allianz and Fredrickson breach of contract, breach of fiduciary duty, and conspiracy.

Allianz is a defendant in several actions involving the same and similar annuity contracts, and, according to Allianz, Watson sought, and obtained orders in the trial court compelling Allianz to produce, documents previously produced for two of those cases, including:

"1. All documents produced by [Allianz] in the case of Vida F. Negrete, et al. v. [Allianz] (Civil Docket # 2:05-cv-06838-CAS-MAN), United States District Court for the Central District of California, as well as the case of Mooney, et al. v. [Allianz] (Civil Docket # 06-cv-00545 (ADM/FLN)), United States District Court for the District of Minnesota.

"2. All depositions taken in [Negrete], as well as [Mooney], including exhibits to the depositions."

Allianz filed a motion for a protective order as to the documents, which the trial court denied.² Allianz states that the Negrete court has certified the class in a nationwide RICO class action as follows:

"`All persons who within the applicable statute of limitations of the date of commencement of this action and while 65 years of age or older, purchased one or more Allianz Life Insurance Company of North America deferred Annuities either directly, or through surrender(in whole or in part) of an existing permanent life insurance policy or annuity, or by borrowing against an existing permanent life insurance policy.'

"App. Exh. 6, [Stephen] Jordan Aff. Exh. B at 26-27. The Negrete class consists of approximately 200,000 members[, and Watson] is neither a member of the Negrete class, nor a California sub-class, because she was age 52 when she purchased her policy, and is not a California resident."

Petition at 3. Allianz notes that production of the documents in Negrete has resulted in over 180,000 documents produced under 143 requests, and it anticipates that production will be substantially more than one million documents, not including over 2,800 pages of transcripts resulting from 13 days of depositions. Petition at 4.

The Mooney³ action pending in the United States District Court for Minnesota is based entirely on alleged violations of the Minnesota Consumer Protection Fraud Act and on common-law unjust enrichment.⁴ The Mooney court certified a nationwide class consisting of:

"`All individuals who from February 9, 2000 to the present purchased one of the following two-tiered annuities from Allianz Life insurance Company of North America: BonusMaxxx, BonusMaxxx Elite, BonusDex, BonusDex Elite, 10% Bonus PowerDex Elite, MasterDex 10, and the InfiniDex 10 ("Annuities"). The class excludes all persons who purchased the above-listed Annuities from Allianz while they were California residents and when they were 65 or older.'"

Petition at 5 (quoting Affidavit of Stephen Jordan).⁵ This class includes approximately 337,000 members. Under Mooney, Allianz has produced approximately 70,000 documents in response to 53 requests and has produced about 8,400 pages of transcripts from 53 days of depositions and about 500 associated exhibit documents. Petition at 5. Allianz petitions this Court for a writ of mandamus directing the Barbour Circuit Court to vacate its orders compelling production here of the documents produced in the Negrete and Mooney class actions.

Standard of Review

"A writ of mandamus can be issued to affect the trial court's control of the discovery process, but this Court's review of a petition seeking a writ in a discovery dispute is particularly stringent:

"`The law relating to the issuance of a writ of mandamus in a case involving a discovery dispute was recently set out in Ex parte Henry, 770 So.2d 76 (Ala.2000). In Ex parte Henry, this Court stated:

"`"Rule 26 Ala. R. Civ. P., governs the discovery of information in civil actions. When a dispute arises over discovery matters, the resolution of the dispute is left to the sound discretion of the trial court. `Discovery matters are within the trial court's sound discretion, and its ruling on those matters will not be reversed absent a showing of abuse of discretion and substantial harm to the appellant.' Wolff v. Colonial Bank, 612 So.2d 1146, 1146 (Ala.1992) (citations omitted); see also Ex parte Hicks, 727 So.2d 23, 33 (Ala.1998) (Maddox, J., dissenting).

"`"... The writ of mandamus is a drastic and extraordinary remedy, to 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 Horton, 711 So.2d 979, 983 (Ala.1998) (citing Ex parte United Serv. Stations, Inc., 628 So.2d 501 (Ala.1993)); Ex parte Alfab, Inc., 586 So.2d 889, 891 (Ala.1991) (citing Martin v. Loeb & Co., 349 So.2d 9 (Ala.1977)). Moreover, this Court will not issue a writ of mandamus compelling a trial judge to alter a discovery order unless this Court `determines, based on all the facts that were before the trial court, that the trial court clearly abused its discretion.' Ex parte Horton, 711 So.2d at 983. Moreover, `"[t]he right sought to be enforced by mandamus must be clear and certain with no reasonable basis for controversy about the right to relief," and "[t]he writ will not issue where the right in question is doubtful."' Ex parte Bozeman, 420 So.2d 89, 91 (Ala.1982) (quoting Ex parte Dorsey Trailers, Inc., 397 So.2d 98, 102 (Ala.1981)).'"

"Ex parte Pitts, 822 So.2d 418, 421-22 (Ala.2001). See also Ex parte Ocwen Federal Bank, FSB, 872 So.2d 810, 813 (Ala.2003) (holding that `mandamus will issue to reverse a trial court's ruling on a discovery issue only (1) where there is a showing that the trial court clearly exceeded its discretion, and (2) where the aggrieved party does not have an adequate remedy by ordinary appeal. The petitioner has an affirmative burden to prove the existence of each of these conditions.'). The Court in Ocwen noted that `[i]n certain exceptional cases ... review by appeal of a discovery order may be inadequate' and that among those exceptional cases were those in which `a discovery order compels the production of patently irrelevant or duplicative documents, such as to clearly constitute harassment or impose a burden on the producing party far out of proportion to any benefit that may obtain to the requesting party....' 872 So.2d at 813. See also Ex parte Crawford Broad. Co., 904 So.2d 221 (Ala. 2004). Moreover, we are also aware of the fundamental disinclination of the appellate courts to intrude into the trial court's province of conducting the litigation process. Appellate courts are fundamentally directed toward the review of an appeal after a case is concluded in the trial court, and they are not well equipped to manage the trial court's business, particularly where the appellate caseload is more than sufficient to fully occupy the court's time. This Court has long recognized the principle that `"[c]ases should not be tried by piecemeal, and separate and distinct rulings upon the evidence brought to this court pending the progress of the trial ...."' Ex parte Alabama Power Co., 280 Ala. 586, 599, 196 So.2d 702, 715 (1967) (quoting Ex parte Little, 205 Ala. 517, 517, 88 So. 645, 646 (1921))."

Ex parte Cooper Tire & Rubber Co., 987 So.2d 1090, 1100-01 (Ala.2007).

Analysis

Allianz states the issue as:

"Whether a Plaintiff asserting Alabama fraud and other claims based on oral representations by an independent agent in the purchase of single annuity product in 2003, may compel discovery or more than one million documents and 66 days of depositions (with hundreds of exhibits), produced in two national class actions pending in federal courts in California...