Ex parte Am. Cast Iron Pipe Co., 1200500

CourtSupreme Court of Alabama
Writing for the CourtSTEWART, JUSTICE
PartiesEx parte American Cast Iron Pipe Company v. American Cast Iron Pipe Company In re: Karene Stricklin, as conservator and guardian for John Gray, an incapacitated person
Docket Number1200500
Decision Date23 September 2022

Ex parte American Cast Iron Pipe Company

In re: Karene Stricklin, as conservator and guardian for John Gray, an incapacitated person
v.

American Cast Iron Pipe Company

No. 1200500

Supreme Court of Alabama

September 23, 2022


Jefferson Circuit Court: CV-19-902322; Court of Civil Appeals: 2190470

PETITION FOR WRIT OF CERTIORARI TO THE COURT OF CIVIL APPEALS

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STEWART, JUSTICE

American Cast Iron Pipe Company ("ACIPCO") petitioned this Court for a writ of certiorari to review the Court of Civil Appeals' decision in Stricklin v. American Cast Iron Pipe Co., [Ms. 2190470, Dec. 18, 2020] So.3d (Ala. Civ. App. 2020), which reversed the Jefferson Circuit Court's judgment dismissing a workers' compensation action brought by Karene Stricklin against ACIPCO stemming from alleged on-the-job injuries that her ward and conservatee, John Gray, sustained while an ACIPCO employee. We granted the petition to consider, as a matter of first impression, whether Article II of the Alabama Workers' Compensation Act ("the ombudsman-program article"), which encompasses § 25-5-290 through § 25-5-294, Ala. Code 1975, precludes an action seeking to have a benefit-review agreement declared void ab initio on the basis of a signatory's mental incompetency when that action is not commenced so as to comply with the 60-day period set forth in § 25-5-292(b), Ala. Code 1975. For the reasons below, we conclude that it does not, and, thus, we affirm the Court of Civil Appeals' decision.

I. Facts and Procedural History

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In June 2014, Gray suffered a serious head injury while employed by ACIPCO as an electrician. Gray subsequently applied for workers' compensation benefits and, on May 20, 2016, attended a benefit-review conference pursuant to the ombudsman-program article. At that conference, Gray, his attorney, an attorney for ACIPCO, and an ombudsman from the Alabama Department of Labor signed a written benefit-review agreement ("the 2016 agreement") in which Gray released ACIPCO from liability on all claims related to his work-related injury and, in exchange, ACIPCO released any subrogation interest it possessed regarding Gray's third-party claims against L.B. Foster Company, the owner and operator of the warehouse where Gray sustained his head injury. Neither ACIPCO nor Gray sought court approval of the 2016 agreement, or sought to be relieved from the effect of the 2016 agreement, within the 60-day period set forth in § 25-5-292(b) for a court to review a benefit-review agreement.

In November 2017, the United States District Court for the Northern District of Alabama dismissed Gray's lawsuit against L.B. Foster Company, and, in March 2019, the United States Court of Appeals for the Eleventh Circuit affirmed the district court's judgment. In April

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2019, the Jefferson Probate Court determined that Gray was incompetent and appointed Stricklin, Gray's mother-in-law, as his guardian and conservator. In May 2019, Stricklin, in her capacity as Gray's guardian and conservator, sued ACIPCO in the Jefferson Circuit Court ("the trial court"). Stricklin's complaint asserted a workers' compensation claim on Gray's behalf and alleged that, because of his work-related brain injury, Gray had "lacked the mental capacity to understand and/or make an informed decision" concerning the 2016 agreement that purported to release ACIPCO from liability on Gray's claims under the Workers' Compensation Act ("the Act"), §25-5-1 et seq., Ala. Code. 1975.

ACIPCO filed a motion to dismiss Stricklin's action on the ground that the trial court lacked jurisdiction to set aside the 2016 agreement because Stricklin had filed the complaint attacking that agreement long after the 60-day period set forth in § 25-5-292(b) had expired. Attached to ACIPCO's motion to dismiss, among other materials, was a copy of the 2016 agreement.

In her response to ACIPCO's motion to dismiss, Stricklin again asserted that Gray, because of his alleged mental incompetency at the

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time he signed the 2016 agreement, had lacked the capacity to enter into the 2016 agreement, and she argued that the 2016 agreement was therefore void ab initio. Stricklin further argued that, "if the settlement agreement is void ab initio because of Gray's lack of capacity, the sixty-day restriction ... is not applicable." In support of that argument, Stricklin relied on Alabama caselaw providing that the "contracts of insane persons are wholly and completely void." McAlister v. Deatherage, 523 So.2d 387, 388 (Ala. 1988) (citing, among other authority, § 8-1-170, Ala. Code 1975).[1] Attached to Stricklin's response was the affidavit of Gray's wife, Neisa Gray, who stated that Gray had difficulty understanding and following written instructions in the aftermath of his head injury. Stricklin also attached the affidavit of Dr. Diane Counce, who, based on her examination of Gray and her review of Gray's medical records, testified (1) that, in the months following his accident, Gray had believed it was the 1980s and could not recall that he was married with children and (2) that Gray had "lacked the mental capacity to understand

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and appreciate the effect" of the 2016 agreement at the time that agreement was executed.

After a hearing, the trial court determined that it lacked subject-matter jurisdiction over Stricklin's action based on the 60-day period set forth in § 25-5-292(b) and entered a judgment dismissing Stricklin's complaint. Stricklin filed a Rule 59, Ala. R. Civ. P., postjudgment motion that was denied by operation of law on February 3, 2020. On March 4, 2020, Stricklin timely appealed the trial court's judgment to the Court of Civil Appeals.

The Court of Civil Appeals reversed the trial court's judgment dismissing Stricklin's action. In particular, the Court of Civil Appeals determined that, "[e]ven if § 25-5-292(b) prevents a circuit court from exercising its power to set aside a benefit-review agreement on the grounds of 'fraud, newly discovered evidence, or other good cause' after the expiration of the 60-day period," Stricklin's complaint did not seek to have the 2016 agreement set aside for "other good cause." ___ So.3d at ___. Instead, the Court of Civil Appeals concluded, Stricklin's complaint properly sought a judicial determination that the 2016 agreement did "not exist as a legal matter because Gray lacked the requisite capacity to

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form mutual assent" and that, as a result, the trial court did have subject-matter jurisdiction to consider Stricklin's claim that the 2016 agreement was void ab initio. ___ So.3d at ___.

Moreover, although the Court of Civil Appeals acknowledged that "the trial court granted ACIPCO's motion to dismiss on the express ground that it lacked subject-matter jurisdiction, [and] did not consider Stricklin's argument regarding the validity of the 2016 benefit-review agreement," ___ So.3d at ___, it further concluded that, because no provision of the ombudsman-program article addresses benefit-review agreements signed by an incompetent employee, the provisions of that article do not prevent the application of § 8-1-170, which, subject to certain exceptions not applicable in this case, declares contracts entered into by incompetent persons void an initio. Accordingly, the Court of Civil Appeals remanded the case with instructions that the trial court consider Stricklin's claim that the 2016 agreement was void ab initio based on Gray's alleged incompetency at the time of its execution. ACIPCO petitioned this Court for a writ of certiorari to review whether the Court of Civil Appeals erred in reversing the trial court's judgment and in

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determining that § 8-1-170 applies to benefit-review agreements. We granted certiorari review.

II. Standard of Review

"On certiorari review, this Court accords no presumption of correctness to the legal conclusions of the intermediate appellate court. Therefore, we must apply de novo the standard of review that was applicable in the Court of Civil Appeals." Ex parte Toyota Motor Corp., 684 So.2d 132, 135 (Ala. 1996). The standard of review for analyzing the propriety of a trial court's order granting a Rule 12(b)(6), Ala. R. Civ. P., motion to dismiss[2] is as follows:

"On appeal, a dismissal is not entitled to a presumption of correctness. Jones v. Lee County Commission, 394 So.2d 928, 930 (Ala. 1981); Allen v. Johnny Baker Hauling, Inc., 545 So.2d 771, 772 (Ala. Civ. App. 1989). The appropriate standard of review under Rule 12(b)(6) is whether, when the allegations of the complaint are viewed most strongly in the
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pleader's favor, it appears that the pleader could prove any set of circumstances that would entitle her to relief. Raley v. Citibanc of Alabama/Andalusia, 474 So.2d 640, 641 (Ala. 1985); Hill v. Falletta, 589 So.2d 746 (Ala. Civ. App. 1991). In making this determination, this Court does not consider whether the plaintiff will ultimately prevail, but only whether [the plaintiff] may possibly prevail. Fontenot v. Bramlett, 470 So.2d 669, 671 (Ala. 1985); Rice v. United Ins. Co. of America, 465 So.2d 1100, 1101 (Ala. 1984). We note that a Rule 12(b)(6) dismissal is proper only when it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim that would entitle the plaintiff to relief. Garrett v. Hadden, 495 So.2d 616, 617 (Ala. 1986); Hill v. Kraft, Inc., 496 So.2d 768, 769 (Ala. 1986)."

Nance v. Matthews, 622 So.2d 297, 299 (Ala. 1993). Further, "[t]his Court reviews de novo a trial court's interpretation of a statute." Scott Bridge Co. v. Wright, 883 So.2d 1221, 1223 (Ala. 2003).

III. Analysis

Neither Stricklin nor ACIPCO disputes that Gray signed a written benefit-review agreement on May 20, 2016, or that he failed to seek court review of the 2016 agreement so that the court could rule on its propriety within 60 days of when the agreement was signed; thus, the only issue before this Court is...

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