Ex parte Compass Bank

• Decision Date: 06 September 1996
• Citation: 686 So. 2d 1135
• Parties: Ex parte COMPASS BANK. (Re Tarif QANADILO v. COMPASS BANK, et al.). 1951249.
• Court: Alabama Supreme Court

Page 1135

686 So.2d 1135

Ex parte COMPASS BANK (Re Tarif QANADILO v.COMPASS BANK, et al.).

1951249.

Supreme Court of Alabama.

Sept. 6, 1996.

Rehearing Denied Nov. 27, 1996.

Michael L. Edwards, Gregory C. Cook and Lisa J. Sharp of Balch & Bingham, Birmingham, for Petitioner.

Thomas E. Baddley, Jr. and Jeffrey P. Mauro of Baddley & Crew, P.C., Birmingham, for Respondent.

SHORES, Justice.

The defendant Compass Bank petitions for a writ of mandamus directing Judge William J. Wynn of the Jefferson County Circuit Court to set aside his order compelling broad discovery in this case.We grant the writ.

In 1993, Tarif Qanadilo purchased two variable annuity policies through Compass Bank.The policies were named "Franklin Valuemark II variable annuity" and were a product of Allianz Life Insurance Company of North America.Qanadilo later discovered that these variable annuity investments lacked liquidity and that his policies had lost value.In August 1994 Qanadilo filed a putative class action against Compass Bank; Allianz Life Insurance Company; Susan T. Dennis, an employee of Compass Bank at its Scottsboro location; and fictitiously named parties.He sought to represent "all bank customers who have signed transfer documents pursuant to solicitation and advice from the Defendants which transferred their secured investment into speculative and market determinative investments without proper disclosure."Qanadilo's complaint also alleged fraud and negligence.He claims that Compass Bank suppressed information regarding the amount of fees and expenses charged in regard to the Franklin Valuemark II variable annuities he purchased and that Compass Bank failed to supervise its employees and breached its fiduciary duty in connection with the costs, fees, and expenses of the annuities.No class has been certified in the case.

On November 6, 1995, Judge T.M. Smallwood, Jr., entered a partial summary judgment for the defendants on all claims related to the disclosures that had been made in bold print directly above the plaintiff's signature on the application form.His order read in pertinent part:

"In bold print is a paragraph above Plaintiff's signature....The Court specifically notes section (a) which reads, 'The annuity may increase or decrease depending on the contract's investment results,' and (b) which reads, 'No minimum cash value is guaranteed.'The Plaintiff's claim as to these provisions is without merit and he must have 'closed his eyes' to the discovery of the truth ..., seeHurst v. Nichols Research Corp., 621 So.2d 969[ (Ala.1993) ].The balance of Plaintiff's claims being disputed matters of fact are properly left to the jury.The ... Defendants' motions for summary judgment are granted in part and denied in part.Defendants' motion for summary judgment relative to market determinative risks and the companion claim of a lack of stability is granted; and the balance of the motions for summary judgment to the Plaintiff's claims are denied.Plaintiff will be allowed to pursue the balance of his claims.SeeLiberty National Life Insurance Co. v. McAllister, 675 So.2d 1292(Ala.1995), andHicks v. Globe Life & Accident Insurance Co., 584 So.2d 458[ (Ala.1991) ]...."

This order left standing only Qanadilo's claims regarding the alleged failure to disclose costs, fees, and expenses.Judge Smallwood then recused, and the case was assigned to Judge Wynn.

Qanadilo continued to pursue the remaining claims, by filing a broad request for production of documents.His request included these paragraphs:

"8.Please produce any evidence of all customer complaints involving variable annuities, mutual fund and other such activities of representatives located at banking branches.

"9.Please produce all customer correspondence relating to variable annuities mutual funds, and other such products and the activities of representatives located in bank branches.

"10.Please produce copies of all files indicating review by principals or other supervisory personnel of customer correspondence, customer transaction records and customer account records for all variable product activities conducted at branch facilities....

"....

"14.Please produce a list of all Alabama residents, including their mailing addresses, who have entered into agreements with Compass Bank and/or Allianz Life Insurance Company to purchase variable annuities, mutual funds, and other such products from January 1, 1990, to the present.

"15.Please produce all contracts entered into between Compass Bank and/or Allianz Life Insurance Company and all Alabama residents who have purchased variable annuities, mutual funds, and other such products from January 1, 1990, to the present."

Compass responded to these requests by presenting affidavits from employees indicating that the requested discovery would require the manual review of thousands of files and thus would be unduly burdensome, oppressive, and expensive.Qanadilo filed a motion to compel discovery, which Judge Wynn granted.Compass Bank then filed a "Motion for Reconsideration," again contending that the request for production of documents was overly broad and burdensome.

On April 24, 1996, Judge Wynn held as follows:

"This Court has reviewed all materials submitted in connection with defendant's Motion for Reconsideration of Plaintiff's Motion to Compel.

"It appears defendant's chief objection, in substance, is based on the fact that plaintiff could never be a proper class representative.

"This Court, however, continues to take no note of any class considerations and has previously stated the plaintiff does not appear to be a proper class representative.

"This is not a class action.Therefore, defendant is ordered to produce requested discovery as respects all variable rate annuities.By implication, this Order precludes plaintiff from discovering information regarding mutual funds."

In response, Compass Bank petitioned this Court for a writ of mandamus directing Judge Wynn to set aside his order compelling Compass (1) to produce information that is related to variable annuity products that the plaintiff did not purchase, (2) to produce information on customers who have not complained, (3) to produce information on customers who are not within the class as defined by the plaintiff, and (4) to produce confidential customer information without any restrictions on the use of such information.

Mandamus is the "proper means of review to determine whether a trial court has abused its discretion in ordering discovery, in resolving discovery matters, and in issuing discovery orders so as to prevent an abuse of the discovery process by either party."Ex parte Mobile Fixture & Equipment Co., 630 So.2d 358, 360(Ala.1993).Mandamus is an extraordinary remedy requiring a showing that 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 Edgar, 543 So.2d 682, 684(Ala.1989);Ex parte Alfab, Inc., 586 So.2d 889, 891(Ala.1991);Ex parte Johnson, 638 So.2d 772, 773(Ala.1994).

Because discovery involves a considerable...