Ex parte EXCELSIOR FINANCIAL Inc.

• Decision Date: 22 January 2010
• Docket Number: No. 1081719.,1081719.
• Citation: 42 So.3d 96
• Parties: Ex parte EXCELSIOR FINANCIAL, INC. (In re Jeanie S. Tillis and Lowell A. Tillis v. WM Page & Associates, Inc., d/b/a The Lifeline Program, et al.)
• Court: Alabama Supreme Court

42 So.3d 96

Ex parte EXCELSIOR FINANCIAL, INC.

(In re Jeanie S. Tillis and Lowell A. Tillis v. WM Page & Associates, Inc., d/b/a The Lifeline Program, et al.)

No. 1081719.

Supreme Court of Alabama.

January 22, 2010.

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James N. Walter, Jr., and W. Allen Sheehan of Capell & Howard, PC, Montgomery, for petitioner.

Larry A. Golston, Jr., of Beasley, Allen, Crow, Methvin, Portis & Miles, P.C., Montgomery, for respondents.

LYONS, Justice.

Excelsior Financial, Inc. ("Excelsior"), one of the defendants in an action filed by Jeanie S. Tillis and Lowell A. Tillis in the Barbour Circuit Court, has filed a petition for a writ of mandamus requesting this Court to direct the trial court to vacate its order denying Excelsior's motion to dismiss the claims against it for lack of personal jurisdiction. We grant the petition and issue the writ.

I. Procedural History

On March 18, 2009, the Tillises sued Excelsior, WM Page & Associates, Inc., d/b/a The Lifeline Program ("Lifeline"), and Fredrickson Brokerage Insurance and Jeffrey Dale Fredrickson (collectively "Fredrickson"). The Tillises alleged that the defendants misrepresented certain facts that caused the Tillises to convert two life-insurance policies from term policies to whole-life policies with higher premiums in the belief that Lifeline would then purchase the policies for a specified sum. The complaint alleged, against all the defendants, fraudulent inducement; suppression; misrepresentation; negligent and wanton hiring, training, and supervision; and breach of a fiduciary duty.

On April 27, 2009, Excelsior moved to dismiss the claims against it under Rule 12(b)(2), Ala. R. Civ. P., asserting that the trial court lacked personal jurisdiction over it. The Tillises responded to the motion, and the trial court heard oral arguments on Excelsior's motion on July 8, 2009. On July 30, 2009, the trial court denied Excelsior's motion. Excelsior then filed a petition for a writ of mandamus with this Court, asking us to direct the trial court to vacate its order denying Excelsior's motion. This Court ordered the Tillises to file an answer and brief and ordered Excelsior to file a response.

II. Factual Background

In their complaint, the Tillises alleged that Excelsior and Lifeline were foreign corporations doing business by agent in Barbour County; that Fredrickson Brokerage Insurance was an Alabama corporation doing business in Alabama; and that Jeffrey Dale Fredrickson was a resident of Barbour County. In paragraphs 8-9 and again in paragraphs 19-20 of the complaint the Tillises alleged:

"8. [and 19.] On or about August 11, 2008, in Barbour County, Alabama, Defendants approached [the Tillises] about purchasing [the Tillises'] two life insurance policies.

"9. [and 20.] Defendants represented to, induced, and convinced [the Tillises] that if they converted their two existing term insurance policies into whole life policies, Defendant Lifeline would purchase these policies for the sum of $94,000."

According to the complaint, the Tillises converted their two life-insurance policies to whole-life policies and incurred additional premium costs in reliance on the defendants' representations that Lifeline would then purchase the policies, but Lifeline refused to purchase the policies. Without stating specifics, the Tillises alleged that there was a pattern and practice of fraud among the defendants relating to the conversion and promise of a sale of the Tillises' policies. The Tillises also alleged in paragraph 16 of the complaint:

"At all relevant times, each Defendant was an agent and/or representative of each other Defendant. In committing the acts alleged herein, the Defendants acted within the scope of their agency and/or employment and were acting with the consent, permission, authorization and knowledge of all other Defendants and perpetrated and/or conspired with and/or aided and abetted the unlawful, improper, and fraudulent acts described herein."

To support its motion to dismiss, Excelsior submitted a certificate from the Alabama Secretary of State stating that the records maintained by the secretary for both domestic and foreign corporations did not include any records related to Excelsior. Excelsior also submitted an affidavit of Suzanne Hill, its chief financial officer, chief executive officer, and president, and an affidavit of Melanie Dixon, its office manager. The affidavits state the following facts regarding Excelsior and its relationship with the Tillises.

Excelsior, a Georgia corporation with a principal place of business in Georgia, brokers existing life-insurance policies for sale in the secondary market. Excelsior is not licensed to conduct business in Alabama. It does not own property or maintain an office, a mailing address, a telephone number, or a bank account in Alabama. Excelsior does not pay taxes in Alabama and has never advertised its services in Alabama. Hill and Dixon are Excelsior's only two employees. Neither Hill nor Dixon have ever traveled to Alabama to conduct business for Excelsior. According to Hill's affidavit, during the five years preceding the filing of the Tillises' action, Excelsior was involved in only two sales of life-insurance policies owned by Alabama residents: the Tillises' transaction and an unrelated sale. Excelsior received a total of $8,000 in commissions from those sales.

Hill and Dixon denied the allegations in the complaint that Excelsior, its employees, or its agents had initiated contact with the Tillises regarding the possible sale of their life-insurance policies. Hill and Dixon also denied that Excelsior, its employees, or its agents misled the Tillises, suppressed information from them, or entered into any agreement to do so. Hill and Dixon further denied that any agency relationship existed between Excelsior and the other defendants.

According to Hill and Dixon, Excelsior was contacted by Charlie Meagher, a life-insurance agent in Georgia, who asked Excelsior to assist Meagher in finding a buyer for the Tillises' policies. Nothing in the materials presented to this Court describes Meagher's relationship with the Tillises or shows when Meagher first contacted Excelsior. Hill and Dixon stated that Excelsior worked solely through Meagher-in Georgia-from the time he first contacted Excelsior until April 18, 2008, when Meagher requested that Excelsior work directly with Fredrickson—in Alabama. The precise nature and extent of Excelsior's work with Fredrickson are unclear; neither Hill's nor Dixon's affidavit describe the relationship in any detail.

In her affidavit, Hill stated that Excelsior did not receive any compensation or send any money to Alabama with respect to the proposed sale of the Tillises' policies to Lifeline—the transaction made the basis of the complaint. Ultimately, Lifeline did not purchase the Tillises' policies, and Excelsior found a different buyer. Excelsior received a $1,700 commission on the sale. Hill and Dixon both stated that the only direct communication between Excelsior and the Tillises was a telephone call to Excelsior from Jeanie Tillis in January 2009, after the policies had been sold.

With their response to Excelsior's motion to dismiss, the Tillises submitted two exhibits. First, the Tillises submitted a July 1, 2008, e-mail from Dixon to Fredrickson stating that Dixon was sending Fredrickson two offers from Lifeline, presumably offers to purchase the Tillises' policies. Second, the Tillises submitted a facsimile from Fredrickson to Excelsior dated April 3, 2008, in which Fredrickson sent Excelsior an application form. That form, which Lowell Tillis had completed, disclosed information to Excelsior regarding the Tillises and their life-insurance policies. It also authorized third parties to release information to Excelsior.¹

III. Standard of Review

"`"The writ of mandamus is a drastic and extraordinary writ, 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 United Serv. Stations, Inc., 628 So.2d 501, 503 (Ala. 1993); see also Ex parte Ziglar, 669 So.2d 133, 134 (Ala.1995)." Ex parte Carter, [807 So.2d 534,] 536 [(Ala. 2001) ].'

"Ex parte McWilliams, 812 So.2d 318, 321 (Ala.2001). `An appellate court considers de novo a trial court's judgment on a party's motion to dismiss for lack of personal jurisdiction.' Elliott v. Van Kleef, 830 So.2d 726, 729 (Ala.2002)."

Ex parte Bufkin, 936 So.2d 1042, 1044-45 (Ala.2006).

IV. Analysis

"The extent of an Alabama court's personal jurisdiction over a person or corporation is governed by Rule 4.2, Ala. R. Civ. P., Alabama's `long-arm rule,' bounded by the limits of due process under the federal and state constitutions. Sieber v. Campbell, 810 So.2d 641 (Ala.2001). Rule 4.2(b), as amended in 2004, states:

"`(b) Basis for Out-of-State Service. An appropriate basis exists for service of process outside of this state upon a person or entity in any action in this state when the person or entity has such contacts with this state that the prosecution of the action against the person or entity in this state is not inconsistent with the constitution of this state or the Constitution of the United States....'

"In accordance with the plain language of Rule 4.2, both before and after the 2004 amendment, Alabama's long-arm rule consistently has been interpreted by this Court to extend the jurisdiction of Alabama courts to the permissible limits of due process. Duke v. Young, 496 So.2d 37 (Ala.1986); DeSotacho, Inc. v. Valnit Indus., Inc., 350 So.2d 447 (Ala.1977). As this Court reiterated in Ex parte McInnis, 820 So.2d 795, 802 (Ala.2001) (quoting Sudduth v. Howard, 646 So.2d 664, 667 (Ala.1994)), and even more...