Ex parte Gauntt

Citation677 So.2d 204
PartiesEx parte Mary L. GAUNTT, et al. (Re Mary L. GAUNTT, et al. v. UNITED INSURANCE COMPANY OF AMERICA, et al.) 1940591.
Decision Date09 February 1996
CourtSupreme Court of Alabama

Fred D. Gray of Gray, Langford, Sapp, McGowan, Gray & Nathanson, Tuskegee; Allen W. Howell of Shinbaum & Howell, Montgomery, for Petitioners.

Warren B. Lightfoot, Mac M. Moorer and William H. Brooks of Lightfoot, Franklin, White & Lucas, Birmingham, for Respondents.

Phillip E. Stano, Washington, DC; Cathy S. Wright and Sarah E. Yates of Maynard, Cooper & Gale, P.C., Birmingham, for Amicus Curiae American Council of Life Insurance.

On Application for Rehearing

SHORES, Justice.

The opinion issued on July 14, 1995, is withdrawn and the following opinion is substituted therefor.

A judge of the Macon Circuit Court has ordered that 16 pending civil actions filed in Macon County against United Insurance Company of America ("United"), Unitrin, Inc., United Casualty Insurance Company of America, Union National Life Insurance Company, and Union National Fire Insurance Company be transferred to Shelby County for trial. The plaintiffs, whose actions are based on various contract and fraud claims, have petitioned for a writ of mandamus directing the trial judge to set aside his transfer orders. None of the plaintiffs resides in Macon County, although United does business there. The plaintiffs reside in the central Alabama counties of Elmore, Montgomery, Chilton, and Tallapoosa.

The defendants filed a motion to transfer the cases to Shelby County, based on allegations of improper venue and premised upon the assertion that United's regional manager, George McDonald, resides in Shelby County. The defendants relied on and cited § 6-3-7, Ala.Code 1975, 1 and Ex parte Macon County Greyhound Park, Inc., 634 So.2d 997 (Ala.1993) (venue proper in county where alleged wrongful act occurred, not where resulting nonbodily injuries occurred). In the alternative, the defendants moved for a transfer pursuant to the doctrine of forum non conveniens as codified at Ala.Code 1975, § 6-3-21.1.

The plaintiffs argued that the clause in § 6-3-5 providing that "an action against a foreign insurance corporation shall be commenced only in a county where it does business" makes venue proper in Macon County, where United, a foreign corporation, does business. The trial judge concluded that § 6-3-5 did not establish proper venue in Macon County, and he transferred the cases. His transfer order, dated December 22, 1994, reads as follows:

"All pending motions with the exception of the motion for class certification were set for argument. Prior to argument, the Court stated that it might be appropriate to dispose of the venue question since the remaining motions would become moot as to the Circuit Court of Macon County in the event venue was transferred. It is stipulated and agreed among the parties that venue is proper in Macon County for the following cases subject to a motion for change of venue based on the concept of forum non conveniens:

"Bloodsaw v. United Ins. Co. of America, et al. CV-93-166; Floyd v. United Ins. Co. of America, et al. CV-93-136; Samuels v. United Ins. Co. of America, et al. CV-93-135; Smith v. United Ins. Co. of America, et al. CV-93-180; Torbert v. United Ins. Co. of America, et al. CV-93-146.

"For purposes of argument it is also stipulated and agreed that none of the other plaintiffs in the above-styled causes reside in Macon County and that United Insurance Company of America does business in Macon County.

"The above-styled causes sound in fraud. Counsel for plaintiffs argue that Section 6-3-5(a), Code of Alabama 1975, makes venue proper in Macon County. Section 6-3-5(a), provides:

" 'Any person, firm or corporation that issues policies or certificates of insurance of any kind shall be subject to a civil action on any such policy or certificate in the county where the holder of the policy or certificate resides, and the summons may be executed by serving a copy of the summons and complaint upon any officer or agent of the insurer; provided, however, that an action against a foreign insurance corporation shall be commenced only in a county where it does business.'

"Counsel for defendants argue that Section 6-3-5(a) has no application in this case since the actions are not 'action[s] on any such policy or certificate' and that the general venue rules as to fraud apply. Counsel for plaintiffs argue that the portion following the semi-colon makes venue proper in Macon County and that there should be no distinction drawn between actions ex delicto and [actions] ex contractu. Plaintiffs cite the opinion of the Alabama Supreme Court in [Ex parte Bloodsaw, 648 So.2d 553 (Ala.1994) ], as being dispositive. One of the causes of action in that case is for bad faith refusal to pay. Consequently, at least a portion of that case sounds in contract and is therefore distinguishable from the fraud cases. The Court is of the opinion that the defendants are correct in their argument and consequently their various motions for change of venue are due to be and hereby are granted. Defendants have indicated that their preference of venue is Shelby County. The Court is of the opinion that defendants are entitled to have venue transferred to the county of their preference.

"It is, therefore, ORDERED, ADJUDGED and DECREED that with the exception of the four cases cited in the body of this order, venue of the above-styled cases is transferred to Shelby County. The Circuit Clerk of Macon County shall transfer all documents necessary to perfect said transfer...."

The writ of mandamus is an extraordinary remedy. One seeking it must show: "(1) a clear legal right ... 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). The writ of mandamus will issue to correct an erroneous ruling on a motion to transfer a case. Elmore County Comm'n v. Ragona, 540 So.2d 720 (Ala.1989). The essential question in our consideration of a petition for the writ of mandamus in this context is whether the county in which the action was brought was a proper venue. Id.; Ex parte Wilson, 408 So.2d 94 (Ala.1981); Ex parte Maness, 386 So.2d 429 (Ala.1980).

Whether Macon County is a proper venue for these cases depends on whether a complaint alleging both contract and tort claims against a foreign corporation may be brought in a county in which it does business, even though the plaintiff does not reside there. These plaintiffs are bringing contract and fraud actions against foreign insurance corporations and their agents, directors, and officers. Accordingly, this Court considers § 6-3-5, establishing venue for a civil action by a policyholder against an insurer; § 6-3-7, establishing venue rules for actions against foreign and domestic corporations; and Amendment No. 473, Ala. Const.1901, equating domestic and foreign corporations for purposes of venue.

The plaintiffs, relying on Ex parte City of Fayette, 611 So.2d 1032 (Ala.1992), overruled on other grounds, Ex parte Alabama Power Co., 640 So.2d 921, 924 (Ala.1994); and Ex parte Bloodsaw, 648 So.2d 553 (Ala.1994), argue that venue is proper in Macon County or in any other county where a foreign corporate defendant does business. Neither of these cases is authority for this proposition, and the plaintiffs' argument fails to acknowledge the significance of Amendment No. 473. The defendants argue that each complaint alleges only personal actions and that § 6-3-7, Ala.Code 1975, makes venue proper only (1) where the plaintiff resides, if the defendant does business there, or (2) where the wrongful act occurred. This argument fails because the complaints allege contract as well as "personal injury" claims under § 6-3-7, and contract claims are not subject to the personal injury clause of § 6-3-7. A review of the statutory history is helpful in resolving this issue.

A. History

In 1886, Alabama's corporate venue statute, codified at Ala.Code 1886, § 2642, provided that "[a] foreign or domestic corporation may be sued in any county in which it does business by agent." The statute was first passed on February 13, 1879. Ala.Acts 1879, No. 166, p. 197. In Montgomery Iron Works v. Eufaula Oil & Fertilizer Co., 110 Ala. 395, 20 So. 300 (1896), the Court held that the statute was not mandatory: the language did not exempt a corporation from being sued, in an action not in contract, in a county in which it was not doing business by agent. The Court construed this statute in pari materia with § 2640, prescribing that personal actions, other than those on contracts, could be brought "in the county in which the act or omission complained of may have been done."

The corporate venue statute appeared unchanged as § 4207, Ala.Code 1896, but the legislature amended the venue provision in 1903 by adding "but all actions for personal injuries must be brought in the county where the injury occurred, or in the county where the plaintiff resides, if such corporation does business by agent in the county of plaintiff's residence." Ala.Acts 1903, No. 174, p. 182, codified at Ala.Code 1907, § 6112. The statute did not distinguish between foreign and domestic corporations. The statute required that a personal injury action against a foreign corporation, as well as one against a domestic corporation, be brought in the county in which the injury occurred or in the county of the plaintiff's residence if the corporation did business by agent there. Alabama Great Southern Ry. v. Ambrose, 163 Ala. 220, 50 So. 1030 (1909) (action by administrator based on personal injury resulting in death to his intestate...

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