Ex parte Hampton Ins. Agency

• Decision Date: 18 November 2011
• Docket Number: 1101226.,1101211
• Citation: 85 So.3d 347
• Parties: Ex parte HAMPTON INSURANCE AGENCY and Ginger A. Spencer. Ex parte Acceptance Indemnity Insurance Company and Ashland General Agency, Inc. (In re Mary Alice Patton d/b/a Hole in the Wall Lounge v. Hampton Insurance Agency et al.).
• Court: Alabama Supreme Court

85 So.3d 347

Ex parte HAMPTON INSURANCE AGENCY and Ginger A. Spencer.

Ex parte Acceptance Indemnity Insurance Company and Ashland General Agency, Inc.

(In re Mary Alice Patton d/b/a Hole in the Wall Lounge

v.Hampton Insurance Agency et al.).

1101211

1101226.

Supreme Court of Alabama.

Nov. 18, 2011.

James N. Walter, Jr., and Patricia R. Osuch of Capell & Howard, P.C., Montgomery, for petitioners Hampton Insurance Agency and Ginger A. Spencer.

J. Mark Hart of Hand Arendall LLC, Birmingham, for petitioners Acceptance Indemnity Insurance Agency and Ashland General Agency, Inc.

Gene T. Moore and Alan L. Vickrey of Law Office of Gene T. Moore, P.C., Tuscaloosa, for respondent.

SHAW, Justice.

In separate petitions, Hampton Insurance Agency ("Hampton") and Ginger A. Spencer (case no. 1101211) and Acceptance Indemnity Insurance Company ("Acceptance") and Ashland General Agency, Inc. ("Ashland") (case no. 1101226), the defendants in an action filed in the Hale Circuit Court by Mary Alice Patton d/b/a Hole in the Wall Lounge alleging that they failed to procure insurance coverage, petition this Court for writs of mandamus directing the trial court to transfer the underlying action to the Tuscaloosa Circuit Court. Because of the identical nature of the mandamus relief sought, we have consolidated the two petitions for the purpose of issuing one opinion. We grant the petitions and issue the writs.

Facts and Procedural History

In November 2008, Patton purchased from Spencer, an independent insurance agent who was doing business in Tuscaloosa County as Hampton,¹ insurance coverage for her lounge located in Hale County. At the heart of the underlying dispute is the nature and extent of the coverage Patton sought. Patton's policy, which was obtained by Hampton through Ashland, a surplus-lines agency that serves as a general agent for Acceptance, included only liquor-liability and general-liability coverage.

In May 2009, the building in which Patton operated the lounge was destroyed by fire. Upon filing an insurance claim associated with the damage to the lounge, Patton was informed that her insurance policy did not include coverage for property damage. As a result, on August 18, 2009, Patton sued Hampton and fictitiously named "Defendants A, B, and C,"² alleging that the "Defendants were negligent and/or wanton in their procurement of full coverage insurance for [Patton] on her lounge building and its contents."³ Hampton responded with a motion to dismiss pursuant to Rule 12(b)(3), Ala. R. Civ. P., or, in the alternative, to transfer the case on the ground that Hale County constituted an improper venue. More specifically, Hampton's motion alleged that Hampton is a sole proprietorship whose only office is located in Tuscaloosa County. In support of its motion, Hampton attached Spencer's affidavit reflecting that Hampton is an unincorporated entity operated by Spencer as a sole proprietorship in Tuscaloosa County, where Spencer resides.

Patton subsequently amended her complaint to add numerous additional counts and to name Spencer, Ashland, and Acceptance as defendants. Thereafter, Hampton renewed its initial motion seeking a transfer of the case to Tuscaloosa County, which Spencer, Acceptance, and Ashland joined. Hampton, Spencer, Acceptance, and Ashland also subsequently—and repeatedly—filed supplemental materials, including both information disclosed during discovery and recently released decisions of this Court, in support of the requested transfer, which Patton continued to oppose.⁴

On June 15, 2011, following a hearing, the trial court entered an order denying the requested transfer based on its conclusion that venue in Hale County was proper at the time Patton originally filed her action against Hampton. Specifically, the trial court concluded that § 6–3–6, Ala.Code 1975,⁵ and this Court's decisions in Ex parte Greenetrack, Inc., 25 So.3d 449 (Ala.2009), Ex parte Perfection Siding, Inc., 882 So.2d 307 (Ala.2003), and Ex parte Swift Loan & Finance Co., 667 So.2d 706, 707 (Ala.1995),⁶ controlled. In further support of its decision, the trial court's order denying the requested transfer included the following:

"Hampton Insurance Agency and/or Ginger A. Spencer conducted business in Hale County in that they sold at least five (5) policies of insurance in Hale County, they inspected the properties that were insured, advertised in a phone book of general publication and distribution in Hale County and the policy in question in this case was delivered via United States Postal Service regular mail in Hale County. The actual policy at issue in this matter was sold by Hampton and/or Ginger Spencer, Brokered through Ashland and written by Acceptance."

The instant petitions were filed on July 21, 2011; this Court ordered answers and briefs.

Standard of Review

" ‘ "The question of proper venue for an action is determined at the commencement of the action." ’ Ex parte Pike Fabrication, Inc., 859 So.2d 1089, 1091 (Ala.2002) (quoting Ex parte Pratt, 815 So.2d 532, 534 (Ala.2001) ). If venue is improper at the outset, then upon motion of the defendant, the court must transfer the case to a court where venue is proper. Ex parte Pike Fabrication, 859 So.2d at 1091. If the defendant's motion is denied, then the defendant is entitled to seek review of this decision by petitioning for a writ of mandamus. Ex parte Alabama Great Southern R.R., 788 So.2d 886, 888 (Ala.2000).

" ‘Mandamus is a drastic and extraordinary writ, to be issued only where 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 Integon Corp., 672 So.2d 497, 499 (Ala.1995). This Court reviews mandamus petitions seeking review of a venue determination by asking whether the trial court exceeded its discretion in granting or denying the motion for a change of venue. Ex parte Scott Bridge Co., 834 So.2d 79, 81 (Ala.2002). Also, in considering such a mandamus petition, this Court is limited to those facts that were before the trial court. Ex parte Pike Fabrication, 859 So.2d at 1091."

Ex parte Perfection Siding, Inc., 882 So.2d at 309–10.

Discussion

In their respective petitions, the petitioners contend that venue was improper in Hale County at the time the underlying litigation commenced and that the trial court, therefore, erred in denying their motions to transfer the action to Tuscaloosa County. Specifically, relying on this Court's recent decision in Ex parte Hughes, 51 So.3d 1016 (Ala.2010), they maintain that § 6–3–2, Ala.Code 1975, the venue provision applicable to actions against individuals, clearly applies to sole proprietorships such as Hampton and that, therefore, venue is proper in Tuscaloosa County where Spencer resides and where all actions related to procurement of the subject insurance indisputably occurred. The petitioners further contend that the subsequent amendment of Patton's complaint to name Acceptance and Ashland as defendants, which amendment they argue was not in keeping with the rules of fictitious-party practice, was insufficient to cure the improper venue at the beginning of the action and, thus, did not defeat the trial court's mandate to transfer the action pursuant to Rule 82(d), Ala. R. Civ. P.,⁷ to Tuscaloosa County. Patton counters that venue in Hale County was proper at the time of commencement of the action because, she contends, her amended complaint adding Acceptance and Ashland relates back to the filing of her original complaint; thus, she says, § 6–3–7(a)(3), Ala.Code 1975,⁸ not § 6–3–2(a)(3), controls and because venue is proper in Hale County as to Acceptance and Ashland, it is also proper there as to Hampton. See Rule 82(c), Ala. R. Civ. P. ("Where several claims or parties have been joined, the suit may be brought in any county in which any one of the claims could properly have been brought."). We disagree.

"As this Court has frequently held, proper venue for an action is determined at the commencement of the action. Ex parte Mitchell, 690 So.2d 356 (Ala.1997) ; Ex parte Parker, 413 So.2d 1105 (Ala.1982) ; Ex parte Wilson, 408 So.2d 94 (Ala.1981) ; see also Rule 82(d)(1), Ala. R. Civ. P. If venue is not proper at the commencement of an action, then, upon motion of the defendant, the action must be transferred to a court where venue would be proper. Parker, supra; Rule 82(d)(1), Ala. R. Civ. P.

" Section 6–3–2, Ala.Code 1975, governs venue of actions against individuals. It provides that such an action must be brought in the county of the defendant's residence or ‘in the county in which the act or omission complained of may have been done or may have occurred.’ § 6–3–2(a)(3) ; see also Rule 82(b)(1)(A), Ala. R. Civ. P."

Ex parte Overstreet, 748 So.2d 194, 196 (Ala.1999) (emphasis added).

This Court, in determining the appropriate venue provision in actions initiated against a sole proprietorship, stated the following in Ex parte Hughes, supra :

"Hughes testified at the hearing on his motion to transfer that he operated RBM Transport as an unincorporated entity. Hughes testified that he had no partners in the endeavor, and it appears that RBM Transport had no distinct legal existence other than its operation by Hughes. For legal purposes, RBM Transport Company must therefore be considered a sole proprietorship. See Black's Law Dictionary 1427 (8th ed.2004) (defining ‘sole proprietorship’ as ‘[a] business in which one person owns all the assets, owes all the liabilities, and operates in his or her personal capacity’). In Carolina Casualty Insurance Co. v. Williams, 945 So.2d 1030, 1035 (Ala.2006), this Court recognized that ‘Alabama law makes no distinction between an individual and a sole proprietorship operated by the individual. They are considered the same for legal purposes.’ (Citing Clardy v. Sanders, 551 So.2d 1057, 1059–60 (Ala.1989)

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