Ex parte Holland

• Court: Alabama Supreme Court
• Writing for the Court: HOUSTON; Kittrell; Kittrell; HOOPER; BUTTS
• Citation: Ex parte Holland, 692 So.2d 811 (Ala. 1997)
• Decision Date: 28 March 1997
• Parties: Ex parte Mitchell HOLLAND and Tammy Holland. (In re Jacqueline ANDERSON v. AUTO MART OF THE SOUTHEAST, INC., et al. Mitchell HOLLAND and Tammy Holland v. AUTO MART OF THE SOUTHEAST, INC., et al. FIDELITY FINANCIAL SERVICES, INC., etc. v. Mitchell HOLLAND and Tammy Holland). 1951631.

Page 811

692 So.2d 811

Ex parte Mitchell HOLLAND and Tammy Holland.

(In re Jacqueline ANDERSON v. AUTO MART OF THE SOUTHEAST, INC., et al.

Mitchell HOLLAND and Tammy Holland v. AUTO MART OF THE SOUTHEAST, INC., et al.

FIDELITY FINANCIAL SERVICES, INC., etc. v. Mitchell HOLLAND and Tammy Holland).

1951631.

Supreme Court of Alabama.

March 28, 1997.

George W. Finkbohner III of Finkbohner & Lawler, L.L.C., Mobile; and Robert G. Methvin, Jr., Birmingham, for Petitioners.

Steven L. Nicholas and Kenneth J. Riemer of Sirote & Permutt, P.C., Mobile; and A. Danner Frazer, Jr., and D. Brent Baker of Frazer, Greene, Upchurch & Baker, Mobile, for Fidelity Financial Services, Inc.

Michael Gillion of Gillion, Brooks & Hamby, P.C., Mobile, for Auto Mart of the Southeast, Inc.

Robert T. Cunningham, Jr., Toby D. Brown, Andrew T. Citrin, and Kelli D. Taylor of Cunningham, Bounds, Yance, Crowder & Brown, Mobile, for Jacqueline Anderson, as representative of the class (stating that "the Class does not have a position it chooses to assert before this Court").

HOUSTON, Justice.

Mitchell and Tammy Holland petition for a writ of mandamus directing Mobile Circuit Judges Braxton L. Kittrell, Jr., and Robert L. Byrd, Jr., to vacate their orders of June 12, 1996, and June 14, 1996, respectively. Those orders, together, had the effect of precluding the Hollands from opting out of a class action filed in the Mobile County Circuit Court by Jacqueline Anderson against Fidelity Financial Services, Inc. ("Fidelity"), and Auto Mart of the Southeast, Inc. ("Auto Mart"), and, thereby, preventing the Hollands from individually pursuing their claims for punitive damages against those entities. We grant the writ.

This dispute arose out of the Hollands' purchase of a Mazda automobile from Auto Mart. The Hollands financed the purchase through Fidelity. After repossessing the Hollands' automobile and selling it, Fidelity initiated this litigation by filing an action to recover the balance it alleged was owed by the Hollands on the debt. The Hollands counterclaimed, alleging, among other things, fraud and conspiracy to defraud in connection with the sale and financing of the automobile. The Hollands also sued Auto Mart in a separate action, alleging fraud and conspiracy to defraud. The actions against Auto Mart and Fidelity were consolidated for trial, and both actions were assigned to Judge Byrd.

The Hollands' claims were eventually set for trial on April 29, 1996. Relying on Ex parte First National Bank of Jasper, 675 So.2d 348 (Ala.1995), Fidelity moved to stay the Hollands' counterclaim against it pending the resolution of two class actions, each alleging misconduct on the part of Fidelity and Auto Mart, that had been conditionally certified in the Circuit Courts of Mobile and Washington Counties. The Mobile County class action (Glenn v. Fidelity Financial Services of Alabama, Inc., CV-94-003373) was pending before Judge Robert G. Kendall, and the Washington County class action (Coates v. Auto Mart of the Southeast, Inc., CV-94-4814) was pending before Judge J. Lee McPhearson. Judge Byrd granted Fidelity's motion to stay. Thereafter, Judge Kendall allowed the Hollands to opt out of the Glenn class action and Judge McPhearson ruled that the Hollands were not part of the class in the Coates class action. On motion of the Hollands, Judge Byrd rescheduled the Hollands' claims for trial on June 17, 1996.

On May 10, 1996, Judge Kittrell conditionally certified the Anderson action as a class action, without specifying which part of Rule 23(b) formed the basis for the certification. That class action, which was filed more than a year after the Hollands' counterclaim against Fidelity and their action against Auto Mart, was based on allegations of wrongful conduct on the part of Auto Mart and Fidelity similar to that alleged by the Hollands in their individual actions. Judge Kittrell's order certifying the Anderson action as a class action provided in part as follows:

"Pursuant to the parties' motion, this action is conditionally certified as a class action, said class consisting of all individuals who have purchased from the defendants, Auto Mart of the Southeast, Inc., Melvin LaDon Summerlin, Stacey Summerlin and/or Grady Walker, 'altered' vehicles and/or vehicles whose condition, equipment or options had been misrepresented, including, but not limited to, those vehicles which have been 'altered' (i.e., striping, decals, emblems, stickers and/or medallions have been added to either or both the vehicle's exterior or interior) by the defendant, James Hughes d/b/a Preferred Stripes Custom Graphics and Accessories, and which were financed through the defendants, Fidelity Financial Services, Inc., a Mississippi corporation, and/or Fidelity Financial Services, Inc., an Alabama corporation."

Following the entry of this order, Fidelity, again relying on Ex parte First National Bank of Jasper, supra, moved to stay the Hollands' claim against it, pending resolution of the Anderson class action. The Hollands responded to this motion by moving to opt out of the class. Fidelity then moved to declare the Anderson class action a mandatory action (no right to opt out) with respect to the issue of punitive damages, arguing that there was a "limited fund" from which the class members could recover and that it was preferable to have everyone with a claim against it before the trial court. The attorney for the class stated at the hearing on Fidelity's motion: "I don't want to interfere with [the Hollands'] lawsuit, as long as I can be convinced the class is protected or the funds are protected, that's all I care about." Judge Kittrell granted Fidelity's motion in an order dated June 12, 1996, stating:

"The motion to opt out of this class action proceeding has been considered by the Court and it is

"ORDERED that the plaintiffs in the case of Holland v. Fidelity set for trial in this circuit on June 17, 1996, before the Honorable Robert L. Byrd, shall be allowed to proceed insofar but only insofar as their claims relate to compensatory damages, and any claim for punitive damages shall be considered in the instant class action."

Judge Kittrell made no factual findings as to the financial condition of Fidelity (or Auto Mart) or as to the extent of Fidelity's ability to pay damages for the alleged wrongful conduct. Two days later, on June 14, 1996, Judge Byrd entered an order again abating the Hollands' actions, pending resolution of the Anderson class action.

Two well-settled standards of review govern our decision in this case. First, a writ of mandamus, which is a drastic and extraordinary remedy, is appropriate only when the one seeking it has shown a clear legal right to the order sought; an imperative duty on the respondent to perform, accompanied by a refusal to do so; the lack of another adequate remedy; and properly invoked jurisdiction of the court. Ex parte Johnson, 638 So.2d 772 (Ala.1994). Second, an order certifying an action as a class action is generally not disturbed by this Court in the absence of an abuse of discretion on the part of the trial judge. Ex parte Gold Kist, Inc., 646 So.2d 1339 (Ala.1994). Thus, the issue presented is whether Judge Kittrell abused his discretion in certifying the Anderson action as a mandatory class action under Rule 23, Ala.R.Civ.P. If he did, then a writ of mandamus would be appropriate to require him to set aside that order.

In Adams v. Robertson, 676 So.2d 1265, 1268-70 (Ala.1995), cert. granted, --- U.S. ----, 117 S.Ct. 37, 135 L.Ed.2d 1128 (1996), this Court discussed at length the nature of the various kinds of class actions available under Rule 23:

"At the outset, we note that Rule 23 of the Alabama Rules of Civil Procedure reads the same as Rule 23 of the Federal Rules, and we consider federal case law on class actions to be persuasive authority for the interpretation of our own Rule 23. See, First Alabama Bank of Montgomery, N.A. v. Martin, 381 So.2d 32 (Ala.1980).

"A class action is a procedural device created solely for the purposes of litigation. The goal of a class action is to provide a simple and efficient way for processing numerous interrelated claims. A class action allows one or more persons, known as class representatives, to sue on behalf of the many persons who have the same, or similar, questions of law or fact as the representatives.

"Under Rule 23(a), A.R.Civ.P., certain prerequisites must be met in order for one to proceed with a class action: (1) the class must be so numerous that joinder is impracticable; (2) there must be questions of law or fact common to the class; (3) the claims or defenses of the class representatives must be typical of the claims or defenses of the class; and (4) the class representatives must be able to fairly and adequately protect the interests of the class....

"Once the prerequisites are met, the class action must fit within one of the types of classes described in Rule 23(b).

"Rule 23(b)(1) provides that a class action may be maintained if

" 'the prosecution of separate actions by or against individual members of the class would create a risk of

" '(A) inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the class, or

" '(B) adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests....'

"A class action may be maintained under Rule 23(b)(2) if 'the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole.'

"A class action under Rule 23(b)(3) is appropriate when

" 'the court...