Ex Parte John Alden Life Ins. Co.

• Decision Date: 20 June 2008
• Docket Number: 1070414.
• Citation: 999 So.2d 476
• Parties: Ex parte JOHN ALDEN LIFE INSURANCE COMPANY. (In re H.M. Beasley v. Fortis Insurance Company and John Alden Life Insurance Company).
• Court: Alabama Supreme Court

999 So.2d 476

Ex parte JOHN ALDEN LIFE INSURANCE COMPANY (In re H.M. Beasley v. Fortis Insurance Company and John Alden Life Insurance Company).

1070414.

Supreme Court of Alabama.

June 20, 2008.

Jennifer M. Busby, Richard C. Keller, and R. Frank Springfield of Burr & Forman, LLP, Birmingham, for petitioner.

C. Carter Clay of Pittman, Dutton, Kirby & Hellums, P.C., Birmingham, for respondent.

COBB, Chief Justice.

John Alden Life Insurance Company ("JALIC") petitions this Court for a writ of mandamus ordering the Barbour Circuit Court to vacate its December 4, 2007, order compelling JALIC to produce a list of names and addresses of individuals who have been issued individual medical certificates by JALIC (known as a JALIC Form 390), from June 1, 2002, through December 4, 2007, and directing the trial court to enter a protective order preventing JALIC from having to produce the names and addresses of its insureds. We deny the petition.

In June 2002, Jeffrey Fredrickson, a JALIC agent, approached H.M. Beasley regarding the purchase of health insurance from JALIC. According to Beasley, Fredrickson marketed the health plan as a true "group" health-insurance product. Specifically, Beasley recalled that Fredrickson explained to him that JALIC's health-insurance plan was a "group-type policy" and thus that the rates and premiums would be lower than his current policy and that his premiums would be rated as part of a group. Beasley also contends that Fredrickson represented to him that any future increases in premiums would be uniform as to all policyholders in the group. Beasley purchased a family-plan health-insurance policy under a "Master Group Policy" from JALIC, effective July 1, 2002, to cover both him and his ex-wife. Beasley's initial monthly premiums for the family plan were $245.76; however, by 2005 his monthly premiums had increased to $440.21. Beasley asserts that this increase was not instituted uniformly among all policyholders and that JALIC employs a rating system that discriminates against various policyholders based upon certain personal factors such as claim history and the policyholder's health.

On July 1, 2005, Beasley sued JALIC and Fortis Insurance Company,¹ the administrator of the policy, alleging breach of contract, negligence, recklessness, wantonness, fraud in the sale of the insurance policy, suppression, breach of a fiduciary duty, negligent training and supervision of Fredrickson, and negligent procurement of the insurance policy by Fredrickson. Contemporaneously with the filing of the complaint, Beasley served JALIC with interrogatories and requests for production. In his interrogatories and requests of production, Beasley requested the following:

"14. Please produce a list of names and addresses for any and all policyholders in the State of Alabama that have the same or similar type of health insurance policy with [JALIC and Fortis] as [Beasley] during the years 1998 through 2005."

On May 11, 2006, JALIC responded to Beasley's request for production and objected to the discovery of the information sought in request no. 14, alleging that it was overly broad and unduly burdensome, sought information for an unreasonable and inappropriate time frame, and sought information that was confidential and proprietary. JALIC further objected that the information sought was "health information" as defined by the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), 42 U.S.C. § 1320d(4) and that disclosure of the information would be a violation of the HIPAA privacy rule, 45 C.F.R. §§ 160 and 164. On August 23, 2006, Beasley's attorney wrote JALIC's attorney asking that within 15 days he provide the documents and information JALIC had not produced. On December 5, 2006, Beasley's attorney again wrote JALIC's attorney inquiring as to the status of the outstanding discovery.

On May 31, 2007, and again on June 6, 2007, Beasley filed with the trial court motions to compel the production of the documents and information sought in request no. 14. Fortis and JALIC responded to Beasley's motions to compel on July 19, 2007. The response asserted that Beasley has never been insured by Fortis and that it did not possess the information requested in Beasley's discovery responses. It further responded that JALIC does not maintain a list of the names and addresses of JALIC's certificate holders in Alabama, that its policyholder lists are confidential proprietary information, that Beasley had not demonstrated a particularized need for the discovery, that the discovery request was not closely tailored to the nature of his fraud claim, and that production of the requested information would be a violation of HIPAA and the Gramm-Leach-Bliley Act, 15 U.S.C. § 6801 et seq. On July 26, 2007, the trial court entered an order requiring JALIC to provide a list of names and addresses of individuals in Alabama who have been covered during the period from July 1, 2002, to July 26, 2007, by the same or similar type of health insurance as Beasley.

On August 15, 2007, JALIC and Fortis filed a motion asking the trial court to reconsider its order of July 26, 2007, and also asking for a protective order preventing JALIC and Fortis from producing any of the information requested in Beasley's request no. 14. Additionally, JALIC and Fortis requested that if they had to produce the information requested that it be designated as confidential and that Beasley be able to contact JALIC's insureds only via a court-approved letter. On December 4, 2007, the trial court granted JALIC and Fortis's motion in part so that Fortis was not required to produce any documents requested in Beasley's request no. 14; however, the trial court ordered JALIC to produce the names and addresses requested in request no. 14 within 20 days of the order. The trial court also ordered (1) that the list JALIC produce be designated "confidential," (2) that the list not be used for purposes other than the current litigation, (3) that the list must be returned to JALIC at the conclusion of the case, (4) that Beasley's attorneys make contact with any individual on the list only one time and through a court-approved letter, (5) that, within 30 days of mailing the letter and within 5 days of any response made after the initial 30-day period, Beasley notify JALIC of the individuals who responded to the letter, and (6) that Beasley notify JALIC if he wished to make additional contact with any individual on the list and explain why such contact was needed and if JALIC did not agree to the additional contact then Beasley must petition the trial court to make the additional contact. Attached to the order was a court-approved form letter that Beasley's attorneys were to use to contact JALIC's insureds.

On December 20, 2007, JALIC filed this petition for the writ of mandamus. JALIC contemporaneously filed an emergency motion to stay compliance with the trial court's December 4, 2007, order, which this Court granted.

"Rule 26, Ala. R. Civ. P., governs the discovery of information in civil actions. When a dispute arises over discovery matters, the resolution of the dispute is left to the sound discretion of the trial court. `Discovery matters are within the trial court's sound discretion, and its ruling on those matters will not be reversed absent a showing of abuse of discretion and substantial harm to the appellant.' Wolff v. Colonial Bank, 612 So.2d 1146, 1146 (Ala.1992) (citations omitted); see also Ex parte Hicks, 727 So.2d 23, 33 (Ala.1998) (Maddox, J., dissenting).

"Petitioning for the writ of mandamus is the proper method for determining whether a trial judge has abused his discretion in limiting discovery. Ex parte Allstate Ins. Co., 401 So.2d 749, 751 (Ala.1981). The writ of mandamus is a drastic and extraordinary remedy 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 Horton, 711 So.2d 979, 983 (Ala.1998) (citing Ex parte United Serv. Stations, Inc., 628 So.2d 501 (Ala. 1993)); Ex parte Alfab, Inc., 586 So.2d 889, 891 (Ala.1991) (citing Martin v. Loeb & Co., 349 So.2d 9 (Ala.1977)). Moreover, this Court will not issue a writ of mandamus compelling a trial judge to alter a discovery order unless this Court `determines, based on all the facts that were before the trial court, that the trial court clearly abused its discretion.' Ex parte Horton, 711 So.2d at 983. Moreover, `"[t]he right sought to be enforced by mandamus must be clear and certain with no reasonable basis for controversy about the right to relief," and "[t]he writ will not issue where the right in question is doubtful."' Ex parte Bozeman, 420 So.2d 89, 91 (Ala.1982) (quoting Ex parte Dorsey Trailers, Inc., 397 So.2d 98, 102 (Ala. 1981))."

Ex parte Henry, 770 So.2d 76, 79-80 (Ala. 2000). Furthermore, "mandamus will issue to reverse a trial court's ruling on a discovery issue only (1) where there is a showing that the trial court clearly exceeded its discretion, and (2) where the aggrieved party does not have an adequate remedy by ordinary appeal." Ex parte Ocwen Federal Bank, FSB, 872 So.2d 810, 813 (Ala.2003). "Moreover, we are also aware of the fundamental disinclination of the appellate courts to intrude into the trial court's province in conducting the litigation process." Ex parte Cooper Tire & Rubber Co., 987 So.2d 1090, 1101 (Ala. 2007). As has been previously noted, this Court is bound to "`[l]et the trial court be the trial court, without microscopic manipulation of its discretion by this Court.'" Ex parte Henry, 770 So.2d at 81 (quoting Ex parte Howell, 704 So.2d 479, 483 (Ala. 1997) (Houston, J., dissenting)).

JALIC asserts that it has a legal right to a writ of mandamus because, it argues, the trial court's December 4, 2007,...