Ex parte LaCoste

• Decision Date: 13 November 1998
• Docket Number: No. 1970957.,1970957.
• Parties: Ex parte Virginia N. LaCOSTE. (In re Virginia N. LaCoste v. SCI Alabama Funeral Services, Inc., d/b/a Roche-Belmany-Herrington Funeral Homes)
• Court: Alabama Supreme Court

733 So.2d 889

Ex parte Virginia N. LaCOSTE.

(In re Virginia N. LaCoste v. SCI Alabama Funeral Services, Inc., d/b/a Roche-Belmany-Herrington Funeral Homes)

No. 1970957.

Supreme Court of Alabama.

November 13, 1998.

Rehearing Denied February 26, 1999.

Peter F. Burns of Burns, Cunningham & Mackey, P.C., Mobile; and John F. Whitaker of Sadler, Sullivan, Sharp & Van Tassel, P.C., Birmingham, for petitioner.

Edward A. Dean of Armbrecht, Jackson, DeMouy, Crowe, Holmes & Reeves, Mobile; and Andrew P. Campbell and David M. Loper of Campbell, Waller & McCallum, L.L.C., Birmingham, for respondent.

HOUSTON, Justice.

In 1978, the United States District Court for the Northern District of Alabama entered a final judgment pursuant to a settlement agreement in Battle v. Liberty National Life Ins. Co. (CV-70-H-752-S), a consolidation of three class actions (Battle v. Liberty National Life Ins. Co.; Campbell v. Liberty National Life Ins. Co.; and Holman v. Liberty National Life Ins. Co.) alleging federal anti-trust violations and fraud with respect to the issuance, sale, and performance of certain burial and/or vault insurance policies by Liberty National Life Insurance Company ("Liberty National") and Brown-Service Funeral Home Company, Inc. ("Brown-Service"). The settlement was the result of seven years of litigation in both federal and state courts.

The district court in Battle made permanent two plaintiff classes: 1) all owners of Alabama funeral homes from June 29, 1954, until September 22, 1977, certified as a class under Rule 23(b)(3), Fed.R.Civ.P.; and 2) all insureds with burial or vault policies, certified as a class under Rule 23(b)(2). The only defendants in Battle were Liberty National and Brown-Service. The final judgment established the rights and obligations of approximately 300 owners of some 400 funeral homes in Alabama and the rights under the burial/vault policies of approximately one million policyholders. The district court expressly retained jurisdiction over the case, stating in the judgment:

"This Court retains jurisdiction of the subject matter and all parties hereto for the purpose of enabling any of the parties to this action to apply to the Court at any time for further orders and directions as may be necessary or appropriate for the construction or implementation of the terms of this Final Judgment."

Under this retained jurisdiction, the district court has been asked from time to time to settle disputes concerning the application of its judgment to particular burial policies. For a good explanation of the ongoing Battle litigation, see Battle v. Liberty National Life Ins. Co., 660 F.Supp. 1449 (N.D.Ala.1987); Battle v. Liberty National Life Ins. Co., 877 F.2d 877 (11th Cir.1989); Battle v. Liberty National Life Ins. Co., 770 F.Supp. 1499 (N.D.Ala.1991); and Battle v. Liberty National Life Ins. Co., 974 F.2d 1279 (11th Cir.1992).

By an order dated March 3, 1987, the district court, in Obering v. Ridout's-Brown Service, Inc., CV-86-H-2372-S, explained that it had not intended in Battle to retain jurisdiction over all individual breach-of-contract and fraud actions filed against funeral-service providers and relating to Liberty National policies:

"This cause came before the court at a regularly scheduled motion docket on February 13, 1987. Before the court [was] ... the February 10, 1987, motion of the plaintiffs for remand. This cause was originally filed in the Tenth Judicial Circuit Court, Jefferson County, Alabama, on November 24, 1986. It was removed by the defendant to this court on December 31, 1986.... The defendants removed the cause from state court on the basis of the retained jurisdiction this court set out in Battle v. Liberty National Life Insurance Co., CV-70-H-752-S, January 6, 1978. That jurisdiction was retained so that this court could issue further orders and directions as may be necessary or appropriate for the construction [or] implementation of the terms of that final judgment. Plaintiffs here were members of the policyholder class under Battle and brought suit against defendants over events and incidents involving their burial insurance policy. However, after careful consideration by the court and oral and written argument by the parties, the court is convinced that the allegations set out in the plaintiffs' complaint do not jeopardize or interfere with this court's order in Battle. The plaintiffs' complaint does not affect the obligations of the insurance carrier under the policy construction reached in Battle, or the obligations of the carrier or Ridout's-Brown [Service] as the funeral service provider under that policy construction. The plaintiffs' complaint sets out only allegations of fraud, misrepresentation, and breach of contract against the service provider; in fact, the carrier is not a defendant to this suit; and thus they do not seek to alter the rights of the policyholder or the obligations of the policy carrier or the service provider under the Battle decree. There is thus no reason for this court to assume jurisdiction over this cause in order to protect or further clarify its previous order in Battle. Should those rights and obligations under Battle be later threatened, the situation would be different."

In 1990 the district court issued a similar order in Johnson v. Memory Chapel Funeral Homes, Inc., CV-89-H-2117-W:

"This cause came on for consideration at a motion docket held on February 2, 1990, in Birmingham, Alabama, at which time the court considered the January 4, 1990, motion of plaintiffs to remand. The action was commenced in the Circuit Court of Tuscaloosa County and is an action over which this court has no jurisdiction except to the extent that one can successfully demonstrate the appropriateness of jurisdiction under either 28 U.S.C. § 1651(a) or 28 U.S.C. § 2283. The complaint in essence charges that defendant funeral home committed fraud and misrepresentation with regard to the handling of a particular funeral of a decedent who owned a burial policy issued by Liberty National Life Insurance Company.

"Defendant and attorneys for interested persons, pointing to the fact that this is not the first action of this nature, argue that this court must accept jurisdiction in order to effectuate its earlier judgment and implement the retained jurisdiction in Battle v. Liberty National Life Insurance Co., CV-70-H-752-S. The court does not agree. They also request more time to present to the court the impact of this type action on the willingness of funeral directors to continue servicing the burial policies. The request will not be granted since impact on the authorized funeral directors is of little significance where, as here, the state court suit does not affect the obligations of the insurance carrier under the policy construction determined in Battle or the obligations of the funeral service provider under that policy construction. One or two or six or twelve, or perhaps even more individual lawsuits in a short period of time against one or more funeral homes for common law fraud do not so interfere with the court's earlier order or its continuing supervision of the case to justify the extraordinary jurisdiction authorized under 28 U.S.C. § 1651(a) or 2283. The interference, if any, of such few fraud claims with that judgment does not even arguably approach the interference which was embraced in subsequent proceedings in Battle to which defendant draws an analogy. See Battle v. Liberty National Life Insurance Co., 660 F.Supp. 1449 (N.D.Ala.1987), aff'd, 877 F.2d 877 (11th Cir.1989). Should one or more authorized funeral directors through timidity or sound business judgment elect not to renew their arrangement with Liberty National for providing policy funerals, Liberty National will have to make other arrangements to discharge its obligations under the burial policy in the area affected. The consent decree has been in effect for over ten years, during which time authorized funeral directors apparently have been able fairly to reveal and satisfactorily to explain to their customers the services and merchandise available under the policy funeral and the effect the choices available to them will have with regard to the loss of a policy funeral. The few fraud actions (less than six) filed during that time frame attests the fact that an authorized funeral director should be able to conduct his business without undue exposure to fraud suits. Should the suits proliferate, the court at that time can reconsider the issues now before it."

On February 25, 1994, Virginia N. LaCoste, the petitioner in this proceeding, filed an action in the Mobile Circuit Court against SCI Alabama Funeral Services, Inc., d/b/a Roche-Belmany-Herrington Funeral Homes ("SCI"), seeking damages based on allegations of fraud and breach of contract. LaCoste's claims arose out of her husband's funeral and centered on the same kind of burial policy that was at issue in Battle.

Twenty months later, on October 25, 1995, Carol Williams and Annie Merle Williams, individually and on behalf of others similarly situated, filed an action in the Mobile Circuit Court against SCI and others, seeking damages based on allegations of breach of contract and fraud. These allegations were essentially the same as those that had been previously made by LaCoste. A little over two months later, on January 8, 1996, Mary Sue Thrash and James E. Thrash filed a substantially similar action in the Mobile Circuit Court against SCI and others. The record indicates that the Williams and Thrash actions were later certified as breach-of-contract class actions only, with no claims for punitive damages or mental distress. The defendants in Williams and Thrash were successful in removing both cases to the United States District Court for the Southern District of Alabama. On July 23, 1997, that court denied the plaintiffs' motions to remand the cases to the state court and, instead, granted the defendants' ...