Ex parte Lewis
| Decision Date | 02 November 1990 |
| Citation | 571 So.2d 1069 |
| Parties | Ex parte Lorraine S. LEWIS, et al. (Re GOVERNMENT EMPLOYEES INSURANCE COMPANY v. Dale L. STILES, et al.). 89-1181. |
| Court | Alabama Supreme Court |
This Court's opinion of September 28, 1990, is withdrawn and the following is substituted therefor:
The factual background and the proceedings in the trial court out of which this petition for writ of mandamus arose are set out in Justice Maddox's dissenting opinion. Although we agree with Justice Maddox that the trial court erred in dismissing the claim of Blue Cross and Blue Shield of Alabama and erred in its determination that 29 U.S.C. § 1132(a)(3)(B)(ii) places in the federal district court exclusive jurisdiction to determine that claim, the judgment of dismissal was not challenged in this Court. Despite its representations to the contrary, Blue Cross did not file a counter-petition for writ of mandamus in this Court. Therefore, the only issue before us is whether the petitioners are entitled to the relief prayed for, viz., an order directing the trial court to release the withheld funds. We hold that they are, and we issue the writ of mandamus.
The petition for writ of mandamus is granted because the order dismissing Blue Cross's claim was not challenged. That claim is now pending in the United States District Court for the Northern District of Alabama for appropriate disposition.
ORIGINAL OPINION WITHDRAWN; OPINION SUBSTITUTED; APPLICATION OVERRULED; WRIT GRANTED.
The majority has granted the writ of mandamus in this case and has ordered the trial judge to disburse funds deposited in an interpleader action, even though there remains in the case the question of whether the trial judge was correct in dismissing the health insurance carrier's subrogation claim on the ground that the federal courts had exclusive jurisdiction of the subrogation claim because of the determination that the welfare benefit plan was one regulated by the Employees Retirement Income Security Act of 1974 ("ERISA").
The majority, although agreeing with me "that the trial court erred in dismissing the claim of Blue Cross," and in determining "that 29 U.S.C. § 1132(a)(3)(B)(ii) places in the federal district court exclusive jurisdiction to determine that claim," 571 So.2d at 1070, nevertheless orders the funds disbursed to the petitioners on the basis that "the judgment of dismissal was not challenged in this Court." 571 So.2d at 1070.
I think that the majority errs in ordering that the interpleaded funds be disbursed, based on these reasons:
(1) "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." Jefferson County Comm'n v. Fraternal Order of Police, Lodge 64, 543 So.2d 198 (Ala.1989).
(2) The rights of various claimants to share in interpleaded funds should be determined in one action, and the refusal of a court to pay out such funds until the rights of the affected parties have been determined does not constitute a prejudgment attachment.
(3) The federal district court does not have exclusive jurisdiction to determine the subrogation rights of an insurer just because those rights are contained in an employees' welfare benefit plan that is regulated under the provisions of ERISA.
(4) The order of the trial court dismissing a subrogation claim by an insurer in an action of interpleader is not a final appealable order, unless it has been certified as provided in Rule 54(b), Ala.R.Civ.P.
Specifically presented are these two questions: (1) Does a state trial judge have jurisdiction to order a portion of the interpleaded funds retained until the subrogation rights can be settled, and (2) Does the federal district court have exclusive jurisdiction of the health insurance carrier's claim because of specific provisions of ERISA?
The underlying interpleader proceeding was filed in the Circuit Court of Jefferson County by Government Employees Insurance Company (GEICO) to settle multiple claims against its insured based on injuries and damage arising out of an automobile accident. 1 GEICO joined as defendants to the interpleader action all parties who were damaged as a result of the accident, and also joined Blue Cross, the health insurance carrier that had paid hospital and medical bills for the Lewises. The petitioners here had previously made claims against GEICO's insured, those claims being based on the bodily injuries they suffered as a result of the automobile accident. 2
Blue Cross's claim to the interpleaded funds, asserted in its answer to the interpleader complaint, and its answer to the Lewises's cross-claim, was based on its health benefits contract with the Lewises. Blue Cross claims that it was, and is, obligated to provide medical benefits to the Lewises and, in turn, was, and is, entitled to be subrogated to the Lewises' rights of action against those who caused the injuries for which the benefits were provided, which, in this case, would be the Lewises' rights against GEICO's insured. In addition to this contractual right of subrogation, Blue Cross's claim was based on its contractual right of first-money reimbursement from the Lewises, from any money recovered by the Lewises from those who caused the injury or condition for which Blue Cross provided medical benefits.
The terms of the Lewises' health benefits plan, under which Blue Cross claims it has subrogation/reimbursement rights, reads as follows:
GEICO interpleaded $300,000, the policy limit of its liability for this accident, to the clerk of the court. The court divided the hearing on the interpleader action into two parts: (1) the allocation of funds between the parties who suffered bodily injuries in the accident and J. William Lewis, and (2) the division of the funds allocated to the Lewises in the first part of the hearing between the Lewises and Blue Cross. 3
After hearing evidence in the first phase of the hearing and finding that the settlement proposed by GEICO, the Lewises, and the other bodily-injured parties was in the best interest of the minors and the other parties, the Court allocated the interpleaded funds as follows:
Lorraine Lewis $199,000.00 plus interest
Deirdre Lewis 20,000.00 plus interest
J. William Lewis 1,000.00 plus interest
Driver of 2d Car 60,000.00 plus interest
Passenger in 2d Car 20,000.00 plus interest
-----------
$300,000.00 plus interest
Because none of the parties to the interpleader action disputed the amount of the funds allocated to the minors, who were the driver and passenger in the second car, the court made these allocations final and ordered the funds due them released. Because GEICO had paid its policy limits into the court, the court released GEICO's insured from any future liability to the parties named in the interpleader action for injuries resulting from the automobile accident.
In the second part of the hearing, the court considered the division between Blue Cross and the Lewises of the funds allocated to the Lewises. The Lewises subsequently filed a motion with the court in which they asked the court to dismiss Blue Cross's subrogation claim on the grounds that the court lacked jurisdiction over the claim under 29 U.S.C. §§ 1132(a)(3) and 1132(e)(1) (Sections 502(a)(3) and 502(e)(1) of ERISA). 4
The court initially did not make a definitive ruling on the question of whether it had jurisdiction to settle the claims of Blue Cross and the Lewises to the remaining interpleaded funds, but rejected the argument of the Lewises that Blue Cross had failed to file a claim for a portion of the funds, and found that Blue Cross had asserted a claim for the funds in its answers to the complaint in the interpleader action and to the Lewises' cross-claim.
The Lewises then asserted that if Blue Cross had made a claim for the funds, its claim would be a matter exclusively within the jurisdiction of the federal courts under § 502(a)(3) of ERISA.
After considering the arguments of Blue Cross and the Lewises on the motion to dismiss, the court entered the following order:
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