Ex Parte Ruggs

• Court: Alabama Supreme Court
• Writing for the Court: Cobb
• Citation: Ex Parte Ruggs, 10 So.3d 7 (Ala. 2008)
• Decision Date: 22 August 2008
• Docket Number: 1061379.
• Parties: Ex parte Nacola RUGGS (In re: MasterBrand Cabinets, Inc., f/k/a NHB Industries, Inc. v. Nacola Ruggs).

10 So.3d 7

Ex parte Nacola RUGGS (In re: MasterBrand Cabinets, Inc., f/k/a NHB Industries, Inc. v. Nacola Ruggs).

1061379.

Supreme Court of Alabama.

August 22, 2008.

Donald W. Lang, Sylacauga, for petitioner.

Mark J. Romaniuk and Kelley Bertoux Creveling of Baker & Daniels, LLP, Indianapolis, Indiana; and Joseph T. Carpenter of Carpenter, Ingram & Mosholder, LLP, Montgomery, for respondent.

COBB, Chief Justice.

Nacola Ruggs petitioned this Court for the writ of certiorari to review the judgment of the Court of Civil Appeals reversing the decision of the trial court, which had found MasterBrand Cabinets, Inc., f/k/a NHB Industries, Inc. ("MasterBrand"), liable, pursuant to § 25-5-8(e), Ala.Code 1975, for two times the amount of compensation that would otherwise have been payable. We granted certiorari review to determine the question of first impression: Whether the double-compensation penalty provided in § 25-5-8(e), Ala.Code 1975, is subject to the time limitations set forth in Rule 59, Ala. R. Civ. P. Because we find that a claim asserted under § 25-5-8(e) is independent of the claim for workers' compensation benefits and that, therefore, a motion seeking the double-compensation penalty is not a Rule 59 motion, we reverse and remand.

Facts and Procedural History

Ruggs sustained an on-the-job injury while she was employed by MasterBrand. The details of the injury and Ruggs's subsequent treatment are set forth in the Court of Civil Appeals' opinion. MasterBrand Cabinets, Inc. v. Ruggs, 891 So.2d 869 (Ala.Civ.App.2004) ("MasterBrand I"). Although this fact is not revealed in the opinion in MasterBrand I, Ruggs was paid temporary-total-disability benefits for approximately a year by Gallagher Bassett Services, Inc., a workers' compensation third-party administrator. A dispute arose over the payment of Ruggs's benefits, and Ruggs sued MasterBrand, seeking workers' compensation benefits. Following an ore tenus proceeding, the trial court entered an order finding Ruggs 100% permanently and totally disabled. MasterBrand appealed the judgment to the Court of Civil Appeals, which affirmed the judgment in part, reversed it insofar as it found that Ruggs suffered a 100% total disability, and remanded the case to the trial court. MasterBrand I. On remand, the trial court again found Ruggs to be 100% permanently and totally disabled. MasterBrand again appealed, and the Court of Civil Appeals affirmed the trial court's judgment, without an opinion. MasterBrand Cabinets v. Ruggs, 945 So.2d 496 (Ala.Civ.App.2005) (table) ("MasterBrand II"). The Court of Civil Appeals issued its certificate of judgment on September 16, 2005.

On October 20, 2005, Ruggs's counsel wrote MasterBrand demanding payment of the lump sum due under the trial court's judgment and requesting that MasterBrand designate an authorized treating physician for Ruggs; MasterBrand failed to respond to Ruggs's letter.

Clarence Haynes, the circuit clerk for Talladega County, mailed a letter to MasterBrand's counsel of record inquiring as to whether to pay Ruggs the supersedeas bond that had been deposited with the circuit clerk pending appeal. He received no response. Haynes also telephoned MasterBrand's local counsel regarding the supersedeas bond. According to Haynes, local counsel stated he would contact Haynes within a week regarding the supersedeas bond, but he did not do so. Haynes then declared the bond forfeited and paid the proceeds of the bond and the accrued interest to Ruggs. The bond proceeds and accrued interest, however, failed to satisfy the judgment. Ruggs then attempted to garnish the balance due on the judgment from MasterBrand's bank accounts, but the garnishment document was returned "not indebted."

On November 29, 2005, Ruggs filed with the trial court a pleading styled "Motion to Enforce Judgment of Court and Petition for Rule Nisi." In her motion, Ruggs sought to have the trial court enforce its judgment, to hold MasterBrand in contempt for failing to comply with the trial court's judgment, and to assess a double penalty on MasterBrand pursuant to § 25-5-8(e), Ala.Code 1975, for failure to be insured or self-insured. The trial court set a hearing on Ruggs's motion for December 14, 2005. In its six-line order setting the hearing date, the trial court ordered MasterBrand to have "its duly authorized representative that is familiar with [MasterBrand's] workers' compensation insurance, if any," present at the hearing. MasterBrand, however, failed to have such a representative at the hearing. Instead, Joseph Scott Ammons, general counsel for the workers' compensation division of the Alabama Department of Industrial Relations ("DIR"), as a witness for Ruggs, testified at the hearing that DIR's records indicated that MasterBrand was neither insured nor enjoying self-insurer status at the time Ruggs sustained her on-the-job injury.¹ On April 4, 2006, the trial court entered an order finding that MasterBrand was not insured and did not hold self-insurer status at the time of Ruggs's injury and thus that Ruggs was entitled to double compensation under § 25-5-8(e), Ala.Code 1975. The trial court also found that although MasterBrand had failed to comply with the trial court's order on more than one occasion, its noncompliance was due to negligence instead of willful disregard and, thus, it did not find MasterBrand in contempt of court. On May 4, 2006, MasterBrand moved the trial court to vacate or amend its judgment pursuant to Rule 59(e), Ala. R. Civ. P., and asserted for the first time that Ruggs's motion to enforce the judgment and her petition for rule nisi was actually a Rule 59, Ala. R. Civ. P., motion to alter or amend the judgment; MasterBrand's motion was denied on May 11, 2006.

MasterBrand appealed to the Court of Civil Appeals. On appeal, MasterBrand again argued that the trial court lacked jurisdiction to award double compensation because, it argued, Ruggs's motion, which it asserted was a Rule 59(e), Ala. R. Civ. P., motion, was untimely filed. The Court of Civil Appeals agreed, concluding that the "motion was in substance a Rule 59(e), Ala. R. Civ. P., motion seeking to amend the May 24, 2004, final judgment," and that the trial court lacked jurisdiction to entertain the motion, and it reversed the April 4, 2006, judgment of the trial court.² MasterBrand Cabinets, Inc. v. Ruggs, 10 So.3d 1 (Ala.Civ.App.2007) ("MasterBrand III"). Ruggs petitioned this Court for the writ of certiorari. We granted certiorari review in this case to address whether Ruggs's motion seeking to enforce the judgment and to assess double compensation under § 25-5-8(e) is an untimely Rule 59(e), Ala. R. Civ. P., motion so as to preclude her from seeking relief under § 25-5-8(e), even though she learned of MasterBrand's noninsured status more than 30 days after the entry of judgment.

Analysis

This is not the first time our appellate courts have addressed § 25-5-8(e). Previously the Court of Civil Appeals has issued opinions in which the double-compensation penalty assessed by § 25-5-8(e) was imposed at the time judgment was entered. See, e.g., CIGNA Ins. Co. v Ward, 658 So.2d 504 (Ala.Civ.App.1994); Highfield's Alignment Serv. v. Scott, 624 So.2d 630 (Ala.Civ.App.1993); and Hester v. Ridings, 388 So.2d 1218 (Ala.Civ.App. 1980). The Court of Civil Appeals has also issued opinions in which the issue of the double-compensatory penalty has been raised during the pendency of a timely filed Rule 59(e), Ala. R. Civ. P., motion to alter, amend, or vacate a judgment. See, e.g., Christopher v. Hunter, 674 So.2d 564 (Ala.Civ.App.1995), and Hastings v. Hancock, 576 So.2d 666 (Ala.Civ.App.1991). However, the instant case raises for the first time the issue whether a claimant may assert a claim based on the double-penalty provision in § 25-5-8(e) more than 30 days after judgment has been entered.

It is well settled that the double-compensation penalty provision in § 25-5-8(e) is mandatory. See Hastings, 576 So.2d at 667 ("This court has previously determined that the double award penalty provision of § 25-5-8(e), [Ala.] Code 1975, is mandatory."); Rush v. Heflin, 411 So.2d 1295, 1296 (Ala.Civ.App.1982) ("[T]here is no legal right to relief from a penalty which is required to be imposed by law."); and Harris v. Vaughan, 373 So.2d 1111, 1112-13 (Ala.Civ.App.1979) ("In view of the mandatory language of [§ 25-5-8(e)] ... and because of the requirement that the remedial and beneficent purposes of the Workmen's Compensation Act be recognized through liberal construction of its provisions ..., we hold that plaintiff is entitled to the award of double the amount to which she would have otherwise been entitled."). As the Court of Civil Appeals has previously observed regarding § 25-5-8(e):

"The [double-compensation] penalty was designed to promote compliance with our workmen's compensation law just as other penalties are designed to promote compliance with other laws. Compensation laws were enacted to make more certain the relief available to the employee who comes under its influence. Alabama By-Products Co. v. Landgraff, 32 Ala.App. 343, 27 So.2d 209 (1946). These laws are a form of regulation by the state. It is within the limits of permissible regulation, in aid of a system of compulsory compensation, to require the employer either to carry workmen's compensation insurance or furnish satisfactory proof of his financial ability to pay compensation when due. Ward & Gow v. Krinsky, 259 U.S. 503, 42 S.Ct. 529, 66 L.Ed. 1033 (1922). The penalty provided in § 25-5-8(e) is permissible in that it promotes compliance with a valid legislative objective."

Hester, 388 So.2d at 1220.

As a member of this Court noted during oral argument in this case, it appears that the Court of Civil Appeals attempted to "pigeonhole" Ruggs's pleading as an authorized pleading under the Alabama Rules of Civil Procedure and determined that it fit best under Rule 59(e), Ala. R. Civ. P. Before...