Ex parte Wal-Mart Stores, Inc.

• Decision Date: 25 September 1998
• Parties: Ex parte WAL-MART STORES, INC. (Re Wal-Mart Stores, Inc. v. Joseph P. Hines III).
• Court: Alabama Supreme Court

725 So.2d 279

Ex parte WAL-MART STORES, INC.

(Re Wal-Mart Stores, Inc. v. Joseph P. Hines III).

1970426.

Supreme Court of Alabama.

September 25, 1998.

Charles F. Carr, Glenn E. Ireland, and Sarah J. Carlisle of Carr, Allison, Pugh, Oliver & Sisson, P.C., Birmingham, for petitioner.

Debra H. Coble and Frank V. Potts of Potts & Young, L.L.P., Florence, for respondent.

SHORES, Justice.

We granted certiorari review to consider the opinion of the Court of Civil Appeals, which held that the trial court had acted within its discretion in ordering that a judgment approving a workers' compensation settlement agreement between Wal-Mart Stores, Inc., and Joseph P. Hines III be set aside under Rule 60(b)(6), Ala. R. Civ. P., to the extent the judgment barred Hines from pursuing a pending claim seeking damages for an alleged retaliatory discharge. See Wal-Mart Stores, Inc. v. Hines, 725 So.2d 275 (Ala.Civ.App.1997). We reverse and remand.

Hines injured his right shoulder on January 5, 1995, while working at a store operated by his employer, Wal-Mart. He filed a claim for workers' compensation benefits.¹ On June 30, 1995, Wal-Mart terminated Hines's employment. On August 30, 1995, Frank V. Potts, an attorney in Florence, sent a letter to Wal-Mart's corporate headquarters, in Bentonville, Arkansas, stating that Hines had contacted him and that he intended to file an action alleging that Wal-Mart had wrongfully terminated Hines in retaliation for his having filed a claim for workers' compensation benefits.² Brad L. Karren, an Arkansas attorney retained by Wal-Mart, sent a reply letter to Potts dated January 22, 1996, stating that it would be necessary for Karren to contact the Wal-Mart store involved to conduct a preliminary investigation and that Potts might expect a formal response by February 19, 1996. After receiving no further correspondence, Potts filed, on February 28, 1996, on Hines's behalf, an action against Wal-Mart, in the Lauderdale Circuit Court, alleging retaliatory discharge. That action was assigned No. CV-96-127.

Three weeks later, on March 21, 1996, Hines signed a workers' compensation settlement agreement with Wal-Mart ("the settlement"). Although he was represented by counsel in the pending retaliatory discharge action, Hines neither brought an attorney with him when he signed the settlement agreement nor consulted with his attorney before signing it. The settlement agreement provided in pertinent part:

"This settlement concludes all workmen's compensation and other claims which the Plaintiff has for any injuries or damages sustained while working with the Defendant through the date of this order.... When all payments hereunder have been made, the defendant/employer shall be, and hereby is released from all claims on account of said injury, under said Act or otherwise."

This language was drafted by Alabama lawyers that Wal-Mart had retained. In exchange for Hines's release, Wal-Mart agreed to pay Hines a lump sum of $8,500.

On the same day they executed the settlement agreement, the parties filed a joint petition in the Circuit Court of Lauderdale County to have the settlement approved. See § 25-5-56, Ala.Code 1975. That petition was given case No. CV-96-206, and it was assigned to Judge N. Michael Suttle. Judge Suttle explained to Hines, who appeared pro se, that he had the right to legal representation and that he, Judge Suttle, was not acting as his lawyer and was not giving him legal advice. Hines replied by stating that he understood that, but that he did not want a lawyer. Unaware that Hines had pending an action (CV-96-127) seeking damages for retaliatory discharge and that in that action he was represented by counsel, Judge Suttle entered a judgment on March 21, 1996, approving the settlement, and Hines acknowledged acceptance of the $8,500 settlement check.

On April 4, 1996, Hines's attorney in the retaliatory-discharge action (CV-96-127) sought a default judgment in that action, on the ground that Wal-Mart had not answered the complaint. On April 16, 1996, Judge Suttle entered a default judgment for Hines in case No. CV-96-127, the retaliatory-discharge action. On May 2, 1996, Wal-Mart moved to set aside that default judgment. Wal-Mart alleged that Hines's complaint had been addressed to Wal-Mart's general delivery address in Bentonville, Arkansas, rather than to its agent in Alabama designated to receive service of process, and that Hines's motion for a default judgment had been made on the 31st day after the certified mail receipt showed the arrival of the complaint at Wal-Mart's address in Bentonville. According to a supporting affidavit, the complaint arrived in the Wal-Mart mail room in Bentonville on March 4, 1996, but it was not received by Wal-Mart's legal department until April 9, 1996. On May 7, 1996, Judge Suttle set aside the default judgment, and Wal-Mart answered the complaint.

On September 26, 1996, Wal-Mart moved for a summary judgment on Hines's retaliatory discharge claim, asserting that it was precluded by the judgment approving the parties' settlement and release in case No. CV-96-206. On October 23, 1996, Hines filed a motion, styled as a motion pursuant to Rule 60(b)(6), Ala. R. Civ. P., seeking to set aside the judgment approving the settlement. In that motion, Hines claimed that when he signed the settlement he thought he was merely waiving his right to recover any future medical expenses and/or future vocational rehabilitation benefits resulting from his injury, not his right to recover for the alleged retaliatory discharge. Hines maintained that he was not told that the settlement could have such an effect, until Wal-Mart moved for a summary judgment in case No. CV-96-127. Hines also alleged that, when its lawyers negotiated the settlement with him, Wal-Mart knew that he had filed his retaliatory-discharge action and knew that he had retained counsel in that case; thus, he argued, "[Wal-Mart] can not state that the negotiated settlement included all claims, including the wrongful discharge claim, in that to include the wrongful discharge claim in the release would be a fraud upon the court because of [Wal-Mart's] prior knowledge of the lawsuit and representation." (Emphasis original.)

Also on October 23, 1996, Hines moved to consolidate the workers'-compensation-settlement case with the retaliatory-discharge case. Judge Suttle recused himself and assigned the case to Judge Larry Mack Smith on November 4, 1996. Judge Smith set a hearing on Hines's Rule 60(b) motion, his motion to consolidate, and Wal-Mart's motion for a summary judgment. On December 3, 1996, Judge Smith entered an order stating, in pertinent part:

"The court finds that at the time of the entry of the judgment in this cause [CV-96-206], there was pending in Lauderdale Circuit Court a case in which [Hines] had sued [Wal-Mart] for retaliatory discharge, being styled Joseph P. Hines, III, Plaintiff v. Wal-Mart Stores, Inc., Defendant, Civil Action No. CV-96-127. [Hines] was represented in CV-96-127 by Frank V. Potts. [Hines] had no attorney representing him in this case, CV-96-206. Neither [Hines] nor his attorney ... was ever told that the settlement of Case CV-96-206 also settled Case No. CV-96-127. Hon. N. Michael Suttle, who entered the order approving the consent settlement and release in Case CV-96-206, testified that he understood that the settlement embraced only the workmen's compensation benefits due [Hines] for his physical injuries, and that had he known that the settlement was to include the dismissal of another claim in which [Hines] was represented by counsel, he would not have approved the settlement, without at least conferring with the attorney.

"....

"The court further finds that the judgment rendered in this cause on March 21, 1996, by Hon. N. Michael Suttle does not accurately represent the agreement by and between [Hines] and [Wal-Mart] in that the settlement was to include only workmen's compensation benefits due [Hines] for his physical injuries sustained by him on January 5, 1995, whereas the Judgment entered arguably releases Plaintiff's claim for Retaliatory Discharge....

"The Court is of the opinion that the Plaintiff is entitled to relief from Judgment, pursuant to Rule 60(b)(6), and that the Judgment should be amended by deleting that portion thereof which in any way affects or could be construed to affect Plaintiff's Retaliatory Discharge Claim...."

Wal-Mart appealed. The Court of Civil Appeals affirmed the order setting aside the judgment approving the settlement. That court held that Judge Smith had not abused his discretion in granting relief pursuant to Rule 60(b)(6). Without addressing whether Hines's motion stated a proper ground for relief under Rule 60(b)(6) or whether the motion was timely filed, the Court of Civil Appeals reasoned that there was evidence supporting the finding that, when he signed the settlement agreement on March 21, 1996, Hines had not intended to release Wal-Mart from liability in his pending retaliatory-discharge action. Therefore, the Court of Civil Appeals held, it was equitable for Judge Smith to modify the settlement order "to reflect the true intention of the parties." 725 So.2d at 278.

In this Court, Wal-Mart argues that Hines's motion to set aside the judgment was based upon an allegation of mistake or inadvertence and that Hines was therefore, in reality, seeking relief under Rule 60(b)(1). Wal-Mart further contends that Hines's motion was, therefore, untimely and that it cannot be made timely by merely styling it as a Rule 60(b)(6) motion.

As a threshold matter, we note that the question whether the language of the approved settlement order would, if the order was not set aside, preclude Hines's retaliatory discharge action is not now before us. In setting aside the judgment, Judge Smith concluded that Hines's retaliatory-discharge claim was "arguably" released by the settlement.³ Thus, the trial court did not...