Hanner v. Metro Bank and Protect. Life Ins.

• Citation: 952 So.2d 1056
• Decision Date: 23 June 2006
• Docket Number: 1041966.
• Parties: Pamela HANNER, as guardian of Stephen D. Hanner v. METRO BANK AND PROTECTIVE LIFE INSURANCE COMPANY.
• Court: Supreme Court of Alabama

952 So.2d 1056

Pamela HANNER, as guardian of Stephen D. Hanner v. METRO BANK AND PROTECTIVE LIFE INSURANCE COMPANY.

1041966.

Supreme Court of Alabama.

June 23, 2006.

Opinion on Return to Remand September 15, 2006.

Jeffrey W. Brumlow and Chesley P. Payne of Massey, Stotser & Nichols, P.C., Birmingham, for appellant.

Hugh E. Holladay of Holladay, P.C., Pell City, for appellee Metro Bank.

Marcie P. Braswell, Thomas J. Butler, and Robert D. Hancock of Maynard, Cooper & Gale, P.C., Birmingham, for appellee Protective Life Insurance Company.

LYONS, Justice.

Pamela Hanner, as guardian of Stephen D. Hanner, appeals from a summary judgment in favor of Metro Bank and Protective Life Insurance Company. We remand the cause to the trial court because the judgment appealed from is not a final judgment.

I.

In July 1994, Bret Hanner and Pamela Hanner were divorced. At the time of the divorce, Bret and Pamela had a minor son, Stephen. An agreement between Bret and Pamela, incorporated into the divorce judgment, provided, in part:

"That [Pamela] and [Bret] will each maintain the separate life insurance policies on each of their lives presently in effect, and shall name the minor child, [Stephen], as the irrevocable beneficiary of each of those life insurance policies."

At the time of the divorce, Bret had a $75,000 life insurance policy with State Farm. The parties do not reveal if Stephen was ever made the beneficiary of that policy. According to Pamela's deposition testimony, sometime before January 1997, Bret stopped paying premiums on the State Farm policy and allowed it to lapse. Also according to Pamela, sometime later in 1997, the St. Clair Circuit Court ordered Bret to obtain another life insurance policy and to name Stephen as the irrevocable beneficiary of that policy. Bret subsequently purchased a life insurance policy from Primerica, and Stephen was listed as the beneficiary. Apparently, Stephen was not made an irrevocable beneficiary of that policy, because Pamela testified in deposition that Bret later changed the beneficiary of the Primerica policy from Stephen to his new wife, Ann.

To secure a $330,000 loan from Metro Bank, Bret assigned the Primerica insurance policy to Metro Bank. Subsequently, however, Bret allowed the Primerica policy to lapse for nonpayment of premiums.

In March 1999, Bret told a Metro Bank insurance agent, who sold insurance underwritten by Protective Life, that he needed to purchase a life insurance policy naming Stephen as beneficiary in order to comply with the terms of the divorce judgment. According to the Metro Bank insurance agent, although Bret stated that he needed the policy to comply with the terms of the divorce judgment, he did not elaborate on what those terms were. In June 1999, Protective Life issued a $100,000 life insurance policy to Bret, naming Stephen as beneficiary of $75,000 and naming Ann as beneficiary of the remaining $25,000. Bret did not request that Protective Life name Stephen as an irrevocable beneficiary of the policy.

In or shortly before January 2002, Metro Bank learned that Bret's Primerica policy, which Bret had assigned to Metro Bank to secure its $330,000 loan to Bret and Ann, had been canceled for nonpayment. On January 18, 2002, Bret assigned to Metro Bank the Protective Life policy as new collateral for the loan.

Bret died on August 16, 2002. Pamela claims that, on August 20, 2002, she contacted Protective Life's claims department in order to obtain instructions on filing a claim on behalf of Stephen for his share of the proceeds of the Protective Life policy. She also claims that, several days later, a representative of Metro Bank contacted her and requested that she fill out some release forms so that, pursuant to the assignment of the policy by Bret, Metro Bank could collect the proceeds. Pamela refused. A few days later, Protective Life sent Pamela a letter informing her that the outstanding balance of the loan secured by the insurance policy was greater than the face value of the policy and that all of the proceeds of Bret's life insurance policy would be paid to Metro Bank. On September 9, 2002, Protective Life paid the benefits under the policy to Metro Bank. In a letter sent by Pamela's attorney to Protective Life, Pamela informed Protective Life of the divorce judgment requiring Bret to maintain a life insurance policy naming Stephen as irrevocable beneficiary. Although the letter is dated September 6, 2002, which was three days before Protective Life paid the proceeds of the policy to Metro Bank, the letter is stamped "received" by Protective Life on September 12, 2002, three days after it had paid the policy proceeds to Metro Bank.

In December 2002, Protective Life filed a declaratory-judgment action in the St. Clair Circuit Court, seeking a declaration of the proper owner of the proceeds of the insurance policy. Metro Bank and Pamela, as Stephen's guardian, were named as defendants in Protective Life's complaint. Pamela filed a counterclaim against Protective Life, asserting claims of breach of contract, bad faith, conversion, and negligence. She also filed a cross-claim against Metro Bank, alleging unjust enrichment and conversion.

Pamela, Metro Bank, and Protective Life all filed motions for a summary judgment. On August 11, 2005, the trial court entered an order granting Metro Bank's and Protective Life's motions and denying Pamela's motion, stating: "Metro Bank is the rightful recipient of the [life insurance] proceeds ...." Pamela appealed.

II.

A.

In addition to her counterclaim against Protective Life and her cross-claim against Metro Bank, Pamela filed a separate action against Bret's estate and against Bret's widow, Ann. That action was consolidated with the declaratory-judgment action from which Pamela has appealed. However, the record does not indicate that a final judgment has been entered in Pamela's action against Ann and the estate.

An appeal will not lie from a nonfinal judgment. Robinson v. Computer Servicenters, Inc., 360 So.2d 299, 302 (Ala. 1978). "A ruling that disposes of fewer than all claims or relates to fewer than all parties in an action is generally not final as to any of the parties or any of the claims. See Rule 54(b), Ala. R. Civ. P." Wilson v. Wilson, 736 So.2d 633, 634 (Ala.Civ.App. 1999). When an action involves multiple claims or parties, Rule 54(b), Ala. R. Civ. P., gives the trial court the discretion to "direct the entry of a final judgment as to one or more but fewer than all of the claims or parties." If a trial court certifies a judgment as final pursuant to Rule 54(b), an appeal will generally lie from that judgment.

According to Wright and Miller:

"Although federal courts usually have said that consolidated actions do not lose their separate identity, some courts have reasoned persuasively that they should be treated as a single action for purposes of review by way of Rule 54(b), and that a judgment in the consolidated case that does not dispose of all claims and all parties is appealable only if certified as that rule requires."

9 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2386 (2d ed.1995) (footnote omitted). The United States Court of Appeals for the Ninth Circuit has said:

"In our view, the best approach is to permit the appeal only when there is a final judgment that resolves all of the consolidated actions unless a 54(b) certification is entered by the district court. This leaves the discretion with the court which is best able to evaluate the [e]ffect of an interim appeal on the parties and on the expeditious resolution of the entire action."

Huene v. United States, 743 F.2d 703, 705 (9th Cir.1984). See, also, Trinity Broad. Corp. v. Eller, 827 F.2d 673, 675 (10th Cir.1987) ("To obtain review of one part of a consolidated action, appellant must obtain certification under Fed.R.Civ.P. 54(b)."); and Spraytex, Inc. v. DJS&T, 96 F.3d 1377, 1382 (Fed.Cir.1996) ("We now extend this approach to join the Ninth and Tenth Circuits in adopting the rule that, absent Rule 54(b) certification, there may be no appeal of a judgment disposing of fewer than all aspects of a consolidated case."). We find persuasive the holdings of these decisions interpreting the Federal Rules of Civil Procedure, on which our own Rules of Civil Procedure are based. Accordingly, we hold that a trial court must certify a judgment as final pursuant to Rule 54(b), Ala. R. Civ. P., before a judgment on fewer than all the claims in a consolidated action can be appealed.

B.

"[I]f it is clear and obvious from the language used by the trial court in its order that the court intended to enter a final order pursuant to Rule 54(b), then we will treat the order as a final judgment ...." Schneider Nat'l Carriers, Inc. v. Tinney, 776 So.2d 753, 755 (Ala.2000), summarizing the holding in Sho-Me Motor Lodges, Inc. v. Jehle-Slauson Constr. Co., 466 So.2d 83, 87 (Ala.1985). In Sho-Me Motor Lodges, the trial court's order clearly indicated that the court intended to enter an order pursuant to Rule 54(b) because the order, clearly quoting Rule 54(b), stated: "`The Court further finds there is no just reason for delay in the entry of said final judgment.'" 466 So.2d at 87. And in Schneider National Carriers, Inc., we recognized the existence of a Rule 54(b) certification based on the fact that the trial court specifically cited Rule 54(b).

In the instant case, the trial court's summary-judgment order states that it "resolves all controversies pending in this case with prejudice and is final in accordance with the Alabama Rules of Civil Procedure." However, the order does not mention Rule 54(b), nor does it quote from that rule, other than to use the word "final." Lastly, the order fails to recognize that the action in which it was entered had previously been consolidated with another action. Accordingly, we cannot say that the trial court clearly intended to certify its order as a...