Miller v. Thompson

• Decision Date: 13 September 2002
• Citation: 844 So.2d 1229
• Parties: Michael MILLER v. Nancy W. THOMPSON.
• Court: Alabama Court of Civil Appeals

844 So.2d 1229

Michael MILLER v. Nancy W. THOMPSON.

2010153.

Court of Civil Appeals of Alabama.

September 13, 2002.

Michael Gillion and Scott W. Hunter of Michael Gillion, P.C., Mobile, for appellant.

Richard M. Crump of Crump & Davis, P.C., Mobile, for appellee Nancy W. Thompson.

Mark R. Ulmer and Andrew S. McDavid of Ulmer, Hillman & Ballard, P.C., Mobile, for State Farm Mutual Insurance Company.¹

CRAWLEY, Judge.

On January 27, 2000, Nancy W. Thompson and her husband John Michael Thompson sued Michael Miller, alleging that Miller had negligently or wantonly caused his vehicle to collide with the vehicle occupied by the Thompsons, thereby causing Mrs. Thompson to suffer personal injuries; Mr. Thompson's claim was a derivative claim alleging a loss of consortium. The Thompsons also sued State Farm Mutual Automobile Insurance Company, alleging that Miller was an underinsured motorist and that State Farm had issued them a policy of insurance that included underinsured-motorist ("UIM") coverage.

On September 7, 2000, Progressive Specialty Insurance Company, Miller's automobile liability insurer, offered to settle the case for the policy limit of $20,000. State Farm did not consent to the settlement, and it advanced the Thompsons $20,000, in compliance with the procedure established in Lambert v. State Farm Mutual Automobile Insurance Co., 576 So.2d 160 (Ala.1991). On March 8, 2001, State Farm moved to "opt out" of the trial proceedings, pursuant to Lowe v. Nationwide Insurance Co., 521 So.2d 1309 (Ala.1988); the trial court granted the motion. The case proceeded to trial. The jury rendered a verdict for Mrs. Thompson on her personal-injury claim and awarded her $10,000. The jury rendered a verdict for Miller on Mr. Thompson's derivative claim.

Mrs. Thompson filed a posttrial motion to tax costs—including deposition expenses and expert-witness fees—amounting to $1,159.50 to Miller. Miller filed an objection to Thompson's motion. Miller had previously filed a "Motion to Allocate Attorney's Fees and Expenses," requesting the court to tax "all expenses and attorney's fees from September 7, 2000, to State Farm, the uninsured-motorist carrier for [Thompson]."

The trial court entered a judgment that, among other things, taxed costs of $1,159.50 to Miller. The judgment states, in pertinent part:

"Michael Miller personally incurred costs in the amount of $465.45 for attending trial of this cause, and also incurred extensive attorney's fees and costs for the preparation and trial of this case to a jury. Defendant Miller argues that State Farm required him to try this cause by buying out the settlement which he had reached with the Plaintiff in the amount of $20,000.00, pursuant to the procedure set out in Lambert v. State Farm, 576 So.2d 160 (Ala.1991). Miller further argues that it is unfair and inequitable to require him to bear the cost of attorney's fees and expenses in connection with the trial of this case after State Farm exercised its option to opt out, and bought out the settlement. This Court sympathizes with the position of Defendant Michael Miller, and agrees that attorney's fees and expenses of trial are substantial and burdensome where Defendant's carrier had tendered its policy limits before trial. Defendant Miller argues that State Farm should pay his attorney's fees and costs because of the buyout, and the Court recognizes the validity of that position. This issue appears to be a question of first impression. However, Lambert, supra, does not provide for allocation of attorney's fees as urged by Defendant Miller and this Court, therefore, declines to award attorney's fees and costs of trial against State Farm because of the lack of any controlling authority on this issue. Said Motion is hereby DENIED, and Miller's Motion seeking reimbursement of his personal expenses of attending trial in the amount of $465.45, is hereby DENIED.

"The Court notes that Miller's policy, a Mississippi policy, provided Mississippi minimum limits of $10,000.00, which became the Alabama minimum limits of $20,000.00 pursuant to the Alabama Motor Vehicle Safety-Responsibility Act. Miller's liability insurance carrier recognized this obligation, and tendered its policy limit of $20,000.00. [T]o require Miller's carrier to double its available coverage, as well as bear the cost of attorney fees and expenses of attending Court, after tendering its limits to settle the case, creates a windfall to State Farm and a harsh, undue burden on the primary carrier. However, present Alabama law allows this result and Lambert, supra, does not address this issue."

Miller argues that, when a UIM carrier refuses to consent to a settlement between its insured and the underinsured tortfeasor, buys out the proposed settlement, and opts out of the proceedings, the UIM carrier forces to trial two parties who were willing to settle the case. He contends that the UIM carrier should, therefore, bear the expense of the trial, including attorney fees and costs. Miller maintains that the procedure established in Lambert "creates an inequity by omission," in that it does not specify how attorney fees and costs should be allocated among the plaintiff, the defendant, and the UIM carrier after the carrier's buyout of the defendant's settlement offer.

I. Attorney Fees

Miller was not ordered to pay Mrs. Thompson's attorney fee. Therefore, he does not have standing to assert that State Farm should pay, or share in the payment of, Mrs. Thompson's attorney fee. That would have been a matter for Mrs. Thompson to assert, see Eiland v. Meherin, [Ms. 2001219, June 14, 2002] ___ So.2d ____ (Ala.Civ.App.2002).

"As a general rule, `a litigant may not claim standing to assert the rights of a third party.' Jersey Shore Medical Center-Fitkin Hosp. v. Estate of Baum, 84 N.J. 137, 417 A.2d 1003 (1980). A party lacks standing to invoke the power of the court in his behalf in the absence of `a concrete stake in the outcome of the court's decision.' Brown Mechanical Contractors, Inc. v. Centennial Ins. Co., 431 So.2d 932, 937 (Ala.1983)."

Ex parte Izundu, 568 So.2d 771, 772-73 (Ala.1990). See also Nationwide Prop. & Cas. Ins. Co. v. DPF Architects, P.C., 792 So.2d 369, 372-73 (Ala.2000) (in holding that building contractors who were defendants in a subrogation action had no standing to assert that the insurer had no right of subrogation because the insured had not been "made whole," the court stated that "`the only party with standing to object to the insurer's lack of payment is the insured' ") (quoting Economy Fire & Cas. Co. v. Goar, 564 So.2d 867, 868 (Ala.1990)).

Miller requested the trial court to order State Farm to pay his attorney fee. The trial court correctly denied Miller's request. The general rule is that a party may recover attorney fees when "authorized by statute, when provided in a contract, or by special equity, such as in a proceeding where the efforts of an attorney create a fund out of which fees may be paid." Eagerton v. Williams, 433 So.2d 436, 450 (Ala.1983). There is no statutory authorization for awarding Miller an attorney fee from State Farm; there is no contract between Miller or his attorney and State Farm that provides for an attorney fee, and there is no "special equity" exception that applies.

II. Allocation of Costs

Miller was ordered to pay Mrs. Thompson's costs. He, therefore, does have standing to assert that those costs were not properly taxed to him but, instead, should have been taxed to State Farm. Rule 54(d), Ala. R. Civ. P., states, in pertinent part:

"Except when express provision therefor is made in a statute, costs shall be allowed as of course to the prevailing party unless the court otherwise directs...."

The taxation of costs under Rule 54(d) rests in the discretion of the trial court, and its decision will not be reversed in the absence of a clear abuse of discretion. See Garrett v. Whatley, 694 So.2d 1390 (Ala. Civ.App.1997).

Miller argues that, because Mrs. Thompson obtained a verdict that was less favorable than his pretrial offer to her, she was not the "prevailing party" for purposes of taxing costs under Rule 54(d). We disagree. As to Miller, Mrs. Thompson was the prevailing party because the jury rendered a verdict in her favor and the trial court entered a judgment on that verdict. See generally C. Wright et al., Federal Practice & Procedure § 2667 (3d ed.1998).

Miller's argument implies that the principle underlying the "offer-of-judgment rule" found in Rule 68, Ala. R. Civ. P., should operate here. Rule 68 states, in pertinent part:

"At any time more than fifteen (15) days before the trial begins, a party defending against a claim may serve upon the adverse party an offer to allow judgment to be taken against the defending party for the money or property or to the effect specified in the offer, with costs then accrued. If within ten (10) days after the service of the offer, the adverse party serves written notice that the offer is accepted, either party may then file the offer and notice of acceptance together with proof of service thereof and thereupon the clerk shall enter judgment. An offer not accepted shall be deemed withdrawn and evidence thereof is not admissible except in a proceeding to determine costs. If the judgment finally obtained by the offeree is not more favorable than the offer, the offeree must pay the costs incurred after the making of the offer."

(Emphasis added.) The principle underlying Rule 68 cannot fairly be used to allocate costs to a UIM carrier in a Lambert buy-out situation because that principle is incompatible with Lambert. Rule 68 expresses a general prosettlement policy. Alabama's Rule 68 is substantially the same as Rule 68, Fed.R.Civ.P. The United States Supreme Court, discussing Federal Rule 68, has stated: "The plain purpose of Rule 68 is to encourage settlement and avoid litigation." Marek v. Chesny, 473 U.S. 1, 5, 105 S.Ct. 3012, 87 L.Ed.2d 1 (1985). Lamb...