Unum Life Ins. Co. of America v. Wright
| Decision Date | 24 September 2004 |
| Parties | UNUM LIFE INSURANCE COMPANY OF AMERICA v. Rosemary WRIGHT et al. Ex parte Unum Life Insurance Company of America. (In re Rosemary Wright et al. v. Unum Life Insurance Company of America et al.) Unum Life Insurance Company of America v. Susan Coleman. Ex parte Unum Life Insurance Company of America (In re Susan Coleman v. Unum Life Insurance Company of America et al.) |
| Court | Alabama Supreme Court |
James S. Williams, Kaye K. Houser and Kristen S. Cross of Sirote & Permutt, P.C., Birmingham, for petitioner/appellant Unum Life Insurance Company of America.
Christopher E. Sanspree of Beasley, Allen, Crow, Methvin, Portis & Miles, P.C., Montgomery, for respondents/appellees Rosemary Wright and Susan Coleman.
Stephen E. Whitehead and Mark E. Tindal of Lloyd, Gray & Whitehead, P.C., Birmingham, for Mike Howard and Charles Niel.
These four appellate proceedings arise out of two orders entered by the Bullock Circuit Court compelling Unum Life Insurance Company of America ("Unum") to arbitrate the claims asserted against it by more than 400 individuals. One order relates to the proceeding initiated in that court by Rosemary Wright and 413 other claimants ("the Wright case") and the other order relates to the proceeding brought individually by Susan Coleman ("the Coleman case"). Unum appeals in each case as to that aspect of the orders requiring it to proceed to arbitration (cases no. 1022043 and 1030066) and petitions for a writ of mandamus as to that aspect of each order necessarily, although not explicitly, denying its challenge to venue in Bullock County (cases no. 1022060 and 1030069).
Among the issues presented is one of first impression in this State: What legal procedures may a party seeking enforcement in the circuit court of a contractual obligation to arbitrate a dispute employ when there is no independent court proceeding pending? We must also decide the proper venue for the court filings by the plaintiffs in these cases. We issue the writ of mandamus in case no. 1030069 (the Coleman case); we deny the writ in case no. 1022060 (the Wright case); we dismiss the appeal in case no. 1030066 (the Coleman case); and we affirm the appeal in case no. 1022043 (the Wright case).
Unum and the plaintiffs agree that in order to understand the Bullock County proceedings, one must have a full understanding of prior proceedings in the Sumter Circuit Court. Accordingly, we take note of the following pertinent chronology.
During the first six months of 2002, the law firm of Beasley, Allen, Crow, Methvin, Portis & Mills ("the Beasley firm") filed four single-plaintiff actions in the Sumter Circuit Court against Unum and its alleged agent, Mike Howard, asserting fraud-based claims relating to the plaintiffs' purchase of group long-term disability-insurance coverage in connection with their employment with the Sumter County School Board. All the plaintiffs were residents of Sumter County. In August of that year the Beasley firm filed a similar action in the Sumter Circuit Court involving 13 plaintiffs. Still later in August and then in October, the Beasley firm filed in the Sumter Circuit Court a total of four more essentially identical actions against Unum and Howard; the plaintiffs in those four actions included Sumter County residents and residents of other counties. There were at that point fewer than 200 plaintiffs in the nine cases, and the majority of them were Sumter County residents. Along the way, either Unum, through its attorneys with the law firm of Sirote & Permutt, P.C. (the "Sirote firm"), or the plaintiffs, through the Beasley firm, filed motions to compel arbitration.
On December 9, 2002, Unum served its "Motion to Consolidate and Arbitrate" with respect to all nine of the cases; the motion stated in pertinent part:
Previously, on November 20, 2002, the Beasley firm had filed another action in Sumter County against Unum and Howard on a behalf of Pamela P. McGee and 83 other plaintiffs, only 4 of whom were residents of Sumter County ("the McGee case"). Unum contends that its counsel were unaware of the McGee action at the time they filed the motion to consolidate and arbitrate. On December 18, 2002, the Beasley firm filed another action in Sumter County against Unum and Howard asserting essentially the same claims as before, on behalf of Shirley Larde and 57 other plaintiffs, only 4 of whom were residents of Sumter County ("the Larde case"). The Beasley firm filed motions to compel arbitration in those two cases, but, on January 3, 2003, Unum filed motions to dismiss or for a change of venue in those cases.
On January 22, 2004, Howard's attorney, Stephen E. Whitehead, wrote to Christopher E. Sanspree of the Beasley firm and James S. Williams of the Sirote firm to provide the names of three individuals acceptable to Howard as arbitrators, one of whom was Richard Bell, a Birmingham attorney. On January 28 Williams e-mailed to Sanspree and Whitehead the names of seven acceptable candidates for arbitrators; that list included Bell. The next day Unum filed motions to dismiss or, in the alternative, to sever and to transfer the cases in the other five multi-plaintiff Sumter County cases, seeking to have dismissed or transferred only the claims of the plaintiffs not residing in Sumter County. Howard took the opposite position, moving to compel arbitration in all of the cases.
On January 31, 2003, Sanspree wrote to Williams and Whitehead to advise them that the plaintiffs had selected Bell to serve as the arbitrator in the "Unum cases"; on that same day Sanspree wrote to Sumter County Circuit Judge Eddie Hardaway, Jr., referencing all of the cases preceding those filed by McGee and Larde, to advise Judge Hardaway that "counsel for all parties have agreed to use Richard Bell as arbitrator in the above referenced cases." Sanspree sent copies of that letter to both Williams and Whitehead. The Beasley firm also filed oppositions to Unum's motions to dismiss or to sever and transfer the cases. On February 9, 2003, Judge Hardaway conducted a hearing on the motions, but no transcript of that hearing is contained in the record and there is no attempt pursuant to Rule 10(d), Ala. R.App. P., to reconstruct a record of the proceedings.
In a memorandum of law Unum filed with Judge Hardaway on February 13, 2003, in support of its motions for a dismissal or a transfer of the cases, it argued that the plaintiffs "are all employees of various state school boards throughout Alabama, and their claims against Unum and Howard are exclusively fraud-based claims related to the plaintiffs' purchase of group long-term disability insurance coverage provided in connection with their employment," but that of the "approximately 3201 plaintiffs" involved, "only about 25% are residents of Sumter County," whereas "220 or more of the 320 plaintiffs reside in one of 16 other counties of Alabama, and there are 19 plaintiffs who reside in Mississippi." Unum explained that in the first seven cases filed, more than 85% of the plaintiffs were either residents of Sumter County or alleged fraud occurring in Sumter County. Unum went on to explain that even after the next two actions were filed adding more nonresidents of Sumter County, the parties still agreed that, in the interest of judicial economy, the claims involved in the nine cases then pending should be consolidated and arbitrated. "At no time, however, did Unum agree to the consolidation and arbitration of any and all subsequent similar cases filed in Sumter County against Unum and Mike Howard." Unum justified its change of position concerning arbitration of the claims of nonresident plaintiffs in the previously filed multi-plaintiff cases and in the cases subsequently filed by McGee and Larde as follows:
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