Ex parte Electric Insurance Company. , 2014 Ala. LEXIS 160 ( 2014 )

Rel: 9/26/14
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
SPECIAL TERM, 2014
____________________
1130820
____________________
Ex parte Electric Insurance Company
PETITION FOR WRIT OF MANDAMUS
(In re: Paul Nelson Bolt
v.
Electric Insurance Company and John Christopher Wilson)
(Marshall Circuit Court, CV-12-000072)
BRYAN, Justice.
Electric Insurance Company ("Electric") petitions this
Court for a writ of mandamus directing the Marshall Circuit
1130820
Court to allow Electric, an uninsured-motorist insurer, to
"opt out" of the trial of the underlying case. The issue
presented by this petition is whether Electric asserted its
right to opt out within a reasonable time. We conclude that
it did; thus, we grant the petition and issue the writ.
The facts giving rise to this action are as follows. An
automobile being driven by Paul Nelson Bolt was involved in an
accident with an automobile being driven by John Christopher
Wilson, an uninsured motorist. On April 4, 2012, Bolt sued
Wilson and Electric, Bolt's uninsured-motorist insurer,
alleging that he had sustained various injuries in the
accident and that the accident was caused by Wilson's
negligence and wantonness. On May 17, 2012, Electric answered
the complaint and served Bolt with interrogatories and a
request for production. On July 6, 2012, Bolt responded to
the discovery requests. Electric deposed Bolt on September
26, 2012. In the latter part of 2013 and early 2014, Bolt
deposed four physicians who had treated him following the
accident. Those depositions were taken on October 7, 2013,
October 17, 2013, November 7, 2013, and January 17, 2014.
2
1130820
On December 3, 2013, the trial court ordered the parties
to submit a proposed scheduling order, which they did. On
February 4, 2014, the trial court adopted the scheduling order
submitted by the parties. The scheduling order provided that
the last day for Electric to amend its answer would be March
15, 2014, that discovery would be completed no later than
March 28, 2014, and that the trial would be held on May 12,
2014.
On March 14, 2014 –– one day before the last day
Electric could have freely amended its answer –– Electric
filed a motion seeking to opt out of the trial under Lowe v.
Nationwide Insurance Co., 521 So. 2d 1309 (Ala. 1988). Bolt
objected to Electric's attempt to opt out. Following a
hearing, the trial court denied Electric's motion, without
stating a reason. Electric then petitioned this Court for a
writ of mandamus directing the trial court to allow Electric
to opt out of the trial. We stayed the proceedings below
pending the resolution of the mandamus petition.
"A writ of mandamus is an extraordinary remedy,
and it will be 'issued only when there is: 1) a
clear legal right in the petitioner to the order
sought; 2) an imperative duty upon the respondent to
perform, accompanied by a refusal to do so; 3) the
lack of another adequate remedy; and 4) properly
3
1130820
invoked jurisdiction of the court.' Ex parte United
Serv. Stations, Inc., 628 So. 2d 501, 503 (Ala.
1993)."
Ex parte Empire Fire & Marine Ins. Co., 720 So. 2d 893, 894
(Ala. 1998). "A petition for a writ of mandamus is the
appropriate means for challenging a trial court's refusal to
grant a[n uninsured-motorist] insurer the right to opt out of
litigation pursuant to Lowe. Ex parte Aetna Cas. & Surety
Co., 708 So. 2d 156 (Ala. 1998)." Ex parte Geico Cas. Co., 58
So. 3d 741, 743 (Ala. 2010).
In Lowe, this Court discussed the rights of an
underinsured-motorist insurer when its insured is involved in
litigation. Although Lowe involved an underinsured motorist,
we noted in that case that the term "underinsured motorist" is
statutorily included within the term "uninsured motorist."
521 So. 2d at 1309 n. 1 (citing § 32-7-23(b), Ala. Code 1975).
Our analysis in Lowe and its progeny applies equally to
underinsured and uninsured motorists. See, e.g., Ex parte
Geico. In Lowe, this Court stated:
"A plaintiff is allowed either to join as a party
defendant his own liability insurer in a suit
against the underinsured motorist or merely to give
it notice of the filing of the action against the
motorist and of the possibility of a claim under the
underinsured motorist coverage at the conclusion of
4
1130820
the trial. If the insurer is named as a party, it
would have the right, within a reasonable time after
service of process, to elect either to participate
in the trial (in which case its identity and the
reason for its being involved are proper information
for the jury), or not to participate in the trial
(in which case no mention of it or its potential
involvement is permitted by the trial court)."
Lowe, 521 So. 2d at 1310 (some emphasis omitted; some emphasis
added).
"We stated in Lowe that the insurer has the option
to withdraw from the case, provided that it
exercises that option within a reasonable time after
service of process. It was also stated that whether
the insurer's motion to withdraw is timely made is
left to the discretion of the trial court, to be
judged according to the posture of the case.
Logically, the insurer would not want to withdraw
from the case too early, before it could determine,
through the discovery process, whether it would be
in its best interest to do so. On the other hand,
the insurer cannot delay, unnecessarily, in making
its decision whether to withdraw. We believe that
it would not be unreasonable for the insurer to
participate in the case for a length of time
sufficient to enable it to make a meaningful
determination as to whether it would be in its best
interest to withdraw."
Ex parte Edgar, 543 So. 2d 682, 685 (Ala. 1989). Although
Lowe was decided more than 25 years ago, there have been very
few opinions addressing whether an insurer timely asserted its
right to opt out. See Ronald G. Davenport, Alabama Automobile
Insurance Law § 33:4 (4th ed. 2013); see also Ex parte Geico,
5
1130820
supra (concluding that the motion to opt out was timely when
it was filed five days after the insurer deposed its insured).
We must determine whether Electric asserted its right to
opt out of the trial within a reasonable time. In Ex parte
Edgar, we emphasized that such a determination must be made in
light of "the posture of the case." Given the posture of this
case, we conclude that Electric asserted its right to opt out
within a reasonable time. Significantly, Electric attempted
to opt out of the trial before the final day on which the
scheduling order allowed Electric to amend its answer. By
amending its answer, Electric could have complicated the case
by adding parties, defenses, or counterclaims, and those
changes may have delayed the trial. Conversely, Electric's
opting out of the trial would simplify and streamline the case
and would not delay the trial. It is inconsistent, on the one
hand, to allow Electric freely to amend its answer and, on the
other hand, to forbid Electric from exercising its right under
Lowe to opt out of the trial.
We have noted that "the insurer would not want to
withdraw from the case too early, before it could determine,
through the discovery process, whether it would be in its best
6
1130820
interest to do so." Ex parte Edgar, 543 So. 2d at 685.
Electric sought to withdraw only after Bolt had deposed four
physicians who had treated him following the accident. Those
physicians testified regarding the extent of Bolt's various
alleged injuries and whether the accident may have caused
those injuries. Electric reasonably waited until after the
physicians had been deposed to fully assess the strength of
Bolt's personal-injury case and whether opting out would be in
its best interest. We recognize that Electric asserted its
right to opt out 56 days after the taking of the final
physician's deposition. Considering that Electric sought to
withdraw within the period in which it could have amended its
answer and only 38 days after the trial court adopted the
scheduling order submitted by the parties, such a delay was
reasonable.
Electric asserted its right to opt out of the trial
within a reasonable time. Accordingly, we grant the petition
for a writ of mandamus and direct the trial to grant
Electric's motion seeking to opt out of the trial.
PETITION GRANTED; WRIT ISSUED.
7
1130820
Stuart, Bolin, Parker, Murdock, Shaw, Main, and Wise,
JJ., concur.
Moore, C.J., dissents.
8