Circuit Court, CV-12-901575, Macon Circuit Court,
CV-13-900170, Jefferson Circuit Court, CV-15-900013
PETITION FOR WRIT OF MANDAMUS
these three matters, Allstate Property and Casualty Insurance
Company ("Allstate") and GEICO Indemnity Company
("GEICO") separately petition this Court for a writ
of mandamus. The petitions seek writs directing the Madison,
Macon, and Jefferson Circuit Courts to vacate their
respective orders purporting to allow separate parties who
have underinsured-motorist ("UIM") insurance with
Allstate or GEICO to enter into, without the applicable
insurer's consent, settlement agreements with an alleged
underinsured tortfeasor. In case no. 1150269, we dismiss the
petition as untimely filed. In case no. 1150511 and case no.
1151266, we grant the petitions and issue the writs.
and Procedural History
these matters resulted from separate automobile accidents
between either an Allstate or a GEICO insured with UIM
coverage and allegedly underinsured tortfeasors. In each
case, it appears undisputed that the applicable insurance
policy contained a "consent-to-settle" clause
requiring the provision of notice to, and the consent of, the
affected insurer prior to the insured's settlement of any
claims against the alleged underinsured tortfeasors and/or a
release of the tortfeasors' liability.
November 1, 2012, Elizabeth Rebecca Zajic filed in the
Madison Circuit Court a complaint against Kimberly D. Payne,
alleging that the two had been involved in an automobile
accident on November 1, 2010, in which Payne had acted
negligently and wantonly. Zajic also included a claim against
her insurer, Allstate, seeking to recover UIM benefits.
Thereafter, Payne's liability insurer offered to tender
the entire $50, 000 available under Payne's policy limits
in exchange for a full release of Payne's liability.
to the procedure outlined by this Court in Lambert v.
State Farm Mutual Automobile Insurance Co., 576 So.2d
160, 167 (Ala. 1991), Zajic notified Allstate of the
settlement offer and sought its consent to settle. Allstate,
however, declined to consent; instead, as also permitted by
Lambert, Allstate opted to advance the $50, 000 to
Zajic. Allstate then opted out of participation in further
proceedings determining Payne's liability and Zajic's
10 months after Allstate opted out, Payne filed a
"Motion to Enforce Settlement and for Pro Tanto
Dismissal of Defendant, Kimberly D. Payne." In her
motion, Payne, citing Lambert, among other
authorities, argued that "the only permissible reason
for a UIM carrier to advance or front the tortfeasor's
liability limits is to preserve subrogation." Payne,
citing Pennsylvania National Mutual Casualty Insurance
Co. v. Bradford, 164 So.3d 537 (Ala. 2014), and
Hardin v. Metlife Auto & Home Insurance Co., 982
So.2d 522 (Ala. Civ. App. 2007), further argued that Allstate
had, after advancing the money in Zajic's case, failed to
file either a subrogation cross-claim or a separate action
against Payne, and that the applicable statute of limitations
had, by that time, expired on any such action. Thus, Payne
"As [Zajic] originally reached a settlement agreement
with ... Payne, to accept her policy limits of $50, 000.00
and to release and dismiss ... Payne from [the] case, and
because the only delay was an alleged subrogation claim by
... [Allstate] which no longer exists as a matter of law, the
original settlement agreement ... should not be prevented
from proceeding forward."
response, Allstate argued, among other things, that, despite
the expiration of the statute of limitations on direct
actions it might have against Payne, under Bradford
and pursuant to the terms of the policy, it retained certain
reimbursement rights to any funds Zajic might obtain from
Payne in excess of the liability policy.
hearing and over Allstate's objection, the trial court,
on October 20, 2015, granted Payne's motion. More
specifically, the trial court directed that the parties
"effectuate the settlement" and submit appropriate
pleadings seeking to dismiss the claims against Payne. In
response, Allstate filed, on November 4, 2015, a motion
requesting that the trial court "alter, amend, or
vacate" its order. The trial court denied that motion by
order entered the following day. Following the denial of its
motion seeking relief from that order, Allstate filed the
instant petition for a writ of mandamus on December 16, 2015.
result of an automobile accident that occurred in Tuskegee on
August 5, 2013, Danielle Carter sued, in the Macon Circuit
Court, the alleged tortfeasor, Alvin Lee Walker. Carter's
complaint also included a count against Allstate, her UIM
insurer, pursuant to which Carter, who alleged that Walker
was underinsured, sought to recover UIM benefits under her
own policy. Walker's liability insurer subsequently made
a $25, 000 policy-limits offer to settle Carter's claims
against Walker. Carter notified Allstate of the settlement
offer; Allstate refused to consent to the settlement and,
pursuant to the Lambert guidelines, instead elected
to advance Carter $25, 000. In addition, on May 12, 2014,
Allstate obtained leave from the trial court to opt out of
further participation in the litigation.
one year later, in September 2015, Walker filed a motion
seeking "enforcement" of the original settlement
offer and his dismissal from the action. In his motion,
Walker noted that, despite the fact that "the only
permissible reason for a UIM carrier to 'front'
liability limits is to preserve subrogation, " Allstate
had not filed either a cross-claim or a separate subrogation
action against him; thus, according to Walker, because the
statute of limitations applicable to any such claim against
him had expired with no action by Allstate, the settlement
offer was due to be "enforced." Citing
Bradford, Allstate responded that, although the
statute of limitations might foreclose the right of a UIM
insurer to maintain a direct action against the tortfeasor
for recovery of amounts paid to its insured, the insurer had
other means to seek reimbursement if the UIM insured obtained
amounts from the tortfeasor in excess of the liability
January 7, 2016, the trial court ordered the parties to
effectuate settlement of Carter's claims against Walker
and dismissed Walker with prejudice. The trial court further
noted: "The case will remain pending only against the
underinsured motorist carrier, Allstate ...." Allstate
responded with the instant petition for a writ of mandamus,
which was filed on February 17, 2016.
October 22, 2013, Rasheena Harris-Williams was, while driving
a vehicle insured under a policy issued by GEICO, injured as
the result of an automobile accident in Birmingham.
Harris-Williams filed, in the Jefferson Circuit Court, a
complaint against the alleged tortfeasor, Frederick
Chamberlin IV. The complaint did not name GEICO as a party.
Thereafter, Harris-Williams placed GEICO on notice, in light
of the amount of Chamberlin's policy limits, of her
intent to also seek UIM benefits under the GEICO policy.
Harris-Williams also notified GEICO that Chamberlin's
insurer had extended a $25, 000 policy-limits offer to settle
her claims against Chamberlin in exchange for
Chamberlin's dismissal and that bills related to her
medical treatment already exceeded $20, 000. Harris-Williams
requested that GEICO consent to the settlement or advance
funds in the amount of the settlement offer. GEICO declined
to consent and, instead, remitted the requested amount,
stating that it reserved its right of subrogation and to
pursue reimbursement of the advanced settlement.
2016, Harris-Williams amended her complaint to add GEICO as a
named defendant and to formally assert a claim for UIM
benefits. In June 2016, Chamberlin filed a motion seeking
"enforcement" of the settlement offer to
Harris-Williams and the dismissal of all claims against him.
More specifically, Chamberlin argued, as in the above cases,
that preservation of its subrogation rights was the only
"permissible" reason for GEICO's decision and
that, pursuant to Bradford and Hardin,
supra, the two-year statute of limitations applicable to any
subrogation claim against him had expired without action by
GEICO. Thus, according to Chamberlin, "[t]he settlement
agreement is due to be enforced in its entirety and upon
payment of $25, 000.00 by [his insurer], [he was] due to be
released and dismissed from this case, with prejudice."
The trial court, over GEICO's claim that
Bradford and Hardin concerned only the
filing of "new actions" and were, thus,
inapposite, granted, on August 2, 2016, Chamberlin's
motion in all respects and dismissed Chamberlin as a
defendant. Following the denial of its motion requesting that
the trial court "reconsider" that decision, GEICO
filed the instant petition for a writ of mandamus on
September 13, 2016.
Court subsequently ordered answers and briefs in all three
cases and, considering that the issues presented are
identical, has consolidated them for the purpose of writing a
discussed in more detail below, in Lowe v.
NationwideInsurance Co., 521 So.2d 1309, 1310
(Ala. 1988), this Court "set out the rights of a UIM
carrier when its insured is ...