Baldwin Circuit Court, CV-16-900328
PETITION FOR WRIT OF MANDAMUS
Insurance Company ("Nautilus") and Lyon Fry Cadden
Insurance Agency, Inc. ("LFC"), separately petition
this Court for writs of mandamus directing the Baldwin
Circuit Court ("the trial court") to vacate its
orders denying their motions to dismiss the action filed
against them by Precision Sand Products, LLC
("Precision"). For the reasons set forth herein, we
grant Nautilus's petition and deny LFC's petition.
and Procedural History
the period from June 10, 2015, to June 10, 2016, Precision
had in place a commercial general-liability insurance policy
("the policy") it had purchased from Nautilus
through LFC, an insurance broker. In March 2016, Terry
Williams sued Precision in the trial court, seeking recovery
for injuries he allegedly suffered on Precision's
property during the period the policy was in
effect. Williams later amended his complaint to
add his wife, Zandra Williams, as a plaintiff. Pursuant to
the terms of the policy, Precision demanded that Nautilus
defend and indemnify it against the Williamses' claims.
Nautilus agreed, under reservation of rights, to defend
Precision against the Williamses' claims and is currently
3, 2017, Nautilus filed a declaratory-judgment action against
Precision and the Williamses in the United States District
Court for the Southern District of Alabama ("the
district court"), seeking a judgment declaring that,
pursuant to an exclusion in the policy, Nautilus was not
obligated to defend and indemnify Precision against the
Williamses' claims ("the federal action").
Precision filed a motion to dismiss or, alternatively, to
stay the federal action, asking the district court to refuse
to exercise its discretionary jurisdiction. See Wilton v.
Seven Falls Co., 515 U.S. 277, 282 (1995) (noting that
"district courts possess discretion in determining
whether and when to entertain an action under the Declaratory
Judgment Act, [28 U.S.C. § 2201(a), ] even when the suit
otherwise satisfies subject matter jurisdictional
prerequisites"). As of the filing of these petitions,
the district court has not yet ruled on that motion, and the
federal action remains pending.
October 13, 2017, Precision filed in the Williamses'
action in the trial court a "crossclaim complaint"
against Nautilus and LFC ("the state
action"). In its complaint, Precision asserted the
following claims against both Nautilus and LFC: (1) a claim
seeking a judgment declaring that Nautilus and LFC are
obligated to defend and indemnify Precision against the
Williamses' claims; (2) an abnormal bad-faith claim; (3)
a bad-faith-failure-to-settle claim; (4) a
breach-of-the-enhanced-duty-of-good-faith claim; (5) a fraud
claim, alleging that Nautilus and LFC misrepresented to
Precision that the policy provided coverage for claims such
as the Williamses'; and (6) a negligence claim, alleging
that Nautilus and LFC "had a duty to sell an insurance
policy to Precision ... that provides coverage for its
business operations and for any potential claims [to which
it] might be exposed ...."
filed a motion to dismiss the claims against it in the state
action, arguing that Precision's claims against it were
compulsory counterclaims that Precision was required to file
in the federal action pursuant to § 6-5-440, Ala. Code
1975, the abatement statute. LFC, arguing that
Precision's complaint failed to state a claim against LFC
upon which relief could be granted, filed a motion to dismiss
the claims against it in the state action pursuant to Rule
12(b)(6), Ala. R. Civ. P. Alternatively, LFC argued that, if
the trial court dismissed Nautilus from the state action,
then LFC was also entitled to a dismissal under Rule 19, Ala.
R. Civ. P., which provides for the joinder of persons needed
for just adjudication, because, according to LFC, Nautilus is
an indispensable party to Precision's claims against LFC.
November 15, 2017, the trial court, without specifying its
reasons, entered separate orders denying Nautilus's and
LFC's motions to dismiss, and Nautilus and LFC separately
petitioned this Court for writs of mandamus directing the
trial court to vacate those orders. Nautilus's petition
was assigned case no. 1170170; LFC's petition was
assigned case no. 1170235. We consolidated the two petitions
for the purpose of writing a single opinion, but because the
petitions assert different grounds for issuing the writs, we
address the petitions separately.
standard of review applied to a petition seeking the issuance
of a writ of mandamus is well settled:
"'Mandamus is a drastic and extraordinary writ, to
be issued only where 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
invoked jurisdiction of the court.'"
Ex parte Caremark Rx, LLC, 229 So.3d 751, 756 (Ala.
2017) (quoting Ex parte Integon Corp., 672 So.2d
497, 499 (Ala. 1995)).
no. 1170170 (Nautilus)
petition to this Court, Nautilus makes the same argument it
made in its motion to dismiss the state action, i.e., that it
is entitled to a dismissal from the state action under §
6-5-440 because, Nautilus says, Precision's claims
against it are compulsory counterclaims in the federal
action, which was pending when Precision commenced the state
action. "Mandamus is the appropriate remedy to correct a
trial court's failure to properly apply §
6-5-440." Ex parte J.E. Estes Wood
Co., 42 So.3d 104, 108 (Ala. 2010). "When the facts
underlying a motion filed pursuant to § 6-5-440 are
undisputed, as is the case here, our review of the
application of the law to the facts is de novo." Ex
parte Metropolitan Prop. & Cas. Ins. Co.,
974 So.2d 967, 969 (Ala. 2007).
"No plaintiff is entitled to prosecute two actions in
the courts of this state at the same time for the same cause
and against the same party. In such a case, the defendant may
require the plaintiff to elect which he will prosecute, if
commenced simultaneously, and the pendency of the former is a