Alabama Psychiatric Services, P.C., and Managed Health Care Administration, Inc.
Sheri Lynn Lazenby et al. Alabama Psychiatric Services, P.C., and Managed Health Care Administration, Inc.
Sheri Lynn Lazenby et al.
Appeals from Jefferson Circuit Court (CV-16-901279)
former employees of Alabama Psychiatric Services, P.C.
("APS"), filed a putative class action against APS
and Managed Health Care Administration, Inc.
("MHCA"), an affiliate of APS, in the Jefferson
Circuit Court. The complaint alleged that APS had not paid
the former employees for unused vacation time after they lost
their jobs when APS went out of business. APS and MHCA moved
the circuit court to compel arbitration pursuant to
arbitration agreements the plaintiffs had entered into with
APS. APS and MHCA asked the circuit court to determine, as a
threshold question, whether class arbitration is available in
this case. The arbitration agreements did not expressly
mention class arbitration. The circuit court issued an order
granting the motion to compel arbitration. In that same
order, the circuit court declined to decide whether class
arbitration is available, concluding that that issue was to
be decided by the arbitrator.
case proceeded to arbitration, which was governed by the
rules of the American Arbitration Association ("the
AAA"). Under Rule 3 of the AAA's Supplementary Rules
for Class Arbitration, a party may ask the arbitrator for a
"clause- construction award" determining whether
class arbitration is available; the plaintiffs here asked the
arbitrator to issue such an award. The arbitrator
subsequently issued a clause-construction award ("the
award"), concluding that the relevant arbitration
agreements authorize class arbitration in this case. Rule 3
also allows for the immediate judicial review of a
clause-construction award. Accordingly, APS and MHCA sought
review of the award in the circuit court.
71B, Ala. R. Civ. P., establishes the procedure for appealing
an arbitration award to the circuit court. Under Rule 71B,
"(1) [a] party must file a notice of appeal with the
appropriate circuit court within 30 days after service of the
notice of the arbitration award; (2) the clerk of the circuit
court shall promptly enter the award as the final judgment of
the circuit court; (3) the aggrieved party may file a Rule
59, Ala. R. Civ. P., motion to set aside or vacate the
judgment, and such filing is a condition precedent to further
review by any appellate court; (4) the circuit court grants
or denies the Rule 59 motion; and (5) the aggrieved party may
then appeal from the circuit court's judgment to the
appropriate appellate court."
Guardian Builders, LLC v. Uselton, 130 So.3d 179,
181 (Ala. 2013).
case has various procedural irregularities that initially
must be sorted out. First, APS and MHCA, in appealing the
award, did not file a document titled "notice of
appeal" with the circuit court. Instead, on January 5,
2018, APS and MHCA filed with the circuit court a
"motion to vacate" the award. This Court has
considered a "motion to vacate" as a notice of
appeal for purposes of Rule 71B when the motion was in
substance a notice of appeal. Honea v. Raymond James Fin.
Servs., Inc., 240 So.3d 550, 559 (Ala. 2017). See
also Guardian Builders, 130 So.3d at 182; and J.L.
Loper Constr. Co. v. Findout P'ship, LLP, 55 So.3d
1152 (Ala. 2010). The motion to vacate was in substance a
timely filed notice of appeal (in addition to being a motion
to vacate); thus, the requirement in Rule 71B that a notice
of appeal be filed with the circuit court was satisfied.
Rule 71B, the clerk of the circuit court, as a ministerial
matter, should have promptly entered the award as the
judgment of the circuit court. However, the award was not
promptly entered as the judgment of the circuit court, but
the appeal proceeded as if it had been. On April 11, 2018,
the circuit court purported to deny the motion to vacate the
judgment. Then, 42 days later, on May 23, 2018, APS and MHCA
filed a notice of appeal to this Court from the order
purporting to the deny the motion to vacate the judgment;
that appeal was docketed as appeal no. 1170856. The problem
here is that, because the award had not yet been entered as
the judgment of the circuit court, there actually was no
judgment that formed the basis for the motion to vacate.
However, that problem is not fatal, because a postjudgment
motion filed before the entry of a judgment quickens upon the
entry of the judgment, New Addition Club, Inc. v.
Vaughn, 903 So.2d 68, 72 (Ala. 2004), and that is what
happened here. On June 7, 2018, the clerk of the circuit
court entered the arbitrator's award as the judgment of
the circuit court. At that point, the motion to vacate
quickened and was ripe for a decision by the circuit court
under Rule 71B. Id. See also Ex parte Cavalier Home
Builders, LLC, [Ms. 1170847, November 16, 2018] __So.
3d__, __ (Ala. 2018) (noting, in an appeal from an
arbitration award, that a premature Rule 59(e), Ala. R. Civ.
P., motion quickened when the circuit court later entered the
award as the judgment of the circuit court). On July 17,
2018, the circuit court, perhaps realizing that its earlier
motion purporting to deny the motion to vacate had been
premature, entered an order denying the motion to vacate.
matters is the fact that APS and MHCA had filed a notice of
appeal on May 23 (appeal no. 1170856), before the motion to
vacate quickened on June 7. Rule 4(a)(4), Ala. R. App. P.,
provides that "[a] notice of appeal filed after the
announcement of a decision or order but before the entry of
the judgment or order shall be treated as filed after the
entry and on the day thereof." In this case, the circuit
court essentially announced its decision by purporting to
deny the motion to vacate the first time around, on April 11.
However, the motion to vacate did not actually quicken until
June 7, when the circuit clerk performed the ministerial duty
of entering the award as the judgment of the circuit court.
The circuit court then denied the motion to vacate on July
17, and, under Rule 71B, that is the judgment from which the
appeal lies. Under Rule 4(a)(4), the notice of appeal filed
on May 23 was, in effect, suspended until the circuit court
denied the motion to vacate on July 17. Pursuant to Rule
4(a)(4), we will treat the notice of appeal in appeal no.
1170856 as having been filed on July 17.
address another procedural irregularity regarding the notice
of appeal in appeal no. 1170856. The notice of appeal listed
the appellants as "Alabama Psychiatric Services, P.C.,
et al." and listed the appellees as "Sheri Lynn
Lazenby, et al." Rule 3(c), Ala. R. App. P., was amended
effective January 1, 2017, to provide that "[a]n
appellant may not use the terms 'et al.' or
'etc.' to designate multiple appellants or appellees
in lieu of naming each appellant or appellee." In light
of that provision, this Court on June 20, 2018, ordered that
appeal no. 1170856 be docketed only as to those parties
specifically identified in the notice of appeal,
i.e., APS as the sole appellant and Sheri Lynn
Lazenby as the sole appellee. On July 16, 2018, APS filed a
motion seeking to amend the notice of appeal to specifically
list all the parties in this case, in compliance with Rule
3(c). This Court denied that motion by order on August 10,
2018. However, as explained above, when APS filed its motion
to amend the notice of appeal on July 16, the notice of
appeal not yet become effective; it would not become
effective until the following day, July 17, when the circuit
court denied the motion to vacate. Thus, in retrospect, APS
should have been allowed to amend the notice of appeal in
appeal no. 1170856. Accordingly, we rescind our order of June
20, 2018, which ordered that the appeal be docketed only as
to those two parties specifically identified in the notice of
appeal. Further, we amend the notice of appeal to include all
the parties in this case. Accordingly, the appellants in
appeal no. 1170856 are APS and MHCA, and the appellees are
the plaintiffs, Sheri Lynn Lazenby, Robert Doyle, Latanya
Renee Keith, Margie Dukes, January Simpson, Mary Ferdon, Lisa
Marlowe, Anita Clark, Debra McAuliffe, Dolores Bray, Judith
Madelyn Basham, Patricia Nowlin, and Elizabeth Wood.
August 28, 2018, 42 days after the circuit court's July
17 order denying the motion to vacate, APS and MHCA filed a
second notice of appeal, listing all the parties in this
case, in compliance with Rule 3(c); this Court docketed that
appeal as appeal no. 1171150. In the second appeal, like the
first appeal, APS and MHCA challenge the circuit court's
denial of the motion to vacate, and they present the same
arguments. The second notice of appeal appears to have been
filed out of uncertainty regarding the unusual procedural
history in this case. However, as explained above, the second
notice of appeal is redundant, given that the first notice of
appeal has now been amended to include all the parties.
Accordingly, we dismiss appeal no. 1171150.
MHCA's first argument on appeal does not address any
decision the circuit court made in its order denying the
motion to vacate the arbitrator's award. Rather, APS and
MHCA first argue that the circuit court, in its earlier order
compelling arbitration, erred by declining to decide the
threshold issue whether class arbitration is available. As
noted, the circuit court concluded that the arbitrator, not
the circuit court, should decide the availability of class
arbitration. However, the issue whether the circuit court
erred in this regard is not properly before us. Rule 4(d),
Ala. R. App. P., provides:
"An order granting or denying a motion to compel
arbitration is appealable as a matter of right, and any
appeal from such an order must be taken within 42 days (6
weeks) of the date of the entry of the order, or within the
time allowed by an extension pursuant to Rule 77(d), Alabama
Rules of Civil Procedure."
order granting a motion to compel arbitration is a final
judgment, Bowater, Inc. v. Zager, 901 So.2d 658, 667
(Ala. 2004), and "failure to take an appeal from it
within the 42-day time period forecloses later appellate
review." 901 So.2d at 664. APS and MHCA now attempt to
challenge that part of the order compelling arbitration in
which the circuit court declined to decide the availability
of class arbitration. However, to properly challenge that
aspect of the earlier order, APS and MHCA should have
appealed from the order, pursuant to Rule 4(d). APS and MHCA
failed to appeal from that order, and the time for such an
appeal has long since expired. Thus, the issue whether the
circuit court properly declined to decide the availability of
class arbitration is not properly before us in this appeal.
MHCA argue that this issue is properly before us because,
they say, the order compelling arbitration was not a final
judgment and, therefore, was not appealable. As noted, that
position is unsupported by Alabama law, which considers such
an order to be a final judgment. Bowater, 901 So.2d
at 667. In making their argument, APS and MHCA cite federal
caselaw discussing federal procedural law regarding the
appealability of various arbitration decisions. Thus, APS and
MHCA seem to imply that federal procedural law regarding
arbitration -- not Alabama procedural law -- applies in this
case. The pertinent federal provision, 9 U.S.C. § 16,
which is a part of the Federal Arbitration Act, 9 U.S.C.
§ 1 et seq. ("the FAA"), lists the types of
arbitration decisions from which an appeal may and may not be
taken in federal court. Under that provision, a federal-court
order compelling arbitration generally is not appealable
unless the federal court also dismisses the underlying
action. Green Tree Fin. Corp.-Alabama v. Randolph,
531 U.S. 79, 84-89, n.2 (2000) (determining that an order
compelling arbitration is appealable as a "final
decision" under 9 U.S.C. § 16(a)(3) if the federal
district court dismisses the underlying action but is not
appealable if the federal district court enters a stay
instead of a dismissal). However, although the FAA contains
federal substantive law that is applicable in both
state and federal courts, Southland Corp. v.
Keating, 465 U.S. 1, 12 (1984), the FAA's
procedural rules are simply inapplicable in this
may apply their own neutral procedural rules to federal
claims, unless those rules are pre-empted by federal
law." Howlett v. Rose, 496 U.S. 356, 372
(1990). As the United States Supreme Court has explained,
"[t]he FAA contains no express pre-emptive provision,
nor does it reflect a congressional intent to occupy the
entire field of arbitration." Volt Info. Scis., Inc.
v. Board of Trs. of Leland Stanford Junior Univ., 489
U.S. 468, 477 (1989). Nevertheless, the FAA preempts a state
provision "to the extent that it actually conflicts with
[the FAA] -- that is, to the extent that it 'stands as an
obstacle to the accomplishment and execution of the full
purposes and objectives of Congress.'" Id.
(quoting Hines v. Davidowitz, 312 U.S. 52, 67
(1941)). The United States Supreme Court has observed that
the "primary purpose" of the FAA is to
"ensur[e] that private agreements to arbitrate are
enforced according to their terms." Volt, 489
U.S. at 479. The Court has further stated that "[t]here
is no federal policy favoring arbitration under a certain set
of procedural rules; the federal policy is simply to ensure
the enforceability, according to their terms, of private
agreements to arbitrate." Id. at 476. In sum,
as the Supreme Court of South Carolina succinctly explained,
"[t]he FAA's substantive provisions apply to
arbitration in federal or state courts, but a state's
procedural rules apply in state court unless they conflict
with or undermine the purpose of the FAA." Henderson
v. Summerville Ford-Mercury Inc., 405 S.C. 440, 450, 748
S.E.2d 221, 226-27 (2013). Many other state courts have
reached a similar conclusion. See, e.g.,
Morgan Keegan & Co. v. Smythe, 401 S.W.3d 595,
605-607 (Tenn. 2013) (collecting cases). Particularly
relevant here, other state courts have concluded that state
procedural rules allowing for the immediate appeal of an
order compelling arbitration -- like our Rule 4(d) -- do not
run afoul of the FAA. See, e.g., Kremer
v. Rural Cmty. Ins. Co., 280 Neb. 591, 597-603, 788
N.W.2d 538, 546-50 (2010); Wells v. Chevy Chase Bank,
F.S.B., 363 Md. 232, 241-50, 768 A.2d 620, 624-29
(2001); and Simmons Co. v. Deutsche Fin. Servs.
Corp., 243 Ga.App. 85, 87-89, 532 S.E.2d 436, 438-40
the FAA does not preempt Rule 4(d), which, unlike § 16
of the FAA, always allows for the appeal of an order granting
a motion to compel arbitration. Rule 4(d) does not conflict
with or undermine the purposes of the FAA, in particular the
"primary purpose of ensuring that private arbitration
agreements are enforced according to their terms."
Volt, 489 U.S. at 479. "The timing of the right
to appeal from an order compelling arbitration is a
procedural matter which may delay but does not prevent
enforcement of a valid arbitration agreement."
Simmons Co., 243 Ga.App. at 89, 532 S.E.2d at 440.
As the Supreme Court has observed: "[T]he basic
objective in this area is not to resolve disputes in the
quickest manner possible, no matter what the parties'
wishes, ... but to ensure that commercial arbitration
agreements, like other contracts, '"are enforced
according to their terms"' ... and according to the
intentions of the parties." First Options of
Chicago, Inc. v. Kaplan, 514 U.S. 938, 947 (1995)
(quoting Mastrobuono v. Shearson Lehman Hutton,
Inc., 514 U.S. 52, 54 (1995), quoting in turn
Volt, 489 U.S. at 479). Further, allowing for an
immediate appeal of an order compelling arbitration is
consistent with the fundamental principle that a party
"'cannot be required to submit to arbitration any
dispute which he has not agreed so to submit.'"
AT & T Techs., Inc. v. Communications Workers of
America, 475 U.S. 643, 648 (1986) ...