Johnson et al v. Mabry
ORDER GRANTING Allstate Dfts' 64 Motion to Opt Out of Trial as set out. The Allstate Dfts have now withdrawn from active participation in this litigation. The Allstate Dfts, however, are not dismissed from this case. Signed by Judge Callie V. S. Granade on 11/14/2014. (tot)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
TRUDI A. JOHNSON and DAVID )
) CIVIL ACTION NO. 13-339-CG-C
CHRISTOPHER RAY MABRY, et )
This action is before the Court on a motion to opt out of trial (Doc. 64) filed by
Allstate Property & Casualty Insurance Company, Allstate Indemnity Company,
and Allstate Insurance Company (collectively, “Allstate Defendants”). Trudi A.
Johnson and David Johnson (together, “Plaintiffs”) responded and opposed the
motion to opt out (Doc. 66), and the Allstate Defendants replied. (Doc. 67). After
consideration, the Allstate Defendants’ motion to opt out is GRANTED.
On July 2, 2013, Plaintiffs filed this action against Christopher Ray Mabry.
(Doc. 1). Plaintiffs allege Mabry negligently turned his car into a car driven by
Trudi Johnson, causing her to suffer personal injuries and damages. (Doc. 1, p. 2).
On April 29, 2014, the Allstate Defendants filed a motion to intervene. (Docs. 24,
30). After the Court granted that motion (Doc. 32), Plaintiffs filed an amended
complaint adding the Allstate Defendants and seeking a declaratory judgment
against them. (Doc. 39, p. 5). Specifically, Plaintiffs seek money damages from the
Allstate Defendants because Plaintiffs held insurance policies with them and Mabry
was an underinsured motorist at the time of the accident. (Doc. 39, pp. 4 – 5). After
participating in discovery, the Allstate Defendants filed a motion on October 29,
2014, to opt out of the trial pursuant to Lowe v. Nationwide Ins. Co., 521 So. 2d
1309, 1310 (Ala. 1988). (Doc. 64). Plaintiffs contest the Allstate Defendants’ request
to opt out.
In challenging the motion to opt out, Plaintiffs argue Mississippi law controls
contract issues, and Alabama law controls the question of negligence. (Doc. 66, pp.
4, 6). Plaintiffs therefore contend Mississippi law applies to the Allstate Defendants’
decision to opt out, and an “uninsured motorist insurance carrier has no right under
Mississippi UIM law to unilaterally ‘opt out’ of a case.” (Doc. 66, p. 6). Plaintiffs
confuse the issues. A substantive contract question is not raised in this motion.1
Plaintiffs seek only use of a procedural mechanism that allows them to withdraw
from participating in the trial. Alabama law allows insurers to opt out of trial so
long as the parties follow certain procedures:
A plaintiff is allowed either to join as a party defendant his own
liability insurer in a suit against the underinsured motorist or merely
This action was brought on the basis of diversity jurisdiction. As a result,
Plaintiffs correctly note that potential contract disputes may require a choice of
laws analysis. (Doc. 66, p. 4); see also Clanton v. Inter.net Global, L.L.C., 435 F.3d
1319, 1323 (11th Cir. 2006) (“In determining which law applies [in contract
disputes], a federal district court sitting in diversity must apply the choice of law
rules of the forum state.”). But there is no contract dispute here. The Allstate
Defendants are merely seeking to withdraw from the trial without commenting on
any contract formation or application issues, and the Allstate Defendants do not cite
or question any of the provisions contained in the insurance policies in their motion.
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 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). Under either election, the
insurer would be bound by the factfinder’s decisions on the issues of
liability and damages. If the insurer is not joined but merely is given
notice of the filing of the action, it can decide either to intervene or to
stay out of the case. The results of either choice parallel those set out
above—where the insurer is joined as a party defendant.
Lowe, 521 So. 2d at 1310 (emphasis omitted).
The Alabama Supreme Court has further explained that opting out within a
“reasonable time” is determined by examining the posture of the case. Ex parte
Elec. Ins. Co., No. 1130820, 2014 WL 4798736, at *2 (Ala. Sept. 26, 2014). On one
hand, an insurer does not want to withdraw from a case too early, before it could
determine through discovery whether it would be in its best interest to do so. On the
other hand, an insurer cannot delay unnecessarily in making its decision to
withdraw. Thus it is not unreasonable for an “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).
In this case, the Allstate Defendants participated in discovery and relevant
proceedings for roughly six months. Dispositive motions were due on October 3,
2014, and trial is scheduled for March 3, 2015. (Doc. 33). After reviewing the
posture of the case, the Court finds that the Allstate Defendants filed their motion
to opt out of the trial within a reasonable time.
As noted in the reply (Doc. 67, p. 2), the Allstate Defendants remain parties
in this action even though they will not participate in trial. Ex parte Boles, 720 So.
2d 911, 914-15 (Ala. 1998) (when an insurer elects not to participate in trial, it is
not dismissed as a defendant but “has simply withdrawn from the litigation by
exercising its option not to participate in the trial”). Additionally, after opting out,
the Allstate Defendants cannot be mentioned at trial. Moore v. United Services
Auto. Ass’n, 898 So. 2d 725, 728 (Ala. 2004) (when an insurer opts out of litigation,
trial court has “an affirmative duty to ensure that the plaintiff’s insurer or its
potential involvement is not mentioned at trial”). And as required by Lowe, the
Allstate Defendants have agreed “to be bound by the fact-finder’s decision on issues
of liability and damages.” (Doc. 64, pp. 1 – 2).
The Allstate Defendants have timely elected not to participate in the trial.
Accordingly, the motion to opt out (Doc. 64) is GRANTED. The Allstate Defendants
have now withdrawn from active participation in this litigation. The Allstate
Defendants, however, are not dismissed from this case.
DONE and ORDERED this 14th day of November, 2014.
/s/ Callie V. S. Granade
UNITED STATES DISTRICT JUDGE
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