Alabama Appellate Opinions Released January 13, 2017
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Alabama Appellate Opinions Released 
January 13, 2017
Huie Case of Note: Congrats to Jim Shaw  and Bart Cannon  for their successful petition for writ of mandamus to the Alabama Court of Civil Appeals. See featured case below, Ex parte Thompson Tractor Company, Inc. Huie recently surpassed the milestone of 500 appellate decisions, with over 400 being reported.  
Alabama Supreme Court

Arbitration 

FMR Corp. n/k/a FMR LLC, et al. v. Elizabeth Ann Howard n/k/a Elizabeth Ann Hart

In 2006, Elizabeth Howard n/k/a Elizabeth Hart’s (“Hart”) husband, Frederick Howard (“Howard”), opened an individual retirement account (“the Fidelity IRA”), with FMR Corp. n/k/a FMR LLC, Fidelity Management Trust Company, and Fidelity Brokerage Services LLC (collectively referred to as “Fidelity”). Howard funded the account with money previously held in a retirement account administered by his former employer. Although Howard had previously designated his three children from a prior marriage as beneficiaries of the employer’s retirement account, he did not designate any beneficiary for the Fidelity IRA. Howard died in 2011. His will left all his personal property to the children, explaining that Hart “has a sizeable separate estate of her own.” However, because Howard never designated a beneficiary for the Fidelity IRA, Fidelity distributed the money held in that account to Hart in accordance with the terms of the Fidelity IRA, which provided that any assets in the account would become the property of a surviving spouse when the account holder died if no beneficiary had been named.  

Howard’s children unsuccessfully challenged that distribution in Probate Court. The children then sued Fidelity and Hart, asserting claims of undue influence, fraud, and conversion against Hart and a claim of negligence against Fidelity, contending their father was incompetent at the time the Fidelity IRA was opened and that Hart was the motivation behind the opening of the Fidelity IRA, Fidelity was negligent for failing to implement adequate procedures governing its online-account-opening process that would prevent either fraudulent activity or invalid actions by incompetent individuals. Fidelity moved the Circuit Court to compel arbitration, noting in its motion that Howard, Hart, and the Howard children had all executed documents related to accounts with Fidelity that contained arbitration provisions. The trial court denied the motion to compel mediation. The Alabama Supreme Court reversed the trial court’s holding, finding that the circuit court denied Fidelity’s motion notwithstanding the submission of competent evidence establishing Fidelity had a right to arbitrate these claims.

    Alabama Court of Civil Appeals

    Workers’ Compensation

    Ex parte Thompson Tractor Company, Inc.

    In May of 2011, Ray Franklin (“the employee”) and Donna Franklin (“the widow”) jointly filed a complaint against Thompson Tractor Company, Inc. (“Thompson Tractor”) and other defendants. Pertinent allegations in Count Six of the Complaint included: “As a result of Defendant’s actions, Plaintiff Ray Franklin contracted one or more asbestos-related diseases, including asbestosis;” “Plaintiff Ray Franklin has been diagnosed with asbestosis;” and “the plaintiff, Ray Franklin, received an injury or injuries arising out of and in the course of plaintiff’s said employment… as a proximate result of said employment, Plaintiff has suffered an injury to his person.” The trial court later severed Count Six from the Complaint, and assigned the severed claim (“the workers’ compensation action”) a separate civil action number. After Count Six was severed, the clerk and the parties continued to identify the widow as a named plaintiff in the workers’ compensation action. However, the widow failed to make any claim in the workers’ compensation action.  

    In October of 2011, prior to the adjudication of the employee’s rights based on his workers’ compensation claim, the employee died. On February 1, 2012, the widow filed a motion to be substituted as the plaintiff in the workers’ compensation action in her individual capacity and also in her capacity as personal representative of the estate of her husband, the employee. Additionally, the widow filed a motion to amend the complaint to add a wrongful death claim and a claim for death benefits under the Workers’ Compensation Act. While the widow’s motions remained pending, Thompson Tractor filed a motion to dismiss the workers’ compensation action based on the theory that the trial court lost subject-matter jurisdiction upon the death of the employee in October of 2011. The widow filed a separate civil action seeking death benefits under the Act (“the death-benefits action”) and later moved to consolidate the death-benefits action with the workers’ compensation action. The trial court granted the window’s motion to consolidate and denied Thompson Tractor’s motion to dismiss.  

    Thompson Tractor filed a motion to reconsider, which remained pending when it filed its petition for a writ of mandamus requesting that the Alabama Court of Civil Appeals order the trial court to dismiss the workers’ compensation action. In citing long-standing Alabama precedent which holds “[an employee’s] rights [to workers’ compensation benefits] terminate[s] at his [or her] death,” and “A workers’ compensation claim is not considered an action that survives the death of an employee so that it may be continued in the name of a personal representative of the estate of the employee,” the Court of Civil Appeals granted Thompson Tractor’s petition and ordered the trial court to dismiss the workers’ compensation action. 

      Workers’ Compensation

      Hand Construction, LLC v. Mitchell D. Stringer

      Hand Construction, LLC (“Hand”) appealed from a judgment entered by the trial court finding that injuries Mitchell D. Stringer (“Stringer”) sustained in a motor-vehicle accident in Arkansas were compensable under the Alabama Workers’ Compensation Act (“the Act”).  On appeal, Hand raised the issue of whether the trial court had subject-matter jurisdiction over the action. Evidence produced demonstrated that Stringer lives in Mobile, Alabama. Hand is a construction contractor whose principal place of business is in Shreveport, Louisiana. Hand is licensed to do business in a number of states, including Alabama. However, the chief financial officer for Hand testified by affidavit that Hand does not maintain an office in Alabama, has not done business in Alabama in the last 10 years, and has no employees working in Alabama. According to affidavits of Hand employees, Stringer was hired in Shreveport, Louisiana. According to Stringer, however, he was hired in Alabama because he was offered and accepted employment through a telephone call made to his home in Mobile. Stringer testified that he first worked for Hand at a construction site in Louisiana. Stringer was later sent by Hand to supervise a construction project in North Dakota. Stringer testified that from April 2015 to October 2015 he would work for ten days in North Dakota then return to his home in Mobile for four to five days. However, he testified that when he was in Mobile he would work from home using the computer Hand provided to him.  

      On October 6, 2015, Stringer met with a manager of Hand in Shreveport, Louisiana. The manager informed Stringer that the job in North Dakota had concluded and that Hand did not have sufficient work to retain Stringer. According to Stringer, the manager sent him to North Dakota to retrieve his personal belongings as well as some of Hand’s equipment. Stringer was to bring the materials back to Mobile, and then ship the items from Mobile to Shreveport. The “notice of termination/separation” indicated Stringer was terminated October 5, 2015. The notice stated: “Will pay through current + 1-week severance.” Hand paid for Stringer to fly from Mobile to North Dakota on October 8, 2015, to collect certain equipment that belonged to Hand that Stringer used while working on the project. Stringer stated that he packed the equipment in his pickup truck and began his trip back to Mobile.  

      On October 10, 2015, as he was en route from North Dakota to Mobile, Stringer was involved in a motor-vehicle accident in Arkansas and sustained multiple injuries. The First Report of Injury indicates that Louisiana has jurisdiction over the claim. However, on May 4, 2016, the trial court entered a judgment in which it concluded that it had jurisdiction over the workers’ compensation matter pursuant to § 25-5-35(d)(2) of the Alabama Code. Specifically, the trial court found that at the time of the accident, Stringer was “working under a contract of hire made in this state in employment not principally localized in any state.” Hand appealed the trial court’s judgment. After a review of the evidence, the Alabama Court of Civil Appeals reversed the trial court’s judgment, and stated “we found no evidence that would indicate that no other state, particularly North Dakota or Louisiana, would have jurisdiction over Stringer’s workers’ compensation claim…” Accordingly, the case was remanded to the trial court for an entry of judgment dismissing Stringer’s workers’ compensation action. 

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