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DECLARATORY JUDGMENT & SUBJECT MATTER JURISDICTION - PRIVILEGE UNDERWRITERS RECIPROCAL EXCHANGE V. GRAYSON

Privilege Underwriters Reciprocal Exchange v. Grayson, [Ms. 1150927, Dec. 16, 2016] __ So.3d __ (Ala. 2016). Privilege Underwriters Reciprocal Exchange ("PURE"), a Florida insurance exchange, obtained a judgment, entered upon a jury verdict, after a three-day trial, declaring that Grayson was not entitled to coverage under the uninsured-motorist portion of an automobile insurance policy. The Mobile Circuit Court granted Grayson's motion to set aside the judgment based upon his contention that the judgment was void for lack of subject-matter jurisdiction since there was no justiciable controversy at the time PURE filed its complaint for a declaratory-judgment pursuant to § 6-6-220 et seq., Ala. Code 1975. The Supreme Court reverses the order setting aside the judgment upon concluding the Mobile Circuit Court had jurisdiction over the declaratory-judgment action.

The standard of review on appeal from an order granting relief under Rule 60(b)(4), Ala. R. Civ. P. ("the judgment is void") is straightforward and dispositive:

"The standard of review on appeal from an order granting relief under Rule 60(b)(4), Ala. R. Civ. P. ('the judgment is void'), is not whether the trial court has exceeded its discretion. When the decision to grant or to deny relief turns on the validity of the judgment, discretion has no field of operation. Cassioppi v. Damico, 536 So. 2d 938, 940 (Ala. 1988). 'If the judgment is void, it is to be set aside; if it is valid, it must stand.... A judgment is void only if the court which rendered it lacked jurisdiction of the subject matter, or of the parties, or if it acted in a manner inconsistent with due process.' Seventh Wonder v. Southbound Records, Inc., 364 So. 2d 1173, 1174 (Ala. 1978) (emphasis added)."

Ex parte Full Circle Distribution, L.L.C., 883 So. 2d 638, 641 (Ala. 2003)(some emphases added).

Ms. * 7.

Alabama law is settled that unless there is a justiciable controversy, a trial court does not obtain subject-matter jurisdiction under the Declaratory Judgment Act:

"'There must be a bona fide justiciable controversy in order to grant declaratory relief. If no justiciable controversy exists when the suit is commenced, then the court lacks jurisdiction.' Durham v. Community Bank of Marshall County, 584 So.2d 834, 835 (Ala. 1991) (citations omitted). Where 'the trial court ha[s] no subject-matter jurisdiction, [it has] no alternative but to dismiss the action.' State v. Property at 2018 Rainbow Drive, 740 So. 2d 1025, 1029 (Ala. 1999). '"Any other action taken by a court lacking subject matter jurisdiction is null and void."' Id. (quoting Beach v. Director of Revenue, 934 S.W.2d 315, 318 (Mo. Ct. App. 1996)). ...

"This Court has recognized that a purpose of the Declaratory Judgment Act, codified at §§ 6–6–220 through –232, Ala. Code 1975, is 'to enable parties between whom an actual controversy exists or those between whom litigation is inevitable to have the issues speedily determined when a speedy determination would prevent unnecessary injury caused by the delay of ordinary judicial proceedings.' Harper v. Brown, Stagner, Richardson, Inc., 873 So. 2d 220, 224 (Ala. 2003).... Further, '[w]e have recognized that a justiciable controversy is one that is "'definite and concrete, touching the legal relations of the parties in adverse legal interest, and it must be a real and substantial controversy admitting of specific relief through a [judgment].'" MacKenzie v. First Alabama Bank, 598 So. 2d 1367, 1370 (Ala. 1992)(quoting Copeland v. Jefferson County, 284 Ala. 558, 561, 226 So. 2d 385, 387 (1969)).' Harper, 873 So. 2d at 224.... Thus, the Declaratory Judgment Act does not '"'empower courts to decide ... abstract propositions, or to give advisory opinions, however convenient it might be to have these questions decided for the government of future cases.'"' Bruner v. Geneva County Forestry Dep't, 865 So. 2d 1167, 1175 (Ala. 2003)(quoting Stamps v. Jefferson County Bd. of Educ., 642 So. 2d 941, 944 (Ala. 1994), quoting in turn Town of Warrior v. Blaylock, 275 Ala. 113, 114, 152 So. 2d 661, 662 (1963))....

"In determining whether [PURE's] complaint alleges a bona fide justiciable controversy, we 'must accept the allegations of the complaint as true,' and 'must also view the allegations of the complaint most strongly in [PURE's] favor.' Harper, 873 So. 2d at 223."

Gulf Beach Hotel, Inc. v. State ex rel. Whetstone, 935 So. 2d 1177, 1182-83 (Ala. 2006)(emphasis omitted).

Ms. * 7-9. Adhering to the principle that neither party to an insurance contract "should be compelled to wait until the events giving rise to liability had occurred before having a determination of the rights and obligations under the policy" (Ms. * 10, quoting Federated Guaranty Life Insurance Co. v. Bragg, 393 So.2d 1386, 1388-89 (1981)), the Court concludes that PURE's action seeking a declaratory-judgment about whether uninsured motorist benefits were owed to Grayson based upon the policy's residency requirement stated a bona fide justiciable controversy such that the Circuit Court of Mobile County did in fact obtain subject-matter jurisdiction.

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