Voluntary Dismissal – Transfer of Structured-Settlement Rights – Intervention – Interpleader

Ex parte Scoggins, [Ms. 1200102, 1200103, 1200104, 1200105, 1200106, 1200107, Sept. 3, 2021] __ So. 3d __ (Ala. 2021). Addressing six consolidated mandamus petitions arising from multiple actions in the Calhoun Circuit Court relating to a structured settlement executed in 2002 to resolve a wrongful death action where the distributees Michael Scoggins and Matthew Scoggins were minors, the Court (Mendheim, J.; Parker, C.J., and Bolin, Shaw, Wise, Bryan, Sellers, and Stewart, JJ., concur; Mitchell, J., recuses) first holds that the Calhoun Circuit Court lacked jurisdiction to “reopen” the wrongful death action in 2011 which had been dismissed by joint stipulation in 2002. The Court explains

The unequivocal fact is that the wrongful-death action was dismissed by joint stipulation on July 19, 2002. “‘“[T]he effect of a voluntary dismissal ... is to render the proceedings a nullity and leave the parties as if the action had never been brought.”’ Ex parte Sealy [, L.L.C.],904 So. 2d [1230,] 1236 [(Ala. 2004)] (quoting In re Piper Aircraft Distrib. Sys. Antitrust Litig., 551 F.2d 213, 219 (8th Cir. 1977)) (emphasis added).” Gallagher Bassett Servs., Inc. v. Phillips, 991 So. 2d 697, 700 (Ala. 2008).

Ms. **46-47.

The Court explained further that

The only purported authority for “reopening” the wrongful-death action is the probate court’s April 20, 2010, order, but, even though the probate court had the authority to appoint a legal conservator for the then-minor brothers’ estates under the Alabama Uniform Guardianship and Protective Proceedings Act (“the AUGPPA”), Ala. Code 1975, § 26-2A-1 et seq., [to pursue sale of certain future payments under the structured settlement] such authority could not empower the circuit court to revive an action that had so long ago ceased to exist.

Ms. *51.

The Court noted that even though the distributees of the wrongful death settlement were minors, the circuit court did not approve the settlement and had determined in an order entered in 2002 that “[t]he interest of the minors in this matter are as distributees of the estate and are not personal in nature. The representatives have the authority to settle this matter. No pro ami is necessary in this matter.” Ms *7. In this regard, the Court noted in dicta that

[A] pro ami settlement may not be required in a wrongful-death action in which a minor is a distributee of the settlement proceeds because “[t]he Wrongful Death Act, § 6-5-410, [Ala. Code 1975,] creates the right in the personal representative of the decedent to act as agent by legislative appointment for the effectuation of a legislative policy of the prevention of homicides through the deterrent value of the infliction of punitive damages.” Steele v. Steele, 623 So. 2d 1140, 1141 (Ala. 1993). Thus, the personal representative has the authority to settle a wrongful-death claim even though “[i]n a wrongful death action the personal representative is only the nominal or formal party. He sues as statutory trustee for the benefit of the designated beneficiaries, who are the real parties in interest.” Board of Trs. of Univ. of Alabama v. Harrell, 43 Ala. App. 258, 261, 188 So. 2d 555, 557 (1965). See William E. Shreve, Jr., Settling the Claims of a Minor, 72 Ala. Law 308, 315-16 (2011). But see also Roby v. Benton Express, Inc., No. 2:05cv494-MHT, May 19, 2006 (M.D. Ala. 2006) (not published in Federal Supplement) (finding that “court’s approval [of the final settlement of a wrongful-death claim] is necessary because the decedent ... left surviving him minor children ... who will receive a portion of the settlement.”).

Ms.*6, n. 2.

Turning to 2012 actions filed by Stratcap Investments, Inc. (“Stratcap”), a purchaser of the structured-settlement payment rights, the Court denies Michael’s petition for a writ of mandamus seeking to vacate the circuit court’s order denying Michael’s motion to intervene in the Stratcap actions. The Court explains

In this instance, Michael’s motion did not clearly delineate whether he was seeking permissive intervention or intervention as a matter of right. This is important because “trial courts have broader discretion in denying a motion for permissive intervention as untimely under Rule 24(b) than they do in denying as untimely a motion to intervene as of right under Rule 24(a).” QBE Ins. Corp., 23 So. 3d at 1131. As we have already mentioned, Michael also did not clearly indicate in his motion that he was seeking to set aside the circuit court’s orders [in the Stratcap actions] approving the transfers of certain structured-settlement-payment rights. Such an argument is especially important when a party seeks to intervene after a final judgment has been entered because otherwise the motion to intervene serves no relevant purpose in the “defunct” action. Phillips, 991 So. 2d at 700.

Ms. *75, citing Gallagher Bassett Servs., Inc. v. Phillips, 991 So. 2d 697, 700 (Ala. 2008). The Court also rejected Michael’s argument that Stratcap’s failure to notify him of the filing of the actions to approve the transfer to Stratcap of certain of the structured-settlement-payments rights voided the judgments approving the transfers. While acknowledging that Michael and Matthew were interested parties under the Alabama Structured Settlement Protection Act (ASSPA) who were entitled to notice of the Stratcap action, the Court concludes the failure to give notice does not render the order approving the transfer void because “the ASSPA itself suggests that failures to fulfill its procedural requirements are remedied by holding the transferee accountable, not by voiding the transfer transaction.” Ms. *64, citing Section 6-11-54(a)(2)b., Ala. Code 1975.

Finally, the Court issues the writ directing the circuit court to vacate its order denying American General Annuity Service Corporation’s motion to interplead annuity payments in the 2019 action [filed by Michael and Matthew against Stratcap and others] and holds

Whether they [Michael and Matthew] ultimately will succeed in undermining the orders in the Stratcap actions is not relevant to whether American General’s motion to interplead funds should be granted. What is relevant is that multiple parties clearly claim a stake in American General’s annuity payments. The circuit court granted American General’s motion to intervene in the 2019 action, which was filed with the intention of desiring to interplead its annuity-payment funds. Under those circumstances, the circuit court should have granted American General’s motion for interpleader relief.

Ms. **79-80.

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