Stay Improper Where Prospect of Parallel Criminal Investigation Was Speculative

Ex parte Insurance Express, LLC, et al., [Ms. SC-2022-0939, Aug. 25, 2023] __ So. 3d __ (Ala. 2023). The Court (Shaw, J.; Parker, C.J., and Wise, Bryan, Sellers, Mendheim, Stewart, Mitchell, and Cook, JJ., concur) issues a writ of mandamus directing the Choctaw Circuit Court to vacate a stay of a civil action filed by Insurance Express, LLC (“Insurance Express”), Wayne Taylor, and Julie Singley against Lynne Ernest Insurance, LLC (“LEI”), Lynne Ernest, Chynna Ernest, and Deadra Stokley. The circuit court stayed the case “‘until all applicable statutes of limitations have expired for any potential criminal prosecution that could be brought against Defendants based on the allegations [in Insurance Express’s] Complaint.’” Ms. *5.

The following factors determine whether a stay is warranted: “‘(1) whether the civil proceeding and the criminal proceeding are parallel, see Ex parte Weems, 711 So. 2d 1011, 1013 (Ala. 1998); (2) whether the moving party’s Fifth Amendment protection against self-incrimination will be threatened if the civil proceeding is not stayed, see Ex parte Windom, 763 So. 2d 946, 950 (Ala. 2000); and (3) whether the requirements of the balancing tests set out in Ex parte Baugh, 530 So. 2d [238,] 244 [(Ala. 1988)], and Ex parte Ebbers, 871 So. 2d 776, 789 (Ala. 2003), are met.’” Ms. *8, quoting Ex parte Rawls, 953 So. 2d 374, 378 (Ala. 2006).

After discussing the evidence before the circuit court, the Court concludes “[w]hen allegations of wrongdoing in a civil action purportedly could rise to the level of criminal misconduct, but law-enforcement and regulatory agencies repeatedly decline to investigate, to prosecute, or to prosecute after an investigation, and years have passed with no further law-enforcement action – in this case, three years – we cannot hold that a party has ‘clearly demonstrate[d]’ that it ‘is the subject of an ongoing, and overlapping, criminal investigation.’” Ms. *15, quoting Ex parte Ebbers, 871 So. 2d 776, 785 (Ala. 2003). The Court vacates the stay and reiterates “a motion to stay civil discovery during the pendency of a parallel criminal proceeding is not properly granted upon speculative or conclusory grounds.” Ms. *16 , internal quotation marks omitted.

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