author: JOHNSTONE, Justice.

text:
    ROYAL INSURANCE COMPANY OF AMERICA v. Sandra Hill THOMAS et al.
    1011518.
    Supreme Court of Alabama.
    Oct. 3, 2003.

      Philip R. Collins of Huie, Fernambucq & Stewart, L.L.P., Birmingham, for plaintiff.
    Jack B. MeNamee and Michael D. Pet-way of MeNamee, Snead & Petway, Birmingham; and Rhonda Pitts Chambers of Taylor & Taylor, Birmingham, for defendant Velma Daniel.
    Russell Q. Allison and Allan Sidney Jones of Carr, Allison, Pugh, Howard, Oliver & Sisson, P.C., Birmingham, for defendant Lloyd’s of London.
   JOHNSTONE, Justice.

This Court consented to answer two questions certified by the United States District Court for the Northern District of Alabama (“the federal district court”) under Rule 18, Ala. R.App. P. The certified questions relate to the coverage afforded Sandra Hill Thomas (“Thomas”), a customer of Carl Cannon Chevrolet-Olds, Inc. (“Carl Cannon”), by two insurance policies issued to Carl Cannon: a garage. policy issued by Certain Interested Underwriters at Lloyd’s of London (“Lloyd’s London”) and an umbrella policy issued by Royal Insurance Company of America (“Royal”).

Facts

About October 9,1998, Carl Cannon lent a car to Thomas while Carl Cannon repaired Thomas’s car. On October 13, 1998, Thomas was driving the Carl Cannon car when it collided with another car occupied by Velma Daniel (“Daniel”). To recover for injuries she suffered in the collision, Daniel sued Thomas and Carl Cannon in the Walker Circuit Court. The Walker Circuit Court entered a summary judgment for Carl Cannon.

The Lloyd’s London and Royal policies constituted Thomas’s only potential sources of liability insurance for the collision. Lloyd’s London contended that Section II, paragraph A.l.a.(2) of the Lloyd’s London garage policy (“the exclusion”) excluded Thomas as an insured unless she either had no other available primary, excess, or contingent insurance or had insufficient coverage under such insurance to meet the $20,000 minimum required by the Motor Vehicle Safety-Responsibility Act, § 32-7-1 et seq., Ala.Code 1975 (“the Act”). Lloyd’s London further contended that, if Thomas did not have other available primary, excess, or. contingent insur-anee or had insufficient coverage under such insurance to meet the $20,000 minimum required by the Act, then the exceptions to the exclusion preserved coverage for Thomas under the Lloyd’s London garage policy but limited the coverage to the amount necessary for her to meet the $20,000 minimum required by the Act.

The exclusion and the two exceptions to the exclusion appear within the subsection of the Lloyd’s London garage policy defining “who is an insured” under the policy. After that subsection of the policy initially defines “insured” as including Carl Cannon and anyone else while using a Carl Cannon car with the permission of Carl Cannon, the exclusion then excludes customers of Carl Cannon. The two exceptions to the exclusion then preserve coverage for customers who either have no other available primary, excess, or contingent insurance or have insufficient coverage under such insurance to meet the $20,000 minimum required by the Act. The pertinent portions of the Lloyd’s London garage policy provide:

“SECTION II — LIABILITY COVERAGE
“A. COVERAGE
“1. WHO IS AN INSURED
“a. The following are ‘insureds’ for covered ‘autos’:
“(1) You [Carl Cannon] for any covered ‘auto.’
“(2) Anyone else while using with your permission a covered ‘auto’ you own, hire or borrow except:
“(d) Your customers, if your business is shown in the Declarations as an ‘auto’ dealership. However, if a customer of yours:
“(i) Has no other available insurance (whether primary, excess or contingent) they are an ‘insured’ but only up to the compulsory or financial responsibility law limits where the covered ‘auto’ is principally garaged.
“(ii) Has other available insurance (whether primary, excess or contingent) less than the compulsory or financial responsibility law limits where the covered ‘auto’ is principally garaged they are an ‘insured’ only for the amount by which the compulsory or financial responsibility law limits exceed the limit of their other insurance.”

(Emphasis added.)

Daniel and Royal contend that the exclusion in the Lloyd’s London garage policy is invalid because it violates public policy as expressed in the requirement of the Act that a car owner’s liability insurance policy shall insure permissive users of the car. Daniel and Royal further contend that, because the exclusion is invalid, Thomas is an insured entitled to the same coverage of $1,000,000 as permissive users of Carl Cannon ears who were not customers of Carl Cannon.

The Royal policy states on the declarations page that it provides umbrella coverage:

“ITEM 2 COVERAGE: UMBRELLA”

The Royal policy defines an insured, in pertinent part:

“IV. WHO IS AN INSURED
“1. If you [Carl Cannon] are designated in the declarations as:
“(a) An organization other than a partnership, joint venture or limited liability company, you are an insured ....
“2. Each of the following is also an insured:
“(d) Any person who has your permission to use an ‘automobile’ owned by, loaned to, or hired for use by you, and any person or organization legally responsible for the use of that ‘automobile’....”

Royal concedes that Thomas is an insured entitled to coverage under the Royal umbrella policy. However, Royal contends that the Royal umbrella policy covered Thomas only for liability to .Daniel that exceeds $1,000,000. Royal contends that the Insuring Agreement of the Royal umbrella policy provides that Royal insures “sums in excess of the ‘retained limit,’ and that the policy defines Thomas’s “retained limit” as “the applicable policy limits of the ‘underlying insurance’ shown on the declarations page” of $1,000,000. In pertinent part, the Insuring Agreement of the Royal umbrella policy provides:

“I. INSURING AGREEMENT
“1. We will pay on behalf of the insured those sums in excess of the ‘retained limit’ which the insured becomes legally obligated to pay as damages to which this insurance applies because of:
“(a) ‘Bodily injury’ or ‘property damage’ which occurs during the policy period and is caused by an ‘occurrence’;
“The amount we will pay is limited as described in Section VI — LIMITS OF INSURANCE.

In pertinent part, the Royal policy defines “retained limit” and “underlying insurance:”

“V. DEFINITIONS
“11. ‘Retained limit’ means:
“(a) With respect to any ‘occurrence’ that is covered by ‘underlying insurance’ ..., ... the applicable limits of the ‘underlying insurance’ shown on the declarations page ...; or
“(b) With respect to any ‘occurrence’ that is not covered by ‘underlying insurance’ or any other insurance, the amount stated in Item 4 of the declarations as the Retained Limit/Each Occurrence.
“13. ‘Underlying insurance’ means the policies ... listed in the Schedule of Underlying Insurance.... ”

The Schedule of Underlying Insurance on the declarations page of the Royal policy shows, in pertinent part:

“ITEM 6 SCHEDULE OF UNDERLYING INSURANCE
“Type of Policy Insurer Applicable Limit
“GARAGE LIABILITY LLOYD’S $1,000,000 AUTO ONLY
$1,000,000 OTHER THAN AUTO
$2,000,000 AGGREGATE

(Capitalization original; emphasis added.)

Item 4 on the declarations page of the Royal umbrella policy shows:

“ITEM 4 LIMITS AND PREMIUM
“LIMITS OF INSURANCE:
“$5,000,000. EACH OCCURRENCE
“$5,000,000. AGGREGATE WHERE APPLICABLE
RETAINED LIMIT/BACH OCCURRENCE
X FLAT AUDITABLE— “PREMIUM
$6,000.00 SEE PREMIUM COMPUTATION ENDORSEMENT”

(Capitalization original; emphasis added.)

Daniel, on the other hand, contends that, if Thomas’s coverage under the Lloyd’s London garage policy is limited to $20,000, then Section VI.6 of the Royal policy (“the drop-down provision”) obliges Royal to “drop down” and to indemnify Thomas for any liability she incurred to Daniel that is in excess of $20,000 and less than or equal to $5,000,000, the policy limit of the Royal policy. The drop-down provision provides:

“VI. LIMITS OF INSURANCE
“6. If the applicable limits of the ‘underlying insurance’ or other insurance are reduced or exhausted by payment for ‘bodily injury’ or ‘property damage’ which occurs ... during the policy period of this policy, the limits of this policy will apply in excess of such reduced or exhausted limits.”

To resolve these coverage disputes, Royal sued Thomas, Daniel, and Lloyd’s London for a declaratory judgment in the federal district court. Thomas, whom neither Lloyd’s London nor Royal provided with counsel for the coverage disputes, depended on Daniel to advocate Thomas’s rights to coverage under the policies. (Likewise, Thomas has not filed a brief in this Court.) After Royal moved for a partial summary judgment and Lloyd’s London cross-moved for a summary judgment, the federal district court certified these questions to this Court:

“1. Is the exclusion or limiting clause contained in Section II, paragraph A.l.a.(2) of the Lloyd’s Garage Liability Policy issued to Carl Cannon Chevrolet-Olds, Inc., as the insured’s primary liability coverage, valid under Alabama law? Put another way, does the Alabama law allow an insurer to limit its exposure under a so-called ‘garage’ policy by reducing its liability limit to the statutory minimum in cases in which a permitted driver qualifies as an ‘insured,’ but does not possess automobile liability coverage?
“2. Depending upon the answer to question 1, what coverage, if any, is provided to the driver of the automobile that was furnished by Carl Cannon Chevrole1>Olds to her under the language of Section VI.6 of Royal’s Big Shield Commercial Catastrophe Liability Policy?”

Analysis

Lloyd’s London Policy

An exclusion in an insurance policy is a provision that eliminates coverage that would have existed in the absence of the exclusion. Coppi v. West American Ins. Co., 247 Neb. 1, 11, 524 N.W.2d 804, 813 (1994). An exception to an exclusion in an insurance policy is a provision that preserves coverage that would have been excluded by the exclusion in the absence of the exception. Avemco Ins. Co. v. Auburn Flying Serv., Inc., 242 F.3d 819, 822 n. 3 (8th Cir.2001).

On October 13, 1998, the pertinent portion of the Motor Vehicle Safety-Responsibility Act provided:

“ § 32-7-22. ‘Motor vehicle liability policy’ defined; policy provisions.
“(a) A ‘motor vehicle liability policy,’ as the term is used in this chapter, means an owner’s or an operator’s policy of liability insurance....
“(b) The owner’s policy of liability insurance:
“(2) Shall insure the person named in the policy and any other person, as insured, using any motor vehicle or motor vehicles designated in the policy with the express or implied permission of the named insured....
“(j) The requirements for a motor vehicle liability policy may be fulfilled by the policies of one or more insurance carriers which policies together meet the requirements for a policy.”

Section 32-7-22, Ala.Code 1975.

In State Farm Mutual Automobile Insurance Co. v. Auto-Owners Insurance Co., 331 So.2d 638 (Ala.1976), a garage lent a ear to a customer named Folkes to use while the garage repaired Folkes’s car. Folkes was driving the loaned car when it collided with another car. A person injured in the collision sued Folkes. Folkes was insured by State Farm, and the garage was insured by Auto-Owners. Folkes’s State Farm policy contained an “escape clause” to the effect that the State Farm coverage was excess over other collectible insurance for any liability incurred by Folkes in the use of a temporary substitute car. The Auto-Owners policy issued to the garage contained this exclusion:

“ ‘Garage customers are not insureds with respect to the use of automobiles covered by this policy except in accordance with the following additional provisions:
“ ‘(1) If there is other valid and collectible insurance, whether primary, excess or contingent, available to the garage customer and the limits of such insurance are sufficient to pay damages up to the applicable limit of the financial responsibility law of the state where the automobile is principally garaged, no damages are collectible under the policy.
“ ‘(2) If there is other valid and collectible insurance available to the garage customer, whether primary, excess or contingent, and the limits of such insurance are insufficient to pay damages up to the applicable limit of the aforesaid financial responsibility law, then this insurance shall apply to the excess of damages up to such limit.
“ ‘(3) If there is no other valid and collectible insurance, whether primary, excess or contingent, available to the garage customer, this insurance shall apply but the amount of damages payable under this policy shall not exceed the applicable limit of the aforesaid financial responsibility law.’

331 So.2d at 640 (emphasis added).

State Farm sued Auto-Owners for a declaratory judgment that the Auto-Owners policy covered Folkes and provided Folkes with primary coverage. State Farm contended that the exclusion in the Auto-Owners policy excluding Folkes as an insured was invalid because it violated the public policy expressed in the Motor Vehicle Safety-Responsibility Act. The Code sections then applicable were like the version of § 32-7-22 applicable to the case now before us. Title 36, § 74(62)(b)2., Ala. Code 1940 (Recomp.1958), which was in effect when Folkes’s collision occurred, provided that an owner’s policy of liability insurance (like that issued by Auto-Owners to the garage) “shall insure the person named therein and any other person, as insured, using any such motor vehicle or motor vehicles with the express or implied permission of such named insured.Title 36, § 74(62)(j), provided that “[t]he requirements for a motor vehicle liability policy may be fulfilled by the policies of one or more insurance carriers which policies together meet such requirements.” State Farm further contended that, because the exclusion in the Auto-Owners policy was invalid, the Auto-Owners policy covered Folkes, the Auto-Owners policy afforded Folkes primary coverage, and Folkes’s own State Farm policy afforded Folkes only excess coverage.

The trial court declared that the Auto-Owners exclusion did not violate the public policy expressed in the Act. Further, the trial court declared that, because the State Farm policy provided at least excess coverage for Folkes, the Auto-Owners exclusion excluded coverage for Folkes under the Auto-Owners policy. State Farm appealed. Affirming the trial court, this Court held that the Auto-Owners exclusion did not violate the public policy expressed in the Act, that the State Farm policy provided Folkes with primary insurance notwithstanding the “escape clause” in the State Farm policy, and that the Auto-Owners exclusion excluded Folkes from coverage under the Auto-Owners policy because the State Farm policy afforded Folkes coverage. This Court said:

“Issues Presented for Review
“(1) Did the policy of insurance issued by State Farm to Folkes afford him such coverage that the policy issued by Auto-Owners to [the garage] afforded [Folkes] none?
“(2) Is the exclusionary provision in the Auto-Owners policy contra to the public policy of Alabama?
“Decision and Opinion
“The first issue can otherwise be stated, as it was in brief by Auto-Owners: which coverage is contingent or excess and which coverage is primary?
‘Various types of ‘other insurance’ clauses were analyzed and discussed at length, most recently in State Farm Mutual Automobile Insurance Co. v. Auto-Owners Insurance Co., 287 Ala. 477, 252 So.2d 631 (1971)[,] and Continental National American Group v. Burleson, 283 Ala. 671, 220 So.2d 611 (1969). By reference to those decisions we may characterize the ‘other insurance’ clause set out in this opinion, found in the State Farm policy as an automobile-business-owned temporary substitute automobile ‘escape clause.’ That clause from the Auto-Owners policy which is set out herein could be described as one ‘exclusionary’ of otherwise insured garage customers.
“It is the specific composition of the ‘exclusionary’ clause of the Auto-Owners policy, under the operative facts of this case, which takes this case from without the general rule that primary coverage follows ownership of the auto. That rule underlies the reasoning in State Farm, supra, and Burleson, supra. No coverage is afforded garage customers if there is available other collectible insurance whether primary, excess, or contingent. The distinguishing factor is the specificity of the ‘exclusion.’
“Where the exclusionary clause is specific by its terms to include primary or excess insurance, excess insurance constitutes ‘other collectible insurance’, and permits operation of the exclusion. United States Fidelity and Guaranty Co. v. Dixie Auto Insurance Co., 292 F.Supp. 554 (Ala.) (1968). The general rule that primary coverage follows ownership is not controlling where there is a specific exclusionary clause rather than a ‘simple’ escape clause contained in the owner’s policy. Continental Casualty Company v. Weekes, 74 So.2d 367 (Fla.) (1954).
“Auto-Owners’ policy intended to extend coverage to additional insureds only when they have no other coverage available to them. Excess coverage as provided by State Farm, constitutes ‘other insurance’ as contemplated in the exclusion found in Auto-Owners’ policy. Therefore, State Farm’s coverage is primary. Clearly, Auto-Owners has the right to determine the class of persons it wishes to insure as long as the policy provides the coverage required by law. Auto-Owners’ policy is not violative of the public policy of this State expressed in the Motor Vehicle-Safety Responsibility Act. Code of Ala., Tit. 36, § 74(42), et seq.
“By sustaining the operative effect of the Auto-Owners exclusionary clause Folkes is not deprived of the amount of liability insurance which the law requires he be afforded. Were it not provided by the State Farm policy — other available insurance — the Auto-Owners’ policy would provide it to the full extent required by law. The law is only concerned that required coverage is provided, not by what or which carrier. The requirements of coverage may be fulfilled by policies of one or more carriers which together meet the requirements. Code of Ala., Tit. 36, § 74(62)©.”

331 So.2d at 640-41.

Despite differences in wording, the exclusion in the Auto-Owners policy in State Farm operated like the exclusion in the Lloyd’s London garage policy in the case before us. While the Auto-Owners exclusion generally provided that garage customers were not insureds, the Auto-Owners policy contained exceptions to the exclusion preserving coverage up to the minimum amount necessary to meet the requirement of the Motor Vehicle Safety-Responsibility Act for any garage customer who did not have other available primary, excess, or contingent insurance or had an insufficient amount of such other insurance to meet the minimum required by the Act. Likewise, while the Lloyd’s London garage policy exclusion generally provides that customers of Carl Cannon are not insureds, the Lloyd’s London garage policy contains two exceptions preserving coverage up to $20,000, the minimum amount required by the Act, for customers of Carl Cannon who either have no other available primary, excess, or contingent insurance or have an insufficient amount of such insurance to meet the $20,000 minimum required by the Act.

Daniel asserts in a footnote in her brief that State Farm does not control the answer to the question whether the Lloyd’s London exclusion is valid:

“At first blush it would appear that there is controlling precedent with respect to the certified question. However, the issue in State Farm Mutual Automobile Insurance Co. v. Auto-Owners Insurance Co., 331 So.2d 638 (Ala.1976), is different than the issue in this case. Although this Court held that the policy at issue was not violative of the public policy of this state as expressed in the Financial Responsibility laws, that policy contained an exclusion for other valid and collectible insurance. There is no such exclusion in the Lloyd’s policy in this case.”

Daniel’s brief, p. 11 n. 3. If Daniel is asserting that the Lloyd’s London exclusion is not an exclusion, she misapprehends what constitutes an exclusion. An exclusion eliminates coverage that would exist in the absence of the exclusion. Coppi, supra. The Lloyd’s London exclusion generally excludes coverage for customers of Carl Cannon that would otherwise exist under the definition of “insured” in the absence of the exclusion; and the two exceptions to the exclusion then preserve coverage, up to the amount necessary to meet the $20,000 minimum required by the Act, for Carl Cannon customers who either have no other available primary, excess, or contingent insurance or have an insufficient amount of such insurance to meet the $20,000 minimum required by the Act.

If Daniel is asserting in her footnote that State Farm, is distinguishable because the Auto-Owners exclusion used the words “other valid and collectible insurance, whether primary, excess or contingent, available to the garage customer” (emphasis added) rather than the words “other available insurance (whether primary, excess or contingent),” which the Lloyd’s London exclusion uses, she is misreading the holding in State Farm. The holding in State Farm that the Auto-Owners exclusion did not violate the public policy expressed in the Act did not turn on the use of the words “valid and collectible ” in the Auto-Owners exclusion. Rather, the holding turned on the presence of the two exceptions to the exclusion which preserved coverage for garage customers who had either no other available insurance or insufficient coverage under such insurance to meet the minimum required by the Act. There is no material difference between an exception that preserves coverage for a customer who does not have “other valid and collectible insurance ... available” and an exception that preserves coverage for a customer who does not have “other available insurance.” A customer who does not have “valid and collectible” other insurance would not have “available” other insurance under the Lloyd’s London garage policy exception to the exclusion and would therefore have coverage under that policy.

Not only was the Auto-Owners exclusion essentially the same as the Lloyd’s London exclusion, but also the version of the Act in effect when the Court upheld the Auto-Owners exclusion was virtually identical to the version of the Act in effect when Thomas’s collision occurred. This latter likeness invalidates Daniel’s reliance on Swank v. Chrysler Insurance Co., 282 Mont. 376, 938 P.2d 631 (1997).

Daniel argues that this Court should follow the holding of the Montana Supreme Court in Swank in determining whether the Lloyd’s London exclusion violates public policy. In Swank, the Montana Supreme Court held that an exclusion similar to the Lloyd’s London exclusion violated the public policy expressed in the Montana compulsory insurance statute. However, that holding is not apt because Alabama did not have a comparable statute on October 13, 1998, when Thomas’s collision occurred. The Mandatory Liability Insurance Act of this State did not become effective until June 1, 2000. Act No. 2000-554, § 5, Ala. Acts 2000. Accordingly, the holding in State Farm controls our answer to the first certified question in the present case. Under State Farm, the Lloyd’s London exclusion did not violate the public policy expressed in the Act as it existed on October 13, 1998. Therefore, we answer the first certified question in the affirmative for the time pertinent to this case.

Royal Policy

“Insurance contracts, like other contracts, are construed to give effect to the intention of the parties and, to determine this intent, the court must examine more than an isolated sentence or term; it must read each phrase in the context of all other provisions. State Farm Mut. Auto. Ins. Co. v. Lewis, 514 So.2d 863 (Ala.1987)

Hall v. American Indem. Group, 648 So.2d 556, 559 (Ala.1994).

“It has been stated that a contract of insurance, being the law between the parties, should have every stipulation construed as written. It being presumed that every condition was intended to accomplish some purpose, it is not to be considered that idle provisions were inserted. Each word is deemed to have some meaning, and none should be assumed to be superfluous. All portions of a policy should be considered in construing it. Accordingly, a court will attempt to give meaning and effect, if possible, to every word and phrase in the contract in determining the meaning thereof, and a construction which neutralizes any provision of a contract should never be adopted if the contract can be so construed as to give effect to all the provisions.... ”

J. Appleman, Insurance Law and Practice § 7383 (1981).

“Umbrella policies differ from standard excess insurance policies in that they are designed to fill gaps in coverage both vertically (by providing excess coverage) and horizontally (by providing primary coverage). See Bryan Constr. Co. v. Employers’ Surplus Lines Ins. Co., 60 N.J. 375, 290 A.2d 138, 139-40 (finding that insurance policy was ‘expressly called an “umbrella policy” by the insurer. Its very nomenclature suggested a purpose to protect against gaps in the underlying policies and indicated more than mere excess coverage’) (1972); 8A John A. Appleman, Insurance Law and Practice, § 4909.85 at 452-53 (1981).... As one authority has explained, umbrella policies effectively shift away from the insured the burden of choosing the risks to which the insured remains exposed:
“ ‘[an umbrella] arrangement contrasts with the method of providing Excess Liability insurance along traditional lines. Under the excess approach, it is up to the insured ... to choose those exposures against which excess protection is desired. The obvious disadvantage lies in the possibility of a wrong guess about the critical exposures. Under the Umbrella Liability contract, the principal guesswork is in the [underwriter’s] rating [of the overall risk].... ’
“F.C. & S. Bulletins, ‘Companies and Coverages: Specialty Lines’ at U-1 (December 1980) (cited in Pl.’s Br. at 33).”

Commercial Union Ins. Co. v. Walbrook Ins. Co., 7 F.3d 1047, 1053 (1st Cir.1993).

The Royal umbrella policy does not require that Thomas be an insured under the Lloyd’s London garage policy in order to be an insured under the Royal policy. The Royal policy defines an “insured” as including any person using a Carl Cannon car with the permission of Carl Cannon. Royal concedes that Thomas is an “insured” under the Royal policy who is entitled at least to excess coverage under the Royal umbrella policy. Because Thomas is an “insured” under the Royal umbrella policy with, at least, excess insurance available to her under that policy, the Lloyd’s London garage policy exclusion excludes Thomas as an “insured” under the Lloyd’s London garage policy.

The Royal umbrella policy defines “underlying insurance” as the Lloyd’s London garage policy. Because the Lloyd’s London garage policy exclusion excludes Thomas as an “insured” under the Lloyd’s London garage policy, Thomas is not covered by either “underlying insurance” or “other insurance” under the definition of “retained limit” in the Royal umbrella policy. The definition of “retained limit” provides that, if an occurrence is not covered by “underlying insurance” or other insurance, “retained limit” means “the amount stated in Item 4 of the declarations as the Retained Limit/Each Occurrence.”

In Item 4 of the declarations page, “$” with no amount beside it appears opposite “Retained Limit/Each Occurrence.” Royal argues that the absence of an amount beside the “$” means that the policy does not cover an insured who does not have “underlying insurance” or other insurance. However, the Royal policy definition of “insured,” which does not condition coverage by the Royal policy on there being coverage by “underlying insurance” or other insurance, contradicts Royal’s argument. Likewise, the very nature of umbrella coverage reveals the fallacy in the argument made by Royal. “Umbrella policies differ from standard excess insurance policies in that they are designed to fill gaps in coverage both vertically (by providing excess coverage) and horizontally (by providing primary coverage).” Commercial Union, 7 F.3d at 1053. An umbrella policy could not fill a horizontal gap in coverage by providing primary coverage if it provided coverage only for insureds who were covered by underlying insurance. In effect, Royal is arguing that the umbrella policy it issued affords only excess coverage rather than umbrella coverage. However, the designation of the coverage as “umbrella” on the declarations page of the Royal policy forecloses that argument.

Because we must interpret insurance policies “to give meaning and effect, if possible, to every word and phrase in the contract” and cannot adopt “a construction which neutralizes any provision,” J. Appleman, Insurance Law and Practice, supra, we must interpret the absence of an amount beside the “$” where the amount of the “Retained Limit/Each Occurrence” is to be designated in Item 4 of the declarations page as the expression of an intent to specify that the “Retained Limit/Each Occurrence” was zero when there was no applicable “underlying insurance” or other insurance and that, therefore, the “retained limit” applicable to Thomas under the Royal policy is zero. This interpretation means that the Royal policy affords Thomas primary coverage for Daniel’s claims.

The drop-down provision provides that the Royal policy will drop down and provide excess coverage when the limits of the “underlying insurance” have been reduced or exhausted by payment for “bodily injury” or “property damage.” Because Thomas does not have “underlying insurance” and the Royal policy affords primary coverage to Thomas instead of excess coverage, the drop-down provision does not apply to the coverage Royal owes Thomas.

Conclusion

The Lloyd’s London garage policy exclusion validly excludes Thomas as an insured under that policy. The Royal umbrella policy affords Thomas primary coverage for the collision, and the drop-down provision in the Royal policy has no application to the coverage for Thomas under the Royal policy.

QUESTIONS ANSWERED.

HOUSTON, SEE, LYONS, BROWN, HARWOOD, and STUART, JJ., concur.


source: Caselaw Access Project

author: STUART, Justice.

license: Public Domain

text:
    Ex parte LEASECOMM CORPORATION. (In re Jeffery R. Sisk v. Tim Kelleher et al.)
    1021212.
    Supreme Court of Alabama.
    Oct. 3, 2003.

      Roger L. Bates and E. Shane Black of Hand Arendall, L.L.C., Birmingham, for petitioner.
    Daniel B. King of King & King Atto-neys, P.C., Gadsden, for Jeffery R. Sisk.
   STUART, Justice.

Leasecomm Corporation, a Massachusetts corporation registered to do business in Alabama, petitions this Court for a writ of mandamus directing the Etowah Circuit Court to grant its motion to dismiss or, in the alternative, for a change of venue. We grant the petition.

Facts and Procedural History

On June 8, 1999, Jeffery R. Sisk, the owner of Southern Belle Quick Stop convenience store, executed a “Non-Cancella-ble Equipment Lease Agreement,” pursuant to which he was to lease certain credit-card processing equipment from Lease-comm. The lease agreement contained the following paragraph just above Sisk’s first signature on the front page, typed in boldface and underlined:

“The Parties hereby agree that this Agreement is made in, governed by, to be performed in, and shall be construed in accordance with the laws of the Commonwealth of Massachusetts. They further consent and submit to the exclusive jurisdiction of the Courts of the Commonwealth of Massachusetts and expressly agree to such exclusive forum for the bringing of any suit, action or other proceeding arising out of their obligations hereunder, and expressly waive any objection to venue in any such Courts and waive any right to a trial by jury so that trial shall be by and only to the Court. It is further agreed and understood that the corporate headquarters of Leasecomm Corporation is located within the venue of The District Court Department of the Trial Court within Middlesex County.”

The agreement also contained the following statement just above Sisk’s second signature on the front page, also in boldface and underlined:

“The undersigned specifically understands and also agrees with the bold, underlined provision stated above submitting and consenting to the laws and jurisdiction of the Commonwealth of Massachusetts for any action whatsoever arising out of this lease.”

On January 3, 2002, after the credit-card processing equipment had malfunctioned and Leasecomm had refused to repair the equipment, Sisk sued Leasecomm in the Etowah Circuit Court, alleging fraud in the inducement, continuing fraud, misrepresentation, and breach of contract. On November 7, 2002, Leasecomm moved to dismiss the complaint pursuant to Rule 12(b)(1) and 12(b)(3), Ala.R.Civ.P., or, in the alternative, to enforce the forum-selection clause in the agreement and transfer the case to an appropriate court in Massachusetts. After a hearing, the trial court denied Leasecomm’s motion without making any factual findings.

Standard of Review
“An outbound forum-selection clause — a clause by which parties specifically agree to trial outside the State of Alabama in the event of a dispute— implicates the venue of a court rather than its jurisdiction. See Ex parte CTB, Inc., 782 So.2d 188 (Ala.2000); and O’Brien Eng’g Co. v. Continental Machs., Inc., 738 So.2d 844, 845 n. 1 (Ala.1999).
“ ‘ “The proper method for obtaining review of a denial of a motion for a change of venue in a civil action is to petition for the writ of mandamus.” Ex parte National Security Ins. Co., 727 So.2d 788, 789 (Ala.1998). “Mandamus is a drastic and extraordinary writ, to be issued only where there is (1) a clear legal right in the petitioner to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) properly invoked jurisdiction of the court.” Ex parte Integon Corp., 672 So.2d 497, 499 (Ala.1995).’ “Ex parte CTB, Inc., 782 So.2d at 190. ‘On appeal, the review of a trial court’s ruling on the question of enforcing a forum-selection clause is for an abuse of discretion.’ Ex parte D.M. White Constr. Co., 806 So.2d 370, 372 (Ala.2001).”

Ex parte Rymer, 860 So.2d 339, 341 (Ala.2003).

Analysis

Leasecomm contends that it has a clear legal right to the enforcement of the outbound forum-selection clause because, it says, Sisk did not clearly establish that Sisk was fraudulently induced to enter into the agreement containing the clause. We agree.

This Court, in Professional Insurance Corp. v. Sutherland, 700 So.2d 347 (Ala.1997), adopted the majority rule that an outbound forum-selection clause should be enforced so long as its enforcement is neither unfair nor unreasonable under the circumstances of the case. When a party challenges the enforcement of an outbound forum-selection clause, the party must clearly establish either

“(1) that enforcement of the forum selection elause[ ] would be unfair on the basis that the eontract[ ] ... [was] affected by fraud, undue influence, or overweening bargaining power or (2) that enforcement would be unreasonable on the basis that the chosen ... forum would be seriously inconvenient for the trial of the action.”

700 So.2d at 352.

The United States Supreme Court in Scherk v. Alberto-Culver Co., 417 U.S. 506, 94 S.Ct. 2449, 41 L.Ed.2d 270 (1974), relying on its holding in The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972), addressed the enforcement of forum-selection clauses and upheld the enforceability of a forum-selection clause when the action involved claims of fraud. In Scherk, the Court, despite the allegations of fraud, upheld the enforcement of a forum-selection clause, stating:

“In The Bremen we noted that forum-selection clauses ‘should be given full effect’ when a ‘freely negotiated private international agreement [is] unaffected by fraud.... ’ 407 U.S., at 13. This qualification does not mean that any time a dispute arising out of a transaction is based upon an allegation of fraud, as in this case, the clause is unenforceable. Rather, it means that an arbitration or forum-selection clause in a contract is not enforceable if the inclusion of that clause in the contract was the product of fraud or coercion.”

417 U.S. at 519 n. 14, 94 S.Ct. 2449. The United States Court of Appeals for the Eleventh Circuit in Lipcon v. Underwriters at Lloyd’s, London, 148 F.3d 1285, 1296 (11th Cir.1998), applied the Scherk holding, stating, “By requiring the plaintiff specifically to allege that the choice clause itself was included in the contract due to fraud in order to succeed in a claim that the choice is unenforceable, courts may ensure that more general claims of fraud will be litigated in the chosen forum, in accordance with the contractual expectations of the parties.”

Thus, the proper inquiry is whether the forum-selection clause is the result of fraud in the inducement in the negotiation or inclusion in the agreement of the forum-selection clause itself. If the forum-selection clause is the result of fraud in the inducement, then the fraud exception to the enforceability of the clause applies. However, if the claim of fraud in the inducement is directed toward the entire contract, the fraud exception to enforcement of the forum-selection clause does not apply. Cf. Investment Mgmt. & Research, Inc. v. Hamilton, 727 So.2d 71, 78 (Ala.1999)(“[W]hen a claim of fraud in the inducement is directed toward the arbitration clause itself, the issue is adjudicated by the court. On the - other hand, when a claim of fraud in the inducement is directed toward the entire contract ... the issue is subject to arbitration.”).

In his complaint, Sisk alleged that Lea-secomm, through its agent, fraudulently represented that if the leased equipment malfunctioned the defendant would repair the equipment within 24 hours, but that when the equipment malfunctioned, Lease-comm refused to repair it.

At the hearing on Leasecomm’s motion to dismiss, Sisk maintained that enforcement of the outbound forum-selection clause would be unfair because, he said, the entire lease agreement was affected by fraud. Sisk testified that he was fraudulently induced to sign the agreement because, he says, he was not permitted the opportunity to retrieve his glasses and read the small print before he signed the agreement. Sisk emphasizes in his answer to this Court that he signed the agreement based on representations that Tim Kelle-her, who, he alleges, is Leasecomm’s agent, made to him. Specifically, he alleged that Kelleher told him that after Sisk signed the agreement, Kelleher would finish filling out the agreement, have it signed by Leasecomm, and send it back to Sisk. According to Sisk, Kelleher told him that Sisk could then read the agreement, and, if Sisk objected to some of the provisions, he could “x” through them, initial the changes, and send the agreement back to Leasecomm. If Leasecomm agreed with Sisk’s proposed changes, it would initial the changes. If Leasecomm disagreed, then Sisk and Leasecomm could continue to negotiate. According to Sisk, Kelleher stated that if the differences could not be worked out, there would be no lease agreement between Leasecomm and Sisk.

We conclude that Sisk has not established that the forum-selection clause was the result of fraud in the inducement. With regard to his contention that he was fraudulently induced into signing the agreement and that he was not permitted to retrieve his glasses to read it, we note that “ ‘a person who signs a contract is on notice of the terms therein and is bound thereby even if he or she fails to read the document.’ Locklear Dodge City, Inc. v. Kimbrell, 703 So.2d 303, 306 (Ala.1997).” Ex parte Rymer, 860 So.2d at 342. Moreover, evidence indicating that the fraud occurred after the contractual relationship was formed and that it resulted from Lea-secomm’s not properly responding to an equipment failure appears to establish a claim of breach of contract, not fraud in the inducement. Consequently, Sisk has not met his burden of clearly establishing that enforcement of the outbound forum-selection clause would be unfair under the circumstances.

Moreover, we note that Sisk does not argue, much less demonstrate, that the lease agreement was affected by undue influence or overweening bargaining power, or that enforcement of the forum-selection clause would be unreasonable on the basis that the chosen forum would be seriously inconvenient for the trial of an action.

Conclusion

Sisk failed to clearly establish that enforcement of the forum-selection clause would be either unfair or unreasonable. Leasecomm has demonstrated a clear legal right to have the action against it dismissed- on the basis that venue in the Etowah Circuit Court is, by virtue of the outbound forum-selection clause, improper. The trial court exceeded its discretion in denying Leasecomm’s motion to dismiss. We direct the court to dismiss this action, without prejudice, pursuant to Rule 12(b)(3), Ala. R. Civ. P.

PETITION GRANTED; WRIT ISSUED.

HOUSTON, SEE, BROWN, JOHNSTONE, HARWOOD, and WOODALL, JJ., concur.

LYONS, J., concurs in the result.


author: WOODALL, Justice.

text:
    Ex parte Robert A. TIFFIN, Jr., et al. (In re Grady Price et al. v. Tiffin Motor Homes, Inc., et al.).
    1020898.
    Supreme Court of Alabama.
    Oct. 3, 2003.

      C. Lee Reeves, Joseph S. Bluestein and Shaun K. Ramey of Sirote & Permutt, P.C., Birmingham, for petitioners.
    Thomas E. Baddley, Jr., and Jeffrey P. Mauro of Baddley & Mauro, LLC, Birmingham; and Daniel McDowell of McDowell, Beason, Russellville, for respondents.
   WOODALL, Justice.

The majority shareholders in, and officers or directors of, Tiffin Motor Homes, Inc. (“TMH”), namely, Robert A. Tiffin, Jr., David Tiffin, Judy Tiffin, Timothy R. Tiffin, Van L. Tiffin, and Alex B. Tiffin (hereinafter collectively referred to as “the Tiffins”), petition this Court for a writ of mandamus directing the trial court to “reinstate Sirote [ & Permutt, P.C.,]” as the law firm representing the Tiffins in an action filed against them by the minority shareholders of TMH, namely, J.M. Page, Darrell Harp, Grady Price, Ann Vincent, David D. Deaton, and Kathryn B. Deaton (hereinafter collectively referred to as the “minority shareholders”). We grant the petition.

I. Facts and Background

The material facts are not in dispute. This action began on August 10, 2001, when the minority shareholders filed a 14-count complaint against the Tiffins and TMH. The first nine counts of the complaint were shareholder-derivative claims, asserted on behalf of TMH, pursuant to Ala. R. Civ. P. 23.1, against the Tiffins in their official capacities. The essence of those claims was that the Tiffins had breached various duties to the corporation by “causing the corporation to pay excessive prices for goods and services to entities connected to the Tiffin family, by usurping business opportunities, and by diverting incomes and profits to other related companies” (“the derivative claims”).

The remaining claims were against the Tiffins in their individual capacities. In those claims, the minority shareholders alleged that they had been “individually damaged by the [Tiffins’] actions.” More specifically, they averred that they had been “deprived of their just share of the corporate gains”; that the Tiffins had “siphoned off and diverted profits and dividends from [TMH]”; and that the Tiffins had “engaged in a systematic scheme or design to ‘squeeze out’ the minority shareholders of [TMH]” (“the minority-shareholder claims”). Sirote & Permutt, P.C. (“Sirote”), undertook to represent the Tif-fins, individually, in the action, while the law firm of Bedford, Rogers & Bowling, P.C., represented TMH in the action. On June 13, 2002, the trial court entered a partial summary judgment for the Tiffins disposing of the derivative claims; that judgment was made final pursuant to Rule 54(b), Ala. R. Civ. P., and is no longer reviewable by appeal.

On July 22, 2002, almost a year after the complaint was filed and more than a month after the entry of the partial summary judgment, the minority shareholders moved to disqualify Sirote from representing the Tiffins. The motion alleged that “[a]t all times relevant ..., [Sirote had] served as general counsel for [TMH].” (Emphasis added.) The motion also alleged that “in its capacity as counsel for TMH, [Sirote had] provided legal advice and performed legal services with respect to issues and transactions ... directly at issue.” It further alleged that Sirote’s “continued representation” of the Tiffins constituted an “irreconcilable conflict of interest” with TMH, as prohibited by Rule 1.7, Ala. R. Prof. Conduct, and Rule 1.9, Ala. R. Prof. Conduct. Those rules provide:

“Rule 1.7. Conflict of Interest: General Rule.
“(a) A lawyer shall not represent a client if the representation of that client will be directly adverse to another client, unless:
“(1) the lawyer reasonably believes the representation will not adversely affect the relationship with the other client; and
“(2) each client consents after consultation.

“(b) A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer’s responsibilities to another client or a third person, or by the lawyer’s own interests, unless:

“(1) the lawyer reasonably believes the representation will not be adversely affected; and
“(2) the client consents after consultation. When representation of multiple clients in a single matter is undertaken, the consultation shall include explanation of the implications of the common representation and the advantages and risks involved.”

“Rule 1.9. Conflict of Interest: Former Client.

“A lawyer who has formerly represented a client in a matter shall not thereafter:

“(a) represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client, unless the former client consents after consultation; or
“(b) use information relating to the representation to the disadvantage of the former client except as Rule 1.6 or Rule 3.3 would permit or require with respect to a client or when the information has become generally known.”

The Tiffins responded to the minority shareholders’ motion to disqualify Sirote, arguing that because Sirote was representing only them, individually, in the litigation, the summary judgment on the derivative claims removed any purported conflict of interest. More specifically, they argued:

“If the Plaintiffs argue that they represent not only the Minority Shareholders but also the interests of TMH in their oppression claims, and thus disqualification is appropriate in the remainder of this case, Plaintiffs are without standing. Pursuant to this court’s June 13, 2002, order, the only remaining claims in this case, as labeled in Plaintiffs’ own complaint, are individual claims. These claims belong solely to the Minority Shareholders, not the corporation itself. Indeed, any recovery on these oppression claims would go solely to the Plaintiffs, not to TMH.... Hence, TMH does not have an interest in the remaining claims and, consequently, the Plaintiffs are not representing TMH’s interests. As stated above, the only claims that TMH had an interest in were the derivative claims which were fully resolved pursuant to this court’s June 13, 2002, order granting partial summary judgment. Accordingly, since TMH has no interest in the remaining claims, there could exist no [derivative] attorney-client relationship between the Plaintiffs and Sirote.”

(Emphasis in original.)

In that response, the Tiffins also argued:

“To the extent Plaintiffs claim a conflict with Sirote in connection with the oppression claims, Plaintiffs lack standing .... Only a former client could revifye] that type of conflict — and since Sirote never represented any of the Plaintiffs in connection with any substantially similar matters, there can be no such standing. Sirote has not represented any of them in a substantially similar manner and thus cannot he disqualified in this lawsuit for being adverse to them.”

(First emphasis original; other emphasis added.)

The trial court granted the minority shareholders’ motion, and entered an order disqualifying Sirote from representing the Tiffins. Subsequently, the Tiffins filed this mandamus petition, challenging that order.

II. Standard of Review

A petition for a writ of mandamus is the appropriate vehicle by which to review an order disqualifying an attorney from representing a party. Ex parte Lammon, 688 So.2d 836, 838 (Ala.Civ.App.1996); see Ex parte Intergraph Corp., 670 So.2d 858, 860 (Ala.1995); Ex parte Central States Health & Life Co. of Omaha, 594 So.2d 80 (Ala.1992). “A writ of mandamus will issue where the petitioner has demonstrated ‘a clear legal right to the relief sought.’ ” Ex parte Dowdell, 677 So.2d 1158, 1159 (Ala.1996) (quoting Ex parte Clark, 643 So.2d 977, 978 (Ala.1994)).

This Court reviews questions of law de novo. Tipler v. Alabama State Bar, 866 So.2d 1126 (Ala.2003); Alabama Dep’t of Transp. v. Price, 854 So.2d 59 (Ala.2003); Thompson Tractor Co. v. Fair Contracting Co., 757 So.2d 396, 398 (Ala.2000); Ex parte Alabama Real Estate Appraisers Bd., 739 So.2d 14, 16 (Ala.1999). Where there is no dispute as to any fact material to a dispositive element of Rule 1.7 or Rule 1.9, Ala. R. Prof. Conduct, the question is one of law and our review is de novo. Cf. Chrispens v. Coastal Refining & Marketing, Inc., 257 Kan. 745, 761, 897 P.2d 104, 116 (1995) (“In the area of disqualification of counsel under the ethical rules adopted by this court, the determination of whether under given facts application of the rules to those facts requires disqualification of the attorney or firm is a question of law.”).

III. Conflict of Interest

The minority shareholders contend that “Sirote has discarded” the duty of loyalty it owes to TMH as general counsel of TMH “by abandoning representation of the corporation and thereafter undertaking representation of the [Tiffins], who are in an adversarial position relative to the [minority] [shareholders.” Minority Shareholders’ brief, at 13-14. It is the “continued representation” of the Tiffins that the minority shareholders contend constitutes an “irreconcilable conflict of interest” with TMH, as prohibited by Rule 1.7 and Rule 1.9.

The party moving for an attorney’s disqualification under Rule 1.7 or Rule 1.9 bears the burden of proving the existence of a conflict of interest. Carlyle Towers Condo. Ass’n, Inc. v. Crossland Sav., FSB, 944 F.Supp. 341 (D.N.J.1996); Barragree v. Tri-County Elec. Coop., Inc., 263 Kan. 446, 950 P.2d 1351 (1997); Walker v. State Dep’t of Transp. & Dev., 817 So.2d 57 (La.2002); Rose v. Rose, 849 P.2d 1321 (Wyo.1993); In re Commissioner of Banks & Real Estate, 327 Ill.App.3d 441, 764 N.E.2d 66, 261 Ill.Dec. 775 (2001).

Rule 1.7 governs a lawyer’s responsibility with regard to concurrent clients. More specifically, Rule 1.7(a) “prohibits representation of opposing parties in litigation,” while Rule 1.7(b) governs “[simultaneous representation of parties whose interests in litigation may conflict, such as coplaintiffs or codefendants.” Rule 1.7, Comment, Conflicts in Litigation. Rule 1.9 governs a lawyer’s responsibility with regard to consecutive clients, that is, “[a]f-ter termination of a client-lawyer relationship.” Rule 1.9, Comment.

At a minimum, a party seeking disqualification for the conflict addressed in Rule 1.7 must demonstrate (1) that it is a current client of the lawyer whose representation is challenged, and (2) that the party’s interests “conflict” with the interests of the other client, or with the interests of the lawyer. See Ex parte Am-South Bank, N.A., 589 So.2d 715, 718 (Ala.1991). A former client seeking disqualification for the conflict addressed in Rule 1.9 must demonstrate (1) that it “had an attorney-client relationship with the attorney the former client seeks to disqualify and [ (2) ] that the attorney represented the former client in a [ (3) ] substantially related matter.” Ex parte Intergraph Corp., 670 So.2d at 860.

Ordinarily, therefore, “a stranger to the attorney-client relationship lacks standing to assert a conflict of interest in that relationship.” Jones v. American Employers Ins. Co., 106 Ohio App.3d 636, 641, 666 N.E.2d 1152, 1155 (1995) (citing Morgan v. North Coast Cable Co., 63 Ohio St.3d 156, 586 N.E.2d 88 (1992)); see also Lowe v. Graves, 404 So.2d 652 (Ala.1981); Hawkes v. Lewis, 255 Neb. 447, 586 N.W.2d 430 (1998); Johnson v. Prime Bank, 219 Ga.App. 29, 464 S.E.2d 24 (1995). In other words, “ ‘as a general rule, courts do not disqualify an attorney on the grounds of conflict of interest unless the [current or] former client moves for disqualification.’ ” Lowe, 404 So.2d at 653 (quoting In re Yarn Processing Patent Validity Litig., 530 F.2d 83 (5th Cir.1976)).

The minority shareholders do not inform this Court why the general rule should not apply in this case. Indeed, they concede that Sirote’s client is TMH, that is, the corporation. Minority shareholders’ brief, at 13,15.

To be sure, this action began as a shareholder derivative suit, in which the shareholders are “nominal plaintiff[s] representing the corporation,” which is the “real party in interest.” Barrett v. Southern Connecticut Gas Co., 172 Conn. 362, 370, 374 A.2d 1051, 1055 (1977) (emphasis added); see also Kilburn v. Young, 244 Ga.App. 743, 744, 536 S.E.2d 769, 771 (2000). However, this action is no longer a shareholder derivative suit. The derivative claims were disposed of by the partial summary judgment entered on June 13, 2002, and, as previously stated, are not now reviewable. The resolution of the derivative claims changed the legal status of the minority shareholders. Curiously, the minority shareholders did not move to disqualify Sirote until more than a month after the entry of the partial summary judgment. Thus, the corporation has never been the beneficiary of the minority shareholders’ attempt to disqualify Sirote. In other words, the challenge to Sirote’s representation has never been maintained by (1) current clients, (2) former clients, or (3) representatives of TMH. In short, the minority shareholders have no answer to the Tiffins’ lack-of-standing argument.

Because there is no factual dispute as to a dispositive element of Rule 1.7 and Rule 1.9, the question before us is one of law. Solely on the basis of the arguments presented by both sides of this dispute, we conclude that the Tiffins have demonstrated a clear legal right to a writ of mandamus directing the trial court to reinstate Sirote as the Tiffins’ counsel.

PETITION GRANTED; WRIT ISSUED.

HOUSTON, SEE, LYONS, BROWN, JOHNSTONE, HARWOOD, and STUART, JJ., concur.

      . The minority shareholders contend, and Si-rote does not deny, that Sirote continues to serve as general counsel for TMH.

      . Subsequently, at a special meeting of the board of directors, two directors who had not been named as defendants in the action— without the participation of the directors who were defendants — passed a resolution purporting to "waive[ ] any conflict of interest” arising out of Sirote's representation of the Tiffins.


author: LYONS, Justice.

text:
    Ex parte Ruben Corey McNABB. (In re State of Alabama v. Ruben Corey McNabb).
    1021528.
    Supreme Court of Alabama.
    Oct. 3, 2003.
    M. Hampton Baxley of Ramsey, Baxley & McDougle, Dothan, for petitioner.
    William H. Pryor, Jr., atty. gen., and James B. Prude, asst. atty. gen., for respondent.
   LYONS, Justice.

On April 17, 2003, Ruben Corey McNabb petitioned the Court of Criminal Appeals for a writ of mandamus ordering the trial court to approve payment of a trial transcript. The Court of Criminal Appeals did not address the merits of the petition. Instead, the Court of Criminal Appeals transferred the petition to this Court for us to decide whether the Court of Criminal Appeals has jurisdiction to issue writs of mandamus addressing the payment of extraordinary trial expenses. We return the petition to that court because the transfer was improper.

McNabb was arrested and charged with the June 7, 2001, robbery of a grocery store in Dothan. Authorities later located McNabb in Florida and extradited him to Alabama, where he was indicted by a grand jury. Shortly before McNabb’s trial began, the Houston Circuit Court granted McNabb indigent status.

At the conclusion of McNabb’s trial, the jury deliberated for several hours, but subsequently informed the trial court that it was hopelessly deadlocked. The trial court polled the jury and determined that, in fact, the jury was deadlocked. As a result, the court declared a mistrial.

On February 26, 2003, McNabb’s attorney filed a motion for extraordinary expenses to pay for a transcript of the trial. McNabb’s attorney stated that the transcript was needed for rebuttal and cross-examination in McNabb’s second trial. The cost of the transcript would have amounted to $800. The trial court denied the motion. McNabb’s attorney attempted, to no avail, to reach a compromise with the trial court regarding the request for payment. On April 15, 2003, the court reporter informed McNabb’s attorney that she had been advised by the presiding judge of the circuit that the audiotapes of McNabb’s first trial could not be released for use in a subsequent trial.

In reviewing McNabb’s petition for the writ of mandamus, the Court of Criminal Appeals determined that the issue of jurisdiction was not clear. It issued an order purporting to transfer the petition to this Court and stating:

“In Ex parte Smith, 794 So.2d 1089 (Ala.2001), the Alabama Supreme Court held that this Court did not have jurisdiction to consider a similar mandamus petition. In Smith, the circuit court ordered the Montgomery Police Department to provide Smith a free copy of tapes that he sought in a capital case. The State filed a mandamus petition in this Court arguing that those type of expenses were expenses contemplated under § 15 — 12—21(d), Ala.Code 1975, and were recoverable by defense counsel at the end of the case. We granted mandamus relief. Smith filed a similar petition in the Alabama Supreme Court. The Supreme Court set aside our order granting relief and held that we did not have jurisdiction to consider the mandamus petition. The Court noted that the Court of Civil Appeals was the proper court to consider the case. See also Ex parte Galanos, 796 So.2d 390 (Ala.2000).
“However, in Ex parte Barksdale, 680 So.2d 1029 (Ala.Crim.App.1996), this Court entertained a mandamus petition filed by an attorney challenging the ruling on his request for preapproval of extraordinary expenses in a criminal case. This case has recently been cited by the Alabama Supreme Court. See Lyons v. Norris, 829 So.2d 748 (Ala.2002).”

Turning first to the propriety of the transfer, § 12-1-4, Ala.Code 1975, allows a court of appeals to transfer a case to the Supreme Court if the case is one “which should have gone to the Supreme Court.” Additionally, § 12-3-14, Ala.Code 1975, allows a transfer from the Court of Criminal Appeals to the Supreme Court if the Chief Justice of the Supreme Court and the presiding judge of the Court of Criminal Appeals “in writing designate” that the “case in the Court of Criminal Appeals ... be transferred to the Supreme Court for hearing and final determination.” The purported transfer in this case does not satisfy the requirements of either § 12-1-4 or § 12-3-14, Ala.Code 1975. See Gill v. Burrell, 874 So.2d 1072 (Ala.2003).

McNabb’s petition does not present an issue that should have been initially presented to this Court. Neither has the Chief Justice of this Court and the presiding judge of the Court of Criminal Appeals requested that this case be decided by the Supreme Court as opposed the Court of Criminal Appeals.

Turning to the remaining question of the proper forum for McNabb’s petition, this Court, in Ex parte Smith, 794 So.2d 1089, 1093 (Ala.2001), applying the rationale of Ex parte Galanos, 796 So.2d 390, 393 (Ala.2000), held, under the circumstances presented there, that the Court of Civil Appeals was the proper appellate court to issue a writ of mandamus addressing the payment of a defense counsel’s fees because the matters in issue were not ap-pealable to the Court of Criminal Appeals. Smith, 794 So.2d at 1093. In Galanos, counsel for several indigent defendants in criminal cases, upon conclusion of his services, applied for payment of attorney fees and for reimbursement of his expenses; he then challenged the trial court’s award of those fees and expenses as inadequate. In Smith, the State challenged the trial court’s requirement that copies of discovery materials be furnished to the defendant at the expense of the State and contended that counsel should pay in advance and obtain reimbursement later, in accordance with Ala.Code 1975, § 15-12-21. In both Galanos and Smith this Court held that the Court of Criminal Appeals lacked jurisdiction in those cases. Also, in both Galanos and Smith the issues did not implicate the defendants’ right to a fair trial. In Galanos, the criminal cases were concluded. In Smith, the defendant was going to receive a copy of the evidence before trial and the issue was whether counsel would be required to advance the costs of the discovery being turned over before the trial and be reimbursed later or whether the State would pay for the copy of such discovery before it was delivered to the defendant.

In the posture here presented, the trial court has denied the motion for extraordinary expenses. Presumably, its ruling is simply a refusal to require the State to pay the expense before the trial and does not reach the issue of preapproval of expenses under § 15-12-21(d). Nevertheless, this case differs from Smith in that, unlike in Smith, we cannot say, at this stage of the proceedings, that McNabb will have access to the requested materials before the trial.

Amendment No. 828, § 6.03(d), Ala. Const.1901, provides:

“The court of criminal appeals shall have and exercise original jurisdiction in the issuance and determination of writs of quo warranto and mandamus in relation to matters in which said court has appellate jurisdiction. Said court shall have authority to issue writs of injunction, habeas corpus and such other remedial and original writs as are necessary to give it a general superintendence and control of jurisdiction inferior to it and in matters over which it has exclusive appellate jurisdiction.... ”

Because the Court of Criminal Appeals has jurisdiction to hear a petition for the writ of mandamus “in relation to matters in which said court has appellate jurisdiction” (§ 6.03), and because the right of a defendant to a fair trial if the requested transcript is not available is an issue as to which that court has appellate jurisdiction, the Court of Criminal Appeals has jurisdiction to deal with the issue presented in McNabb’s petition filed before it. Whether there is any merit in the petition or whether appeal is an adequate remedy is a matter we do not address.

Because the transfer of this petition to this Court was improper, the petition is returned to the Court of Criminal Appeals for proceedings consistent with this opinion.

PETITION RETURNED TO THE COURT OF CRIMINAL APPEALS.

HOUSTON, SEE, BROWN, JOHNSTONE, HARWOOD, WOODALL, and STUART, JJ., concur.

      . Ala.Code 1975, § 15 — 12—21 (d), provides, "Counsel shall also be entitled to be reimbursed for any expenses reasonably incurred in the defense of his or her client, to be approved in advance by the trial court.” McNabb's motion does not speak in terms of subsequent reimbursement, nor does it refer to § 15-12-21(d).

      . The Court of Criminal Appeals' reference to Lyons v. Norris, 829 So.2d 748 (Ala.2002), is misplaced. In Lyons, we cited Ex parte Barksdale, 680 So.2d 1029 (Ala.Crim.App.1996), for the limited premise that payment of expenses for an indigent client must be preap-proved. Lyons does not support or even address the jurisdictional issues presented by Barksdale. As a result, there is no conflict between the reference to Ex parte Barksdale in the more recent case of Lyons and our holdings in Smith and Galanos.

      . Section 12-2-7, Ala.Code 1975, outlines the jurisdiction of this Court:
      "The Supreme Court shall have authority:
      "(1) To exercise appellate jurisdiction coextensive with the state, under such restrictions and regulations as are prescribed by law....
      "(2) To exercise original jurisdiction in the issue and determination of writs of quo warranto and mandamus in relation to matters in which no other court has jurisdiction.

      "(3) To issue writs of injunction, habe-as corpus, and such other remedial and original writs as are necessary to give to it a general superintendence and control of courts of inferior jurisdiction.
      “(4) To make and promulgate rules governing the administration of all courts and rules governing practice and procedure in all courts....
      "(5) To punish for contempts by the infliction of a fine not exceeding $100, and imprisonment not exceeding 10 days or both.
      “(6) To transfer to the Court of Civil Appeals, for determination by that court, any civil case appealed to the Supreme Court and within the appellate jurisdiction of the Supreme Court....”
      (Emphasis added.)