text:
    Ex parte FIRST ALABAMA BANK OF MONTGOMERY, N.A., a National Banking Association (In re BARCLAY INTERNATIONAL, INC., et al. v. FIRST ALABAMA BANK OF MONTGOMERY, N.A., et al.)
    83-1092.
    Supreme Court of Alabama.
    Dec. 21, 1984.

      M.R. Nachman, Jr. of Steiner, Crum & Baker, Montgomery, and Ronald Slepian of McDermott, Slepian, Windom & Reed, Mobile, for petitioners.
    Charles Partin, Bay Minette, and William W. Watts of Reams, Vollmer, Philips, Kil-lion, Brooks & Schell, Mobile, for respondents.
   TORBERT, Chief Justice.

Petitioner First Alabama Bank of Montgomery (Bank) seeks a writ of mandamus to compel the trial court to transfer the case from Baldwin to Montgomery County.

Barclay International, Inc., (Barclay) and its president, Joseph Dzwonkowski, and his wife, Patricia Dzwonkowski, filed suit against Bank. Bank had called upon a letter of credit given to it as further assurance of the payment on industrial bonds which Bank held. The complaint alleges that Bank misapplied the proceeds from the letter of credit, causing Barclay to be declared in default on the bonds. Barclay and the individual plaintiffs also allege that as a result of the false and slanderous publication of statements by the Bank that plaintiffs were in default, personal and business interests of the plaintiffs were injured.

Bank moved to dismiss the action in Baldwin County for lack of venue. Bank took the position that it was a foreign corporation and as such it could only be sued in the county where it was doing business by agent. The Bank contended that it did not do business by agent in Baldwin County. After a hearing the trial court refused to dismiss the action or transfer it to Montgomery County, where the Bank maintained venue was proper.

The threshold issue to be resolved is whether Bank, a corporation organized under the national banking laws with its principal place of business in Alabama is a foreign or domestic corporation for the purpose of determining venue. This is a case of first impression in Alábama, because venue with respect to national banks was formerly controlled by federal statute. 12 U.S.C. § 94 (1945). In 1982, § 94 was amended so! that, except in a few situations inapplicable^ in this case, federal law no longer controls venue. Therefore, we must look to state law to determine where venue is proper.

Section 232 of the Alabama Constitution of 1901 and Code 1975, § 6-3-7, establish where venue is proper with respect to a foreign corporation. Ex parte Harrington Manufacturing Company, Inc., 414 So.2d 74 (Ala.1982). Section 6-3-7 also establishes where venue is proper with respect to a domestic corporation. There is no statutory definition of “domestic” or “foreign corporation” for the purposes of venue.

The legislature has defined the term “foreign corporation” in other contexts. The Alabama Business Corporation Act, Chapter 2A of Title 10, defines “foreign corporation” in two different ways. Section 10-2A-2(2) defines a foreign corporation for the purposes of Chapter 2A generally as “A corporation for profit organized under laws other than the laws of this state.... ” In Division 1 of Article 8, Chapter 2A, that part of the foreign corporation article regulating foreign corporations acting in fiduciary capacities, the term foreign corporation means:

“(1) Any bank or other corporation now or hereafter organized or existing under the laws of any state of the United States other than the state of Alabama; and
“(2) Any national banking association having its principal place of business in any state of the United States other than the state of Alabama.”

Code 1975, § 10-2A-220. The net result is that in one context the legislature has decided that this kind of bank is a foreign corporation and in another context it has decided that it is not a foreign corporation. Because we lack clear statutory guidance, we will examine the nature of corporations organized under federal law and the policy behind the constitutional venue provisions.

Before the adoption of the 1975 Code, corporations organized under national law were not treated as foreign corporations for the purposes of our business corporation statutes. Title 10, § 198, 1940 Code (and as Recomp.1958); 1923 Code, § 7217. Moreover in Jeffreys v. Federal Land Bank of New Orleans, 238 Ala. 97, 98, 189 So. 557, 558 (1939), the Court, while relying on our statutes, said that the statute “but gives expression to the current of judicial thought to the effect that the United States is not a foreign sovereignty as regards the several states.... ”

As mentioned in Jeffreys, the settled rule is that a “corporation created by Congress in the exercise of its powers as the legislature for the United States ... is not to be regarded as a foreign corporation, but as a domestic corporation, in any state or territory in which it may do business-” 17 W. Fletcher, Cyclopedia of the Law of Private Corporations, § 8291 p. 12 (perm. ed. 1977). Specifically with regard to the status of national banking associations, the general rule is that they “are domestic corporations in the states in which they are located and foreign corporations in other states.” Id. at § 8291 p. 15. Congress, in setting out when diversity jurisdiction exists with respect to national banks, took a similar position by stating that national banks were to be treated as citizens of the state where located. 28 U.S.C. § 1348 (1976).

The policy concerns behind the constitutional provisions dealing with foreign corporations were stated in Nelms v. Edinburg American Land Mortgage Co., 92 Ala. 157, 159, 9 So. 141 (1890):

“Foreign corporations are essentially non-residents. Suits against non-residents are sometimes attended with inconvenience, difficulties and expense, and judgments rendered are not always absolute. Service by publication only, may be sufficient to authorize judgment and condemnation, when the proceedings are in rem, and for all purposes, within the jurisdiction of the State; but such judgments rendered in cases where the court did not have jurisdiction of the person, are not conclusive as personal judgments beyond the jurisdiction of the State.”

A national bank with its principal place of business in Alabama is not, in essence, a non-resident. The problems that arise in suing a non-resident do not arise when one sues a national bank located in Alabama. In light of Congress’s determination concerning citizenship of national banks for jurisdictional purposes and the policy behind our venue provisions concerning foreign corporations, we see no reason why Bank should not be treated as a domestic corporation. Therefore, we hold that a national bank with its principal place of business in Alabama is not a foreign corporation for the purposes of venue.

A domestic corporation can be sued “in any county in which it does business by agent at the time the cause of action arose; provided that all actions against a domestic corporation for personal injuries must be commenced in the county where the plaintiff resides if such corporation does business by agent in the county of the plaintiffs residence.” Code 1975, § 6-3-7.

The individual plaintiffs contend that they were defamed in a letter sent by Bank to the Industrial Development Board in Baldwin County. The phrase “personal injury” comprehends mental distress, annoyance, inconvenience, humiliation, and other manifestations of disturbed or perturbed feelings. Hatcher v. Southern Railway Co., 191 Ala. 634, 68 So. 55 (1916). The inquiry in this case is where this “injury” took place.

The term “injury” in the venue statute has been determined to refer to the wrongful act or omission, as opposed to the damage. Age-Herald Publishing Co. v. Huddleston, 207 Ala. 40, 92 So. 193 (1921). In coming to this conclusion, this Court said:

“The meaning we accord to ‘injury’ in section 6112 [Code 1907] is made clearer by a consideration of 6110, which is a general venue statute, and which authorizes the bringing of non-contractual personal actions either in the county of the defendant’s residence, ‘or in the county in which the act or omission complained of may have been done, or may have occurred.’ Certainly, in enacting the later section (6112), the Legislature did not intend to change the basis of venue in tort actions from the county in which the wrongful act was done or occurred to the county, or any county, in which the resulting damage occurred, and to thereby effect so vital a change in actions only against corporate defendants, and for personal injuries only.”

Id., 207 Ala. at 44, 92 So. at 197.

The Court concluded that “in an action for libel against a newspaper the injury — the breach of duty — occurs, within the meaning and application of the venue statute, at the place where the newspaper is primarily published, and not in other places where it is secondarily published, that is merely recirculated.” Id., 207 Ala. at 45, 92 So. at 198.

Fourteen months after Age-Herald was decided, this Court held that venue was proper “at the place of posting or at the place of receipt by the addressee” in an action for libelous matter sent through the mail. Kenney v. Gurley, 208 Ala. 623, 625, 95 So. 34, 36 (1923). See also, Weir v. Brotherhood of Railroad Trainmen, 221 Ala. 494, 129 So. 267 (1930). While Kenney was decided under the statute concerning venue in suits against individuals and Age-Herald was decided under the.statute concerning venue in suits against corporations, the focus under both statutes is on the question of where the wrongful act or omission occurs. Therefore, we find that the Kenney holding is controlling. The action for libel was properly brought in Baldwin County, where the letter was received. Because the libel action was properly brought in Baldwin County, the other claims are also properly brought there. A.R.Civ.P. 82(c).

Therefore, we deny the writ of mandamus.

WRIT DENIED.

JONES, SHORES, BEATTY and ADAMS, JJ., concur.

      . While the Court in Nelms was referring to Article XIV, § 4, of the Alabama Constitution of 1875, the provisions of § 4 are virtually Mentical to the first two sentences of Article XII, § 232, of the Alabama Constitution of 1901.

        . One aspect of having limited venue with respect to national banks, namely not having the bank’s records removed from its place of business, no longer is deemed valid, as evidenced by Congress's amendment to 12 U.S.C. § 94. Sen. Rep. No. 9-536, 97th Cong., 2d Sess., reprinted in 1982 U.S.Code Cong. & Ad.News 3054, 3082.


source: Caselaw Access Project

author: MADDOX, Justice.

license: Public Domain

text:
    John D. EDWARDS and Bertha Edwards v. Bonnie Lou McCORD.
    83-1132.
    Supreme Court of Alabama.
    Dec. 21, 1984.
    Joe M. Dawson of Dawson & McGinty, Scottsboro, for appellants.
    Robert S. Thomas of Thomas & Proctor, Scottsboro, for appellee.
   MADDOX, Justice.

In this case, the purchasers of land, sought in a prior proceeding to reform a deed, claiming that the seller had intended to convey tracts 1, 2, and 3, but that the deed had only covered tracts 1 and 2. The seller counterclaimed in that proceeding and averred that she intended to convey tract 3 instead of tract 2. She also sought reformation of the deed to substitute tract 3 for tract 2. The trial judge found insufficient evidence to support either party’s position. Thereafter, the seller sued in ejectment, claiming that she was the owner of tract 3. Obviously, this position was inconsistent with the one she had taken in the first proceeding. Was she estopped? The trial court held she was not, because she was unsuccessful in maintaining her position in the prior proceeding. We agree.

In Russell v. Russell, 404 So.2d 662, at 665 (Ala.1981), this Court addressed this issue and stated the following:

“The law is settled in Alabama that a party who has, with knowledge of the facts, assumed a particular position in a judicial proceeding is estopped from assuming a position inconsistent to the first one to the prejudice of an adverse party. Brown v. Terry, 375 So.2d 457 (Ala.1979); United Security Life Insurance Co. v. Birmingham Trust National Bank, 282 Ala. 295, 211 So.2d 139 (1968); Maner v. Maner, 279 Ala. 652, 189 So.2d 336 (1966); Watt v. Lee, 238 Ala. 451, 191 So. 628 (1939); Bromberg v. First Nat. Bank of Mobile, 235 Ala. 226, 178 So. 48 (1937); Wright v. Fannin, 229 Ala. 278, 156 So. 849 (1934); Brown v. French, 159 Ala. 645, 49 So. 255 (1909). Likewise, a party who, for the purpose of maintaining a cause or defense, has deliberately represented a fact or claim in one aspect, cannot be permitted to contradict his own representation by giving the same thing another aspect. Watt v. Lee, 238 Ala. 451, 191 So. 628 (1939); Bromberg v. First Nat. Bank of Mobile, 235 Ala. 226, 178 So. 48 (1937); Wright v. Fannin, 229 Ala. 278, 156 So. 849 (1934). When a party obtains or defeats a judgment by pleading or representing a thing or judgment in one aspect, that party will be estopped from giving it in another aspect in a suit founded upon the same subject matter. Maner v. Maner, 279 Ala. 652, 189 So.2d 336 (1966); Watt v. Lee, 238 Ala. 451, 191 So. 628 (1939); Bromberg v. First Nat. Bank of Mobile, 235 Ala. 226, 178 So. 48 (1937); Wright v. Fannin, 229 Ala. 278, 156 So. 849 (1934); McQuagge Bros., Inc. v. Thrower, 214 Ala. 582, 108 So. 450 (1936). Thus, when a party defeats a judicial proceeding by alleging in his pleadings a particular state of facts, he cannot be heard to subsequently deny or disprove those facts in defense of another proceeding. Watt v. Lee, 238 Ala. 451, 191 So. 628 (1938); Bromberg v. First Nat. Bank of Mobile, 235 Ala. 226, 178 So. 48 (1937); Wright v. Fannin, 229 Ala. 278, 156 So. 849 (1934).” 404 So.2d at 665 (Emphasis added.)

Furthermore, in Davis v. Wakelee, 156 U.S. 680, 689, 15 S.Ct. 555, 558, 39 L.Ed. 578 (1894), the United States Supreme Court stated the following:

“It may be laid down as a general proposition that, where a party assumes a certain position in a legal proceeding, and succeeds in maintaining that position, he may not thereafter, simply because his interests have changed, assume a contrary position, especially if it be to the prejudice of the party who has acquiesced in the position formerly taken by him.” (Emphasis added.)

It is essential, in order to invoke the operation of the legal doctrine of estoppel, that the inconsistent position first asserted must have been successfully maintained. Here, neither party was successful in maintaining the position each took in the first proceeding. We, therefore, find that the lower court properly denied the purchasers’ motion for summary judgment, and did not err in entering a judgment for the seller in her ejectment action. The judgment of the trial court is due to be affirmed.

AFFIRMED.

TORBERT, C.J., and JONES, SHORES and BEATTY, 33., concur.


author: BEATTY, Justice. JONES, Justice

text:
    BLUE CROSS AND BLUE SHIELD OF ALABAMA v. Roy W. GRANGER, Jr.
    82-959.
    Supreme Court of Alabama.
    Dec. 21, 1984.

      William G. Somerville, Jr., and Lawrence B. Clark of Lange, Simpson, Robinson & Somerville, Birmingham, and John Percy Oliver, II of Oliver & Sims, Dadeville, for appellant.
    John F. Dillon, IV of Dillon, Kelley & Brown and Larry W. Morris of Radney & Morris, Alexander City, for appellee.
   BEATTY, Justice.

Roy W. Granger, Jr., brought suit against Blue Cross and Blue Shield of Alabama (Blue Cross), alleging bad faith refusal to pay a claim. The action involved coverage under a group hospital and medical contract. Defendant Blue Cross now appeals from an adverse judgment entered on a jury verdict. We reverse and remand.

On January 4, 1981, Roy W. Granger III (Trey) and his sister Jennifer were injured in an automobile accident. They were taken to Elmore County Hospital, then transferred to Baptist Medical Center (BMC) in Montgomery. When the children were admitted to BMC, plaintiff Granger signed a form whereby he agreed to pay all medical expenses and to assign any applicable insurance benefits to BMC. The plaintiff at this time also submitted the Blue Cross identification card issued in the name of his wife, Robbie L. Granger.' Mrs. Granger was a teacher covered under a group hospital and medical contract. She was listed as the subscriber, and her husband, son, and daughter were designated as dependents.

Jennifer spent several days at BMC, but Trey was treated in the emergency room and released. The cost of Jennifer’s treatment was over $500. The cost of Trey’s treatment totalled $282, which included a $120 fee for physician’s services. Blue Cross paid claims for all of the children’s medical bills from both Elmore County Hospital and BMC, except for the $120 claim for physician’s services provided to Trey at BMC. This $120 claim remained unpaid for approximately a year and three months and is the sole basis of this action.

Granger filed suit against Blue Cross on March 29, 1982, alleging fraud and bad faith refusal to pay a claim. The complaint was amended to add BMC as a party defendant, and sought from BMC damages for fraud, bad faith, outrageous conduct, and abuse of legal process. Another amendment added counts of negligence and wanton misconduct against BMC. A motion for summary judgment filed by BMC was granted on all counts except those alleging negligence and wanton misconduct. The complaint was again amended to allege an additional count of invasion of privacy against BMC and to add Robbie L. Granger as a party plaintiff.

Various third party claims were filed by BMC and cross-claims were filed by both BMC and Blue Cross. These actions were dismissed prior to trial. Consequently, when the matter came on for trial, the only claims remaining were plaintiffs’ claims of negligence, wanton misconduct, and invasion of privacy against BMC and fraud and bad faith against Blue Cross.

At the close of the plaintiffs’ evidence, both Blue Cross and BMC moved for a directed verdict on all counts. The trial court granted BMC’s motion as to the negligence and invasion of privacy counts and granted Blue Cross’s motion on the fraud count. The court also granted plaintiffs’ motion to remove Robbie L. Granger as a party plaintiff.

After defendant Blue Cross rested, but before defendant BMC presented its evidence, the trial court granted Granger’s motion to dismiss BMC from the suit and denied Blue Cross’s renewed motion for directed verdict on the bad faith count. Accordingly, the only claim submitted to the jury was the bad faith claim against Blue Cross. The jury returned a verdict in favor of Granger and assessed damages at $500,000.

The trial court entered judgment on the verdict and subsequently denied Blue Cross’s motion for judgment notwithstanding the verdict or, in the alternative, for a new trial. Blue Cross appeals from the final judgment and from the denial of its post-trial motions.

The facts which led to the initiation of this suit are lengthy and complicated, with the evidence on many points being contradictory. The record discloses that, after Trey was discharged, BMC submitted to Blue Cross claims for his treatment. The portion of the bill for hospital services ($162) was submitted by mail January 8, 1981, on the usual Blue Cross claim form. Blue Cross initially refused to pay this claim due to lack of information on coordination of benefits. This information was later provided and Blue Cross paid the $162 claim in April 1981.

The $120 claim for physician’s services was also submitted January 8, 1981, via BMC’s newly installed computerized claim billing system. This system was installed to facilitate the processing of claims, and, in effect, allows BMC to enter claims directly into the Blue Cross claim system.

Under that process, BMC first enters the claim on its computer terminal. Using a code system developed by the American Hospital Association, BMC codes in both the type of service rendered and the type of procedure performed by the physician. Other information is also provided in the claim. The BMC computer then transmits the claim by telephone line to a computer at Blue Cross’s headquarters for processing. A computer printout of each claim filed is retained by BMC.

If the Blue Cross computer accepts the claim as entered and determines it to be payable under the contract, it generates a pay document for the hospital. If a claim is rejected (cannot be processed as submitted due to errors in coding) or is denied (accepted for processing but a determination is made that no coverage exists for the claim), a printed “audit trail” is sent to the hospital indicating why the claim was not paid.

Blue Cross representatives had instructed the BMC employees on the use of the computer system. January 8, 1981, the date the $120 claim was filed, was the first day BMC had filed any claims through the computer system. In submitting the claim, BMC gave a surgery code for type of service, but used a general medical examination code for type of procedure performed. Due to this inconsistency, Blue Cross’s computer system was unable to process the claim. On January 9, 1981, the Blue Cross computer sent an audit trail to BMC indicating that the $120 claim for physician’s services to Trey was rejected due to inconsistent coding on the claim.

When the audit trail was received at BMC, a notation was made that the claim was to be resubmitted with the proper code numbers. This was not done, however. Instead, BMC transferred the $120 bill to a “self-pay account,” which meant that Gran-ger, rather than Blue Cross, would be billed. On March 22, April 16, and May 12, BMC sent Granger a bill and/or a letter seeking payment of the $120. In response to the third letter, which stated that payment must be made within seven days, Mrs. Granger called BMC and requested that it resubmit the claim. BMC resubmitted the claim via computer on May 19, but again used inconsistent code numbers. According to a BMC employee, no response was received from Blue Cross, although it was acknowledged that some type of response is received whenever a claim is filed with Blue Cross. Records of audit trial rejections are not kept by Blue Cross.

BMC billed Granger again on May 21, two days after the computer resubmission. Bills were also sent to Granger on June 20 and July 15. Mrs. Granger went to BMC’s business office on July 17 and attempted to pay the $120 bill. She was told, however, that BMC would resubmit the claim to Blue Cross. Mrs. Granger requested that she be notified before the matter was turned over to a collection agency and was assured that she would be.

BMC did not resubmit the claim or otherwise contact Blue Cross concerning the matter. BMC did, however, mail payment demand notices to Granger oh July 31 and August 12. Granger did not respond to these letters, and BMC turned the account over to a collection agency on September 14, 1981.

In late August, Mrs. Granger attended a teachers’ meeting at which Tim Sexton, a Blue Cross marketing representative, spoke. After the meeting, Mrs. Granger had a conversation with Sexton concerning the $120 unpaid claim. She testified that Sexton told her that if her husband had signed release forms with the automobile insurer, the $120 claim “would be taken care of.” She acknowledged, however, that in her deposition she had stated that Sexton told her that “he would check into” any unpaid claims.

Sexton testified that he told Mrs. Gran-ger he “would check into it for her.” He stated that he did so and later called the Grangers to relay the information that “if a release form had been signed releasing the automobile carrier of any further liability, then the claim could be filed.” (Emphasis added.) Sexton had no further communication with the Grangers until late March 1982. He stated that he was unaware until that time that the claim had not been filed or paid.

Granger continued to receive bills from BMC. In response to these bills, Mrs. Granger called BMC around the first of October and requested that it resubmit the $120 claim to Blue Cross. She testified that at about this same time, she wrote a letter to Sexton concerning the claim and gave it to her husband to mail. Mr. Gran-ger testified that Sexton telephoned him later and said that “he received the information [Granger] had sent him and that the bill would be or had been taken care of.” Sexton, however, stated that he never received this letter.

During October 1981, Granger received letters and telephone calls from the collection agency employed by BMC to pursue the account. In mid-October, Mr. Granger attempted to call Sexton about this matter. Sexton was not in the office; therefore, Granger left a message. His call was not returned.

In response to further communications from the collection agency, Mrs. Granger contacted BMC in early November 1981 and again requested that the $120 claim be resubmitted. On November 11, BMC mailed to Blue Cross a copy of the claim form for the $162 claim which had previously been paid and a photocopy of the computer printout of the May 19 resubmission of the $120 claim. No letter or note of explanation accompanied these documents. Other than this mailing and the May 19 resubmission containing incorrect codes, BMC did not, at any time after January 9, 1981, attempt to contact Blue Cross concerning this claim.

Upon receipt of the items mailed November 11, Blue Cross reviewed the $162 claim and determined that it had already been paid. The BMC computer printout of the May 19 resubmission of the $120 claim, however, was a document intended for internal use at BMC and had no meaning for Blue Cross personnel. Consequently, the printout copy was simply placed in the files of the Blue Cross claims department. Blue Cross received no further contacts concerning the $120 claim until March 1982.

Granger, meanwhile, continued to receive letters from the collection agency demanding payment. However, he did not pursue the matter with either BMC or Blue Cross. On March 18, 1982, a collection suit was filed against Granger, and he was served with the summons and complaint on March 24, 1982.

Granger testified that he immediately called Blue Cross to apprise Sexton of this turn of events. Sexton was not in, however, so Granger informed the person with whom he was speaking that he was being sued by BMC for the unpaid $120 claim. Granger stated that sometime after April 1 Blue Cross telephoned his office and informed his secretary that the claim had been paid. A default judgment was taken against Granger on April 9,1982, due to his failure to answer the complaint.

Debbie Townes, a former Blue Cross employee, testified that she received a call on March 26, 1982, from Carol Love, Gran-ger’s secretary, who informed her that Granger was being sued by BMC. Townes obtained from Love an account number taken from one of the bills Granger had received. She then called BMC and ascertained that the $120 charge was for Trey’s treatment after the accident. After obtaining permission from her department manager, Townes entered a “pickup” claim for the $120 on the $162 claim previously paid in Trey’s behalf.

Each Thursday Blue Cross pays hospitals for claims filed. Townes testified that the $120 claim was entered in the claims system on Friday, March 26, 1982, and was paid to BMC on the next payroll, which was Thursday, April 1. She called Carol Love on March 29 or 30 and advised her that the $120 claim would be paid on April 1.

Tim Sexton testified that he received a call from Granger in late March 1982 concerning the unpaid $120 claim. According to Sexton, after this call, he contacted Debbie Townes and asked her to review the matter. He then called Granger back and informed him that Blue Cross was working to resolve the matter. However, Townes testified that she never talked to Sexton concerning the matter, and Blue Cross records show that Sexton called one Connie Roberts on March 25, 1982, and inquired as to the status of the claim of Granger.

The plaintiff in a bad faith case has a heavy burden of proof. As this Court set forth in National Security Fire & Casualty Co. v. Bowen, 417 So.2d 179, 183 (Ala.1982), the plaintiff must show:

“(a) an insurance contract between the parties and a breach thereof by the defendant;
“(b) an intentional refusal to pay the insured’s claim;
“(c) the absence of any reasonably legitimate or arguable reason for that refusal (the absence of a debatable reason);
“(d) the insurer’s actual knowledge of the absence of any legitimate or arguable reason;
“(e) if the intentional failure to determine the existence of a lawful basis is relied upon, the plaintiff must prove the insurer’s intentional failure to determine whether there is a legitimate or arguable reason to refuse to pay the claim.
“In short, plaintiff must go beyond a mere showing of nonpayment and prove a bad faith nonpayment, a nonpayment without any reasonable ground for dispute. Or, stated differently, the plaintiff must show that the insurance company had no legal or factual defense to the insurance claim. [Emphasis in original.]
“The ‘debatable reason’ under (c) above means an arguable reason, one that is open to dispute or question. Webster’s Third New International Dictionary (1931) at 116. See Chavers [v. National Security Fire & Casualty Co., 405 So.2d 1 (Ala.1981)] at 10; see also Embry, J., concurring on rehearing in Aspinwall v. Gowens, 405 So.2d 134 (1981).”

We further commented in National Savings Life Ins. Co. v. Dutton, 419 So.2d 1357, 1362 (Ala.1982):

“[T]he tort of bad faith refusal to pay a valid insurance claim is in the embryonic stage, and the Court has not had occasion to address every issue that might arise in these cases. In Bowen, supra, we set out the elements of the tort and attempted to show the plaintiffs burden in these cases. It is a heavy burden. In the normal case in order for a plaintiff to make out a prima facie case of bad faith refusal to pay an insurance claim, the proof offered must show that the plaintiff is entitled to a directed verdict on the contract claim and, thus, entitled to recover on the contract claim as a matter of law. Ordinarily, if the evidence produced by either side creates a fact issue with regard to the validity of the claim and, thus, the legitimacy of the denial thereof, the tort claim must fail and should not be submitted to the jury.”

Although several issues are raised by Blue Cross, the dispositive issue in this case is whether Granger met his burden of proof under Bowen and Dutton.

Initially, we note that Granger’s complaint contained no allegation of breach of contract. However, a breach of contract claim of necessity underlies a claim of bad faith. See Dutton; Bowen, supra. It is the insurer’s breach of the insurance contract by refusing in bad faith to pay the claim that gives rise to the tort action of bad faith. Regardless of the fact that Granger did not bring a breach of contract claim, we must, under Dutton, determine whether he would have been entitled to a directed verdict on such a claim.

To be entitled to a directed verdict on the breach of'contract claim, and consequently get his bad faith claim to the jury, Granger must show that there was no debatable reason for this refusal. See National Security Fire & Casualty Co. v. Vintson, 454 So.2d 942 (Ala.1984); Dutton, supra. Section IX of the insurance contract under which the Grangers were covered provides in pertinent part:

“I. Duty of Members and Providers to Furnish Information Requested by Company
“As conditions precedent to the availability under this Contract of any coverage or benefits for any services, care, treatment, or supplies furnished or rendered to a Member:
“1. The Company must have received from or on behalf of the Member a claim or claims in writing for benefits hereunder prepared and submitted in the manner, with such information, and on such forms as the Company prescribes.”

While this provision requires that claims be submitted in writing, the effective date of the contract was October 5, 1980, and the computer billing system was not installed until January of 1981. Clearly, claims submitted through the computer will not be in writing. Nevertheless, this provision would apply to computer claims to the extent that they must be “prepared and submitted in the manner, with such information ... as the Company prescribes.”

Blue Cross representatives initially instructed BMC employees in the use of the computer system. As a general matter, the basic instructions for filing a computer claim must have been followed in submitting the $120 claim, for the claim was actually transmitted to the Blue Cross computer. However, both times the claim was submitted by computer (January 8 and May 19) inconsistent codings were used and therefore the claim was not “prepared and submitted in the manner” prescribed by Blue Cross. It would be ludicrous to suggest that Blue Cross instructed BMC employees to use inconsistent codings which would be rejected by the Blue Cross computer.

In denying Blue Cross’s motion for directed verdict, the trial judge indicated that he felt that the fact that the claim was not properly presented was not a valid “debatable reason” and, further, stated his opinion that Blue Cross had “made [its] claim form procedure unnecessarily complex so that it could not be complied with in the context of this type case.” We cannot agree with either assessment. The computer age is a fact of contemporary life. Computers are able to process more information in less time than can be processed manually. There is, however, little margin for error in entering the information.

Obviously, Blue Cross installed this computerized system in order to facilitate the processing of claims, not to complicate that process. The system, however, can only process claims which are presented in the correct manner, that is, claims which contain consistent codes. This does not appear to be a particularly complex requirement.

The $120 claim was never correctly submitted by BMC. Granted, the BMC employees were unfamiliar with the system the first time the $120 claim was submitted. By the time the claim was resubmitted, BMC employees had had some five months to familiarize themselves with this system. Even so, the repeated errors by BMC in transmitting this claim cannot be attributed to Blue Cross. In the final analysis, the claim, as submitted by BMC, could not be processed by the Blue Cross computer, and this is sufficient to show a debatable reason for Blue Cross’s not paying the claim.

Moreover, this Court has made it abundantly clear that an action for bad faith lies only where the insurer has acted with an intent to injure. In Chavers v. National Security Fire & Casualty Co., 405 So.2d 1 (Ala.1981), in which we first recognized the tort of bad faith, bad faith was defined as an action “arispng] for an insurer’s intentional refusal to settle a direct claim.” 405 So.2d at 7. (Emphasis added.) Bad faith “imports a dishonest purpose and means a breach of a known duty, i.e., good faith and fair dealing, through some motive of self-interest or ill will.” Gulf Atlantic Life Ins. Co. v. Barnes, 405 So.2d 916, 924 (Ala.1981). Mere negligence or bad judgment will not support a bad faith claim. Prudential Ins. Co. of America v. Coleman, 428 So.2d 593 (Ala.1983); Barnes, supra.

We find nothing in the record before us which indicates that Blue Cross acted with any intent to injure, nor do we find any evidence of malice or ill will on the part of Blue Cross. Even if the computer system was unnecessarily complex in design, that in and of itself would amount only to bad judgment or negligence and not to bad faith. An insurer which, without more, seeks to serve its insureds by computerizing its claims system should not be penalized for its efforts when, through no intentional act of the insurer, a claim runs afoul of the system.

The trial judge stated in denying Blue Cross’s motion for directed verdict:

“Now, so that we address the question of the intentional aspect of the thing. I’m not saying that you [Blue Cross] were intentionally not paying the claim. I’m saying that the file reflects that you had all the necessary information — the evidence in the case reflects — you had all the necessary information for a period of many months but failed totally to make any investigation of any consequence. And it’s on that leg, the tort of bad faith, that the court is resting its decision....”

As the trial judge recognized, there are two “legs” or prongs to a bad faith action. We stated in Chavers, 405 So.2d at 7:

“[A]n actionable tort arises for an insurer’s intentional refusal to settle a direct claim where there is either ‘(1) no lawful basis for the refusal coupled with actual knowledge of that fact or (2) intentional failure to determine whether or not there was any lawful basis for such refusal.’ ” (Emphasis added.)

It follows from this language that the plaintiff in a bad faith case may prove his case either by showing that the insurer refused to pay the claim, knowing there was no legitimate reason to refuse payment, or by showing that the insurer intentionally failed to investigate the claim to determine whether there was a legitimate reason for refusing payment.

In regard to the intentional-failure-to-investigate aspect of bad faith, this Court stated in Barnes, 405 So.2d at 924:

“The relevant question before the trier of fact would be whether a claim was properly investigated and whether the results of the investigation were subjected to a cognitive evaluation and review. Implicit in that test is the conclusion that the knowledge or reckless disregard of the lack of a legitimate or reasonable basis may be inferred and imputed to an insurance company when there is a reckless indifference to facts or to proof submitted by the insured....”

We find nothing in the record to support a finding that Blue Cross intentionally failed to investigate the $120 claim. The two times the claim was submitted by computer, it was lawfully rejected because it was apparent on the face of the claim, through its inconsistent codes, that the claim could not be processed. Therefore, there was no duty on Blue Cross to investigate further. Had the claim been submitted on a traditional claim form, Blue Cross would no doubt have returned it, stating that the form contained inconsistent information. The audit trail accomplished the same purpose, that is, BMC was notified that it should resubmit the claim with the correct information. Having returned the claim with an indication of the problem, Blue Cross had no duty to investigate further at that time.

Sometime-prior to the time Blue Cross paid the $162 claim for Trey’s treatment, Mrs. Granger made some telephone calls to Blue Cross. The evidence was in conflict as to the content of these calls. Mrs. Granger stated that she asked about the $120 claim, while Blue Cross maintained that she inquired only as to the $162 claim which had been rejected due to a lack of information on the coordination of benefits. Apparently, the calls generated additional investigation into the $162 claim or resulted in providing the needed information, because this claim was subsequently paid. If Mrs. Granger did ask Blue Cross to review the $120 claim, there is no evidence that Blue Cross intentionally failed to do so. Once again we reiterate that bad faith requires an intentional action on the part of the insurer. See Barnes; Chavers, supra. While intent can be inferred from a “reckless indifference to facts or to proof submitted by the insured,” Barnes, 405 So.2d at 924, there has been no showing that Blue Cross acted with reckless indifference. The most that can be shown from the evidence presented is that Blue Cross was mistaken or negligent in investigating only the $162 claim. Neither negligence nor mistake is sufficient to show bad faith. Coleman; Barnes, supra.

These same principles apply to the Grangers’ contacts with Sexton. There has been no showing of malice or ill will on the part of Sexton. By Mrs. Granger’s own admission, Sexton may only have said that “he would check into” the claim. Apparently he did so and reported back to the Grangers. At most, he was negligent in not pursuing the matter further with the Grangers, but there has not been any showing of the intentional kind of action contemplated by bad faith. In granting Blue Cross’s motion for directed verdict on the fraud claim, the trial court specifically found that there had been no showing of intentional fraud or fraudulent misrepresentation on the part of Blue Cross or its representatives. We agree with this finding and view it as supporting the conclusion that there was no intentional failure to investigate on the part of Sexton.

As for the items mailed by BMC on November 11, 1982, it is clear that Blue Cross regarded this as a claim for the $162 and, after investigating, determined that it had previously been paid. A Blue Cross employee testified that Blue Cross frequently receives all sorts of unidentified papers and notations attached to claims. These are routinely placed in the file with the claim. Since BMC did not send any letter of explanation with these items, it is not surprising that Blue Cross acted as it . did. In fact, a BMC employee admitted that this mailing was not pursuant to normal Blue Cross procedures and would not constitute submission of the claim to Blue Cross.

This Court will not place an insurer in the position of having to investigate every unidentified and incomprehensible item it receives to determine whether it is, in fact, a claim. The responsibility lies with the insured or the entity seeking benefits on behalf of the insured (in this case BMC) to properly place the claim before the insurer. We do not mean to imply that the insurer can ignore any and every item it receives and then defend a bad faith action on the basis that it did not realize that a claim had been filed. Nevertheless, items that are intended to be claims must at least give the insurer reasonable notice that one is attempting to file a claim, so that the insurer can respond in the appropriate manner.

We conclude that Granger would not have been entitled to a directed verdict on a breach of contract claim. Not only did he fail to disprove the existence of a debatable reason for the refusal to pay the claim when it was initially submitted, but he also failed to prove any facts which would put in operation Blue Cross’s duty to investigate his claim. Consequently, Blue Cross’s motion for directed verdict should have been granted.

The plight of Granger arouses our concern. Certainly he was subjected to a great deal of unnecessary inconvenience and worry over the $120 claim. However, the record simply does not support a finding that he was wronged through the intentional acts, of Blue Cross. It must be remembered that Granger, on his own motion, dismissed BMC from the case and proceeded solely against Blue Cross on a claim of bad faith. As we stated in Chavers, 405 So.2d at 10, “the remedy [of bad faith] will be afforded in only extreme cases.” This is not such a case.

For the reasons stated above, the judgment of the Tallapoosa Circuit Court is hereby reversed and the cause remanded.

REVERSED AND REMANDED,

TORBERT, C.J., and MADDOX and SHORES, JJ., concur.

JONES and ADAMS, JJ., concur specially-

FAULKNER and EMBRY, JJ., recuse themselves.

JONES, Justice

(concurring specially).

This case asks the agonizing question: Can cumulative inefficiency and gross neglect in the handling of a valid claim amount to a breach of the insurer’s duty to exercise good faith in the performance of its contractual obligation? Only because we have defined that duty in the strictest of terms favorable to the insurer do the facts of this case fall short of sustaining liability.

So far, this Court has upheld bad faith judgments only in extreme cases of conscious, intentional failure to process or pay valid claims. While the facts of this case do not meet that stringent standard, it is appropriate to observe that repetitive mistreatment of, and indifference to, the rights of insureds, as demonstrated here, will inevitably invite re-examination, either by this Court or by the legislature, of the claimant’s burden in bad faith cases.

ADAMS, J., concurs.


text:
    Sharon Elizabeth HARRIS v. Henry Thomas HARRIS.
    Civ. 4153.
    Court of Civil Appeals of Alabama.
    May 23, 1984.
    Rehearing Denied June 20, 1984.

      Bert P. Noojin and Donald C. Partridge of Noojin & McNair, Mobile, for appellant.
    A1 Seale and Frances R. Niccolai of Seale, Marsal & Seale, Mobile, for appellee.
   EDWARD N. SCRUGGS, Retired Circuit Judge.

This is a divorce case.

The husband contended through his pleadings and evidence that an equitable mortgage or indebtedness exists as to the homeplace of the parties which resulted from a loan made several years earlier by the husband’s father in order to enable the parties to initially purchase that property. On the date of the ore tenus trial, the wife filed a motion for a summary judgment upon that indebtedness issue. It was taken under advisement by the trial court but was overruled at the conclusion of the trial. In the final divorce judgment, the husband was ordered to pay all joint debts and bills of the parties which were incurred during their marriage, expressly including the debt, “if any,” to the husband’s father.

The wife argues through able counsel that the trial court erred in overruling her motion for a summary judgment. If error was so committed, it was not prejudicial to the wife since the husband was ordered by the final judgment to pay the debt, if any, to his father. Any error in overruling the wife’s motion was corrected by the final judgment. Accordingly, the error complained of did not injuriously affect any substantial right of the wife. Rule 45, A.R.A.P.; rule 61, Alabama Rules of Civil Procedure.

However, the wife further contends that the trial court indirectly imposed a part of that debt upon her when she was awarded forty-seven percent and the husband fifty-three percent of the net sale proceeds from the land when it sold. The judgment states no reason for that unequal decision. From a study of all of the evidence, it appears that the cause of the disparity could have been an attempt by the court to balance the equities in dividing the property by granting to the husband six percent more of the sale proceeds because of his contribution to the marriage of property which he owned at the time of the marriage.

In any event, a division of property in a divorce case is not required to be equal but must be equitable. That is a matter which falls within the judicial discretion of the trial court whose property awards will not be reversed upon an appeal except for a palpable abuse of discretion. The ore tenus rule applies also. Kaiser v. Kaiser, 434 So.2d 264 (Ala.Civ.App.1983); Spradlin v. Spradlin, 426 So.2d 462 (Ala.Civ.App.1983). The evidence in this cause does not disclose that the trial court was clearly wrong. The property division was equitable and was supported by the evidence.

After the conclusion of the evidence in chief of both parties, the trial court denied to the wife the right to use their fifteen year old son as a witness, whereupon the mother made a showing that the son would testify that on several separate occasions he had observed the husband beating and abusing the wife, that the son purchased one of the horses in question with his own money, and that the son had had no relationship with his father for the last several years.

The wife correctly states that a trial court may not prohibit a witness from testifying in a divorce case solely because the proposed witness is a child of the parties even though calling children to testify against one of their parents in a divorce case is distasteful and should be discouraged. The sole statutory prohibition against a child of the parties testifying in that type of litigation is that a child who does not understand the nature of an oath is an incompetent witness. § 12-21-165, Code 1975. Thus, the learned trial court erred in prohibiting the fifteen year old son from testifying only because of his relationship to the parties. The issue now evolves as to whether that error was reversible.

The stated grounds for divorce in the wife’s complaint were incompatibility of temperament and irretrievable breakdown of the marriage. There was ample evidence in support of those grounds and the trial court entered a divorce. The circuit court gave to the son the horse which was mentioned in the showing as having been bought by him. Custody of the children was awarded to the wife and was not an issue since the husband had stipulated during the trial that their custody could be granted to her. In short, the relief sought by the wife in those particular respects was granted to the wife without the son’s proposed testimony. The burden falls upon the wife to show that the error prejudicially affected her substantial rights. Sams v. Equitable Life Assurance Society of the United States, 402 So.2d 999, 1003 (Ala.Civ.App.1981).

The wife contends that the testimony of the son “would have presented the trial court with evidence that would have allowed, it to make a more equitable division of the property considering the needs of the minor children.” After, a careful review of the record, we find that the wife herself testified regarding the husband’s “cruelty” to her. Therefore, the son’s testimony would be, in view of all of the circumstances of this matter, merely cumulative. Hence, no error. Rule 61, A.R. Civ.P.; rule 45, A.R.A.P.

We affirm the judgment of the trial court.

The wife’s request for an attorney’s fee upon appeal is denied.

The foregoing opinion was prepared by Retired Circuit Judge EDWARD N. SCRUGGS while serving on active duty status as a judge of this court under the provisions of section 12-18-10(e), Code 1975, and this opinion is hereby adopted as that of the court.

AFFIRMED.

All the Judges concur.


author: FAULKNER, Justice.

text:
    Ex parte: Sharon Elizabeth HARRIS. (Re: Sharon Elizabeth HARRIS v. Henry Thomas HARRIS.)
    83-1110.
    Supreme Court of Alabama.
    Nov. 9, 1984.

      Bert P. Noojin and Donald C. Partridge of Noojin & McNair, Mobile, for petitioner.
    A1 Seale and Frances R. Niccolai of Seale, Marsal & Seale, Mobile, for respondent.
   FAULKNER, Justice.

This appeal arises from the trial court’s denial of the petitioner’s request to call her fifteen-year-old son as a witness in the parties’ divorce action. After the judge refused to allow the son to testify, the wife made an offer of proof as to the son’s expected testimony.

The Court of Civil Appeals, in affirming, found that the trial court’s refusal to allow the child to testify was not reversible error because “the son’s testimony would be, in view of all circumstances of this matter, merely cumulative.” Harris v. Harris, 461 So.2d 1330 (Ala.Civ.App.1984).

We granted certiorari to resolve the issue of whether it was reversible error to prohibit the parties’ fifteen-year-old son from testifying in the divorce case when the trial court’s decision was based solely upon a blanket prohibition against allowing children to testify against their parents.

Initially, we agree with the Court of Civil Appeals" statement of the law that “a trial court may not prohibit a witness from testifying in a divorce case solely because the proposed witness is a child of the parties even though calling children to testify against one of their parents in a divorce case is distasteful and should be discouraged.” Harris v. Harris, supra.

The general rule is that “a party is entitled to have received in evidence and considered by the court, before findings of fact are made, all competent, material, and relevant evidence which tends to prove or disprove any material issue raised by the pleading.” Bole v. Bole, 76 Cal.App.2d 344, 172 P.2d 936 (1946).

In Kreutzer v. Kreutzer, 226 Or. 158, 359 P.2d 536 (1961), the Oregon Supreme Court stated:

“Consequently, the right of the defendant to call the children to the stand and to elicit testimony from them material to the issues was precisely the same as it would have been in the case of any other competent witness. This is, of course, a fundamental right. In divorce eases, it seems to be uniformly held that the court has no authority to exclude the testimony of children of the parties of tender years if they are otherwise competent witnesses.”

Id., 359 P.2d at 537 (citations omitted). Many other jurisdictions that have considered this issue have followed this general principle. See e.g. Annot. 2 A.L.R.2d 1029-1032 (1948); Crownover v. Crownover, 33 Ill.App.3d 327, 337 N.E.2d 56 (1975); Louks v. Louks, 345 Ill.App. 185, 102 N.E.2d 364 (1951); Chavigny v. Hava, 125 La. 710, 51 So. 696 (1910); Powell v. Powell, 198 Miss. 301, 22 So.2d 160 (1945); Ames v. Ames, 231 Mich. 347, 204 N.W. 117 (1925); Morrone v. Morrone, 44 N.J. Super. 305, 130 A.2d 396 (1957); Schafer v. Schafer, 243 Or. 242, 412 P.2d 793 (1966); Nichols and Fleischman, 67 Or.App. 256, 677 P.2d 731 (1984); Callicott v. Callicott, 364 S.W.2d 455 (Tex.Civ.App.1963); Helper v. Helper, 195 Va. 611, 79 S.E.2d 652 (1954).

In Alabama, there is no statutory prohibition against children testifying in a divorce case so long as they are otherwise competent to testify. Testimony of competent children in a divorce action must be admitted, if relevant, otherwise admissible, and not merely cumulative. In this case, so far as it appears, the fifteen-year-old son would have been able to understand the nature of the oath and would likewise have been competent to testify. Ala.Code 1975, § 12-21-165.

The husband argues, as the Court of Civil Appeals held, that in this instance the exclusion of the son as a witness was not reversible error because his testimony would have been merely cumulative. This determination was based upon the offer of proof propounded by the wife’s attorney at the conclusion of all of the evidence.

“The primary reason for the offer of proof is that it better enables the trial judge to consider further the claim for admissibility of such evidence. The secondary reason is that the offer of the proposed answer places the same in the official record for the benefit of the appellate court called upon to decide whether there has been error committed in the ruling.”

C. Gamble, McElroy’s Alabama Evidence § 425.01(1) (3d ed. 1977).

In this case, however, the trial judge failed even to consider the admissibility of the child’s testimony. The trial court’s decision to prohibit the fifteen-year-old son from testifying was based solely upon the child’s relationship to the parties. The determination was not based upon a concern for the nature of the testimony to be elicited by the witness, nor upon a consideration of whether the child’s testimony would merely be cumulative. Likewise, there is no indication that the court acted on the basis of reasonable satisfaction that sufficient evidence had been presented on each material issue in the case. It appears that the trial judge had made up his mind that he was not going to hear the child’s testimony even before knowing what that testimony would reveal.

The wife’s offer of proof, no matter what would have been stated, would have been unavailing; for the court’s ruling was based upon a blanket exclusion of the child’s testimony rather than upon a legal objection to the admissibility of evidence.

An offer of proof, although preserving the record on appeal, is an insufficient substitute for the witness’s testimony. Despite the offer of proof, we are unable in hindsight to determine that the son’s testimony would have been merely cumulative. We cannot conclusively determine everything that the child would have testified to on the stand. In the present case, most of the evidence presented by the parties was in conflict. Arguably, the son’s testimony may have helped to resolve or corroborate the issues in dispute.

A party has a fundamental right to introduce evidence which is competent, otherwise admissible, and relevant to the material issues being tried. Accordingly, any doubt as to whether the testimony was cumulative should be resolved in favor of the party who would call the witness to the stand.

While we are sympathetic with the learned trial judge’s attempt to protect the best interest of the family, and, although we are reluctant to find reversible error because of the social and policy considerations of allowing children to take sides in court against one of their parents, we are unable to conclude in this instance that the exclusion of the child from the stand was merely harmless error. Accordingly, we reverse and remand.

REVERSED AND REMANDED.

TORBERT, C.J., and MADDOX, JONES, SHORES, EMBRY, BEATTY and ADAMS, JJ., concur.

ALMON, J., not sitting.


text:
    Sharon Elizabeth HARRIS v. Henry Thomas HARRIS.
    Civ. 4153.
    Court of Civil Appeals of Alabama.
    Dec. 12, 1984.
   EDWARD N. SCRUGGS, Retired Circuit Judge.

The prior opinion of this court, 461 So.2d 1330 (Ala.Civ.App.1984), has been reversed and remanded by the Alabama Supreme Court, 461 So.2d 1332 (Ala.1984). On remand to this court, and in compliance with the supreme court’s opinion of November 9, 1984, this case is now reversed and remanded to the trial court.

The wife’s initial request for the award of an attorney’s fee on appeal is granted, and we fix that fee at $1,000.

The foregoing opinion was prepared by Retired Circuit Judge EDWARD N. SCRUGGS while serving on active duty status as a judge of this court under the provisions of section 12-18-10(e), Code 1975, and this opinion is hereby adopted as that of the court.

REVERSED AND REMANDED.

All the Judges concur.


author: PATTERSON, Judge.

text:
    Lynn D. WILLIAMS v. STATE.
    5 Div. 871.
    Court of Criminal Appeals of Alabama.
    July 17, 1984.
    Rehearing Denied Aug. 14, 1984.

      Robert S. Milner, Wetumpka, for appellant.
    Charles A. Graddick, Atty. Gen., and J. Callen Sparrow, Asst. Atty. Gen., for appel-lee.
   PATTERSON, Judge.

Williams appeals the summary dismissal of his pro se petition for writ of habeas corpus challenging the constitutionality of a disciplinary proceeding which resulted in the loss of one year of good time. He was charged with possession of contraband jn violation of prison regulations. The record discloses that as a result of information furnished by an informer, appellant’s bed was searched by an officer named Swain, who found an “ashtray with folded paper inside which contain [sic] some seeds and a green leafy substance” under the mattress. Williams alleges in his petition that there was insufficient evidence for the Disciplinary Board to find him guilty as charged, that he was denied the right to be confronted by the witnesses against him and to cross-examine them, and that he was denied the right to a fair and impartial hearing board. The State moved to dismiss the petition on the grounds that the hearing complained of met the due process requirements of Wolff v. McDonnell, 418 U.S. 539, 94 S.Ct. 2963, 41 L.Ed.2d 935 (1974), that the court had no jurisdiction to review substantive matters in disciplinary proceedings, and that the petition was not properly verified as required by § 15-21-4, Code of Alabama 1975.

A petition for habeas corpus is the proper method by which a prisoner who claims to be deprived of his good time credit without due process of law can challenge the results of his disciplinary hearing. Williams v. Davis, 386 So.2d 415 (Ala.1980).

The record in this case does not contain an answer or return denying the allegations of fact in the petition. The memoranda and affidavits filed with the State’s motion to dismiss the habeas corpus petition contain no facts which contradict those facts set out in the petition. Therefore, the unrefuted facts set out in the petition must be taken as true. Ex parte Floyd, 457 So.2d 961 (Ala.1984); Vaughan v. State, 415 So.2d 1231 (Ala.Crim.App.1982).

The due process requirements set out in Wolff v. McDonnell, supra, and approved by the Supreme Court of Alabama in Williams v. Davis, supra, are summarized as follows:

“(a) advance notice of the information to be considered at the hearing;
“(b) a written statement of the evidence relied on and reasons for the decision;
“(c) the right of the prisoner to be present;
“(d) the right to present documentary evidence on his behalf;
“(e) a qualified right to have a representative present to aid the prisoner in presenting his case; and
“(f) a qualified right to call witnesses....”

Williams contends on appeal that he did not receive the required advance notice of the hearing. The record shows that the hearing was held at 11:25 p.m., November 16, 1983, and that he received notice at 5:38 p.m., November 14, 1983. It thus appears from the record that he received timely and adequate notice and therefore his contention to the contrary is without merit.

He further contends that there was no substantial evidence to support the finding of guilty by the Board. The evidence relied upon was the testimony of the arresting officer, who stated, “While searching inmate Williams’s bed I found an ashtray with folded paper inside which contain [sic] some seeds and a green leafy substance”. The Board’s finding upon which it based its decision was: “Guilty due to the fact that officer Swain did search the bed assigned to inmate Williams and in the process found what appeared to be marijuana under the mattress”. There was no other evidence introduced showing that the substance was in fact marijuana.

In Washington v. State, 405 So.2d 62 (Ala.Crim.App.1981), this court held:

“To comport with due process the Board’s decision must not have been made arbitrarily or capriciously but should have been based upon ‘substantial •evidence’.”

This court stated in Vick v. State, 448 So.2d 474 (Ala.Crim.App.1984):

“The rule requiring ‘substantial evidence’ means that an inmate will not be found guilty except by an appropriate quantum of evidence. If a prison official finds an inmate guilty, it is the responsibility of the reviewing courts to determine whether the decision was based on substantial evidence or whether the decision was arbitrary. Aikens v. Lash, 514 F.2d 55 (7th Cir.1975).”

We were faced with a similar factual situation in Barker v. State, 437 So.2d 1375 (Ala.Crim.App.1983), where we stated:

“The lack of the procedural due process mandated in Wolff and approved by our Supreme Court in Williams v. Davis, 386 So.2d 415 (Ala.1980), is directly related to the substantive issue raised by Barker. Barker argues that the opinion of the arresting correctional officer that the handrolled cigarettes containing a green vegetable material actually contained marijuana does not constitute substantial evidence of his guilt. As was noted in Aikens v. Lash, 514 F.2d 55, 60 (7th Cir.1975), ‘As a practical matter, we fail to see the conflict defendants note between the term “substantial evidence” and the phrase “evidence relied on and reasons for the disciplinary actions.” .... The term “substantial evidence” need not be something prison officials should be overly concerned about. In each case, they should write their conclusions and the reasons for them based on the evidence they have heard.’
“We reject Barker’s argument that scientific evidence was necessary to prove that the vegetable material was marijuana. Evidence that the arresting officer was qualified from study, experience, or observation to identify marijuana would have been sufficient. Jenkins v. State, 46 Ala.App. 719, 248 So.2d 758 (1971). In other words, why did the arresting officer ‘believe’ the material was marijuana? Without such information the action of the board was arbitrary and capricious.”

In the instant case the only evidence that the material found was contraband was the statement of Officer Swain that it “appeared to be marijuana”. No opinion by a person qualified from experience to give such an opinion was offered. The Board did not find that the substance was marijuana, but only that it “appeared to be marijuana”. This falls short of constituting “substantial evidence” of guilt as required by the decisions of this court in Washington v. State, supra; Vick v. State, supra; and Barker v. State, supra. The action of the Board in finding Williams guilty on the basis of evidence that was obviously insufficient was arbitrary and capricious and we so hold.

Williams further contends that his right to a fair and impartial hearing was denied. He bases this contention on his allegations that the chairman of the disciplinary board, Mr. William E. James, was personally involved in the investigation of the incident and the presentation of evidence to the Board. He alleges that during the hearing Mr. James stated: “When I got to work Monday, we received information that you were smoking marijuana in bed Sunday night”, and “... you had marijuana in your possession”, and “We received information from an informant that Williams had been smoking marijuana in his bed and had possession of marijuana Sunday night”.

The loss of “good time” is a sufficient deprivation of liberty to warrant a prior due process hearing before an impartial board composed of persons who were not directly involved in the incident. Williams v. Davis, supra; Diamond v. Thompson, 364 F.Supp. 659 (M.D.Ala.1973).

Paragraph 4d(6)(b), Administration Regulation 403 of the State Department of Corrections, provides:

“(b) The disciplinary board must be impartial meaning that a board member must not be the arresting officer, witness to the actual incident, the investigating officer, a party to the incident, the victim of the incident, or an official who has approval authority over the disciplinary.”

In the ease of Vick v. State, supra, this court stated:

“From these facts, taken from the statements of the correction official, it is apparent that Mr. Patrick Halliday was directly and personally involved with the events in question. He was also the chairman of the disciplinary board before which appellants were heard. Under the circumstances, it seems very likely that the appellants’ right to a fair and impartial hearing was denied. See Ex parte Crear, 460 So.2d 1208 (Ala.1983). For this reason, we reverse the order of the trial court and remand with instructions that appellants be given an evidentiary hearing on their petition of writ of habe-as corpus.”

It appears from the allegations of the petition in the instant case that the chairman of the disciplinary board, Mr. James, was directly and personally involved with the events in question, and under the circumstances, it seems likely that the appellant’s right to a fair and impartial hearing was denied. Williams has raised a factual question in his petition which if proven correct would raise a prima facie case of partiality. Nothing in the record contradicts Williams’s statements concerning Mr. James. Williams’s petition in reference to this contention raised an issue which merited a hearing in the circuit court. See Ex parte Crear, 460 So.2d 1208 (Ala.1983).

The appellant further contends that he was denied due process by the Board’s refusal to allow him to cross-examine witnesses against him and to present a prepared statement in his defense. In view of our findings in reference to the lack of substantial evidence to support the finding of guilty of possession of contraband and the apparent lack of impartiality of the disciplinary board, we find it unnecessary to address this contention; however, we point out that the inmate facing disciplinary proceedings should be allowed to call witnesses and present documentary evidence in his defense when permitting him to do so will not be unduly hazardous to institutional safety or correctional goals. Williams v. Davis, supra.

The State contends that the petition for writ of habeas corpus was not properly verified as required by § 15-21-4, Code of Alabama 1975. There is no merit in this contention. Rice v. State, 460 So.2d 254 (Ala.Crim.App.1984).

For the above reasons we conclude that the trial court erred in summarily granting the State’s motion to dismiss the petition without a hearing.

We reverse the order of the trial court and remand with instructions that the appellant be given an evidentiary hearing on his petition of writ of habeas corpus.

REVERSED AND REMANDED.

All the Judges concur.


author: EMBRY, Justice. TORBERT, Chief Justice MADDOX, Justice

text:
    Ex parte State. (Re: Lynn D. WILLIAMS v. STATE).
    83-1338.
    Supreme Court of Alabama.
    Dec. 21, 1984.
    Charles A. Graddick, Atty. Gen. and J. Callen Sparrow, Asst. Atty. Gen., for petitioner.
    Robert S. Milner, Wetumpka, for respondent.
   EMBRY, Justice.

By denial of this petition, we are not to be understood as approving the language of the Court of Criminal Appeals’ opinion, 461 So.2d 1335.

WRIT DENIED.

FAULKNER, JONES, ALMON, SHORES, BEATTY and ADAMS, JJ., concur.

TORBERT, C.J., and MADDOX, J., concur specially.

TORBERT, Chief Justice

(concurring specially).

I concur in the denial of the writ; however, I want to express my concern over the reliance by the Court of Criminal Appeals on the case of Barker v. State, 437 So.2d 1375 (Ala.Cr.App.1983), a factually similar case.

Williams alleged in his petition to the Court of Criminal Appeals that there was insufficient evidence for the disciplinary board to find him guilty as charged, that he was denied the right to confront and cross-examine the witnesses against him, and that he was denied the right to a fair and impartial hearing board. The Court of Criminal Appeals was correct in stating that since the State did not file an answer or return denying the allegations of fact in the petition, the facts as set out in the petition must be taken as true. Ex parte Floyd, [Ms.1984] 457 So.2d 961 (Ala.1984), and Vaughan v. State, 415 So.2d 1231 (Ala.Cr.App.1982). The Court of Criminal Appeals then remanded the case to the trial court with instructions that the appellant be given an evidentiary hearing on his petition of writ of habeas corpus. I agree with this result.

I disagree with the Court of Criminal Appeals in its holding that the evidence that the substance was marijuana fell short of constituting “substantial evidence” of guilt as required by Barker, supra.

In Barker, the officer stated that, in his opinion, the substance was marijuana. The Court of Criminal Appeals held that scientific evidence was not necessary but, rather, that “evidence that the arresting officer was qualified from study, experience, or observation to identify marijuana would have been sufficient” to prove that the substance was marijuana. 437 So.2d at 1377. The court went on to restate what constitutes substantial evidence in disciplinary proceedings: “It means such evidence as a reasonable mind might accept as adequate to support a conclusion. Richardson v. Perales, 402 U.S. 389, 91 S.Ct. 1420, 28 L.Ed.2d 842 (1971).” Id.

In the present case, the arresting officer stated that when he looked under Williams’s mattress he found “an ashtray with folded paper inside which contained some seeds and a green leafy substance” that appeared to be marijuana. The Court of Criminal Appeals held that the statement that the substance “appeared to be marijuana” falls short of constituting substantial evidence of guilt. I see no difference in allowing the officer in the present case to say that the substance appeared to be marijuana and the officer in Barker saying that, in his opinion, the substance was marijuana.

MADDOX, Justice

(concurring specially).

I concur in the result, because the Court of Criminal Appeals concluded that “the trial court erred in summarily granting the State’s motion to dismiss the petition without a hearing.” The Court directed the trial court to hold a hearing on the inmate’s petition for writ of habeas corpus. I concur in the holding made by the Court of Criminal Appeals directing a hearing on the petition, but do not necessarily agree with portions of the court’s opinion which I believe addressed the merits of the petition.


text:
    Roland MARTIN v. STATE.
    6 Div. 309.
    Court of Criminal Appeals of Alabama.
    July 17, 1984.
    Rehearing Denied Aug. 14, 1984.

      C. Harry Green, Hamilton, for appellant.
    Charles A. Graddick, Atty. Gen., and Jane LeCroy Brannan, Asst. Atty. Gen., for appellee.
   PATTERSON, Judge.

Appellant Roland Martin was convicted of receiving stolen property and sentenced to seven years’ imprisonment. Since the only issue we will discuss in this case involves the sufficiency of the evidence, we include a summary of the State’s case in chief.

John Wilburn testified that he was a branch manager of the Neely Coble Company. He said that according to the company’s business records, they received a Freightliner truck in stock containing a thirteen-speed Fuller transmission in December of 1981. The witness related the model and identification numbers of the vehicle. The truck was stolen on January 1, 1982. Sherria Trapp testified that early in 1982 she was living with her future husband, Howard Ray Trapp. She was asked if at that time Trapp “and maybe you and some other folks” had in their possession a 1982 Freightliner truck. She replied, “Yes”, and stated that when she saw the truck it was “in pieces”. She said that on March 11, 1982 she went to appellant’s house with Howard Trapp in a pickup truck carrying “a big part of a truck”. When asked if the particular part came out of the Freightliner truck, the witness replied, “I guess.” When asked what the truck part specifically was, she said, “I think it was a transmission.” During cross-examination, the witness admitted that she was unable to recognize a transmission and that she did not know what was in Trapp’s truck. She testified that there were other things that appeared to be automobile and truck parts around Howard Trapp’s house, and that they had been around there for some time. She stated that while she stayed at the Martin residence, Howard Ray Trapp and Roland Martin left, driving the pickup truck. When they returned, the large part was no longer in the pickup.

B.A. Richardson testified that he was an investigator for the Auto Theft Unit of the Department of Public Safety. His investigation of the theft at the Neely Coble Company led him to the residence of Howard Ray Trapp and Sherria Nelson, where he found a dismantled 1982 Freightliner truck. The truck’s transmission and tires were missing. Richardson said that all of the identifying numbers had been removed from the truck except for one, and through the use of that number the dismantled truck was identified as the one stolen from the Neely Coble Company.

In April of 1982, Investigator Richardson went to the home of Roland Martin, wheré he saw a Freightliner truck containing a transmission that appeared to the witness to be new. When questioned about the transmission, Martin said it was a thirteen-speed Fuller which he had bought in December for $1,000.00. The witness told Martin that the transmission was stolen, although Richardson’s testimony did not reveal how he identified that transmission as the stolen one. He testified on cross-examination that there were no serial number plates on the transmission and that there was no way to tell one Fuller transmission from another without such serial number plates. He was asked, “_ there is no way that we can or anybody can tell that that particular transmission you saw was stolen; is there?” His answer was, “No, sir.” Appellant stated he would remove it from the truck and call Richardson. When the investigator called the appellant later, Martin said he had given the transmission back to the man who had sold it to him.

Investigator Richardson testified that he had been unable to locate the transmission since that time.

Gary Sutherland said that he worked for City Diesel Service and that around March 11, 1982, Roland Martin came by, saying he was having trouble with his truck’s transmission. The transmission was checked by City Diesel Service and it was discovered that it would cost a considerable amount to repair it. The witness said Martin returned the next day with a thirteen-speed Fuller transmission, which was installed in the truck.

Ralph Humphries of City Diesel Service testified that he put a new transmission in a Freightliner truck for Roland Martin. He stated that an individual came to City Diesel with Martin on one occasion. Both Humphries and another employee of City Diesel picked pictures of Howard Ray Trapp out of photographic lineups; they told Investigator Richardson that the man in the picture was the one who had accompanied Martin to City Diesel.

Appellant contends that the trial court committed reversible error when it overruled his motion to exclude the State’s evidence. Specifically he claims that the State failed to prove that the transmission seen in his possession came from the truck stolen from the Neely Coble Company.

We must agree. Before a conviction for receiving stolen property can be sustained it must be shown that the accused had control over the property stolen. Tyree v. State, 46 Ala.App. 8, 237 So.2d 119 (1970); Tombrella v. State, 431 So.2d 1355 (Ala.Crim.App.1983).

The strongest evidentiary link between the stolen transmission and appellant is the testimony of Sherria Trapp. She indicated that it was her “guess” that the truck part carried to Roland Martin came from the Freightliner truck that was in pieces around the residence where she and Trapp lived. She also said that she thought that the large part taken to Martin was a transmission. The dismantled Freightliner truck on the Trapp property was the vehicle stolen from Neely Coble; however, there was insufficient showing that its missing transmission was the same large truck part delivered in the pickup truck to Roland Martin.

While it is true that the corpus de-licti of the crime of receiving stolen property may be proven by circumstantial evidence, Boykin v. State, 398 So.2d 766 (Ala.Crim.App.1981), writ denied, Ex parte Boykin, 398 So.2d 771 (Ala.1981), Sherria Trapp’s “guess” that the part delivered to Roland Martin came from the Freightliner truck is not enough to establish appellant’s possession of the stolen property. In the case of Parker v. State, 386 So.2d 495 (Ala.Crim.App.1980), a conviction for receiving stolen property was overturned for insufficiency of the evidence. In that case the only admissible evidence linking the defendant to the crime showed that he was in possession of a van of the same make, color and design as the one stolen from the victim. In that case, this court, speaking through Judge Bowen, emphasized that in order to establish the identity of the stolen vehicle there must be evidence of common characteristics other than make, model and color.

Applying those principles to the case at bar, we find that although appellant was shown to be in possession of a transmission of the same type and model as the one stolen, this showing was insufficient to prove that he had control over the unrecov-ered stolen transmission.

The motion to exclude the State’s evidence should have been granted and the defendant discharged. The State failed to present sufficient evidence to sustain the defendant’s conviction, and the judgment of the trial court is due to be reversed.

The United States Supreme Court has mandated that “the Double Jeopardy Clause precludes a second trial once a reviewing court has found the evidence legally insufficient”, Burks v. United States, 437 U.S. 1, 98 S.Ct. 2141, 57 L.Ed.2d 1 (1978), and we find we have no choice but to reverse and render the decision of the lower court.

REVERSED AND RENDERED.

All the Judges concur.


author: SHORES, Justice. MADDOX, Justice

text:
    Ex parte: State of Alabama (Re: Roland MARTIN v. STATE).
    83-1340.
    Supreme Court of Alabama.
    Dec. 21, 1984.
    Charles A. Graddick, Atty. Gen., and Jane LeCroy Brannan, Asst. Atty. Gen., for petitioner.
    C. Harry Green, Hamilton, for respondent.
   SHORES, Justice.

WRIT DENIED.

TORBERT, C.J., and FAULKNER, JONES, ALMON, EMBRY, BEATTY and ADAMS, JJ., concur.

MADDOX, J., concurs specially.

MADDOX, Justice

(concurring specially).

I agree that the writ should be denied, because the Court of Criminal Appeals made the following finding:

“The State failed to present sufficient evidence to sustain the defendant’s conviction, and the judgment of the trial court is due to be reversed.”

There being nothing presented to us pursuant to Rule 39(k), Ala.R.App.P., to show this finding is incorrect, I agree that the writ should be denied.


author: BOYD, Chief Justice,

text:
    Jim FAIR, Petitioner, v. James ANTISTA, et al., Respondents.
    No. 65693.
    Supreme Court of Florida.
    Sept. 13, 1984.
    Rehearing Denied Feb. 5, 1985.
    Jim Fair, petitioner, in pro. per.
    Joseph Lewis, Jr., Asst. Atty. Gen., Tallahassee, for respondents.
   Upon consideration of the Petition for Writ of Mandamus, it is ordered by the Court that said petition be and the same is hereby denied.

OVERTON, ALDERMAN, McDONALD and EHRLICH, JJ., concur.

BOYD, C.J., specially concurs with an opinion, in which SHAW, J., concurs.

ADKINS, J., dissents.

BOYD, Chief Justice,

concurring specialty-

I concur in the Court’s denial of the petition for writ of mandamus. Although I believe that the factual allegations of the petition do state a case of wrongful deprivation of fundamental rights, I must nevertheless conclude that the petitioner Mr. Fair has failed to bring his action against the proper defendant.

Mr. Fair’s pro se petition, filed in forma pauperis, asks us to direct the respondent officers of the Florida Department of State to maintain uniformity in the application of the election laws, as is the Department’s duty, under section 97.012(1), Florida Statutes (1983), by ensuring that any adjudication of incompetency is lawful and valid before a citizen is denied the right to vote. Mr. Fair alleges that he was adjudicated incompetent by a court lacking jurisdiction to make such a judgment. But his petition does not show how the Department of State is involved nor what action the Department could take to correct the wrong alleged to have been done to him. At the very least, the petition fails to allege a clear ministerial duty of the Department to take action beneficial to Mr. Fair. Mr. Fair’s grievance is against the court alleged to have wrongfully adjudicated him incompetent. There are legal remedies available for the redress of the alleged wrong done to him, but he must proceed against the proper parties.

SHAW, J., concurs.


author: PER CURIAM.

text:
    THE FLORIDA BAR: IN RE RULES OF SUMMARY PROCEDURE.
    No. 65086.
    Supreme Court of Florida.
    Sept. 13, 1984.
    On Rehearing Jan. 10, 1985.
    John F. Harkness, Jr., Executive Director, The Florida Bar, Tallahassee, and Nath C. Doughtie, Chairman, The Florida Bar, Summary Procedure Rules Committee, Gainesville, for petitioner.
    Paul Sidney Elliott, County Court Judge, Thirteenth Judicial Circuit, Tampa, on behalf of the Conference of County Court Judges of Florida; and Leo 0. Myers, Jacksonville, in support of proposed Amendments.
   PER CURIAM.

Appended to this order are the amended and new rules of the Florida Rules of Summary Procedure which will govern all proceedings within their scope after 12:01 a.m. January 1, 1985. Deletions are indicated by use of struck-through type. New language is indicated by underscoring.

We have in almost every respect adopted the recommendations of the Bar committee and provide the following index as a brief overview of the changes represented by the new or amended rules.

Rule 7.010. Title and Scope — Raises scope to $2,500.

Rule 7.070. Method of Service of Process — Clarifies service on out-of-state defendants and allows substitute service.

Rule 7.090. Appearance; Defensive Pleadings; Trial Date — Requires plaintiff to appear; requires use of pretrials;' requires personal attendance at the initial appearance; governs the time between pretrial and trial.

Rule 7.110. Dismissal of Actions — Defines reasonable time as 30 days.

Rule 7.130. Continuances and Settlements — Allows judgment on defaults after settlement upon affidavit without notice.

Rule 7.140. Trial — Allows telephone testimony of nonparty witnesses.

Rule 7.150. Jury Trials — Deletes jury trial cost deposit.

Rule 7.170. Default; Judgment — Establishes minimum time between service and default.

Rule 7.180. Motions for New Trial; Time For; Contents — Clarifies the time in which a motion for new trial may be made.

We would note that we have modified the committee’s suggested Rule 7.180 to make it consistent with the Florida Rule of Civil Procedure 1.530 as modified in the 1985 revision.

All rules and statutes in conflict with the following rules are hereby superseded as of the effective date of this revision. Any statute not in conflict shall remain in effect as a rule promulgated by the Supreme Court. The committee notes are not adopted by the Court.

It is so ordered.

BOYD, C.J., and ADKINS, OVERTON, ALDERMAN, McDONALD, EHRLICH and SHAW, JJ., concur.

RULE 7.010. TITLE AND SCOPE

(a) (NO CHANGE)

(b) Scope. These rules are applicable to all actions at law of a civil nature in the county courts in which the demand or value of property involved does not exceed $1,500.00 $2,500.00 exclusive of costs, interest and attorneys’ fees; if there is a difference between the time period prescribed by these rules and by Section 51.011, Florida Statutes, the statutory provision shall govern.

RULE 7.070. METHOD OF SERVICE OF PROCESS

Service of process shall be effected as provided by law, or as provided by Florida Rules of Civil Procedure 1.070. Constructive service or substituted service of process may be effected as provided by law. Service of process on Florida residents only may also be effected by registered mail, return receipt signed by the defendant, or someone authorized to receive mail at the residence or principal place of business of the defendant, the cost of which is in addition to the filing fee.

Note

1984 Revision. Mail service is allowed on persons authorized to receive mail for the defendant similar to substituted service by the sheriff on a resident of the defendant’s abode. The proposal clarifies the rule that service by mail is not available for out-of-state defendants.

RULE 7.090. APPEARANCE; DEFENSIVE PLEADING; TRIAL DATE

(a) Appearance. On the date and time appointed in the notice to appear the plaintiff and defendant shall appear personally or by counsel.

(b) The notice to appear shall specify that the initial appearance shall be for a pretrial conference. At the pretrial conference, all matters specified in Rule 1.200(a) Florida Rules of Civil Procedure shall be considered.

(b) (c) Defensive Pleadings. Unless required by order of court, written pretrial motions and defensive pleadings are not necessary. If filed, copies of such pleadings shall be served on all other parties to the action at or prior to trial. the pretrial conference or within such time as the court may designate. The filing of a defensive pleading shall not excuse the personal appearance of a party or his attorney on the initial appearance date.

(e) (d) Trial Date. The court shall provide set the case for trial of an action on the appearance date or not more than 60 days from the date of personal service of preeess-or — the-date the return receipt was signed under service by mail or the last publication — in-eonstruetive-service. the pretrial conference. At least 45 10 days notice of the time of trial shall be given, w-hether- the-time -of-trial is sched-nled-on-the — appearance- date or thereafter,-Twenty days notice shall be given if any of the defendants-reside outside the county in w-hich-the-court sits.

The parties may stipulate to a shorter time with the approval of the court. This rule does not apply to actions to which Chapter 51, Florida Statutes, applies.

Note

1984 Revision. This change requires the use of a pretrial procedure and requires both parties to attend the pretrial conference which can be used to resolve pretrial motions. The use of a pretrial previously varied from county to county.

RULE 7.110. DISMISSAL OF ACTIONS

(a) (NO CHANGE)

(b) (NO CHANGE)

(c) (NO CHANGE)

(d) (NO CHANGE)

(e) Failure to Prosecute. All actions in which it affirmatively appears that no action has been taken by filing of pleadings, order of court or otherwise for a period of six months shall be dismissed by the court on its own motion or on motion of any interested person, whether a party to the action or not, after reasonable 30 days notice to the parties, unless a party before the hearing on the motion shows good cause in writing why the action should remain pending.

Note

1984 Revision. Subsection (e) is changed to allow more time for an attorney to inquire about the status of a claim. Many actions are disposed of by a stipulation to pay, and it may take longer than ten days to determine the amount due, if any.

RULE 7.130. CONTINUANCES AND SETTLEMENTS

(a) (NO CHANGE)

(b) Settlements. Settlements in full or by installment payments made by the parties out of the presence of the court are encouraged. The plaintiff shall notify the clerk of settlement and the case may be dismissed or continued pending payments. Upon failure of a party to perform the terms of any stipulation or agreement for settlement of the claim before judgment, the court may enter appropriate judgment without notice upon filing an affidavit by the creditor of the amount due upon request and after proper notice.

Note

1984 Revision. Subsection (b) is altered to conform with Rule 7.210(c), which provides for an affidavit but no notice.

RULE 7.140. TRIAL

(a) Time. The trial shall be had at the time fixed in the notice to appear or such time thereafter as the judge-shall -desig-

The trial date shall be set by the court at pretrial.

(b) (NO CHANGE)

(c) Pretrial. 1⅜ — at-the-■ time set for ■trial, it-appears to the court that for good eause-the-trial should not proceed, the time may be utilized-for a pretrial conference to-determine the issues-so -that-at the-next-appointed trial date-the trial can be held, This should narrow'contested factual issues. The case may proceed to trial with the consent of both parties.

(d) (NO CHANGE)

(e) (NO CHANGE)

(f)How Conducted. The trial may be conducted informally but with decorum befitting a court of justice. The rules of evidence applicable to trial of civil actions apply but are to be liberally construed. At the discretion of the court and upon agreement of the parties, testimony of a nonparty witness may be presented over the telephone.

Note

1984 Revision, (a) Changed to conform this rule with the requirement for pretrials.

(c) Allows the cases to proceed to trial with consent of the parties.

(f) This is similar to the proposed amendment to the Civil Rules to allow depositions by telephone. Since the court has discretion to allow this testimony, all procedural safeguards could be maintained by the court. Since the court is also the trier of fact, the testimony could be rejected if unreliable.

RULE 7.150. JURY TRIALS

Jury trials may be had upon written demand of the plaintiff at the time of the commencement of his suit, or by the defendant within five days after service of notice of suit or at pretrial conference, if any, by depositing with.the-elerk such sum-as- the judge may-⅛ as reasonable to-seeare the-payment of cost incurred by reason of a jury trial,- or otherwise jury trial shall be deemed waived. The cost of summoning and paying the jurors may be taxed as costs in the case.

Note

1984 Revision. The purpose of the cost deposit formerly required was to discourage frivolous demands for jury trials. The committee feels that there should be no distinction between the taxation of costs in a $300.00 claim or a $3,000.00 claim.

RULE 7.170. DEFAULT; JUDGMENT

(a)Default. If defendant does not appear at the scheduled time, the plaintiff is entitled to a default to be entered by either the judge or clerk. No default shall be entered prior to the expiration of 7 days from the date of service of process.

(b)(NO CHANGE).

Note

1984 Revision. This change establishes a uniform minimum time between service of process and the initial appearance (pretrial) date. This is currently not standard throughout the state.

RULE 7.180. MOTIONS FOR NEW TRIAL; TIME FOR; CONTENTS

(a) Time. A motion for new trial shall be filed not later than 10 days after return rendition of the judgment, of verdict in a jury action or the date of filing of the judgment in a nonjury action. A timely motion may be amended to state new grounds at any time before it is disposed of in the discretion of the court.

(b) (NO CHANGE)

(c) (NO CHANGE)

Note

1984 Revision. This change will be in conformity with the proposed amendment to Rule 1.530, Florida Rules of Civil Procedure.

UPON PETITION FOR REHEARING

In response to petitions filed subsequent to our release of the 1984 revision of the Rules of Summary Procedure, The Florida Bar In Re Rules of Summary Procedure, 461 So.2d 1344 (Fla.1984), we make the following changes:

Rule 7.010(a) is amended to read as follows:

Rule 7.010. Title and scope

(a) Title. These rules shall be cited as Small Claims Rules and may be abbreviated “SCR.” These rules shall be construed to implement the simple, speedy and inexpensive trial of actions at law in county courts.

The language added to rule 7.170(a) “No default shall be entered prior to the expiration of 7 days from the date of service of process,” is deleted and rule 7.170(a) now reads, in its entirety:

(a) Default. If defendant does not appear at the scheduled time, the plaintiff is entitled to a default to be entered by either the judge or clerk.

It is so ordered.

BOYD, C.J., and ADKINS, OVERTON, ALDERMAN, McDONALD, EHRLICH and SHAW, JJ., concur.