author: STUART, Justice.

text:
    Bedii OKAY v. Terrence MURRAY d/b/a Centennial Residential Developments, Inc.
    1081193.
    Supreme Court of Alabama.
    June 4, 2010.

      Mark M. Lawson, Devin C. Dolive, and Rachel G. Stabler of Burr & Forman LLP, Birmingham, for appellant.
    Tara L. Helms of Martin & Helms, P.C., Huntsville, for appellee.
   STUART, Justice.

Bedii Okay appeals from the order of the Limestone Circuit Court appointing an arbitrator to preside over his dispute with Terrence Murray d/b/a Centennial Residential Developments, Inc. (hereinafter referred to as “CRDI”), arguing that the arbitrator was selected in a manner inconsistent with the method agreed to by the parties in their arbitration agreement. We reverse and remand.

I.

On October 18, 2005, CRDI signed a contract to purchase property located at 29025 Highway 72 in Limestone County from Okay for $272,500. That contract contained the following arbitration provision:

“In connection with the purchase and sale of the above described property, [CRDI] and [Okay] mutually covenant, stipulate and agree in connection with the resolution of any dispute or controversy arising out of or relating to this agreement or concerning the within described property, or the breach, termination, or validity thereof, as follows: That the transaction contemplated in this agreement directly involves interstate commerce, and said transaction has been and will continue to be regulated by the laws of the United States of America; and, that the contract(s) entered into by the parties concerning this property evidence transactions involving and affecting commerce. The undersigned agrees that all disputes not barred by applicable statutes of limitations or otherwise barred by law, resulting from or arising out of this agreement [sic]; that [CRDI] and [Okay] agree to submit such dispute(s) to binding arbitration, pursuant to the provisions of 9 U.S.C. Section 1, et seq., and according to the Commercial Rules of the American Arbitration Association then existing in the County where property being sold is located. The prepaid arbitration filing fees and all other prepaid costs of the arbitration proceeding shall be paid by the party seeking to invoke arbitration, with the assignment of those costs to be divided between the parties as the arbitrator sees fit in setting the arbitration award. It is hereby agreed that it is the intent of the parties that the arbitrator’s award is to be final and binding and judgment upon the award rendered by the arbitration may be entered in any court having jurisdiction thereof. This arbitration shall be in full lieu of any civil litigation in any court, and in lieu of any trial by jury.”

(Emphasis added.) CRDI closed on its purchase of the property sometime in December 2005.

Some months thereafter, CRDI discovered that property adjacent to the property it had purchased from Okay had been used as an unauthorized dumping ground by unknown parties and contained large amounts of construction debris and other solid waste, in violation of § 22-27-4, Ala. Code 1975. Some of that adjacent property was owned by Okay, and, after being notified by the Alabama Department of Environmental Management (“ADEM”) that the unauthorized dump on his property was in violation of the statute, Okay endeavored to clean up the property. Other owners of property adjacent to CRDI’s property apparently took no action to clean up the unauthorized dumping on their properties even after ADEM advised them of the need to do so.

Unsatisfied with the cleanup efforts, on May 22, 2008, CRDI sued Okay, the owners of two other parcels of property adjacent to CRDI’s property, and various fictitiously named parties in the Limestone Circuit Court, alleging negligence and/or wantonness, nuisance, and trespass. CRDI also stated a fraudulent-suppression claim against Okay for failing to disclose that the property it had purchased from him was situated next to an unauthorized and illegal solid-waste dump. Okay filed a motion to dismiss the claims against him, which the trial court denied. After his motion to dismiss was denied, Okay moved the trial court to compel arbitration of the claims asserted against him pursuant to the arbitration provision in the real-estate contract CRDI and Okay had entered into on October 18, 2005. On November 25, 2008, the trial court granted the motion and stayed the case pending arbitration.

The record reflects that the attorney for CRDI thereafter sent letters to Okay’s attorney on at least four occasions between January 30, 2009, and April 3, 2009, requesting that he contact her in order to discuss the selection of an arbitrator. Those letters also indicate that she was simultaneously trying to contact Okay’s attorney by telephone. CRDI alleges that the attorneys did have a conversation in which they agreed to mutually select an arbitrator, and Okay alleges that they had multiple conversations discussing possible arbitrators. However, on April 13, 2009, CRDI unilaterally moved the trial court to appoint Richard Warren Bell, a Birmingham attorney on the panel of neutrals maintained by the United States District Court for the Northern District of Alabama, as the arbitrator, alleging that Okay had not cooperated in setting the case for arbitration. Three days later, the trial court granted that motion without a hearing and appointed Bell to arbitrate the dispute between CRDI and Okay.

On May 28, 2009, Okay moved the trial court to vacate its April 16 order appointing Bell as arbitrator because, he alleged, he and CRDI had agreed in the arbitration provision in the real-estate contract that any arbitration between them would be conducted according to the Commercial Arbitration Rules of the American Arbitration Association (“the AAA”). At the time this case was referred to arbitration, Rule R-ll of those rules set forth the following procedure for selecting an arbitrator:

“If the parties have not appointed an arbitrator and have not provided any other method of appointment, the arbitrator shall be appointed in the following manner:
“(a) Immediately after the filing of the submission or the answering statement or the expiration of the time within which the answering statement is to be filed, the AAA shall send simultaneously to each party to the dispute an identical list of 10 (unless the AAA decides that a different number is appropriate) names of persons chosen from the National Roster.[] The parties are encouraged to agree to an arbitrator from the submitted list and to advise the AAA of their agreement.
“(b) If the parties are unable to agree upon an arbitrator, each party to the dispute shall have 15 days from the transmittal date in which to strike names objected to, number the remaining names in order of preference, and return the list to the AAA. If a party does not return the list within the time specified, all persons named therein shall be deemed acceptable. From among the persons who have been approved on both lists, and in accordance with the designated order of mutual preference, the AAA shall invite the acceptance of an arbitrator to serve. If the parties fail to agree to any of the persons named, or if acceptable arbitrators are unable to act, or if for any other reason the appointment cannot be made from the submitted lists, the AAA shall have the power to make the appointment from among other members of the National Roster without the submission of additional lists.”

Accordingly, Okay argued, the trial court erred by compelling him to arbitrate his dispute with CRDI before an arbitrator selected in a manner inconsistent with the manner agreed to by CRDI and Okay in the arbitration provision. Okay simultaneously filed a petition for the writ of mandamus in this Court seeking the same relief. On June 25, 2009, after a hearing on the matter, the trial court denied Okay’s motion. However, on July 17, 2009, this Court entered an order staying further proceedings in the trial court and declaring that Okay’s petition for the writ of mandamus would be treated as a notice of appeal. The parties thereafter filed appellate briefs, and the case was submitted for a decision.

II.

Okay appeals the order of the trial court compelling him to arbitrate his dispute with CRDI before an arbitrator appointed by the trial court, in contravention, he says, of the manner agreed to by the parties for selecting an arbitrator. We review that order applying the same de novo standard of review we apply to any order granting or denying a motion to compel arbitration. We “must determine ‘whether the trial judge erred on a factual or legal issue to the substantial prejudice of the party seeking review.’ ” BankAmerica Hous. Servs. v. Lee, 833 So.2d 609, 617 (Ala.2002) (quoting Ex parte Roberson, 749 So.2d 441, 446 (Ala.1999)).

III.

Okay argues that the trial court’s order violates the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (“the FAA”), inasmuch as the FAA requires that arbitration be conducted “in accordance with the terms of the [arbitration] agreement.” 9 U.S.C. § 3. He further argues that this Court has enforced this provision on multiple occasions and has previously reversed the judgments of trial courts when the arbitrators were appointed in a manner inconsistent with the provisions of the arbitration agreement. Okay cites Bowater Inc. v. Zager, 901 So.2d 658 (Ala.2004), as one such case. In Bowater, the parties had agreed that they would arbitrate any disputes arising out of a timber lease before arbitrators who “‘shall be members of at least twenty (20) years standing in the Society of American Foresters.’ ” 901 So.2d at 660 (quoting the arbitration agreement of the parties). When a dispute thereafter arose that resulted in litigation, the defendant moved for arbitration pursuant to the arbitration agreement it had entered into with the plaintiffs. Id. The plaintiffs opposed the motion to compel arbitration, arguing, in part, that Alabama law required arbitrators to be attorneys and that there were no 20-year members of the Society of American Foresters who were licensed to practice law in Alabama. 901 So.2d at 661. The trial court thereafter granted the defendant’s motion and compelled arbitration but ordered that the arbitrators appointed by the parties only “ ‘be duly licensed Attorneys.’ ” 901 So.2d at 662 (quoting order of the trial court compelling arbitration). The defendant then appealed to this Court, and we reversed the order of the trial court, stating:

“This Court has recognized the right of a party to an arbitration agreement to require that the method for selecting the arbitrator or arbitrators set forth in the arbitration agreement be followed and has reversed trial court orders that changed the contractually prescribed method of selecting the arbitrator. Ex parte Cappaert Manufactured Homes, 822 So.2d 385 (Ala.2001); BankAmerica Housing Servs. v. Lee, 833 So.2d 609 (Ala.2002); Ex parte Southern United Fire Ins. Co., 843 So.2d 151 (Ala.2002); Northcom, Ltd. v. James, 848 So.2d 242 (Ala.2002); and McDonald v. H & S Homes, LLC, 853 So.2d 920 (Ala.2003).
“‘When a trial court compels arbitration, it must do so in a manner consistent with the terms of the arbitration provision. See Ex parte Capp-aert Manufactured Homes, 822 So.2d 385, 387 (Ala.2001) (“[section] 5 [of the Federal Arbitration Act] mandates that the method set forth in the arbitration agreement be followed”); Southern Energy Homes Retail Corp. v. McCool, 814 So.2d 845 (Ala.2001) (trial court directed to vacate its order because it failed to compel arbitration in a manner consistent with the terms of the agreement between the parties) .... A trial court’s order compelling arbitration that changes the terms of the arbitration provision will be reversed when
“ ‘ “it appears that the trial court, although it ordered the parties to arbitrate, failed to compel arbitration in a manner consistent with the terms of [the] arbitration provision.”
‘McCool, 814 So.2d at 849.’
“BankAmerica, 833 So.2d at 618.
“ ‘The trial court erred in ordering the parties to commence arbitration in a manner that conflicted with the provisions of the arbitration agreement.’ Northcom, 848 So.2d at 247-48.
“ ‘Because the trial court’s ... order directs the parties to select an arbitrator in a manner that is inconsistent with the terms of the parties’ agreement to arbitrate, we reverse that order.’ McDonald, 853 So.2d at 925.
“Finally, we cannot agree with the proposition, originally proposed by the plaintiffs in their opposition to the motions to compel arbitration, then adopted by the trial judge in its order compelling arbitration, and now urged by the plaintiffs in their appellees’ brief, that arbitrators in the State of Alabama must be duly licensed attorneys. The plaintiffs argument in this regard is a sophism, relying on a series of invalid premises.
“Accordingly, we reverse the trial court’s order ... to the extent that it required ‘[t]hat the arbitrators to be appointed by each party are to be duly licensed Attorneys’ and omitted the requirement that the arbitrators be members of at least 20 years’ standing in the Society of American Foresters, and we remand this case for the trial court to enter a revised order compelling arbitration consistent with the provisions of the arbitration agreement.”

Bowater, 901 So.2d at 668-71.

CRDI does not contest the holding of Bowater; rather, it argues that Bowater does not apply in this case because, CRDI alleges, the trial court’s order here is consistent with the parties’ agreement as to the appointment of an arbitrator. Rule R-11 of the Commercial Arbitration Rules of the AAA states that the procedure set forth in that rule for selecting an arbitrator applies only “[i]f the parties have not appointed an arbitrator and have not provided any other method of appointment.” In fact, CRDI argues, the parties did agree to a “method of appointment” — that they would voluntarily agree to the selection of an arbitrator. Thus, CRDI argues, Rule R-ll was preempted and, when the parties were thereafter unable to agree on the selection of an arbitrator, the trial court acted within its authority by appointing an arbitrator.

This argument fails, however, because Okay denies that he agreed that he and CRDI would voluntarily select an arbitrator outside the framework set forth in the Commercial Arbitration Rules of the AAA. CRDI steadfastly alleges that there was an oral agreement to voluntarily select an arbitrator; even if that is true, however, the Commercial Arbitration Rules require that changes to those rules be set forth in writing, and there is no evidence in the record indicating that such a written agreement existed. See Rule R-l(a), Commercial Arbitration Rules of the AAA (“The parties, by written agreement, may vary the procedures set forth in these rules.”). The procedure for selecting an arbitrator set forth in Rule R-ll should accordingly have been followed.

CRDI also argues that Okay waived his right to rely on Rule R-ll because he failed to invoke it or to object in a timely manner before the trial court and because he commenced arbitration before the arbitrator selected by the trial court. Specifically, CRDI notes that Okay filed no objection or response to its motion seeking the appointment of Bell as the arbitrator and that he participated without objection in a telephone status conference that Bell conducted approximately one month after his appointment as arbitrator. Okay counters that he did not respond to CRDI’s motion seeking the appointment of Bell as arbitrator because he did not have an opportunity to do so — the trial court granted the motion only three days after it was filed — and that he thereafter promptly moved the trial court to vacate the order appointing Bell and promptly filed the related petition for the writ of mandamus with this Court. Moreover, he argues that the transcript of the status conference conducted by Bell is not in the record and that there is accordingly no evidence as to whether he objected to Bell’s appointment during that conference.

We agree that a finding of waiver would be inappropriate in this case. There is no evidence in the record indicating that Okay ever participated in the arbitration proceedings conducted by Bell to the extent we may conclude he abandoned his right to insist on an arbitrator selected by the method agreed to by the parties; moreover, there is no evidence indicating that CRDI would be substantially prejudiced by being forced to restart the proceedings so that the Commercial Arbitration Rules, which it also agreed to, are followed. Paw Paw’s Camper City, Inc. v. Hayman, 973 So.2d 344, 347 (Ala.2007)

IV.

The trial court appointed an arbitrator to preside over the proceedings resolving a dispute between Okay and CRDI in contravention of the method for selecting that arbitrator agreed to by the parties. Because a trial court is required to compel arbitration “in a manner consistent with the terms of the arbitration provision,” the trial court’s order appointing that arbitrator was entered in error. Ex parte Cappaert Manufactured Homes, 822 So.2d 385, 387 (Ala.2001). That order is hereby reversed and the cause remanded so that CRDI can pursue its claims against Okay in arbitration pursuant to the Commercial Arbitration Rules of the AAA, as agreed to by the parties, which rules specifically provide for the selection of arbitrators.

REVERSED AND REMANDED.

COBB, C.J., and LYONS, WOODALL, SMITH, BOLIN, PARKER, MURDOCK, and SHAW, JJ., concur.

      . Before the adoption of an amendment effective April 15, 2008, § 22-27-4(b) provided that "[t]he formation of unauthorized dumps is hereby declared to be a public nuisance per se, a menace to public health, and a violation of this article....” Section § 22-27-4(b) now provides: "The creation, contribution to, and operation of unauthorized dumps shall be prohibited, removed, enjoined, and enforced upon and regulated as provided in this article generally....”

      . The National Roster is a National Roster of Commercial Arbitrators established and maintained by the AAA.


source: Caselaw Access Project

author: PER CURIAM.

license: Public Domain

text:
    PIRTEK USA, LLC v. Michael WHITEHEAD and Fluid Services, Inc. Pirtek USA, LLC v. Michael Whitehead and Fluid Services, Inc.
    1071570 and 1071571.
    Supreme Court of Alabama.
    June 11, 2010.

      Robin G. Laurie and Kelly F. Pate of Balch & Bingham LLP, Montgomery, for appellant.
    James B. Pittman, Jr., and Jennifer L. Evans of James B. Pittman, Jr., P.C., Daphne, for appellees.
   PER CURIAM.

Pirtek USA, LLC (“Pirtek”), filed two separate actions in the Mobile Circuit Court against Michael Whitehead and Fluid Services, Inc., of which Whitehead was the sole owner (hereinafter collectively referred to as “FSI”), seeking domestication of a foreign judgment entered in Bre-vard County, Florida. The circuit court consolidated the actions and ultimately refused to domesticate the Florida judgment. Pirtek filed a motion to alter, amend, or vacate the circuit court’s judgment or, alternatively, to confirm part of the Florida judgment. The circuit court denied Pir-tek’s postjudgment motion, and Pirtek appealed. The appeals have been consolidated for purposes of issuing one opinion. We reverse and remand.

Facts and Procedural Histo'ry

On November 2, 1998, Fluid Services entered into a franchise agreement with Pirtek (“the franchise agreement”), pursuant to which Fluid Services was to sell, assemble, and install Pirtek’s line of industrial and hydraulic hoses, fixed tube assemblies, fittings and related components, and other distinctive Pirtek products. The franchise agreement contains a noncom-petition provision, Section 12. C, which states:

“Noncompetition. Franchisee (including specifically Principal Owner and Personal Guarantors) may not engage ... in any business within 15 miles of Franchisee’s Territory or any Promotional Zone that sells products and services similar to the products and services sold by a ‘Pirtek’ business for a period of two (2) years after expiration or termination of this Agreement. Franchisee expressly agrees that the two (2) year period and 15 mile radius are the reasonable and necessary time and distance needed to protect Franchisor if the Agreement expires or is terminated for any reason.”

On January 21, 2005, Pirtek terminated the franchise agreement. Immediately following the termination of the franchise agreement, FSI and other current and former Pirtek franchisees commenced an arbitration proceeding against Pirtek in Orlando, Florida, pursuant to Section 13.A of the franchise agreement (“the arbitration proceeding”). In the arbitration proceeding, FSI alleged that Pirtek had breached the franchise agreement and had violated Florida’s Deceptive and Unfair Trade Practices Act. In response, Pirtek asserted counterclaims against FSI for past-due licensing fees and product purchases, enforcement of the noncompetition provision, and an award of attorney fees and costs pursuant to Section 13.C of the franchise agreement.

It is undisputed that in April 2005 Pirtek filed in the United States District Court for the Southern District of Alabama a motion requesting a restraining order and a preliminary injunction against FSI in a dispute arising out of the franchise agreement, which dispute was simultaneously being arbitrated in the arbitration proceeding. United States District Court Judge Callie Granade denied Pirtek’s requests on the ground that the proper forum for Pirtek to request a temporary restraining order and a preliminary injunction was before the arbitration panel in conjunction with the arbitration proceeding. Pirtek never requested that the arbitration panel issue a temporary restraining order or a preliminary injunction against FSI.

On July 27, 2006, the arbitration panel issued an interim award, and on November 27, 2006, the arbitration panel issued a final award, which incorporated the interim award. The arbitration panel awarded Pirtek damages against FSI, as follows:

“Pirtek is awarded $345,872.88 from [FSI] for money owed as determined in the panel’s Interim Award ($156,394.42) plus fees in connection with this proceeding ($189,671.44 = $193,735.44 to Pirtek as the prevailing party less 2 x $2,032, i.e., $4,064, against Pirtek as the non-prevailing party).”

The arbitration panel also ruled that FSI be permanently enjoined from violating Section 12. C of the franchise agreement, the noncompetition provision, as follows:

“The [arbitration] panel permanently enjoins [FSI] from violating the terms of § 12.C, the non-compete provision, of them respective franchise agreement.”

On January 12, 2007, Pirtek sought to have the arbitration award confirmed by filing in the Circuit Court of Brevard County, Florida (“the Florida court”), an application to confirm the arbitration award. Pirtek also filed the affidavit of its attorney, Craig Miller, in support of the application to confirm the award.

Whitehead acknowledged that the application and Miller’s affidavit were properly served on Whitehead and Fluid Services by a private process server at their correct addresses and that such service put them on notice of the proceedings in the Florida court to have the arbitration award confirmed. Whitehead also acknowledges that, after seeking advice from counsel, FSI chose not to participate in the confirmation proceedings.

On March 14, 2007, Pirtek filed with the Florida court a memorandum of law in support of its application to confirm the arbitration award and a notice of hearing, indicating that a hearing on Pirtek’s application to confirm was scheduled for April 23, 2007. Whitehead testified that FSI was not served with the memorandum of law or notice of the April 23, 2007, hearing. David Dyer, Pirtek’s attorney in the confirmation proceedings, filed an affidavit stating that he had served FSI with the memorandum of law in support of Pirtek’s application to confirm and the notice of the hearing that was to occur on April 23, 2007; Pirtek did, in fact, file the documents with the Florida court. It is undisputed that Pirtek used an incorrect mailing address in its attempt to serve FSI with the documents by first-class mail through the United States Postal Service.

On April 23, 2007, a hearing on the application to confirm the arbitration award was held; FSI did not appear. On May 1, 2007, Pirtek submitted a proposed order to the Florida court, adopting the arbitration panel’s final award. Dyer also claims to have properly served the proposed order on FSI. FSI contends that it was never served with the proposed order.

On May 8, 2007, the Florida court entered the proposed order, which adopted the arbitration panel’s interim and final awards (“the Florida judgment”). The Florida judgment provided:

“[F]or a period of two years from the date of November 27, 2006, which is when the Arbitration Award was issued, defendants Michael Whitehead and Fluid Services, Inc., together with their agents, servants, employees, attorneys and those persons acting in concert or participation with them, shall not engage as an owner, partner, director, officer, franchisee, employee, consultant, agent or in any other capacity in any business that sells products and services similar to the products and services sold by a PIRTEK® business within 15 miles of the territory consisting of the counties of Mobile and Baldwin in the State of Alabama, the counties of Escambia, Santa Rosa and Okaloosa in the State of Florida and the county of Harrison in the State of Mississippi or within 15 miles of any promotional zone of any other PIR-TEK® Center. In addition, for the same two year period, Michael Whitehead and Fluid Services, Inc., may not employ or seek to employ any person who is at that time employed by any other PIRTEK® franchise or center or otherwise directly or indirectly induce such person to leave his or her employment.”

On May 24, 2007, pursuant to Alabama’s Uniform Enforcement of Foreign Judgments Act (“UEFJA”), § 6-9-230 et seq., Ala.Code 1975, Pirtek filed the Florida judgment in the Mobile Circuit Court, seeking to domesticate the Florida judgment. On June 1, 2007, the Mobile Circuit Court served both Whitehead and Fluid Services with notices of the filing of Pir-tek’s domestication petition.

On August 9, 2007, FSI filed a “Motion for Relief’ pursuant to Rule 60(b), Ala. R. Civ. P., in the Mobile Circuit Court. In its Rule 60(b) motion, FSI argued that the Florida judgment was defective. The circuit court held a hearing on FSI’s motion on October 3, 2007. FSI argued that the Florida judgment modified the arbitration award by ordering that the two-year non-competition period began on the date the arbitration award was issued, i.e., November 27, 2006, rather than on the date the franchise agreement was terminated, i.e., January 21, 2005. FSI argued that the Florida court did not have subject-matter jurisdiction to modify the arbitration award because Pirtek never filed a motion to modify, and thus, FSI argued, the Florida judgment was defective. FSI also alleged that the Florida judgment was defective because, it said, FSI was denied due process by Pirtek’s failure to provide notice of its intention to modify the arbitration award by failing to serve FSI with the pertinent documents. On February 28, 2008, the circuit court granted FSI’s Rule 60(b) motion, refusing to domesticate the Florida judgment and holding: (1) that the Florida court did not have subject-matter jurisdiction to modify the arbitration award; and (2) that FSI was not afforded its due-process rights in that it did not receive notice “that Pirtek sought to have the Florida Court provide different relief than that set out in the Arbitration Award.”

On March 28, 2008, Pirtek filed in the Mobile Circuit Court a Rule 59, Ala. R. Civ. P., motion to alter, amend, or vacate the judgment or, alternatively, to confirm the arbitration award. Pirtek requested that the circuit court reverse its judgment granting FSI’s Rule 60(b) motion, reinstate Pirtek’s action to domesticate the Florida judgment, or domesticate only the monetary portion of the Florida judgment. Pirtek argued that FSI had notice of its application to confirm filed in the Florida court and that FSI had been afforded due process. Alternatively, Pirtek requested that the circuit court confirm the arbitration award under the Federal Arbitration Act. FSI filed its response to Pirtek’s motion on May 8, 2008. On July 9, 2008, the circuit court denied Pirtek’s motion. Pirtek appealed.

Standard of Review

In Orix Financial Services, Inc. v. Murphy, 9 So.3d 1241 (Ala.2008), this Court set forth the standard of review applicable to reviewing a ruling on a motion filed pursuant to Rule 60(b)(4), Ala. R. Civ. P., collaterally attacking a foreign judgment on the basis that the judgment is void for lack of jurisdiction:

“In Insurance Management & Administration, Inc. v. Palomar Insurance Corp., 590 So.2d 209, 212 (Ala.1991), we explained that we review de novo a trial court’s ruling on such a motion:
“ ‘The standard of review on appeal from the denial [or granting] of relief under Rule 60(b)(4) is not whether there has been an abuse of discretion. When the grant or denial of relief turns on the validity of the judgment, as under Rule 60(b)(4), discretion has no place. If the judgment is valid, it must stand; if it is void, it must be set aside. A judgment is void only if the court rendering it lacked jurisdiction of the subject matter or of the parties, or if it acted in a manner inconsistent with due process. Satterfield v. Winston Industries, Inc., 553 So.2d 61 (Ala.1989)’
“Additionally, we note that ‘[t]he validity and effect of a foreign judgment, of course, are to be determined by the law of the state in which it was rendered.’ Morse v. Morse, 394 So.2d 950, 951 (Ala.1981) (citing Forbes v. Davis, 187 Ala. 71, 65 So. 516 (1914)).”

9 So.3d at 1244.

Discussion

The circuit court refused to domesticate the Florida judgment and denied Pirtek’s postjudgment motion on the bases that the Florida court was without jurisdiction to enter the Florida judgment and that the Florida court had acted in a manner inconsistent with the principles of due process. Pirtek contests both holdings.

In Menendez v. COLSA, Inc., 852 So.2d 768 (Ala.Civ.App.2002), the Court of Civil Appeals set forth the general principles concerning the domestication of a foreign judgment under the UEFJA:

“While Alabama courts are generally required to give a judgment entitled to full faith and credit at least the res judicata effect accorded in the rendering court’s jurisdiction, Alabama courts are permitted to inquire into the jurisdiction of the rendering court. Feore [v. Feore ], 627 So.2d [411,] 413 [(Ala.Civ.App.1993)]; accord, Republic Nat’l Bank v. Howell, 456 So.2d 58, 59 (Ala.1984). However, the appropriate inquiry is limited to ascertaining ‘ “(1) whether the issue of jurisdiction was fully and fairly litigated by the foreign court and (2) whether the issue of jurisdiction was finally decided by the foreign court.” ’ Feore, 627 So.2d at 413 (quoting Alston Elec. Supply Co. v. Alabama Elec. Wholesalers, Inc., 586 So.2d 10, 11 (Ala.Civ.App.1991)). In short, if jurisdiction is not lacking, an Alabama court must give full faith and credit to a foreign judgment under the UEFJA. Feore, 627 So.2d at 413. The burden is on a party challenging the validity of the foreign judgment to assert and demonstrate the rendering court’s lack of jurisdiction. Greene v. Connelly, 628 So.2d 346, 351 (Ala.1993).”

852 So.2d at 771 “Full faith and credit prohibits an inquiry into the merits of the original cause of action.” Tongue, Brooks & Co. v. Walser, 410 So.2d 89, 90 (Ala.Civ.App.1982) (citing Forbes v. Davis, 187 Ala. 71, 65 So. 516 (1914)).

This Court defined subject-matter jurisdiction in Ex parte Seymour, 946 So.2d 536, 538 (Ala.2006), as follows:

“Jurisdiction is ‘[a] court’s power to decide a case or issue a decree.’ Black’s Law Dictionary 867 (8th ed. 2004). Subject-matter jurisdiction concerns a court’s power to decide certain types of cases. Woolf v. McGaugh, 175 Ala. 299, 303, 57 So. 754, 755 (1911) (‘ “By jurisdiction over the subject-matter is meant the nature of the cause of action and of the relief sought.”’ (quoting Cooper v. Reynolds, 77 U.S. (10 Wall.) 308, 316, 19 L.Ed. 931 (1870))). That power is derived from [a state’s constitution and its statutory law]. See United States v. Cotton, 535 U.S. 625, 630-31, 122 S.Ct. 1781, 152 L.Ed.2d 860 (2002) (subject-matter jurisdiction refers to a court’s ‘statutory or constitutional power’ to adjudicate a case).”

In the present case, the circuit court recognized in its order that the Florida court had jurisdiction to confirm the arbitration award, as follows:

“The Florida statutes governing confirmation of an arbitration award give Florida courts jurisdiction to enter judgment on an award rendered in arbitration and authority to vacate, modify or correct such an award in the manner provided by the statute. Fla. Stat. § 682.18 (2007).”

After determining that the Florida court had jurisdiction to confirm the arbitration award, the circuit court proceeded to inquire into the merits of the Florida judgment. The circuit court determined that the Florida judgment modified the arbitration award by mandating that the noncom-petition provision be given effect “for a period of two years from the date of November 27, 2006,” rather than for a period of two years immediately following the date that the franchise agreement was terminated, i.e., January 21, 2005. The circuit court held that the Florida court did not have jurisdiction to modify the arbitration award because, the circuit court determined, no motion to modify had been filed with the Florida court. As a result, the circuit court determined, the Florida court did not have jurisdiction to enter the Florida judgment. We disagree.

The circuit court’s inquiry into whether the Florida judgment modified the arbitration award is an inquiry into the merits of the Florida judgment; such an inquiry is prohibited. The circuit court properly determined that the Florida court had jurisdiction to enter the Florida judgment based on Florida’s statutory law, but the circuit court exceeded its authority by considering the merits of the Florida judgment. Therefore, the circuit court erred in determining that the Florida court did not have subject-matter jurisdiction to enter the Florida judgment, and we reverse the circuit court’s judgment holding that the Florida court did not have jurisdiction to confirm the arbitration award.

Having determined that the Florida court did have subject-matter jurisdiction to enter the Florida judgment, the next inquiry is whether the Florida court acted in a manner inconsistent with the principles of due process. The circuit court held, in pertinent part:

“Whitehead’s only notice of the Florida proceeding was the motion requesting confirmation of the Arbitration Award. Whitehead contends he did not receive any notice that Pirtek sought to have the Florida Court provide different relief than that set out in the Arbitration Award. Pirtek admits it never filed a motion to modify the award; rather, the proposed judgment contained the language changing the injunctive relief period. Whitehead testified under oath that he never received a copy of the proposed judgment. While Pirtek finds that ‘implausible,’ it has no evidence to the contrary.
“This Court finds the failure of notice to Whitehead that Pirtek intended to ask the Florida Court to modify the Arbitration Award fails the due process guarantees contemplated by the Florida arbitration statutes and the United States Constitution.”

Pirtek argues that the circuit court erred in finding that the Florida court had acted in a manner inconsistent with the principles of due process. Pirtek argues that FSI was afforded all the due-process rights it deserved through Pirtek’s proper service on FSI of its application to confirm the arbitration award. FSI agrees that it received notice of the confirmation proceedings but argues that it did not receive service of Pirtek’s memorandum of law filed in support of its application to confirm the arbitration award, which, FSI alleges, changed the nature of the proceedings from a confirmation proceeding to a modification proceeding.

In Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314-15, 70 S.Ct. 652, 94 L.Ed. 865 (1950), the United States Supreme Court discussed the requirement of notice in affording due process:

“An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. The notice must be of such nature as reasonably to convey the required information, ... and it must afford a reasonable time for those interested to make their appearance. But if with due regard for the practicalities and peculiarities of the case these conditions are reasonably met the constitutional requirements are satisfied.”

(Citations omitted.)

We hold that FSI’s due-process rights were not violated. It is undisputed that FSI had notice of the confirmation proceedings in the Florida court and that, after seeking the advice of counsel, it chose not to file a notice of appearance and defend the action. FSI’s choice not to exercise its due-process rights does not establish a deprivation of those rights; thus, the Florida court did not act in a manner inconsistent with the principles of due process.

Pirtek also argues before this Court that the circuit court should have domesticated at least the monetary portion of the Florida judgment and that, alternatively, the circuit court should have confirmed the arbitration award under the Federal Arbitration Act. However, both of those arguments are moot in light of our reversal of the circuit court’s decision.

Conclusion

Based on the foregoing, we conclude that the circuit court’s judgment is due to be reversed. The Florida court had subject-matter jurisdiction to enter the Florida judgment and acted in a manner consistent with the principles of due process. We therefore reverse the judgment of the circuit court and remand this cause for proceedings consistent with this opinion.

1071570 — REVERSED AND REMANDED.

1071571 — REVERSED AND REMANDED.

COBB, C.J., and LYONS, WOODALL, STUART, SMITH, BOLIN, PARKER, and SHAW, JJ., concur.

MURDOCK, J., concurs in the result.

      . We note that the total of the amount of the interim award ($156,394.42) and the fees ($189,671.44) is $346,065.86.


author: LYONS, Justice.

text:
    Ex parte The CINCINNATI INSURANCE COMPANY. (In re Ray Peacock v. The Cincinnati Insurance Company).
    1081699.
    Supreme Court of Alabama.
    June 11, 2010.

      William P. Gray, Jr., and Douglas N. Robertson of Gray & Associates, LLC, Birmingham; and John P. Oliver II and Mark Allen Treadwell III of Oliver & Treadwell, L.L.P, Dadeville, for petitioner.
    Charles A. MeCallum III and R. Brent Irby of MeCallum, Hoaglund, Cook & Irby, LLP, Vestavia Hills; and Kenneth E. Riley of Farris, Riley & Pitt, LLP, Birmingham, for respondent.
    Robert A. Huffaker of Rushton, Stakely, Johnston & Garrett, P.A., Montgomery, for amicus curiae Property Casualty Insurers Association of America, in support of the petitioner.
    M. Christian King and Sara Anne Ford of Lightfoot, Franklin & White, L.L.C., Birmingham, for amicus curiae Alfa Mutual Insurance Company, in support of the petitioner.

      J. Fairley McDonald III, chief counsel, legal div., Alabama Department of Insurance, for amicus curiae Jim L. Ridling, in his official capacity as Commissioner of Insurance, in support of the petitioner.
   LYONS, Justice.

The Cincinnati Insurance Company (“Cincinnati”), the defendant in a putative class action filed by Ray Peacock, has filed a petition for a writ of mandamus requesting that this Court direct the trial court to dismiss Peacock’s claims against Cincinnati because, Cincinnati argues, the trial court lacked subject-matter jurisdiction and Peacock failed to exhaust his administrative remedies. We grant the petition and issue the writ.

Factual Background and Procedural History

The Motor Vehicle Safety-Responsibility Act, § 32-7-1 et seq., Ala.Code 1975, provides that motor-vehicle liability insurance policies in Alabama must include uninsured/underinsured-motorist (“UM”) coverage, unless the insured rejects such coverage. See § 32-7-23(a), Ala.Code 1975. In a practice commonly known as “stacking,” insureds who suffer a single loss may obtain benefits under multiple UM coverages. This Court has described the practice in a case involving the stacking of UM coverage under multiple policies, stating:

“In Alabama, if the insured’s loss exceeds the coverage limits of one policy providing for underinsured-motorist benefits, then the insured can stack other policies with underinsured-motorist benefits to provide coverage to the full amount of the damages required to compensate for the injury or harm sustained. Canal Indem. Co. v. Burns, 682 So.2d 399, 401 (Ala.1996) (stating that ‘the insured may stack the coverages provided by other uninsured motorist policies to cover up to the amount of damages required to compensate for the actual injury sustained’); State Farm Mut. Auto. Ins. Co. v. Fox, 541 So.2d 1070, 1072 (Ala.1989) (stating that ‘where the loss exceeds the limits of one uninsured motorist policy, the insured may stack other uninsured motorist policies to cover up to the actual damages sustained’).”

Smith v. State Farm Mut. Auto. Ins. Co., 952 So.2d 342, 349-50 (Ala.2006).

Section 32-7-23(c) limits the number of coverages that may be stacked under a single policy. That subsection provides: “The recovery by an injured person under the uninsured provisions of any one contract of automobile insurance shall be limited to the primary coverage plus such additional coverage as may be provided for additional vehicles, but not to exceed two additional coverages within such contract.” Accordingly, § 32-7-23(c) limits stacking so that an injured insured may obtain benefits by stacking a maximum of three UM coverages per policy. See Smith, supra.

On April 8, 2008, Peacock sued Cincinnati in the Tallapoosa Circuit Court, asserting claims both individually and on behalf of a putative class. Peacock alleged that, because an insured may stack a maximum of three UM coverages per loss, both by statute and by the terms of Cincinnati’s standard policy forms, UM coverage for more than three vehicles under a multi-vehicle policy — e.g., UM coverage for four, five, or six vehicles — is “unnecessary, illusory, and provides no benefit to the purchaser of the policy.” Peacock alleged that Cincinnati “engages in a wide-spread and ongoing practice of imposing premiums for additional UM coverages on additional vehicles (i.e., beyond three (3)) when issuing multi-vehicle policies in Alabama, despite the fact that an insured could never utilize the additional UM coverages.” (Emphasis in original.) “Thus,” Peacock alleged, Cincinnati “overcharges for UM coverage it knows it will never have to provide.”

Peacock asserted claims of breach of contract, fraudulent misrepresentation, fraudulent suppression, and unjust enrichment. His complaint defines the potential class as “[a]ll Alabama citizens and entities in the state of Alabama who have paid to [Cincinnati] monies for additional UM coverage on more than three (3) vehicles covered under a multi-vehicle insurance policy issued by [Cincinnati].” Peacock’s complaint seeks damages, for himself and the putative class, only in the form of “restitution or disgorgement of monies paid for the [allegedly] unnecessary and illusory UM coverage.” On the unjust-enrichment claim, Peacock seeks the imposition of a constructive trust on the same funds. Peacock expressly abandons all other forms of monetary damages. He seeks a judgment declaring a) that “the imposition and collection of additional UM premiums for coverage ... is unnecessary, illusory, and provides no additional benefit to the policy purchaser”; and b) that Cincinnati’s “receipt and retention of monies paid for such illusory coverage ... is improper and [the moneys] should be returned to policyholders.”

On May 5, 2009, Cincinnati moved to dismiss Peacock’s action under Rule 12(b)(1), Ala. R. Civ. P., arguing that the trial court lacked subject-matter jurisdiction over Peacock’s claims. Specifically, Cincinnati argued that the Commissioner of Insurance (“the commissioner”) and the Alabama Department of Insurance (“the Department”) have broad authority over the matters made the subject of Peacock’s complaint; that Peacock had failed to exhaust his administrative remedies; and that Peacock’s claims were barred by the filed-rate doctrine. With its motion, Cincinnati submitted the deposition of Myra Frick, a rate manager with the Department. In her affidavit, Frick stated, among other things, that the Department had approved Cincinnati’s rates and forms related to UM coverage. Frick explained that, by approving Cincinnati’s rates and forms, the Department had determined that the rates and forms were not unreasonably high, inadequate, discriminatory, or misleading.

The parties thereafter engaged in discovery, and on July 23, 2009, Cincinnati moved the trial court to set its motion to dismiss for a hearing. Peacock objected, arguing that Cincinnati had not responded to his discovery requests and, therefore, that the matter was not ripe for a hearing. Peacock also moved the trial court to compel Cincinnati to respond to his discovery requests. On July 29, 2009, the trial court denied Cincinnati’s request for a hearing.

The parties deposed Frick on August 17, 2009. On August 19, 2009, before the deposition transcript was prepared, the trial court held a hearing on Peacock’s motion to compel. At the hearing, Peacock argued that he was entitled to additional discovery in order to respond to Cincinnati’s motion to dismiss and that Cincinnati had improperly avoided responding to his discovery requests. Cincinnati argued that the discovery Peacock sought related to the merits of his action and not to the question of subject-matter jurisdiction; that discovery on the question was unnecessary because subject-matter jurisdiction was purely a question of law; that the trial court lacked jurisdiction to compel discovery; and that the jurisdiction question should be resolved before further discovery was taken. During their arguments to the trial court, Peacock and Cincinnati disagreed regarding the content of Frick’s then untranscribed deposition testimony.

On August 26, 2009, the trial court granted Peacock’s motion to compel and denied Cincinnati’s motion to dismiss. Peacock did not respond or submit evidence to the trial court in opposition to Cincinnati’s motion to dismiss before the trial court ruled on it. On September 3, 2009, Cincinnati petitioned this Court for a writ of mandamus directing the trial court to vacate its August 26, 2009, order and to grant Cincinnati’s motion to dismiss.

Standard of Review

“ ‘Mandamus is a drastic and extraordinary writ, to be issued only where there is (1) a clear legal right in the petitioner to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) properly invoked jurisdiction of the court.’ ”

Ex parte Perfection Siding, Inc., 882 So.2d 307, 309-10 (Ala.2003) (quoting Ex parte Integon Corp., 672 So.2d 497, 499 (Ala.1995)). “The question of subject-matter jurisdiction is reviewable by a petition for a writ of mandamus.” Ex parte Liberty Nat’l Life Ins. Co., 888 So.2d 478, 480 (Ala.2003). A denial of a motion to dismiss for failure to exhaust administrative remedies is also reviewable by a petition for a writ of mandamus. See Ex parte Blue Cross & Blue Shield of Alabama, 582 So.2d 469, 472-73 (Ala.1991) (dealing with a claim of failure of an insured to exhaust administrative remedies under the Alabama Insurance Code and stating: “However, because the trial court did not make its judgment final, and therefore appeal-able, Blue Cross’s appeal in this case (case 1900471) is due to be dismissed, but we will address the issues presented in Blue Cross’s petition for a writ of mandamus or prohibition or both (case 1900470), which is properly before this Court.”).

Analysis

In its mandamus petition, Cincinnati argues that the trial court lacks subject-matter jurisdiction over Peacock’s claims based on both the filed-rate doctrine and on Peacock’s failure to pursue administrative remedies through the commissioner and the Department. Cincinnati argues that its motion to dismiss should have been granted based on the face of the complaint and on the evidence Cincinnati presented with its motion.

In his answer to Cincinnati’s petition, Peacock maintains that the filed-rate doctrine does not apply to his claims and that he was not required to pursue administrative remedies. Peacock argues throughout his answer that he is not challenging Cincinnati’s rate calculations or its premiums for UM coverage; instead, Peacock argues, he challenges Cincinnati’s “business practice” of requiring insureds who desire multi-vehicle policies to accept UM coverage for either all or none of the insureds’ vehicles.

The current commissioner, Jim L. Ri-dling, has filed an amicus curiae brief in which he states his position that “claims like [Peacock’s] must first be raised with the affected insurer and then with the Commissioner according to the statutory process the Legislature has devised.” Commissioner’s brief, at 1. Alternatively, Commissioner Ridling agrees with Cincinnati that the filed-rate doctrine applies to bar Peacock’s claims. Alfa Mutual Insurance Company and the Property Casualty Insurers Association of America have also filed amici curiae briefs supporting Cincinnati’s positions and addressing the merits of Peacock’s claims that Cincinnati’s provision of UM coverage for more than three vehicles is illusory.

We must examine the circumstances under which the Department and the commissioner have the exclusive authority to consider Peacock’s claims, thus depriving the trial court of jurisdiction, and the circumstances under which Peacock might have a remedy in proceedings before the Department or before a judicial forum. We view the allegations of Peacock’s complaint in light of the authority granted the commissioner and the Department under the Alabama Insurance Code, § 27-1-1 et seq., Ala.Code 1975 (“the Insurance Code”).

I. The Statutory Authority of the Commissioner

“Our inquiry is governed by settled principles of statutory construction:

“ ‘ “The fundamental rule of statutory construction is that this Court is to ascertain and effectuate the legislative intent as expressed in the statute. League of Women Voters v. Renfro, 292 Ala. 128, 290 So.2d 167 (1974). In this ascertainment, we must look to the entire Act instead of isolated phrases or clauses; Opinion of the Justices, 264 Ala. 176, 85 So.2d 391 (1956).”
‘Darks Dairy, Inc. v. Alabama Dairy Comm’n, 367 So.2d 1378, 1380 (Ala.1979) (emphasis added). To discern the legislative intent, the Court must first look to the language of the statute. If, giving the statutory language its plain and ordinary meaning, we conclude that the language is unambiguous, there is no room for judicial construction. Ex parte Waddail, 827 So.2d 789, 794 (Ala.2001). If a literal construction would produce an absurd and unjust result that is clearly inconsistent with the purpose and policy of the statute, such a construction is to be avoided. Ex parte Meeks, 682 So.2d 423 (Ala.1996).’
“City of Bessemer v. McClain, 957 So.2d 1061, 1074-75 (Ala.2006).”

Bright v. Calhoun, 988 So.2d 492, 497-98 (Ala.2008). Furthermore, this Court has stated that its “role is not to displace the legislature by amending statutes to make them express what we think the legislature should have done. Nor is it this Court’s role to assume the legislative prerogative to correct defective legislation or amend statutes.” Siegelman v. Chase Manhattan Bank (USA), Nat’l Ass’n, 575 So.2d 1041, 1051 (Ala.1991).

The Insurance Code grants the commissioner the authority to enforce the statutes and regulations governing insurance providers in Alabama. See § 27-2-7, Ala. Code 1975. Particularly, the commissioner, and under the commissioner’s authority, the Department, has the authority to regulate insurance rates and forms. See, e.g., §§ 27-2-7, 27-2-8, 27-13-1 et seq., 27-14-8, and 27-14-9, Ala.Code 1975.

UM insurance is a form of casualty insurance and is, therefore, governed by Chapter 13, Article 3, of the Insurance Code. See §§ 27-5-6(a)(l) and 27-13-61, Ala.Code 1975. That article requires insurers to “make rates that are not unreasonably high or inadequate for the safety and soundness of the insurer and which do not unfairly discriminate between risks in this state....” § 27-13-65, Ala. Code 1975. Insurers must submit all rates and rating plans to the Department before using or applying any rates. § 27-13-67, Ala.Code 1975. Section 27-13-68, Ala. Code 1975, grants the commissioner the authority and responsibility to examine the rates and the rating plans submitted to determine whether they comply with § 27-13-65. Under § 27-13-68, the commissioner has the authority to order that noncompliant rating plans be altered. Additionally, § 27-13-68 grants the commissioner the authority to determine whether rating plans that have been previously approved “provide for, result in or produce rates which are unreasonable or inadequate or which discriminate unfairly between risks in this state” and to order insurers to alter any rating plan the commissioner determines does so.

Once the commissioner approves a rate or rating plan, the Insurance Code prohibits the insurer from deviating from that plan. See § 27-13-67 (“From and after the date of the filing of such rating plans, every insurer shall charge and receive rates fixed or determined in strict conformity therewith, except as in this article otherwise expressly provided.”); § 27-13-76 (“No insurer, or employee thereof, and no broker or agent shall knowingly charge, demand or receive a premium for any policy of insurance except in accordance with the respective rating systems on file with, and approved by, the commissioner”). Insurers may alter rates and rate plans only with the approval of the commissioner in accordance with procedures established in § 27-13-76, Ala.Code 1975. Furthermore, the Insurance Code prohibits insurers from reducing premiums except in accordance with rating systems approved by the commissioner. § 27-12-14(a), Ala.Code 1975.

The Insurance Code also grants the commissioner authority to regulate the insurance contract. Particularly, § 12-14-8, Ala.Code 1975, requires that all insurance policies, application forms, contracts, printed riders, endorsement forms, and forms of renewal certificates be approved by the commissioner. Section 27-14-9, Ala.Code 1975, authorizes the commissioner to disapprove any such form if the form:

“(1) Is in any respect in violation of, or does not comply with, [the Insurance Code];
“(2) Contains or incorporates by reference, where such incorporation is otherwise permissible, any inconsistent, ambiguous, or misleading clauses or exceptions and conditions which deceptively affect the risk purported to be assumed in the general coverage of the contract;
“(3) Has any title, heading or other indication of its provisions which is misleading;
“(4) Is printed, or otherwise reproduced, in such manner as to render any provision of the form substantially illegible; or
“(5) Contains provisions which are unfair, or inequitable, or contrary to the public policy of this state or which would, because such provisions are unclear or deceptively worded, encourage misrepresentation.”

Additionally, § 32-7-23(a), the section of the Motor Vehicle Safety-Responsibility Act requiring insurers to offer UM coverage, requires that policy provisions relating to UM coverage be approved by the commissioner.

Section 27-2-7(6) of the Insurance Code grants the commissioner broad investigative authority. That subsection provide:

“The commissioner shall ... [c]onduct such examinations and investigations of insurance matters, in addition to examinations and investigations expressly authorized, as he or she may deem proper to determine whether any person has violated any provision of this title or to secure information useful in the lawful administration of any such provision .... ”

Regarding rates, Chapter 13, Article 3, grants the commissioner even greater authority to inquire into and to examine the records and business practices of casualty insurers. Section 27-13-74, Ala.Code 1975, states:

“The commissioner may, whenever he deems it expedient, but at least once in every five years, make, or cause to be made, an examination of the business, affairs and method of operation of each rating organization doing business in this state and a like examination of each insurer making its own rates.... The officers, managers, agents, and employees of such rating organization or insurer making its own rates shall exhibit all its books, records, documents, or agreements governing its method of operation, its rating systems and its accounts for the purpose of such examination. The commissioner, or his representative, may, for the purpose of facilitating and furthering such examination, examine, under oath, the officers, managers, agents, and employees of such rating organization or insurer making its own rates.”

The legislature, therefore, has granted the commissioner the authority not only to inquire into the rates applied and premiums charged by casualty insurers, but also to inquire into a casualty insurer’s “business, affairs and method of operation.” Id.

The Insurance Code also grants the commissioner the authority to hold hearings and provides for judicial review of the commissioner’s decisions. Generally, the Insurance Code requires the commissioner to hold hearings upon written demand of any person aggrieved by an act, a threatened act, or a failure of the commissioner. See § 27-2-28(b), Ala.Code 1975. Once the commissioner has issued a decision, or if the commissioner refuses to hold a hearing, the aggrieved party may appeal to the Montgomery Circuit Court. See § 27-2-32, Ala.Code 1975.

Specifically regarding rates, the Department may require insurers to furnish “all pertinent information” regarding a rate to persons affected by the rate. See § 27-13-70, Ala.Code 1975. Section 27-13-71, Ala.Code 1975, requires insurers to provide a means by which persons affected by a rate “may be heard on a written application to reduce such rate.” That section then states:

“If such rating organization or such insurer shall refuse to reduce such rate, the person, or persons, affected thereby may make a like application to the commissioner within 30 days after receipt of notice in writing that the application for reduction of rate has been denied by such rating organization or by such insurer .... The commissioner shall fix a time and place for hearing on such application, upon not less than 10 days’ notice by registered or certified mail, for the applicant and such rating organization or such insurer to be heard. The commissioner shall make such order as he shall deem just and lawful upon the evidence placed before him at such hearing.”

Section 27-13-81, Ala.Code 1975, then provides a means by which the commissioner’s decisions may be reviewed by the Montgomery Circuit Court and then by the Court of Civil Appeals.

II. The Filed-Rate Doctrine

The filed-rate doctrine limits judicial review of rates that have been approved by regulatory agencies. Describing the doctrine in a case involving an insurance rate approved by the commissioner, this Court has stated: “The filed-rate doctrine provides that once a filed rate is approved by the appropriate governing regulatory agency, it is per se reasonable and is unassailable in judicial proceedings.” Birmingham Hockey Club, Inc. v. National Council on Compensation Ins., Inc., 827 So.2d 73, 78 n. 4 (Ala.2002) (emphasis added). The bar of the filed-rate doctrine goes to the court’s jurisdiction over the subject matter. See Birmingham Hockey Club, 827 So.2d at 83 n. 11 (“Because the filed-rate doctrine prohibits collateral challenges to rates properly approved by the insurance commissioner, any such challenge raised in the courts is due to be dismissed.” (citing Allen v. State Farm Fire & Cas. Co., 59 F.Supp.2d 1217, 1227-29 (S.D.Ala.1999))). Accordingly, when an insured challenges the rates of an insurer that have been approved by the commissioner, the filed-rate doctrine precludes judicial review.

We note that, with regard to the statutory procedure for seeking a reduction in rates, § 27-13-71 provides a remedy for reduction from the filed rate if circumstances warrant. Therefore, proceedings under § 27-13-71 are distinguishable from an impermissible attack on the rate as filed, and such proceedings are not subject to the bar of the filed-rate doctrine. The extent to which § 27-13-71 requires exhaustion of an administrative remedy is a separate question we address below.

.III. Exhaustion of Administrative Remedies

When the insured asserts the entitlement to a reduction from the filed rate, the Insurance Code provides an administrative remedy, followed by judicial review commenced by a petition for the writ of certio-rari filed in the Montgomery Circuit Court. See §§ 27-13-71 and 27-13-81. Based on the extensive statutory scheme established by the legislature to regulate insurance, including the administrative remedies provided in §§ 27-13-71 and 27-13-81, the commissioner maintains that “insurance form and rate approval are only cognizable in the first instance by the Commissioner and the Department of Insurance, not the courts.” Commissioner’s brief, at 16. According to the commissioner, therefore, the Insurance Code vests exclusive jurisdiction over claims relating to insurance rates and forms in the commissioner and the Department. Cincinnati agrees.

In enacting the Insurance Code, the legislature granted the commissioner wide-ranging authority to regulate insurers. More specifically, the legislature has delegated to the commissioner and the Department its authority to regulate insurance rates. City of Birmingham v. Southern Bell Tel. & Tel. Co., 234 Ala. 526, 530, 176 So. 301, 303 (1937) (“That rate making is a legislative and not a judicial function is well established.” (emphasis added)). The authority to regulate rates is comprehensive. Insurers are prohibited from imposing rates other than those approved by the commissioner. See §§ 27-13-67 and 27-13-76. The commissioner also has the authority to regulate insurance forms, including UM-policy provisions. See §§ 27-14-8, 27-14-9, and 32-7-23(a). The commissioner has the authority to investigate violations of the Insurance Code, including violations relating to insurance forms and rates. See § 27-2-7(6). Furthermore, Chapter 13, Article 3, of the Insurance Code grants the commissioner broad authority to examine the casualty insurers’ business, affairs, and methods of operation. See § 27-13-74.

Peacock, citing Tindle v. State Farm General Insurance Co., 826 So.2d 144 (Ala.Civ.App.2001) (Yates, P.J., and Murdock, J., dissenting), contends that because § 27-13-71 provides that an insured “may be heard by the insurer and “may” apply to the commissioner for a rate reduction, insureds are not required to seek administrative review before filing suit. In Tin-dle, the Court of Civil Appeals considered whether the trial court properly dismissed a putative class action against an insurer challenging the insurer’s calculation of premiums with respect to home insurance. The Court of Civil Appeals agreed that the insured was required to exhaust administrative remedies before seeking redress through the courts. Presiding Judge Yates and then Judge Murdock dissented. Presiding Judge Yates disagreed with the majority based on her characterization of Tindle’s claims. Judge Murdock disagreed with the majority’s interpretation of § 27-13-32, Ala.Code 1975, which provides for administrative review, in the context of home insurance. Judge Murdock reasoned that, because that section states that persons affected by a rate “may” apply to the commissioner for a review of that rate, such review is not mandatory, and Tindle was not required to exhaust administrative remedies before seeking relief in the courts. Peacock argues that this Court should apply a similar reasoning in this case.

Section 27-13-71 states that if, upon application by an insured, an insurer refuses to reduce the insured’s rate, the insured “may make a like application to the commissioner within 30 days.” (Emphasis added.) Peacock contends the legislature’s use of the word “may,” rather than the word “shall,” indicates that the insured has the option of pursuing administrative remedies or pursuing remedies in court. If, however, the legislature had used the word “shall,” § 27-13-71 would impose on an insured a statutory duty to pursue administrative remedies upon every rejection of an application for a rate reduction, even where the insured is satisfied with the insurer’s explanation of the denial or where the insured lacks the means or is disinclined to pursue further action. Such a construction would lead to an unreasonable result. We consider the more reasonable interpretation of “may” as used here to be an expression of the legislature’s intent that an insured lodging a complaint was not required to pursue the complaint further if it did not so desire and not the sanction of alternative remedies independent of the Insurance Code. Accordingly, the legislature’s use of the word “may” need not be read so broadly as Peacock contends and, in the context of the entire Insurance Code and the legislative authority over rate-making, discussed below, should not be so read.

Viewing the Insurance Code as a whole, see Bright, supra, as allowing a court, outside the appellate review provided for in the Insurance Code, to determine, in proceedings as to which the commissioner is not a party, that a rate approved by the commissioner is unreasonably high would allow that court to require insurers to apply rates independently of the commissioner’s involvement. Such a construction of § 27-13-71 would enable courts to interfere with the regulatory power granted the commissioner by the legislature under § 27-13-68. Furthermore, it would enable courts to require insurers in proceedings between an insurer and an insured to apply unapproved rates and, therefore, to engage in conduct prohibited by other sections of the Insurance Code. See §§ 27-13-67 and 27-13-76. However, as this Court has stated in another context, “the matter of rate making is legislative, and the courts have no right to sit as a board of review to substitute their judgment for that of the Legislature, or its agents in matters within the province of either.” City of Birmingham, 234 Ala. at 531, 176 So. at 305.

The legislature has created a narrow exception to the principle that rate-making is a legislative prerogative by the procedures established in §§ 27-13-71 and 27-13-81. Under § 27-13-71, an insured dissatisfied with a rate may apply to the insurer for a rate reduction and then to the commissioner if the insured does not receive a reduction from the insurer. Under § 27-13-81, the insured may, thereafter, obtain judicial review of the commissioner’s decision first by means of a writ of certiorari to the Montgomery Circuit Court and then by means of an appeal to the Court of Civil Appeals. Through these procedures, the legislature has created a limited means by which courts may review the commissioner’s rate-making decisions. Sections 27-13-71 and 27-13-81 authorize judicial review only in this context. Peacock’s construction of “may” as that word is used in § 27-13-71 would sanction an unbridled expansion of this exception inconsistent with the general rule that the judicial branch lacks authority to set rates. We decline to ascribe such intent to the legislature based solely on the use of the word “may” in the context here presented. Consistent with the authority granted the commissioner by the legislature and the limited judicial review of the commissioner’s decisions, we conclude that the insured must exhaust his or her administrative remedies before the commissioner before turning to the courts for relief.

IV. Peacock’s Complaint

Peacock contends that his claims against Cincinnati do not fall within the commissioner’s administrative authority. Specifically, Peacock argues that he does not challenge Cincinnati’s rates or rating systems but, instead, its “business practice” of requiring insureds whose policy covers more than three vehicles to choose UM coverage for either all or none of them vehicles, even for, e.g., four, five, and six vehicles. To determine the nature of Peacock’s claims and whether those claims fall within the commissioner’s exclusive authority, we will consider the language of Peacock’s complaint.

The first sentence of Peacock’s complaint states: “This action challenges [Cincinnati’s] systematic and ongoing practice of improperly imposing and collecting premiums for certain [UM] insurance coverage when issuing multi-vehicle auto insurance policies in the State of Alabama.” (Emphasis added.) Peacock also alleges repeatedly that Cincinnati “overcharges] for UM coverage” and “charg[es] more than is necessary to provide maximum UM coverage under the contract.” (Emphasis added.) Peacock contends that Cincinnati receives “improper gains ... at the expense of insureds and premium pay-ors.” As noted above, Peacock seeks damages only in the form of restitution of premiums paid for the allegedly illusory UM coverage.

Regarding the class allegations of the complaint, Peacock defines his putative class as Alabama citizens who have “paid to [Cincinnati] monies for additional UM coverage.” Peacock states the first three class-wide common questions as:

“a. Whether [Cincinnati] has engaged in a widespread and systematic practice of imposing and collecting premiums for certain unnecessary, improper, and illusory UM coverage when issuing multi-vehicle policies in Alabama;
“b. Whether [Cincinnati] has breached contracts with [Peacock] and class members by requiring and collecting for additional UM coverage for which there was no consideration flowing from [Cincinnati], as the required additional coverage was illusory and of no additional benefit;
“c. Whether [Cincinnati’s] practice of requiring (and collecting for) additional UM coverage as described herein is improper.”

(Emphasis added.)

Peacock contends that he challenges Cincinnati’s UM practices as violating § 32-7-23. However, the language of Peacock’s complaint, including the class allegations, shows a direct challenge to the premiums and rates Cincinnati applies to UM coverage pursuant to rates approved by the commissioner. Specifically, by alleging that Cincinnati “overcharges” for UM coverage, Peacock claims that Cincinnati’s rates are excessive — a matter squarely within the exclusive jurisdiction of the commissioner. See, e.g., §§ 27-13-65 and 27-13-68.

V. The Filedr-Rate Doctrine and Exhaustion of Administrative Remedies Applied

Peacock in essence contends either a) that the commissioner simply should not have approved Cincinnati’s forms and rating plans to the extent those forms and plans permitted Cincinnati to charge and collect premiums for UM coverage on vehicles in excess of three listed in a Cincinnati policy or b) that Peacock and others are entitled to a premium reduction (presumably with an accompanying refund of paid premiums) for UM coverage on listed vehicles exceeding three in a policy. Under the first alternative, which deals with the commissioner’s approval, the flled-rate doctrine precludes judicial review, depriving the trial court of subject-matter jurisdiction. See Birmingham Hockey Club, supra.

Peacock contends that the filed-rate doctrine does not apply to his claims based on this Court’s statement in QCC, Inc. v. Hall, 757 So.2d 1115, 1118 (Ala.2000), that the flled-rate doctrine “holds consumers to a conclusive presumption of knowledge of the contents of the tariff that the utility with which the consumer does business has filed with the appropriate regulatory agency.” Peacock contends that Cincinnati’s rates, approved by the commissioner, do not provide sufficient notice of its practice of requiring insureds to choose UM coverage as to all or none of their vehicles. Thus, Peacock reasons, the filed-rate doctrine does not hold him to a conclusive knowledge of Cincinnati’s business practices. To support this argument, Peacock relies on the now transcribed deposition testimony of Department employee Myra Frick.

As an initial matter, we note that although counsel for the parties discussed Frick’s deposition at the August 19, 2009, hearing, the transcript on which Peacock now relies was not before the trial court when it ruled on Cincinnati’s motion to dismiss. “[E]vidence not presented to the trial court will not be considered in a mandamus proceeding.” Ex parte Volvo Trucks North America, Inc., 954 So.2d 583, 587 (Ala.2006).

Additionally, Peacock’s argument is misdirected. The filed-rate doctrine, as applied in this case, involves not a presumption of knowledge on Peacock’s part, but a limitation on judicial review of rates approved by the commissioner. See Bir mingham Hockey Club, supra. It is undisputed that Cincinnati’s rates and policy forms were approved by the commissioner. Frick’s affidavit, submitted to the trial court by Cincinnati in support of its motion to dismiss, shows that the commissioner approved forms showing that Cincinnati applied rates and charged premiums for UM coverage as to all vehicles under multi-vehicle policies. As a result, Cincinnati’s UM rates are “per se reasonable and [are] unassailable in judicial proceedings.” Birmingham Hockey Club, 827 So.2d at 78 n. 4.

Regarding Peacock’s second alternative contention, which deals with premium reduction, the necessary predicate for judicial review is invocation of the remedy provided by § 27-13-71. The administrative remedy has been exhausted only upon an adverse determination and then, and only then, is the aggrieved party entitled to access to the courts by petition for a writ of certiorari filed in the Montgomery Circuit Court pursuant to § 27-13-71.

Peacock argues as an exception to the general rule of exhaustion of administrative remedies that exhausting his remedies before the commissioner and the Department would be futile. Citing Budget Inn of Daphne, Inc. v. City of Daphne, 789 So.2d 154, 157 (Ala.2000) (“[W]e recognize certain exceptions exist to the general rule of exhaustion of administrative remedies: ‘The doctrine does not apply when (1) the question raised is one of interpretation of a statute, (2) the action raises only questions of law and not matters requiring administrative discretion or an administrative finding of fact, (3) the exhaustion of administrative remedies would be futile and/or the available remedy is inadequate, or (4) where there is the threat of irrepai'able injury.’ Ex parte Lake Forest Property Owners’ Ass’n, 603 So.2d 1045, 1046-47 (Ala.1992).”). To support this argument, Peacock again relies on the now transcribed deposition testimony of Myra Frick. Based on her testimony, Peacock contends that the Department has already decided the issue his claims present.

As noted above, in a mandamus proceeding, this Court will not consider evidence not presented to the trial court. Volvo Trucks, supra. Additionally, we disagree with Peacock’s premise that review of his claims by the commissioner would be futile. Section 27-13-68 grants the commissioner the authority to alter previously approved rates if the commissioner determines that those rates are excessive. Furthermore, § 27-13-71 grants insureds affected by an approved rate a means of obtaining a rate reduction. Even if, as Peacock says, the Department has already decided the issue of the reasonableness of Cincinnati’s rates for UM coverage, given the commissioner’s statutory authority to permit a reduction in approved rates, we cannot say that administrative review is futile.

Under the facts before us, under either of Peacock’s alternative contentions the Tallapoosa Circuit Court exceeded its discretion when it denied Cincinnati’s motion to dismiss.

Conclusion

Based on the foregoing, we conclude that, alternatively, the filed-rate doctrine requires dismissal, as does Peacock’s failure to exhaust administrative remedies with the commissioner and the Department before seeking redress from the courts. Our decision precludes discussion of Cincinnati’s arguments regarding the trial court’s granting of Peacock’s motion to compel discovery. We grant Cincinnati’s petition for a writ of mandamus, and we direct the trial court to vacate its August 26, 2009, order. We further direct the trial court to dismiss Peacock’s action for failure to exhaust administrative remedies.

PETITION GRANTED; WRIT ISSUED.

COBB, C.J., and WOODALL, STUART, SMITH, BOLIN, and SHAW, JJ.; concur.

PARKER, J., recuses himself.

      . The question whether the coverage provided is indeed illusory is not before us; we note the contention of the insurers in amici curiae briefs that the ownership of more than three vehicles increases the risk of a claim for UM benefits for which the insureds are entitled to be compensated.

      . Peacock phrases his argument in terms of § 27-13-32, Ala.Code 1975; however, that section does not apply to UM insurance. We will address our discussion of this argument instead to § 27-13-71, the comparable section dealing with casualty insurance.

      . We note in fairness that Judge Murdock did not contend in his dissenting opinion in Tin-dle that the legislature should have used the word "shall” in order to support the result reached by the majority in Tindle.

      . Peacock has not raised any argument, either in the trial court or in this Court, that Cincinnati is charging premiums or applying rates in excess of those approved by the commissioner.

      . We need not deal with the implications of cases observing that exhaustion of administrative remedies does not implicate subject-matter jurisdiction, see, e.g., Patterson v. Gladwin Corp., 835 So.2d 137, 142 (Ala.2002); Budget Inn of Daphne, 789 So.2d at 157, because we have recognized the propriety of seeking relief by mandamus for the denial of a motion to dismiss based on a failure to exhaust administrative remedies. See Blue Cross, 582 So.2d at 472-73.

      . We note that Peacock, in his answer, relies on an amended complaint that was served after the entry of the trial court’s August 26, 2009, order and after Cincinnati filed its petition for a writ of mandamus in this Court. Accordingly, the amended complaint is not before us for consideration, and, in view of our issuance of the writ, we do not consider it. Whether the amended complaint may be the subject of a separate action is a matter not before us.


text:
    Martin VON SURY v. Christopher K. KUEHN.
    1090085.
    Supreme Court of Alabama.
    June 18, 2010.

      Thomas P. Ollinger, Jr., Mobile, for appellant.
    Barre C. Dumas, Mobile, for appellee.
   STUART, Justice.

Christopher K. Kuehn sued Martin von Sury, alleging breach of contract. The trial court entered a summary judgment for Kuehn. Von Sury appeals. We affirm in part, reverse in part, and remand.

Facts and Procedural History

The record indicates that in January 1995 Von Sury asked Kuehn, an attorney, to represent him in various international business dealings and investments. The two then entered into a retainer agreement dated May 1995, which indicates that Von Sury agreed to pay Kuehn to represent him in a certain matter at a rate of $175 per hour and to pay for Kuehn’s expenses. The retainer agreement further provides that unpaid amounts earn interest at a rate of 1.25% per month and that Von Sury agreed to pay Kuehn’s attorney fees for any action against Von Sury to recover outstanding fees and expenses.

The evidence indicates that from January 1995 until May 2000, Von Sury paid Kuehn regularly. In June 2000, Von Sury started making only partial payments. In March 2003, Von Sury indicated in an email that he could not make a payment “right now” but that he hoped to resume payment in May 2008. Kuehn received his last payment in the amount of $2,202.50 from Von Sury in October 2004. In another e-mail dated December 3, 2007, Von Sury indicated that he would make a payment the following week. On December 8, 2007, Von Sury stated in an e-mail that he expected his financial issues to be resolved by Christmas and that he would “transfer the funds to [Kuehn] immediately.” In an e-mail dated April 24, 2008, Von Sury wrote:

“Dear Christopher
“It has been a long time since I have been in touch with you. My head was mostly ‘under water.’ Today I was told that the banker in charge has signed the payment authorization on behalf of HSBC London and has forwarded it to HSBC.... He said, in the presence of my attorney, that I would have the funds in my account on Monday evening or Tuesday at the latest.
“After all these years of reversals, frustration and existential fears I believe— on the basis of the factual situation— that this time period is coming to an end. Upon receipt of the funds I will send you a first payment of $50,000.
“With best regards,
“Martin”

Kuehn received his last e-mail from Von Sury in August 2008. Von Sury indicated in the e-mail that he would contact Kuehn by the end of the month. According to Kuehn, Von Sury did not contact him.

In October 2008, Kuehn sued Von Sury, alleging that Von Sury had breached the retainer agreement and owed him $112,894.47 for representing Von Sury, $66,325.46 in interest on the unpaid amount, and $37,627.73 in attorney fees for collection of the debt. Kuehn attached to his complaint a copy of the retainer agreement signed by Von Sury and a copy of an invoice detailing the services Kuehn had provided Von Sury, the fees charged and expenses incurred on Von Sury’s behalf, and Von Sury’s payment history.

On March 5, 2009, Von Sury answered, denying that he owed Kuehn any money. On April 2, 2009, Kuehn moved for a summary judgment, stating:

“[Kuehn] is an attorney who was retained in 1995 by [Von Sury] to assist him with his international business dealings and investments. Over the years since being retained [Kuehn] performed professional services for [Von Sury] and submitted itemized invoices to him. [Von Sury] made payments against the invoices without any objections. The last payment received by [Kuehn] was posted on October 19, 2004 and credited against the balance then due in the amount of $115,096.97 leaving a principal balance for which suit has been brought of $112,894.47. At no time until the filing of his pro se answer to the complaint has [Von Sury] denied owing [Kuehn] the amount claimed. In fact, as recently as April of 2008, four years after the last payment made by [Von Sury] he sends an email message to [Kuehn] in which he acknowledges his financial difficulty and promises a payment of $50,000.00.”

In support of his motion, Kuehn attached an affidavit explaining Von Sury’s payment history and copies of e-mails sent by Von Sury to Kuehn in which Von Sury acknowledged that he owed Kuehn money.

Von Sury opposed Kuehn’s motion for a summary judgment, arguing that summary judgment was inappropriate because genuine issues of material fact existed. In support of his motion in opposition, Von Sury attached an affidavit in which he stated:

“I am Martin von Sury, a Swiss national, and I have personal knowledge of all recitations of fact set forth herein below.
“(1) While what appears to be my signature on [the retainer agreement] intrigues me, as I don’t recall signing such a document, I am certain that the handwriting above such signature, to-wit: ‘May 5, 1995,’ is not mine, presumably being that of Mr. Kuehn. Furthermore, the supposed date, as so inserted by someone other than myself, fails to coincide with my recollection of the chronological background of my dealings with Mr. Kuehn, particularly concerning Wuestec Medical, Inc. In fact, it was not until December 1996 that the initial business of that entity was activated. ... Accordingly, my legal counsel will seek production of the original document for due and proper evaluation in terms of its authenticity, which I question.
“(2) It is likewise curious that the initial entry [on Kuehn’s invoice for services] is some four (4) years next following the date [on the retainer agreement] to-wit: January 15,1995. Certainly, not only should Mr. Kuehn explain such a gap in time, he should be compelled to produce all invoices corresponding to the abbreviated entries [in the invoice] together with documentary evidence of the alleged services rendered, especially those described as ‘Mobile — FLAT FEE’ particularly given [the language in the retainer agreement], to-wit: ‘On a case by case basis we may agree to a different hourly rate, a fixed fee or a contingency fee for specific future projects.’ (emphasis added). Accordingly, I dispute that all services thereupon described [in the invoice] were so rendered, if at all, solely for my benefit and/or were performed by Mr. Kuehn based upon or in reliance upon the terms of his said [retainer agreement].
“(3) Further still, investigation is due to be conducted as to whether and in what amounts Mr. Kuehn has sought recovery of attorney fees from other parties involved in the pertinent transactions concerning which he claims to have rendered services, without which revelation an accurate accounting of what share, if any, I might owe him therefore cannot be made.
“(4) I have in the past afforded Mr. Kuehn my complete trust. I, therefore, have taken his word without question as to most all aspects of our dealings, including his assertion that I owed him substantial attorney fees. However, based upon his more recent aggressive tactics I have concluded that he must be having his own financial difficulties unrelated to our association. Accordingly, while I have long assumed my personal share in attorney fees that he has asserted were due and payable to him was significant, I earnestly believe that Mr. Kuehn might well be guilty of overreaching and/or has taken advantage of my prior trust in him. I now know that one must look behind the facade and insist upon a full and complete disclosure of all matters relevant to the assertion he makes associated with the supposed services for which he claims compensation, and I have instructed my counsel ... to pursue such an evaluation in earnest.
“(5) The e-mails [submitted by Mr. Kuehn in support of his motion for a summary judgment] were issued by me during the aforesaid period of my utmost trust and confidence in him. Now I must conclude that such trust was misplaced. Apparently, Mr. Kuehn believes me a convenient target whereby he might right his financial ship, so I must respectfully decline to be victimized in such a manner. Therefore, any conclusions that might otherwise be drawn from the content of such e-mails would be unreliable. Furthermore, I contest the authenticity thereof in the first place.”

On June 12, 2009, the trial court, without providing any reasons, entered a summary judgment for Kuehn.

Standard of Review

“ ‘ “On appeal, this Court reviews a summary judgment de novo.” DiBiasi v. Joe Wheeler Elec. Membership Corp., 988 So.2d 454, 459 (Ala.2008) (citing Ex parte Essary, 992 So.2d 5, 8 (Ala.2007)). In order to uphold a summary judgment, we must determine that “there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Rule 56(c)(3), Ala. R. Civ. P. “When the movant makes a prima facie showing that those two conditions have been satisfied, the burden then shifts to the nonmovant to present substantial evidence creating a genuine issue of material fact.” Blue Cross & Blue Shield of Alabama v. Hodurski, 899 So.2d 949, 952 (Ala.2004). Substantial evidence is “evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved.” West v. Founders Life Assurance Co. of Florida, 547 So.2d 870, 871 (Ala.1989); see also § 12-21-12(d), Ala.Code 1975. In reviewing a summary judgment, we must view the evidence in the light most favorable to the nonmovant. Johnny Ray Sports, Inc. v. Wachovia Bank, 982 So.2d 1067, 1071 (Ala.2007). “Finally, this Court does not afford any presumption of correctness to the trial court’s ruling on questions of law or its conclusion as to the appropriate legal standard to be applied.” DiBiasi, 988 So.2d at 459.’
“Catrett v. Baldwin County Elec. Membership Corp., 996 So.2d 196, 200 (Ala.2008).”

McLemore v. Hyundai Motor Mfg. Alabama, LLC, 7 So.3d 318, 327 (Ala.2008).

Discussion

Von Sury contends that the trial court erred in entering a summary judgment for Kuehn. In McCollough v. Regions Bank, 955 So.2d 405, 410 (Ala.2006), this Court recognized that a summary judgment in a breach-of-contract action is appropriate only where the contract is unambiguous and the facts are undisputed.

First, Von Sury argues that a summary judgment is improper because, he says, the retainer agreement is ambiguous. According to Kuehn’s brief, the following language in the retainer agreement makes the contract ambiguous:

“ ‘On a case by case basis we may agree to a different hourly rate, a fixed fee or a contingency fee for specific future projects. As such we have agreed that for the planned private placement of shares of Wuestec Medical Inc., my hourly rate will be reduced to $125, but that at successful completion of the private placement my accumulated hours will be recalculated at an hourly rate of $225. Work that is not directly related to the private placement of the shares of Wuestec Medical Inc., will be billed at my hourly rate of $175 and to the extent such work may be to the benefit of Wuestec Medical Inc., you will settle this internally with Wuestec Medical Inc.’ (Emphasis added.)”

Von Sury reasons in his brief to this Court that the foregoing language

“expressly provide[d] for the prospect of future legal services to be performed at varying rates, so it would be patently unfair to blithely accept [Kuehn’s] unilateral, self-serving itemization of purported legal services for which he seeks a judgment versus [Von Sury] especially given the fact that such itemization commences with entries some several years next succeeding the supposed date of the purported retainer agreement.”

The language in the retainer agreement, however, is not ambiguous. It simply provides that on a case-by-case basis Kuehn and Von Sury can negotiate varying rates for legal services to be performed for Von Sury by Kuehn.

Von Sury also maintains that a summary judgment is improper because, he says, the statements in his affidavit— that he did not remember signing the retainer agreement, that he questioned whether the legal services Kuehn listed on the invoice attached to the complaint were rendered for his benefit, and that his representations in the e-mails from him to Kuehn are “unreliable” — present substantial evidence creating genuine issues of material fact.

Kuehn presented evidence of the existence of a retainer agreement between him and Von Sury. He also submitted an invoice for his services and expenses, which indicates his representation of Von Sury and his fees and expenses from January 1999 through February 2003. The invoice also included the payments made by Von Sury from April 1999 through October 2004. He further submitted e-mails from Von Sury in which Von Sury recognized that he owed Kuehn money and told Kuehn that payment was forthcoming. Therefore, Kuehn presented prima facie evidence of his breach-of-contract claim and that he was entitled to a judgment as a matter of law. The burden then shifted to Von Sury to present substantial evidence creating a genuine issue of material fact. At best, Von Sur/s affidavit presents only speculation and conjecture. Von Sury does not dispute that he entered into the retainer agreement with Kuehn or that he owes Kuehn money. Although Von Sury attempts to create genuine issues of material fact with regard to the accuracy of the charges in the invoice, he presents only speculation. Consequently, Von Sury does not present “evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved.” West v. Founders Life Assurance Co. of Florida, 547 So.2d 870, 871 (Ala.1989). Therefore, the summary judgment in Kuehn’s favor on the breach-of-contract claim was proper.

Lastly, Von Sury contends that the trial court erred in entering a summary judgment for Kuehn in the amount of $37,627.73 as an attorney fee for .this breach-of-contract litigation. In Highlands Underwriters Insurance Co. v. Elegante Inns, Inc., 361 So.2d 1060, 1066 (Ala.1978), this Court stated:

“When attorneys’ fees or other expenses of litigation are recoverable as damages, they can be recovered only to the extent that they are necessarily incurred and reasonable in amount. 25 C.J.S. Damages § 91(2), p. 981. The fee charged by counsel for plaintiff is not conclusive on the court of the reasonableness of the fee to be awarded as damages. Such fees must be based, not upon the charges made in the case, but upon evidence showing the service rendered and the reasonable value thereof. United Bonding Ins. Co. v. Presidential Ins. Co., 155 So.2d 635 (Fla.App.1963).”

In his brief to this Court, Kuehn concedes that the case should be remanded for the trial court to assess the attorney fees recoverable in this action in accordance with the law. Therefore, we reverse the trial court’s summary judgment with regard to the attorney-fee award for this breach-of-contract litigation and remand this case for the trial court to determine a reasonable attorney fee in accordance with the law.

Conclusion

The judgment of the trial court is reversed insofar as it awards Kuehn an attorney fee of $37,627.73. In all other respects, the judgment is affirmed. This cause is remanded for proceedings consistent with this opinion.

AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.

COBB, C.J., and LYONS, BOLIN, and MURDOCK, JJ., concur.

      . The record contains copies of several emails between Kuehn and Von Sury. The emails are written in German and have been translated by Kuehn. Von Sury does not dispute the accuracy of Kuehn’s translation of these documents.