text:
    Duncan MILLER, a minor, by and through Edward MILLER v. LIBERTY PARK JOINT VENTURE, LLC.
    2100619.
    Court of Civil Appeals of Alabama.
    Aug. 26, 2011.
    Rehearing Denied Oct. 28, 2011.

      W. Whitney Seals of Pate & Cochrun, L.L.P., Birmingham, for appellant.
    William Anthony Davis III, Philip G. Piggott, and Benjamin T. Presley of Starnes Davis Florie, LLP, Birmingham, for appellee.
   THOMAS, Judge.

Edward Miller (“Miller”), on behalf of Duncan Miller (“Duncan”), a minor, appeals from a summary judgment entered by the Jefferson Circuit Court in favor of Liberty Park Joint Venture, LLC (“Liberty Park”), in a premises-liability action. Miller’s complaint alleged that Duncan had been injured when he slipped on a clay-surfaced tennis court at the Old Overton Club, which is owned by Liberty Park, and his arm and elbow slid under the fence surrounding the tennis court. The trial court entered its summary judgment on the ground that there was no basis upon which Liberty Park could be held liable because Miller had failed to present substantial evidence demonstrating that the gap between the fence frame and the clay-surfaced tennis court was a defective condition; thus, the trial court found that there was no genuine issue of material fact and that Liberty Park was entitled to judgment as a matter of law. We agree.

Facts and Procedural History

On September 7, 2008, while playing in a United States Tennis Association tournament at the Old Overton Club, Duncan was injured. The injury occurred when he fell on a clay-surfaced tennis court while attempting a forehand shot near the corner of the court. During the fall, Duncan slipped and his left arm went underneath the fence frame causing him to suffer a dislocation/fracture of his left elbow and a torn ulna collateral ligament, requiring surgery for repair and placement of pins. Miller filed a complaint in the trial court alleging negligence claims based on a premises-liability theory on March 19, 2010. In his original complaint, Miller named Old Overton Club, Inc., and numerous fictitiously named parties as defendants. Old Overton Club, Inc., filed an answer denying liability on March 26, 2010.

On April 7, 2010, Miller amended his complaint and substituted Liberty Park for fictitiously named defendant number 29. Liberty Park answered the amended complaint, denying liability and asserting numerous affirmative defenses. The parties conducted discovery. On April 13, 2010, Miller filed a motion to dismiss Old Over-ton Club, Inc., which the trial court subsequently granted on April 16, 2010.

On July 30, 2010, Miller amended his complaint a second time. In the second amended complaint, Miller added Brasfield & Gorrie, Inc. (“Brasfield & Gorrie”), and Williams Blaekstock Architects, P.C. (“Williams Blackstoek”), as defendants. Brasfield & Gorrie and Williams Black-stock answered the second amended complaint, denying liability and asserting affirmative defenses.

Liberty Park filed a motion for a summary judgment on November 19, 2010. In its motion for a summary judgment, Liberty Park argued that the gap between the fence frame and the clay-surfaced tennis court was not an unreasonably dangerous defect. Specifically, in a supporting affidavit, Liberty Park highlighted the fact that no injury similar to the one in this case had occurred in the 13½ years since the fence had been installed on the premises despite the fact that the court had been used continuously for that entire period. Miller filed an opposition to Liberty Park’s motion for a summary judgment on December 13, 2010. In his opposition, Miller argued that a claim of a defect to a fixture on a business owner’s premises coupled with a claim that the premises owner had failed to properly inspect or maintain the allegedly defective condition raised questions for a jury to resolve, pursuant to Alabama caselaw. Miller also attached his own affidavit and Liberty Parks’s maintenance invoices for the period when Duncan’s accident occurred.

Liberty Park responded to Miller’s opposition to its motion for a summary judgment on January 11, 2011, and attached an affidavit explaining the intended usage of the products listed on the maintenance records. On January 14, 2011, the trial court held a hearing regarding Liberty Park’s pending motion for a summary judgment. After conducting the hearing, the trial court entered a summary judgment in favor of Liberty Park on February 3, 2011. In its judgment, the trial court stated that Liberty Park had shifted the burden to Miller to present substantial evidence demonstrating that the gap between the fence frame and the clay-surfaced tennis court was an unreasonably dangerous defect and that Miller had failed to present substantial evidence demonstrating that this gap was indeed a defective condition. Accordingly, the trial court concluded, there was no genuine issue of material fact and Liberty Park was entitled to a judgment as a matter of law.

Miller filed a motion to alter, amend, or vacate the trial court’s judgment on March 4, 2011. The postjudgment motion was denied by operation of law. Miller timely appealed to the Alabama Supreme Court. The appeal was transferred to this court pursuant to Ala.Code 1975, § 12-2-7(6). Because the trial court had already entered summary judgments in favor of Brasfield & Gorrie and Williams Black-stock, see supra note 2, the summary judgment as to Miller’s claims against Liberty Park was a final judgment.

“In reviewing the disposition of a motion for summary judgment, ‘we utilize the same standard as the trial court in determining whether the evidence before [it] made out a genuine issue of material fact,’ Bussey v. John Deere Co., 531 So.2d 860, 862 (Ala.1988), and whether the movant was ‘entitled to a judgment as a matter of law.’ Wright v. Wright, 654 So.2d 542 (Ala.1995); Rule 56(c), Ala. R. Civ. P. When the movant makes a prima facie showing that there is no genuine issue of material fact, the burden shifts to the nonmovant to present substantial evidence creating such an issue. Bass v. SouthTrust Bank of Baldwin County, 538 So.2d 794, 797-98 (Ala.1989). Evidence is ‘substantial’ if it is 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.’ Wright, 654 So.2d at 543 (quoting West v. Founders Life Assurance Co. of Florida, 547 So.2d 870, 871 (Ala.1989)). Our review is further subject to the caveat that this Court must review the record in a light most favorable to the nonmovant and must resolve all reasonable doubts against the movant. Wilma Corp. v. Fleming Foods of Alabama, Inc., 613 So.2d 359 (Ala.1993); Hanners v. Balfour Guthrie, Inc., 564 So.2d 412, 413 (Ala.1990).”

Hobson v. American Cast Iron Pipe Co., 690 So.2d 341, 344 (Ala.1997).

On appeal, Miller argues that the trial court erred in entering a summary judgment in favor of Liberty Park on his negligence claim based on a premises-liability theory because, he says, the questions whether Liberty Park had notice of the alleged defect and whether Liberty Park failed to properly inspect and maintain the tennis court containing a defective fixture are questions for a jury to resolve, pursuant to Alabama law. Specifically, Miller argues that our supreme court’s holding in Mims v. Jack’s Restaurant, 565 So.2d 609 (Ala.1990), and this court’s reasoning in Edwards v. Intergraph Services Co., 4 So.3d 495 (Ala.Civ.App.2008), are applicable to the present case and, thus, that the trial court erred in entering a summary judgment.

It is well settled that “[t]he duty owed by a landowner to an injured party depends upon the status of the injured party in relation to the landowner’s land, i.e., is the injured party a trespasser, a licensee, or an invitee.” Galaxy Cable, Inc. v. Davis, 58 So.3d 93, 98 (Ala.2010) (footnote omitted). Although Liberty Park argued that Duncan was a licensee and not an invitee, the trial court considered Duncan to have been a business invitee of Liberty Park at the time of the injury for the purpose of addressing the summary-judgment motion, noting that the duty owed to an invitee is higher than the duty owed to a licensee. Id. Accordingly, for the purpose of reviewing the summary judgment, we too consider Duncan to have been an invitee.

The liability of a premises owner to an invitee is well established.

“‘A landowner owes an invitee the legal duty “to exercise reasonable care and diligence to keep the premises in a reasonably safe condition for the uses contemplated by the invitation, and to warn the invitee of known dangers, or dangers that ought to have been known, and of which the invitee was ignorant.” Lamson & Sessions Bolt Co. v. McCarty, 234 Ala. 60, at 62, 173 So. 388 (1937).’ ”

Ervin v. Excel Props., Inc., 831 So.2d 38, 41 (Ala.Civ.App.2001) (quoting Shelton v. Boston Fin., Inc., 638 So.2d 824, 825 (Ala.1994)).

However,

“ ‘[t]he owner of a premises ... is not an insurer of the safety of his invitees ..., and the principle of res ipsa loquitur is not applicable. There is no presumption of negligence which arises from the mere fact of an injury to an invitee.’ Tice v. Tice, 361 So.2d 1051, 1052 (Ala.1978). In order to overcome a defendant’s properly supported summary-judgment motion, the plaintiff bears the burden of presenting substantial evidence as to each disputed element of [his] claim. See Ex parte Atmore Community Hosp., 719 So.2d 1190 (Ala.1998); Mann v. Bank of Tallassee, 694 So.2d 1375 (Ala.Civ.App.1996).”

Ex parte Harold L. Martin Distrib. Co., 769 So.2d 313, 314 (Ala.2000).

“Generally, an invitee must show not only that he was injured as the result of a defective condition on the owner’s premises, but also that the owner knew or should have known of the defective condition.” Edwards, 4 So.3d at 502. However, as Miller argued in the trial court and as he argues on appeal, a showing of actual or constructive knowledge is not required at the summary-judgment stage in some special circumstances. Specifically, in Mims the supreme court stated as follows:

“[I]n cases where the alleged defect is a part of the premises (in this case, a loose threshold in the main entrance of a restaurant), once a plaintiff has made a prima facie showing that a defect in a part of the premises has caused an injury, then the question whether the defendant had actual or constructive notice of the defect will go to the jury, regardless of whether the plaintiff makes a prima facie showing that the defendant had or should have had notice of the defect at the time of the accident.”

565 So.2d at 610; see also Isbell v. Aztecas Mexican Grill, 78 So.3d 420, 425 (Ala.Civ.App.2011) (reversing a summary judgment in favor of the restaurant on the ground that the restaurant’s actual or constructive knowledge of an alleged defect in a booth that collapsed under restaurant patron was a question for a jury to resolve).

Additionally, this court noted in Edwards that an exception to the general requirement that a plaintiff must present substantial evidence at the summary-judgment stage demonstrating that a premises owner had actual or constructive notice of a dangerous condition applies when “the premises owner has failed to perform a reasonable inspection or maintenance of the premises to discover and remedy the defective condition.” 4 So.3d at 503.

In this case, the trial court found that Miller failed to present evidence indicating that the gap between the fence frame and clay-surfaced tennis court was an unreasonably dangerous defect.

Specifically, the trial court’s judgment states:

“In its submissions, [Liberty Park] shifted the burden to [Miller] to show that the condition causing [Duncan’s] injury was dangerous. Here the [c]ourt finds that [Miller] presented no evidence that the premises were ‘dangerous.’ The submissions show that the courts and the fence had been in place for over thirteen years and that no one had been injured on it before. There is no evidence, either through expert testimony or otherwise, to show that the fence violated some standard of care.
“Here [Miller] has failed to submit any evidence that the Old Overton premises were not in a reasonably safe condition. There is no evidence that Liberty Park knew or should have known of any dangerous condition of which it should have warned [Duncan].
“The mere fact that an unfortunate injury occurred, does not give rise to an inference that a dangerous condition existed. Ex parte Harold L. Martin Distrib. Co., 769 So.2d 313 (Ala.2000). There is no presumption of negligence which arises from the mere fact of an injury to an invitee.”

Liberty Park contends that summary judgment was appropriate because the judgment included a finding that the fence was not an unreasonably dangerous defect and, thus, that the exceptions noted in Mims and Edwards are inapplicable because those cases are contingent upon a finding that the premises contained a defective condition. We agree.

Initially, we note that the language of both Mims and Edwards, upon which Miller heavily relies, supports the contention that a plaintiff in a premises-liability action must present evidence that the condition of which it complains is defective. Specifically, Mims states: “[0]nce a 'plaintiff has made, a prima facie showing that a defect in a part of the premises has caused an injury, then the question whether the defendant had actual or constructive notice of the defect will go to the jury.” 565 So.2d at 610 (emphasis added). Additionally, Edwards states: “Generally, an invitee must show not only that he was injured as the result of a defective condition on the owner’s premises, but also that the owner knew or should have known of the defective condition.” 4 So.3d at 502 (emphasis added). Therefore, although these cases present exceptions to the general rule that a plaintiff must present evidence of actual or constructive knowledge of a defective condition at the summary-judgment stage in specific instances, these cases do not relieve a plaintiff of the requirement to present evidence of a defective condition at the summary-judgment stage.

Moreover, with regard to defective conditions in premises-liability cases, this court has stated:

“In Alabama, however, whether an elevation irregularity in a sidewalk, curb, or threshold constitutes an unreasonably dangerous condition or defect has, so far as we are able to tell, always been held to be an issue of fact when the plaintiff has presented evidence indicating that the irregularity creates a danger. See, e.g., Stephens v. City of Montgomery, 575 So.2d 1095 (Ala.1991); Mann v. Smith, 561 So.2d 1112 (Ala.1990); Bogue v. R & M Grocery, 553 So.2d 545 (Ala.1989); Waits v. Crown Dodge Chrysler-Plymouth, Inc., [770] So.2d [618] (Ala.Civ.App.1999); Williams v. Harold L. Martin Distrib. Co., Inc., [769] So.2d [316] (Ala.Civ.App.1999); Woodward v. Health Care Auth. of the City of Huntsville, 727 So.2d 814 (Ala.Civ.App.1998).
“In Stephens, the supreme court reversed a summary judgment for the City in a trip-and-fall case, holding that evidence of an uneven sidewalk, in which ‘one portion of the sidewalk ... was approximately one inch higher than another portion,’ 575 So.2d at 1096, was evidence of a defect in the sidewalk and created ‘a genuine issue of material fact, suitable for jury determination.’ Id. at 1097. In Mann, the supreme court also reversed a summary judgment in favor of the premises owner. The plaintiffs expert, an engineer, testified that the steps leading into the defendant’s business were defective because ‘[t]he top step was not level with the door jamb, but was slightly below the jamb so that someone entering the store had to step from the top step up to enter the store.’ 561 So.2d at 1114. The supreme court held that the plaintiffs had ‘established evidence from which a jury could find that a defect existed in the steps.’ Id.
“In Bogue, the supreme court reversed a summary judgment for the private premises owner in a slip-and-fall case. It held that the plaintiffs expert, a civil engineer, had presented sufficient evidence for a jury to determine whether the plaintiffs fall was caused by a defect in the premises. The engineer had testified that the fall was caused by a drop in elevation from the doorway of the store to the parking lot.
“In Waits, this court held that an architect’s testimony — that the raised threshold over which the plaintiff tripped at an automobile dealer’s service department was unsafe and dangerous for customers — presented ‘a genuine issue of material fact ... as to whether a defect existed.’ [770] So.2d at [620].... In Woodward, a visitor to a hospital emergency room tripped and fell on a curb in the hospital’s parking garage. The plaintiffs expert testified that a ‘level change,’ combined with the nighttime fighting conditions in the parking garage, *create[d] a hazard for persons traversing on foot from the ... parking garage to the emergency room,’ 727 So.2d at 817. The hospital did not argue that the place where the plaintiff fell was not a dangerous defect; it argued only that the defect was open and obvious. This court assumed the existence of a defect and framed the issue in terms of whether the defect was open and obvious, concluding that the expert’s testimony presented a jury question as [to] whether the defect was open and obvious.”

Howard v. Andy’s Store for Men, 757 So.2d 1208, 1211-12 (Ala.Civ.App.2000). Howard illustrates the necessity of presenting evidence indicating that an irregularity on the premises, such as the gap between the fence frame and the clay-surfaced tennis court in this case, is defective in order to create a genuine issue of material fact.

In this case, the trial court found that Liberty Park presented evidence indicating that the gap between the fence framing and the clay-surfaced tennis court was not defective or unreasonably dangerous. Therefore, the burden shifted to Miller to present substantial evidence demonstrating that the gap was indeed an unreasonably dangerous defect on the premises. However, the trial court clearly stated in its judgment that Miller had presented no such evidence, let alone substantial evidence, that the condition was dangerous.

Further, on appeal, Miller also fails to argue that the gap between the fence frame and the clay-surfaced tennis court is a defective condition; instead, he argues only that the questions whether Liberty Park had notice of the alleged defect and whether Liberty Park failed to properly inspect and maintain the tennis court containing an allegedly defective fixture are questions for a jury to resolve, pursuant to Alabama law. Thus, Miller has waived any argument as to the trial court’s holding that there was no defective condition on the premises. See Pardue v. Potter, 632 So.2d 470, 473 (Ala.1994) (“Issues not argued in the appellant’s brief are waived.”).

Accordingly, we conclude that the trial court did not err in entering summary judgment in favor of Liberty Park on the negligence claim based on a theory of premises liability; we therefore affirm the trial court’s judgment.

AFFIRMED.

THOMPSON, P.J., and PITTMAN, BRYAN, and MOORE, JJ., concur.

      . In addition to the premises-liability theory at issue, Miller alleged in an amended complaint that Liberty Park had been negligent in its design, construction, and creation of the fence around the tennis court, which he asserted was a dangerous condition. However, the trial court entered a summary judgment in favor of Liberty Park on this claim, and Miller did not argue this issue on appeal. Thus, we will not consider the propriety of the summary judgment on the negligent-design claim on appeal. See Pardue v. Potter, 632 So.2d 470, 473 (Ala.1994) (“Issues not argued in the appellant’s brief are waived.”).

      . On September 30, 2010, Williams Black-stock filed a motion for a summary judgment stating that all the alleged claims against it were barred by the applicable statute of limitations. Brasfield & Gorrie filed a motion for a summary judgment on October 15, 2010, stating that the claims asserted against it were barred by the statute of limitations. The trial court entered separate summary judgments in favor of both Williams Blackstoek and Bras-field & Gorrie and certified both judgments as final pursuant to Rule 54(b), Ala. R. Civ. P. Miller has not appealed the summary judgments entered in favor of Williams Blackstoek or Brasfield & Gorrie.

      . In its motion for a summary judgment, Liberty Park argued that the gap between the fence frame and clay-surfaced tennis court is not an unreasonably dangerous defect because, in the 13½ years since the completion of the tennis courts and the installation of the fencing, not a single injury had occurred involving a tennis player being hurt when his or her arm was caught under the fencing, despite the fact that the courts were constantly used during that period. See Robison v. Gantt, 673 So.2d 441 (Ala.Civ.App.1995) (affirming summary judgment for premises owner when the plaintiff failed to produce substantial evidence demonstrating that the premises owner knew or had reason to know that there was a danger posed by snakes near the apartment-complex pool when no one had ever been bitten by a snake in the pool area before); Butler v. AAA Warehousing & Moving Co., 686 So.2d 291 (Ala.Civ.App.1996) (affirming summary judgment for company that had presented evidence indicating that reviewing stand, which plaintiff claimed was unreasonably dangerous as erected, had been set up in the same manner with the allegedly dangerous 5-inch vertical gaps between levels for 25 years without injury to a parade patron); and Edwards, supra (affirming summary judgment on design-defect claim when the allegedly defective flooring had been used for over 14 years without injury). Liberty Park also submitted the affidavit of Samuel G. Lowrey III, the project manager for Liberty Park, to further support its assertion that the fencing was not a defect of the premises.


source: Caselaw Access Project

author: THOMAS, Judge. BRYAN, Judge,

license: Public Domain

text:
    ALABAMA MEDICAID AGENCY v. Betty Jane KERBY, by and through her next friend, Brenda Montgomery.
    2100874.
    Court of Civil Appeals of Alabama.
    Oct. 28, 2011.

      Luther Strange, atty. gen.; Courtney W. Tarver, deputy atty. gen. and gen. counsel, Alabama Department of Mental Health; and Stephanie McGee Azar, gen. counsel, Alabama Medicaid Agency, for appellant.
    Stephen F. Brown of Harris, Caddell & Shanks, P.C., Decatur, for appellee.
   THOMAS, Judge.

In 2008, Brenda Montgomery, the cousin of Betty Jane Kerby, sought services for Kerby under the Alabama Mental Retardation Home and Community Based Waiver program (“waiver services”) from the Alabama Medicaid Agency (“the Agency”). The waiver services are administered by the Alabama Department of Mental Health (“the Department”) and are provided to persons suffering from an intellectual disability. The Department denied Montgomery’s request for waiver services for Kerby, and Montgomery sought review from the Associate Commissioner for the Division of Mental Retardation Services of the Department, who, at that time, was Patricia Martin. Martin upheld the denial of waiver services.

Montgomery then sought a fair hearing from the Agency, which was held before an administrative law judge (“ALJ”). Although the ALJ determined that Kerby qualified for waiver services and recommended that the denial of waiver services be overturned, the Agency’s Commissioner, Carol Steckel, disagreed and upheld the denial of Montgomery’s request for waiver services for Kerby. Montgomery sought judicial review of Commissioner Steckel’s denial of waiver services, and the circuit court overturned the Commissioner’s decision, concluding that it was not supported by the evidence provided to the Agency and the ALJ and that Commissioner Steckel’s decision to deny waiver services was arbitrary and capricious. The Agency appeals.

Under the Alabama Administrative Procedure Act (“AAPA”), Ala.Code 1975, § 40-22-1 et seq., review of the Agency’s administrative decision to deny waiver services to Kerby is limited. See Ala.Code 1975, § 41-22-20(k).

“Section 41-22-20(k) provides that in the circuit court ‘[t]he agency order shall be taken as prima facie just and reasonable and the court shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact, except where otherwise authorized by statute.’ Under this limited standard of review, the circuit court must give the Agency’s determination of noneligibility a presumption of correctness. See Benton v. Alabama Board of Medical Examiners, 467 So.2d 234 (Ala.1985).
“In fact, under § 41-22-20(k) the circuit court may reverse or modify an agency’s decision only if it determines that the agency action is due to be set aside or modified under standards set forth in appeal or review statutes applicable to the agency (not applicable in this case) or ‘if substantial rights of the petitioner have been prejudiced because the agency action is:
“‘(1) In violation of constitutional or statutory provisions;
“ ‘(2) In excess of the statutory authority of the agency;
“ ‘(3) In violation of any pertinent agency rule;
“ ‘(4) Made upon unlawful procedure;
“ ‘(5) Affected by other error of law;
“ ‘(6) Clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or
“ ‘(7) Unreasonable, arbitrary or capricious or characterized by an abuse of discretion or a clearly unwarranted exercise of discretion.’
“This court has held that § 41-22-20(k) ‘recognizes the general rule that judicial review of administrative decisions is limited in scope to whether the order is supported by substantial evidence, whether the agency’s decision is reasonable and not arbitrary, and whether the agency acted within its power conferred upon it by law and the constitution.’ Ferlisi v. Alabama Medicaid Agency, 481 So.2d 400 (Ala.Civ.App.1985).”

Alabama Medicaid Agency v. Norred, 497 So.2d 176, 176-77 (Ala.Civ.App.1986). In addition, “an agency’s interpretation of its own regulation must stand if it is reasonable, even though it may not appear as reasonable as some other interpretation.” Ferlisi v. Alabama Medicaid Agency, 481 So.2d 400, 403 (Ala.Civ.App.1985).

At issue in this case is the eligibility of Kerby for waiver services to be provided to intellectually disabled persons under the waiver-services program, as described in Ala. Admin. Code (Alabama Medicaid Agency), Rule 560-X-35-.01 et seq. The qualifications for waiver services are found in Ala. Admin. Code (Dep’t of Mental Health), Rule 580-5-30-.02(3)(a). That administrative rule reads:

“(3) State-Operated Developmental Center. Individuals with mental retardation who reside in the State of Alabama, and who meet the criteria for admission to a developmental center, will be admitted for evaluation for services (or as required by a Court Order), or may be admitted for short-term respite services or crisis stabilization services.
“(a) Admission Criteria: Individuals who meet the following specific criteria may be eligible for residence in the developmental center/intermediate Care Facility for Persons with Mental Retardation (ICF/MR) for the provision of identified services and supports:
“1. The individual has significantly sub-average general intellectual functioning (IQ lower than 70 on a standardized intelligence test), existing concurrently with deficits in adaptive behavior that manifested in the developmental period (before the age of 18 years, for mental retardation).
“2. Community-based services, both generic and specialized, can not afford the person adequate and appropriate services for habilitation.
“3. Residence in a state-operated developmental center is the least restrictive environment adequate for the person’s habilitation at the time.
“4. In order for an individual to be admitted to ICF/MR Active Treatment Services the individual must meet the criteria stated in # 1 through 3 above. Additionally, the individual will benefit from specialized or generic training, treatment, health and related services in three or more of the following areas of life activity: Self-care, Receptive and Expressive Language, Learning, Self Direction, Mobility, and Capacity for Independent Living. These services are directed towards:
“(i) the acquisition of behaviors necessary for the individual to function with as much self-determination and independence as capable; and/or
“(ii) the prevention of regression or loss of current optimal functional status.”

Commissioner Steckel determined that, despite the ALJ’s recommendation otherwise, Kerby did not qualify for waiver services under the requirements stated in Rule 580-5-30-.02(3)(a)(l).

The record contains both documentary and testimonial evidence establishing the following facts. Kerby was born prematurely in Arkansas in November 1946. Kerby moved to Alabama with her mother when Kerby was approximately 14 years old (around 1960). According to the testimony of Montgomery and another relative, Carolyn Turner, at the fair hearing before the ALJ, Kerby had never been “normal.” Kerby did not complete high school, she does not have a driver’s license, and she has never lived independently. Kerby’s parents are deceased, and she had been living for the last several years either with relatives, who had assisted her and had provided for her, or in a group home for the intellectually disabled. In 1973, when Kerby was 26 years old, the Morgan Probate Court determined that Kerby was “of unsound mind.” A cousin, Hadley Key, was appointed as Kerby’s guardian.

Medical records indicate that Kerby’s physician, Dr. S. Nixon Gillespie, believes that Kerby suffers from an intellectual disability. In a letter written on Kerby’s behalf, Dr. Gillespie surmises that Kerby “[m]ost likely ... did have a brain injury from the premature birth and probably complications of health care and mother’s prenatal care at the time” and then concludes that “[i]t is obvious that [Kerby] did suffer brain injury from birth, resulting in [an intellectual disability].... ” In a medical note, Dr. Gillespie indicates that Ker-by’s history, including her premature birth and her educational history of failing grades, “indicates absolutely that [Kerby] was [intellectually disabled] and not demented .... ” Other medical notes further indicate that Dr. Gillespie has determined that Kerby suffers from an intellectual disability.

Anecdotal evidence indicating that Ker-by’s alleged intellectual disability existed before Kerby’s 18th birthday was provided by the testimony of Montgomery and Turner. Their testimony revealed that Kerby did not have friends or have social interactions with peers throughout her teenage years. Montgomery noted that Kerby, as far as Montgomery knew, had never given herself medication and could not handle money without supervision. Montgomery said that she had never received a telephone call from Kerby and that she doubted Kerby could remember a telephone number; Montgomery did admit that she did not know if Kerby had ever used a telephone independently or if Kerby could do so. According to Montgomery, Kerby can perform basic hygiene tasks like bathing; however, Montgomery mentioned that Kerby could not cook. Parts of Montgomery’s testimony concerning Kerby’s abilities are difficult to follow because of apparent issues with the audio recording of the fair hearing.

Turner testified that, when Kerby was younger and had visited in Alabama, Ker-by had acted “like a spoiled brat.” Turner also recalled that Kerby had made poor grades while in school; Turner said that when Kerby’s mother had attempted to assist Kerby with homework, Kerby “did not seem to have a clue.” According to Turner, Kerby’s mother picked out Ker-by’s clothes for her. A letter from Turner also appears in the record. In that letter, Turner explained that her memories of Kerby during her teenage years were that Kerby did not develop close friendships or exhibit interest in typical teenage pursuits, like “social activities, career interests, fashionable clothes, make up, hairstyles and boys.” Turner further noted that Kerby’s gait was similar to that of a young child and that her handwriting had not developed beyond that of a five-year-old child.

The evidence in the record regarding Kerby’s schooling indicates that Kerby was provided “special classes” at Austin High School in the 1963-64 and 1964-65 school years, when she was approximately 17 and 18 years old. This school record also indicates that she was administered an IQ test in July 1962 on which she scored 67. Written on the school record beside her classes for the 1963-64 school year is the phrase “High Elementary Level.” The school record reflects that Kerby earned a mix of “A,” “B,” and “C” grades for her classes both in the 1963-64 school year and the 1964-65 school year. Notations on the same school record appear to indicate that Kerby scored well below her grade level on achievement tests given in September 1963 and in May 1964. The second page of that school record contains a statement that Kerby “needs help for mental illness!” A second school record that does not contain any features identifying the school but which indicates that it reflects Kerby’s 1961-62 school year shows that Kerby failed most of her classes that year, earning only 5 “D” grades and 1 “C” grade out of the 16 grades received. The notation “2nd year” appears on that record; whether that denotes that Kerby was repeating course work or not is unclear, because the same school record contains a column labeled “Repeat Work” that contains no recorded information.

In 1995, when Kerby was 48 years old, she took another IQ test when she sought placement in the Bill Stewart Center in Moulton. According to a report authored by Joel E. Loftin, who administered the IQ test and evaluated Kerby, Kerby’s full-scale IQ was 70. Loftin also noted in his report that Kerby had “significant weaknesses in adaptive functioning relative to her age peers in the community.” Loftin concluded that Kerby “would be classified as functioning in the Borderline to Mild [intellectual disability] range of intellectual functioning.” Loftin recommended vocational-rehabilitation services for Kerby and noted that “attention should be given to development of independent living skills and work activity skills along with development of better socialization and interpersonal skills.”

LaGretta Ratliff, the Director of Community Services at the Department, testified at the fair hearing before the ALJ. Ratliff testified that she had denied waiver services to Kerby based on the fact that Kerby had scored 70 on an IQ test and was therefore not qualified to receive waiver services. According to Ratliff, had Kerby never scored 70 on an IQ test, Ratliff would have approved Kerby for waiver services. When asked whether the fact that Kerby scored a 62 on an IQ test administered in 2009 would change Ratliffs decision, Ratliff answered in the negative, explaining that the score of 70 indicated that, at some point, Kerby had functioned outside of the intellectual-disability range.

Dr. Susan Ford, the Director of Psychological and Behavioral Services for the Division of Intellectual Disability at the Department, also testified before the ALJ. Dr. Ford’s duties include reviewing appeals from the denial of waiver services. Dr. Ford explained that she had concluded that Kerby was properly denied waiver services. According to Dr. Ford, she had reviewed all the documentation originally provided to the Agency and had reviewed later submissions by Kerby’s counsel to determine whether those submissions might impact the decision to deny Kerby waiver services; Dr. Ford reviewed and assessed Kerby’s eligibility three times during the appeal process.

Dr. Ford said that she based her conclusion, in part, on the fact that Kerby had once scored 70 on an IQ test. Dr. Ford explained that a score on an IQ test may, at times, be lower than a test subject’s true ability because of other factors affecting the test subject at the time of the test; however, she said, an IQ test cannot reflect that a test subject has more ability than the test subject actually has. Dr. Ford admitted that Kerby’s score of 70 on an IQ test may have been affected by services she may have received throughout her life and that the lower score Kerby had received earlier in life might better reflect her true intelligence level; however, Dr. Ford did not agree that the fact that other, lower scores existed qualified Kerby for waiver services. According to Dr. Ford, a person receiving waiver services would be reevaluated and could be disqualified for services if he or she scored 70 on an IQ test. Although she admitted that scores on an IQ test had a +/- 3 standard error of measurement, Dr. Ford stated that she was bound by the Department’s administrative rules to consider Kerby’s score of 70 on the 1995 IQ test to determine her eligibility for waiver services.

Dr. Ford further explained that other information regarding Kerby’s claimed intellectual disability was lacking in the documentation that she had reviewed. According to Dr. Ford, the 1962 IQ test score of 67 noted on Kerby’s school records did meet the requirement of “significantly sub-average general intellectual functioning.” However, Dr. Ford noted, although Kerby had scored a 67 on the IQ test, she had never, as far as the documentation reflected, been diagnosed as intellectually disabled. This, Dr. Ford stated, “was part of the problem” leading to the denial of waiver services. Although the record reflected that Kerby had never been “normal,” that she had poor grades and had been placed in special classes in school, and that she had never lived independently, Dr. Ford testified that the information available was not sufficient for her to determine the actual level of adaptive functioning that Kerby had had before she turned 18 years old. According to Dr. Ford, the information listed deficits in Kerby’s abilities but did not establish the skills that Kerby did have. Without information that could provide a solid basis for determining Kerby’s adaptive-functioning level before age 18, Dr. Ford explained, she was unable to determine whether services that had been provided to Kerby had increased her IQ score over time. Thus, she testified, she had concluded that Ker-by did not qualify for waiver services under Rule 580-5-30-.02(3)(a).

The record contains other documents, including letters to Montgomery conveying and explaining the Department’s denial and memoranda from Dr. Ford to Department and/or Agency personnel outlining her recommendations after her review of documentation relating to Kerby provided to the Department. In a November 2008 letter, Patricia Martin, who was then Associate Commissioner for the Division of Mental Retardation Services of the Department, explained the various reasons why the Department had determined that Kerby was not eligible for waiver services. First, Martin set out the criteria for waiver services: “(1) an IQ score below 70; (2) significant deficits in adaptive functioning skills measured by a standardized tool; AND (3) evidence that both 1 & 2 were present prior to the person’s 18th birthday.” Martin stated that the primary reason for the denial of waiver services to Kerby was the fact that Kerby had scored 70 on an IQ test, which, Martin stated, “eliminates her for consideration for services under the waiver.” Martin also mentioned that the documentation provided to the Department contained a letter requesting an assessment that stated that Kerby “possesses all her self-care skills,” which, according to Martin, “might suggest that [the presence of] significant deficits in multiple areas of adaptive functioning were questionable as well.” Finally, Martin stated, the documentation provided “insufficient evidence ... to verify that [Kerby] would have met criteria for a diagnosis of [intellectual disability] prior to the age of 18 years.” In the conclusion of her letter, Martin further explained:

“Although [Kerby] may have been given a diagnosis of [intellectual disability] early in life, that does not guarantee that she meets the strict eligibility criteria required. Not everyone with [an intellectual disability] qualifies for services under the Waiver in Alabama because there must also be evidence that, except for those services, the person would have to be institutionalized in the near future. The report issued in 1995 indicated that [Kerby] was estimated to be functioning within the Borderline to Mild [intellectual disability] range of intelligence. Persons functioning in the Borderline range of intelligence are not considered to have a diagnosis of [intellectual disability] and those with mild [intellectual disabilities] do not typically require an institutional level of care. Therefore, they would most likely not qualify for [intellectual disability] waiver services.”

After the conclusion of the fair hearing before the ALJ, the ALJ made a recommendation that the Agency overturn the Department’s denial of waiver services to Kerby. In his written recommendation, the ALJ opined that the record evidence “substantiates] [Kerby’s] right to the waiver sought.” The ALJ stated that he relied on the school record indicating that Kerby had scored 67 on an IQ test administered before the age of 18 and on the testimony from Montgomery and Turner regarding Kerby’s lack of adaptive skills in order to reach his conclusion that Kerby met the eligibility requirements for waiver services.

In her letter rejecting the ALJ’s recommendation, Commissioner Steckel noted that Kerby had scored 70 on an IQ test, which, Commissioner Steckel stated, disqualified her for waiver services. Commissioner Steckel also noted that she had found Dr. Ford’s testimony and opinions persuasive on the matter of Kerby’s eligibility for waiver services. Finally, Commissioner Steckel pointed out that Dr. Ford had explained that the waiver-services requirements were more stringent than diagnostic criteria, indicating that, even though a person might be diagnosed with an intellectual disability, that person might not qualify for waiver services if that person were to score 70 or above on an IQ test. Based on her review of the testimony and evidence before the ALJ, Commissioner Steckel upheld the Department’s original decision denying waiver services to Kerby.

As noted above, Montgomery, on Ker-by’s behalf, sought judicial review of the Agency’s denial of waiver services to Ker-by in the Morgan Circuit Court. The circuit court, after considering the administrative record and submissions by both parties, entered a judgment ordering that the Agency provide waiver services to Ker-by. In support of its judgment, the circuit court found fault with the Commissioner Steckel’s reliance on the testimony and opinion of Dr. Ford and her rejection of the ALJ’s findings and credibility determinations. The concluding paragraph of the circuit court’s judgment reads:

“The Court concludes that the Agency Commissioner rejected the findings and recommendations of the Administrative Law Judge in favor of the written opinions of one witness, Dr. Susan Ford. The Commissioner in essence ignored all other evidence, including certain testimony that was elicited from Dr. Ford during the administrative hearing, and overruled the credibility determinations that were made by the Administrative Law Judge. The Court is satisfied that the Commissioner’s rejection of the findings of the Administrative Law Judge was done without substantial justification, that the substantial rights of Ms. Kerby were prejudiced, that the Commissioner adopted legal opinions or conclusions that are not part of the regulations governing eligibility for [waiver] services and that her decision denying eligibility for Ms. Kerby under the [waiver-services] program was not substantially justified and was unreasonable, arbitrary or capricious.”

From that judgment, the Agency appeals.

First, the Agency argues that the circuit court erred when it overruled Commissioner Steckel’s denial of waiver services to Kerby in light of the deference to be afforded the Agency’s determination. The Agency contends that it properly interpreted and applied the criteria for waiver services to Kerby and that, based on a review of all the evidence as examined by the expert employed by the Department, Dr. Ford, Kerby was not eligible for waiver services. Montgomery, on the other hand, argues that the evidence before the ALJ established “unequivocally” that Ker-by was eligible for waiver services and that Commissioner Steckel’s denial of those services was unsupported by the evidence and was arbitrary and capricious.

This court, like the circuit court, is required to begin with the presumption that the Agency decision is just and reasonable. Norred, 497 So.2d at 176-77. Our review of the circuit court’s judgment raises questions regarding the circuit court’s application of this standard of review. The circuit court appears to give more deference to the ALJ’s determination and to fault Commissioner Steckel for reweighing the evidence at the fair hearing to support her decision to deny waiver services to Kerby. However, it is the decision of the Agency, acting through Commissioner Steckel, that is due deference, not the recommendation of the ALJ. “It is the Agency’s commissioner who has the authority to make the final determination for the Agency, and the hearing officer’s recommendations are in no way binding upon the commissioner.” Alabama Medicaid Agency v. Beverly Enters., 521 So.2d 1329, 1333 (Ala.Civ.App.1987). As this court explained in Norred:

“For aught that appears, the circuit court did not apply the AAPA’s limited standard of review in this ease, but, rather, substituted its judgment for that of the Agency as to the weight to be given the evidence presented at the administrative hearing. In this regard, we note that the findings and recommendations of the administrative hearing officer, with which the circuit court concurred, were not binding upon the Agency. Rather, it is the Agency’s commissioner who makes the final determination of Medicaid eligibility based upon the evidence presented at the administrative hearing. Rule 560-X-3-.01(2), Alabama Medicaid Agency Administrative Code.”

Norred, 497 So.2d at 177. By favoring the ALJ’s findings and indicating that the weight given to the evidence by the ALJ was improperly ignored by Commissioner Steckel, the circuit court failed to apply the appropriate standard of review to the Agency’s decision.

However, the circuit court also determined that “the Commissioner adopted legal opinions or conclusions that are not part of the regulations governing eligibility for [waiver] services.” In another portion of its judgment, the circuit court explained that it had concluded that Dr. Ford gave legal opinions that the “[w]aiver eligibility requirement is more stringent than diagnostic criteria” and that “if a person obtains an IQ score of 70 or higher at any point, the person is determined to be ... ineligible for [wjaiver services even if there have been other IQ scores that were below 70.” The circuit court went on to state that, based on its review of the Agency’s brief and the applicable administrative rules, no law supported Dr. Ford’s “legal” opinions. The circuit court explained that it appeared to the court that the diagnostic criteria for intellectual disability and the eligibility criteria for waiver services were “parallel.” In conclusion, the circuit court stated that “Dr. Ford’s opinion that an IQ score of 70 or higher at any point disqualifies a person for [waiver services] may be a professional rule of thumb, but it does not have the force of law.”

The circuit court further determined that the Agency was misinterpreting the first criterion for waiver-services eligibility by failing to focus on the presently existing state of intellectual functioning. The circuit court, using the principle that words in a regulation should be given their plain, ordinary, and commonly understood meaning, see Beverly Enters., 521 So.2d at 1332 (“The language used in an administrative regulation should be given its natural, plain, ordinary, and commonly understood meaning, just as language in a statute.”), concluded that the use of the word “has” in the applicable administrative rule required the Agency to consider only the most recent evidence regarding Kerby’s IQ and not the evidence from 1995 establishing that Kerby had scored 70 on an IQ test. See Rule 580-5-30-.2(3)(a)(l) (stating, in part, that to qualify for waiver services proof must be presented that “[t]he individual has significantly sub-average general intellectual functioning (IQ lower than 70 on a standardized intelligence test)”). Because Kerby had scored 62 on the most recent IQ test administered to her in 2009, the circuit court reasoned, Kerby met the first part of the first criterion for waiver services. Although the circuit court’s attempt to apply the principles of statutory construction to the language of Rule 580-5-30-.2(3)(a)(l), is understandable, we cannot agree that the circuit court was permitted to reject the Agency’s reasonable interpretation of the criteria for waiver services set out in the administrative rule governing eligibility for those services.

Again, it appears that the circuit court misunderstands both the appropriate standard of review and the well settled principle that “an agency’s interpretation of its own regulation must stand if it is reasonable, even though it may not appear as reasonable as some other interpretation.” Ferlisi, 481 So.2d at 403. The interpretation of the Department’s and the Agency’s governing criteria was explained by Martin in her letter to Montgomery regarding the denial of waiver services, in Dr. Ford’s memorandum, and in both Ratliffs testimony and Dr. Ford’s testimony at the fair hearing before the ALJ. The consistent interpretation of the waiver-services criteria advanced by the Department and the Agency is that a person must have “(1) an IQ score below 70; (2) significant deficits in adaptive functioning skills measured by a standardized tool; AND (3) evidence that both 1 & 2 were present prior to the person’s 18th birthday.” Both Ratliff and Dr. Ford explained that a person receiving waiver services would be reevaluated and could be disqualified for services if that person scored 70 or higher on an IQ test.

The Department’s and the Agency’s interpretation of the criteria is supported by the fact that there is no mandated federal criteria for provision of services to the intellectually disabled. Alabama is permitted to decline to offer services for the intellectually disabled. King v. Sullivan, 776 F.Supp. 645, 651 (D.R.I.1991) (citing 42 U.S.C. §§ 1396a(a)(10)(C)(iv) & 1396a(a)(31) (1988)) (“A participating state has the option not to offer ICF-MR [intermediate care for persons with mental retardation] services at all.”). Alabama is also permitted “to choose the proper mix of amount, scope, and duration limitations on coverage, as long as care and services are provided in ‘the best interests of the recipients.’ ” Alexander v. Choate, 469 U.S. 287, 303, 105 S.Ct. 712, 83 L.Ed.2d 661 (1985) (quoting 42 U.S.C. § 1396a(a)(19)); see also Sullivan, 776 F.Supp. at 651 (“If a state includes ICF-MR [intermediate care for persons with mental retardation] services in its State Plan, as Rhode Island has done, then the state is free to set which level of ICF-MR care it will offer above the minimal requirements of 42 U.S.C. §§ 1396a(a)(10)(C)(iv).”).

No evidence was presented indicating that the Department’s and the Agency’s interpretation of the eligibility criteria was unreasonable or that it contradicted any other interpretation of the same or similar criteria. The Department’s and the Agency’s administrative rules have the force of law, and the reasonable interpretation of those regulations by those officials entrusted with applying them are not mere “professional rule[s] of thumb” and are, in fact, the law. Ex parte Wilbanks Health Care Servs., Inc., 986 So.2d 422, 424 (Ala.2007) (“ ‘Rules, regulations, and general orders of administrative authorities pursuant to powers delegated to them have the force and effect of laws when they are of statewide application....’” (quoting Hand v. State Dep’t of Human Res., 548 So.2d 171, 173 (Ala.Civ.App.1988))). Therefore, the circuit court was not permitted to supplant the Department’s and the Agency’s interpretation of the criteria for waiver services with its own interpretation.

The Agency is the agency to which decisions regarding eligibility for waiver services are ultimately entrusted. See Ala. Code 1975, § 22-6-7 (“The Medicaid Agency of the State of Alabama [is] the single state agency charged with responsibility for administering the Alabama Medicaid Program.... ”). The record contains no evidence indicating that the Department’s and the Agency’s interpretation of Rule 580-5-30-.02(3)(a) is unreasonable, and the circuit court was not free to interpret that rule differently. However, we must still consider whether Commissioner Steckel’s decision to uphold the denial of waiver services to Kerby was without substantial justification, arbitrary, or capricious. We have explained that, even in light of the fact that the findings of the ALJ are not binding on the commissioner, “[i]n making [a] final determination, however, the commissioner’s discretion is not unbridled. She must have some reasonable justification for her determination or base it upon adequate principles or fixed standards so that it will not be arbitrary or capricious.” Beverly Enters., 521 So.2d at 1333.

Based on the evidence of record, Commissioner Steckel’s decision to uphold the denial of waiver services to Kerby is supported by the Department’s and the Agency’s interpretation of Rule 580-5-30-.02(3)(a) and the application of the criteria set out in that rule to Kerby. Therefore, Commissioner Steckel’s decision is not without substantial justification, arbitrary, or capricious. The determinations of Dr. Ford, Ratliff, Martin, and Commissioner Steckel were consistent with the Department’s and the Agency’s interpretation of the criteria set out in the applicable administrative rule. Dr. Ford testified that, based on all the documentation she was provided, she had determined that Kerby had scored 70 on an IQ test, indicating that Kerby had, in fact, that level of intelligence. Dr. Ford also noted that the evidence regarding Kerby’s adaptive-functioning skills before the age of 18 was not developed enough for her to conclude that Kerby suffered from an intellectual disability before she turned 18. Because of these facts, Dr. Ford concluded, Kerby was not entitled to waiver services. Dr. Ford’s detailed explanation of the issues she encountered when assessing Kerb/s eligibility and her testimony that she reviewed information pertaining to Kerby on three occasions indicates that sufficient consideration was given to Kerby’s eligibility. Commissioner Steckel was entitled to rely on Dr. Ford’s analysis of the eligibility criteria and Dr. Ford’s decision regarding whether Kerby met those criteria; the commissioner’s decision to do so is in no way arbitrary or capricious. Accordingly, we reverse the judgment of the circuit court and remand the cause for proceedings consistent with this opinion.

REVERSED AND REMANDED WITH INSTRUCTIONS.

THOMPSON, P.J., and PITTMAN, J., concur.

BRYAN, J., concurs specially, with writing, which MOORE, J., joins.

BRYAN, Judge,

concurring specially.

Given the deferential standard of review in this case, I must conclude that the circuit court erred in reversing the decision by the Alabama Medicaid Agency (“the Agency”) to deny Betty Jane Kerby waiver services. However, this is an unfortunate result. Evidence indicates that currently Kerby cannot independently function and that she could greatly benefit from the Agency’s waiver services. I believe that the Agency could have interpret-* ed its rules and exercised its discretion to grant Kerby and any similarly situated applicants waiver services; unfortunately it has not. Consequently, this is a sad day for Kerby and others like her. However, because of the deference due the Agency’s interpretation, I am bound to concur.

MOORE, J., concurs.

      . Although most of the statutes and administrative rules governing the Alabama Department of Mental Health use the terms "mentally retarded” or "mental retardation,” the Department is in the process of changing the terminology in the statutes and the rules to "people with an intellectual disability” or "intellectual disability.” See Ala.Code 1975, § 22-50-2.1(d). Thus, we will use the term "intellectual disability” or appropriate phrases to refer to the condition formerly referred to as "mental retardation.”


author: THOMPSON, Presiding Judge.

text:
    Robert MCDANIEL and Shirley McDaniel v. HARLEYSVILLE MUTUAL INSURANCE COMPANY.
    2100622.
    Court of Civil Appeals of Alabama.
    Oct. 28, 2011.

      H. Arthur Edge III and Joseph H. McClure III of H. Arthur Edge, P.C., Birmingham, for appellants.
    James M. Smith of Stockham, Carroll & Smith, P.C., Birmingham, for appellee.
   On Application for Rehearing

THOMPSON, Presiding Judge.

The opinion of August 12, 2011, is withdrawn, and the following is substituted therefor.

Robert McDaniel and Shirley McDaniel (“the McDaniels”) appeal from a judgment entered by the Madison Circuit Court in favor of Harleysville Mutual Insurance Company (“Harleysville”). For the reasons stated herein, we reverse that judgment and remand the cause for further proceedings.

On August 31, 2010, the McDaniels filed an action against Harleysville and Brian Homes, Inc. (“Brian Homes”). They alleged that they had entered into a contract with Brian Homes for the construction of a house and that, in 2002, they and others had filed an action against Brian Homes asserting, among other things, negligence, breach of warranty, breach of contract, and fraud (“the 2002 action”). The McDaniels asserted that, at the time of the events giving rise to their claims in the 2002 action, Brian Homes was covered by a commercial-general-liability insurance policy that had been issued by Harleysville and that Harleysville had provided a defense for Brian Homes in the 2002 action. They asserted that, on November 20, 2008, a judgment had been entered in their favor in the amount of $82,000 against Brian Homes, after which Harleysville disclaimed liability. The McDaniels stated that neither Brian Homes nor Harleysville had satisfied the judgment, and they asserted a claim pursuant to § 27-23-2, Ala. Code 1975, which provides:

“Upon the recovery of a final judgment against any person, firm, or corporation by any person, including administrators or executors, for loss or damage on account of bodily injury, or death or for loss or damage to property, if the defendant in such action was insured against the loss or damage at the time when the right of action arose, the judgment creditor shall be entitled to have the insurance money provided for in the contract of insurance between the insurer and the defendant applied to the satisfaction of the judgment, and if the judgment is not satisfied within 30 days after the date when it is entered, the judgment creditor may proceed against the defendant and the insurer to reach and apply the insurance money to the satisfaction of the judgment.”

On October 29, 2010, Harleysville filed a motion to dismiss pursuant to Rule 12(b), Ala. R. Civ. P. In its motion, Har-leysville stated that, in late 2008, it had filed a declaratory-judgment action (“the federal-court action”) against Brian Homes in the United States District Court for the Northern District of Alabama, less than a month before the entry of the jury verdict in favor of the McDan-iels in the 2002 action. Harleysville stated that, in the federal-court action, it had obtained a default judgment against Brian Homes declaring that there was no insurance coverage available for the claims that had been made against Brian Homes in the 2002 action and that Harleysville did not owe a duty to indemnify Brian Homes for the judgment that had been entered in favor of the McDaniels in the 2002 action. Harleysville argued that, because there had been a judicial determination that it had no duty to indemnify Brian Homes, any liability it could have had to the McDaniels had been extinguished. In effect, Harleysville was asserting the affirmative defense of collateral estoppel, which is defined as “ ‘[a]n affirmative defense barring a party from relitigating an issue determined against that party in an earlier action, even if the second action differs significantly from the first one.’” Bowers v. Wal-Mart Stores, Inc., 827 So.2d 63, 67 n. 2 (Ala.2001) (quoting Black’s Law Dictionary 256 (7th ed.1999)). Harleysville attached to its motion a copy of the complaint it had filed in the federal-court action, a copy of its amendment to that complaint, a copy of the federal court’s findings and conclusions on Harleysville’s motion for a default judgment, and a copy of the federal court’s default judgment.

On November 16, 2010, the McDaniels filed a response to the motion to dismiss. They pointed out that, in the default judgment in the federal-court action, the trial judge had included a footnote that read, “Of course, this court’s declaration does not prejudice the rights of Robert and Shirley McDaniel, or any other parties who have an interest that would be affected by this declaration, as they are not parties to this proceeding. See Ala.Code § 6-6-221 (1975).” Thus, the McDaniels argued, the declaratory judgment issued by the federal court was not binding on them and Harleysville’s motion was due to be denied. Harleysville responded that, under § 27-28-2, the McDaniels were deemed to step into the shoes of Brian Homes in attempting to collect their judgment and that, as a result, the federal court’s determination that Brian Homes had no insurance coverage for the claims that had been brought against Brian Homes foreclosed the McDaniels’ claim against Harleysville.

On December 20, 2010, the trial court entered the following judgment:

“This Court is in receipt of the Motion to Dismiss filed on behalf of [Harleys-ville], requesting that this case be dismissed with prejudice pursuant to Rule 12 of the Alabama Rules of Civil Procedure. Further, this Court conducted a hearing on said Motion on December 17, 2010. Counsel for Harleysville was present but counsel for [the McDaniels] did not appear. After due consideration, Harleysville’s Motion to Dismiss is hereby GRANTED and this case is dismissed with prejudice, costs taxed as paid.”

The McDaniels filed a motion to alter, amend, or vacate the judgment, which, on February 14, 2011, the trial court denied as to Harleysville but granted as to Brian Homes. The trial court reinstated the McDaniels’ action as to Brian Homes and directed the McDaniels to apply for a default judgment against Brian Homes no later than March 15, 2011.

On March 15, 2011, the McDaniels applied for an entry of default against Brian Homes. On March 21, 2011, the circuit clerk noted the entry of default against Brian Homes on the face of the McDaniels’ application. On March 28, 2011, the McDaniels filed a notice of appeal to our supreme court naming only Harleysville as the appellee. That court transferred the appeal to this court pursuant to § 12-2-7(6), Ala.Code 1975.

Although the trial court was divested of jurisdiction as of the date the McDaniels filed their appeal, see Johnson v. Halagan, 29 So.3d 915, 917 (Ala.Civ.App.2009), the trial court purported to enter an order on March 25, 2011, in which it stated that, after a further review of the pleadings, it appeared that a judgment already had been entered in favor of the McDaniels against Brian Homes in the 2002 action; the trial court concluded that, as a result of that judgment, it was “without jurisdiction to award any further sums of money” against Brian Homes. Thus, the trial court purported to dismiss the McDaniels’ claim against Brian Homes in the present action.

On May 3, 2011, this court entered an order reinvesting the trial court with jurisdiction for a period of 14 days “to enter, if appropriate, either a [Rule] 54(b)[, Ala. R. Civ. P.,] order as to the February 14, 2011, order or adjudicate all pending claims.” On May 17, 2011, the trial court entered what it titled an “order and final judgment” in which it wrote, in pertinent part:

“[I]t is hereby ORDERED, ADJUDGED and DECREED that all claims against ... Harleysville are dismissed with prejudice as previously ordered, and all claims against [Brian Homes] have been addressed by this Court in its order dated March 25, 2011. Thus, all pending claims have been adjudicated and this judgment is made final pursuant to Rule 54(b) of the Alabama Rules of Civil Procedure.”

We construe that order as adopting and entering the purported order of March 25, 2011, thus disposing of the remaining claim against Brian Homes.

On appeal, the parties dispute the nature of Harleysville’s motion to dismiss. The McDaniels argue that the motion had been converted to one seeking a summary judgment because Harleysville attached materials to its motion that were outside the pleadings. Harleysville responds that the attachment of pleadings from a prior pending action to a motion to dismiss does not convert the motion into one seeking a summary judgment. We conclude that Harleysville’s motion to dismiss was, in substance, a summary-judgment motion.

As noted above, the basis of Harleys-ville’s motion was the assertion of the affirmative defense of collateral estoppel as a bar to the relitigation of its potential liability under the policy of insurance it had issued to Brian Homes. In Lloyd Noland Foundation, Inc. v. HealthSouth Corp., 979 So.2d 784 (Ala.2007), our supreme court considered whether a motion to dismiss that asserted collateral estoppel and res judicata was in fact a motion for a summary judgment. Determining that it was a motion for a summary judgment, the court wrote:

“The trial court based its final order on the affirmative defenses of res judicata and collateral estoppel. Rule 8(c),-Ala. R. Civ. P., provides that affirmative defenses shall be set forth in a responsive pleading. ‘Res judicata’ and ‘estop-pel’ are two of the affirmative defenses listed in Rule 8(c). An affirmative defense is ‘[a] defendant’s assertion of facts and arguments that, if true, will defeat the plaintiffs or prosecution’s claim, even if all the allegations in the complaint are true.’ Black’s Law Dictionary 451 (8th ed.2004). The party asserting the affirmative defense bears the burden of proving it. Stewart v. Brinley, 902 So.2d 1 (Ala.2004).
“Generally, an affirmative defense is pleaded in a responsive pleading, such as an answer to a complaint. The reason affirmative defenses must be pleaded in a responsive pleading is to give the opposing party notice of the defense and a chance to develop evidence and offer arguments to controvert the defense. Blonder-Tongue Labs., Inc. v. University of Illinois, 402 U.S. 313, 350, 91 S.Ct. 1434, 28 L.Ed.2d 788 (1971). ‘Since the facts necessary to establish an affirmative defense generally must be shown by matters outside the complaint, the defense technically cannot be adjudicated on a motion under Rule 12[, Fed.R.Civ. P.].’ 5 Charles Alan Wright and Arthur C. Miller, Federal Practice and Procedure § 1277 (3d ed.2004). However, a party can obtain a dismissal under Rule 12(b)(6), Ala. R. Civ. P., on the basis of an affirmative defense when ‘ “the affirmative defense appears clearly on the face of the pleading.” ’ Jones v. Alfa Mut. Ins. Co., 875 So.2d 1189, 1193 (Ala.2003) (quoting Braggs v. Jim Skinner Ford, Inc., 396 So.2d 1055, 1058 (Ala.1981)). In Jones v. Alfa, supra, the face of the plaintiffs’ complaint did not indicate that the statutory limitations period applicable, to their bad-faith refusal-to-pay-insurance-benefits claim had expired before they sued; therefore, the insurer was not entitled to a dismissal pursuant to Rule 12(b)(6), Ala. R. Civ. P., on the affirmative defense of the statute of limitations.
“In the present case, the Foundation’s complaint does not mention the federal litigation. In response to the Foundation’s complaint, HealthSouth, in compliance with Rule 8(c), Ala. R. Civ. P., pleaded res judicata and collateral es-toppel in its amended answer. Health-South filed a ‘motion to dismiss,’ and, in a supplemental brief in support of its motion to dismiss, it addressed the doctrines res judicata and collateral estop-pel. Additionally, HealthSouth attached filings from the federal court proceeding. Although HealthSouth’s motion addressing its defenses of res judicata and collateral estoppel was actually framed as a ‘motion to dismiss,’ the motion should have been treated as one seeking a summary judgment because the face of the complaint did not reference the prior litigation and HealthSouth properly pleaded res judicata and collateral es-toppel in its answer. The substance of a motion, not what a party calls it, determines the nature of the motion. Ex parte Lewter, 726 So.2d 603 (Ala.1998).”

979 So.2d at 791-92 (footnote omitted).

In the present case, the McDaniels’ complaint does not reference the federal-court action. Thus, to decide Harleys-ville’s motion, the trial court was required to consider matters outside of the pleadings, namely the assertions contained in Harleysville’s motion as well as the documents attached to that motion. As a result, Harleysville’s motion, although titled a motion to dismiss, was, in substance, a motion for a summary judgment, and, accordingly, we will review the judgment pursuant to the standard by which we review a summary judgment.

The standard by which this court reviews a summary judgment is well settled:

“ ‘ “To grant ... a [summary-judgment] motion, the trial court must determine that the evidence does not create a genuine issue of material fact and that the movant is entitled to a judgment as a matter of law. Rule 56(c)(8), Ala. R. Civ. P. When the movant makes a prima facie showing that those two conditions are satisfied, the burden shifts to the nonmovant to present ‘substantial evidence’ creating a genuine issue of material fact. Bass v. SouthTrust Bank of Baldwin County, 538 So.2d 794, 797-98 (Ala.1989); § 12-21-12(d)[,] Ala.Code 1975. Evidence is ‘substantial’ if it is 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 Assur. Co. of Florida, 547 So.2d 870, 871 (Ala.1989).
“ ‘ “In our review of a summary judgment, we apply the same standard as the trial court. Ex parte Lumpkin, 702 So.2d 462, 465 (Ala.1997). Our review is subject to the caveat that we must review the record in a light most favorable to the non-movant and must resolve all reasonable doubts against the movant. Hanners v. Balfour Guthrie, Inc., 564 So.2d 412 (Ala.1990).” ’
“Payton v. Monsanto Co., 801 So.2d 829, 832-33 (Ala.2001) (quoting Ex parte Alfa Mut. Gen. Ins. Co., 742 So.2d 182, 184 (Ala.1999)).”

Maciasz v. Fireman’s Fund Ins. Co., 988 So.2d 991, 994-95 (Ala.2008).

The McDaniels contend that the trial court erred in entering a judgment for Harleysville. Specifically, they argue that they could not be bound by the default judgment entered in the federal-court action because they were not parties to that action. We agree.

For a prior judgment as to an issue to have a preclusive effect on a party’s later relitigation of that issue, it must be shown that the person against whom the preclusive effect is sought, or a person in privity with that person, was a party to the prior litigation in which the issue was decided and that the issue for which preclusion is sought was actually litigated in the prior action. See Dairyland Ins. Co. v. Jackson, 566 So.2d 723, 726 (Ala.1990) (listing the elements of collateral estoppel). In the present case, neither the McDaniels nor someone with whom they were in privity were parties to the federal-court action in which the default declaratory judgment was entered. See Jim Parker Bldg. Co. v. G & S Glass & Supply Co., 69 So.3d 124, 132 (Ala.2011) (“‘“Privity” is a flexible legal term, comprising several different types of relationships and generally applying when a person, although not a party, has his interests adequately represented by someone with the same interests who is a party.’ ” (quoting EEOC v. Pemco Aeroplex, Inc., 383 F.3d 1280, 1286 (11th Cir.2004))). Moreover, an issue has not been actually litigated in a prior action if that action was resolved by a default judgment. See AAA Equip. & Rental, Inc. v. Bailey, 384 So.2d 107, 112 (Ala.1980) (discussing the doctrine of collateral estoppel and distinguishing another case that had held that collateral estoppel was applicable because, with regard to the other case, “[i]n the first suit that issue was actually litigated, that is, the judgment rendered in it was not based upon default, stipulation, or consent. Cf. Matter of McMillan, 579 F.2d 289 (3rd Cir.1978) (issues involved in an action terminated by default judgment not ‘actually litigated’ for purpose of collateral estoppel).”); Martin v. Cash Express, Inc., 60 So.3d 236, 253 (Ala.2010) (Lyons, J., concurring in the result) (“If the previous judgment is by default ... then there can be no collateral estoppel or issue preclusion because nothing was ‘actually litigated’ in the default judgment.”). As a result, the default judgment entered in the federal-court action is not binding on the McDaniels, and they are free to litigate the issue of coverage determined by that judgment.

In so concluding, we join a substantial number of jurisdictions that have reached the same conclusion in circumstances that are the same or similar to those presented in this case. See, e.g., Harris v. Quinones, 507 F.2d 533, 537 (10th Cir.1974) (holding that trial court did not err in concluding that injured party was not bound by default judgment declaring that insurance was not in effect at time of accident issued in declaratory-judgment action brought by insurer against insured); Gallegos v. Nevada Gen. Ins. Co., 149 N.M. 364, 248 P.3d 912, 916-17 (N.M.Ct.App.2010) (concluding that judgment declaring that insurer was not required to indemnify insured in proceeding to which injured party was not made a party could not preclude injured party from litigating the insurer’s liability); Coleman v. Mississippi Farm Bureau Ins. Co., 708 So.2d 6, 8-10 (Miss.1998) (same); Independent Fire Ins. Co. v. Paulekas, 633 So.2d 1111, 1113 (Fla.Dist.Ct.App.1994) (“Independent argues that the coverage question has previously been decided in its favor, relying on the doctrine of res judica-ta to support this position. We disagree, finding that the doctrine of res judicata does not apply under the facts of this case. A declaratory action obtained by an insurer against its insured is not binding on a third-party claimant who was not a party to the declaratory judgment action.”); Glandon v. Searle, 68 Wash.2d 199, 202-03, 412 P.2d 116, 118-19 (1966) (holding that default judgment in favor of insurer against insured declaring that insurer was not liable under insurance policy did not bind injured parties in separate action against insured who had not been made parties to insurer’s declaratory-judgment action); Southern Farm Bureau Cas. Ins. Co. v. Robinson, 236 Ark. 268, 270-72, 365 S.W.2d 454, 456-57 (1963) (holding that default judgment declaring that insurer was not liable under insurance policy could not estop injured party who was not party to declaratory-judgment action and who had obtained judgment against insured from litigating the question of the insurance company’s liability under the policy); and Churchman v. Ingram, 56 So.2d 297, 300-01 (La.Ct.App.1951) (holding that injured party was not bound by declaration in action between insurer and insured that insurance policy was void). Because we conclude that Harleysville’s motion was without merit and that the trial court’s judgment is due to be reversed, we preter-mit discussion of the other grounds for reversal the McDaniels assert on appeal.

Harleysville argues on appeal that the trial court’s judgment can be affirmed because it was entered as a result of the McDaniels’ failure to prosecute their action. We disagree. We recognize that it is within a trial court’s discretion to dismiss an action pursuant to Rule 41(b), Ala. R. Civ. P., when a party has failed to prosecute its action under circumstances evidencing purposeful delay, willful default, or some other contumacious conduct on the part of that party. See Riddlesprigger v. Ervin, 519 So.2d 486, 487-88 (Ala.1987). However, in the present case, the language of the trial court’s December 20, 2010, order dismissing the McDaniels’ action indicates that the order of dismissal was based on a consideration of the merits of Harleysville’s motion. Although the order notes that counsel for the McDaniels did not appear for the hearing on the motion to dismiss, the order reflects that it was entered as a result of the trial court’s “due consideration” of the pending motion, not because of a lack of diligence by the McDaniels in prosecuting their action. Further indicating that the trial court did not conclude that the action was due to be dismissed for failure to prosecute is the fact that the trial court set aside its December 20, 2010, order in part, despite a lack of argument in the McDaniels’ post-judgment motion relative to any possible failure to prosecute their action. Indeed, the first time in this entire action that an issue has been raised as to a possible failure to prosecute on the part of the McDaniels is in Harleysville’s appellate brief; no such suggestion is contained in the record of the proceedings below.

Moreover, had the trial court dismissed the McDaniels’ action on the basis that their counsel had failed to attend the hearing on Harleysville’s motion to dismiss, such an action would have constituted reversible error. The McDaniels filed a response to Harleysville’s motion to dismiss, and, as a result, the trial court was fully apprised of the McDaniels’ position with respect to that motion. Furthermore, the record does not contain any evidence or, indeed, any suggestion of purposeful delay, willful default, or other contumacious conduct on the part of the McDaniels in their counsel’s failure to attend the hearing. The trial court’s discretion did not extend, under these circumstances, so far as to allow the trial court to dismiss the action for failure to prosecute. See Gill v. Cobern, 36 So.3d 31, 32-34 (Ala.2009).

Based on the foregoing, we conclude that the trial court erred to reversal when it dismissed the McDaniels’ action as to Harleysville. As a result, the trial court’s judgment is due to be reversed and the cause remanded to the trial court for additional proceedings.

APPLICATION OVERRULED; OPINION OF AUGUST 12, 2011, WITHDRAWN; OPINION SUBSTITUTED; REVERSED AND REMANDED.

PITTMAN, BRYAN, THOMAS, and MOORE, JJ., concur.

      . See also 17 Lee R. Russ and Thomas F. Segalla, Couch on Insurance § 239.68 (3d ed. 2005) ("When an insurer and insured oppose each other in a proceeding for a declaratory judgment concerning the validity of, or coverage under, a policy of liability insurance, there is not always the incentive on the part of the insured to vigorously contest the insurer’s claims. Accordingly, when the insurer attempts to assert the judgment in that proceeding as preclusive of a later action by the injured party, or by an insurer of that party, there is considerable authority that the earlier judgment is not binding [o]n such new plaintiffs who were not party to the earlier declaratory judgment action.” (footnotes omitted)); 20 John Alan Appleman, Insurance Law and Practice § 11371 (1980) ("Persons who have been injured in an automobile accident are certainly proper parties to a suit by the liability insurer to determine the coverage of its policy, and the better rule would seem to be that they are both proper and necessary parties to the maintenance of the suit. Hence, it would be error to dismiss such persons from the declaratory judgment suit. In fact, one case was reversed upon appeal where it refused the right to interested parties to attack a default judgment. However, if the court does not or cannot secure jurisdiction over them, their rights cannot be destroyed by their nonappearance; nor can such rights be determined where they are not made parties to the suit.” (footnoted omitted)).

      . Rule 41(b) reads:
      "For failure of the plaintiff to prosecute or to comply with these rules or any order of court, a defendant may move for dismissal of an action or of any claim against the defendant. Unless the court in its order for dismissal otherwise specifies, a dismissal under this subdivision and any dismissal not provided for in this rule, other than a dismissal for lack of jurisdiction, for improper venue, or for failure to join a party under Rule 19, operates as an adjudication upon the merits."

      . The McDaniels do not raise as an issue on appeal, and thus we do not address, whether the trial court erred in dismissing Brian Homes from the action.


author: PITTMAN, Judge.

text:
    Misty Cowart MARTIN v. Donald Jason COWART.
    2100379.
    Court of Civil Appeals of Alabama.
    Oct. 28, 2011.
    Dale Segrest of The Segrest Law Firm, Tallassee, for appellant.

      Tamara Knowles, Alexander City, for appellee.
   PITTMAN, Judge.

Misty Cowart Martin (“the mother”) appeals from an order denying her petition to modify previous judgments awarding the parties joint custody of the child born during the mother’s marriage to Donald Jason Cowart (the father”). We dismiss the appeal as being from a nonfinal judgment.

The parties were married in February 1999, and they divorced slightly over a year later, in March 2000. They agreed to share joint custody of the child, and their agreement was incorporated into the divorce judgment, which provided that the father would exercise his custodial periods during his regularly scheduled days off. Neither party was ordered to pay child support. In 2001, the mother filed a petition to modify the custody provision of the divorce judgment; that proceeding concluded when both parties agreed to confirm the original joint-custody provision of the divorce judgment.

On February 11, 2009, the mother filed a second petition to modify the divorce judgment, seeking sole physical custody of the child, scheduled visitation for the father, and child support. On March 17, 2009, the father filed a counterclaim seeking a modification of the divorce judgment to award him sole physical custody of the child and “such other, further, different, and general relief to which he may, in equity and good conscience, be entitled.” On April 3, 2009, the father filed a petition seeking a finding of contempt as to the mother, alleging that she had interfered with his custodial rights to the child and that she had intimidated the child.

Following a hearing, the trial court denied the petitions to modify filed by both parties, finding that “[n]either party has submitted a legally sound reason, supported in the evidence, to change the joint custody order of 2001.” The trial court, however, failed to rule on the father’s contempt petition.

“Even though the issue has not been addressed by either party, this court must first determine whether it has jurisdiction over this appeal. ‘Jurisdictional matters are of such importance that a court may take notice of them ex mero motu.’ McMurphy v. East Bay Clothiers, 892 So.2d 395, 397 (Ala.Civ.App.2004). ‘[T]he question whether a judgment is final is a jurisdictional question.’ Johnson v. Johnson, 835 So.2d 1032, 1034 (Ala.Civ.App.2002). ‘A final judgment is one that disposes of all the claims and controversies between the parties.’ Heaston v. Nabors, 889 So.2d 588, 590 (Ala.Civ.App.2004).”

Decker v. Decker, 984 So.2d 1216, 1219 (Ala.Civ.App.2007).

In Decker, the former husband filed a petition to modify the parties’ divorce judgment, seeking, among other things, to reduce or terminate his periodic-alimony obligation. The former wife answered and counterclaimed, seeking to have the former husband held in contempt for his alleged failure to comply with provisions of the divorce judgment that ordered him to provide the former wife with a life-insurance policy and to pay court costs. The trial court ruled on the former husband’s petition to reduce or terminate his alimony obligation and on that part of the former wife’s counterclaim that sought to hold the former husband in contempt for his alleged failure to provide the life-insurance policy. The court did not rule, however, on that part of the former wife’s counterclaim seeking to have the former husband held in contempt for his alleged failure to pay court costs. This court dismissed the appeal as being from a nonfinal judgment, citing Heaston v. Nabors, 889 So.2d 588 (Ala.Civ.App.2004), for the proposition that

“if, ... during a postdivorce proceeding, the trial court fails to rule on every pending contempt motion, its failure to do so does affect the finality of the judgment in the postdivorce proceeding because, in such circumstances, the filing of each contempt motion does not initiate a separate and independent proceeding.”

Decker, 984 So.2d at 1220.

On the authority of Decker, because the trial court’s failure to dispose of the father’s contempt petition renders the order from which the mother has appealed nonfi-nal, we must dismiss this appeal.

The appellee’s request for an attorney fee on appeal is denied.

APPEAL DISMISSED.

THOMPSON, P.J., and BRYAN, THOMAS, and MOORE, JJ., concur.

      . Although the pleadings in this case designate the father as "Donald B. Cowart,” the father identified himself at trial as "Donald Jason Cowart.”