Nationwide Retirement Solutions, Inc. v. Alabama State Personnel Board

54 So. 3d 886, 2010 Ala. LEXIS 121, 2010 WL 2629335
CourtSupreme Court of Alabama
DecidedJune 30, 2010
Docket1090530
StatusPublished
Cited by14 cases

This text of 54 So. 3d 886 (Nationwide Retirement Solutions, Inc. v. Alabama State Personnel Board) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nationwide Retirement Solutions, Inc. v. Alabama State Personnel Board, 54 So. 3d 886, 2010 Ala. LEXIS 121, 2010 WL 2629335 (Ala. 2010).

Opinion

BOLIN, Justice.

The Alabama State Personnel Board, an agency of the State of Alabama (“the Board”), petitions this Court for a writ of mandamus directing the trial court to vacate its order referring the underlying case to a special master. We grant the petition and issue the writ.

Facts and Procedural History

On July 15, 2009, Nationwide Retirement Solutions, Inc. (“NRS”), filed an in-terpleader action against the Board, PEBCO, Inc., and the Alabama State Employees Association (“ASEA”), depositing $432,740 in the court. The complaint provided that future sums would also be added to the interpleaded amount. The moneys interpleaded by NRS involve a supplemental retirement plan available to State employees called the “Alabama State Employees Deferred Compensation Plan” (“the plan”), which is administered by NRS. The plan permits State employees to save for retirement on a tax-deferred basis, deferring a portion of their income in accordance with § 457 of the Internal Revenue Code. The Board sponsors the plan and is its fiduciary. Pursuant to § 36-26-14, Ala.Code 1975, the Board adopts the plan as recommended by State employees through ASEA. NRS alleged that the Board and ASEA both claimed a legal right to the moneys, and NRS was seeking direction from the court regarding the payment of the moneys and an order discharging NRS and its affiliated company, Nationwide Life Insurance Company, from liability.

On August 20, 2009, ASEA and PEBCO each filed a motion to dismiss the inter-pleader complaint, arguing that they had settled claims alleging that NRS and Nationwide had been paying “kickbacks” in the form of unauthorized commissions, expenses, and fees to ASEA and PEBCO, *889 benefiting them at the expense of the plan and its participants. Both ASEA and PEBCO also asked that the Board be ordered to stop interfering with the Securities and Exchange Commission, which made the original allegations involving the kickback scheme.

On August 21, 2009, the Board filed its answer and filed cross-claims against ASEA and PEBCO and added claims against seven individuals, who are officers and employees of ASEA and PEBCO. 1 The Board alleged that it recently discovered that improper payments had been made to ASEA and/or PEBCO from NRS and/or Nationwide and that the amounts due on those payments from 2009 were the funds that were the subject of the inter-pleader action. The Board further alleged that improper payments had been made each year since 2000. The Board asserted that it was entitled to the interpleaded funds and that there should be an accounting from ASEA, PEBCO, and the seven named individual defendants. The Board also asserted claims of breach of fiduciary duty, fraud, fraudulent suppression, and conspiracy. The Board demanded a jury trial on those claims triable of right by a jury.

On September 10, 2009, Twanna Brown, a State employee and a member of ASEA and of the plan, moved to intervene in the action. She also sought certification of a class action on behalf of all ASEA members and plan participants. 2

On December 16, 2009, the trial court entered the following order:

“It has become apparent that the appointment of a special master is necessary to hear pending motions and other matters and make recommended orders. Pursuant to Rule 58, Ala. R. Civ. P., it is hereby ordered that Frank Wilson is appointed special master to hear all matters in the above-styled case.
“The special master shall have the rights, powers, and duties provided in Rule 58 and may adopt such procedures as are not inconsistent with that rule or with this or other orders of the Court.
“The special master shall make findings of fact, as necessary, and conclusions of law with respect to matters presented by the parties, and he shall report expeditiously to the Court.
“Compensation at rates mutually agreeable to the special master and the parties shall be paid to the special master on a monthly basis by the parties, together with reimbursement for reasonable expenses incurred by the special master. If the parties and the special master are unable to agree upon the compensation, it shall be fixed by the Court. The special master shall, within five (5) days, inform the Court if he and the parties have agreed upon his compensation.”

On December 21, 2009, the Board filed an objection to the court’s appointment of a special master and moved the court to vacate that order or, in the alternative, to modify the order appointing the special master so that the appointment was only for issues directly related to accounting work that may arise in the case. Brown also filed a motion objecting to the appointment.

On January 26, 2010, the Board filed this petition for a writ of mandamus. That same day, the Board amended its plead *890 ings to add a new defendant, AON Consulting, Inc., and to add additional claims against ASEA, PEBCO, and the seven named individual defendants.

On January 28, 2010, the trial court held a status hearing. The trial court appears to have anticipated that the parties would have a contentious discovery process and that the special master would hear those issues, among others. The court also indicated that it would terminate the special master’s appointment if the parties did not get into “a lot of fights.” Ultimately, the trial court stated that it would hold another status conference and then decide how to use the special master.

On February 4, 2010, the trial court entered an order amending its order appointing the special master:

“This matter is before the Court on the Objection of the Alabama State Personnel Board ... to the Appointment of a Special Master, and Motion to Vacate and/or Modify The Court’s Order Appointing the Special Master.
“[NRS] filed a complaint to interplead approximately $1,000,000.00 into the court to determine to whom the money should be awarded. [The Board,] PEB-CO, Inc. (‘PEBCO’), and the Alabama State Employees Association (‘ASEA’) are named as defendants.
“[The Board] filed a cross-claim that contains thirteen counts, as amended. The counts are as follows:
“Count 1: claim for the interpled funds, against ASEA, PEBCO, and Edwin J. McArthur, Steve Walkley, Glenn Parker, Ulysses Lavender, Diana McLain, Randy Hebson, and Robert Wagstaff (‘seven individual named defendants’);
“Count 2: accounting, against ASEA, PEBCO, and seven individual named defendants;
“Count 3: breach of fiduciary duties, against ASEA, PEBCO, seven individual named defendants, and AON Consulting (‘AON’);
“Count 4: fraud, against ASEA;
“Count 5: fraudulent suppression, against ASEA;
“Count 6: conspiracy, against ASEA, PEBCO, and seven individual named defendants;
“Count 7: conspiracy, against AON;
“Count 8: breach of contract, against AON;

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Bluebook (online)
54 So. 3d 886, 2010 Ala. LEXIS 121, 2010 WL 2629335, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nationwide-retirement-solutions-inc-v-alabama-state-personnel-board-ala-2010.