Perdue ex rel. Perdue v. Green

127 So. 3d 343
CourtSupreme Court of Alabama
DecidedMarch 16, 2012
Docket1101337 and 1101506
StatusPublished
Cited by12 cases

This text of 127 So. 3d 343 (Perdue ex rel. Perdue v. Green) 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
Perdue ex rel. Perdue v. Green, 127 So. 3d 343 (Ala. 2012).

Opinions

PER CURIAM.

In these consolidated appeals, Carol M. Perdue, individually and as next friend and guardian of her daughter, Anna K. Perdue; William D. Motlow, Jr.; and Shane Sears (hereinafter collectively referred to as “the objectors”), all of whom are objecting class members in class-action litigation related to the Alabama Prepaid Affordable College Tuition (“PACT”) Trust Fund a/k/a The Wallace-Folsom Prepaid College Tuition Trust Fund, appeal the trial court’s judgment approving a class-action settlement concluding the litigation.1 We vacate the trial court’s judgment and remand the case.

Facts and Procedural History

This Court, in Ex parte Callan Associates, Inc., 87 So.3d 1161 (Ala.2011), explained the pertinent history of the PACT program, as it led to the underlying class-action litigation and to other litigation, as follows:

“In 1990, the Alabama Legislature established the Alabama Prepaid Affordable College Tuition (‘PACT’) program as part of the Wallace-Folsom College Savings Investment Plan, see §§ 16-33C-1 to 8, Ala.Code 1975. As explained by the Court of Civil Appeals in Johnson v. Taylor, 770 So.2d 1103 (Ala.Civ.App.

[349]*3491999), the purpose of the PACT program is

“ ‘to assist payment of college tuition costs by allowing a person to purchase PACT contracts in advance of a child’s attending college. The PACT program obligates the state to pay tuition in accordance with the contract if the minor child attends a state college or university. § 16-33C-1. The purchase price of a PACT contract is determined actuarially. § 16-33C-6(f). Payments received become public funds, which the state invests to generate assets to fund the child’s education. § 16-33C-6(d).’

“770 So.2d at 1104.

“Pursuant to the statutory scheme, the PACT program is overseen by a ‘PACT board,’ which serves as both ‘[t]he board of directors and trustees of the PACT Trust Fund.’ § 16-33C-3(14), Ala.Code 1975. Also pursuant to statute, the members of the PACT board are specifically empowered ‘[t]o invest as [the board] deems appropriate any funds in the PACT Trust Fund.... ’ § 16-33C-5(3), Ala.Code 1975. In fulfilling that responsibility, including decisions relating to ‘acquiring, investing, reinvesting, exchanging, retaining, selling, and managing property of the PACT Trust Fund,’ both ‘the PACT board and any person or investment manager to whom the PACT board delegates any of its investment authority’ is charged with ‘exercising] the judgment and care under the circumstances then prevailing which persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not in regard to speculation but to permanent disposition of funds, considering the probable income as well as the safety of their capital.’ § 16-33C-6(d), Ala. Code 1975.
[[Image here]]
“On February 27, 2009, Kay Ivey, then state treasurer and, by virtue of that office, chairman of the PACT board, issued a letter to the purchasers (holders) of PACT contracts informing them that a downturn in the stock market had negatively impacted the assets of the PACT Trust Fund but indicating that the PACT board remained committed to honoring the PACT contracts and that the PACT board was investigating options and exploring opportunities that would ‘allow PACT benefits to be consistently paid.’ ”

87 So.3d at 1162-64 (footnote omitted).

In response to then State Treasurer Ivey’s disclosure, several lawsuits were filed against the PACT board, including a class-action complaint filed in March 2009 in the Montgomery Circuit Court (case no. CV-09-900351) by Lisa Nix Green, individually and as next friend of Brent A. Green and Blake A. Green. In that action, Green, purporting to represent a class consisting of those who had purchased a PACT contract before 1995, alleged breach of contract and a violation of 42 U.S.C. § 1983. The action sought a judgment declaring that the PACT board was liable to PACT contract holders for the sums guaranteed in their respective contracts. In September 2009, Green’s complaint was dismissed on the ground that the stated claims were not ripe because, the trial court concluded, no PACT beneficiary had yet been denied contractual benefits and, therefore, no PACT beneficiary had suffered a loss. Green subsequently filed a motion to alter, amend, or vacate the trial court’s judgment.

The action underlying these appeals (case no. CV-10-900013) was instituted by a separate complaint filed in January 2010 — while Green’s postjudgment motion [350]*350in the first action, case no. CV-09-900351,2 remained pending — against the PACT board in the Montgomery Circuit Court by Lisa Nix Green; Brent A. Green; Blake Green; Eldridge M. Franklin;3 Ea-son L. Franklin; and Kimberly H. Franklin, individually and as next friend of John Stephen Franklin, all of whom were PACT contract holders and/or PACT beneficiaries, who purported to represent “a class of persons who purchased a [PACT] contract prior to May 9, 2001,” and the designated beneficiaries of each such PACT contract. That same pleading also included as plaintiffs Brian A. McVeigh, individually and as next friend of Sarah K. McVeigh; Allen R. Hudson, individually and as next friend of Emma L. Hathaway; and Nina McGinnis, individually and as next friend of Stevie A. Graves, who purported to represent “a class of persons who purchased a [PACT] contract [on or] after May 9, 2001,” and the designated beneficiaries of each such PACT contract. The underlying class action was assigned to a different judge in the Montgomery Circuit Court than the judge who presided over Green’s separate action.4

In their complaint in the underlying action, which included claims virtually identical to those asserted by Green in her initial action, the above-named plaintiffs alleged that their claims were typical of and consistent with the claims of all class members, whose numbers allegedly made joinder impractical, and sought to be named representatives for their respective classes. Acting under the premise that the PACT program was created to allow the designated beneficiary of a PACT contract to attend college without being required to pay tuition or mandatory fees, regardless of the financial health of the PACT Trust Fund and/or the ability of the PACT program to pay, the plaintiffs alleged that the PACT board had indicated its inability to fulfill outstanding PACT contracts. The complaint also alleged, in a claim not included in Green’s initial action, that, at the time of filing, “not all of the tuition and fees covered by PACT contracts [were] being paid by the [PACT board].”5 The plaintiffs requested a declaratory judgment construing the respective rights and obligations of the individual [351]*351classes under the PACT contracts and the controlling statutes so they could decide whether to remain in the PACT program or to cancel their existing contracts and seek a refund (less any applicable tax penalty). They also stated a claim under 42 U.S.C. § 1983, alleging violations of rights guaranteed by various provisions of the United States Constitution.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Jarvis v. Taylor
M.D. Alabama, 2021
Lawler v. Johnson
253 So. 3d 939 (Supreme Court of Alabama, 2017)
Hudson v. Hudson
178 So. 3d 861 (Court of Civil Appeals of Alabama, 2014)
Christopher v. Christopher
145 So. 3d 60 (Supreme Court of Alabama, 2013)
Vest v. Vest
130 So. 3d 572 (Supreme Court of Alabama, 2012)
Perdue ex rel. Perdue v. Green
127 So. 3d 343 (Supreme Court of Alabama, 2012)

Cite This Page — Counsel Stack

Bluebook (online)
127 So. 3d 343, Counsel Stack Legal Research, https://law.counselstack.com/opinion/perdue-ex-rel-perdue-v-green-ala-2012.