SafetyNet Youth Systems, LLC v. Guarantee Insurance Co.

133 So. 3d 862, 2013 WL 2683728, 2013 Ala. LEXIS 64
CourtSupreme Court of Alabama
DecidedJune 14, 2013
Docket1120337
StatusPublished
Cited by2 cases

This text of 133 So. 3d 862 (SafetyNet Youth Systems, LLC v. Guarantee Insurance Co.) 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
SafetyNet Youth Systems, LLC v. Guarantee Insurance Co., 133 So. 3d 862, 2013 WL 2683728, 2013 Ala. LEXIS 64 (Ala. 2013).

Opinions

MAIN, Justice.

Guarantee Insurance Company, Patriot National Insurance Group, Randy Thomas, and Paul Harper (hereinafter referred to collectively as “the insurance-company parties”) are the defendants in an action filed by SafetyNet Youth Systems, LLC, that is pending in the Dallas Circuit Court. The insurance-company parties petition this Court for a writ of mandamus directing the Dallas Circuit Court to vacate its order denying their motion to transfer the action to the Lee Circuit Court and to enter an order granting the motion because, they argue, venue in Dallas County is improper. We grant the petition on the basis that venue is improper in Dallas County, and we issue the writ directing the Dallas Circuit Court to transfer the case to the Lee Circuit Court.

I. Facts and Procedural History

SafetyNet is an Alabama limited-liability company. Its managing member is Lyn-dell Wheatley. Guarantee is a Florida corporation with its principal place of business in Ft. Lauderdale and its registered agent in Alabama in Jefferson County; it is a wholly owned subsidiary of Patriot. Patriot is a Delaware corporation with its principal place of business in Ft. Lauder-dale; it is solely a holding company. Randy Thomas and Paul Harper are insurance agents with Cobbs, Allen & Hall, an insurance-brokerage and risk-management firm in Montgomery (“the brokerage firm”). Thomas resides in Montgomery County; Harper resides in Lee County.

SafetyNet was formed in 2001. It provides housing, treatment, and other services, including residential psychiatric treatment, to disadvantaged, abused, or emotionally disturbed youth. SafetyNet has three facilities — two in Montgomery County and one in Dallas County.1 In [865]*8652009, SafetyNet purchased a workers’ compensation and employers’ liability insurance policy issued by Guarantee that covered the period August 25, 2009, to August 25, 2010. The insurance-company parties briefly describe a meeting that took place in Montgomery regarding the issuance of that insurance policy, but the materials before us contain no information as to when that meeting was held. A premium notice from Guarantee contained in the materials before us indicates that SafetyNet renewed that policy for the period August 25, 2010, to August 25, 2011. SafetyNet states that it also had purchased a policy of insurance from Guarantee in 2008; however, it is undisputed that the policies at issue in this case are the two policies covering 2009-2011 (hereinafter referred to as “the subject policies”). SafetyNet describes the subject policies as follows:

“The policies in question were marketed and sold as ‘retro policies’ which, because they offer a retrospective analysis after the policy period, would present the opportunity for SafetyNet to receive a policy refund. Such a refund would occur after a final premium calculation and audit of SafetyNet’s financial records with respect to Workers’ Compensation and Employer’s Liability which was to be conducted subsequent to the expiration of the policy year.”

SafetyNet’s brief, at 1 (reference to an exhibit omitted).

After a dispute over premiums arose, SafetyNet sued the insurance-company parties and several fictitiously named parties in the Dallas Circuit Court on July 31, 2012, alleging breach of contract, fraudulent misrepresentation, fraud in the inducement, fraudulent suppression, negligence and wantonness, “negligent procurement of insurance coverage,” and conversion stemming from SafetyNet’s purchase of the subject policies. Safe-tyNet seeks to have refunded to it premiums it paid that it alleges were excessive.

On September 12, 2012, the insurance-company parties filed a joint motion requesting the transfer of this action to the Lee Circuit Court.2 Their motion was supported by, among other things, records from the Alabama Secretary of State’s office; the affidavit of Frank Kushler, Patriot’s senior vice president; and the affidavits of Paul Harper and Randy Thomas. The Secretary of State’s records reflect that SafetyNet was formed on January 16, 2001, with a registered office address in Montgomery, and that SafetyNet amended its articles of formation in September 2004 and November 2006. Kushler testified in his affidavit that he oversees operations for both Guarantee and Patriot; that Patriot has neither an office nor a resident agent in Dallas County; and that, although Guarantee is registered to do business in Alabama, it has neither an office nor a registered agent in Dallas County.3 Harper testified in his affidavit that he never sent e-mails to or received e-mails from any employee of SafetyNet regarding the subject policies, that he did not place any telephone calls to any employee of Safe-tyNet regarding the subject policies, and that the only meeting he had “with someone from SafetyNet regarding the placement or renewal of the [subject policies] referenced in the lawsuit took place at the office of SafetyNet in Montgomery, Alabama.” Thomas testified in his affidavit that any e-mails he sent to any employee [866]*866of SafetyNet regarding the subject policies were sent from Montgomery and that he did not have any meetings with any employee from SafetyNet concerning the placement or renewal of the subject policies.

SafetyNet filed a response in opposition to the insurance-company parties’ motion to transfer. The response was supported by, among other things, the application for the 2010-2011 policy; the insurance binder for the 2009-2010 policy issued by the brokerage firm dated August 25, 2009; and Wheatley’s affidavit. SafetyNet’s application states its mailing address as “Lyn Wheatley, 80 Mel Bailey Drive, Minter, AL 36761.” The binder states as the insured “SafetyNet Youth Systems, LLC, Attn: Mr. Lyn Wheatley, 80 Mel Bailey Drive, Minter, AL 36761.” In his affidavit, Wheatley testified, in pertinent part, as follows:

“2. SafetyNet Youth Systems, LLC was formed in 2001. At that time Safe-tyNet did not maintain any property or offices but was simply in the ‘formation stages.’ It has been brought to my attention that the Secretary of State website maintains a listing indicating that SafetyNet Youth Systems, LLC has an address of Montgomery, Alabama. While SafetyNet does maintain facilities in Montgomery County, SafetyNet’s principal office in Alabama is located in Minter, Dallas County, Alabama. In 2009 at the time SafetyNet purchased policies and insurance through Guarantee Insurance Company, Patriot National Insurance Group, Randy Thomas and Paul Harper, SafetyNet’s principal office in the state of Alabama was located in Minter, Dallas County, Alabama.
“3. While SafetyNet maintains facilities in counties other than Dallas County, Alabama, SafetyNet’s largest facility and its’ [sic] corporate offices are located in Minter, Dallas County, Alabama. In addition, all administrative staff report to SafetyNet’s Minter, Dallas County, Alabama offices. SafetyNet’s business manager, human resources director and accounts payable clerk all maintain offices at the SafetyNet principal office in Minter, Dallas County, Alabama. Additionally, the address maintained with the Internal Revenue Service as well as the Alabama Department of Industrial Relations and all other Alabama State Agencies is SafetyNet’s corporate office located in Minter, Dallas County, Alabama.”

The insurance-company parties filed a reply to SafetyNet’s response. That reply was supported by, among other things, a second affidavit from Kushler.

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Cite This Page — Counsel Stack

Bluebook (online)
133 So. 3d 862, 2013 WL 2683728, 2013 Ala. LEXIS 64, Counsel Stack Legal Research, https://law.counselstack.com/opinion/safetynet-youth-systems-llc-v-guarantee-insurance-co-ala-2013.