Seybourn Harris Lynne

This case involved an employee who worked as a machinist for twenty-two years and applied for disability retirement benefits under his employer's pension plan after claiming total and permanent disability due to back and neck pain. After initially approving the application, the employer denied benefits and terminated the employee upon reviewing surveillance video showing him performing strenuous physical activities on his farm, citing a violation of company rules against false reports or claims. The employee sued under ERISA, alleging breach of fiduciary duty and wrongful discharge to prevent attainment of benefits. The court granted summary judgment to the defendants, holding that the plaintiff failed to establish a prima facie case for wrongful discharge and that equitable relief under ERISA § 502(a)(3) was unavailable because § 502(a)(1)(B) provided an adequate remedy for any benefits due under the plan.

labor & employmentprocedure

This case involved Blue Cross and Blue Shield of Alabama (BCBS), which administered a self-funded employee health benefits plan under ERISA for Nichols Research Corporation. BCBS paid $12,678.69 in medical expenses for plan participant Tina Sanders after she was injured in a car accident, but the Sanderses later obtained a $200,000 settlement from the at-fault parties without notifying BCBS or reimbursing the plan as required by its subrogation clause. BCBS sued in federal court to enforce the plan's subrogation and reimbursement provisions. The court granted summary judgment to BCBS and ordered the defendants to pay the full amount without any deduction for attorneys' fees. It reasoned that ERISA preempts Alabama's equitable subrogation rules because the plan is self-funded, the state law does not regulate insurance under the McCarran-Ferguson factors, and the deemer clause exempts such plans from state insurance regulation.

healthcarebusiness & regulatoryfederal power

This case involved Blue Cross and Blue Shield of Alabama seeking a declaratory judgment that three Alabama statutes—the Assignment Act, Dental Act, and Pharmacy Act—were preempted by ERISA and that state law exempted Blue Cross from complying with them; intervening health care providers counterclaimed that Blue Cross violated the Dental and Pharmacy Acts. The court certified classes of providers and addressed threshold issues on motions for summary judgment. It held that ERISA preempts the three acts because they have a connection to and reference employee benefit plans governed by ERISA and do not qualify for the insurance saving clause, and that Alabama law separately exempts Blue Cross from the acts due to its enabling statutes. The court therefore granted Blue Cross partial summary judgment on the relevant counts.

healthcarefederal powerbusiness & regulatory

This case is an interpleader action brought by Northwestern Mutual Life Insurance Company to resolve competing claims to the cash surrender value of eight life insurance policies purchased by City Federal Savings and Loan Association in connection with deferred compensation agreements and supplemental retirement income agreements for certain executives. After the Office of Thrift Supervision placed City Federal into receivership, the Resolution Trust Corporation as receiver demanded the policies' value as successor to the institution's general assets, while the former executives claimed the policies were subject to a constructive trust for their benefit. The court granted partial summary judgment to the Receiver, ruling that the agreements expressly made any such policies general, unpledged assets of City Federal rather than plan assets, that the plans were unfunded top-hat plans exempt from ERISA vesting and fiduciary rules, and that the claimants therefore held only unsecured creditor rights with no interest in the policies themselves.

business & regulatorylabor & employment

The case involved the United States seeking reimbursement from Blue Cross and Blue Shield of Alabama for medical care and services provided to eight Medicare-eligible veterans with non-service-connected conditions at VA hospitals between 1987 and 1990. Each veteran held a Blue Cross Medigap policy, but the insurer denied the VA's claims on the ground that VA facilities do not participate in Medicare. The court held that 38 U.S.C. § 1729 requires Blue Cross to pay the VA the portion of costs (such as deductibles and coinsurance) that would have been covered if the care had been rendered in a participating private hospital. This conclusion followed from the statute's definition of a health-plan contract, which includes Medigap policies, and its anti-discrimination provision that prevents contractual terms from blocking federal recovery. The court issued a declaratory judgment to that effect but did not calculate specific amounts owed.

healthcarebusiness & regulatory

The case involved Acceptance Insurance Company seeking a declaratory judgment regarding its obligations under an insurance policy issued to Jerry Schafner after his guard dog bit Alice Frazier. The court granted summary judgment to Acceptance, holding that Schafner's six-month delay in notifying the insurer of the incident and lawsuit relieved Acceptance of its duties to defend, cover, or indemnify him. Under Alabama law, timely notice is a condition precedent to coverage, and the delay here lacked a reasonable excuse, as Schafner had been advised of potential litigation.

torts & liabilitybusiness & regulatory

This case involved former insurance sales representatives who sued A.L. Williams and Associates, alleging they were fraudulently induced in 1978 to join the company by promises of lifetime override commissions on sales by recruits in a pyramid-style marketing scheme for term life insurance. The sole remaining claims were for fraud after other counts were dismissed. The court granted summary judgment to the defendants, holding that the claims were barred by Alabama's one-year statute of limitations. The core reasoning was that the plaintiffs received actual notice of the alleged fraud more than three years before filing suit in 1984, both from repeated failures to receive the promised overrides on their recruits and from signing 1981 and 1982 contracts inconsistent with those promises.

business & regulatorylabor & employmentproceduretorts & liability

This case involved Ann Burford seeking a refund of federal income taxes paid on settlement proceeds from an Alabama wrongful death claim after her husband's death at a hospital. The plaintiff argued that the proceeds were excludable from gross income under Internal Revenue Code § 104(a)(2), contrary to a recent IRS Revenue Ruling that deemed them taxable. The court granted summary judgment for the plaintiff, holding that the proceeds qualify for exclusion. The reasoning centered on the plain language of § 104(a)(2), which excludes damages received on account of personal injuries, noting that wrongful death actions arise from such injuries regardless of their punitive characterization under Alabama law.

taxestorts & liability

This case involved former Amoco Oil Company employees in its liquid propane gas operations who sued Amoco and buyer Northern Propane Gas Company (Norgas) after the 1979 sale of that division. Plaintiffs alleged multiple ERISA violations concerning retirement benefits under the Amoco and Norgas plans, plus state-law claims for misrepresentations about job and benefit security and breach of alleged lifetime employment contracts. The court granted summary judgment to both defendants on every claim. It reasoned that undisputed facts showed the sale contract credited prior Amoco service only for vesting purposes under the Norgas plan, with no fiduciary breaches, no prohibited discrimination or interference with rights under ERISA sections such as 1140, and no viable state claims on the record developed after extensive discovery.

labor & employmentbusiness & regulatory

This case concerned employees seeking supplemental unemployment benefits under an ERISA-covered plan established by a collective bargaining agreement between their employer, Revere, and their union. After Revere entered bankruptcy and stopped contributing to the plan's trust fund, the plaintiffs sued the trustee, Bankers Trust, alleging breaches of fiduciary duties under ERISA as well as state-law claims including fraud, conversion, and money had and received. The court granted summary judgment to Bankers Trust, holding that ERISA preempted the state-law claims and that the trustee had no liability because its role was limited to custody and investment of assets with no duty to monitor the employer's contributions or notify participants. The core reasoning was that the trust agreement did not impose administrative responsibilities on the trustee that would create the fiduciary obligations claimed, and there was no evidence of knowledge sufficient to trigger co-fiduciary liability.

labor & employmentfederal power

In Lary v. United States, Dr. Lary and his wife sued the government after the IRS disallowed various tax deductions and credits on their returns, including automobile expenses and depreciation for commuting between home and his medical clinic, an investment tax credit for a Mercedes used in that commute, depreciation and credits for medical equipment, and a charitable deduction for donating blood to the Red Cross. The court granted the government's motion for summary judgment on all claims. It held that the home-to-office travel was a nondeductible personal commute because the clinic, not the home, was the principal place of business for his medical practice, rendering the home office merely secondary and incidental. The court further ruled that the taxpayers failed to provide required records or evidence to substantiate the depreciation and tax credit claims for equipment, and that blood donation constitutes nondeductible personal services rather than a contribution of property under Section 170.

taxes

The case involved a subcontract dispute where Willoughby Roofing sued Kajima for breach of contract, fraud, and related claims after Kajima canceled the contract following changes to specifications. The defendant successfully moved to send the claims to arbitration, where the panel awarded both compensatory and punitive damages. Kajima then sought to vacate the punitive damages portion, arguing the arbitrators lacked authority to award them. The court denied the motion and confirmed the award, reasoning that the broad arbitration clause in the contract authorized the panel to resolve all related claims, including those for punitive damages under applicable law.

business & regulatoryproceduretorts & liability

This case involves a breach of contract lawsuit filed by Intergraph Corp., an Alabama corporation, against Stottler, Stagg & Associates, Inc., Florida corporations, regarding the sale and performance of computer equipment. The defendants moved to dismiss for lack of personal jurisdiction or alternatively to transfer the case to the Middle District of Florida. The court transferred the action under 28 U.S.C. § 1404(a) to Florida, finding it a more convenient forum for the parties and witnesses, with the center of the controversy in Florida, and to avoid deciding a complex jurisdictional issue.

procedure

The case concerns a lawsuit by Pepsi-Cola Bottling Co. of Ft. Lauderdale-Palm Beach against Buffalo Rock Co. and Desnoes & Geddes, Ltd., alleging that the defendants violated territorial restrictions in their Pepsi bottling agreements by selling and shipping large quantities of product into the plaintiff's Florida territory, amounting to breach of contract, conspiracy, and tortious interference. Desnoes & Geddes, a Jamaican company, moved to dismiss for lack of personal jurisdiction in Alabama federal court. The court denied the motion, holding that the plaintiff had made a prima facie showing of minimum contacts with Alabama through purchase orders mailed to Alabama, a meeting in Jamaica that led to further negotiations in Alabama, payments received in Alabama, and a contractual provision designating Alabama as the place of consummation, such that exercising jurisdiction would not offend due process. Alabama's long-arm rule reaches the limits of due process, and the contacts were evaluated based on affidavits and discovery materials even where facts were disputed.

procedurebusiness & regulatorytorts & liability

This case involved former employees at a closed Alabama plant who sued their employer, Continental Group, and their union, the United Steelworkers, over the loss of jobs and benefits. The plaintiffs alleged breach of contract and promises of continued employment until age 65, ERISA violations by the company, fraud under Alabama law, and that the union breached its duty of fair representation by failing to pursue grievances or arbitration related to the plant shutdown. The court granted summary judgment to both defendants. It held that federal labor policy under cases like Republic Steel Corp. v. Maddox required the employees to first attempt the contractual grievance and arbitration procedures before suing, and that their claims against the union were time-barred by the six-month statute of limitations under DelCostello v. International Brotherhood of Teamsters, which also eliminated any excuse for not exhausting remedies against the employer.

labor & employmentprocedure

In this trademark dispute, Arthur Young, Inc., an executive search firm owned by Arthur L. Young, sought a declaratory judgment that its use of the name "Arthur Young" did not infringe the service marks and trade names of Arthur Young & Company, a major accounting partnership that had long provided executive search services under names including "Arthur Young & Company" and "Arthur Young Executive Resource Consultants." Arthur Young & Company counterclaimed, alleging infringement under the federal Lanham Act, common law, and Alabama trademark statutes, as well as dilution under Alabama law, and requested injunctive relief. After reviewing the strength of the registered marks, evidence of actual confusion, and other factors identified by the Eleventh Circuit, the court concluded there was a likelihood of confusion and held that the plaintiff's use infringed the defendant's federally registered and incontestable marks. The court therefore enjoined Arthur Young, Inc. from using "Arthur Young" or confusingly similar designations, ordered it to adopt the new name "A.L.Y., Inc.," and directed related changes to corporate records, telephone listings, and business materials.

business & regulatory

The case concerned the Ashburn brothers' application for attorneys' fees and expenses under the Equal Access to Justice Act (28 U.S.C. § 2412(d)) after prevailing against the IRS in a tax dispute over the installment reporting of gains from stock sales to trusts and the liquidation of their Subchapter S corporation, Pin Palace Lanes. The government opposed the award, claiming its positions were substantially justified, that fees were unavailable for prior administrative proceedings, and that the claimed amounts were unreasonable. The court granted the application, finding that the government's in-court position was not substantially justified because it contradicted controlling precedent such as Rushing v. Commissioner and other cases, and because the government abandoned its valuation argument without justification. The court also determined that the fees sought were reasonable based on factors including complexity, duration, and results obtained.

taxesprocedure

Clark Ray Helms sued his employer, Monsanto Company, for declaratory judgment after the company denied his claim for total and permanent disability benefits under its Disability Income Plan, an ERISA-governed employee welfare benefit plan. The plan defined total and permanent disability strictly and required that any unresolved disagreement between the employee and the company be resolved by a jointly selected third-party medical expert whose decision would bind both parties. After examining Helms and reviewing records, the selected ophthalmologist concluded that Helms had retinitis pigmentosa but was not totally and permanently disabled from any gainful occupation under the plan's terms, leading Monsanto to deny benefits. The court held that the plan's delegation of review to the third-party doctor satisfied ERISA's full-and-fair-review requirements and that the doctor's decision was neither arbitrary nor capricious, so Helms remained bound by it and was not entitled to benefits.

labor & employmentprocedure

In this case, the widow of a worker killed by a forklift at an Alabama metal plant sued the employer's workers' compensation insurer, Liberty Mutual, alleging that the insurer's negligent safety inspections proximately caused the death. The plaintiff had already settled with the forklift manufacturer under Alabama's Extended Products Liability Doctrine. After a jury awarded the plaintiff $35,000, the court granted the insurer's motion for judgment notwithstanding the verdict. The court reasoned that, under Alabama precedent such as Hughes v. Alabama Power Co., the plaintiff failed to show that Liberty Mutual undertook a specific inspection of the accident area or that any negligence in its inspections was the proximate cause of the death, as the insurer had no duty to perform an in-depth traffic study or correct hazards it identified. The court noted that the plant's own safety engineers were aware of pedestrian-vehicle risks and were addressing them.

torts & liabilitylabor & employment

This case involved a class action under the Truth in Lending Act against Ford Motor Credit Company (FMCC) arising from vehicle financing contracts assigned by a dealer, Bondy's Ford, during 1973-1974. Plaintiffs alleged three disclosure violations in the contracts: insufficient conspicuousness of the annual percentage rate and finance charge, failure to clearly identify FMCC as a creditor, and omission of certain fees from the stated cash price. The court certified the class, determined that FMCC qualified as a creditor due to its close integration with the dealer, found no violations on the first two claims, and acknowledged a violation on the cash price disclosures but held that FMCC bore no liability under Regulation Z § 226.6(d) because those items fell outside its knowledge and the scope of its relationship with buyers. Accordingly, the court entered judgment for the defendant on all claims.

business & regulatory