MURDOCK, Justice.
This consolidated appeal and petition for a writ of mandamus concerns two rulings by the Jefferson Circuit Court ("the circuit court"). First, Regions Bank ("Regions") appeals a writ of mandamus issued by the circuit court ordering the Jefferson Probate Court ("the probate court") to dismiss a petition for final settlement filed by Regions concerning its administration of certain trusts (case no. 1081619). Second, Regions petitions this Court for a writ of mandamus directing the circuit court to dismiss or stay an action filed in the circuit court by Jean W. Reed, Mary W. Haynes, and Susan W. Stockham, individually and as trustees of various family trusts (hereinafter referred to collectively as "the sisters"). With respect to the appeal, we reverse the circuit court's issuance of the writ of mandamus to the probate court. We grant in part and deny in part Regions' petition to this Court for a writ of mandamus directed to the circuit court.
The sisters are the daughters of Clement and Elizabeth Walter. In December 1974, Clement Walter established the "Clement S. Walter Trust" ("the Father Trust"). The original trustees of the Father Trust were Elizabeth Walter and First National Bank of Birmingham. An amendment to the trust changed the corporate trustee to First Alabama Bank, which, through a succession of corporate transactions, is now Regions. Upon Elizabeth Walter's death, the trust instrument designated that the sisters were to benefit
In 1982, Elizabeth Walter created three separate irrevocable trusts ("the Mother Trusts"), one to benefit each of the sisters. The Mother Trusts were established to provide income to each of the sisters for her life. Stockham is designated as the sole trustee of the Mother Trusts created for the benefit of Reed and Haynes. Stockham and Regions are designated as cotrustees of the Mother Trust created for the benefit of Stockham.
In 1983, Regions entered into "custody agreements" with regard to the Mother Trusts created for the benefit of Reed and Haynes under which Regions agreed to act as the custodian of the assets of those trusts. In 1994, Regions entered into separate (but identical) "Investment Agency Agreements" with the Mother Trusts created for the benefit of Reed and Haynes. In those agreements, Regions undertook the responsibility to manage the investments for those trusts.
On May 4, 2004, Stockham established a revocable trust ("the Stockham Trust") under which she is the sole beneficiary for the duration of her life. The trust designated Regions as the sole trustee. On the same date, Haynes established a revocable trust ("the Haynes Trust") under which she is the sole beneficiary for the duration of her life. The trust designated Regions as the sole trustee.
The sisters allege in the circuit court action that they are "of a mature age" and that they "rely heavily upon the income from these various trusts to support themselves. Accordingly, they desired that the assets in these trusts should be invested in "stable, conservative, low-risk holdings that produced a secure stream of income." They allege that Regions was aware of and had a duty to follow these instructions.
The sisters allege that Regions actually invested the assets of these trusts in certain funds that were established and operated by companies closely affiliated with Regions, and that those funds "were, in reality, very high risk and lacking in diversification." According to the sisters, those funds also were "plagued with extremely severe problems" that caused them to be unstable and unsuccessful. The sisters claim that Regions invested in those funds at least in part on the advice of Morgan Asset Management, Inc. ("MAM"), the investment-advisory arm of Regions Financial Corporation, the parent corporation of Regions. The sisters allege that both Regions and MAM knew that the funds were high-risk investments and that they were plagued with problems, yet MAM advised Regions to invest the assets of the various trusts in them, and Regions did so despite knowing the desired goals of the sisters for the trust assets.
According to the sisters, in 2008 several class action lawsuits were filed in Tennessee federal district courts against Regions (and others) as the trustee of certain trusts for alleged violations of securities laws relating to investments made by Regions in the funds described above. In response to the Tennessee class actions, Regions filed in the probate court a "Petition for Instructions and Declaratory Judgment" relating to Alabama trusts for which Regions served as a trustee. Regions requested that the probate court appoint a trustee ad litem to participate in the class-action litigation and to represent the interests of the trust accounts. The probate court granted Regions's request. Upon receiving notice of the appointment of the trustee ad litem, the sisters (and others) filed motions to intervene in the probate court proceeding to protect their own interests. The probate court denied the motions to intervene, but it allowed
On November 14, 2008, the sisters sent Regions a letter informing it that they were removing Regions as trustee or cotrustee of the Father Trust, the Mother Trust created for the benefit of Stockham, the Stockham Trust, and the Haynes Trust. The letter also stated that the sisters were terminating Regions as custodian and agent of the Mother Trusts created for the benefit of Reed and Haynes. The letter added that the sisters "specifically reserve the rights to pursue any claims against Regions or its affiliates for mismanagement or misappropriation of these trusts or their assets."
On November 19, 2008, Regions filed a "Petition for Final Settlement" in the probate court ("the final-settlement action") pursuant to § 19-3B-205, Ala.Code 1975,
On November 20, 2008, the sisters filed the above-referenced action in the circuit court ("the circuit court action"). The sisters' complaint named as defendants Regions, MAM, and fictitiously named parties and alleged breach of fiduciary duty, negligence, wantonness, breach of contract, fraud, negligent indemnity, violation of the Alabama Securities Act, conspiracy, and aiding and abetting breaches of duty and law. The claims encompassed both the trusts for which Regions served as trustee or cotrustee as well as the two trusts for which it served as agent and custodian, i.e., the Mother Trusts created for the benefit of Reed and Haynes. The gravamen of the complaint is that Regions knowingly invested the assets of the trusts in—and MAM advised Regions to invest the assets trusts in—unstable, high-risk funds affiliated with Regions that were experiencing severe financial problems. The complaint requests damages of at least $400,000 and makes a demand for a jury trial.
On January 8, 2009, Regions filed an answer in the circuit court to the circuit court action. In that answer, Regions did not plead the affirmative defense of abatement. On February 11, 2009, however, Regions filed an amended answer in which it specifically pleaded the affirmative defense of abatement based on § 6-5-440, Ala.Code 1975.
On March 26, 2009, the probate court issued an order denying Stockham's motion to dismiss or to transfer the final-settlement action. In its order, the probate court concluded that "Regions' Petition for Final Settlement was properly and timely filed" and that by bringing its action "Regions does not curtail potential claims against it. Rather, [the sisters] may object to the requested relief and assert any claims against Regions relating to the administration of the trusts in this proceeding for adjudication by this Court." The probate court based its jurisdiction on its interpretation of § 19-3B-203(b), finding that the statute gave the probate court
The probate court went on to state that "[i]t is the Circuit Court action—filed subsequently to this action—that should be dismissed or stayed pursuant to Ala.Code [1975,] § 6-5-440."
Also on August 11, 2009, the circuit court entered an order granting the sisters' petition for a writ of mandamus directing the probate court to vacate its order denying Stockham's motion to dismiss the final-settlement action and to dismiss in its entirety the final-settlement action without prejudice in order to allow Regions to raise any matters it asserted in the probate court as counterclaims in the circuit court action. In its order, the circuit court observed that Article VI, § 142(b), Ala. Const.1901, provides circuit courts with "general jurisdiction in all cases except as may be otherwise provided by law" and provides them with authority "to review decisions of inferior courts." It noted that § 12-11-30, Ala.Code 1975, empowers circuit courts to "exercise a general superintendence over all ... probate courts." After establishing its general supervisory authority, the circuit court held that
The circuit court reasoned that § 12-11-30, Ala.Code 1975,
The circuit court went on to find that § 19-3B-203, Ala.Code 1975,
The circuit court further held that allowing the final-settlement action to proceed "would be a waste of judicial resources and contrary to the desirable goal of judicial economy" because, in addition to the damages claims made against Regions in its capacity as trustee or cotrustee of several of the trusts, the sisters brought other claims in the circuit court action "which could [n]ever be heard in the Probate Court." Specifically, the circuit court referred to the claims against Regions as an agent and custodian of the Mother Trusts created for the benefit of Reed and Haynes and the claims against MAM in its capacity as a financial advisor to Regions in investing assets of all the trusts. The circuit court stated that these claims were not, and could not be, part of the final-settlement action because they did not involve Regions' actions as a trustee and that "[j]udicial economy would not be promoted by litigating these claims' piecemeal separately from [the final settlement action]."
Finally, the circuit court also found that allowing the final-settlement action "to proceed to conclusion on a nonjury basis, while the [sisters] in the [circuit court action] are entitled to adjudicate their claims through a jury trial, creates an unacceptable and unnecessary risk of inconsistent adjudications."
Also on August 11, 2009, the circuit court entered an order denying Regions' February 11, 2009, motion to dismiss or to stay the circuit court action. In its order, the circuit court adopted the reasoning set forth in its order granting the sisters' petition for a writ of mandamus directed to the probate court.
On August 18, 2009, Regions filed a "Motion to Certify for Interlocutory Appeal the Circuit Court's denial of Regions' Motion to Dismiss or Stay," and Regions sought a stay of all proceedings in the circuit court pending the interlocutory appeal. On August 24, 2009, the circuit court denied Regions' motion.
Regions appealed the circuit court's writ of mandamus directing the probate court to dismiss the final-settlement action. Regions filed a petition for a writ of mandamus with this Court seeking an order directing the circuit court to vacate its August 11, 2009, order denying Regions' motion to dismiss the circuit court action.
As mentioned above, the circuit court adopted the reasoning from its order issuing a writ of mandamus to the probate
As a preliminary matter, the sisters have filed a motion to dismiss Regions' appeal of the circuit court's ruling on the sisters' petition for a writ of mandamus directed to the probate court (case no. 1081619). They contend that the circuit court's consolidation of that mandamus proceeding with the circuit court action caused the two actions to become one case. The sisters argue that the circuit court's ruling on the mandamus proceeding was not a final judgment because, they say, the claims in the original circuit court action remain to be adjudicated, and Regions did not obtain a certification under Rule 54(b), Ala. R. Civ. P., that the circuit court's ruling on the mandamus proceeding was final and appealable. Therefore, the sisters reason, it is incumbent upon this Court to dismiss as from a nonfinal judgment Regions' appeal of the circuit court's ruling on the sisters' petition for a writ of mandamus directed to the probate court, leaving before us only the mandamus petition filed by Regions in this Court.
The sisters' argument misapprehends the nature of a mandamus proceeding. A writ of mandamus is a remedy sought for correcting a particular ruling by a lower court. It is not an appeal of a party's claim that transfers jurisdiction of any portion of a case to the court in which the petition for the writ of mandamus is filed. As this Court explained in State v. Webber, 892 So.2d 869 (Ala.2004):
892 So.2d at 871 (citations omitted).
Thus, the sisters' petition for a writ of mandamus in the circuit court did not transfer jurisdiction of the final-settlement action—or any particular claim involved in that action—to the circuit court. Rule 54(b), Ala. R. Civ. P., permits a trial court to "direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment." (Emphasis added.) Rule 54(b) provides a mechanism for appealing a judgment on fewer than all the claims that are before a trial court. The circuit court's issuance of a writ of mandamus to the probate court did not constitute a judgment on any claims brought by the parties. Regions appealed the issuance of the writ, not the disposition of one or more claims. Thus, the mechanism provided by Rule 54(b), Ala. R. Civ. P., for certification has no application here because there is no claim or party over which entry of a judgment was made by the circuit court in the mandamus proceeding.
See also Ex parte A.S., 3 So.3d 842, 845 (Ala.2008) (citing § 12-22-6 for the proposition that "an appeal, not a petition for the writ of mandamus, is the proper avenue for challenging a circuit court's disposition of a petition for the writ of mandamus"). It follows from these authorities that the appeal of the circuit court's issuance of the writ of mandamus in this case is permitted. Accordingly, we deny the sisters' motion to dismiss Regions' appeal of the circuit court's ruling on the sisters' petition for a writ of mandamus.
The threshold question before us in both Regions' appeal and its petition for a writ of mandamus is whether § 19-3B-203(b), Ala.Code 1975, grants the probate court jurisdiction to hear the claims brought by the sisters in the circuit court action. Section 19-3B-203 provides:
The Alabama Comment to § 19-3B-203 states, in part:
As this Court has recognized, Act No. 1144, Ala. Acts 1971,
Jett v. Carter, 758 So.2d 526, 529 (Ala. 1999).
The parties' divergent interpretations of § 19-3B-203(b) track the different interpretations offered by the probate court and the circuit court. Regions argues, as the probate court held, that § 19-3B-203(b) grants the probate court concurrent jurisdiction with the circuit court in proceedings involving testamentary or inter vivos trusts. Under this interpretation, the probate court has jurisdiction to hear any claim involving the subject trusts, including claims for money damages that concern "the liability of a trustee for an action relating to the trust" and to "compel
The sisters argue, as the circuit court held, that Alabama law provides that "[t]he circuit court shall have exclusive original jurisdiction of all civil actions in which the matter in controversy exceeds ten thousand dollars ($10,000)," § 12-11-30, Ala.Code 1975, and that § 19-3B-203(b) does not alter the circuit court's exclusive jurisdiction or enlarge the probate court's jurisdiction such that the probate court is permitted to hear claims for such money damages. Instead, according to the sisters, § 19-3B-203(b) limits the jurisdiction of the Jefferson Probate Court—and the probate courts of Mobile and Shelby Counties—to matters of equity in relation to trusts. According to the sisters, the majority of their claims against Regions are claims at law, not claims in equity, and thus § 19-3B-203(b) does not grant the probate court jurisdiction over those claims. The sisters contend that their interpretation of § 19-3B-203(b) is bolstered by the Alabama Comment to subsection (b), which mentions the "equity jurisdiction" of the Jefferson Probate Court and reiterates that the Jefferson Probate Court has been "granted equity powers."
State Farm Mut. Auto. Ins. Co. v. Motley, 909 So.2d 806, 813-14 (Ala.2005).
Subsection (a) of § 19-3B-203 provides the general rule: "[T]he circuit court has exclusive jurisdiction of proceedings in this state brought by a trustee or beneficiary concerning the administration of a trust." Subsection (a) begins, however, by noting that subsection (b) provides an exception to this general rule. A plain reading of § 19-3B-203 indicates that subsection (b) acknowledges that certain probate courts have been granted broader powers and that the exception referenced in subsection (a) is that those courts that have been granted those broader powers have the same jurisdiction to hear actions brought by trustees or beneficiaries concerning the administration of trusts as do the circuit courts of this State.
We acknowledge that § 12-11-30 provides for the circuit court to have exclusive original jurisdiction of civil actions in which the matter at controversy exceeds $10,000. We note, however, that this statute operates to distinguish between the jurisdiction of circuit courts and district courts as to civil actions generally. Section 19-3B-203, Ala.Code 1975, specifically addresses actions concerning the administration of trusts. "[A] specific statute relating to a specific subject is regarded as an exception to, and will prevail over, a general statute relating to a broad subject." Ex parte Jones Mfg. Co., 589 So.2d 208, 211 (Ala.1991). Moreover, § 12-11-30 was last amended in 1996, whereas § 19-3B-203 was enacted in 2006. With respect to jurisdiction of actions concerning the administration of trusts, therefore, § 19-3B-203 is controlling.
Thus, the probate courts of Jefferson, Mobile, and Shelby Counties have concurrent jurisdiction with the circuit courts of those counties to hear any proceeding brought by a trustee or beneficiary concerning the administration of a trust. In other words, the reference in subsection (b) of § 19-3B-203 to probate courts that have been granted "statutory equitable jurisdiction" is an identifying reference, not a limitation on the jurisdiction of the courts so identified. It is those probate courts to which subsection (b) grants "concurrent jurisdiction" with the circuit courts to hear actions concerning the administration of a trust brought by a trustee or beneficiary.
Kemp v. Kroutter, 531 So.2d 854, 855 (Ala. 1988).
The problem with the sisters' argument is that the clear gravamen of their complaint in the circuit court action with regard to their claims against Regions as trustee or cotrustee involves "essentially the administration of a trust, when a trial by jury is not allowed. See Ex parte Floyd, [250 Ala. 154, 33 So.2d 340 (1947)]." Hanks v. Hanks, 281 Ala. 92, 98, 199 So.2d 169, 174 (1967). Their claims of negligence, wantonness, fraud, and the like are derivatives of their claim of the breach of fiduciary duty.
First Alabama Bank of Montgomery, N.A. v. Martin, 425 So.2d 415, 423 (Ala.1982). In First Alabama Bank of Huntsville, N.A. v. Spragins, 475 So.2d 512 (Ala.1985), this Court provided a thorough explanation as to why even claims for money damages alleging the breach of a trust do not carry a right to trial by jury:
475 So.2d at 513-14. See also Ex parte Holt, 599 So.2d 12, 14-15 (Ala.1992) (noting that "`"[t]he basically equitable nature of an action ... for an accounting is not changed by the inclusion of a claim for damages. Such a claim only restates the basic equitable action, and in no way creates a right to trial by jury. Indeed it would make no sense that the claim for damages could change an equitable action into one at law. Damages can only be determined after an accounting of whether or not money is owed to or from [the defendant] ...."'" (quoting Sanders v. Kirkland & Co., 510 So.2d 138, 141 (Ala. 1987), quoting in turn Bonnell v. Commonwealth Realty Trust, 363 F.Supp. 1392, 1393 (E.D.Pa.1973)) (emphasis omitted)).
The two exceptions to the general rule discussed in Spragins—a duty of an immediate and unconditional money payment by
Ex parte SouthTrust Bank of Alabama, N.A., 679 So.2d 645, 649 (Ala.1996).
Thus, the sisters' claims for money damages do not entitle them to a trial by jury. The claims brought by the sisters in this case concern alleged breaches by the trustee of its fiduciary duties in relation to the trust, claims that sound in equity. As a result, the probate court retains jurisdiction over the sisters' claims against Regions as trustee or cotrustee.
It follows from the fact that § 19-3B-203(b) grants the probate court jurisdiction over the sisters' claims against Regions concerning the trusts as to which Regions served as trustee or cotrustee that the circuit court erred in granting the sisters' petition for a writ of mandamus to the probate court. There remains, however, the matter of Regions' petition to this Court for a writ of mandamus concerning the circuit court's denial of Regions' motion to dismiss or stay the circuit court action (case no. 1081712).
Regions contends that, because the probate court has jurisdiction to hear the sisters' claims against Regions, as a trustee or cotrustee, concerning the trusts involved in the final-settlement action, the circuit court action is due to be dismissed under § 6-5-440, Ala.Code 1975. As a preliminary matter, we note that Regions' motion to dismiss based on abatement depends in part upon the assumption that the claims brought by the sisters in the circuit court are in the nature of compulsory counterclaims to the final-settlement action; thus, the sisters would have to bring them in the final-settlement action or they would be waived. This assumption is, of course, correct with regard to the claims brought by the sisters in the circuit court action that pertain to the trusts for which Regions served as trustee or cotrustee, because those claims "arise[ ] out of the transaction or occurrence that is the subject matter of the opposing party's claim." Rule 13(a), Ala. R. Civ. P.
This assumption is not correct, however, with regard to the sisters' claims concerning the Mother Trusts created for the benefit of Reed and Haynes. Regions is not a trustee or cotrustee of those trusts; therefore, those claims are not involved in the final-settlement action filed in the probate court by Regions. The claims brought by the sisters concerning the Mother Trusts created for the benefit of Reed and Haynes are not compulsory counterclaims in the final-settlement action in the probate court.
As for Regions' contention that the sisters' claims in circuit court against Regions involving the trusts at issue in the final-settlement action should be abated, the sisters first argue that Regions waived
Veteto v. Yocum, 793 So.2d 814, 815 n. 1 (Ala.Civ.App.2001).
Ziade v. Koch, 952 So.2d 1072, 1075 (Ala. 2006) (quoting Ex parte Liberty Nat'l Life Ins. Co., 858 So.2d 950, 953 (Ala.2003)).
As we noted in the rendition of the facts, Regions filed an answer to the sisters' complaint on January 8, 2009. The first answer did not contain a plea of abatement. Regions filed an amended answer on February 9, 2009, however, in which it asserted abatement as a defense to the action. On the same date, Regions filed its motion to dismiss or to stay the circuit court action based on § 6-5-440. The sisters filed a motion on March 4, 2009, to strike the amended complaint, arguing that Regions had waived the defense of abatement. The circuit court did not rule on the sisters' motion to strike Regions' amended answer, and in its order denying Regions' motion to dismiss the circuit court action, the circuit court did not list waiver of the abatement defense as a reason for denying the motion. Thus, under the authority of Ex parte Liberty National Life Insurance Co., Regions revived the affirmative defense of abatement through the amendment of its complaint.
We noted in note 4 supra that § 6-5-440, Ala.Code 1975, provides that
This statutory directive means that "where two or more courts have concurrent jurisdiction, the one which first takes cognizance of a cause has the exclusive right to entertain and exercise such jurisdiction, to the final determination of the action and the enforcement of its judgments or decrees." Ex parte Burch, 236 Ala. 662, 665, 184 So. 694, 697 (1938); see also Ex parte McMichael, [Ms. 1090150, Sept. 24, 2010] ___ So.3d ___ (Ala.2010). A compulsory counterclaim is an "action" for purposes of
The final-settlement action was the first filed action.
Finally, there remains the matter of the sisters' claims against MAM as the investment advisor to Regions in managing the assets of all the trusts at issue. In the last count of their complaint, the sisters charge MAM with "aiding and abetting" Regions "in carrying out each of the breaches of duty, including breach of fiduciary duty, and including each of the violations of law and obligation, committed by Regions" listed in the previous counts of the complaint. Thus, the sisters' claims against MAM are derivative of the sisters' claims against Regions. Accordingly, the claims against MAM that involve the trusts that are the subject of the final-settlement action concern the administration of those trusts; therefore, those claims should be brought in the probate court. The claims against MAM that involve the Mother Trusts established for the benefit of Reed and Haynes must remain in the circuit court, where the sisters' claims against Regions concerning those trusts originated.
The sisters' motion to dismiss Regions's appeal of the circuit court's writ of mandamus
We grant Regions' petition for a writ of mandamus with respect to the circuit court's denial of its motion to dismiss the circuit court action as to the sisters' claims against Regions and MAM that involve the trusts at issue in the final-settlement action because the abatement rule requires the dismissal of those claims. We deny the petition, however, with respect to the circuit court's denial of Regions' motion to dismiss the circuit court action as to the sisters' claims against Regions and MAM that involve the trusts for which Regions served only as custodian and agent because those claims are not part of the final-settlement action.
1081619—MOTION TO DISMISS DENIED; REVERSED AND REMANDED WITH INSTRUCTIONS.
1081712—PETITION GRANTED IN PART AND DENIED IN PART; WRIT ISSUED.
COBB, C.J., and WOODALL, STUART, PARKER, and SHAW, JJ., concur.
LYONS and BOLIN, JJ., concur specially.
LYONS, Justice (concurring specially).
I concur fully in the main opinion. I write specially concerning the construction of § 19-3B-203, Ala.Code 1975, which provides:
Subsection (a) refers to the exclusive jurisdiction of the circuit courts over proceedings "brought by a trustee or beneficiary concerning the administration of a trust," subject to an exception found in subsection (b). Subsection (b) defines the scope of the exception for "[a] probate court granted statutory equitable jurisdiction" and then permits the exercise of jurisdiction by such probate courts, concurrent with the circuit court, "in any proceeding involving a testamentary or inter vivos trust." (Emphasis added.) Obviously, the scope of the exclusive jurisdiction of the circuit court provided for in subsection (a) is narrower than the grant of concurrent jurisdiction in subsection (b) for probate courts granted statutory equitable jurisdiction.
Prior to enactment of § 19-3B-203(a), a circuit court, as a court of general jurisdiction, had jurisdiction in any proceeding involving a testamentary or inter vivos trust. Subsection (a) makes no change in such jurisdiction other than to make it exclusive in proceedings brought by a trustee or beneficiary concerning the administration of a trust.
The net effect of the unambiguous language of § 19-3B-203 is to confine proceedings brought by a trustee or beneficiary concerning the administration of a trust to the circuit court except as to those probate courts exercising statutory equitable
BOLIN, J., concurs.