Baldwin Mutual Insurance Company, Inc. ("Baldwin Mutual"), appeals from the Mobile Circuit Court's certification of a class action against it. We reverse and remand.
Factual Background and Procedural History
Dean Edwards sued Baldwin Mutual on July 12, 2007, asserting a breach-of-contract claim. Specifically, Edwards stated that, in August 2005, his house was damaged by Hurricane Katrina and that Baldwin Mutual was his homeowner's insurer at the time. Edwards alleged that, under his homeowner's policy with Baldwin Mutual, he was entitled to recover the "actual cash value" of his loss, which the policy defined, in relevant part, as "the amount it would cost to repair or replace [the] covered property." Edwards maintained that, as part of "actual cash value" he says was due under his policy as a result of his loss, he was entitled to receive an additional 20% of the costs of material and labor, a sum, Edwards alleged, typically charged by contractors for overhead and profit. Edwards alleged that Baldwin Mutual breached its policy by failing to include that 20% for contractor overhead and profit in calculating the "actual cash value" of his loss.
Edwards also sought to represent a proposed class of plaintiffs under Rule 32(b)(3), Ala. R. Civ. P. In his complaint, Edwards defined the class as including:
(Emphasis added.) On July 30, 2009, Edwards moved the trial court to certify the class. On August 19, 2009, Edwards and Baldwin Mutual jointly moved the trial court for a hearing regarding the certification of the class defined above.
The trial court held an evidentiary hearing on the class-certification question on October 15, 2009. At that hearing, Edwards presented evidence as to the damage to his house caused both by Hurricane Katrina in August 2005 and by Hurricane Ivan in September 2004. Edwards represented that the class definition was broad enough to include claims based on damage caused by Hurricane Ivan and that he intended to amend his complaint to state a breach-of-contract claim against Baldwin Mutual arising from its payment of a loss for damage to Edwards's house sustained during Hurricane Ivan.
Counsel for Baldwin Mutual presented evidence at the hearing indicating that Baldwin Mutual had not, in fact, paid Edwards's loss resulting from Hurricane Katrina on an "actual cash value" basis, but, instead, pursuant to Edwards's policy, had paid his claim based on the "replacement cost" of the damaged property. Accordingly, Baldwin Mutual argued that Edwards was not a part of the class he sought to certify. Baldwin Mutual also argued that the class definition should be limited because, it says, as written, the definition included claims by putative class members who had already litigated or settled their claims with Baldwin Mutual. Edwards's counsel acknowledged at the hearing that he needed to "tinker with the class definition." The trial court instructed Edwards's counsel to settle on a class definition and present it to the court in a
On November 6, 2009, Edwards filed a brief in support of his motion for class certification in which he asked the trial court to certify the following class:
The class defined by Edwards in his November 6, 2009, brief adds certain exclusions as discussed at the hearing; it also omits from the class definition the requirement that class members' losses have been paid "on an actual cash value basis."
In its response brief, Baldwin Mutual argued that, in deleting the requirement that the losses of putative class members have been paid based on actual cash value, the revised class definition impermissibly expanded the class beyond that as to which the trial court had received evidence at the class-certification hearing. Specifically, Baldwin Mutual argued that certification of the new class would violate the procedural requirements of § 6-5-641, Ala.Code 1975; that Baldwin Mutual would be substantially prejudiced by the post-hearing expansion of the class; that the evidence presented at the October 15, 2009, hearing did not address loss payments other than those based on actual cash value; and that certification of the new class "would deny Baldwin Mutual the opportunity for a meaningful hearing on class certification and prevent [the trial court] from conducting the requisite `rigorous analysis' on [Edwards's] requested class. Ala.Code , § 6-5-641."
Edwards responded, arguing that the revised class definition was substantively appropriate for class certification. Edwards subsequently moved to amend his complaint to include an individual claim against Baldwin Mutual arising from the loss Edwards suffered as a result of Hurricane Ivan and to include the class definition as revised in Edwards's November 6, 2009, brief. Baldwin Mutual objected to Edwards's motion to amend, arguing again that the revised class definition impermissibly expanded the class, that it was prejudiced by the expansion, that it was denied a meaningful opportunity to challenge the revised class, and that certification of the revised class would not satisfy the requirements of § 6-5-641. Edwards replied, arguing primarily that Baldwin Mutual did not show that it would have presented its case differently at the hearing had it known of the revised class definition.
On March 1, 2010, the trial court granted Edwards's motion to amend the complaint
This Court has stated the standard of review applicable to a class-certification order as follows:
U-Haul Co. of Alabama, Inc. v. Johnson, 893 So.2d 307, 310-11 (Ala.2004).
Section 6-5-641, Ala.Code 1975, provides, in relevant part:
This Court has stated: "Section 6-5-641(d) requires the trial court to conduct an evidentiary hearing on class-certification issues and to record that hearing, if any `party' requests such a hearing by motion." Disch v. Hicks, 900 So.2d 399, 406 (Ala. 2004) (reversing a trial court's certification of a settlement class, in part, because the trial court did not hold a hearing on certification upon the request of a putative class member).
Baldwin Mutual argues on appeal that the trial court erred in certifying the revised class defined in Edwards's November 6, 2009, brief. Specifically, Baldwin Mutual argues that Edwards impermissibly expanded the original class definition and that, in certifying the revised class, the trial court failed to comply with the requirements of § 6-5-641 in that it did not hold a hearing on the class it certified and it could not have conducted a rigorous analysis of that class. We agree.
Edwards's proposed redefinition of the class in his November 6, 2009, brief materially changed the class in a manner
Based on the foregoing, we conclude that the trial court exceeded its discretion in certifying the class as redefined in Edwards's November 6, 2009, brief. This finding precludes our consideration of the other issues presented by the parties on appeal.
We reverse the trial court's March 1, 2010, order certifying the class defined in Edwards's November 6, 2009, brief, and we remand the cause to the trial court for further proceedings consistent with this opinion.
REVERSED AND REMANDED.
COBB, C.J., and STUART, BOLIN, and MURDOCK, JJ., concur.