Fill and Sign the Gamble V United States Wikipedia Form

IN THE UNITED STATES COURT OF APPEALS ELEVENTH CIRCUIT Ex parte ___________________ *and ___________________, ** Petitioners,**RE:____________________ *__________________ *CASE NUMBER:*______________Plaintiffs, **Vs. **___________________ * And _________ *_________**Defendants.* _______________________________________________ PETITION FOR WRIT OF MANDAMUS ORAL ARGUMENT REQUESTED Attorney JOHN DOE & ASSOCIATES, P.C. Post Office Drawer ____Mobile, Alabama _____ (334) ________ ATTORNEYS FOR PETITIONERS IN THE UNITED STATES COURT OF APPEALS ELEVENTH CIRCUIT Ex parte__________________ *and _____________________ ** Petitioners,**RE:________________ *________________ ;*CASE NUMBER:*______________Plaintiffs, **Vs. **________________**Defendants.* PETITION FOR WRIT OF MANDAMUS Come now ___________________________________________, Defendants in Civil Action Number CV-99-_________, captioned as _____________________________________________________________ _______________________________, in the United States District Court for the Southern District of Alabama, and petition in the above-named Court for a Writ of Mandamus to the Honorable ______________ of said District Court, and as support for said request, respectfully submit Exhibits A-H and the following: -2- I. STATEMENT OF THE FACTS NECESSARY TO AN UNDERSTANDING OF THE ISSUES PRESENTED The___________ filed a complaint in the Mobile County Circuit Court on November 12, 1998 against ________and _______ =s agents, _____ and ______. The __________ alleged claims of fraud and conspiracy against the defendants based on the sale and servicing of _______ adjustable life insurance policies (and the surrendering of their older policies) in 1984. The __________ assert in their complaint that they met with _______ agent ______ at their home in October of 1984 to discuss their insurance coverage with _______. The __________ already had policies with _______ with built-up cash value. _______suggested they surrender these, and put the money into two new policies. _______ told the___________ that Mr. _________ could purchase a 150,000 policy for $102.00 per month and Mrs. _________ could purchase a policy for approximately $20-$30 per month. The __________ had told _______that they only wanted permanent type of coverage where the insurance was guaranteed for life for the premium paid. The __________ did not want term or term-like insurance where the policy runs out at a certain age. ______ told them that she had just the policy for them. She stated that as long as the premiums quoted were paid, the insurance coverage would exist. She further told the __________ that these -3- policies had a savings fund where money would continue to build up for the _________s= retirement. The __________ were told that the savings and the insurance were separate parts of the same product, except that they could use the savings fund to pay premiums on the policies if they ever needed to do that. (Petitioners= Exhibit AA@.)______ showed the __________ illustrations with the current rates only (no guarantees), which reflected that Mr.__________ would have $58,114 he could withdraw at age 65, and Mrs. _________ would have around $10,000 she could withdraw. _______told the __________ that taking these amounts out would not affect the insurance coverage. ______ told the __________ that _______ was paying 8%-10% interest on the money in the savings fund because of the money _______ was saving on not advertising this policy to the public. ______ convinced the __________ to exchange their older policies for these new policies. Consequently, close to $6,000 dollars was taken from Mr.__________=s policy ($5,922.73) and put into his new policy, and $447.05 was taken from Mrs. _________=s older policy and put into her new policy. (Petitioners= Exhibit AA@.) -4- ______ did not inform the __________ that these new policies were actually a type of term insurance where the cost of insurance goes up each year, and that the premium ______ quoted the __________ for each policy would not carry the policies to maturity or even through the _________s= life. The policies will lapse within a few years, leaving the __________ without insurance coverage they thought they had purchased or the retirement money guaranteed. Further, agent _____, part of _______= s management, spoke to the __________ a couple of years after the purchase of these new policies, and told them these policies were good policies as sold to them by ______, and that they would not have to put additional money into the policies other than the premiums they were paying. _____ returned again a couple of years later and confirmed what he had told the __________ previously. He also told the __________ not to pay attention to notices or documents they received from _______ referencing their policies, as these were just form notices that _______ had to send out; that their policies were fine. (Petitioners= Exhibit AA@.)The __________ filed their Complaint against _______ on November 12, 1998. Upon being served, _______ filed a Removal to this Court. -5- _______ did so without the Alabama resident ______ being served. The __________ promptly filed a Motion for Remand, with which ______, after being served at her home in Baldwin County, Alabama, agreed. The case was then remanded to the Circuit Court of Mobile County on March 3, 1999. _______ thereafter filed this Complaint and Petition under 9 U.S.C. ''3 and 4 with this Court. (Petitioners = Exhibit AB@.) The Arbitration provision that _______ seeks to force the __________ to follow instead of their suit in the Mobile County Circuit Court was not a part of the applications they signed to purchase the policies and was not a part of the policies. Indeed, no reference is made to arbitration in any of the documents given to the __________ at the sale and delivery of the policies. _______ claims that simply because it is allowed to amend its Constitution and Laws at any time (if certain requirements are met), and that the amendments are supposed to be binding on its policyholders (as a Fraternal Benefit Society), retroactively, that it can make any amendment it wants, even where as here, the amendment violates established federal and state law and constitutional rights of the __________. The ___________ 1984 policies in Part Two(2), starting on page six (6), define that the contracts between them and _______ consist of the policy with all applications, -6- endorsements, etc., the written application attached to the policy, the Articles of Incorporation of _______, and the Constitution and Laws of _______ _______ fails to include within the definition any amendment to the Constitution, Laws, or Articles of Incorporation. Page seven (7) of each of the policies provides that the terms of the policy are governed by the laws of the state where it is delivered. In this case, the state is Alabama. (Petitioners= Exhibit AC@.) It was not until approximately twelve (12) years after the __________ purchased the policies that _______ decided to amend its Constitution to include an alternative dispute resolution procedure for all claims brought by insureds against _______. This amendment was made in December of 1996. The final step of the procedure is arbitration. _______ unilaterally, without the knowledge or vote of its policyholders, held a quick telephonic Ameeting@ of the Board of Directors of _______ and proposed for vote an amendment to its constitution to take away its insureds = rights to trials by juries. (Petitioners= Exhibit AD@.) In response to________= s FAA Complaint and Petition, the __________ filed a Motion to Dismiss with a supporting Brief. (Petitioners= Exhibit AE@ .) _______ filed an Opposition to that Motion on -7- April 12, 1999. (Petitioners= Exhibit AF@.) On or about April 26, 1999, the District Court issued an Order denying the _________s= Motion to Dismiss, and simultaneously granting _______=s request for enforcement of its recent arbitration provision. (Petitioners= Exhibit AG@.) -8- II. STATEMENT OF ISSUES PRESENTED A.Whether _______=s arbitration clause/provision amended into its Constitution and Laws in December 1996, is prohibited and nonenforceable in Alabama contracts of insurance under the McCarran-Ferguson Act?2. Whether the arbitration provisions purported by ________to be a part of the __________= _______ policies violate their right to trial by jury guaranteed to them by the United States Constitution? -9- III. STATEMENT OF RELIEF SOUGHT ___________________________ ask this Court to issue an order instructing the Honorable ______________ to: (1) set aside the granting of _________ Complaint and Petition to Compel Arbitration; (2) enter an Order granting the _________s = Motion to Dismiss; and (3) an Order lifting the stay as to the State Court action. -10- IV. STATEMENT OF THE REASONSWHY THE WRIT SHOULD ISSUE 1.Preamble.A petition for writ of mandamus is the appropriate method by which a trial court=s order compelling arbitration is to be challenged. Suarez-Valdez v. Shearson Lehman/American Express, Inc., 858 F.2d 648 (11th Cir. 1988).B.The McCarran-Ferguson Act, 15 U.S.C. '' 1011-1012 (1945), prohibits enforcement of arbitration clauses in insurance policies purchased in Alabama. ____________ asserts that it is allowed to force the ____________ under the FAA to arbitrate their disputes through ____________=s alternative resolution/arbitration provisions amended into its Constitution and laws in December of 1996 because it is a Fraternal Benefits Society. The ____________= policies and applications to purchase the policies contain no clauses relating to arbitration or make any reference to arbitration whatsoever. The ____________ did not agree to arbitrate any claims against ____________. Arbitration agreements in insurance contracts are prohibited in Alabama by the McCarran-Ferguson Insurance Regulation Act, 15 U.S.C. '' 1011-1012 (1945) and Ala. Code ' 8-1-41(3). Further, civil actions are -11- guaranteed under '27-34-45 to insureds who purchased policies from a Fraternal Benefits Society where that insured is the victim of Aany misrepresentation or false or misleading statement concerning the terms, benefits, or advantages of any fraternal insurance contract now issued or to be issued in this State. . . .@Section 2 of the FAA which is relied upon by ____________ for the enforcement of arbitration upon the ____________, provides in pertinent part:A written provision in any ... contract evidencing a transaction involving interstate commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction ... shall be valid, irrevocable, and enforceable....9 U.S.C. ' 2.Historically, the United States Supreme Court has held that the business of insurance is not "commerce" within the meaning of the Constitution's Commerce Clause. Thus, insurance was beyond the scope of federal control via statutes such as the FAA or otherwise. Then, the United States Supreme Court's 1944 decision in United States v. Southeastern Underwriters Assoc., 322 U.S. 533 (1944), declared that the "business of insurance" was interstate commerce subject to the Sherman Antitrust Act. -12- Congress responded quickly to this case by enacting the McCarran-Ferguson Insurance Regulation Act, 15 U.S.C. '' 1011-1012 (1945). This Act reserved to the states the sole right to regulate the business of insurance. Indeed, Congress enacted this statute for the specific purpose of insuring that each State has broad and primary responsibility for regulating the insurance industry. S.E.C. v. National Sec., Inc., 393 U.S. 453, 458 (1969); Barnhardt v. Marine Ins., Inc., 961 F.2d 529, 531 (5th Cir. 1992). In relevant part, the Act provides:Regulation by state law, federal law relating specifically to insurance; applicability of certain federal law after June 30th, 1948.(a)the business of insurance, and every person engaged therein, shall be subject to laws of several states which relate to the regulation or taxation of such business.(b)no Act of Congress shall be construed to invalidate, impair, or supersede any law enacted by any state for the purpose of regulating the business of insurance, or which imposes a fee or tax upon such business, unless such Act specifically relates to the business of insurance; PROVIDED, that after June 30th, 1948, the Act of July 2, 1890, as -13- amended, known as the Sherman Act, and the Act of October 15, 1914, as amended, known as the Federal Trade Commission Act, as amended, shall be applicable to the business of insurance to the extent that such business is not regulated by state law.15 U.S.C. '1012(a) and (b). Ordinarily, federal law preempts conflicting state law due to the Supremacy Clause in the United States Constitution, Art. VI, Cl. 2. The McCarran-Ferguson Act, however, reverses that rule in situations involving state regulation of the insurance industry. While the Act specifically reserves the application of certain federal provisions to the regulation of insurance companies, the FAA is not one of them. The McCarran-Ferguson Act allows a state law to Areverse preempt@ a federal statute where: (1) the federal statute does not specifically relate to the business of insurance; (2) the state law was enacted for the purpose of regulating the business of insurance, and (3) the federal statute operates to invalidate, impair, or supersede the state law. Humana, Inc., et al. v Forsyth, et al., 119 S.Ct. 719 (January 20, 1999).The FAA unquestionably is not an AAct of Congress @ that -14- Aspecifically relates to the business of insurance.@ The legislative history of the FAA clarifies that it was never intended to apply to or regulate the business of insurance. In December 1922, the United States Senate and House of Representatives submitted simultaneous Bills in regard to the passage of what we now know as the FAA. Bills S. 4214 and H.R. 13522 were introduced and debated by the members of Congress in regard to establishing the FAA. In 1922, the Senate Judiciary Committee held a hearing on S. 4212 and focused much of their attention on the arbitration provision=s effect on consumers and a citizen's constitutional right to a trial by jury. Senator Walsh and Mr. W. H. H. Piatt1 were two proponents who argued in favor of passage of S. 4212. The following is an excerpt from their discussion of the FAA in the Senate Judiciary Sub-Committee:Senator Walsh of Montana. The trouble about this matter is that a great many of these contracts that are entered into are really not voluntarily things at all. Take an insurance policy, there is a blank in it. You can take that or you can leave it. The agent has no power at all to decide it. Either you can make the contract or you cannot make any contract. It is the same with a good many contracts of employment. A man says "these are 1 W.H.H. Piatt was a representative of the American Bar Association serving as Chairman of the Committee of Commerce, Trade, and Commercial Law. -15- our terms. All right, take it or leave it." Well, there is nothing for the man to do except to sign it; and then he surrenders his right to have his case tried by the Court, and has to have it tried before a tribunal in which he has no confidence at all.Mr. Piatt. That would be the case in that kind of case I think; but it is not the intention of this Bill to cover insurance cases.Sales and Contracts to Sale in Interstate and Foreign Commerce, and Federal Commercial Arbitration, hearing on S. 4212 and 4214 before a subcommittee of the Committee on the Judiciary, 67th Cong., 4th Sess. 9-10 (1923) (emphasis added).; see also Allstar Homes, Inc. v. Waters, 711 So.2d 924 (Ala. 1997).The original legislative intent of the FAA was not to govern insurance contracts. There can be no other meaning derived from this language of the senator who sponsored passage of the FAA. There is no need for the FAA to govern an insurance contract because the McCarran-Ferguson Act explicitly reserves that right to the several states.Ala. Code ' 8-1-41 is a statute relating to the business of insurance. At least one federal circuit has interpreted a similar statute to be relating to insurance. See Mutual Reinsurance Bureau v. Great Plains Mutual Ins. Co., Inc., 969 F.2d 931 (10th Cir. 1992). The insured in that case argued that the -16- McCarran-Ferguson Act precluded application of the FAA to an insurance agreement because the FAA conflicted with a law of that state (Kansas) that discouraged arbitration clauses. Id. 969 F.2d at 934. The Kansas statute stated that arbitration agreements are enforceable except in contracts of insurance. Alabama=s anti-arbitration statute is stronger than the Kansas statute in that it is a blanket prohibition to pre-dispute arbitration clause. Further, the FAA is unquestionably not. Ala. Code ' 8-1-41(3) regulates business in general, including the business of insurance. This Code Section in pertinent part, is as follows:' 8-1-41. Obligations which cannot be specifically enforced.The following obligations cannot be specifically enforced: * * * (3) An agreement to submit a controversy to arbitration; * * * This statute is part of Title 8 of the Code entitled Commercial Law and Consumer Protection (emphasis added). It is the public policy of this State, for protection of consumers such as purchasers of life insurance, that pre- dispute arbitration agreements are not enforceable. -17- As stated by the United States Supreme Court, the category of law enacted Afor the purpose of regulating the business of insurance@ is broad and consists of those laws Athat possess the end, intention, or aim@, of adjusting, managing, or controlling the business of insurance. In determining what constitutes the Abusiness of insurance,@ the McCarran-Ferguson Act contemplated the focus being on the relationship between the insurance company and the policyholder. AStatutes aimed at protecting or regulating this relationship, directly or indirectly, are laws governing the Abusiness of insurance.@ United States Treasury Dept. v. Fabe, 508 U.S. 491 (1993); Union Labor Life Ins. Co. v. Pirenzo, 458 U.S. 119 (1982); S.E.C. v. National SEC, Inc., 393 U.S. 453 (1969); Mutual Reinsurance Bureau, 969 F.2d at 933. It is not necessary that the state statute be in the form itself of an insurance code or an act relating only to insurance. Mutual Reinsurance Bureau, 962 F.2d at 934. Ala. Code ' 8-1-41 is a statute which regulates the relationship between the insurer and insured. It specifically provides that arbitration clauses in Alabama contracts are unenforceable. Claims the insured may have against the insurance company, therefore, can not be determined by an arbitrator, but through the Courts. -18- Further, and most importantly, Chapter 34 in Title 27 of the Alabama Code is the chapter of the (Insurance) Code relating only to Fraternal Benefit Societies and the contracts of insurance they issue. Section 27-34-45 provides specifically for an action by the insured against the Society A. . . in accordance with the provisions of civil practice @ where the Society and its agent(s) have made Aany misrepresentations or false or misleading statement concerning the terms, benefits, or advantages of any fraternal insurance contract. . . .@2 This statute does not state the negative that arbitration 2 ' 27-34-45. Unfair or deceptive practices.No person shall cause or permit to be made, issued or circulated in any form:I. (1)Any misrepresentation or false or misleading statement concerning the terms, benefits or advantages or any fraternal insurance contract now issued, or to be issued, in this state or the financial condition of any society; II.(2)Any false or misleading estimate or statement concerning the dividends or shares of surplus paid, or to be paid, by any society on any insurance contract; or III.(3)Any incomplete comparison of an insurance contract of one society with an insurance contract or another society or insurer for the purpose of inducing the lapse, forfeiture or surrender of any insurance contract. A comparison of insurance contracts is incomplete:I. 1.If it does not compare in detail:II.1.The gross rates and the gross rates less any dividend or other reduction allowed at the date of the comparison; and III.2.Any increase in cash values and all the benefits provided by each contract for the possible duration thereof as determined by the life expectancy of the insured; or IV.2.If it omits from consideration:1. 1.Any benefit or value provided in the contract;2.2.Any differences as to amount or period of rates; or3.3.Any differences in limitations or conditions or provisions -19- provisions are prohibited in contracts of insurance issued by Societies, but rather states the positive that insureds may bring an action in accordance with the provisions of civil practice; i.e., the ability to bring a lawsuit in court is guaranteed and specifically provided for the insured. See Justice Cooper=s dissent, ____________ of the World Life Insurance Society v. Harris, [Ms. 1980395] ____ So.2d ____ (Ala. 1999).Lastly, the FAA, in providing for the enforcement of arbitration agreements, directly Ainvalidates and impairs@ Ala. Code ' 8-1-41(3), and most importantly, ' 27-34-45. If ____________ =s arbitration provision is forced upon the insured, ' 27-34-45 would have no meaning or purpose in the Code. A guarantee of the right to a trial necessarily envisions no statute, law, or organization can in turn take that away. Because of this direct conflict, and the frustrating affect the FAA would have on Alabama statutory law, the which directly or indirectly affect the benefits.In any determination of the incompleteness or misleading character of any comparison or statement, it shall be presumed that the insured had no knowledge of any of the contents of the contract involved.I.(4)Any person who violates any provision of this section or knowingly receives any compensation or commission by or in consequence of such violation shall, upon conviction, be punished by a fine not less than $100.00 nor more than $1,000.00 or by imprisonment in the county jail not less than 30 days nor more than 90 days, or by both fine and imprisonment, and shall, in addition, be liable for a civil penalty in the amount of three times the sum received by such violator as compensation or commission, which penalty an action may be maintained, for and recovered by any person or society aggrieved for his, or its, own use and benefit in accordance with the provisions of civil practice. II. -20- McCarran-Ferguson Act combined with these statutes prevents application of the FAA and hence makes ____________=s Complaint and Petition for Arbitration unenforceable. 3.The arbitration provision purported by ____________ to be a part of the ____________= policies violates their right to trial by jury under Amendment VII of the United States Constitution. ____________=s and the District Court=s forcing of the ____________ to pursue their claims through arbitration violates their right to trial by jury provided in Amendment VII of the United States Constitution and applicable through Amendment XIV. The Petitioners= right to trial by jury under the United States Constitutions is "inviolate". The United States Constitution, Amendment VII provides:Trial by Jury in Civil Cases.In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury shall be otherwise re-examined in any court of the United States, than according to the rules of the common law. The arbitration provision before this Court, strips away the ____________' right to trial by jury by unilaterally forcing arbitration upon them without an agreement, without signatures, and without any type of authorization from them as the policyholders.Ala. Code ' 8-1-41(3), and particularly '27-34-45, were attempts by the -21- Alabama Legislature to insure preservation of every Alabama citizen's right to trial by jury. The framers of these statutes did not want consumers' right to trial by jury to be terminated by arbitration clauses. ____________=s unilateral insertion of an Aunbargained for@ arbitration provision into the ____________' policies would be and is a violation of their right to trial by jury. This kind of act is prohibited by the federal law, and specifically the McCarran-Ferguson Act.Every Alabama citizen who enters into an insurance contract in the State of Alabama, has the inherent right and benefit to a trial by jury should they seek such redress. To hold otherwise, would absolutely violate the policyholders= constitutional rights under the United States Constitution.Thus, ____________ and the District Court have violated the ____________= rights to trial by jury through application of ____________=s unilaterally adopted arbitration provision in its Constitution. -22- V. CONCLUSION The foregoing arguments and legal authority clearly reflect that arbitration clauses in contracts of insurance violate a Plaintiff=s right to a trial by jury, are prohibited in Alabama, and court trials are expressly preserved for insureds of Fraternal Benefit Societies. The District Court =s decision in this matter compelling Arbitration is incorrect, and is due to be set aside, with the Complaint and Petition of ____________ being dismissed pursuant to the ____________ = Motion to Dismiss. -23- VI. REQUEST FOR ORAL ARGUMENT The Petitioners respectfully request oral argument in this matter if this Court desires same, as same will serve to explain the issues in this Writ. Respectfully requested,BY:________________________________Petitioner=s attorneyAttorney=s numberOF COUNSEL:JOHN DOE & ASSOCIATES, P.C.Attorneys for Petitioners, ______________________ and ______________________Post Office Drawer ____Mobile, Alabama ______(334)_________ -24- VII. LISTING OF ATTACHED PLEADINGS AND ORDERS Exhibit AA@:____________= Complaint;Exhibit AB@: ____________=s Complaint and Petition to Compel Arbitration;Exhibit AC@:Copies of the ____________= ____________ policies; Exhibit AD@:The arbitration amendment to the ____________ Constitution;Exhibit AE@: The Petitioners= Motion to Dismiss ____________=s Complaint and Petition with Supporting Brief; Exhibit AF@: ____________=s Opposition to Petitioners= Motion and Brief;Exhibit AG@:Honorable ________________ Order of April 26, 1999, Denying Petitioners= Motion to Dismiss and Granting ____________=s Complaint and Petition to Enforce Arbitration; Exhibit AH@: Case Action Summary. This Writ respectfully submitted and served this 24th day of May, 1999.By:___________________________ Petitioner= s attorneyJOHN DOE & ASSOCIATES, P.C. Attorneys for PetitionersPost Office Drawer _____Mobile, Alabama _____(334) _________ -25- CERTIFICATE OF COMPLIANCE AND OF SERVICE The number of lines of monospaced type in this Brief is 576.Service By Hand DeliveryThe Honorable ______________United States District Court, Chief Judge Courtroom #5A113 St. Joseph StreetMobile, Alabama 36602Service By United States Mail:Other attorneys of record_______________________________Petitioner=s attorneyAttorney number