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9a766b5c-ae4e-4a5b-bfce-a5a2a0675a4c | Ex Parte Oswalt | 686 So. 2d 368 | 1950203 | Alabama | Alabama Supreme Court | 686 So. 2d 368 (1996)
Ex parte Ronald Eric OSWALT.
In re Ronald Eric Oswalt, Alias
v.
State.
1950203.
Supreme Court of Alabama.
May 24, 1996.
*369 Joseph G. Pierce of Drake & Pierce, Tuscaloosa, for petitioner.
Jeff Sessions, Atty. Gen., and Jean A. Therkelsen, Asst. Atty. Gen., for respondent.
PER CURIAM.
We granted Ronald Eric Oswalt's petition for a writ of certiorari to the Court of Criminal Appeals to determine whether that court erred by affirming the trial court's denial of Oswalt's motion to suppress evidence seized when police officers executed an "anticipatory search warrant" for his residence. Based on the evidence seized in the search, Oswalt was found guilty of trafficking in cocaine.
The Court of Criminal Appeals affirmed the conviction, holding that anticipatory search warrants do not violate the protections against unreasonable searches and seizures contained in the Fourth Amendment to the United States Constitution and the Alabama Constitution of 1901, Art. I, § 5. It also held that such warrants are valid under Alabama law controlling the issuance of search warrants. Oswalt v. State, 686 So. 2d 361 (Ala.Crim.App.1994). Although we recognize, along with an overwhelming number of jurisdictions,[1] that an anticipatory search *370 warrant is not per se unconstitutional,[2] we hold that the specific anticipatory search warrant at issue in this case was not authorized by existing Alabama law.
An informant told Officer Norman Willingham, of the narcotics division of the Alabama Department of Public Safety, that Oswalt was involved in the distribution of illegal drugs and that Oswalt wished to purchase cocaine and marijuana. Willingham had the informant tell Oswalt that he knew someone who could sell Oswalt those drugs. In response, the informant told Willingham that Oswalt wanted to purchase one ounce of cocaine and wanted it delivered to him at his residence in Northport on August 1, 1992.
On the morning of August 1, Willingham obtained a search warrant from Magistrate Gene Boswell, based on his affidavit stating that later that same day an undercover narcotics agent, Paul Johnson, would travel to Oswalt's residence and sell Oswalt an ounce of cocaine, which would then be in Oswalt's possession in his residence. It is uncontested that when Willingham obtained the search warrant, there was no probable cause to believe that Oswalt already had possession of the cocaine that was ultimately seized from his residence, or that he had possession of other controlled substances. Later that day, Johnson was accompanied by the informant to Oswalt's residence, the drug transaction occurred as planned, and the search warrant was executed. The search yielded the 28 grams of cocaine that Agent Johnson had just delivered and sold to Oswalt.
Oswalt was indicted for trafficking in cocaine, in violation of Ala.Code 1975, § 13A-12-231(2)a. He pleaded not guilty and moved to suppress the evidence obtained by the search of his residence, contending that the search warrant was invalid. The trial court denied the motion and, after the case was submitted to the trial judge on stipulated facts, Oswalt was convicted. He was sentenced to three years in prison, with five years' probation upon release. As noted above, the Court of Criminal Appeals affirmed Oswalt's conviction. Oswalt, supra. We granted certiorari review to consider whether the anticipatory search warrant at issue in this case is valid under Alabama law.
Both Ala.Code 1975, § 15-5-2, and Rule 3.8, Ala.R.Crim.P., address the issuance of search warrants. The requirements of the procedural rule and the statute are virtually identical; however, unless otherwise provided by law, Rule 3.8 supersedes § 15-5-2.[3] Although a legislative act generally controls over a court rule, Section 6.11 of Amendment 328 of the Alabama Constitution of 1901 confers on this Court the authority to "make and promulgate rules governing the administration of all courts and rules governing practice and procedure in all courts," subject to the rules being changed by the legislature only "by a general act of statewide application." See, also, Ex parte Foshee, 246 Ala. 604, 21 So. 2d 827 (1945); Holsemback v. State, 443 So. 2d 1371 (Ala.Crim.App.1983); Committee Comments to Rule 1.1, Ala.R.Crim.P. The Alabama legislature has recognized the supremacy of this Court's Rules of Criminal *371 Procedure over statutory provisions on the same subject, stating in § 15-1-1, Ala.Code 1975: "Any provision of this title [`Criminal Procedure'] regulating procedure shall apply only if the procedural subject matter is not governed by rules of practice and procedure adopted by the Supreme Court of Alabama."
Thus, in order to determine whether a search warrant is authorized under Alabama law, we look to the specific language of Rule 3.8. The Rule reads:
(Emphasis added.)
The search warrant was obtained on the morning of August 1, 1992. The affidavit supporting the warrant, which is also dated August 1, 1992, stated, in pertinent part:
(Emphasis added.) Although the affidavit concludes by asserting that the affiant "has probable cause to believe that the [cocaine] is concealed upon the aforesaid ... property," it states that the probable cause is based on events that would occur in the future, i.e., "Agent Johnson will have a conversation with Oswalt," and "Agent Johnson will conduct a cocaine transaction with Oswalt."
In general, a search warrant based upon "an affidavit showing probable cause that at some future time (but not presently) certain evidence of a crime will be located at a specific place" is referred to as an anticipatory search warrant. 2 W. LaFave, Search and Seizure § 3.7(c) (2d ed. 1987). In other words, an anticipatory search warrant anticipates that certain specific events will occur after the issuance of the warrant, those future events creating the probable cause that supports the warrant.[4] If the future events do not occur, the warrant is void. United States v. Garcia, 882 F.2d 699 (2d Cir.), cert. denied, 493 U.S. 943, 110 S. Ct. 348, 107 L. Ed. 2d 336 (1989).
Oswalt argues that the Court of Criminal Appeals erred by ruling that anticipatory search warrants are valid in Alabama. He contends that such warrants are not allowed under the language of Rule 3.8 because, he says, that rule requires probable cause to believe that a violation of the law has occurred or is occurring at the time the warrant issues, not that one will occur in the future. Oswalt contends that the Court of Criminal Appeals ignored its own holding in Walls v. State, 536 So. 2d 137 (Ala.Crim.App. 1988), cert. denied, 490 U.S. 1020, 109 S. Ct. 1744, 104 L. Ed. 2d 181 (1989), where, he says, that court held that both the issuance and the execution of search warrants must strictly comply with legal requirements. Oswalt says that in his case the court merely concluded, without any supporting legal analysis, that anticipatory search warrants are valid under Alabama law.
In response, the State first argues that anticipatory search warrants are valid because, it says, they are not expressly prohibited by Alabama law. It also suggests that this Court should follow the trend of federal courts, which have held such warrants valid under the Federal Rules of Criminal Procedure. Finally, the State argues that should this Court rule that the search warrant for Oswalt's residence was invalid, we should hold that there was sufficient probable cause, based on exigent circumstances, to justify a warrantless search.
The State's brief focuses on the issue whether anticipatory search warrants are constitutional. As we noted above, such warrants *373 are not per se unconstitutional. However, the threshold question in this case is whether the specific anticipatory search warrant at issue in this case was authorized by Rule 3.8. Specifically, we must determine whether the use of present- and past-tense language in Rule 3.8, e.g., "[w]as unlawfully obtained," "[w]as used as the means," "[i]s in the possession," and "[c]onstitutes evidence of a criminal offense," required that there be probable cause to believe that the cocaine was located at Oswalt's premises at the time the warrant was issued, or whether the expectation that the cocaine would be there at the time of the future search would suffice.
Although the Rules of Criminal Procedure are to be liberally construed by this Court to "secure simplicity in procedure, fairness in administration, and the elimination of unnecessary delay and expense" in criminal proceedings, Rule 1.2, Ala.R.Crim.P., we find no indication of an intent when Rule 3.8 was adopted to expand the grounds for granting a search warrant beyond those that were provided for in § 15-5-2 and its ancient predecessors. Thus, we look to § 15-5-2, which states:
Even though rules of statutory interpretation are not necessarily applicable to this Court's procedural rules, in this case we have looked to certain basic rules of statutory construction for the limited purpose of determining the meaning of § 15-5-2. First, where the language of a statute is clear it is the duty of this Court to give effect to the intent expressed by that language. Parker v. Hilliard, 567 So. 2d 1343 (Ala.1990); Ex parte Rodgers, 554 So. 2d 1120 (Ala.1989). Second, we note the legal maxim expresio unius est exclusio alteriusthe expression of one thing implies an intent to exclude another not so expressed. Jefferson County v. Alabama Crim. Justice Info. Ctr. Comm'n, 620 So. 2d 651 (Ala.1993); Geohagan v. General Motors Corp., 291 Ala. 167, 279 So. 2d 436 (1973).
Given these guiding concepts, we conclude that the plain and unambiguous language of § 15-5-2 would not provide for the anticipatory search warrant at issue in this case. The plain language of subsections (1) and (2) of § 15-5-2, which are echoed by subsections (1) and (2) of Rule 3.8, require that the evidence to be seized be evidence of a criminal offense that has already occurred. Although subsection (3) of § 15-5-2, which is mimicked by subsection (3) of Rule 3.8, requires only the intent to commit a criminal offense rather than the actual commission of a crime, it requires that the evidence be presently in the possession of the person whose premises are to be searched. Thus, we conclude that when the legislature enacted § 15-5-2, and when much of the language of that statute was adopted by this Court into one of the Rules of Criminal Procedure, without any expression of a differing, more expansive intent, there was no intent to allow the issuance of a search warrant where, as in this case, the crime to which the evidence at issue relates has not yet occurred and the evidence to be seized is not presently in the possession of the person whose premises are to be searched.
Even though the Rules of Criminal Procedure are "intended to provide for the just and speedy determination of every criminal proceeding," Rule 1.2, Ala.R.Crim.P., that charge alone does not lead us to so expand the meaning of the clear language of Rule 3.8 so as to allow for the anticipatory search warrant at issue. That is our conclusion, notwithstanding the fact that Rule 3.8 added subsection (4), which has no equivalent in § 15-5-2. Like subsections (1) and (2) of Rule 3.8, subsection (4) also requires that the criminal offense have been committed before the search warrant may be issued. In this case, the crime, Oswalt's purchase and possession *374 of a large volume of a controlled substance, had not yet occurred and the evidence, the cocaine, was not in his possession at the time the search warrant was issued. Accordingly, the requirements of Rule 3.8 had not been met when the search warrant was issued, and the warrant was not valid under Alabama law.[5]
Thus, although anticipatory search warrants may be constitutional, those which fail to comply with the requirements adopted by this Court in Rule 3.8 are currently impermissible in Alabama. However, because we believe it would be in the best interest of the citizens of this State, we recommend that the Criminal Rules Advisory Committee redraft Rule 3.8 to permit the broader issuance of anticipatory search warrants than the Rule currently allows.
In addition to the plain and unambiguous language of Rule 3.8, we also take note of a recent amendment to Rule 41, Fed.R.Crim.P. The 1990 advisory committee note for Federal Rule 41(a) explains the purpose of the amendment:
(Emphasis added.) The language "is located" was deleted from Federal Rule 41(a)(1) because the language was viewed as requiring probable cause to believe the property or person was located at the place to be searched at the time of the issuance of the search warrant. Thus, Federal Rule 41(a)(1) was amended to specifically allow for anticipatory search warrants, by deleting present-tense language, such as that currently appearing in Rule 3.8, Ala.R.Crim.P. The fact that Rule 41(a)(1) was amended as it was supports our holding in this case.
Accordingly, we hold that the anticipatory search warrant issued for Oswalt's premises violated Rule 3.8 and, thus, was void. The State has suggested that if this Court holds the warrant void, then it should hold that under the facts of this case the State made a sufficient showing of exigent circumstances to support a warrantless search of Oswalt's residence. However, that is an issue the trial court should decide initially. The judgment of the Court of Criminal Appeals affirming Oswalt's conviction, based on that court's ruling that all anticipatory search warrants are valid under Alabama law, is reversed, and this cause is remanded with instructions for the Court of Criminal Appeals to remand it to the trial court for further proceedings consistent with this opinion.
REVERSED AND REMANDED.
HOOPER, C.J., and SHORES, KENNEDY, COOK, and BUTTS, JJ., concur.
ALMON, J., concurs in the result.
MADDOX and HOUSTON, JJ., dissent.
MADDOX, Justice (dissenting).
This case involves the validity of a so-called anticipatory search warrant. The Court of Criminal Appeals, with a well-written opinion by Judge John Patterson, concluded that neither Alabama law nor Federal law prohibits the issuance of anticipatory search warrants, and affirmed this defendant's conviction. Oswalt v. State, 686 So. 2d 361 (Ala.Crim.App.1994). Judge Patterson reviewed the applicable law, finding "no requirement that possession be present or contemporaneous with the issuance of [a] *375 warrant in this state and ... no provision, statute, or rule that prohibits the issuance of a warrant to search at a time in the near future for contraband [that] is anticipated will be at the place of the search at that time." 686 So. 2d at 366. I believe Judge Patterson was imminently correct.
In ascertaining the intent of this Court when it adopted Rule 3.8, Ala.R.Crim.P.,[6] the majority applies a "library analysis"an analysis condemned in Illinois v. Gates, 462 U.S. 213, 103 S. Ct. 2317, 76 L. Ed. 2d 527 (1983)and reverses the judgment of the Court of Criminal Appeals, even though the majority recognizes, "along with an overwhelming number of jurisdictions, that an anticipatory search warrant is not per se unconstitutional." 686 So. 2d at 369.
Having thoroughly reviewed the law of Alabama relating to the existence of probable cause to validate a search, I am compelled to disagree with the majority's reasoning and holding, and, instead, to agree completely with the statement of the Court of Criminal Appeals that "[n]umerous courts, both state and federal, have upheld the validity of anticipatory search warrants under governing search warrant provisions and factual circumstances similar to those in the present case." Oswalt v. State, 686 So. 2d at 366.
The reasons I believe the majority has incorrectly construed Rule 3.8 are as follows: (1) In ascertaining the intent of this Court in adopting Rule 3.8, the majority applies rules of construction applicable to legislative acts, citing the provisions of Rule 1.2 that govern how the Rules are to be construed, and concludes that "Rule 3.8 simply reflects law that has remained virtually unchanged for more than 140 years." 686 So. 2d at 370 (n. 3). (2) In holding this "anticipatory search warrant" invalid, the majority essentially applies the exclusionary rule. This rule was first enunciated in Weeks v. United States, 232 U.S. 383, 398, 34 S. Ct. 341, 346, 58 L. Ed. 652 (1914), which was held to be binding on the states in Mapp v. Ohio, 367 U.S. 643, 654-55, 81 S. Ct. 1684, 1691-92, 6 L. Ed. 2d 1081 (1961). However, the majority fails to recognize that the exclusionary rule had been substantially modified by the time this Court adopted Rule 3.8, by United States v. Leon, 468 U.S. 897, 104 S. Ct. 3405, 82 L. Ed. 2d 677 (1984), and Illinois v. Gates, 462 U.S. 213, 103 S. Ct. 2317, 76 L. Ed. 2d 527 (1983). It should be noted that the framers of the Rules were aware of the decision of the United States Supreme Court in Illinois v. Gates, because the Committee Comments to Rule 3.6 cite that case. The Rule 3.6 Comments state that the "[r]equirements of ... Illinois v. Gates ... are also included in the rules." In my opinion, this Court, in adopting Rule 3.8 did not intend that it would be used to exclude evidence of the commission of a crime and certainly did not intend that a "library analysis" be applied to its interpretation. See, Illinois v. Gates, where the Court condemned the use of "library analysis" in probable cause determinations.
In this case, the police go to a magistrate, they tell the magistrate what they propose to do, they conduct themselves just as they told the magistrate they would. The crime is committed, and they make the seizure and the arrest. What is unreasonable about that?
Rule 1.2, Ala.R.Crim.P., states:
Applying this rule of construction to the provisions of Rule 3.8, I can only conclude, as the Court of Criminal Appeals did, that the search in this case did not offend either the State or the Federal Constitution. Both Constitutions, of course, protect an individual against unreasonable searches and seizures, and Rule 3.8 likewise should be construed to protect this important constitutional right. *376 On the other hand, Rule 1.2 further stipulates that the public welfare must be preserved. The majority concedes that "it would be in the best interest of the citizens of this State ... that the Criminal Rules Advisory Committee redraft Rule 3.8 to permit the broader issuance of anticipatory search warrants than the Rule currently allows," 686 So. 2d at 374 (emphasis omitted), even though Rule 1.2 already provides, in part, that the public welfare must be protected.
"An anticipatory warrant, by definition, is a warrant that has been issued before the necessary events have occurred which will allow a constitutional search of the premises; if those events do not transpire, the warrant is void." United States v. Garcia, 882 F.2d 699, 702 (2d Cir.), cert. denied, 493 U.S. 943, 110 S. Ct. 348, 107 L. Ed. 2d 336 (1989).
The defendant's main argument in challenging the validity of the warrant is that there was no present probable cause at the time the warrant was issued. The majority accepts this argument in holding this particular warrant invalid, even though the officers went before a neutral magistrate and obtained a warrant, based upon a probable cause determination made by the issuing magistrate. In accepting the defendant's argument that the "anticipatory search warrant" in this case is invalid, the majority fails to recognize that at the time of the adoption of Rule 3.8, the Supreme Court of the United States, in Illinois v. Gates and United States v. Leon, had substantially modified the holdings in Weeks v. United States and Mapp v. Ohio, the cases in which the exclusionary rule was first enunciated and then was held to be binding on the states. In fact, the Committee Comments to Rule 3.6 state: "Requirements of such United States Supreme Court cases as Illinois v. Gates, 462 U.S. 213, 103 S. Ct. 2317, 76 L. Ed. 2d 527 (1983), are also included in the rules."
Although I recognize that neither this Court nor the United States Supreme Court has previously addressed the constitutionality of anticipatory search warrants, many other courts, both state and federal, have addressed the issue, and several law review articles have addressed that issue. Flannery, Abridged Too Far: Anticipatory Search Warrants And The Fourth Amendment, 32 Wm. & Mary L.Rev. 781) (1991); Mitchell, Note, Anticipatory Search Warrants: The Supreme Court's Opportunity to Reexamine the Framework of the Fourth Amendment, 44 Vand.L.Rev. 1387 (1991); James W. Hryekewicz, The Anticipatory Search Warrant in Texas, 44 Baylor L.Rev. 205 (1992).
In United States v. Garcia, supra, the Court of Appeals for the Second Circuit approved the use of an anticipatory search warrant and set out a model for the use of such a warrant. The court upheld the use of an anticipatory search warrant in connection with a controlled delivery of cocaine by an informant. The court explained that anticipatory warrants are based on probable cause, which exists for a future search only if there is independent evidence that a delivery of the contraband will occur before the search. The court said that the fact that the contraband is not presently located on the premises to be searched is immaterial, provided that at the time the warrant is issued probable cause exists to believe that the contraband will be there when the warrant is executed. The Garcia court further stated that although anticipatory search warrants, by definition, are issued before the events necessary to trigger a search have transpired, such warrants do not lack probable cause. The court focused on the existence of probable cause at the moment of the execution of the warrant, rather than at the time of the issuance of the warrant.
Pursuing this rationale, the Court of Appeals for the Second Circuit held that probable cause would be present at the time of the search if: (1) "a government official presents independent evidence" indicating a "sure course" of delivery; and (2) "the magistrate conditions the warrant on [the occurrence of] that delivery." 882 F.2d at 702. Both of those requirements were met in Oswalt's case.
In clarifying the nature of these restrictions, the Second Circuit Court of Appeals established that independent evidence must *377 be presented to the magistrate indicating that the contraband will be located at the premises when the search warrant is executed and that the affidavit must show: (1) "that the agent believes a delivery" will occur; (2) "how [the agent] obtained this belief"; (3) the reliability of the agent's sources; and (4) "what part government agents will play in the delivery." 882 F.2d at 703. Additionally, that court stated that the issuing judge or magistrate should condition the anticipatory warrant explicitly on a stated occurrence, so as to prevent both "premature execution" and "manipulation by government agents." 882 F.2d at 703-04. Moreover, the Garcia court did recognize that the issuing magistrate should strictly observe the particularity requirement of the Fourth Amendment in order to limit governmental abuse of anticipatory warrants. The Second Circuit, in making its analysis of the constitutionality of such a warrant, drew an analogy to a typical search warrant situation and concluded that "the purposes of the [F]ourth [A]mendment are best served by permitting government agents to obtain warrants in advance if they can show probable cause to believe that the contraband will be located on the premises at the time that search takes place." Garcia, 882 F.2d at 703. That court thus recognized that anticipatory search warrants afford more constitutional protections by encouraging police and other government officials to obtain judicial approval before conducting a search.
In my opinion, the Garcia court made an excellent analysis of the propriety of an anticipatory search warrant when all the requirements for its issuance are met. Consistent with that court's reasoning, I would construe the provisions of Rule 3.8 to permit the issuance of an anticipatory search warrant.
Additionally, based upon the method of interpretation required by the provisions of Rule 1.2, I conclude that it would be in the best interest of the public welfare to hold that this Court, by the adoption of Rule 3.8, has already validated the use of anticipatory search warrants and that it need not refer the matter to a committee. It appears to me that this Court, in adopting Rule 3.8, was attempting only to protect a defendant's constitutional right against an unreasonable search, and it appears to me that the use of the anticipatory search warrant in this case did not infringe on that protected right. It just seems a little incongruous to me to say that the evidence regarding the drugs seized in this case must be suppressed, based on what I consider a technical and overly strict reading of the provisions of Rule 3.8. In fact, Illinois v. Gates counselled against using such a "library analysis," and that case is cited in the Committee Comments to Rule 3.6.
Although I recognize that some legal scholars disagree with the use of anticipatory search warrants and that there were dissenting views expressed in Illinois v. Gates, there can be little doubt that when this Court adopted Rule 3.8 the law relating to searches and seizures had been modified from what it had been before. Therefore, I believe the Court of Criminal Appeals correctly held that the search and seizure in this case were not "unreasonable."
HOUSTON, J., concurs.
[1] United States v. Wylie, 919 F.2d 969 (5th Cir. 1990); United States v. Garcia, 882 F.2d 699 (2d Cir.), cert. denied, 493 U.S. 943, 110 S. Ct. 348, 107 L. Ed. 2d 336 (1989); United States v. Dornhofer, 859 F.2d 1195 (4th Cir.1988), cert. denied, 490 U.S. 1005, 109 S. Ct. 1639, 104 L. Ed. 2d 155 (1989); United States v. Hale, 784 F.2d 1465 (9th Cir.), cert. denied, 479 U.S. 829, 107 S. Ct. 110, 93 L. Ed. 2d 59 (1986); United States v. Lowe, 575 F.2d 1193 (6th Cir.), cert. denied, 439 U.S. 869, 99 S. Ct. 198, 58 L. Ed. 2d 180 (1978); United States v. Outland, 476 F.2d 581 (6th Cir.1973); United States ex rel. Beal v. Skaff, 418 F.2d 430 (7th Cir.1969); Johnson v. State, 617 P.2d 1117 (Alaska 1980); State v. Cox, 110 Ariz. 603, 522 P.2d 29 (1974); People v. Sousa, 18 Cal. App. 4th 549, 22 Cal. Rptr. 2d 264 (1993); Bernie v. State, 524 So. 2d 988 (Fla.1988); Danford v. State, 133 Ga.App. 890, 212 S.E.2d 501 (1975); People v. Brake, 208 Mich.App. 233, 527 N.W.2d 56 (1994); State v. Morrison, 243 Neb. 469, 500 N.W.2d 547 (1993); State v. Canelo, 139 N.H. 376, 653 A.2d 1097 (1995); State v. Ulrich, 265 N.J.Super. 569, 628 A.2d 368 (1993); State v. Folk, 74 Ohio App.3d 468, 599 N.E.2d 334 (1991); Commonwealth v. Reviera, 387 Pa.Super. 196, 563 A.2d 1252 (1989), appeal granted, 525 Pa. 598, 575 A.2d 564 (1990), appeal dismissed, 526 Pa. 41, 584 A.2d 308 (1991); State v. Engel, 465 N.W.2d 787 (S.D.1991); McNeill v. Commonwealth, 10 Va.App. 674, 395 S.E.2d 460 (1990); State v. Falbo, 190 Wis.2d 328, 526 N.W.2d 814 (1994), review denied, 531 N.W.2d 327 (Wis.1995).
[2] The key element to the constitutionality of such warrants is a sufficient degree of judicial control over the circumstances under which the warrant is to be executed. Courts have stated that an anticipatory search warrant will be found unconstitutional if the conditions upon which the warrant is to become effective are not explicit, clear, and narrowly drawn. See State v. Lee, 93 Md. App. 408, 613 A.2d 395 (1992); and People v. Brake, State v. Ulrich, and Commonwealth v. Reviera, all cited in n. 1.
[3] The Alabama Rules of Criminal Procedure became effective on January 1, 1991, to bring uniformity to the practice and procedure of criminal proceedings. The Committee Comments to Rule 3.8 and the Code Commissioner's note to § 15-5-2 both state that Rule 3.8 supersedes § 15-5-2. However, the fact that Rule 3.8 superseded § 15-5-2 does not mean there was a change in the law regarding the issuance of search warrants, which is at issue in this case. Further, § 15-5-2 is only a recodification of the historic requirements for issuance of a search warrant in Alabama. See Ala.Code 1940, T. 15 § 101; Ala.Code 1923, § 5472; Ala.Code 1907, § 7758; Ala.Code 1897, § 5485; Ala.Code 1886, § 4728; Ala.Code 1876, § 4006; Ala.Code 1867, § 4377; Ala.Code 1852, § 3775. Thus, in regard to Alabama law regarding issuance of search warrants, Rule 3.8 simply reflects law that has remained virtually unchanged for more than 140 years.
[4] A common factual setting in which other jurisdictions have authorized the issuance of an anticipatory search warrant is where a law enforcement officer presents evidence showing that the contraband to be seized is on a "sure course" to the premises to be searched and that there is a substantial probability that the item will be at that place at the time the warrant is executed. An example is where an employee of a package delivery service discovers an illegal shipment of a controlled substance, contacts the police, who then obtain an anticipatory search warrant for the destination address, and then the package is allowed to continue on to its destination. The warrant is then executed contemporaneously with delivery of the package. See State v. Morrison, 243 Neb. 469, 500 N.W.2d 547 (1993); State v. Ulrich, 265 N.J.Super 569, 628 A.2d 368 (1993), cert. denied, 135 N.J. 304, 639 A.2d 303 (1994); McNeill v. Commonwealth, 10 Va.App. 674, 395 S.E.2d 460 (1990).
[5] We note that in certain other jurisdictions anticipatory search warrants have recently been ruled invalid based on a holding that present-and past-tense language in the controlling statute did not authorize a finding of probable cause based on future events. See People v. Poirez, 904 P.2d 880 (Colo.1995); People v. Ross, 267 Ill. App.3d 711, 642 N.E.2d 914, 205 Ill.Dec. 49 (1994), appeal allowed, 161 Ill. 2d 537, 649 N.E.2d 423, 208 Ill.Dec. 367, judgment affirmed, 168 Ill. 2d 347, 659 N.E.2d 1319, 213 Ill.Dec. 672 (1995); State v. Gillespie, 530 N.W.2d 446 (Iowa 1995).
[6] Rule 3.8 became effective January 1, 1991. See Committee Comments to Rule 1.5, Ala. R.Crim.P. | May 24, 1996 |
9e79ae99-9cdd-465d-8c68-e2822fa3f4e0 | Ex Parte Walker | 675 So. 2d 408 | 1941873 | Alabama | Alabama Supreme Court | 675 So. 2d 408 (1996)
Ex parte Altion Maxine WALKER.
(Re State of Alabama v. Altion Maxine Walker.)
1941873.
Supreme Court of Alabama.
February 23, 1996.
Ruth E. Friedman, Atlanta, Georgia, for Petitioner.
Jeff Sessions, Atty. Gen., and Jack W. Willis, Asst. Atty. Gen., Robert Rumsey, District Atty., Talladega, for Respondent.
MADDOX, Justice.
This petition for a writ of mandamus, filed by a defendant in a capital case, presents a question of the defendant's right to require the trial judge to allow her to have counsel of her choice, an attorney admitted to practice in a state other than Alabama, but who seeks to represent the defendant, pro hac vice, at no expense to the State.
Under the facts of this case, we agree with the petitioner, Altion Maxine Walker, who has asked this Court to issue a writ of mandamus directing Judge Jerry Fielding, of the Talladega Circuit Court, to admit attorney Clive A. Stafford Smith, pro hac vice, to represent her in her capital murder trial.
*409 We have reviewed the substantiating evidence and we find that Ms. Walker timely filed a motion with the trial court, in which she asked the trial court to permit her to substitute attorney Smith as counsel in place of William Willingham, an attorney previously appointed by the court to serve as co-counsel for her in her first trial.[1] The trial judge denied that motion; Ms. Walker filed a mandamus petition with the Court of Criminal Appeals, which denied the petition without opinion.[2] She then filed a similar petition with this Court.
Attorney Smith is not a member of the Alabama State Bar, but he has filed a duly verified application to practice pro hac vice under Rule VII of the Rules Governing Admission to the Alabama State Bar, promulgated by the Alabama State Bar and approved by this Court. The trial judge overruled Ms. Walker's motion asking the court to allow attorney Smith to represent her. Instead, the court appointed Ms. Ruth Friedman (co-counsel for Ms. Walker on her first appeal, see note 1), and one of Ms. Walker's lawyers from her first trial, attorney Willingham, as counsel for her.
The legal question presented is whether Ms. Walker has a clear legal right to have attorney Smith admitted pro hac vice to represent her interests in her retrial. To establish such a right, Ms. Walker says that she cannot effectively communicate with attorney Willingham and that she does not believe that his representation would be in her best interest; similarly, attorney Willingham wishes to be replaced as counsel for her.[3]
The record supports Ms. Walker's argument that attorney Smith wishes to represent her, at no expense to the State, even though Ms. Walker, having been determined to be indigent, is entitled to have the State pay for her attorney.
In view of the undisputed fact that Ms. Walker moved for a substitution of counsel in a timely manner, and considering the fact that she raised the issue of her right to have counsel of her choice when the case was remanded for the second trial, we believe that she has clearly shown that she is entitled to the relief she seeks.
The trial judge did not state his reasons for denying Ms. Walker's request, and she has shown that attorney Smith is a member of the Georgia State Bar and that he had timely filed a petition to practice pro hac vice, as is commonly and frequently done, especially in civil cases.[4] The record here shows that the trial judge has allowed attorney Smith to represent other defendants in criminal cases in the Talladega Circuit Court. Based on these facts, it does not appear that the trial court's refusal to allow attorney Smith to serve as counsel for Ms. Walker was based on any procedural defects in the pro hac vice petition.
*410 Mandamus is an extraordinary remedy requiring a showing that there is: "(1) a clear legal right ... to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) properly invoked jurisdiction of the court." Ex parte Alfab, Inc., 586 So. 2d 889 (Ala.1991). This Court has previously held that mandamus review of a trial court's action is proper in a criminal case where a defendant's rights would be irreparably abridged if the defendant were required to await the appellate process. See, e.g., Ex parte Large, 501 So. 2d 1208 (Ala.1986); Ex parte Anderson, 457 So. 2d 446 (Ala.1984); Ex parte Jones, 444 So. 2d 888 (Ala.1983). It is well settled that "in cases involving the exercise of discretion by a lower court, a writ of mandamus may issue to compel the exercise of that discretion; however, it may not issue to control the exercise of discretion except in a case of abuse." Ex parte Ben-Acadia, Ltd., 566 So. 2d 486, 488 (Ala.1990) (emphasis added).
Ms. Walker asserts that the failure of the trial judge to substitute counsel of her choice is an abuse of discretion, contending that the ruling violates her Sixth Amendment right to counsel. In support of this contention, Ms. Walker cites numerous federal cases that address the issue of whether an indigent criminal defendant has a right to choose the attorney appointed to represent him. See, e.g., United States v. Padilla-Martinez, 762 F.2d 942 (11th Cir.), cert. denied, 474 U.S. 952, 106 S. Ct. 320, 88 L. Ed. 2d 302 (1985); Birt v. Montgomery, 725 F.2d 587 (11th Cir. 1984); Gandy v. Alabama, 569 F.2d 1318 (5th Cir.1978). Although these cases acknowledge that an indigent defendant has a right to request counsel of his or her choice, the law is clear that the right of an indigent defendant to choose counsel is not absolute. In determining whether an indigent defendant is entitled to choose his or her appointed counsel, a trial court must balance this request against a number of factors to determine whether the request would frustrate the public interest in the prompt and efficient administration of the criminal justice system.[5]
In the case sub judice, the Court is not faced with the situation addressed in the above-cited cases, because those cases deal with a defendant's right to choose state paid counsel. Here, Ms. Walker requested that the trial judge appoint an attorney who was prepared to serve pro bono; she did not request a certain attorney who was to be paid by the State. Although Ms. Walker, as an indigent criminal defendant, is entitled to representation at the State's expense, she requested to be represented by an attorney who would not be paid by the State. These facts are analogous to a factual setting where a nonindigent criminal defendant procures counsel of his or her choice. A trial judge would have no authority to bar that attorney from representing that defendant, so long as that attorney was qualified to practice law in this State and the representation would not frustrate the public interest in the fair and efficient administration of justice. The fact that Ms. Walker has inadequate resources to hire an attorney should be of no consequence, if she can secure representation at no expense to the State. Just as a defendant who can pay for legal counsel has a right to choose his or her own attorney, an indigent defendant can choose to be represented by an attorney who offers to represent the defendant at no expense to the State.
Summarizing, we find that in the case sub judice, Ms. Walker made a timely motion to have attorney Smith appointed as her trial counsel, that he is willing to serve in a pro bono capacity, and that attorney Willingham wishes to be replaced as co-counsel for Ms. Walker. It appears, based on our review of the record, that Ms. Walker did not make her motion in order to delay her criminal trial or to manipulate the trial proceeding, but made it in order to express her desire to have the attorneys of her choice appointed to represent herthe two attorneys she thought would best represent her interest. Based on these facts, we hold that Ms. Walker is entitled to the writ of mandamus.
WRIT GRANTED.
*411 HOOPER, C.J., and HOUSTON, KENNEDY, COOK, and BUTTS, JJ., concur.
[1] This is the second time this case has been tried. In 1989, Ms. Walker was tried in Talladega County and convicted of capital murder. In that first trial, she was represented by attorney Willingham and attorney Steve Adcock. She appealed her conviction to the Court of Criminal Appeals, where she argued that the prosecution had arbitrarily dismissed black jurors, thus violating the mandate of Batson v. Kentucky, 476 U.S. 79, 106 S. Ct. 1712, 90 L. Ed. 2d 69 (1986). See Walker v. State, 611 So. 2d 1133 (Ala.Crim.App.1992), cert. denied, 611 So. 2d 1133 (Ala.1993). On that appeal, Ms. Walker was represented by attorneys Ruth Friedman and Clive Stafford Smith, who she desires to have represent her in her second trial. In the appeal from the first trial, the Court of Criminal Appeals, basing its holding substantially on the argument presented in that case by attorneys Friedman and Smith, reversed her conviction and ordered a new trial. Upon remand, Ms. Walker moved in a timely manner to have these two attorneys appointed to represent her in the new trial.
[2] Ex parte Walker, [CR-94-2073, Aug. 29, 1995] ___So.2d ___ (Ala.Crim.App.1995).
[3] With her petition, Ms. Walker filed the affidavit of attorney Willingham, in which he states that he would like to be replaced as trial counsel because he does not "think it would be beneficial for anyone to undertake a capital case for a client who does not feel she can work with her lawyer in her defense." It appears from the record that the relationship between Ms. Walker and attorney Willingham has further been strained, in light of accusations by Ms. Walker that attorney Willingham's prior representation of her amounted to "ineffective assistance of counsel."
[4] The Alabama State Bar periodically furnishes this Court with a list of all pro hac vice admissions.
[5] See, Gandy v. Alabama, 569 F.2d 1318, 1323 (5th Cir.1978). | February 23, 1996 |
48791bcd-f457-4a5b-8dbd-0a257591a5c7 | McDuffie v. Roscoe | 679 So. 2d 641 | 1941112 | Alabama | Alabama Supreme Court | 679 So. 2d 641 (1996)
Terry L. McDUFFIE, et al.
v.
George ROSCOE, Jr., as personal representative of the Estate of George Twiller Roscoe, deceased.
1941112.
Supreme Court of Alabama.
April 19, 1996.
Rehearing Denied August 30, 1996.
Jerry L. Weidler and Pamela R. Scott, State of Alabama Department of Transportation, Montgomery, for Appellants.
Larry U. Sims and Joseph P.H. Babington of Helmsing, Lyons, Sims & Leach, P.C., Mobile, and Joseph W. Hutchinson III, Butler, for Appellee.
MADDOX, Justice.
This interlocutory appeal involves a single issue: Whether employees of the State Department of Transportation are entitled to substantive or discretionary function immunity under the particular facts of this case.
The plaintiff, George Roscoe, Jr., as personal representative of the estate of his son, George Twiller Roscoe, filed a wrongful death action against certain employees of the State Department of Transportation. He alleged that his son had been killed in an accident proximately caused by negligent or wanton conduct on the part of the State employees in maintaining the shoulders along a portion of State Highway 17. At the time of the accident, this portion of Highway 17 was being resurfaced.
In their answer, the State employees asserted the affirmative defense of substantive or discretionary function immunity, and, subsequently, they moved for a summary judgment based on this defense. The trial court denied the motion, and the employees, pursuant to Rule 5, Ala.R.App.P., appealed that denial. We reverse and remand, based on Grant v. Davis, 537 So. 2d 7 (Ala.1988).
The plaintiff contends that "[u]nder Alabama law, substantive or discretionary function immunity is to be applied on a limited basis to protect the citizens of this state," and he argues:
Because of this argument, we set out the facts and circumstances surrounding the accident and the activities of the defendants.
The one-car accident that resulted in the death of the plaintiff's son occurred on Highway 17 near milepost 81. George Twiller Roscoe was the only person in the vehicle, and there were no eyewitnesses to the accident. The evidence filed in support of the motion for summary judgment, along with the evidence filed in opposition to it, suggests that at the time of the accident the defendants, Terry L. McDuffie, Leroy Cobb, Johnny Cook, Joseph Dueitt, Edwin Knight, and Jerry Holt (collectively referred to as the "State employee defendants"), were employed by the Alabama Department of Transportation ("ALDOT"). McDuffie was employed as the district engineer for District 4 of ALDOT's Eighth Division; Cobb was a project engineer who worked on construction projects in the Eighth Division; Cook and Dueitt were project inspectors who also worked in the Eighth Division; Knight was the construction engineer for the Eighth Division; and Holt was the maintenance engineer for the Eighth Division. The portion of Highway 17 on which the accident occurred was within District 4 of the Eighth Division.
Prior to the accident, Butts & Billingsley Construction Company, Inc., had contracted with ALDOT to resurface Alabama Highway 17 from milepost 79.28 to milepost 92.60. The parties concede that resurfacing causes the level of the road surface to be raised above the level of the shoulder of the road and that after a road is resurfaced the shoulders must be built back up to the level of the highway surface. The construction contract did not require that Butts & Billingsley perform this shoulder work, nor did it require that the contractor place any signs warning of low shoulders along the resurfaced portion of the roadway. Instead, the shoulder work for the resurfacing project was to be performed by ALDOT.
Butts & Billingsley had completed much of resurfacing work in District 4 under several contracts, and because the District 4 crews were required to do all the shoulder work, the ALDOT crews were behind in their work. At the time of the accident, the District 4 crews were working on the shoulders of two other highways where resurfacing had recently been completed. Mr. McDuffie testified in his deposition that he had planned to move the road crews to the area where the accident occurred after the shoulder work was completed on the other projects. Some "low shoulder" warning signs had been erected at the intersection of Highways 17 and 84 approximately 4-5 miles north of milepost 81, but there were none at the point of the accident.
The plaintiff alleges that the State employee defendants were negligent in the performance of their required duties and through their negligence caused or allowed a dangerous drop-off to exist at the edge of the pavement, that they failed to warn the motoring public of the dangerous drop-off, and that they either failed to inspect, or inadequately inspected, the dangerous drop-off or shoulder of the highway.
The leading case on the issue involved in this appeal is Grant. In Grant, the plaintiffs were injured in an accident they alleged was caused by a low shoulder. They sued certain employees of the State Highway Department, alleging negligence, recklessness, and wantonness "in failing to properly inspect, maintain, or repair the shoulder of the road." 537 So. 2d at 7. A jury found for the plaintiffs. The defendants moved for a JNOV based on their defense of discretionary immunity. The trial court denied the JNOV.
In reversing the denial of a JNOV, this Court stated:
537 So. 2d at 8-10 (emphasis original).
The plaintiff attempts to distinguish Grant by this argument:
(Appellee's Brief, 28-30; emphasis original; footnotes and citations omitted.)
Although we have carefully considered the plaintiff's argument that the State employee defendants had no discretion in posting warning signs, we cannot agree that posting warning signs was a ministerial function. We conclude that the facts of this case are not so different from those in Grant as to justify denying these defendants' defense of substantive or discretionary function immunity.
The State employee defendants were immune from liability, based on the qualified immunity doctrine set forth in Grant. The order denying these defendants' summary judgment motion is reversed. This cause is remanded for an order or proceedings consistent with this opinion.
REVERSED AND REMANDED.
HOOPER, C.J., and COOK and BUTTS, JJ., concur.
HOUSTON, J., concurs specially.
HOUSTON, Justice (concurring specially).
In Taylor v. Shoemaker, 605 So. 2d 828 (Ala.1992), a case relied on by the defendants, I dissented and asked: "Where is the discretion?" 605 So. 2d at 834-35. In today's case, I easily recognize the discretion. | April 19, 1996 |
9fb10ab8-4564-48ac-8868-df3f6adb24aa | Choat v. Kawasaki Motors Corp. | 675 So. 2d 879 | 1920544 | Alabama | Alabama Supreme Court | 675 So. 2d 879 (1996)
Thomasine CHOAT, as mother of Connie Michelle Johnson, a minor, deceased
v.
KAWASAKI MOTORS CORPORATION, a U.S. Corporation, et al.
1920544.
Supreme Court of Alabama.
February 23, 1996.
*880 R. Ben Hogan, III, James R. Pratt, III, and Pamela D. Beard of Hogan, Smith, Alspaugh, Samples & Pratt, P.C., Birmingham, and William R. Hovater, Tuscumbia, for Appellant.
W. Stancil Starnes of Starnes & Atchison, Birmingham, Robert E. Jones, III of Jones & Trousdale, Florence, and Richard A. Mueller of Coburn & Croft, St. Louis, Missouri, for Kawasaki Motors Corp., U.S.A., Kawasaki Heavy Industries, Inc. and Kawasaki Motors Mfg. Corp., U.S.A.
Bruce J. McKee of Hare, Wynn, Newell & Newton, Birmingham, and Jack Drake of Drake & Pierce, Tuscaloosa, for Amicus Curiae Alabama Trial Lawyers Ass'n, in support of appellant's application for rehearing.
COOK, Justice.
The opinion of May 27, 1994, is withdrawn and the following is substituted therefor.
Thomasine Choat appeals from an adverse summary judgment in her action seeking damages for the alleged wrongful death of her daughter, Connie Johnson. We reverse and remand.
The evidence suggests the following: On July 15, 1991, 18-year-old Connie Johnson and her friend Lania Moore were relaxing on inflatable floats approximately 50 feet from the shoreline of a slough in Wilson Lake, an impoundment of the Tennessee River. In the same slough, 13-year-old Michael Fields was operating a "Kawasaki Jet Ski." Michael made a number of "playful" passes close to the floats in order to "splash" the girls. Brief of Appellee, at 4. On one of the passes, the Jet Ski struck Connie in the head. She fell from her float and disappeared beneath the surface. A diver subsequently located Connie's body in approximately 22 feet of water and retrieved it from the bottom of the slough. At the time of Connie's death, she was unmarried and had no dependents.
On April 23, 1992, Thomasine Choat filed a wrongful death action against Kawasaki Motors Corporation, Kawasaki Heavy Industries, Ltd., and Kawasaki Motors Manufacturing Corporation, U.S.A. ("collectively referred to as Kawasaki"), and a number of individual defendants.[1] Her claims against Kawasaki sought damages based on allegations of negligence, wantonness, and liability under the Alabama Extended Manufacturer's Liability Doctrine. Kawasaki moved for a summary judgment, contending that the claims were subject to admiralty jurisdiction and arguing that under maritime law nondependents may not recover in a wrongful death action punitive damages or damages for loss of society. The trial court entered a summary judgment in favor of Kawasaki, and Choat appealed. On appeal, Choat contends (1) that maritime law does not apply to her action, and, alternatively, (2) that its application does not supersede the remedies provided by the Alabama Wrongful Death Act, Ala.Code 1975, § 6-5-391.
Admiralty jurisdiction would be proper in this case if the incident of which Choat complains meets two criteria set forth by the United States Supreme Court. First, the type of incident involved must "potential[ly affect] maritime commerce." Sisson v. Ruby, 497 U.S. 358, 363, 110 S. Ct. 2892, 2896, 111 L. Ed. 2d 292 (1990). Second, the type of activity involved must bear "`a substantial relationship to traditional maritime activity.' " Id. at 362, 110 S. Ct. at 2895 (quoting Foremost Insurance Co. v. Richardson, 457 U.S. 668, 675 n. 5, 102 S. Ct. 2654, 2658 n. 5, 73 L. Ed. 2d 300 (1982)).
To determine the "potential effect on maritime commerce," we must imagine an incident of the same general character as the incident under consideration as having occurred, not in the location in which it actually occurred, but in the busiest conceivable sea lane. From that premise, we must then postulate the possible effect on commercial *881 shipping of the occurrence in that latter location. Sisson, 497 U.S. at 363, 110 S. Ct. at 2896 ("a court must assess the general features of the type of incident involved to determine whether such an incident is likely to disrupt commercial activity"); Price v. Price, 929 F.2d 131, 135 (4th Cir.1991) (under Foremost and Sisson, "we must project more generally the composite genre of the tort or its essential elements and determine whether traditional maritime commerce will be affected"). Thus, in Foremost, the Court held that a collision on the Amite River in Louisiana between an "eighteen foot pleasure boat" towing a water skier and a "sixteen-foot `bass boat'" potentially interfered with maritime commerce, notwithstanding the facts that neither vessel had ever been engaged in commercial maritime activity and that the situs of the accident had been "seldom, if ever, used for commercial activity." Foremost Insurance Co. v. Richardson, 457 U.S. 668, 678, 102 S. Ct. 2654, 2660, 73 L. Ed. 2d 300 (1982) (Powell, J., dissenting). The Foremost Court, as Sisson later more fully explained, "supported [its] finding of potential disruption... with a description of the likely effects of a collision at the mouth of the St. Lawrence Seaway, ... an area heavily traveled by commercial vessels." Sisson, 497 U.S. at 363, 110 S. Ct. at 2896 (emphasis added). In Sisson itself, the Supreme Court held that an action based on fire damage to a Lake Michigan marina and to vessels docked therein invoked admiralty jurisdiction, notwithstanding the facts that the vessel in which the fire originated was a "56-foot pleasure yacht," id., at 360, 110 S. Ct. at 2894, and that no commercial vessels were docked at the marina at the time of the fire. Id. at 363, 110 S. Ct. at 2896. Because, the Court noted, fire poses a perennial danger to commercial vessels, the genre of the occurrence involved in Sisson"fire on a vessel docked at a marina on navigable waters"constituted a "potential hazard to maritime commerce." Id. at 362-63, 110 S. Ct. at 2895.
Under these principles, we must conclude that the incident of which Choat complains a fatal collision on navigable waterpotentially affects maritime commerce. Were an incident of this genre to occur "at the mouth of the St. Lawrence Seaway," Foremost, 457 U.S. at 675, 102 S. Ct. at 2658, emergency personnel could be called to rescue victims or to retrieve casualties. Such rescue activities could interrupt commercial shipping. See Complaint of Bird, 794 F. Supp. 575, 579 (D.S.C.1992) ("commotion" conceivably arising from attempts to rescue a "[man overboard] in a crowded seaway would potentially have an impact on maritime commerce"); Sinclair v. Soniform, Inc., 935 F.2d 599, 602 (3d Cir.1991) ("possibility that commercial vessels would be diverted to respond" to distress signals to aid a diver suffering from "decompression sickness" potentially affected maritime commerce). Thus, because the occurrence of an incident of this general character potentially affects maritime commerce, the first criterion of the jurisdictional analysis is met.
"Operating a vessel is a traditional maritime activity." Lipworth v. Kawasaki Motors Corp., U.S.A., 592 So. 2d 1151, 1153 (Fla.Dist.Ct.App.), cert. denied, 506 U.S. 974, 113 S. Ct. 465, 121 L. Ed. 2d 373 (1992). Therefore, in connection with the second step of the jurisdictional inquiry, the parties have devoted considerable attention to the question whether a Jet Ski is a "vessel." This question has not been unanimously resolved, and at least one court has answered the question in the negative.
In Complaint of Roffe, 724 F. Supp. 9, 10-11 n. 2 (D.P.R.1989), the operator of a "WaveJammer" that she had rented from Roffe, was killed when she collided with a yacht. Id. at 9. Roffe began an action pursuant to the Limitation of Liability Act of 1851, 46 U.S.C.App. § 183, seeking to limit his liability to $2500, the cost of the Wave-Jammer. 724 F. Supp. at 9. Reasoning that the application of the Act to "pleasure crafts," and, in particular, to the relatively inexpensive WaveJammer, would often inadequately compensate for serious injuries or death, the court held that the Act did not apply to "pleasure crafts." Id. at 10. As an alternative basis for excluding the owner of the WaveJammer from the application of the Act, the court stated: "[W]e decline to rule *882 that the WaveJammer, one of a new breed of aquatic motorbikes, is a vessel within the meaning of the statute. As described in the literature submitted by the petitioner ..., it is a vehicle characterized as a personal watercraft designed for only one rider." Id. at 10-11 n. 2 (emphasis in original).
Complaint of Roffe, however, did not involve the jurisdictional question involved in this case, that is, whether admiralty jurisdiction was proper. In our view, the rationale for defining such machines as nonvessels for purposes of the Limitation of Liability Act is entirely separate from, and probably inapplicable to, the question whether such devices are vessels for jurisdictional purposes. Nevertheless, at least one court has concluded that a Jet Ski is a "vessel," even for purposes of the Limitation of Liability Act. Keys Jet Ski, Inc. v. Kays, 893 F.2d 1225 (11th Cir. 1990) (collision involving a Jet Ski and a motorboat).
More on point are Wahlstrom v. Kawasaki Heavy Industries, Ltd., 800 F. Supp. 1061 (D.Conn.1992) (Jet Ski collided with a motorboat), vacated on other grounds, 4 F.3d 1084 (2d Cir.1993), cert. denied, 510 U.S. 1114, 114 S. Ct. 1060, 127 L. Ed. 2d 380 (1994), and Lipworth v. Kawasaki Motors Corp., U.S.A., 592 So. 2d 1151 (Fla.Dist.Ct.App.) (Jet Ski collided with a dock), cert. denied, 506 U.S. 974, 113 S. Ct. 465, 121 L. Ed. 2d 373 (1992). Both of those cases, like this case, involved products liability claims against Kawasaki. Both courts regarded Jet Skis as vessels and held that maritime law applied. Wahlstrom concluded that "the operation of a motorized Jet Ski, like [the operation of] a small motor boat, sufficiently implicates traditional maritime activities." 800 F.2d at 1062. Lipworth discerned "no reasonable distinction between small motor boats capable of being used as a means of transportation on water and a Jet Ski, which is also capable of substantially equivalent transportation on water." 592 So. 2d at 1153.
Wahlstrom and Lipworth both relied, in part, on 1 U.S.C. § 3 (1982) (the "general provisions" section), which defines "vessel" in the broadest of terms. Specifically, § 3 defines the term "vessel" as including "every description of watercraft or other artificial contrivance used, or capable of being used, as a means of transportation on water." Indeed, this definition might well include "`the three men in a tub,'" or "`Jonah inside the whale.'" McCarthy v. The Bark Peking, 716 F.2d 130, 135 (2d Cir.1983) (quoting Burks v. American River Transportation Co., 679 F.2d 69, 75 (5th Cir.1982)), cert. denied sub nom. South Street Seaport Museum v. McCarthy, 465 U.S. 1078, 104 S. Ct. 1439, 79 L. Ed. 2d 760 (1984).
Also significant is the manner in which the owner's manual and similar material provided with the Jet Ski in this case characterize the machine. For example, this material states in part: "The Jet Ski is not a toy; it is a high performance class A power boat. With a lightweight rider, a Jet Ski accelerates more quickly and has a higher top speed than with a heavier rider." (Emphasis added.)
Additionally instructive are characterizations of the Jet Ski contained in correspondence to Kawasaki from the United States Coast Guard. In a letter issued on March 9, 1983, the Coast Guard, pursuant to Kawasaki's request, granted Kawasaki an "exemption" from various federal standards, including the "Certification of Compliance" standard, set forth in 33 C.F.R. § 181(B); the "Safe Loading Standard, the Flotation Standard, the Electrical Systems Standard, the Fuel Systems Standard and the powered ventilation portion of the Ventilation Systems Standard," set forth in 33 C.F.R. § 183(B)-(C), (F), (I)-(K).
In considering an exemption from the safe loading standard, the Coast Guard, in the letter to Kawasaki, stated that "the Jet Ski boat could not, as a practical matter, be tested in accordance with the language of the standard which is intended to deal with a conventional boat of open hull construction." (Emphasis added.) The Coast Guard also noted that the provisions of the ventilation standard are not dispositive as to the Jet Ski, because it "is designed to be capable of being capsized and partially submerged without causing the engine to cease operating," and because "the boat is equipped with a carburetor that has no float bowl and is sealed against leakage." (Emphasis added.) As to a requested variance in the format and placement *883 of certification labels, the Coast Guard reasoned that "as long as the label continues to be visible to the operator when boarding the boat or getting the boat underway, the... placement of the label on the rear portion of the engine cover [should be considered] as meeting the requirement for the visibility of the label." (Emphasis added.) In considering an exemption from the floatation standard, the Coast Guard "found that the amount of flotation material provided in the Jet Ski boat [was] sufficient to float the weight of the boat, its permanent appurtenances and the operator, and thus [met] the intent of the Floatation Standard." (Emphasis added.) The Coast Guard concluded that, as to "the Kawasaki Motors Corp., U.S.A. boats known as the `Jet Ski,' "the requested exemptions "would not adversely affect boating safety." (Emphasis added.)
That the Jet Ski is not a "conventional boat" is not the dispositive consideration. It is a self-propelled device without nonaquatic function or capacity. The definitions and descriptions cited above lead us to hold that, at least for jurisdictional purposes, a Jet Ski is a "vessel," and, consequently, to characterize its operation and steerage as navigation.
In this connection, we must disagree with Choat's characterization of this case as one not involving allegations of "improper navigation." Brief of Appellant, at 15. The complaint alleges that the Jet Ski was defective because "of its unreasonably dangerous operating and handling characteristics," and "because of its lack of warning that it [would] not turn without engaging [the] throttle and that when [the] throttle [was] disengaged it [would] tend to go straight even when the operator attempt[ed] a turn." (Emphasis added.) These allegations demonstrate the logical difficulty in separating the activity of navigation from Choat's cause of action. Navigation was, after all, the activity that rendered the alleged design defect dangerous.
Because we regard the operation of a Jet Ski as the navigation of a vessel, we need not determine whether Connie's floatation device also was a vessel. Admiralty jurisdiction is invoked by an activity involving the navigation of a vessel into, or over, (1) a swimmer, Oliver v. Hardesty, 745 F.2d 317 (4th Cir.1984); Hogan v. Overman, 767 F.2d 1093 (4th Cir.1985) (waterskier struck by a vessel); Medina v. Perez, 733 F.2d 170 (1st Cir.1984) (swimmer struck by a pleasure boat), cert. denied, 469 U.S. 1106, 105 S. Ct. 778, 83 L. Ed. 2d 774 (1985); or (2) a stationary object, McCormick v. United States, 680 F.2d 345 (5th Cir.1982) (action involving a pleasure boat's collision with a piling); Hebert v. Outboard Marine Corp., 638 F. Supp. 1166 (E.D.La.1986) (action involving a homemade skiff's collision with a piling).
This case is, therefore, distinguishable from Woltering v. Outboard Marine Corp., 245 Ill.App.3d 684, 185 Ill.Dec. 791, 615 N.E.2d 86 (1993), appeal denied, 152 Ill. 2d 582, 190 Ill.Dec. 912, 622 N.E.2d 1229 (1993), petition for cert. filed, 62 U.S.L.W. 3493 (U.S. January 4, 1994) (No. 93-1098). In that recent case, cited by Choat, the court held that an action arising from the death of a passenger who "was thrown" from a pleasure craft and fatally injured by the propeller of the boat's outboard motor did not invoke admiralty jurisdiction. Woltering, unlike this case, contained no evidence of a navigational malfunction. Significantly, the court noted: "While negligent navigation is not necessary to invoke admiralty jurisdiction, its presence strongly suggests the propriety of applying admiralty law." 245 Ill.App.3d at 688, 185 Ill.Dec. at 794, 615 N.E.2d at 89 (emphasis added). Thus, Woltering provides no authority for the application of state law in this case.
Indeed, the United States Supreme Courtsee Yamaha Motor Corp., U.S.A. v. Calhoun, ___ U.S. ___, 116 S. Ct. 619, 133 L. Ed. 2d 578 (1996), which shall be discussed more fully in Part II of this opinionrecently considered a case involving the collision of a WaveJammer piloted by a minor child with a vessel that was anchored in the water before a beachfront hotel in Puerto Rico. Preferatory to its discussion of the issue of remedies, the Court summarily concluded: "Because this case involves a watercraft collision on navigable waters, it falls within admiralty's domain. See Sisson v. Ruby, 497 U.S. 358, 361-367, 110 S. Ct. 2892, 2895-2898, 111 L. Ed. 2d 292 (1990); Foremost Ins. Co. v. *884 Richardson, 457 U.S. 668, 677, 102 S. Ct. 2654, 2659, 73 L. Ed. 2d 300 (1982)." ___ U.S. at ___, 116 S. Ct. at 623. We conclude, therefore, that the second criterion of the jurisdictional inquiry is satisfied, and that maritime law governs Choat's claims against Kawasaki.
This conclusion does not, however, dispose of Choat's alternative argument, namely, that regardless of whether maritime law applies, she is entitled to the remedies provided by the Alabama Wrongful Death Act. This contention is correct from a historical perspective, because until 1920 American admiralty courts did not recognize wrongful death claims based on general maritime law. Moragne v. States Marine Lines, Inc., 398 U.S. 375, 90 S. Ct. 1772, 26 L. Ed. 2d 339 (1970). In 1920, Congress enacted the Death on the High Seas Act ("DOHSA"),[2] 41 Stat. 537 (codified as amended at 46 U.S.C.App. §§ 761-68 (1987)), and the Jones Act, 41 Stat. 1007 (codified at 46 U.S.C.App. § 688 (1987)), which extended to seamen the protections afforded railroad employees under FELA.[3]Sheffield v. Owens-Corning Fiberglass Corp., 595 So. 2d 443, 447 n. 1 (Ala. 1992). Thus, where federal statutes were inapplicable, courts exercising admiralty jurisdiction applied remedies available under state statutes operative in the territorial waters in which the tort occurred. The Tungus v. Skovgaard, 358 U.S. 588, 79 S. Ct. 503, 3 L. Ed. 2d 524 (1959). In Moragne v. States Marine Lines, Inc., 398 U.S. 375, 90 S. Ct. 1772, 26 L. Ed. 2d 339 (1970), the United States Supreme Court adopted a rule that called into question the validity of this practice.
Moragne arose out of the death of a longshoreman aboard a vessel in Florida's navigable waters. His widow, Petsonella Moragne, seeking damages for wrongful death, sued the vessel owner in a state court under theories of negligence and unseaworthiness. 398 U.S. at 376, 90 S. Ct. at 1775. The defendants, on the basis of diversity of citizenship, removed the action to a federal district court, which subsequently "dismissed" the unseaworthiness count on the ground that it did not invoke federal statutes and was not recognized under Florida's wrongful death statute. After the United States Court of Appeals for the Fifth Circuit affirmed the order of the trial court, Moragne sought certiorari review in the United States Supreme Court.
The Supreme Court reversed the judgment of the court of appeals and recognized, for the first time, the right to assert federal, nonstatutory claims for maritime torts resulting in death. The Court cited examples of federal and state legislation as convincing evidence of public policy favoring wrongful death actions. Questioning whether American admiralty's hostility to such actions had ever been justified, the Court remanded the *885 cause for reconsideration of the widow's unseaworthiness claim.
Although Moragne did not articulate the remedies available under the new causes of action or define with particularity the scope of its application, a number of courts construed the opinion as "preempt[ing] state causes of action and remedies," Texaco Refining & Marketing, Inc. v. Estate of Dau Van Tran, 808 S.W.2d 61, 64 (Tex.) (emphasis added), cert. denied, 502 U.S. 908, 112 S. Ct. 301, 116 L. Ed. 2d 245 (1991) in all actions subject to admiralty jurisdiction. Wahlstrom v. Kawasaki Heavy Indus., Ltd., 4 F.3d 1084, 1087 (2d Cir.1993), cert. denied, 510 U.S. 1114, 114 S. Ct. 1060, 127 L. Ed. 2d 380 (1994); see also Nelson v. United States, 639 F.2d 469 (9th Cir.1980). After the release of our original opinion in this case, however, the United States Supreme Court decided Yamaha Motor Corp., U.S.A. v. Calhoun, ___ U.S. ___, 116 S. Ct. 619, 133 L. Ed. 2d 578 (1996), in which it expressly rejected this view of Moragne.
Calhoun involved an action against Yamaha Motor Company, U.S.A., and Yamaha Motor Company, Ltd. ("Yamaha") by the parentsadministrators of the estateof 12-year-old Natalie Calhoun, who was killed when the Yamaha WaveJammer she was riding collided with a vessel docked in the navigable, territorial waters of Puerto Rico. ___ U.S. at ___, 116 S. Ct. at 620. The Calhouns, who were Pennsylvania residents, sued under provisions of Pennsylvania's Wrongful Death and Survival Acts, seeking compensation under several theories of recovery, including "negligence, strict liability, and breach of implied warranties." Id.
"Yamaha moved for partial summary judgment, arguing [as does Kawasaki in this case] that the federal maritime wrongful death action ... recognized in Moragne v. States Marine Lines, Inc., 398 U.S. 375, 90 S. Ct. 1772, 26 L. Ed. 2d 339 (1970), provided the exclusive basis for recovery, displacing all remedies afforded by state law." ___ U.S. at ___, 116 S. Ct. at 622. Consequently, Yamaha insisted, "the Calhouns could recover as damages only Natalie's funeral expenses." ___ U.S. at ___, 116 S. Ct. at 622. The United States District Court for the Eastern District of Pennsylvania denied Yamaha's partial summary judgment motion to the extent that it would have precluded recovery of compensation for "loss of society and loss of support and services," holding that such remedies were recoverable under Moragne. Calhoun v. Yamaha Motor Corp., U.S.A., 40 F.3d 622, 625 (3d Cir.1994). It granted Yamaha's partial summary judgment motion to the extent that the Calhouns sought compensation for lost future wages and sought punitive damages. The Court of Appeals for the Third Circuit reversed the summary judgment, holding that Moragne did not "preempt state law wrongful death acts in actions based on the death of a nonseaman in territorial waters." Id. at 644. The United States Supreme Court granted certiorari review to consider that holding. ___ U.S. at ___, 116 S. Ct. at 623.
In a unanimous opinion, the Supreme Court affirmed the judgment of the Court of Appeals. In connection with a thorough historical analysis of Moragne and its antecedents, the Court explained:
___ U.S. at ___, 116 S. Ct. at 628. (emphasis added) (footnotes omitted). Thus, the Supreme Court held that the application of maritime law in a case involving the death of a nonseaman in state territorial waters does not displace remedies available under that state's wrongful death statutes. ___ U.S. at ___, 116 S. Ct. at 628.
The Supreme Court's holding in Calhoun is controlling in this case. We hold, therefore, that Choat may recover such damages as are provided by § 6-5-391, Ala.Code 1975, notwithstanding the fact that this dispute is subject to admiralty jurisdiction.[4] The judgment of the trial court is reversed, and the cause is remanded for further proceedings consistent with this opinion.
APPLICATION GRANTED; ORIGINAL OPINION WITHDRAWN; OPINION SUBSTITUTED; REVERSED AND REMANDED.
MADDOX, SHORES, HOUSTON, INGRAM, and BUTTS, JJ., concur.
[1] Choat eventually released the individual defendants pursuant to a pro tanto settlement for $125,000.
[2] DOHSA provides in pertinent part:
"[§ 761] Whenever the death of a person shall be caused by wrongful act, neglect, or default occurring on the high seas beyond a marine league from the shore of any State, or the District of Columbia, or the Territories or dependencies of the United States, the personal representative of the decedent may maintain a suit for damages in the district courts of the United States, in admiralty, for the exclusive benefit of the decedent's wife, husband, parent, child, or dependent relative against the vessel, person, or corporation which would have been liable if death had not ensued.
"[§ 762] The recovery in such suit shall be a fair and just compensation for the pecuniary loss sustained by the persons for whose benefit the suit is brought and shall be apportioned among them by the court in proportion to the loss they may severally have suffered by reason of the death of the person by whose representative the suit is brought."
(Emphasis added.)
[3] The Jones Act provides in part:
"Any seaman who shall suffer personal injury in the course of his employment may, at his election, maintain an action for damages at law, with right of trial by jury, and in such action all statutes of the United States modifying or extending the common-law right or remedy in cases of personal injury to railway employees shall apply; and in case of the death of any seaman as a result of any such personal injury the personal representative of such seaman may maintain an action for damages at law with the right of trial by jury, and in such action all statutes of the United States conferring or regulating the right of action for death in the case of railway employees shall be applicable."
46 U.S.C.App. § 688.
[4] Of course, we express no view of the merits of Choat's action. | February 23, 1996 |
c78ceae6-a12f-4c69-9759-192ff824836e | Ex Parte Birmingham Airport Authority | 678 So. 2d 757 | 1931533 | Alabama | Alabama Supreme Court | 678 So. 2d 757 (1996)
Ex parte BIRMINGHAM AIRPORT AUTHORITY.
(Re HUDDIE DANSBY & ASSOCIATES, et al. v. BIRMINGHAM AIRPORT AUTHORITY, et al.).
1931533.
Supreme Court of Alabama.
April 26, 1996.
Gregory H. Hawley and Jeffrey A. Lee of Maynard, Cooper & Gayle, P.C., Birmingham, for Petitioner.
John H. Wiley III, Birmingham, for Respondent Huddie Dansby & Associates.
PER CURIAM.
The Birmingham Airport Authority petitions for a writ of mandamus directing the Jefferson Circuit Court to set aside an order granting a Rule 60(b), Ala.R.Civ.P., motion for relief from a judgment, filed by Huddie *758 Dansby and Associates ("Dansby"). The action to which this mandamus petition relates arose from a dispute between the Authority and Dansby concerning an agreement for Dansby to perform a land survey for the Authority. The dispositive issue is whether the circuit court abused its discretion in granting Dansby's motion for relief from a judgment.
The Authority refused to pay for what it characterized as unsatisfactory performance of services and services performed outside the terms of the contract. Based upon this refusal to pay, Dansby brought an action against the authority in the Circuit Court of Jefferson County. Because of the complex issues involved, the parties agreed to settle the dispute through arbitration. According to the exhibits supporting the Authority's petition, the Authority made repeated attempts to encourage Dansby's attorney to do his part in submitting the claim to arbitration, but Dansby's attorney failed to respond. The Authority's exhibits include four letters mailed by its attorney to Dansby's attorney concerning arbitration. In particular, the Authority's attorney included in one letter an "arbitration submission" and the Authority's share of the arbitration filing fee and in another letter included a copy of the rules of the American Arbitration Association. According to the Authority, Dansby did not respond, and Dansby makes no showing to the contrary.
The circuit court dismissed Dansby's action, with prejudice, for failure to prosecute the action, after neither party attended a status conference scheduled for April 22, 1991. Although the Authority was not notified of the dismissal, Dansby received notification. Three years later, Dansby filed a Rule 60(b), A.R.Civ.P., motion in the circuit court in an attempt to obtain relief from the April 1991 judgment dismissing its action with prejudice. Dansby also filed a motion to compel arbitration. Before filing these motions, Dansby had taken no action whatever regarding its dispute with the Authority. In fact, the Authority did not even receive notice of the motion for relief from judgment.
Notwithstanding the fact that the Authority was unable to file a response or to participate in the hearing on the motion for relief from judgment, the circuit court granted the Rule 60(b) motion in April 1994. Not until the Authority's attorneys attended the hearing on the motion to compel arbitration did they learn of Dansby's success on its Rule 60(b) motion. The Authority filed a motion asking the court to set aside its reinstatement of Dansby's action, but the circuit court denied this motion in July 1994. In its order denying the motion, the circuit court indicated that it had granted Dansby's Rule 60(b) motion because the parties continued to have a "live dispute" and because it was the Authority's responsibility to submit the dispute to arbitration. This petition for the writ of mandamus followed.
Rule 60(b), A.R.Civ.P., includes the following provisions:
It is well established that the Rule 60(b) categories for relief are mutually exclusive and that the grounds for relief under Rule 60(b)(1) "cannot be valid grounds under Rule 60(b)(6), in the absence of aggravating circumstances sufficient to permit the trial court to say that the case is properly within 60(b)(6)." Chambers County Comm'rs v. Walker, 459 So. 2d 861, 865 (Ala.1984); Hill v. Townsend, 491 So. 2d 237, 239 (Ala.1986); Barnett v. Ivey, 559 So. 2d 1082, 1084 (Ala. 1990). Furthermore, a party may not simply characterize its Rule 60(b)(1) motion as falling under Rule 60(b)(6), to escape the four-month time limitation imposed by Rule 60(b)(1). Ex parte Hartford Ins. Co., 394 So. 2d 933, 936 (Ala.1981).
The record reflects no justification for Dansby's failure to pursue its claims for three years after the dismissal of its action *759 against the Authority. It appears, at best, that Dansby's attorney failed to respond to the dismissal for reasons of "mistake, inadvertence, surprise, or excusable neglect." Although the Authority did not receive notice of the dismissal, it is undisputed that Dansby received notice. During the intervening three years, the Authority made numerous attempts to correspond with Dansby's attorney for the purpose of initiating arbitration. Thus, the Authority did its part in pursuing arbitration of this dispute. Moreover, the assertion that the dismissal was due to be set aside because it was the Authority's responsibility to submit the dispute to arbitration is without merit, because it was Dansby who brought this action, and Dansby agreed to submit it to arbitration. The circuit court's acceptance of Dansby's argument that reinstatement of the action was warranted under Rule 60(b)(6) simply because there was a "live dispute" was error.
Dansby did not show, in any materials submitted with this petition, any exceptional or aggravating circumstances warranting the granting of the Rule 60(b) motion. Even if Dansby were able to identify any exceptional circumstances, a three-year delay is not "reasonable" within the terms of Rule 60(b)(6), under the circumstances. Barnett, supra, at 1084. Therefore, we must conclude that the circuit court abused its discretion in reinstating Dansby's action pursuant to Dansby's Rule 60(b)(6) motion. The circuit court is directed to set aside its order granting that motion and reinstating Dansby's action.
WRIT GRANTED.
HOOPER, C.J., and ALMON, HOUSTON, INGRAM, and BUTTS, JJ., concur. | April 26, 1996 |
d672c40a-9f57-417e-b3b3-771721606679 | Barron v. CNA Ins. Co. | 678 So. 2d 735 | 1941294, 1941296, 1950013, 1950248 | Alabama | Alabama Supreme Court | 678 So. 2d 735 (1996)
Joseph BARRON, et al.
v.
CNA INSURANCE COMPANY.
Joseph BARRON, et al.
v.
FIREMAN'S FUND INSURANCE COMPANIES.
Joseph BARRON, et al.
v.
COMMERCIAL UNION INSURANCE COMPANY.
Joseph BARRON, et al.
v.
Vernon W. GIBSON, Sr., et al.
Joseph BARRON, et al.
v.
Richard Greene REYNOLDS and Garry Wayne Dodson.
1941294 to 1941296, 1950013 and 1950248.
Supreme Court of Alabama.
March 15, 1996.
*736 Roger L. Lucas and Leigh Ann King of Lucas, Alvis & Wash, P.C., Birmingham, for Appellants.
Andrew P. Campbell, Charles M. Elmer and David M. Loper of Leitman, Siegal, Payne & Campbell, P.C., Birmingham, for Commercial Union Insurance Company.
John M. Laney, Jr., Richard E. Smith, Deborah Alley Smith, and Rhonda Pitts Chambers of Rives & Peterson, Birmingham, for CNA Insurance Company.
John W. Clark, Jr. of Clark & Scott, P.C., Birmingham, for Fireman's Fund Insurance Companies.
Frank E. Lankford, Jr. of Huie, Fernambucq & Stewart, Birmingham, for Vernon Gibson, Sr., Vernon Gibson, Jr., James Sykes, James Ross, Richard Greene Reynolds and Garry Wayne Dodson.
M. Christian King and Madeline H. Haikala of Lightfoot, Franklin & White, L.L.C., Birmingham, John N. Leach, Jr. of Helmsing, Lyons, Sims & Leach, Mobile, for amici curiae 190 former and current employees of International Paper Company and Reynolds Metals Company who have been named as defendants in negligence and wantonness actions in Alabama, in support of appellees.
Robert D. Hunter and William L. Waudby of Lange, Simpson, Robinson & Somerville, Birmingham, for amici curiae 62 individuals *737 sued in co-employee actions, in support of appellees.
Jesse C. Gardner of Gardner, Middle-brooks & Fleming, Mobile, David Shelby of Shelby & Cartee, Birmingham, Brent M. Rosanthal, David Denny, and Jennifer Currie, of Baron & Budd, P.C., Dallas, Texas, for amici curiae various labor organizations representing "persons ... who came into contact with asbestos-containing products while working in a multitude of occupations".
SHORES, Justice.
These actions arose under § 25-5-11, Ala. Code 1975. The plaintiffs claimed damages for injuries they claimed to have suffered from an alleged exposure to asbestos during their employment. The plaintiffs, Joseph Barron and others,[1] worked for many years at a plant in Pelham operated by Sepco Corporation. For many years, Sepco manufactured asbestos-containing products at that plant, until August 1984, when the plant was destroyed by fire.
The plaintiffs sued their supervisory co-employees Vernon W. Gibson, Sr., Vernon Gibson, Jr., James Sikes, James Ross, Richard Reynolds, and Garry Dodson. They alleged that those co-employees had a duty to provide them with a safe work place and that they had negligently or wantonly breached that duty by exposing the plaintiffs to the hazards of asbestos without providing adequate safety equipment and safety procedures for protection against those hazards. The plaintiffs did not allege willful conduct on the part of these defendants.
The plaintiffs also sued CNA insurance company, Commercial Union Insurance Company, and Fireman's Fund Insurance Companies, Sepco's workers' compensation insurance carriers, alleging that the carriers had negligently performed their undertaking to inspect the plaintiffs' workplace and had negligently failed to recommend to Sepco the complete removal of asbestos. The plaintiffs did not allege willful conduct on the part of these defendants.
The co-employee defendants moved for a judgment on the pleadings arguing that the exclusive remedy provisions of the Workers' Compensation Act, Ala.Code 1975, § 25-5-11, barred the plaintiffs' negligence claims. After oral argument on their motion, the trial court, treating the motion as a motion for summary judgement, entered a judgment in favor of the co-employee defendants and made it final pursuant to Rule 54(b), Ala. R.Civ.P.
The defendant insurance carriers filed motions for summary judgment, arguing that the exclusive remedy provisions of the Workers' Compensation Act, Ala.Code 1975, § 25-5-11, barred the plaintiffs' negligence claims. The trial court entered a summary judgment in favor of the carriers. The trial court's judgment for these defendants expressly stated that it did not address factual issues, but, rather, was based purely on legal principles applied to the pleadings.
The plaintiffs appeal as to each defendant. All five appeals involve the same issue of law.
Do the plaintiffs state a cause of action under Alabama law? Specifically, does the effective date provision, § 14, Act No. 85-41, Ala. Acts 1984-85, have the effect of preserving the plaintiffs' cause of action? The plaintiffs argue that the "effective date" provision of Act No. 85-41 makes the provisions of that Act inapplicable to their claims against co-employees and workers' compensation insurance carriers based on exposure to asbestos that occurred before 1985.
Before 1985, co-employees and workers' compensation carriers could be civilly liable for personal injuries caused by their negligence or wantonness. In 1985, the legislature passed Act No. 85-41, which amended the Alabama Workers' Compensation Act to bar claims against co-employees and workers' compensation carriers based on negligence or wantonness. Under Act No. 85-41, a co-employee or workers' compensation carrier *738 is liable only for willful conduct that results in injury or death to the employee.
As amended by Act No. 85-41, § 25-5-53, part of the workers' compensation law, provides, in pertinent part:
Section 25-5-11(b), also a part of the Workers' Compensation Act (and which also was amended by Act No. 85-41), limits actionable claims by an employee against the employer's workers' compensation insurance carrier to claims based on the "willful conduct" of the carrier. That section provides:
Section 25-5-11(c)(1) defines "willful conduct" in pertinent part as:
The legislative intent, to provide immunity against causes of action except those based on willful conduct, is set forth in § 25-5-14 (which was a part of Act No. 85-41):
The plaintiffs, relying on § 14 of the Act No. 85-41, the effective date provision of that act, contend that Act No. 85-41 does not apply to claims against co-employees or insurance carriers based on injuries resulting from exposure to asbestos where the exposure occurred before 1985. That section provides:
1984-85 Ala. Acts., No. 85-41, § 14.
First, the plaintiffs argue that the first sentence of § 14 saves pre-amendment asbestos-exposure actions. They present the novel argument that their causes of action arose at the time of the injury, i.e., when the asbestos exposure occurred; yet, they say, their causes of action did not accrue until the plaintiffs learned of their asbestos-related condition, citing § 6-2-30, Ala.Code 1975. In other words, the plaintiffs assert that there are two "accrual dates" for their claims: one date to avoid § 14, Act. No. 85-41, and another to bring their claims within the coverage of the statute of limitations. In support of their argument, the plaintiffs argue that the words "arising" and "accruing" are made alternatives by the use of the word "or." We disagree.
The statute of limitations for asbestos claims, Ala.Code 1975, § 6-2-30(b), provides that a civil action for any injury to the person or rights of another resulting from exposure to asbestos shall be "deemed to accrue on the first date the injured party, through reasonable diligence, should have reason to discover the injury giving rise to such civil action." Once the cause of action accrues, the plaintiff has two years to bring an action. Ala.Code 1975, § 6-2-38. In the context of an asbestos case, it is impossible to ascertain the precise date of injury, so the traditional date-of-injury test for determining the date on which a tort cause of action arises cannot realistically be applied. Therefore, for asbestos claims, the legislature created an exception to the traditional date-of-injury test. Under § 6-2-30, the date a cause of action for an asbestos injury "arises" and "accrues" is determined under the discovery provisions of § 6-2-30; it is not the date the plaintiff was exposed to asbestos. These plaintiffs filed their complaints on December 28, 1993. For their complaints to be within the limitations period of § 6-2-30, the causes of action must have "arisen" or "accrued" on or after December 28, 1991; that date was more than six years after the effective date of Act No. 85-41. Because the plaintiffs' causes of action arose after the effective date of Act No. 85-41, we hold that their claims are barred by the exclusive remedy provisions of § 25-5-11.
As to the plaintiffs' argument that the phrase "arising or accruing" must be interpreted as stating alternativesby the use of the word "or"we note that "this court is at liberty in ascertaining the intent of the legislature to construe the disjunctive conjunction `or' and the conjunctive conjunction `and' interchangeably." Ex parte Jordan, *740 592 So. 2d 579, 581 (Ala.1992). In addition, while in certain contexts the words "arise" and "accrue" could have different meanings, we find the terms as used in Act No. 85-41 to be interchangeable.
Next the plaintiffs assert that their negligence and wantonness claims are governed by pre-1985 law because, they say, their alleged "exposure to dangerous conditions" occurred before the effective date of Act No. 85-41, January 9, 1985. We disagree. This Court's interpretation of the last sentence of § 14, Act No. 85-41, is governed by our decision in Twilley v. Daubert Coated Products, Inc., 536 So. 2d 1364 (Ala.1988).
In Twilley, an employee sued his employer under § 25-5-11.1, Ala.Code 1975, another Code section taken from Act No. 85-41, alleging that his employment had been terminated in retaliation for his filing a workers' compensation claim. The employee's injury had occurred in 1984, before the effective date of Act No. 85-41, but the alleged wrongful termination occurred on January 15, 1985, after the effective date of the Act. The employer contended on appeal that the employee could not state a claim for wrongful termination because the employee's workplace injury had occurred before the effective date of the Act. This Court rejected that argument and held:
536 So. 2d at 1370.
Under Twilley, the second sentence of § 14 relating to "any accident or exposure to injurious condition occurring before the effective date of [Act No. 85-41]" applies only to claims for workers' compensation benefits and not to claims against workers' compensation carriers or co-employees. Therefore, we hold that the plaintiffs' claims were not preserved under the second sentence of § 14.
In summary, the plaintiffs' claims are barred because those claims do not fall into either of the two savings provisos of § 14. This interpretation is consistent with the legislature's intent to provide immunity against all claims except those based on willful conduct.
1941294AFFIRMED.
1941295AFFIRMED.
1941296AFFIRMED.
1950013AFFIRMED.
1950248AFFIRMED.
HOOPER, C.J., and MADDOX, ALMON, HOUSTON, INGRAM, and COOK, JJ., concur.
BUTTS, J., dissents.
[1] The other plaintiffs are Grady Buckner, Willie Payne, Matthew Smith, Jimmie Sullens, Garlie Davis, Wayne Cummings, Linnie Cumberland, Joe Gaston, and Thelma Lee Gilliam.
[2] For a review of the constitutional issues arising from the § 25-5-11 grant of limited immunity as it applies to co-employees and workers' compensation insurance carriers, see Reed v. Brunson, 527 So. 2d 102 (Ala.1988), and Kruszewski v. Liberty Mut. Ins. Co., 653 So. 2d 935 (Ala.1995). | March 15, 1996 |
49818e97-b752-4d26-8e01-2b636e0627f6 | Lamar Advertising v. State Dot. | 694 So. 2d 1256 | 1941386, 1941387, 1941396 | Alabama | Alabama Supreme Court | 694 So. 2d 1256 (1996)
LAMAR ADVERTISING OF MONTGOMERY, INC., and Dyess Outdoor Advertising, Inc.
v.
STATE of Alabama DEPARTMENT OF TRANSPORTATION.
HEADRICK OUTDOOR ADVERTISING, INC.
v.
STATE of Alabama DEPARTMENT OF TRANSPORTATION.
1941386, 1941387 and 1941396.
Supreme Court of Alabama.
March 15, 1996.
Rehearing Denied April 18, 1997.
W. Joseph McCorkle, Jr., and Dorman Walker of Balch & Bingham, Montgomery, for appellants Lamar Advertising of Montgomery, Inc., and Dyess Outdoor Advertising, Inc.
Susan Russ Walker of Miller, Hamilton, Snider & Odom, Montgomery, for appellant Headrick Outdoor Advertising, Inc.
*1257 Jerry L. Weidler, counsel, Alabama Department of Transportation, Montgomery, for appellee.
RICHARD L. JONES, Retired Justice.
These three cases have been previously reviewed by this Court on separate appeals.[1] The trial court proceedings resulted in summary judgments favorable to the three sign companies. The trial court held that the Alabama Highway Department (now known as the Alabama Department of Transportation ("ALDOT")) was equitably estopped from claiming that signs erected between March 1983 and November 1988 in reliance on permits issued by the City of Montgomery were illegal under the the provisions of Ala. Code 1975, § 23-1-270 et seq.the Alabama Highway Beautification ActOutdoor Advertising ("AHBA").
On appeal from these three initial actions, this Court held:
State Highway Department v. Headrick Outdoor Advertising, Inc., 594 So. 2d 1202, 1205 (Ala.1992) (emphasis in original).
Further, this Court reversed the judgments for the sign companies and remanded the causes for:
Id.
On remand, the trial court reversed its earlier rulings and determined that the signs had been illegally erected contrary to the prohibitions specified in the AHBA.
We quote the relevant language of the trial court's judgment order on remand, from which these three appeals are taken:
Arguing that "agriculture" is a "business," the defendant sign companies contend that the term "business area," as defined by the AHBA, is broad enough to cover "agriculture." The trial court rejected this contention, holding that "[t]he uses permitted in Agricultural Areas are not commensurate with uses permitted in zoned Business Areas, Industrial Districts, Office Districts, or Institutional Districts." Surely, no citation of authority is required to support this conclusory proposition.
Finding no error in the judgment appealed from, we adopt that portion of the judgment quoted hereinabove as part of the opinion of this Court.
This opinion was prepared by retired Justice RICHARD L. JONES, sitting as a Justice *1260 of this Court pursuant to § 12-18-10(e), Ala.Code 1975.
AFFIRMED.
HOOPER, C.J., and SHORES, COOK, and BUTTS, JJ., concur.
MADDOX and HOUSTON, JJ., concur specially.
HOUSTON, Justice (concurring specially).
The problem presented in these cases centers around the proper construction of Ala. Code 1975, § 23-1-273(5), which is part of the Alabama Highway Beautification Act, § 23-1-270 et seq. The pertinent portion of § 23-1-273 states:
(Emphasis added.) The first portion of § 23-1-271(1) of the Alabama Highway Beautification Act defines the term "business area" to mean "[a]ny part of an adjacent area which is at any time zoned for business, industrial or commercial activities under the authority of any law of this state." Subsection (4) of § 23-1-271 defines "adjacent area" as "[a]n area which is adjacent to and within 660 feet of the nearest edge of the right-of-way of any interstate or primary highway."
The signs in question were erected after February 10, 1972, and were erected in areas zoned "agricultural" by local zoning authorities. The issue on appeal is whether, for purposes of applying § 23-1-273(5), part of the Alabama Highway Beautification Act, the phrase "area ... zoned for business ... activities,"[4] appearing in the statutory definition of "business area," was intended to include within the scope of its meaning areas zoned for agricultural use.
"The fundamental rule of statutory construction is to ascertain and give effect to the intent of the legislature in enacting the statute." Clark v. Houston County Comm'n, 507 So. 2d 902, 903 (Ala.1987). "If possible, the intent of the legislature should be gathered from the language of the statute itself." Clark, 507 So. 2d at 903. "[W]here the language of a statute is clear and unambiguous and the meaning obvious, there is no room for construction, [and] the court will confine itself to the language as it is and not invade the legislative realm by imposing ... a ... different meaning." Department of Industrial Relations v. Little Mfg. Co., 253 Ala. 416, 418, 44 So. 2d 587, 589 (1950).
I have my doubts as to whether one can glean a plain meaning from the phrase "area... zoned for business ... activities." The zoning ordinances in question, while they create "commercial" zoning districts and "industrial" zoning districts, do not use the term "business" to describe any of the types of zones created under those ordinances. The petitioners correctly point out that the line between business activities and agricultural activities, if it ever truly existed, is continually being ever more blurred by the modern growth of agribusiness. Furthermore, the definition of the term "business" is very broad. For example, "business" is defined by Black's Law Dictionary (6th ed. 1990), as "employment, occupation, profession, or commercial activity engaged in for gain or livelihood. Activity or enterprise for gain, benefit, advantage or livelihood." It is possible to make a very good argument that agriculture could come within the commonly understood meaning of the term "business activity."
But even if the phrase "area ... zoned for business ... activities" is ambiguous, I am forced to agree with the majority's conclusion that agriculturally zoned areas were not intended to be included within the meaning of the phrase in question in the context of interpreting § 23-1-273(5), part of the Alabama Highway Beautification Act. It has long been established that when faced with a statute of "doubtful interpretation" this Court "will place upon the statute that construction which is reasonable and just." Ex parte *1261 Alabama Public Service Comm'n, 268 Ala. 322, 328, 106 So. 2d 158, 163 (1958). After considering the Alabama Highway Beautification Act as a whole, and especially the legislature's findings set out in that Act (see § 23-1-272), I am convinced that the construction the majority has given the phrase "area ... zoned for business ... activities" is the only reasonable construction that can be given the phrase in this context.
The Alabama Highway Beautification Act was clearly intended to reduce the prevalence of outdoor advertising, especially in the more rural and scenic portions of our state. It resulted from an obvious attempt to balance the economic interests of businesses seeking to advertise and the outdoor advertising businesses that help to meet those advertising needs against the aesthetic and safety interests of Alabama's citizens and those who visit Alabama. In § 23-1-272 the legislature set forth its findings, acknowledging in subsection (1) that "outdoor advertising is a legitimate commercial use of private property adjacent to roads and highways" and in subsection (3) that "outdoor advertising is an integral part of the business and marketing function ... and should be allowed to operate in business areas," while at the same time recognizing in subsection (2) that outdoor advertising "should be regulated in order to protect the public investment in ... highways, to promote the recreational value of public travel, to preserve natural beauty and to promote the reasonable, orderly and effective display of such signs." (Emphasis added.) By restricting outdoor advertising principally to commercially developed and more urban areas of our state, the legislature struck an almost perfect compromise that benefits both advertisers and those interested in preserving Alabama's natural beauty.[5]
Outdoor advertising is obviously most effective in more congested areas where a greater number of motorists pass daily and where lower speed limits and intermittent stop lights enable those motoristswho, as consumers, are the persons at whom the signs are directedto notice billboards much more easily than on high-speed stretches of highway in undeveloped areas. At the same time, the addition of such signs to already commercially developed areas does not affect the natural beauty the legislature was intending to protect. The addition of outdoor advertising to agriculturally zoned areas would clearly run counter to the purposes behind the enactment of the Alabama Highway Beautification Act, and counter to the regulatory scheme created by that Act.
MADDOX, J., concurs.
[1] State Highway Department v. Headrick Outdoor Advertising, Inc., 594 So. 2d 1202 (Ala.1992); State Highway Department v. Lamar Advertising of Montgomery, Inc., 594 So. 2d 1205 (Ala.1992); State Highway Department v. Dyess Outdoor Advertising, Inc., 594 So. 2d 1207 (Ala.1992).
[2] The AHBA also makes this distinction. Ala. Code 1975, § 23-1-271 provides:
"For the purposes of this division, unless otherwise indicated, the following terms shall have the meanings respectively ascribed to them by this section:
"(1) Business area. Any part of an adjacent area which is at any time zoned for business, industrial or commercial activities under the authority of any law of this state or not zoned, but which constitutes an unzoned commercial or industrial area as defined in this section.
"....
"(10) An unzoned commercial, business or industrial area. The land occupied by the regularly used building, parking lot, storage or processing area of a commercial, business or industrial activity, and the land within 600 feet thereof on each side of the highway....
"(11) Commercial or industrial activities for purposes of unzoned industrial and commercial areas. Those activities generally recognized as commercial or industrial by local zoning authorities in this state, except that none of the following activities shall be considered commercial or industrial.
"a. Outdoor advertising structures;
"b. Agricultural, forestry, ranching, grazing, farming and similar activities, including but not limited to, wayside fresh produce stands...."
(Emphasis supplied.)
[3] Section 23-1-273 provides, in pertinent part, as follows:
"No sign shall, subject to the provisions of Section 23-1-274 ["Erection or maintenance of signsControls; criteria"], be erected or maintained in an adjacent area after February 10, 1972...." [Footnote continued.]
Section 23-1-271(4) defines "adjacent area":
"An area which is adjacent to and within 660 feet of the nearest edge of the right-of-way of any interstate or primary highway, which 660 feet distance shall be measured horizontally along a line normal or perpendicular to the centerline of the highway."
[4] No one argues that areas zoned for "agriculture" should be considered as areas "zoned for... industrial or commercial activities"; therefore, I will discuss only whether the term "area... zoned for business ... activities" includes within its meaning an area zoned for agriculture.
[5] This intent is clear from looking at the Act as a whole, especially considering the method in which the legislature sought to regulate outdoor advertising in rural areas not yet zoned. Such signs can be placed only in those areas on "land occupied by the regularly used building, parking lot, storage or processing area of a commercial, business or industrial activity." Ala.Code 1975, § 23-1-271(10). See Hawley Fuel Corp. v. Burgess Mining & Construction Corp., 291 Ala. 546, 548, 283 So. 2d 603, 605 (1973) ("When construing a statute this court must look to the context, spirit, and the whole, to reach the true intent of the legislature."). | March 15, 1996 |
e78864c2-39c2-4e64-82bb-13f3499df84f | Ex Parte Allen | 675 So. 2d 428 | 1950447 | Alabama | Alabama Supreme Court | 675 So. 2d 428 (1996)
Ex parte Yvette Susanne ALLEN.
(In re Yvette Susanne Allen v. Albrecht Enterprises, Inc., d/b/a A-1 Print & Copy Center.)
1950447.
Supreme Court of Alabama.
March 1, 1996.
Victor L. Miller, Jr. of Newman, Miller, Leo & O'Neal, Birmingham, for petitioner.
Perryn G. Carroll of Carroll & Carroll, P.C., Birmingham, for respondent.
Prior report: Ala.Civ.App., 675 So. 2d 425.
HOUSTON, Justice.
The petition for the writ of certiorari is denied. In denying the petition, this Court does not wish to be understood as approving all of the language, reasons, or statements of law in the opinion of the Court of Civil Appeals. Horsley v. Horsley, 291 Ala. 782, 280 So. 2d 155 (1973).
WRIT DENIED.
HOOPER, C.J., and INGRAM, COOK, and BUTTS, JJ., concur. | March 1, 1996 |
56067a33-e229-4c8b-b0dc-9b3916a0a6bf | Scott v. Goins | 677 So. 2d 1154 | 1940860 | Alabama | Alabama Supreme Court | 677 So. 2d 1154 (1996)
Eddie SCOTT and Primm Scott
v.
Robert GOINS, et al.
1940860.
Supreme Court of Alabama.
March 8, 1996.
Rehearing Denied May 24, 1996.
*1155 John T. Crowder, Jr., David G. Wirtes, Jr., Andrew T. Citrin and Kelli D. Taylor of Cunningham, Bounds, Yance, Crowder & Brown, Mobile, for Appellants.
Warren B. Lightfoot and Madeline H. Haikala of Lightfoot, Franklin, White & Lucas, Birmingham, and John N. Leach, Jr. of Helmsing, Lyons, Sims & Leach, Mobile, for Appellees.
INGRAM, Justice.
Eddie Scott and his wife Primm Scott appeal from a summary judgment in a personal injury action filed against Mr. Scott's co-employees: *1156 Robert Goins, the mill manager; Mike DuPont, the safety director; Devon Jones, the maintenance manager; and Billy Edge and Gene Hinton, the maintenance supervisors. The action was filed pursuant to Ala.Code 1975, §§ 25-1-1 and 25-5-11(c)(4).[1]
On a motion for summary judgment, the burden is initially on the movant to make a prima facie showing that there is no genuine issue of material fact (i.e., that there is no dispute as to any material fact) and that the movant is entitled to a judgment as a matter of law. Rule 56, Ala.R.Civ.P.; McClendon v. Mountain Top Indoor Flea Market, Inc., 601 So. 2d 957 (Ala.1992); Elgin v. Alfa Corp., 598 So. 2d 807 (Ala.1992). "The burden does not shift to the opposing party to establish a genuine issue of material fact until the moving party has made a prima facie showing that there is no such issue of material fact." McClendon, at 958; Elgin, at 810-11.
Rule 56 must be read in conjunction with the "substantial evidence rule," § 12-21-12, Ala.Code 1975, for actions filed after June 11, 1987. See Bass v. SouthTrust Bank of Baldwin County, 538 So. 2d 794, 797-98 (Ala.1989). In order to defeat a defendant's properly supported motion for summary judgment, the plaintiff must present substantial evidence, i.e., "evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." West v. Founders Life Assurance Co. of Florida, 547 So. 2d 870, 871 (Ala.1989). On an appeal from a summary judgment, this Court reviews the record in a light most favorable to the nonmovant and resolves all reasonable doubts against the movant. Wilma Corp. v. Fleming Foods of Alabama, 613 So. 2d 359 (Ala.1993).
On June 17, 1991, Mr. Scott was an employee of International Paper Company. On that date, while "changing out" cables on an overhead crane, as a part of his work for that employer, he fell 40 feet from the crane to a concrete floor. He suffered severe injuries and was determined to be totally disabled.
Mr. Scott brought this third-party action against his co-employees under § 25-1-1(a) and § 25-5-11(c)(4). He contends that his co-employees (1) willfully and intentionally failed to provide him and other employees with a safe place to work; see § 25-1-1(a); and (2) willfully and intentionally violated a written safety rule; see § 25-5-11(c)(4).
Section 25-1-1 establishes an employer's duty to provide a safe workplace for its employees. It provides, in pertinent part:
Co-employee actions may be brought pursuant to § 25-1-1; however, the exclusivity provisions of § 25-5-11 have limited them to only those acts that are willful or intentional.
In Powell v. United States Fidelity & Guar. Co., 646 So. 2d 637 (Ala.1994), citing Bean v. Craig, 557 So. 2d 1249 (Ala.1990), this Court set out the principles of co-employee liability:
Powell, at 639, quoting Weaver v. Frazer, 576 So. 2d 200 (Ala.1991), quoting Bean v. Craig, *1157 557 So. 2d 1249, 1252 (Ala.1990). (Emphasis added.)
Mr. Scott places great emphasis on the phrase "substantial certainty that injury will occur." He contends that a reasonable man in the co-employees' positions would have known that injury or death was "substantially certain" to follow from their failure to provide adequate fall protection to a worker whose work routinely placed him on an unguarded pedestal 40 feet above a concrete floor. However, the evidence shows that safety belts were provided for the employees to use. Before Mr. Scott's accident, some of the employees who performed maintenance work on the crane had used safety belts. Furthermore, the evidence showed that before Mr. Scott's accident no one had ever fallen while working on the crane. We do not agree with Mr. Scott that the co-employees knew with substantial certainty that an injury would occur. At most, the evidence tends to show that the co-employees may have been aware that anyone in Mr. Scott's position could have fallen while working on the overhead crane.
Layne v. Carr, 631 So. 2d 978, 982 (Ala.1994).
Mr. Scott also relies on § 25-5-11(c)(4), which provides that injured employees shall have a cause of action against co-employees for personal injuries resulting from "willful conduct." Section 25-5-11(c)(4) defines "willful conduct" to include:
(Emphasis added.)
Mr. Scott argues that the trial judge erred in entering the summary judgment for the co-employees because, he argues, their conduct constituted "willful conduct" as defined by § 25-5-11(c)(4). Mr. Scott contends that he and other employees gave "oral notice" of the safety violation at numerous safety meetings by complaining about the lack of use of any fall protection, and he contends that this was sufficient notice under the statute.
Mr. Scott cites Layne v. Carr, 631 So. 2d 978 (Ala.1994), for the proposition that the required notice need only "substantially conform" to the requirements of § 25-5-11(c)(4). However, that section requires that the injured employee give written notice, which notice must conform to certain specifications. This Court held that "for an employee to bring an action under subsection (c)(4), the required notice must substantially conform to the requirements of that subsection." Layne, at 983. We hold that this does not mean that an "oral notice" is sufficient under the statute, only that the "written notice" need only substantially conform to the specifications listed in the statute.
*1158 Therefore, the trial judge correctly held that Mr. Scott's action could not proceed under § 25-5-11(c)(4).
For the foregoing reasons, the summary judgment in favor of the co-employees is affirmed.
AFFIRMED.
MADDOX, HOUSTON, and COOK, JJ., concur.
HOOPER, C.J., concurs in the result.
[1] Primm Scott claimed damages for loss of consortium. | March 8, 1996 |
d2cf31be-9b2d-4237-a591-fdcaa7d4a67e | Ex Parte Dawson | 675 So. 2d 905 | 1941625 | Alabama | Alabama Supreme Court | 675 So. 2d 905 (1996)
Ex parte Nathaniel LeRoy DAWSON.
(Re Nathaniel LeRoy Dawson and Mark Keith Glaster v. State.)
1941625.
Supreme Court of Alabama.
February 23, 1996.
*906 Shirley T. Chapin, Tuscaloosa, for Petitioner.
Jeff Sessions, Atty. Gen., and James B. Prude, Asst. Atty. Gen., for Respondent.
INGRAM, Justice.
Nathaniel LeRoy Dawson was convicted of first degree burglary, first degree rape, first degree sodomy, and first degree robbery and was subsequently sentenced to four consecutive terms of life imprisonment.[1] Dawson appealed, contending, among other things, that all of the offenses arose from a single transaction and that he, therefore, should not have been sentenced to four consecutive life terms. The Court of Criminal Appeals affirmed the trial court's judgment, holding that the trial court had not violated the prohibition against double jeopardy by sentencing Dawson to four consecutive life terms. Specifically, that court held that Dawson's consecutive sentences must be construed as punishments for different offenses. Dawson v. State, 675 So. 2d 897 (Ala.Cr.App.1995).
However, in affirming, the Court of Criminal Appeals reversed its earlier holding in a factually similar case, Robertson v. State, [Ms. CR-93-0735, July 8, 1994] ___ So.2d ___ (Ala.Cr.App.1994). In Robertson, citing Ex parte McKelvey, 630 So. 2d 56 (Ala.1992), the Court of Criminal Appeals had held that the defendant could receive only one punishment for his three convictions, because that court construed the three crimes as constituting "the same act." Robertson is presently before this Court. We granted the State's petition for certiorari review in Robertson to determine if the Court of Criminal Appeals erred in holding that the multiple sentences violated the prohibition against double jeopardy. We then granted Dawson's petition for certiorari review on this same issue.
The pertinent facts as they relate to the double jeopardy issue are as follows: On July 31, 1993, V.T., the victim, and a five-month-old child, who was sleeping with her, were awakened by what V.T. called a "boom" sound. When she got up, she saw two men, one of whom she later identified as Dawson, in the hallway of her home, and she saw that her door had been broken. She then ran back into her bedroom, where the baby was, and shut the door. Dawson and the other man entered the bedroom and began asking for money and jewelry. Dawson told her to put the baby down and to take off her clothes. When she refused, Dawson put a knife on the baby and said that he would kill both of them if she did not do as she was told. She then took off her clothes and lay back on the bed as instructed by Dawson and the other man. Dawson then raped her, while the other man watched. The other man then raped her. While the other man was raping V.T., Dawson pressed the knife to her neck and told her that he would slash her neck if she did not perform oral sex on him. The other man then made her perform oral sex on him, and for a while they went back *907 and forth with her. When they stopped raping and sodomizing V.T., Dawson tied her up in a chair in the bedroom while she was still naked. He used telephone cords to tie her up and wrapped her mouth with an umbrella cover. They then dumped the contents of her purse on the floor and took her car keys. V.T. testified that she heard them move and knock over things in her home and that she could see them putting things in the car. After they had left, V.T. freed herself and telephoned 911. The police came and determined that Dawson and the other man had taken televisions and a VCR from her home, her 1991 model automobile, stereo speakers, and a black cellular telephone. The police testified that when they arrived at V.T.'s home, the door had been broken and the inside of the home looked as if a tornado had hit.
Dawson, along with the other man involved, Mark Keith Glaster, was charged with, and was convicted of, first degree burglary, first degree rape, first degree sodomy, and first degree robbery. As noted above, the Court of Criminal Appeals affirmed.
In 1932, the United States Supreme Court held that multiple punishments for multiple statutory offenses do not violate the prohibition against double jeopardy where each statutory offense requires proof of an additional fact that the other statutory offenses do not require. Blockburger v. United States, 284 U.S. 299, 52 S. Ct. 180, 76 L. Ed. 306 (1932). In other words, as long as each statutory offense requires proof of additional facts, the double jeopardy prohibition is not implicated.
However, in 1992, this Court held that where a defendant is charged with both burglary and theft arising from a transaction that is the foundation for both charges, the defendant may receive only one punishment. Ex parte McKelvey, 630 So. 2d 56 (Ala.1992). As the Court of Criminal Appeals noted in its opinion in this present case, 630 So. 2d at 58, McKelvey relies on the fact that "[theft] and burglary are of the same kindred of crimes." 630 So. 2d at 58. That court held, and we agree, that the rationale in McKelvey concerning theft-burglary situations constitutes a narrow exception to the Blockburger double jeopardy test.
Therefore, this case is distinguishable from McKelvey, and the only question here is whether, according to the Blockburger test, Dawson committed four separate offenses.
Judge Patterson, writing for the Court of Criminal Appeals, held that Dawson had committed four separate offenses, namely, burglary, robbery, rape, and sodomy. 630 So. 2d at 58. We agree. Judge Patterson added:
630 So. 2d at 58 (citations omitted).
V.T. awoke when Dawson forcibly entered her home by kicking her door open. When she first saw the intruders, one of them was standing in the hall holding a knife. A jury could reasonably infer from these facts that Dawson intended to commit a felony. Furthermore, these facts were not necessary to prove either robbery, rape, or sodomy. Therefore Dawson's consecutive sentences for burglary, robbery, rape, and sodomy must be construed as punishments for different offenses. They do not constitute double jeopardy under the Blockburger test, and they do not fall within the narrow exception *908 to Blockburger carved out in McKelvey. Accordingly, the judgment of the Court of Criminal Appeals is due to be affirmed.
AFFIRMED.
HOOPER, C.J., and MADDOX, SHORES, HOUSTON, KENNEDY, COOK, and BUTTS, JJ., concur.
[1] Mark Keith Glaster was tried with Dawson. He was convicted of the same offenses and received the same sentences. However, Glaster is not a party to this petition for the writ of certiorari. | February 23, 1996 |
c3392359-557b-40a3-bcce-6b7eea1c2367 | Ex Parte Weaver | 678 So. 2d 284 | 1950044 | Alabama | Alabama Supreme Court | 678 So. 2d 284 (1996)
Ex parte William Ray WEAVER.
(In re William Ray Weaver v. State of Alabama).
1950044.
Supreme Court of Alabama.
February 2, 1996.
Rehearing Denied March 8, 1996.
*285 Charles C. Hart, Gadsden, and Walden M. Buttram, Gadsden, for Petitioner.
Jeff Sessions, Atty. Gen., and Gail Ingram Hampton, Asst. Atty. Gen., for Respondent.
HOUSTON, Justice.
William Ray Weaver was indicted and convicted in Etowah County for the capital offense stated in Ala.Code 1975, § 13A-5-40(a)(2), involving the robbery and murder of Aubrey Ray Estes. The Court of Criminal Appeals affirmed Weaver's conviction and death sentence, and it later overruled his application for rehearing. See Weaver v. State, 678 So. 2d 260 (Ala.Crim.App.1995), for a detailed statement of the facts. We granted certiorari review pursuant to Rule 39(c), Ala.R.App.P. We reverse and remand.
The dispositive issue is whether the trial court erred to reversal in instructing the jury as follows during the guilt phase of the trial:
The trial court gave this one-sentence instruction on flight at the end of its oral charge on the law and immediately after it had given the following instruction on intent:
Weaver contends that the trial court's instruction on flight improperly suggested to the jury that there was only one conclusion that could be reasonably drawn from the evidencethat he had gone to live with his niece in Florida to avoid arrest and prosecution for the murder of Mr. Estes. In this respect, he argues that the jury was not properly instructed to fully consider whether his move to Florida might have been motivated by reasons other than a consciousness of guilt of the murder. Weaver contends, in the alternative, that there was insufficient evidence that he left Alabama to avoid arrest and prosecution for the murder of Mr. Estes to even warrant an instruction on flight. In response, the State, although conceding that the instruction on flight was rather terse, contends that it properly conveyed to the jury that the jury had the responsibility for determining Weaver's motivation for going to Florida and for considering whether his motivation indicated a consciousness on his part of guilt. The State also contends that the evidence of Weaver's move to Florida was probative on the question of his guilt or innocence. After carefully reviewing the record, the briefs, and the opinion of the Court of Criminal Appeals, we conclude that the trial court's one-sentence instruction on flight *286 was misleading and that its prejudicial effect requires the reversal of Weaver's conviction.
In Ex parte Musgrove, 638 So. 2d 1360, 1366-67 (Ala.1993), cert. denied, Rogers v. Alabama, ___ U.S. ___, 115 S. Ct. 136, 130 L. Ed. 2d 78 (1994), this Court, faced with a similar problem concerning the adequacy of an instruction on flight, stated:
"The jury instruction at issue stated:
"The second instruction, which had been requested by defense counsel, stated:
"This instruction repeated to the jury the explanation that it could look to all the evidence to determine the motive for the defendants' flight, and it sufficiently cured the impropriety that existed in the earlier charge. Accordingly, we find no plain error."
The trial court's instruction on flight in the present case improperly suggested to the jury that the only conclusion that could be reasonably drawn from the evidence was that Weaver had gone to Florida to avoid prosecution for the murder of Mr. Estes. Contrary to the State's assertion here, the instruction did not inform the jury that it had the responsibility to determine in the first instance what Weaver's motivation was in going to Florida. The instruction, instead, conveyed to the jury the idea that Weaver's move to Florida was presumptively to avoid prosecution. The jury was asked, in essence, to determine whether Weaver's "flight to avoid prosecution" tended in any way to indicate a consciousness of guilt on his part regarding the murder of Mr. Estes. Unlike Ex parte Musgrove, supra, this case had no additional instruction to cure the impropriety of the instruction regarding flight. We hold, therefore, that the trial court's instruction on flight, when examined in the context of the entire case, was highly prejudicial and constituted reversible error.[1]
Because of the possibility that Weaver may be retried, we further note that the evidence appears to be insufficient to warrant an instruction on flight. In Ex parte Jones, 541 So. 2d 1052, 1053-57 (Ala.1989), Justice Maddox, writing for this Court, discussed flight evidence and the requirements for its admissibility. We quote extensively from his opinion:
"In an even earlier case, this Court did hold, however, that care must be taken in introducing evidence like evidence of flight. In Liles v. State, 30 Ala. 24, 24-25 (1857), this Court stated:
"Alabama cases clearly hold that evidence of flight that is not combined with other criminative circumstances has little probative force. The teaching of Levison, supra, of course, is that care should be used when evidence of flight is presented. The United States Supreme Court has similarly warned, on more than one occasion, of the dangers in the introduction of evidence of flight. In Hickory v. United States, 160 U.S. 408, 16 S. Ct. 327, 40 L. Ed. 474 (1896), the Court made a detailed examination of the nature of evidence of flight and ruled that a jury charge that raised evidence of flight into a presumption of guilt was error:
"160 U.S. at 417-18, 16 S. Ct. at 330-31.
"Further, the United States Supreme Court has `consistently doubted the probative value in criminal trials of evidence that the accused fled the scene of an actual or supposed crime. Wong Sun v. United States, 371 U.S. 471, 483 n. 10, 83 S. Ct. 407, 415 n. 10, 9 L. Ed. 2d 441 (1963).' Nevertheless, the rule still remains that such evidence is admissible in a proper case.
"The basic rule for the introduction of evidence of flight was set forth in the early Alabama case of Bowles v. State, 58 Ala. 335, 338 (1877):
"This basic statement about evidence of flight has remained intact and basically unchanged in the law of Alabama up until this time. It is still the law. Later cases dealing with flight often state little more than the main proposition that such evidence is admissible. See Kelley v. State, 226 Ala. 80, 145 So. 816 (1933); Carden v. State, 84 Ala. 417, 4 So. 823 (1887); Sylvester v. State, 71 Ala. 17 (1881).
"One of the most recent cases summarizing the Alabama rule on this subject is Beaver v. State, 455 So. 2d 253, 257 (Ala. Crim.App.1984):
"A good statement of the rule concerning the admissibility of evidence of flight when separate offenses are involved appears in United States v. Myers, 550 F.2d 1036 (5th Cir.1977), cert. denied, 439 U.S. 847, 99 S. Ct. 147, 58 L. Ed. 2d 149 (1978):
"550 F.2d at 1049-51.
See, also, Rogers v. State, 630 So. 2d 88 (Ala. 1992).
The evidence indicated that Mr. Estes was killed on or about December 2, 1989; that Weaver moved to Florida in August or September 1990 to live with his niece and to find work; that he did not leave Alabama until after he had been discharged from parole in connection with another offense; and that he was arrested in Florida in June 1991, approximately two months after he had been notified by an investigator with the Attalla, Alabama, Police Department that he was a suspect in the case. The record and the arguments of the parties also suggest that the Attalla Police Department did not begin until February 28, 1991, to focus on Weaver as a possible suspect in the murder of Mr. Estes. Assuming that Weaver was not a suspect when he left Alabama in 1990, we would conclude that the evidence was insufficient to furnish reasonable support for an inference that Weaver's move to Florida was motivated by a guilty conscience in regard to the murder of Mr. Estes. Our conclusion in this regard would be dictated by the fact that the only reasonable inference to be drawn from the evidence would be that Weaver, approximately eight or nine months after the crime had occurred and at a time when he was under no suspicion of being involved in it, left Alabama and went to Florida to live with a relative and to find work. The length of time between the murder and Weaver's move to Florida, in conjunction with the fact that Weaver was under no suspicion of being involved in the murder, would weigh heavily against inferring that his move was motivated by a desire to avoid arrest and prosecution for the murder of Mr. Estes. It is also significant, we think, that Weaver delayed his move to Florida until after he had been discharged from parole and that he made no attempt to flee from his niece's residence in Florida after he had been notified that he was a suspect in the case. As a whole, the record does not appear to demonstrate the kind of instinctive or impulsive behavior on Weaver's part that generally indicates fear of apprehension and that gives evidence of flight such limited reliability and trustworthiness as it possesses. Although we recognize that prosecutors are generally given wide latitude in proving that an accused fled out of a consciousness of guilt, it is clear that flight evidence can be so untrustworthy, when there is no evidence that the defendant fled because of a consciousness of guilt or a desire to avoid arrest and prosecution, that the probative value of the evidence is outweighed by the prejudice it produces.
For the foregoing reasons, the judgment is reversed and the case is remanded for an order or proceedings consistent with this opinion.
REVERSED AND REMANDED.
MADDOX,[*] SHORES, KENNEDY, and COOK, JJ., concur.
HOOPER, C.J., and INGRAM, and BUTTS,* JJ., dissent.
*292 HOOPER, Chief Justice (dissenting).
I respectfully dissent. The jury instruction at issue here was:
(Emphasis added.)
The instruction, taken in its in context, merely states the relevance of "flight." The instruction speaks of "a defendant's flight" and states that it "may be considered," not that it "shall" be considered. If the judge was holding, or instructing the jury, that flight had been proven, then the jury would have been required to consider flight. The instruction does not direct the jury to accept or to reject the evidence of flight. The defense was allowed to introduce evidence indicating there was no flight; this fact is important. The jurors were still left by the judge's instruction to draw a conclusion if they believed the prosecution had proven flight. Therefore, the court was not requiring the jury to find that there had been a flight by the defendant. The jury had evidence on both sides to weigh on the issue of flight. The court did not err in giving the instruction, and thus no curative instruction was required.
There is no dispute that evidence of flight is a circumstance the jury may consider "even where the conduct of the defendant tending to show flight is weak and inconclusive." Eddins v. State, 501 So. 2d 574 (Ala. Crim.App.1986). See also, United States v. Levine, 5 F.3d 1100 (7th Cir.1993) (evidence of defendant's flight one year after murders when defendant realized he would be indicted was admissible as probative of defendant's guilt). Further, I note that no Alabama cases have disallowed evidence of flight on the basis of remoteness. C. Gamble, McElroy's Alabama Evidence, § 190.01(4) at 383 (4th ed. 1991).
The evidence of flight was sufficient to go to the jury, especially since this is an area in which the courts and prosecutors have been given much leeway. The jury could reasonably have found that the reason Weaver took nearly eight months to go to Florida was that he was on parole and had to stay in Alabama, until July 27, 1990. He went to live in Florida with his niece and her husband in August 1990, just after his parole term ended. He had never lived with his niece before and had met her husband only once before. He asked if he and Tina Leslie, the mother of his child, could stay with his niece and her husband until he and Tina "got on their feet." He moved in, and only later did Tina and their child join him there. In the spring of 1991, the police telephoned him and told him he was a suspect in a murder investigation and asked him to return to Alabama. He became angry and did not return to Alabama. He continued to live in Florida until he was arrested there and extradited. The evidence of flight came both from evidence that the state introduced, as well as evidence Weaver introduced. The evidence was at least minimally sufficient to go to the jury, and the jury then weighed the evidence. The conviction should not be reversed on the basis that the court erred in allowing the jury to consider evidence of flight.
[1] The State's case was based primarily on the testimony of two witnessesHenry Gene Whitmore, a codefendant; and Faye Edwards, the mother of another codefendantand the credibility of those two witnesses was at issue. Without detailing all of the testimony at the trial, suffice it to say that any juror who might have been uncertain as to the weight to give these witnesses' testimony could have been influenced by the trial court's instruction.
We also note that Weaver objected at trial to the flight instruction on the ground that there was insufficient evidence to support such an instruction. However, it appears that Weaver's argument concerning the adequacy of the flight instruction was not made to the trial court; therefore, we have reviewed that argument under the "plain error" rule. See Rule 39(k), Ala. R.App.P.
[*] Although Justices MADDOX and BUTTS were not present when this case was orally argued, they have listened to the tape of that oral argument. | February 2, 1996 |
adffd321-2c86-431b-9da9-1fc43bdf094f | Stallworth v. City of Evergreen | 680 So. 2d 229 | 1941622 | Alabama | Alabama Supreme Court | 680 So. 2d 229 (1996)
Freddie L. STALLWORTH
v.
CITY OF EVERGREEN, Alabama, et al.
1941622.
Supreme Court of Alabama.
May 3, 1996.
Rehearing Denied June 21, 1996.
*230 Kenneth L. Thomas and Cynthia W. Clinton of Thomas, Means & Gillis, P.C., Montgomery, for Appellant.
Lawrence M. Wettermark and Andrew J. Rutens of Collins, Galloway & Smith, Mobile, for Appellees.
Kenneth Smith, Counsel, Alabama League of Municipalities, Montgomery, for Amicus Curiae Alabama League of Municipalities (in support of the City of Evergreen's rehearing application).
Peter S. Joffrion, Office of the City Attorney, Huntsville, for Amicus Curiae City of Huntsville (in support of the appellees' rehearing application).
Mylan R. Engel and Edgar P. Walsh of Engel, Walsh & Zoghby, Mobile, for Amicus Curiae Mobile County Personnel Board (in support of the Appellees' rehearing application).
William R. Lauten, Mobile, for Amicus Curiae City of Mobile.
J.R. Brooks and William W. Sanderson, Jr. of Lanier Ford Shaver & Payne, P.C., Huntsville, for Amicus Curiae City of Rainbow City (in support of the City of Evergreen's rehearing application).
James W. Webb, Bart Harmon and Mary E. Pilcher of Webb & Eley, P.C., Montgomery, for Amicus Curiae Association of County Commissions of Alabama (in support of the Appellees' application for rehearing).
Alex L. Holtsford, Jr. and Marianne T. Cosse of Nix, Holtsford & Vercelli, P.C., Montgomery, for Amicus Curiae Alabama Municipal Insurance Corp.
James W. Porter II and Tessa M. Thrasher of Porter, Porter & Hassinger, P.C., Birmingham, for Amicus Curiae City of Leeds.
HOUSTON, Justice.
Freddie L. Stallworth sued for a judgment declaring the termination of his employment to be invalid. He named as defendants the City of Evergreen; Henry Lomax Cassady, in his official capacity as mayor of Evergreen; Curtis Hamilton, in his official capacity as Evergreen's city administrator; and Jerry L. Caylor, James C. King, Phyllis N. Brock, Larry W. Fluker, and Elizabeth M. Stevens, in their official capacities as members of the Evergreen city council. He alleged certain unlawful employment practices in his termination from employment with the City. The trial court entered a judgment for the defendants. Stallworth appeals. We reverse and remand.
Stallworth was employed as personnel officer for the City and was responsible for maintaining employee records; developing, maintaining, and updating job classification and pay plans; and interpreting personnel policies for the City. His job as personnel officer was under the merit system, and he could be terminated only for cause. The mayor was the appointing authority for the City. Hamilton, as the city administrator, *231 supervised the department heads and was Stallworth's immediate supervisor.
At an executive session of the city council, Stallworth was asked to explain certain payroll discrepancies, but he failed to provide an explanation. Consequently, Hamilton recommended that disciplinary action be taken against Stallworth. The mayor concurred in that recommendation. Thereafter, by memorandum, Hamilton notified Stallworth that a hearing had been scheduled to consider his termination. In a subsequent memorandum, Hamilton notified Stallworth of the charges against him and of the witnesses to be called against him. At a pretermination hearing, Hamilton served as the hearing officer. Stallworth, who was represented by counsel, objected to Hamilton's serving as the hearing officer, because the City had been given notice that Stallworth would call Hamilton to testify at the hearing about his responsibilities as city administrator and because of a perceived lack of impartiality on Hamilton's part. When Hamilton was called as a witness, the mayor took over as the hearing officer, over Stallworth's objection based on the City's having called the mayor as a witness against Stallworth at this hearing. The City also called Councilman Caylor as a witness against Stallworth at this hearing.
Following the pretermination hearing, which lasted eight hours, the hearing officer determined that Stallworth had failed to provide an adequate explanation as to the payroll discrepancies. Following the hearing, the mayor and Hamilton, by memorandum, advised Stallworth that he was being terminated from employment and advised him of his right to appeal to the Evergreen Personnel Review Board ("the Review Board"). The Review Board was created to serve in a quasi-judicial capacity as the appeal body to consider grievances by the City's regular classified employees and part-time employees. (Section II A, p. 4, Personnel Handbook.) The Review Board is comprised of five members (not City employees or holders of office in the City), who are appointed by council members. (See Section II B, p. 4, Personnel Handbook.) The employee is "allowed to appear before the [Review Board] with reasonable representation of [his] choice, if [he] desires." (Section IX B, Step 3(c), p. 30, Personnel Handbook.) The Review Board "will hear the employee's grievance, gather pertinent documents, interview witnesses as necessary, and prepare a written statement of fact." (Section IX B, Step 3(d), p. 31, Personnel Handbook.) Pursuant to an amendment to the Personnel Handbook, "[w]ithin ten (10) working days of the hearing, the Personnel Review Board will make a determination in the case," and "[t]he mayor and council will review cases heard before the Personnel Review Board and make the final determination." (Amendment to Section IX B, Step 3(e), p. 31, Personnel Handbook.)
A full evidentiary hearing was held before the Review Board. During the hearing, the City called the mayor as a witness, and it also called Hamilton and Caylor as witnesses. However, neither the mayor nor Hamilton or Caylor participated in the Review Board's deliberations. The Review Board voted 3-2 to affirm Stallworth's termination.
Thereafter, the city council convened to make the final determination as to Stallworth's termination, as authorized by the Personnel Handbook. Caylor abstained from voting on the issue of Stallworth's termination because, he said, he had participated in the pretermination and Review Board hearings. However, the mayor, in spite of his participation at the pretermination and Review Board hearings, voted to uphold Stallworth's termination. Some council members expressed concern over what they considered an inability to make an informed decision without reliable informationthey had been excluded from the Review Board hearing and they had no tape-recording, transcript, or other evidentiary materials pertaining to Stallworth's termination proceedings other than the written findings of the Review Board. In response to these concerns, the city attorney explained that council members had been excluded from the Review Board hearing because, he said, "if you had heard the Review Board proceedings, then you would be in no position to be sitting in the council's position, which is the third step." Thereafter, the city council, *232 with Caylor abstaining, voted 3-2 to terminate Stallworth.
The trial court affirmed the city council's approval of Stallworth's termination, holding, in part, as follows:
Stallworth appeals, maintaining that his due process rights guaranteed by the United States Constitution and the Alabama Constitution were violated by Hamilton's participation as investigator, judge, and adverse witness in the pretermination hearing and as a witness at the Review Board hearing and by the mayor's participation as investigator, adverse witness, prosecutor, judge, and final decision-maker. Stallworth says the proceedings were tainted by bias and prejudgment and, therefore, that the mere cancellation of the mayor's vote at the city council hearing was insufficient to cure the due process violations.
*233 The City concedes that had the pretermination hearing been the only procedural protection given Stallworth, then Stallworth would not have had "meaningful due process." The City, nonetheless, maintains that because it afforded Stallworth the right to appeal to an independent, unbiased Review Board, which it says constituted a mechanism to redress the alleged due process deprivation, the fundamental requirement of due process was satisfied.
The Fourteenth Amendment to the United States Constitution forbids a State or any subdivision thereof from taking a person's property without providing that person with due process of law. Building on earlier cases that had greatly expanded the meaning of the term "property" for Fourteenth Amendment purposes, the United States Supreme Court held in Board of Regents v. Roth, 408 U.S. 564, 576-78, 92 S. Ct. 2701, 2708-10, 33 L. Ed. 2d 548 (1972), that a governmental employee's contractual or statutory right to continued employment was a property interest falling within the scope of the Fourteenth Amendment's protection. Therefore, "a state employee who under state law, or rules promulgated by state officials, has a legitimate claim of entitlement to continued employment absent sufficient cause for dismissal may demand the procedural protections of due process." Goss v. Lopez, 419 U.S. 565, 573, 95 S. Ct. 729, 735, 42 L. Ed. 2d 725 (1975). All parties to this action concede that Stallworth had a protectible interest in continued employment with the City. The parties' sole disagreement concerns the constitutional adequacy of the review procedures provided to Stallworth by the City.
"[C]onsideration of what procedures due process may require under any given set of circumstances must begin with a determination of the precise nature of the government function involved as well as of the private interest that has been affected by governmental action." Cafeteria & Rest. Wkrs. U., Local 473, AFL-CIO v. McElroy, 367 U.S. 886, 895, 81 S. Ct. 1743, 1748-49, 6 L. Ed. 2d 1230 (1961). In the context of the routine dismissal of a governmental employee who has a legitimate right to continued employment absent sufficient cause for termination, the United States Supreme Court has held that "all the process that is due [to such an employee] is provided by a pretermination opportunity to respond, coupled with post-termination administrative procedures." Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 547-48, 105 S. Ct. 1487, 1496, 84 L. Ed. 2d 494 (1985).
Justice White, writing for the majority in Cleveland Bd. of Educ., defined the constitutional boundaries of the required pretermination hearing stating:
470 U.S. at 545-46, 105 S. Ct. at 1495. (Citations omitted.)
Stallworth argues that the involvement of biased decision-makers throughout the termination review process afforded him by the City denied him due process of law. Uncontradicted testimony at trial established that the hearing officer at Stallworth's pretermination hearing was not only Stallworth's supervisor (Hamilton, the person who had initiated the procedures to have Stallworth terminated), but was also a material witness at the pretermination hearing, actually stepping down from being hearing officer long enough to testify.
An unbiased and impartial decisionmaker is one of the most, if not the most, *234 fundamental of requirements of fairness and due process. Evans v. City of Huntsville, 580 So. 2d 1323 (Ala.1991). See also Friendly, "Some Kind of Hearing," 123 U.Pa.L.Rev. 1267, 1279 (1975); and Goldberg v. Kelly, 397 U.S. 254, 271, 90 S. Ct. 1011, 1022, 25 L. Ed. 2d 287 (1970). Although the hearing officer at a pretermination hearing need only determine whether there are "reasonable grounds to believe that the charges against the employee are true and support the proposed action," the most basic precepts of due process of law require that the person making that decision, the hearing officer, must be relatively unbiased and impartial. Cleveland Bd. of Educ., 470 U.S. at 546, 105 S. Ct. at 1495. The United States Supreme Court in Goldberg v. Kelly, 397 U.S. at 271, 90 S. Ct. at 1022, recognized that the very nature of governmental entities will make it nearly impossible in many situations to find anyone within the governmental entity to serve as hearing officer who has been completely shielded from any contact with the subject matter of the proceeding, but the Court further stated that although "prior involvement in some aspects of a case will not necessarily bar" an official from serving as an hearing officer, "participat[ion] in making the determination under review" would bar such an official from serving as hearing officer. It also clearly offends the most basic traditional notions of due process to have a person serve as a hearing officer in a case in which he or she testifies as a material witness.
The trial court recognized that the pretermination hearing afforded Stallworth was constitutionally deficient, but, relying on the case of McKinney v. Pate, 20 F.3d 1550 (11th Cir.1994), cert. denied, McKinney v. Osceola County Bd. of County Comm'rs, ___ U.S. ___, 115 S. Ct. 898, 130 L. Ed. 2d 783 (1995), ruled that Stallworth had not been deprived of his right to procedural due process, because, it held, any procedural deficiency in the pretermination hearing was remedied by an adequate post-deprivation hearing. The trial court's reliance on McKinney is misplaced because the present case is clearly distinguishable and also because some of the reasoning underlying the holding in that case seems questionable in light of United States Supreme Court caselaw. Alabama Courts must apply Federal constitutional law as enunciated by the United States Supreme Court; caselaw from the various Federal circuit courts of appeals, although of invaluable aid in understanding Federal law as enunciated by the United States Supreme Court, is only persuasive authority in our state courts.
The plaintiff in McKinney filed an action under 42 U.S.C. § 1983 after his dismissal from employment. He "failed to take advantage of any state remedies, opting instead to pursue his claim in federal court." McKinney, 20 F.3d at 1563. Unlike the plaintiff in McKinney, Stallworth chose to pursue a remedy in the state courts. The Court of Appeals for the Eleventh Circuit based its holding that McKinney was not entitled to § 1983 relief not only on a conclusion that any due process problems with McKinney's pretermination hearing had been remedied by an adequate post-deprivation hearing, but also on this conclusion:
McKinney, 20 F.3d at 1563. (Citations omitted.)
Furthermore, the Eleventh Circuit's reliance on Parratt v. Taylor, 451 U.S. 527, 101 S. Ct. 1908, 68 L. Ed. 2d 420 (1981), to buttress its conclusion in McKinney that a denial of due process at the pretermination level can be fully remedied by a procedurally adequate post-termination hearing is questionable. Parratt involved a procedural due process claim brought by a prisoner who alleged that a prison employee had either negligently lost or intentionally stolen his personal property. The prisoner in Parratt asserted that a postdeprivation hearing in which he could seek *235 tort damages was constitutionally insufficient, arguing that he should have been provided with a predeprivation hearing, also. Naturally, the United States Supreme Court recognized that a predeprivation hearing in that sort of situation would be impossible, because a State cannot predict when a prison employee will negligently misplace or decide to steal a prisoner's property. The situation where an employee is terminated is much different.
In Cleveland Board of Education, 470 U.S. 532 at 547-48, 105 S. Ct. 1487 at 1496-97, the United States Supreme Court recognized that predeprivation hearings were practicable in the context of employment terminations; that context is very different from the situation in Parratt. The Supreme Court held in Cleveland Board of Education that tenured governmental employees almost always must be afforded at least a limited pretermination hearing before they can constitutionally be terminated. To hold that a procedurally adequate post-termination hearing remedies the deprivation inflicted on a discharged employee by an earlier decision based on a pretermination hearing completely devoid of due process of law would be to render the United States Supreme Court's holding in Cleveland Board of Education a nullity. Furthermore, no matter how fair and adequate the procedures at the posttermination hearing may be, the initial decision made after the pretermination hearing inevitably will have diminished significantly the employee's chances of prevailing at the post-termination hearing.
Based on the foregoing, we hold that Stallworth, who as a classified employee with the City had a property right in his employment, was denied the process he was due. It is undisputed that Stallworth's pretermination hearing was flawed. The holding of the post-termination hearing before the Review Board did not remedy and could not have remedied the earlier deprivation of Stallworth's right to a constitutionally adequate pretermination hearing; this is the case whether or not the trial court's holding that Stallworth was afforded a constitutionally adequate post-deprivation hearing was correct.[1]
REVERSED AND REMANDED.
HOOPER, C.J., and ALMON, COOK, and BUTTS, JJ., concur.
[1] The hearing before the Review Board would have comported with the independent due process requirement of an adequate post-termination hearing if the Review Board had been the final arbiter of Stallworth's termination. However, the city council, pursuant to the Personnel Handbook, was assigned the role of making that final determination. Therefore, review before the city council would have had to be in the form of an evidentiary hearing and would have had to be conducted without the presence of members who taint the proceeding, in order to comport with due process. To do otherwise would create a situation that would lead a council member not to hold the balance nice, clear, and true. See, e.g., Aetna Life Ins. Co. v. Lavoie, 475 U.S. 813, 106 S. Ct. 1580, 89 L. Ed. 2d 823 (1986).
"[W]hile the influence of any single participant... can never be measured with precision, experience teaches us that each member's involvement disposition. The participation of [one] case of which he knows at the time he participates necessarily imports a bias into the deliberative process. This [constitutes a deprivation] of the assurance of impartiality that is the fundamental requirement of due process."
475 U.S. at 831, 106 S. Ct. at 1590 (Justice Brennan, concurring). (Emphasis in original.) | May 3, 1996 |
ebea8cd5-6972-4be7-b19e-e357af429fe0 | Ex Parte NP | 676 So. 2d 928 | 1941703 | Alabama | Alabama Supreme Court | 676 So. 2d 928 (1996)
Ex parte N.P.
(In re K.P. and N.P. v. Josiah F. REED, M.D).
1941703.
Supreme Court of Alabama.
February 23, 1996.
*929 Charles A. Dauphin and Mary Margaret Bailey of Baxley, Dillard, Dauphin & McKnight, Birmingham, for Petitioner.
Thomas H. Keene and William H. Webster of Rushton, Stakely, Johnston & Garrett, P.A., Montgomery, for Respondent.
HOUSTON, Justice.
We granted certiorari review in order to consider the single issue whether the Court of Civil Appeals erred in upholding the trial court's denial of N.P.'s motion for a new trial of her loss of consortium claim against the defendant, Dr. Josiah Reed.
In 1985, N.P.'s husband, K.P., was referred to Dr. Reed for the treatment of Peyronie's disease. This disease causes pain and disfigurement to the penis. Dr. Reed recommended surgery to correct this condition. It was undisputed that the recommended procedure was very risky and that in some cases Peyronie's disease improves markedly without surgery, given time.
On March 31, 1986, Dr. Reed performed surgery on the husband to attempt to correct the condition. After the surgery, Dr. Reed applied an "elastoplast" pressure dressing, which was left on for 45 hours. After the dressing was removed, most of the husband's penis tissue turned black and had to be removed.
The evidence clearly showed that the husband went through tremendous pain and mental anguish, as a result of the unsuccessful procedure. Dr. Reed does not dispute that since the surgery the husband has never been physically able to have intercourse with the wife. The husband eventually underwent two reconstructive surgeries in a failed attempt to restore sexual function. There was also uncontradicted evidence that before the initial surgery, even up to the night before it, N.P. and her husband were still able to have intercourse, although the husband's Peyronie's disease was making intercourse increasingly painful for him.
Since the surgery, because of the husband's embarrassment caused by his physical condition and because of N.P.'s desire not to *930 make him feel sexually inadequate, N.P. and her husband no longer share the same bed. N.P. also testified that she has been forced to help her husband deal with bouts of depression and moodiness that have followed his disfigurement, while having to deal with her own emotional reaction to the entire ordeal.
The husband sued Dr. Reed for malpractice, seeking recovery for pain and suffering based upon three theories: (1) lack of informed consent, (2) negligence in proceeding with surgery the husband alleged was unnecessary, and (3) negligence in post-operative care. N.P. joined her husband's action, claiming damages for loss of consortium.[1] After a five-day trial, the jury returned a verdict in favor of the husband, but awarded him only $1.00 in damages; it returned a verdict against N.P. on her loss of consortium claim. Following the judge's entry of a judgment based on the verdict, both N.P. and her husband moved for a new trial; their motions were denied by operation of law, pursuant to Rule 59.1, Ala.R.Civ.P., after 90 days. They then appealed to the Court of Civil Appeals.
The Court of Civil Appeals reversed the denial of a new trial as to the husband,[2] but affirmed the denial of a new trial as to N.P. That court wrote:
K.P. v. Reed, 676 So. 2d 933, 938, (Ala.Civ. App.1995).
Because a claim for loss of consortium is a derivative claim, a jury must find for a spouse asserting a loss of consortium if the jury finds against the defendant on the underlying claim, provided that the spouse claiming loss of consortium can prove damage to his or her marital interest resulting from the underlying wrongful act. The jury found Dr. Reed liable for malpractice. A finding for the husband under any one of his three theories necessitated a finding that some negligent or otherwise wrongful act of Dr. Reed caused the husband to become disfigured and to be rendered impotent. Furthermore, because of Dr. Reed's alleged malpractice, the husband had to undergo a surgical debridement of the dead tissue and two subsequent reconstructive surgeries; this caused N.P. to be separated from her husband for long periods and caused the husband to be forced to undergo months of recovery. During all of this, the husband was distraught and emotionally distant. Considering the evidence presented to the jury, we can conclude only that the jury's verdict, finding Dr. Reed guilty of negligence or some other wrongful act but failing to find that N.P. had suffered any loss of consortium, reflected "a clear abuse of discretion as will evidence passion or bias." Cook v. Sweatt, 282 Ala. 177, 180, 209 So. 2d 891, 894 (1968). Uncontradicted substantial evidence before the jury indicated a significant loss of *931 consortium on the part of N.P. resulting directly from Dr. Reed's malpractice.[3]
The Court of Civil appeals correctly pointed out that "`[a]n award of damages in favor of an injured spouse does not necessitate a companion verdict for loss of consortium for the other spouse,'" quoting Hinson v. King, 603 So. 2d 1104, 1106 (Ala.Civ.App. 1992) (emphasis added). This is true because a verdict in favor of an injured spouse and a verdict against the other spouse on a derivative consortium claim are not inconsistent, if the spouse claiming a loss of a consortium failed at trial to present substantial evidence of damage to his or her marital interest caused by the injury to the other spouse or if the evidence of the damage presented is truly controverted.
The cases Dr. Reed relies on to support the jury's verdict against N.P. are distinguishable. In each of those cases, the spouse seeking damages for loss of consortium failed to present adequate evidence of an injury to his or her marital interest. In Cook v. Sweatt, 282 Ala. 177, 209 So. 2d 891 (1965), this Court stated: "The [Cook] jury was entitled to conclude from the evidence that even though the defendants were guilty of negligence [in injuring the wife co-plaintiff] as charged, the plaintiff-husband suffered no damages therefrom." 282 Ala. at 181, 209 So. 2d at 894; see also Hinson v. King, 603 So. 2d 1104 (Ala.Civ.App.1992); White v. Searcy, 634 So. 2d 577 (Ala.Civ.App.1994); TG&Y Stores v. Atchley, 414 So. 2d 912, 914 (Ala.1982) ("There is no evidence that Willie Atchley suffered any damages as a result of his wife's injuries."). Furthermore, the cases cited by Dr. Reed do not involve underlying personal injuries as intimately related to the spousal relationship as the injuries involved in this case.
For the foregoing reasons, the judgment of the Court of Civil Appeals affirming the denial of N.P.'s motion for a new trial on her loss of consortium claim is reversed, and this case is remanded.
REVERSED AND REMANDED.
ALMON, SHORES, KENNEDY, INGRAM, COOK, and BUTTS, JJ., concur.
HOOPER, C.J., recuses.
[1] In April 1992, the trial court dismissed all of the plaintiffs' claims, on the basis of a failure to prosecute, but that dismissal was reversed in K.P. v. Reed, 626 So. 2d 1241 (Ala.1992).
[2] The Court of Civil Appeals held that the trial court abused its discretion in denying the husband's motion for a new trial based upon the inadequacy of the damages award.
[3] The wife was in her early 40s and the husband in his late 40s when Dr. Reed performed the operation on the husband. Dr. Reed's contention that the jury could have found that, because of the pain it caused the husband, N.P. and her husband were no longer engaging in intercourse even before the surgery would not in itself be dispositive, even if there was substantial evidence from which the jury could have made such a finding. The consortium interest of a spouse is more than a mere interest in continued sexual intercourse. In addition to "sexual relations," "[c]onsortium includes love, companionship, affection, society, comfort, solace, support, ... and services." Charles W. Gamble, Alabama Law of Damages, § 20-3, p. 262 (3d ed.1994) (quoting 1 Alabama Pattern Jury Instructions: Civil, Instruction 11.13-A (2d ed. 1993)). | February 23, 1996 |
792a4940-664e-4c44-b474-5ab0a76b48ac | Kennedy v. State | 690 So. 2d 1222 | 1941731 | Alabama | Alabama Supreme Court | 690 So. 2d 1222 (1996)
Ex parte State of Alabama.
Re Rosie Lee KENNEDY
v.
STATE.
1941731.
Supreme Court of Alabama.
January 26, 1996.
*1223 Jeff Sessions, Atty. Gen., and J. Thomas Leverette, Asst. Atty. Gen., for Petitioner.
James M. Kendrick, Birmingham, for Respondent.
MADDOX, Justice.
The question presented in this case is whether the State sufficiently proved the chain of custody of certain evidence so as to allow the admission of that evidence. The Court of Criminal Appeals held that there was a missing link in the chain of custody and reversed the defendant's criminal conviction. Kennedy v. State, 690 So. 2d 1220 (Ala. Crim.App.1995). We hold that, based on the facts presented in this case, there was a weak link in the chain, but not a missing link; consequently, we reverse and remand.
The evidence presented at trial tended to show that the defendant Rosie Lee Kennedy participated in the sale of a substance to an undercover Birmingham police officer; that the officer testified that the substance resembled crack cocaine; and that it was offered to her by the defendant as crack cocaine. The State's evidence to authenticate and identify the cocaine was as follows: Birmingham police officer Kiska Thomas testified that she purchased from Kennedy and an unidentified male two small plastic bags containing a substance Kennedy and the other person represented to be crack cocaine; that she retained custody of the substance until she returned to the police station; that at the station she sealed the substance in a large evidence envelope and labeled it with her initials and the date; and that the envelope was then locked in an evidence locker in the presence of the precinct sergeant.
Birmingham police officer Wayne Tyus testified that the precinct sergeant gave him the only key to the locker; that he retrieved the evidence for delivery to the forensic sciences lab; that when he retrieved the evidence envelope it was still sealed and that he did not break the seal or alter the evidence; and that he delivered the sealed envelope containing the evidence to the lab, filled out the proper forms, and gave the envelope to a lab worker who he believed was named "Mike." No person named "Mike" testified at the trial.
Drug chemist Danny Kirkpatrick testified that the lab received the substance still sealed in the envelope, but he did not identify the lab worker who received the envelope. He did testify that the evidence presented by the State, in his opinion, was the same as the material he tested, which he determined during his examination to be .21 grams of cocaine.
Kennedy was convicted of the unlawful distribution of cocaine, a violation of § 13A-12-211, Ala.Code 1975. The Court of Criminal Appeals, in reversing the conviction, cited Ex parte Garrett, 608 So. 2d 337 (Ala.1992), in which this Court held that there was a missing link in the chain of custody of evidence. This Court in Garrett cited and quoted from Ex parte Holton, 590 So. 2d 918 (Ala.1991), in which this Court had affirmed the judgment of the Court of Criminal Appeals holding that there was not a missing link in the chain of custody. Those two cases, which are based on similar factual situations, reached opposite conclusions, one holding that there was a missing link and one holding that there was only a weak link.
In Ex parte Holton, this Court examined the evidentiary foundation required to authenticate and identify demonstrative evidence:
590 So. 2d at 920; see also Ex parte Cook, 624 So. 2d 511, 513 (Ala.1993).
This Court also stated in Ex parte Holton:
590 So. 2d at 919-20 (citations omitted).
Certain provisions of the new Alabama Rules of Evidence deal with the necessity for laying a foundation for the admission of demonstrative evidence. Although those rules were not applicable at the time of Kennedy's trial, we note that the commentary to Rule 901 states the same principles of law that are set out in the Holton opinion.[1]
In the present case, there was no direct testimony from the person receiving the evidence at the forensic lab; consequently, the chain was weakened, but it was not broken. The legal question always presented in this kind of case is whether the evidence is what it is represented to be. "The question of authenticity or proper identification is, in the first instance, for the trial judge as a preliminary matter." Commentary to Rule 901, Ala. R.Evid.[2]
Under traditional Alabama law the evidence presented on the foundational requirement does not have to be conclusive or overwhelming; rather, it must be strong enough for the question to go to the jury.[3] Based on prior Alabama law, unchanged by the new Alabama Rules of Evidence, which became *1225 effective January 1, 1996, we conclude that the State presented sufficient evidence through testimony of the police officers and the lab chemist that the substance presented at the trial as cocaine was the same substance purchased by the undercover police officer from the defendant and represented by the defendant to the police officer as cocaine; the same substance sealed in the evidence envelope by Officer Kiska; the same substance transported to and received by the forensic lab in the sealed envelope; and the same substance determined by the lab chemist to be cocaine. Stated differently, the State presented by both direct and circumstantial evidence that the substance the officer bought from the defendant was the same substance examined by the forensic examiner; therefore, there was sufficient evidence to support a finding that the substance presented at trial was what the State claimed it to be. See Holton, 590 So. 2d at 920. It was the jury's duty to determine how much weight to give the evidence, based on the chain-of-custody evidence presented. Id.
The judgment of the Court of Criminal Appeals is reversed and the cause is remanded to that court for an order consistent with this opinion.
REVERSED AND REMANDED.
HOOPER, C.J., and SHORES, HOUSTON, INGRAM, COOK, and BUTTS, JJ., concur.
[1] The Commentary to Rule 901, Ala.R.Evid., states:
"The identification and authentication requirements in this rule are an integral part of logical relevancy. See J. Michael & M. Adler, Real Proof, 5 Vand.L.Rev. 344, 362 (1952). Even if an item of demonstrative evidence is otherwise probative of a material issue in the case, for example, the item is admissible only if it is what the offering party claims it to be. The question of authenticity or proper identification is, in the first instance, for the trial judge as a preliminary matter. See Ala.R.Evid. 104(a). The required foundation showing must consist of evidence `sufficient to support a finding that the matter in question is what its proponent claims.' The evidence of authentication or identification, as under prior Alabama practice, does not have to be conclusive or overwhelming; rather, it must be strong enough for the question to go to the jury. Any weaknesses in the foundational showing, insufficient to call for exclusion, go to the weight that the trier of fact is to give the evidence. See Tidwell v. State, 496 So. 2d 109 (Ala.Crim. App.1986). Even if the offering party satisfies the requirement of this rule and the evidence is admitted, after satisfaction of the present rule, the ultimate authenticity and identification remains an issue for the jury."
[2] Cf. Ala.R.Evid. 104(a), effective January 1, 1996. Also, see, the commentary to Ala.R.Evid. 901, which states that "[t]he required foundational showing must consist of evidence `sufficient to support a finding that the matter in question is what its proponent claims.'" Ala. R.Evid. 901(a).
[3] See commentary to Ala.R.Evid. 901: "Any weaknesses in the foundational showing, insufficient to call for exclusion, go to the weight that the trier of fact is to give the evidence. See Tidwell v. State, 496 So. 2d 109 (Ala.Crim.App. 1986). Even if the offering party satisfies the requirement of this rule and the evidence is admitted, the ultimate question of authenticity and identification remains an issue for the jury." | January 26, 1996 |
1b69d5ac-474d-4bc4-b557-2429cdaafba3 | Ex Parte Central Bank of the South | 675 So. 2d 403 | 1940086 | Alabama | Alabama Supreme Court | 675 So. 2d 403 (1996)
Ex parte CENTRAL BANK OF THE SOUTH.
(Re Catherine J. LACKEY, et al. v. CENTRAL BANK OF THE SOUTH, et al.)
1940086.
Supreme Court of Alabama.
February 23, 1996.
*404 Sterling G. Culpepper, Jr. and Donald R. Jones, Jr. of Balch & Bingham, Montgomery, Davis Carr of Pierce, Carr & Alford, P.C., Mobile, Michael L. Edwards and Teresa G. Minor of Balch & Bingham, Birmingham, for Petitioner.
Norman J. Gale, Jr. of Clay, Massey & Gale, P.C., Mobile, and Patrick H. Sims of Cabaniss, Johnston, Gardner, Dumas & O'Neal, Mobile, for Catherine J. Lackey.
COOK, Justice.
Central Bank of the South ("Central Bank")[1] petitions this Court for a writ of mandamus directing the Mobile County Circuit Court to vacate an order certifying a class in an action commenced against it by Catherine J. Lackey, or, in the alternative, to narrow the scope of the class. We grant the petition in part and deny it in part.
On October 28, 1991, Catherine Lackey purchased jointly with her husband, James H. Lackey, from Central Bank a one-year $10,000 certificate of deposit ("CD") yielding 5.875% interestthe prevailing "market rate" of interest for CDs of such "term and balance." Accompanying the CD was a "certificate of deposit disclosure statement," which contained the following pertinent language:
Lackey's CD was designated on its face "automatically renewable."
In October 1992, Lackey received a "maturity renewal notice," which stated in pertinent part:
After the maturity date, the Lackeys received "another notice, purporting to confirm that renewal, but stating that the renewed CD would bear a lower interest rate of 3.55%." Response to Petition for Writ of Mandamus, at 5. This notice, in addition to setting out the renewal terms and the interest rate of 3.55%, also informed the Lackeys that if they were dissatisfied with the terms of the renewal, they could redeem their CD without penalty.
Although the Lackeys declined to redeem their CD, they objected to the reduced rate, contending, essentially, that the terms of the certificate of deposit disclosure statement guaranteed them an interest rate of not less than the initial rate of 5.875%. Central Bank insisted that the Lackeys were entitled only to the market rate of interest prevalent at the time of the renewal3.55%.
On April 29, 1993, Catherine Lackey sued Central Bank, alleging that the Bank's renewing her CD at the then-prevailing market rate of interest of 3.55%, instead of renewing it at 5.875%, constituted a breach of the contract. Otherwise stated, her theory of recovery was that she had "complied with [her] obligation under the deposit agreement by leaving [her] money on deposit with the Bank, but [that] the Bank [had] repudiated and attempted to unilaterally modify the contract by paying a lower rate on renewal." Response to Petition for Writ of Mandamus, at 6. Lackey sued on behalf of herself and "all holders ... of automatically renewable Central Bank certificates of deposit which [had] been renewed one or more times during the [previous] six years ... at an interest rate lower than the interest rate stated on the certificates ... or guaranteed by the terms of the contract controlling the renewal rate." She subsequently amended her complaint to define the putative class as follows:
She sought compensatory damages in the amount of $246.16.
On January 31, 1994, the trial court issued an order stating: "Plaintiff's motion for class certification, heard and submitted on January 28, 1994, is granted. Defendant's motion for summary judgment, heard and submitted on January 28, 1994, is denied." On February 9, 1994, Central Bank filed a "motion to reconsider class certification or in the alternative for other relief," asserting, among other things, that "at least as early as August 1991," Central Bank was issuing CD disclosure statements stating in pertinent part:
(Emphasis added.) The emphasized phrase, Central Bank contends, precludes claims like Lackey's as to any depositor whose CD disclosure statement contained it. In its "motion to reconsider," Central Bank argued:
On June 17, 1994, Lackey filed a "motion for approval of class notice," in which she requested "an order approving a Notice for distribution to the class certified." On July 11, 1994, Central Bank requested "an evidentiary hearing on the issue of class certification." On September 21, 1994, the trial court denied Central Bank's motion, stating: "The Court determines that the ends of Justice will best be served by notifying all CD holders in the class as presently constituted and then determining which, if any, hold certificates with a difference that would preclude liability." The following day, the court granted Lackey's "motion for approval of class notice." Central Bank then petitioned this Court for a writ of mandamus directing the trial court to vacate its order "certifying the plaintiff's action as a class action, or in the alternative, to narrow the scope of the class in light of evidence and arguments presented by Central Bank to the trial court."
This action was certified as a class action pursuant to Ala.R.Civ.P. 23(a) and (b)(3). Rule 23(a) requires the following findings:
In opposition to the trial court's certification of a plaintiff class, Central Bank contends that the requisite findings were not made. More specifically, it argues that Lackey lacks standing to represent the putative class. She lacks standing because, it argues, she has failed to "demonstrate that there was [a] material breach of the agreement by Central Bank." Petition for Writ of Mandamus, at 17. Because "Lackey's underlying claim for breach of contract is unfounded," Central Bank insists, this "action is not a proper case for class certification." Id.
The essence of Central Bank's argument is that the trial court erred in denying its motion for a summary judgment. However, "[w]e have ... stated on numerous occasions that mandamus cannot be used as a substitute for appeal." Ex parte Stone, 502 So. 2d 683, 685 (Ala.1986); see also Ex parte Jackson, 614 So. 2d 405, 408 (Ala.1993). Thus, a writ of mandamus will not issue to review the merits of an order denying a motion for a summary judgment. Ex parte Gatwood, 518 So. 2d 115, 116 (Ala.1987); Ex parte Newco Mfg. Co., 481 So. 2d 867, 870 (Ala.1985); Ex parte South Carolina Ins. Co., 412 So. 2d 269, 270 (Ala.1982).
Whether the "underlying claim for breach of contract is unfounded" is an issue that may be addressed on appeal. Therefore, we will not consider under a request for decertification arguments that essentially invite us to review indirectly a ruling on the merits of the underlying claim.
Central Bank also contends that the class as certified by the trial court is overbroad. In this connection, its "standing" argument rests on better ground, for "[t]he *407 definition of a class cannot be so broad that it includes persons without standing to bring the action on their own behalf. Each class member must have standing to bring the suit in his own right." Slaughter v. Levine, 598 F. Supp. 1035, 1041 (D.Minn.1984) (emphasis added), aff'd, 801 F.2d 288 (8th Cir.1986), rev'd sub nom. on other grounds, Gardebring v. Jenkins, 485 U.S. 415, 108 S. Ct. 1306, 99 L. Ed. 2d 515 (1988); see also Rios v. Marshall, 100 F.R.D. 395, 407 (S.D.N.Y.1983) ("class definition ... should be limited to those individuals who were adversely affected by the practices of which the named plaintiffs complain").
In its mandamus petition, Central Bank states that the class as currently constituted includes at least 47,172 CD customers, of whom approximately 9557 received disclosure statements containing the phrase "at bank's prevailing interest rate for new certificates of deposit with the same term and balance." A properly constituted class, Central Bank insists, could not include customers whose CD disclosure statements actually contained the phrase that Lackey alleges should have been contained.
We agree with this contention. In so stating, we are not to be understood as invading the role of the trial court in matters involving its discretion, First Alabama Bank v. Martin, 381 So. 2d 32, 35 (Ala.1980), for a customer whose contract does not suffer the deficiency alleged to form the basis of this action, could not, as a matter of law, maintain such an action "in his own right." Slaughter v. Levine, 598 F. Supp. 1035, 1041 (D.Minn. 1984).
In stating that "the ends of Justice will best be served by notifying all CD holders in the class as presently constituted and then determining which, if any, hold certificates with a difference that would preclude liability" (emphasis added), the trial court tacitly expressed a desire to develop a more complete record before revisiting its certification order. This concern is not entirely without merit, for, at this point in the proceedings, the only evidence presented as to the number of customers to whom Lackey's claim does not apply has been the affidavit testimony of Central Bank's vice-president, Thomas E. Bishop. However, the precise number of customers to whom Bishop referred will readily be available from Central Bank's computers. Moreover, it will serve no legitimate purpose to tell nearly 10,000 Central Bank customers of the pendency of an action in which theyunder the theory of this casecannot participate.[2]
The trial court is directed, therefore, to vacate its class designation to the extent that it includes such customers as Central Bank shall demonstrate, through the production of its relevant records, received CD disclosure statements containing the clause "at bank's prevailing interest rate for new certificates of deposit with the same term and balance," and to vacate its certification order to the extent that it requires notice to such customers. To this extent, Central Bank's petition seeking to narrow the scope of the class is granted. To the extent the petition seeks decertification of the class action, it is denied.
PETITION GRANTED IN PART AND DENIED IN PART.
HOOPER, C.J., and MADDOX and INGRAM, JJ., concur.
KENNEDY, J., concurs in the result.
BUTTS, J., concurs in part and dissents in part.
HOUSTON, J., recuses.
*408 BUTTS, Justice (concurring in part and dissenting in part).
I respectfully dissent from the majority opinion insofar as it denies Central Bank's request for an order directing the trial court to vacate its order certifying the plaintiff class. I would grant the writ. However, given the majority's ruling on that issue, I concur with the majority's order directing the trial judge to narrow the scope of the plaintiff class.
[1] Central Bank is now known as "Compass Bank." In the trial court, however, as well as in the mandamus petition, it was called Central Bank. For the sake of consistency, we shall refer to the petitioner as Central Bank throughout this opinion.
[2] Central Bank also contends that the trial court's certification can be construed so broadly as to "include individuals whose CDs [were] renewed after June 9, 1993, but were purchased during the period of June 1, 1989 to June 9, 1993." Petition for Writ of Mandamus, at 6 n. 9. This construction would, Central Bank argues, include "an individual who purchased a CD with a term of 15 years on June 9, 1993, and who renews his CD on June 9, 2008, at a lower rate of interest." Id. (Emphasis added.)
However, such a construction is unnatural and would lead to difficulty, if not impossibility, in application. We construe the language in its natural sense, namely, as including only those customers whose purchases of automatically renewable CDs were "made between June 1, 1989, and June 9, 1993," and whose CDs were actually renewed between June 1, 1989, and June 9, 1993, at a lower rate of interest than the "original interest rate." | February 23, 1996 |
6bed6ea4-9a6b-40c1-aa86-d2b8880f2ee1 | Ex Parte Fletcher | 675 So. 2d 58 | 1950198 | Alabama | Alabama Supreme Court | 675 So. 2d 58 (1996)
Ex parte Bristol Lee FLETCHER.
(Re Bristol Lee Fletcher v. State.)
1950198.
Supreme Court of Alabama.
February 16, 1996.
Norman Bradley, Jr. of Callaway and Bradley, Huntsville, for petitioner.
Jeff Sessions, Atty. Gen., and Cedric B. Colvin, Deputy Atty. Gen., for respondent.
Prior report: Ala.Cr.App., 675 So. 2d 55.
ALMON, Justice.
The petition for writ of certiorari is denied.
In denying the petition for writ of certiorari, this Court does not wish to be understood as approving all the language, reasons, or statements of law in the Court of Criminal Appeals' opinion. Horsley v. Horsley, 291 Ala. 782, 280 So. 2d 155 (1973).
WRIT DENIED.
HOOPER, C.J., and MADDOX, SHORES, HOUSTON, and KENNEDY, JJ., concur. | February 16, 1996 |
8b3f0622-6647-4fce-9094-97d39fdff653 | Ex Parte Bratton | 678 So. 2d 1079 | 1941958 | Alabama | Alabama Supreme Court | 678 So. 2d 1079 (1996)
Ex parte George BRATTON.
(In re WAL-MART STORES, INC. v. George BRATTON).
1941958.
Supreme Court of Alabama.
February 23, 1996.
Rehearing Denied April 19, 1996.
*1080 E.L. Brobston of Brobston & Brobston, P.C., Bessemer, for Petitioner.
Charles F. Carr, Thomas L. Oliver II and Rhonda Pitts Chambers of Rives & Peterson, Birmingham, for Respondent.
HOUSTON, Justice.
This is a workers' compensation case.
The pertinent facts are as follows: In 1976, when George Bratton was 59 years old, he suffered a heart attack and retired with a disability pension from a job he had worked at for 32 years. Two years later, in 1978, the Social Security Administration determined that he was eligible for Social Security disability benefits because of his heart condition. Thereafter, in 1985, Bratton suffered a stroke that caused weakness to one side of his body. In 1988, at the age of 71, Bratton applied for a job with Wal-Mart Stores, Inc. He told the interviewer that he had had a heart attack and a stroke, but that he felt he was stable enough to work. Wal-Mart hired Bratton as a "greeter" at a Wal-Mart store; the main function of a greeter was to welcome customers as they entered the Wal-Mart store and to offer them information and assistance. He also performed other activities, including helping customers with packages, locating items for customers, and caring for plants in the garden shop. After his first year of employment with Wal-Mart, Bratton began working 30 hours a week, which Wal-Mart considered to be full-time employment. Wal-Mart acknowledged that Bratton was an excellent employee, that it had no complaints about his job performance, and that he was a valued employee. In fact, Wal-Mart gave Bratton an award for being such a good employee. The trial court specifically found that Bratton had performed his duties "efficiently."
At the time of the injury made the basis of this action, Bratton was watering plants in the garden shop section of the store. While doing so, he tripped over a garden hose, fell, and struck the back of his head on the concrete floor. Other Wal-Mart employees assisted him after the fall, and the accident was immediately reported to his supervisors. Wal-Mart's company physician hospitalized Bratton for eight days with a diagnosis of closed-head trauma, abrasions, and contusions to his lower back. The company's physician then referred Bratton to the neurologist who had treated Bratton following the stroke in 1985, from which the neurologist testified that Bratton had almost completely recovered. Bratton's symptoms after the accident included "emotional liability,"[1] headaches, neck pain, an unsteady gait, and vertigo. *1081 The neurologist testified that only the headaches and neck pain were attributable to the fall at Wal-Mart. He further testified that he did not think Bratton should return to work, because of his unsteady gait, his emotional problems, the fact that he had suffered a stroke, and his age. However, the neurologist did not restrict Bratton's activities, nor did the neurologist assign Bratton a disability rating for the fall at Wal-Mart. According to the neurologist, the chances of Bratton's falling, as compared to the chances of a younger, healthier person's falling under the same circumstances, would be much higher because of Bratton's other medical conditions. However, he also testified that, in his opinion, as of the time immediately before the fall, in spite of Bratton's age and the fact that he had suffered a stroke, if Bratton had recovered from his stroke and was fairly functional and able to work, he would not have told Bratton not to work.
Bratton, his wife, a friend, and a Wal-Mart supervisor compared Bratton's physical abilities before the accident with his physical abilities after it. They testified that although Bratton had some physical impairments as the result of his pre-existing medical conditione.g., he walked with a slight limp, had some weakness, and moved somewhat slowlywhile he was employed by Wal-Mart these physical limitations did not interfere with his ability to do his job. Further testimony established that Bratton was not only working at Wal-Mart, but was also gardening, doing yard work, and assisting his wife around the house. The testimony also reflects that after the accident Bratton was unable to walk unassisted, had severe memory loss, suffered from chronic headaches, exhibited significant depression, was unable to do most of the tasks around the house, and was unable to drive. His only outside activity was going to church.
After considering Bratton's age, vocational experience, and physical limitations, the vocational specialist who testified for Bratton concluded that he was 100% disabled because of the accident at Wal-Mart and was unable to engage in gainful employment. She based her findings on the fact that before his injury Bratton could work at a light-duty job but afterwards could not.
The vocational specialist who testified for Wal-Mart concluded that Bratton had suffered no vocational disability as a result of his fall at Wal-Martthat because the Social Security Administration had declared Bratton to be totally and permanently disabled and because of Bratton's age and physical condition, he was already totally disabled when he went to work for Wal-Mart; and that because his disability continued throughout his employment, the accident at Wal-Mart had no bearing on the question of his subsequent employability. He testified that, in his opinion, Bratton's employment at Wal-Mart was in contradiction of the limitations the Social Security Administration had determined created a total disability.
The trial court's order stated:
Wal-Mart appealed, contending that the trial court erred in finding that Bratton was totally and permanently disabled because, it argues, an employee who has been previously declared to be totally and permanently disabled, who has been compensated as a result of the disability, and who subsequently returns to work and is injured, cannot recover total and permanent disability benefits under the workers' compensation statute for a subsequent injurythat is, it argues that once Bratton was declared to be totally and permanently disabled by the Social Security Administration, his injury at Wal-Mart could not make him any more disabled. It also contended that the trial court erred by not applying Ala.Code 1975, §§ 25-5-57(a)(4)e. and 25-5-58, after finding that Bratton had suffered a permanent and total disability because, it says, Bratton had started work at Wal-Mart with certain infirmities and disabilities.
The Court of Civil Appeals affirmed the trial court's holding that Bratton was totally and permanently disabled and held that even though Bratton previously had been adjudged to be totally and permanently disabled and had received compensation benefits for the disability, once he resumed gainful employment he became eligible for subsequent disability benefits calculated to compensate him for any loss of renewed earning capacity incurred as a result of the subsequent injury. However, because the Court of Civil Appeals found that the trial court did not address the application of §§ 25-5-57(a)(4)e. and 25-5-58 to Bratton's disability award, it reversed that portion of the judgment calculating workers' compensation benefits and remanded the cause to the trial court with directions to determine if §§ 25-5-57(a)(4)e. and 25-5-58 were applicable to Bratton's disability award, and, if they were applicable, to recalculate the award of benefits accordingly. See Wal-Mart Stores, Inc. v. Bratton, 678 So. 2d 1071 (Ala.Civ.App.1995).
We granted certiorari review to determine whether the trial court properly considered Bratton's preexisting condition within the context of §§ 25-5-57(a)(4)e. and 25-5-58.
Section 25-5-57(a)(4)e. reads as follows:
Section 25-5-58 reads as follows:
The language of these statutes clearly requires that the court apportion disability awards in workers' compensation cases between work-related accidents and patent preexisting injuries or infirmities when calculating the degree or duration of a disability, *1083 and it clearly limits the liability of an employer to only the increased disability suffered by an employee above that which had existed before the injury made the basis of the claim.
A thorough review of the record indicates that the trial court considered and applied §§ 25-5-57(a)(4)e. and 25-5-58 when determining that Bratton was disabled and when calculating Bratton's disability benefits. Once Bratton presented sufficient evidence as to the extent of his disability, the burden shifted to Wal-Mart to present evidence that Bratton had had a patent preexisting injury or infirmity that combined with his work-related injury to cause the disability complained of and to present evidence as to the degree or duration of the disability that would have resulted from the accident had the patent preexisting injury or infirmity not existed at the time of the accident.
Wal-Mart took the position that, because Bratton had been declared by the Social Security Administration to be totally and permanently disabled before he was employed by Wal-Mart, Bratton's on-the-job injury could not have increased his disability, and, therefore, that Wal-Mart should have no liability under the workers' compensation statute for Bratton's injury. The trial court found that Bratton had been an employee of Wal-Mart for five years before the accident and that he had been able to perform all of the duties of his employment in an efficient manner until the time of his injury while employed by Wal-Mart. These facts are undisputed. Thus, the trial court found that Bratton's stroke and heart attack did not disable him from doing the job that he had been employed to do and, therefore, it did not apportion disability benefits in accordance with §§ 25-5-57(a)(4)e. and 25-5-58. See Southern Cotton Oil Co. v. Wynn, 266 Ala. 327, 96 So. 2d 159 (1957).
We find in the record sufficient evidence to support the trial court's findings of fact.
The judgment is reversed and this cause is remanded for the entry of an order reinstating the trial court's judgment.
REVERSED AND REMANDED.
HOOPER, C.J., and MADDOX, ALMON, SHORES, KENNEDY, INGRAM, COOK, and BUTTS, JJ., concur.
[1] While one physician referred to this symptom as "emotional liability," another physician, apparently referring to the same symptom, called it "emotional ability." | February 23, 1996 |
ac3dbf95-3aeb-450a-b1ec-dfa7971abac9 | George v. ASSOC. DOCTORS HEALTH INS. | 675 So. 2d 860 | 1940433 | Alabama | Alabama Supreme Court | 675 So. 2d 860 (1996)
Phillip GEORGE
v.
ASSOCIATED DOCTORS HEALTH AND LIFE INSURANCE COMPANY.
1940433.
Supreme Court of Alabama.
February 23, 1996.
*861 James A. Hoover and Leslie M. Kalsing of Gorham & Waldrep, P.C., Birmingham, for Appellant.
Ollie L. Blan, Jr., Anthony C. Harlow and Sally A. Broatch of Spain & Gillon, Birmingham, for Appellee.
INGRAM, Justice.
The plaintiff, Phillip George, appeals from a summary judgment for the third-party defendant Associated Doctors Health and Life Insurance Company (hereinafter "Associated Doctors").
On a motion for summary judgment, the burden is initially on the movant to make a prima facie showing that there is no genuine issue of material fact (i.e., that there is no dispute as to any material fact) and that the movant is entitled to a judgment as a matter of law. Rule 56, Ala.R.Civ.P.; McClendon v. Mountain Top Indoor Flea Market, Inc., 601 So. 2d 957 (Ala.1992); Elgin v. Alfa Corp., 598 So. 2d 807 (Ala.1992). "The burden does not shift to the opposing party to establish a genuine issue of material fact until the moving party has made a prima facie showing that there is no such issue of material fact." McClendon, at 958; Elgin, at 810-11.
Rule 56 must be read in conjunction with the "substantial evidence rule," § 12-21-12, Ala.Code 1975, for actions filed after June 11, 1987. See Bass v. SouthTrust Bank of Baldwin County, 538 So. 2d 794, 797-98 (Ala.1989). In order to defeat a defendant's properly supported motion for summary judgment, the plaintiff must present substantial evidence, i.e., "evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." West v. Founders Life Assurance Co. of Florida, 547 So. 2d 870, 871 (Ala.1989). This Court, on review of a summary judgment, reviews the record in a light most favorable to the nonmovant. Wilma Corp. v. Fleming Foods of Alabama, Inc., 613 So. 2d 359 (Ala.1993).
Viewed in a light most favorable to the plaintiff, the evidence suggests the following facts: In September 1987, James George met with an agent for Associated Doctors to discuss the purchase of a Medicare supplement policy for his 78-year-old father, Phillip George. James contends that the agent told him that the Associated Doctors policy was a "better deal" than Mr. George's existing policy and that the Associated Doctors policy would pay for treatment in a skilled nursing care facility. Based upon this information, James advised his father to purchase the policy.
In 1991, Mr. George began to have health problems. James was appointed his attorney-in-fact under a durable power of attorney to handle his financial affairs. Mr. George was hospitalized with a fracture of the left hip, which required hip replacement surgery. After Mr. George's release from the hospital, his physician recommended that he be placed in a skilled nursing facility. James placed him at Mount Royal, after being informed by Mount Royal that it was a skilled nursing facility and that his stay would be covered by Medicare for the first 20 days.
After Mr. George was admitted to Mount Royal, James contacted the agent for Associated Doctors. James contends that the agent told him that, as long as Mount Royal met the criteria for being a skilled nursing facility, the policy would provide coverage, for up to one year.
With the exception of several stays in the hospital, Mr. George remained at Mount Royal from May 1991 until December 1991. Medicare did not cover his entire stay at Mount Royal. Apparently, because of changes in his physical therapy, his care did not always meet the criteria for that required to be provided by a skilled nursing facility; this fact caused a lapse in coverage by Medicare. Payment under the Associated Doctors supplement policy was contingent upon Medicare's providing coverage. Based upon Medicare's coverage, Associated Doctors paid for only a portion of the charges. Associated Doctors contends that, on those occasions for which it did not pay, it failed to do so for two reasons: (1) Medicare did not approve the *862 care Mr. George received at Mount Royal and, therefore, Associated Doctors, it claimed, had no liability to pay under the policy; or (2) Associated Doctors had not received an "Explanation of Benefits" form as required by the policy.
In 1991, Mount Royal sued Mr. George to collect unpaid medical charges. He counterclaimed, seeking damages based on allegations of fraud and misrepresentation. He also filed a third-party action against Associated Doctors, alleging fraud, misrepresentation, breach of contract, bad faith refusal to pay, and the tort of outrage. The trial court entered a summary judgment for Associated Doctors on all claims and made that judgment final pursuant to Rule 54(b). Mr. George appeals, but only as to the fraud and breach of contract claims.
Ala.Code 1975, § 6-5-101, states:
Regardless of whether the representation is made willfully, recklessly, or mistakenly, a plaintiff alleging fraud must prove four elements: (1) a false representation; (2) that the false representation concerned a material existing fact; (3) that the plaintiff relied upon the false representation; and (4) that the plaintiff was damaged as a proximate result of the reliance. Jarrard v. Nationwide Mutual Insurance Co., 495 So. 2d 584 (Ala.1986); International Resorts, Inc. v. Lambert, 350 So. 2d 391 (Ala.1977). The first alleged misrepresentation, which was alleged to have occurred in 1987, involved the agent's statement to James that the Associated Doctors policy was a "better deal" than Mr. George's existing policy with Liberty National and that the policy would cover skilled nursing care.
In Jarrard, supra, this Court held that an insurance agent's statement that his company's policy would provide an insured with better coverage could constitute a misrepresentation. In Jarrard, Nationwide agents met with Rev. Wayne Jarrard and his wife and reviewed their existing policy. The Jarrards told the agents that they wanted better coverage in several areas and a more stable premium. The agents told the Jarrards that the policy offered by Nationwide provided coverage equal to, or better than, that provided by their existing policy. The facts in this case are distinguishable from those presented in Jarrard. Here, no comparisons were made between Mr. George's existing policy and the Associated Doctors policy. The agent merely made a blanket statement that the Associated Doctors policy was a "better deal." Mr. George offered no substantial evidence indicating that the Associated Doctors policy was not a "better deal" and, therefore, that the agent's statement was false. Mr. George also contends that the agent's statement that "the policy provided coverage in a skilled nursing facility" was a false representation. The record reveals that the policy does provide coverage in a skilled nursing facility, so long as certain requirements under the policy are met, i.e., provided Medicare approves treatment in a skilled nursing facility and certain claim forms are filed. Mr. George presented no evidence that this second portion of the agent's statement was false.
The second alleged misrepresentation was alleged to have been made in 1991, after Mr. George was admitted to Mount Royal. James contends that he contacted the agent for Associated Doctors to confirm that the policy would provide coverage. The agent confirmed that Mount Royal was a skilled nursing facility and that the policy would provide coverage up to one year. As noted above, the policy does, in fact, provide coverage in a skilled nursing facility if certain conditions are met. Mr. George failed to show that the alleged representation was false.
We hold that Mr. George has failed to overcome Associated Doctors' prima facie showing that there is no genuine issue of material fact as to either fraud count.
As to the breach of contract claim, Mr. George contends that he demanded payment *863 under the policy and that Associated Doctors has repeatedly refused to pay. Associated Doctors contends that it has fulfilled its obligations under the policy by paying its portion on all claims covered by Medicare and for which a Medicare "Explanation of Benefits" form has been received, as required by the policy. Specifically, Associated Doctors contends that it did not receive the paperwork necessary for it to pay Mr. George's claims. Mr. George makes only a blanket statement that he demanded payment and that Associated Doctors failed to pay. Therefore, we must conclude that Mr. George failed to overcome Associated Doctors' prima facie showing that there is no genuine issue of material fact as to the breach of contract claim.
Based on the foregoing, the judgment of the trial court is affirmed.
AFFIRMED.
HOOPER, C.J., and MADDOX, ALMON, HOUSTON, and COOK, JJ., concur.
BUTTS, J., dissents. | February 23, 1996 |
26f0cfb5-1253-4965-a8d4-49a1d882430a | Jc v. Wala-Tv, Inc. | 675 So. 2d 360 | 1941424 | Alabama | Alabama Supreme Court | 675 So. 2d 360 (1996)
J.C. and C.C., as parents and next friends of S.E.C., a minor
v.
WALA-TV, INC.
1941424.
Supreme Court of Alabama.
January 12, 1996.
*361 John W. Parker, Mobile, for Appellants.
Carroll H. Sullivan and Keith S. Miller of Clark, Scott & Sullivan, Mobile, for Appellee.
INGRAM, Justice.
J.C. and C.C., as the parents and next friends of S.E.C., a minor, sued WALA-TV, Inc. ("WALA"), after WALA televised a report containing information regarding S.E.C. The parents asserted, among other claims, that WALA's broadcast of that information constituted an invasion of privacy. The trial court entered a summary judgment for WALA on all claims. The parents appeal that judgment as it pertains to the invasion-of-privacy claim.
The evidence in this case, viewed in a light most favorable to the parents, see Wilma Corp. v. Fleming Foods of Alabama, Inc., 613 So. 2d 359 (Ala.1993), suggests the following:
S.E.C., who was 15 years old at the time of the broadcast in question, had a history of problems at home, including frequently running away from her home in Theodore, Alabama. In February 1994, she again ran away from home and, without her parents' knowledge, began to reside on South Hallett Street in Mobile. The parents contacted juvenile authorities in Mobile in their attempts to locate S.E.C., but their attempts were without success. While living on South Hallett Street, S.E.C. acquired a puppy, which she named "Gucci." On May 19, 1994, Gucci was hanged, beaten, and severely burned by several persons in the South Hallett Street neighborhood. The vicious attack on the puppy was the subject of extensive news media coverage in Mobile and the rest of the state.[1]
On May 23, 1994, WALA employees learned that S.E.C. was Gucci's owner. On that day, Carol Hunter, a news reporter with WALA, met with S.E.C. on South Hallett Street and taped an interview with her concerning the attack. During the interview, a carload of men stopped nearby and yelled threats and racial epithets toward S.E.C. Members of the group threatened to burn the house where she was residing if she gave their names to the police. WALA's cameras captured the incident on tape. That afternoon, S.E.C. telephoned her mother and told her that she would be featured on the newscasts of WALA and another television station. The mother then telephoned WALA and informed a station manager, John Armand, that S.E.C. was a runaway. Armand gave her information regarding S.E.C.'s whereabouts, and the mother telephoned the Mobile County Sheriff's Department. The Mobile Police Department apprehended S.E.C. and took her to the Strickland Youth Center, a juvenile facility.
In its 5:00 and 6:00 p.m. news broadcasts on May 23, 1994, WALA televised portions of the interview, identifying S.E.C. by name and including the threats made by the group. In its 10:00 p.m. broadcast, WALA described her as a 15-year-old runaway and stated that she had been taken to the Strickland Youth Center. The same report was televised twice on the following day.
The parents contend that WALA's broadcast of the information concerning S.E.C.'s identity, her runaway status, and her detention at the Strickland Youth Center constituted an invasion of privacy.
The tort of invasion of privacy has been defined as the wrongful intrusion into one's private activities in such a manner as to outrage or cause mental suffering, shame, or humiliation to a person of ordinary sensibilities. Phillips v. Smalley Maintenance Services, Inc., 435 So. 2d 705 (Ala.1983). In *362 Smith v. Doss, 251 Ala. 250, 37 So. 2d 118 (1948), the right to privacy was described in part as "`the right of a person to be free from unwarranted publicity' or `the unwarranted appropriation or exploitation of one's personality, the publicizing of one's private affairs with which the public has no legitimate concern.'" 251 Ala. at 252-53, 37 So. 2d at 120, quoting 41 Am.Jur. 925. The Smith Court held that the broadcast of matters of "legitimate public interest" is not prohibited by the right to privacy. 251 Ala. at 253, 37 So. 2d at 121. The broadcast of those matters is not obstructed by the right to privacy, because of the interest of the public in being informed. Daily Times Democrat v. Graham, 276 Ala. 380, 162 So. 2d 474 (1964).
The First Amendment to the United States Constitution requires that we recognize a privilege in regard to the invasion of privacy, where the alleged invasion concerns publicity. See Campbell v. Seabury Press, 614 F.2d 395, 396 (5th Cir.1980). Recognizing this Court's holding in Smith v. Doss, supra, the Court of Appeals for the Fifth Circuit noted in Campbell the existence of a privilege that applies to the publishing or broadcasting of information concerning public figures. A second privilege noted by the Campbell court, more important to our analysis of the instant case, is the privilege to publish or broadcast news or other matters of legitimate public interest, as stated in Smith v. Doss. The Campbell court stated:
614 F.2d at 397.
In accord with the First Amendment to the United States Constitution is Art. I, § 4, of the Alabama Constitution of 1901, which states: "[N]o law shall ever be passed to curtail or restrain the liberty of speech or of the press; and any person may speak, write, and publish his sentiments on all subjects, being responsible for the abuse of that liberty."
After reviewing the record, we hold that the broadcasts of which the parents complain did not constitute an actionable invasion of privacy; therefore, the trial court correctly entered the summary judgment on this claim. The public had a legitimate concern as to S.E.C.'s status and whereabouts, after having heard the threats made against her during her television interview. The story of Gucci and the circumstances surrounding his attack were of great interest to the Alabama public. When the viewers of WALA's newscast witnessed S.E.C.'s being threatened by the group shortly after the Gucci attack, they undoubtedly became aware of the danger of a similar attack on S.E.C. WALA's reports identifying S.E.C., describing her as a runaway, and informing the public that she was safe in custody at the Strickland Youth Center were truthful and were of legitimate concern to the public. Campbell, supra. The broadcast, being one concerning matters of legitimate public interest, was not an improper intrusion into private activities and therefore was not actionable under our tort law as an invasion of privacy. Phillips, supra. Because WALA's conduct in this case falls within the bounds of the "legitimate public interest" privilege, we need not determine whether S.E.C. was a public figure for purposes of the "public figure" privilege. Campbell, supra.
The summary judgment in favor of WALA is affirmed.
AFFIRMED.
HOOPER, C.J., and ALMON, HOUSTON, and BUTTS, JJ., concur.
[1] Gucci survived the attack. The record indicates that Gucci was later given to a person who had taken care of him after the attack. | January 12, 1996 |
456fdfc3-66f2-49db-8f10-1699fe74f710 | Sparks v. Alabama Power Co. | 679 So. 2d 678 | 1950114 | Alabama | Alabama Supreme Court | 679 So. 2d 678 (1996)
Mary SPARKS, as administratrix of the Estate of Charles A. Sparks, deceased
v.
ALABAMA POWER COMPANY.
1950114.
Supreme Court of Alabama.
June 21, 1996.
*679 John W. Haley of Hare, Wynn, Newell & Newton, Birmingham, for Appellant.
James A. Bradford and Lisa J. Sharp of Balch & Bingham, Birmingham, for Appellee.
PER CURIAM.
Mary Sparks, as administratrix of the estate of her husband Charles Sparks, deceased, has appealed from the trial court's denial of her motion for a new trial. That motion had followed a judgment entered on a directed verdict and a jury verdict in favor of the defendant Alabama Power Company ("APCo").
Charles Sparks was killed on the evening of November 30, 1991, when he contacted a fallen APCo line that was still energized and was carrying 19,900 volts of electricity. The 40-foot wooden pole suspending the uninsulated electric line was snapped into three pieces and caused to fall when it was struck by an automobile driven by one of Mr. Sparks's friends, who had lost control of his automobile while engaged in a drag race on Shelby County Highway 260 with a second automobile driven by another friend. Mr. Sparks was a participant in the drag race to the limited extent of driving his truck down the road to mark the finish for the race. After the accident occurred, Mr. Sparks drove his truck to the scene and checked on the condition of his friend in the damaged automobile. Mr. Sparks was killed when his shoulder contacted the electric line as he was returning to his truck.
In March 1992, Mary Sparks filed a wrongful death action against APCo. The case went to trial in May 1995, and at the close of the evidence the trial court granted APCo's motion for a directed verdict against Mrs. Sparks's wantonness claim. On May 11, 1995, the jury returned a verdict in favor of APCo on Mrs. Sparks's remaining negligence claim. She moved for a new trial on June 8, 1995, and the court held a hearing on the motion on July 5. The trial court overruled the new trial motion on July 21 by an order that was entered on the case action summary sheet. No notice of the order was mailed to Mrs. Sparks's counsel or to APCo's counsel, and no entry was made on the computer case record system used by the Jefferson circuit clerk's office personnel.
Under our usual procedure, the last day for Mrs. Sparks to file a timely appeal was September 1, 1995, the 42d day from the July 21 final judgment. However, she did not file her notice of appeal until October 12, 1995. APCo has moved this Court to dismiss the appeal as untimely. Thus, we must first determine whether the appeal should be dismissed.
In response to APCo's motion to dismiss her appeal, Mrs. Sparks claims that she relied in good faith on information obtained from the Jefferson circuit clerk's office indicating that her motion for new trial had not been ruled on within 90 days and, thus, had been denied on the 90th day by operation of Rule 59.1, Ala.R.Civ.P. Mrs. Sparks's counsel say that they periodically checked with the circuit clerk's office regarding a possible ruling by the court on the motion for new trial, but were repeatedly informed that the court had not ruled.
However, on September 7, APCo's counsel found the case action summary sheet for this case in the "disposed" case files in the Jefferson circuit clerk's office and learned from the notation on the case action summary sheet that Mrs. Sparks's motion for a new trial had been denied on July 21.
Mrs. Sparks's counsel say that because they did not receive notice of the trial court's July 21 ruling denying the motion for new trial, they believed the motion was denied by operation of law after 90 daysi.e., on September 6. Mrs. Sparks's notice of appeal was filed on October 12, within 42 days of September 6. However, October 12 is 83 days from July 21, the day the trial court entered its order denying the motion for new trial. Therein lies the issue whether the appeal was timely filed.
On October 19, Mrs. Sparks filed a motion asking the trial court to hold that the Jefferson circuit clerk's computerized docket sheet is a legal equivalent of the formal case action summary sheet and that she had a right to rely on what the clerk's office told her counselthat as of the 90th day the court had not ruled on her new trial motion. Mrs. Sparks also asked the court to rule that the effective date of the final judgment was September 6 and not July 21, so that her October 12 notice of appeal would be timely.
Following a hearing, the trial court overruled Mrs. Sparks's motion. That court concluded:
APCo moved this Court to dismiss the appeal, based on the reasoning stated in the trial court's order. APCo argues that, based *681 on Asam and Crawford, cited in the trial court's order, supra, the July 21 entry on the case action summary sheet denying the motion for new trial constituted the entry of an appealable order under Rule 58, Ala.R.Civ.P. Thus, it says, as a matter of law, the 42 days for appeal began running on July 21. APCo also says that its counsel obtained a copy of the case action summary sheet, showing the trial court's July 21 order, on September 7.[1] APCo notes that under Rule 77(d), Ala.R.Civ. P., Sparks had an additional 30 days, following the expiration of the 42 days, to seek an extension of time from the trial court for filing an appeal. APCo points out that September 7 was within the 30-day period within which Mrs. Sparks could have sought a Rule 77(d) extension, but that she did not seek an extension within the 30 days.
In response, Mrs. Sparks seeks from this Court the same relief she sought from the trial courta ruling that her counsel could rely on telephone conversations with employees of the Jefferson circuit clerk's office to determine the status of her new trial motion, and that her appeal must be taken as timely. She asks this Court to hold that the new trial motion was denied by operation of law on the 90th day rather than by the July 21 notation on the case action summary sheet. She argues that the "present Jefferson County and statewide [Administrative Office of Courts] computer system is the equivalent of the `case action summary sheet' or the [Rule 79, Ala.R.Civ.P.,] `civil docket,' at least under these unique facts in this particular case." She asks this Court to hold that when a discrepancy occurs between a circuit clerk's computerized information regarding a case and the information actually recorded on the case action summary sheet (the civil docket), a party should be allowed to rely on either one. She argues that her counsel relied in good faith on information given to them by employees of the circuit clerk's office, taken from the office's computer system, and she contends that it would be an injustice to dismiss her appeal as untimely.
We believe it reasonable, under the facts of this case, to allow Mrs. Sparks to rely on the information affirmatively supplied her by the Jefferson circuit clerk's office information indicating that as of the 90th day there had been no ruling on her motion for new trial. Rule 1, Ala.R.Civ.P., and Rule 1, Ala.R.App.P., state that the Rules of Civil Procedure and the Rules of Appellate Procedure must be construed to assure the just determination of every action. These rules evidence this Court's belief that every litigant must receive fair and just treatment from the court system of this State. Accordingly, we hold that where there is a material discrepancy between the information contained on the formal case action summary sheet in a case and the information contained in the circuit clerk's computerized docket, a litigant should not be penalized by relying in good faith on the information contained in either "document." Thus, we hold that the October 12 appeal, which was filed within 42 days from the date on which the new trial motion would have been denied by operation of Rule 59.1, must be taken as timely. Accordingly, we deny APCo's motion to dismiss the appeal.
On appeal, Mrs. Sparks makes two arguments in support of her contention that the trial court erred in denying her motion for new trial: (1) that she presented substantial evidence in support of her wantonness claim and that the trial court erred in directing a verdict in favor of APCo on that claim, and (2) that the trial court committed reversible error by instructing the jury regarding Alabama's "drag racing statute," Ala.Code 1975, § 32-5A-178, in relation to Charles Sparks's alleged contributory negligence.
Mrs. Sparks claims that APCo acted wantonly by protecting the electric line involved in this case against faults with a 100-ampere fuse. She says the fuse was too *682 large and prevented the electric line from properly de-energizing when, she says, it contacted a ground source after the pole was broken. However, before discussing her argument that she presented substantial evidence in support of her claim, we address APCo's argument that her wantonness claim was precluded as a matter of law because the jury found in favor of APCo on her negligence claim. Citing Lassie v. Progressive Ins. Co., 655 So. 2d 952 (Ala.1995), for the proposition that a jury is presumed to have found the facts necessary to support its verdict, APCo argues that we must presume the jury found that the 100-ampere fuse was the proper size for that electric line and that there was no causal connection between APCo's conduct and Charles Sparks's death.
Although we must presume that from the evidence in this case the jury found those facts necessary to support its verdict, Lassie, supra; State Farm Auto. Ins. Co. v. Morris, 612 So. 2d 440 (Ala.1993), we cannot presume that the jury found that APCo was not negligent. The jury may well have found APCo negligent and also found Charles Sparks contributorily negligent; contributory negligence was raised by APCo as a defense and that issue was hotly debated at trial. It is critical to note that contributory negligence is not a defense to a claim of wantonness. Knight v. Alabama Power Co., 580 So. 2d 576 (Ala.1991); Brown v. Turner, 497 So. 2d 1119 (Ala.1986). Moreover, negligence and wantonness are qualitatively different torts, and a jury may find a defendant wanton without finding the defendant negligent. Lynn Strickland Sales & Service, Inc. v. Aero-Lane Fabricators, Inc., 510 So. 2d 142 (Ala.1987). Accordingly, this Court cannot draw from the jury's verdict the inference APCo asks us to. See Brown, supra. Therefore, we must address the merits of Mrs. Sparks's claim that the trial court erred in directing a verdict against her wantonness claim.
Bussey v. John Deere Co., 531 So. 2d 860, 863 (Ala.1988) (citations omitted). In other words, viewing the evidence in a light most favorable to Mrs. Sparks, we must determine whether she presented substantial evidence in support of her wantonness claim.
This Court noted in Lynn Strickland Sales, supra, that "[i]mplicit in wanton, willful, or reckless misconduct is an acting, with knowledge of danger, or with consciousness, that the doing or not doing of some act will likely result in injury." 510 So. 2d at 145. We have also stated that in order for a party to be found guilty of wanton conduct, "it must be shown that with reckless indifference to the consequences the party consciously and intentionally did some wrongful act or omitted some known duty, and that this act or omission produced the injury." Brown, 497 So. 2d at 1120.
Given our standard for reviewing a directed verdict, we must view the evidence in a light most favorable to Mrs. Sparks, the nonmovant. Viewing the record in that light, we find the following facts relevant to the issue whether APCo acted wantonly: The power line carried 19,900 volts of electricity under a 0.75 amperage load; it was protected from faults and short circuits by a 100-ampere fuse. The power line was not covered by insulation; it was insulated by "isolation," being suspended approximately 40 feet in the air by a series of wooden poles. The wooden pole hit by the automobile was located approximately 15 feet off the roadway. APCo is aware that sometimes automobiles strike power line poles and cause the lines to fall. When the pole holding up the power line involved in this case was broken, sparks were visible in the air and small fires were started in the roadside grass, indicating that power line contacted a ground source, but the 100-ampere fuse on the line did not *683 blow and de-energize the line. Charles Sparks's shoulder contacted the power line while he was walking to his truck at the accident scene. The power line remained energized until an APCo service employee turned off the power.
In addition, Mrs. Sparks's expert witness, Dr. Erwin Reinhard, a retired University of Alabama professor of electrical engineering, testified regarding a general rule that the amperage of the fuse on an electrical appliance or even on a power line should be one and one-half times the amperage of the line. He stated that APCo should have used, at most, a 3- or 5-ampere fuse on the power line at issue, and he testified regarding APCo's use of the 100-ampere fuse. Although this testimony by Dr. Reinhard was contradicted by the testimony of APCo's expert witness, in our review of the directed verdict we must view the following expert testimony by Dr. Reinhard as true:
Mrs. Sparks summarizes her argument on this issue as follows:
In response, APCo argues that Mrs. Sparks failed to present substantial evidence of at least one element of wantonnessthat APCo knew that injury was likely to be suffered by Charles Sparks as the result of his contacting this power line. APCo argues that much of Mrs. Sparks's case is supported only by conjecture and that, under Alabama law, a jury question on wantonness cannot be created by conjecture. APCo says that Mrs. Sparks presented no evidence that APCo *684 knew that this pole would be struck by a car and that the power line would come down. It contends that the fact that the pole was not located on a curve and was placed at an appropriate distance from the road negates an assumption APCo had such knowledge. APCo also contends that Mrs. Sparks presented no evidence that it knew the use of a 100-ampere fuse on that power line would result in injury. It contends that the use of the 100-ampere fuse did not violate a recognized national standard or electrical code, and it argues that the lack of such a violation negates an assumption that it knew or had reason to know an injury would likely result from the use of such a fuse.
Even viewing the evidence in a light most favorable to Mrs. Sparks, we must conclude that she did not present substantial evidence in favor of her claim that APCo had acted wantonly. The key element of wantonness is a party's action or omission of an act with the conscious knowledge that injury to another is likely to proximately result from the act or omission.
Mrs. Sparks's arguments to this Court, and the evidence she presented at trial, emphasize the idea that APCo breached a duty to the public, the duty of using the lowest-amperage fuse it could reasonably use on the power line involved, specifically a 3- or 5-ampere fuse rather than the 100-ampere fuse APCo did use. We know that the trial court considered that evidence as substantial evidence of negligence, because the court submitted the negligence claim to the jury but it is not substantial evidence of wantonness. Mrs. Sparks failed to present substantial evidence that APCo had knowledge that a 100-ampere fuse would not properly de-energize the electric line if the line contacted a ground source and that it consciously chose to use that size fuse knowing a person would likely suffer injury as a result. Viewing the evidence in a light most favorable to Mrs. Sparks, we accept that the electric line contacted a ground source; that the 100-ampere fuse did not blow to de-energize the line; that Charles Sparks was killed; and that the use of a 3- or 5-ampere fuse would have been safer than the use of a 100-ampere fuse. Yet, a reasonable person could not infer from those facts that APCo had a conscious knowledge in advance that the line would not de-energize with a 100-ampere fuse, and Mrs. Sparks failed to present substantial evidence that APCo did have such knowledge. Accordingly, the trial court properly directed a verdict for APCo on the wantonness claim and properly denied Mrs. Sparks's motion for a new trial on that claim.
Mrs. Sparks contends she should receive a new trial on her negligence claim because, she says, the trial court committed reversible error when it charged the jury that it could consider Charles Sparks's alleged violation of Ala.Code 1975, § 32-5A-178, the drag racing statute, as evidence of contributory negligence. As noted previously, Charles Sparks participated in the drag race only by driving his truck to a spot down the road to mark the finish line. The trial court gave the jury APCo's requested jury charge, which is quoted in relevant part below:
(Emphasis added.) Mrs. Sparks objected to this jury charge, preserving the issue for appeal.
Mrs. Sparks argues that the jury instruction was improper in that, she says, it allowed the jury to possibly find "statutory (contributory) negligence" without APCo's having shown that each of the four elements of statutory negligence set out in Fox v. Bartholf, 374 So. 2d 294 (Ala.1979), were met.[2] Mrs. Sparks also argues that Charles Sparks did not violate § 32-5A-178 because, she says, according to Greer v. State, 563 So. 2d 39 (Ala.Crim.App.1990), he was not sufficiently involved in the drag race for the jury to find a violation on his part. Finally, Mrs. Sparks contends that the jury should not have been charged regarding contributory negligence relating to the drag race because, she says, according to her theory of negligence against APCothat APCo misfused the electric power lineit was irrelevant how the power line came to fall down.
Citing Murray v. Alabama Power Co., 413 So. 2d 1109 (Ala.1982), APCo argues that the charge was proper in that it instructed the jury that a violation of one of the "Rules of the Road" would be prima facie negligence only and not negligence per se. Thus, APCo contends, the statutory negligence standard of Fox, supra, is not applicable. Third, APCo argues that Charles Sparks violated § 32-5A-178 because, APCo says, unlike the criminal defendants in Greer, he was not simply a passive spectator of the drag race. Finally, APCo argues that the issues of contributory negligence and proximate cause are proper for a jury to decide and that the trial court did not err in giving the jury charge at issue.
We conclude that the trial court did not err in giving APCo's requested jury charge relating to § 32-5A-178. The instruction did not involve the concept of pure statutory negligence, or negligence per se, by which if the jury finds that the party violated the statute then the party is considered to have been negligent as a matter of law. Accordingly, APCo was not required to prove the strict elements of statutory negligence set out in Fox, supra. Rather, the trial judge simply informed the jury that it was to determine whether Charles Sparks violated the statute, whether the violation was negligent behavior under the circumstances of the case, and, if so, whether the violation proximately caused his death. Clearly, the jury charge did not invade the province of the jury.
We find our opinion in Murray, supra, referenced by APCo, to be on point as to the jury charge at issue. In Murray, the trial court gave a similar instruction relating to Tuscaloosa City Ordinance No. 1437, which made unlawful the installation of a radio or television tower within a certain distance from an electric power line. In reviewing the jury instruction, this Court stated:
413 So. 2d at 1114.
Although Mrs. Sparks argues that Charles Sparks did not violate the drag racing statute because, she says, his involvement in the race was minimal compared to that of the drivers of the automobiles, and argues that his involvement in the race did not proximately cause his death, we note that the issues of an alleged breach of a legal duty (negligence) and proximate cause are normally questions of fact for the jury. Dale v. Kelly, 620 So. 2d 632 (Ala.1993); Sungas, Inc. v. Perry, 450 So. 2d 1085 (Ala.1984); Murray, supra. In sum, we find no error in the trial court's jury instruction relating to § 32-5A-178. We conclude that the trial court did not err in denying Mrs. Sparks's motion for a new trial on her negligence claim.
The judgment of the trial court is affirmed.
AFFIRMED.
SHORES, HOUSTON, KENNEDY, COOK, and BUTTS, JJ., concur.
HOOPER, C.J., and MADDOX, J., concur in the result.
[1] The record does not indicate that APCo's counsel shared this information with Mrs. Sparks's counsel.
[2] The four elements of statutory negligence set out in Fox are: (1) that the statute was enacted to protect a class of persons that includes the litigant seeking to assert the statute; (2) that the injury was of the type contemplated by the statute; (3) that the party charged with negligent conduct violated the statute; and (4) that the statutory violation proximately caused the injury. 374 So. 2d at 295-96. | June 21, 1996 |
ec34b6d0-3ca0-4c24-a236-8a675dbe1cbd | Davis v. Alabama State Bar | 676 So. 2d 306 | 1940686, 1940687 | Alabama | Alabama Supreme Court | 676 So. 2d 306 (1996)
William Dowsing DAVIS III
v.
ALABAMA STATE BAR.
Dan Arthur GOLDBERG
v.
ALABAMA STATE BAR.
1940686, 1940687.
Supreme Court of Alabama.
January 19, 1996.
Rehearing Denied March 15, 1996.
*307 James L. North and J. Timothy Francis of James L. North & Associates, Birmingham; and Clarence M. Small, Jr., Deborah Alley Smith and Rhonda Pitts Chambers of Rives & Peterson, Birmingham, for Appellants.
L. Gilbert Kendrick, Office of General Counsel, Alabama State Bar, Montgomery, for Appellee.
MADDOX, Justice.
The opinion of December 15, 1995, is withdrawn and the following opinion is substituted therefor.
Two attorneys appeal from Alabama State Bar disciplinary proceedings. They challenge the sufficiency of the evidence presented at their disciplinary hearing, claiming that the disciplinary proceeding was nothing more than a "witch-hunt" that they say the Bar conducted because it did not approve of the attorneys' advertising practices. They further challenge the penalties imposed as being too severe.
The Alabama State Bar Disciplinary Board found William Dowsing Davis III and Dan Arthur Goldberg to be violating Rule 1.1, Alabama Rules of Professional Conduct (failure to provide competent representation); Rule 1.4(a) and (b) (failure to keep clients reasonably informed and failure to reasonably explain a matter so as to permit a client to make an informed decision); Rule 5.1 (failure to make reasonable efforts to ensure that the lawyers in their firm conformed to the Rules of Professional Conduct); Rule 5.3(b) (failure to ensure that the activities of a nonlawyer under an attorney's supervision are compatible with professional standards); Rule 5.5(b) (providing assistance to a person engaging in the unauthorized practice of law); Rule 8.4(a) (violation of the Rules of Professional Conduct through the acts of another); Rule 8.4(d) (engaging in conduct prejudicial to the administration of justice); and Rule 8.4(g) (engaging in conduct that adversely reflects on a lawyer's fitness to practice law). Both of the attorneys were suspended from the practice of law for 60 days.
The record before this Court is voluminous. Several former and present attorneys and secretaries of these attorneys' firm testified at the disciplinary hearing. Several clients of the firm also testified.
These two attorneys were the sole partners in the law firm of Davis & Goldberg. The firm spent approximately $500,000 annually on advertising, primarily television advertising, and the advertising attracted a large number of clients. As a result of this large expenditure and the volume of clients produced by the advertising, the attorneys implemented several policies, described below, designed to minimize expenses and maximize profits.
The Bar presented evidence, for example, that Davis and Goldberg allowed nonlawyer secretaries to provide legal services. It was also shown to be common practice at the firm for secretaries to interview clients and prepare legal filings, especially bankruptcy petitions. Evidence also indicated that nonlawyer staff members gave clients legal advice, such as "informing" clients of the differences between Chapter 7 and Chapter 13 bankruptcy. One former associate attorney testified that it was the firm's practice that attorneys would not interview or have any contact with the client before the first scheduled court appearance.
There was further testimony that these two attorneys imposed unmanageable caseloads on associate attorneys, many of whom were inexperienced. Some associate attorneys, for example, maintained caseloads of nearly 600 active cases. Former associates testified that because of the sheer volume of cases, the amount of time that could be spent on each case was so limited as to make it *308 impossible for them to adequately represent their clients. At the hearing before the Disciplinary Board, the attorneys' own expert witness on Social Security law, Charles Tyler Clark, testified that the Social Security caseload, as described by a former associate of the firm, could not have been adequately handled by the one attorney assigned to it.
There was testimony that the firm had an inadequate supply of filing cabinets for case files and that files were simply stacked in various parts of the office, including the employees' break room and the hallway near the bathrooms. The evidence further tended to show that associate attorneys were given the barest of support staffs and that this fact, coupled with the huge volume of cases imposed upon the associates, created a situation in which files were mishandled, resulting in harm to the interests of clients.
The harm resulting from what could be described as a practice of the firm is best illustrated in the testimony of a former client, Brenda Marie Wood. Her husband, Douglas Wayne Wood, suffers from acute peripheral neuropathy and is dying. He was awarded Social Security disability benefits, but did not begin receiving his payments until eight months after he was supposed to. Mr. and Mrs. Wood saw a Davis & Goldberg television commercial that promised that the firm would "cut through the Social Security red tape" and get its clients' Social Security benefits fast. Because of the statement made in the advertisement, Mr. Wood hired the firm of Davis & Goldberg in October 1991 to represent him in his claim for past-due benefits. The firm lost Wood's file three times, and each time Wood was required to fill out a new set of forms. Wood was continuously assured by the firm's staff that his claim had been filed, when in fact it had not been. In February 1992, Wood received a letter from the firm informing him that the deadline for filing the claim had passed, and that it was too late to file his appeal.
The associates employed by Davis & Goldberg were also subjected to policies that interfered with their adequate and professional representation of their clients. These policies included the imposition of time limits or restrictions on the amount of time that they could spend with clients and on cases; the imposition of a quota system that required associates to open a specified number of files in a certain time period; and the imposition of a policy requiring associates not to return the phone calls of existing clients, so that the attorneys could free more time to sign new clients.
The appellants contend that the Bar did not meet its burden of proof as to the allegations against them. The standard of review applicable to an appeal from an order of the Disciplinary Board is "that the order will be affirmed unless it is not supported by clear and convincing evidence or misapplies the law to the facts." Noojin v. Alabama State Bar, 577 So. 2d 420, 423 (Ala. 1990), citing Hunt v. Disciplinary Board of the Alabama State Bar, 381 So. 2d 52 (Ala. 1980). We disagree with the attorneys' claims that the evidence was insufficient. In fact, the evidence presented amply showed that the two attorneys, in an effort to turn over a huge volume of cases, neglected their clients and imposed policies on associate attorneys that prevented the attorneys from providing quality and competent legal services. The evidence more than met the clear and convincing standard, and the Board's findings that these lawyers had violated the Rules of Professional Conduct are due to be affirmed.
Even though we affirm the findings that these lawyers had violated the Rules of Professional Conduct, we elect to address their argument that the disciplinary proceeding amounted to a "witch-hunt" conducted because the Bar does not approve of the firm's advertising practices. We reject this contention. Instead, we find that the Disciplinary Board properly fulfilled its role of being a guardian of the image of the legal profession, and, thus, acted as a guardian of the profession itself.[1] We cannot find, as the *309 attorneys ask us to find, that the Bar was conducting a "witch-hunt." In fact, there was evidence that the Bar examined the attorneys' advertising practices; it could have found that their advertisements were misleading, specifically in that the attorneys did not provide the quality legal service advertised. The Disciplinary Board heard evidence that one specific advertisement was misleading as it related to a United States Supreme Court ruling on the availability of Social Security benefits. Even the appellants' expert witness testified that the advertisement could have been misleading under certain circumstances.[2]
This Court recognizes that attorneys have a First Amendment right to engage in various forms of commercial speech.[3] We uphold the discipline imposed upon these attorneys, but we are not upholding it because they advertised; rather, we uphold it because the advertising was misleading in that the attorneys did not provide what they said they would provide. False and misleading advertising by attorneys can, and probably has, greatly harmed the public's perception of the legal profession, at a time when the public's confidence in attorneys has diminished. Indeed, the vast majority of those in the legal profession think advertising is harmful to the image of attorneys.[4]
Justice O'Connor warned in her dissent in Shapero v. Kentucky Bar Ass'n, 486 U.S. 466, 108 S. Ct. 1916, 100 L. Ed. 2d 475 (1988), that the advertising practices of some attorneys, similar to those practices followed by these two attorneys, will "undermine professional standards" by giving an attorney "incentives to ignore (or avoid discovering) the complexities that would lead a conscientious attorney to treat some clients' cases as anything but routine."[5] 486 U.S. at 486, 108 S. Ct. at 1928. (For further discussion of *310 Justice O'Connor's dissent, see notes 1 and 5.)
Evidence was presented that these two attorneys placed advertisements that were false and misleading. There can be no constitutional right to advertise in a false and misleading way. The evidence tends to show that these two attorneys' ethical violations were caused by their advertising practices and desire to turn over a huge volume of cases. The harm caused by this practice seems apparent.
Additionally, this Court finds no error or abuse in regard to the sanction the Board imposed, a 60-day suspension of the licenses of Davis and Goldberg. The violations were serious, and we cannot hold that the Board acted improperly in imposing the punishment. Consequently, the orders of the Disciplinary Board are affirmed.
In their application for rehearing, the attorneys argue that in its opinion of December 15, 1995, the Court erred in upholding the disciplinary sanctions based solely on allegations of misleading or false advertising. They are apparently referring to the Board's acquittal as to the charge of violating Rule 7.1, Alabama Rules of Professional Conduct. The Court affirmed the Disciplinary Board's numerous findings of violations of ethical rules, but did not address the Board's acquittal of the alleged violation of Rule 7.1. Instead, the Court addressed the attorneys' contention that the Disciplinary Board had conducted a "witch-hunt" against them because the Board did not approve of their advertising policies.
However, the Disciplinary Board found the attorneys in violation of Rule 8.4(g), which states:
As we have stated earlier, much evidence was presented at the disciplinary hearing that proved that the attorneys' advertising practices and the procedures and policies adopted by Davis & Goldberg adversely affected the attorneys' ability to practice law in the manner required by the Rules of Professional Conduct. Further, Rule 8.4(g) is broad enough to require that attorney advertisements be honest and accurate and that an attorney's practice of law centered around such heavy advertisement be professional and competent as generally required by the Rules of Profession Conduct.
The evidence presented to the Disciplinary Board showed that Davis & Goldberg advertised that the firm provided legal services of a very high standard, but that the firm's representation of its clients failed to meet the high standard presented in its advertising. This evidence of a failure on the part of Davis & Goldberg to do what was promised in its advertisements, taken with the evidence regarding harmful policies and practices adopted by the firm in response to the fact that a large number of clients were attracted to the firm by its advertising practices, is more than sufficient to support the Board's finding that the attorneys violated Rule 8.4(g).
1940686 and 1940687OPINION OF DECEMBER 15, 1995, WITHDRAWN; OPINION SUBSTITUTED; APPLICATION OVERRULED; AFFIRMED.
HOOPER, C.J., and HOUSTON, KENNEDY, INGRAM, and BUTTS, JJ., concur.
[1] Justice O'Connor described the need for such protection in her dissent in Shapero v. Kentucky Bar Ass'n, 486 U.S. 466, 488-89, 108 S. Ct. 1916, 1929-30, 100 L. Ed. 2d 475 (1988):
"One distinguishing feature of any profession, unlike other occupations that may be equally respectable, is that membership entails an ethical obligation to temper one's selfish pursuit of economic success by adhering to standards of conduct that could not be enforced either by legal fiat or through the discipline of the market. There are sound reasons to continue pursuing the goal that is implicit in the traditional view of professional life. Both the special privileges incident to membership in the profession and the advantages those privileges give in the necessary task of earning a living are means to a goal that transcends the accumulation of wealth. That goal is public service, which in the legal profession can take a variety of familiar forms. This view of the legal profession need not be rooted in romanticism or self-serving sanctimony, though of course it can be. Rather, special ethical standards for lawyers are properly understood as an appropriate means of restraining lawyers in the exercise of the unique power that they inevitably wield in a political system like ours."
[2] During the cross-examination of Charles Tyler Clark at the Bar disciplinary hearing, the following testimony was presented:
"MR. KENDRICK: This tape that we just listened to on the commercial, the last part of it, if I wrote it down correctly, says, `Remember, no fee unless we collect. If you received a notice from Social Security or think you were wrongfully denied benefits, call Davis & Goldberg.' Now, if somebody just listened to the last half of that tape, they wouldn't have [an] idea that they were talking about children's denial of Social Security benefits, would they?
"MR. NORTH: Mr. Chairman, I object to the last half of the tape. The tape as a whole.
"THE CHAIRMAN: I understand. But I'll let him answer the question. I understand the tape.
"MR. KENDRICK: If somebody walked in the room and turned the TV on and only caught the last half of it, they wouldn't understand that those cases were limited to children denial of children's benefits, would they?
"MR. TYLER: That would be correct."
[3] This Court recognizesand has ruled consistently with the United States Supreme Court regardingthe constitutionality of attorney advertising that is not "false, deceptive, or misleading." Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626, 638, 105 S. Ct. 2265, 2275, 85 L. Ed. 2d 652 (1985); also see Bates v. State Bar of Arizona, 434 U.S. 881, 98 S. Ct. 242, 54 L. Ed. 2d 164 (1977), and Alabama State Bar Ass'n v. R.W. Lynch Co., 655 So. 2d 982 (Ala.1995).
[4] In a Gallup poll conducted in November 1993 for the ABA Journal, 87% of the attorneys polled stated that they think legal advertising has harmed the public image of attorneys. James Podgers, ABA Journal, Feb. 1994, 66-72.
[5] Justice O'Connor went on to state:
"[B]ecause lawyers must be provided with expertise that is both esoteric and extremely powerful, it would be unrealistic to demand that clients bargain for their services in the same arm's-length manner that may be appropriate when buying an automobile or choosing a dry cleaner."
486 U.S. at 489-90, 108 S. Ct. at 1930. | January 19, 1996 |
15740a44-48d1-44f9-96be-a2028de25fbe | Ex Parte Prudential Ins. Co. of America | 675 So. 2d 856 | 1941037, 1941038 | Alabama | Alabama Supreme Court | 675 So. 2d 856 (1996)
Ex parte The PRUDENTIAL INSURANCE COMPANY OF AMERICA.
Ex parte Elaine KATZ.
(In re Jimmy M. WALL v. The PRUDENTIAL INSURANCE COMPANY OF AMERICA, et al.)
1941037, 1941038.
Supreme Court of Alabama.
February 9, 1996.
Rehearing Denied May 3, 1996.
*857 Forrest S. Latta and James W. Lampkin II of Pierce, Carr, Alford, Ledyard & Latta, P.C., Mobile, and E. Clark Summerford of Zeanah, Hust, Summerford & Davis, L.L.C., Tuscaloosa, for Prudential Ins. Co. of America.
Charles H. Clark, Jr. and Gregory L. Schuck of Huie, Fernambucq & Stewart, Birmingham, for Elaine Katz.
Robert G. Methvin, Jr. and Archie C. Jones, Jr. of Gaiser & Associates, Birmingham, and J.L. Chestnut, Jr. of Chestnut, Sanders, Sanders & Pettaway, Selma, for Jimmy Wall and Judge Eddie Hardaway.
PER CURIAM.
The defendants, Elaine Katz and The Prudential Insurance Company of America, petition this Court for a writ of mandamus directing Judge Eddie Hardaway, Jr., of the Greene Circuit Court to transfer Jimmy Wall's action against them to the Tuscaloosa Circuit Court.
Wall purchased an insurance policy from Prudential, through its agent Katz in 1983. The sale of the policy occurred in Tuscaloosa County. That insurance policy and the occurrences leading to its purchase by Wall form the basis of his lawsuit. In October 1994, Wall filed a complaint against Prudential, Katz, and several fictitiously named defendants in the Tuscaloosa Circuit Court. That complaint alleged two counts of fraud. Wall later moved for a voluntary dismissal of the complaint; that motion was granted. In December 1994, Wall filed another complaint in the Greene Circuit Court against the same defendants. His second complaint was substantially similar to the first, but added a breach of contract claim against Prudential.
Prudential and Katz filed motions to have the action dismissed for improper venue or, alternatively, to have it transferred to the Tuscaloosa Circuit Court. Both defendants argued that under Ala.Code 1975, §§ 6-3-2(a)(3) and 6-3-5, venue in the action is proper only in Tuscaloosa County. Katz also argued that the action should be transferred to the Tuscaloosa Circuit Court on the basis of the forum non conveniens statute, Ala. Code 1975, § 6-3-21.1, alleging that she had severe health problems that would prevent her from litigating the action in Greene County. Judge Hardaway denied the motions for dismissal and likewise denied the motions for transfer; hence, these petitions for a writ of mandamus.
A petition for a writ of mandamus may be used as a means to challenge a trial judge's refusal to transfer a case to another county. Ex parte Blount, 665 So. 2d 205 (Ala.1995); Ex parte Kennedy, 656 So. 2d 365 (Ala.1995); Ex parte Alabama Power Co., 640 So. 2d 921 (Ala.1994). However, this Court will not grant the petition "unless the petitioner makes a clear showing that the trial court erred in refusing the transfer." Ex parte Kennedy, 656 So. 2d at 367.
It is undisputed that both the plaintiff Wall and the defendant Katz reside in Tuscaloosa County. It is also undisputed that all the transactions and occurrences leading to the sale of the policy by Prudential to Wall took place in Tuscaloosa County. Finally, it is undisputed that Prudential is a foreign corporation doing business in Tuscaloosa County, Greene County, and other Alabama counties. These facts must be applied to the statutes controlling venue for the claims alleged in Wall's complaint in order to determine whether venue is proper in Greene County, or, as the petitioners contend, is proper only in Tuscaloosa County.
Additionally, under Rule 82(c), Ala. R.Civ.P., "[w]here several claims or parties have been joined, the suit may be brought in any county in which any one of the claims could have properly been brought." When Rule 82(c) is applicable, venue is proper for all defendants in any county where it is proper for any claim against one defendant. Accordingly, venue is proper for all the claims against these petitioners in any county where it is proper for any one claim against either of the petitioners.
Wall has alleged fraud claims and a breach of contract claim against Prudential. We first discuss the issue of venue as to the breach of contract claim. The petitioners argue that venue for this claim is controlled solely by Ala.Code 1975, § 6-3-5(a), and, given the effect of Amendment 473 of the Alabama Constitution of 1901, they say that venue for Wall's breach of contract action is proper only in Tuscaloosa County, where Wall resides.
Ala.Code 1975, § 6-3-5(a), states:
In 1988, § 232 of the Alabama Constitution of 1901 was amended by Amendment 473. That amendment states, in relevant part:
We note, however, that Ala.Code 1975, § 6-3-7, also provides venue for claims against corporations:
The petitioners argue that when a claim alleges a breach of an insurance contract, venue for that claim is controlled exclusively by § 6-3-5(a) and that § 6-3-7 has no effect. In response, Wall argues that § 6-3-5(a) is not the exclusive venue provision for such claims. He argues that § 6-3-7 applies to breach of contract claims against insurers and that § 6-3-5(a) is meant only to provide an extra or additional venue where such claims may be brought.
As this Court noted in Ex parte New England Mut. Life Ins. Co., 663 So. 2d 952, 955 (Ala.1995), "no provision in § 6-3-7, Ala. Code 1975, states that it shall govern personal injury actions against insurers and that all insurance contract actions are governed exclusively by § 6-3-5." Thus, we conclude that the venue for claims on insurance policies provided for by § 6-3-5(a) is supplemental to that provided for by § 6-3-7.
*859 Accordingly, because Prudential does business in Greene County, venue as to Wall's breach of contract claim is clearly proper in Greene County under § 6-3-7, and we will not address the issue of venue under § 6-3-5(a). Moreover, given the effect of Rule 82(c), Ala.R.Civ.P., because venue is proper in Greene County for Wall's breach of contract claim against Prudential, it is also proper in that circuit for Wall's fraud claims against Prudential and Katz.
Katz also argues that this action should be transferred to Tuscaloosa County "for the convenience of parties and witnesses," pursuant to Ala.Code 1975, § 6-3-21.1, because, she says, she suffers from health problems that would be adversely affected by having to litigate this action in Greene County rather than in Tuscaloosa County, where she resides. She contends that the trial court erred in denying her motion to transfer this action to Tuscaloosa County.
Whether to grant or deny a motion to transfer an action to another county based on § 6-3-21.1 is within the sound discretion of the trial court. Ex parte Townsend, 589 So. 2d 711 (Ala.1991); Ex parte Canady, 563 So. 2d 1024 (Ala.1990). The trial court will give deference to the plaintiff's choice of venue, and, in order to justify a transfer, the party seeking the transfer has the burden of proving that trial in the other county would be significantly more convenient than trial in the county in which the action was filed. Ex parte Bloodsaw, 648 So. 2d 553 (Ala.1994); Ex parte Alabama Power Co., supra; Ex parte Auto-Owners Ins. Co., 630 So. 2d 435 (Ala.1993); Ex parte Townsend, supra.
Wall argues that the trial court did not abuse its discretion in denying Katz's motion for transfer and that Katz has not met her burden of showing that litigation in Tuscaloosa County would be significantly more convenient than litigation in Greene County. He notes that Greene County is contiguous with Tuscaloosa County, where Katz resides. Wall contends that the affidavit signed by Katz's doctor stating that the doctor believes travel to Greene County would be detrimental to Katz's health is insufficient to meet Katz's burden, because, he says, the affidavit does not state that it would be significantly more convenient for her to litigate in Tuscaloosa County. Wall argues that Katz's traveling an additional 35 miles by automobile to the Greene County courthouse, when she would also have to travel by automobile from her residence in Northport to the Tuscaloosa County courthouse in Tuscaloosa if the case were transferred to Tuscaloosa County, is only a slight inconvenience when weighed against his right as plaintiff to choose his forum.
The only evidence before us in support of Katz's motion for transfer pursuant § 6-3-21.1 is the affidavit of her treating physician stating that she must keep a minimal activity level and that travel to Greene County would be detrimental to her health. However, as Wall notes, the affidavit does not state that it would be more detrimental to her to travel to the courthouse in Greene County than to travel to the courthouse in Tuscaloosa. We conclude that Katz has failed to meet her burden of showing that it would be significantly more convenient to litigate this action in Tuscaloosa County. The trial court did not abuse its discretion in denying her motion.
We conclude that the trial court correctly denied the petitioners' motions to have the action dismissed for improper venue or, alternatively, to have it transferred to the Tuscaloosa Circuit Court. The petitioners have not shown a clear legal right to have the action transferred to the Tuscaloosa Circuit Court. Thus, we deny the writ of mandamus.
WRIT DENIED.
ALMON, SHORES, INGRAM, and BUTTS, JJ., concur.
COOK, J., concurs in the result.
HOOPER, C.J., and MADDOX, HOUSTON, and KENNEDY, JJ., dissent.
*860 MADDOX, Justice (dissenting).
See my dissenting opinion in Ex parte Mary L. Gauntt, [Ms. 1940591, February 9, 1996] ___ So.2d ___, at ___ (Ala.1996).
HOUSTON, Justice (dissenting).
See my dissent on application for rehearing in Ex parte Gauntt, [Ms. 1940591, February 9, 1996] ___ So.2d ___ (Ala.1996) (Houston, J., dissenting).
HOOPER, C.J., concurs. | February 9, 1996 |
e4db6bb4-c59b-45d1-a6ca-c3a89c3c0c0d | Ex Parte State Ex Rel. Horton | 678 So. 2d 106 | 1950086 | Alabama | Alabama Supreme Court | 678 So. 2d 106 (1996)
Ex parte STATE of Alabama ex rel. Martha Jane HORTON.
In re STATE of Alabama ex rel. Martha Jane MOSLEY
v.
Allen Ricky MOSLEY.
1950086.
Supreme Court of Alabama.
January 26, 1996.
William Prendergast and Mary E. Pons, Asst. Attys. Gen., Department of Human Resources, for Petitioner.
Allen Ricky Mosley, pro se.
HOUSTON, Justice.
The Alabama Department of Human Resources ("the State"), on behalf of Martha Jane Horton,[1] petitioned the Marshall County Circuit Court to hold Horton's former husband, Allen Ricky Mosley, in contempt of court for failing to pay a portion of his minor *107 child's dental expenses. Horton and Mosley's divorce judgment required Mosley to pay half of the child's dental expenses not covered by Mosley's medical insurance.[2] Mosley, acting pro se, responded by denying the allegations and demanding "strict proof thereof." At the hearing on the petition, the State established through Horton's testimony that she either had paid, or had contractually obligated herself to pay, for dental work for the child; that the dental work was medically necessary and was ongoing; and that Mosley had failed to contribute his share. Mosley, representing himself at the hearing, testified that he was financially unable to pay for half of the child's dental work. At no time, either before or during the hearing, did he request that the divorce judgment be modified so as to reduce his obligation to pay half of his child's dental expenses. The trial court, not finding Mosley in contempt, modified the divorce judgment by making Mosley responsible for one-third of the cost of the dental treatment for the minor child.
The State moved for a new trial, arguing that the trial court's order was contrary to the applicable law and that it addressed an issue not raised by the pleadings. The trial court denied the motion, stating in part:
The State appealed to the Court of Civil Appeals, which affirmed the trial court's order without an opinion. 679 So. 2d 384 (table). The State then sought certiorari review in this Court, pursuant to Rule 39, Ala.R.App.P. We reverse and remand.
The State contends that the Court of Civil Appeals erred in not reversing the trial court's order. The State argues that the trial court lacked the authority to modify Mosley's child support obligation in the absence of a proper request by him to do so, and that the effect of the order was to retroactively set aside Mosley's obligation to pay for half of the child's dental expenses. We agree. It is well settled that a parent's obligation under a divorce judgment to support his or her child is not subject to modification in the absence of a written or oral request to modify, unless the issue is tried either expressly or impliedly with the consent of the parties. State ex rel. Thompson v. Thompson, 586 So. 2d 7 (Ala.Civ.App.1991); Roberson v. Roberson, 558 So. 2d 946 (Ala. Civ.App.1990); Parnell v. Parnell, 500 So. 2d 1137 (Ala.Civ.App.1986); Price v. Price, 442 So. 2d 121 (Ala.Civ.App.1983); Garden v. Penney, 362 So. 2d 266 (Ala.Civ.App.1978). As previously noted, the State had petitioned to have Mosley held in contempt for failing to comply with his support obligation. He defended on the ground that he was financially unable to pay the amount requested by the State. He did not seek a modification of his child support obligation by filing a written petition or request or by making an oral request at the hearing. Although the State questioned Mosley regarding his financial condition (an issue that is germane in a contempt proceeding of this kind), there is no indication in the record that the State consented, either expressly or impliedly, to try the issue of whether Mosley's obligation to pay half of the child's dental expenses should be reduced.[3]
It is also well established that a trial court cannot, on a petition for modification, relieve a parent of a child support obligation that has already accrued. Whitt v. Whitt, 276 Ala. 685, 166 So. 2d 413 (1964); *108 Morgan v. Morgan, 275 Ala. 461, 156 So. 2d 147 (1963); Frasemer v. Frasemer, 578 So. 2d 1346 (Ala.Civ.App.1991); Waltman v. Waltman, 528 So. 2d 867 (Ala.Civ.App.1988). The record indicates that at the time of the hearing Horton had either paid, or had contractually obligated herself to pay, for medically necessary dental work for the child. Mosley was obligated under the divorce judgment to pay half of the child's dental expenses not covered by his insurance. Therefore, even if the issue of modification had been properly raised and tried, the trial court lacked the authority to "forgive" or set aside Mosley's obligation to pay for the child's dental care because that obligation had already accrued.
The judgment of the Court of Civil Appeals is reversed and the case is remanded.
REVERSED AND REMANDED.
HOOPER, C.J., and MADDOX, SHORES, KENNEDY, and BUTTS, JJ., concur.
[1] During the course of these proceedings Ms. Martha Jane Mosley remarried and is now Martha Jane Horton.
[2] The record indicates that the expenses at issue in this case were not covered by insurance.
[3] Our view of the facts and the applicable law is not influenced by the fact that Mosley represented himself at the hearing or by the trial court's apparent finding of an implied oral request for modification. Although Mosley stated at the hearing that he had not previously sought a modification of the divorce judgment because he could not afford to hire an attorney to represent him, he never asked the trial court to reduce his child support obligation. Thus, the State was never put on notice that modification of the divorce judgment would be an issue at the hearing. See Price v. Price, supra. | January 26, 1996 |
ab97cb66-4cea-42e2-8ee7-60996103a997 | Ex Parte Hill | 674 So. 2d 530 | 1950479 | Alabama | Alabama Supreme Court | 674 So. 2d 530 (1996)
Ex parte Leroy HILL.
(In re STATE of Alabama ex rel. Attorney General Jeff SESSIONS v. Leroy HILL).
1950479.
Supreme Court of Alabama.
January 17, 1996.
Dissenting Opinion January 18, 1996.
*531 A. Danner Frazer, Jr. and Michael E. Upchurch of Frazer, Greene, Philpot & Upchurch, Mobile, for Petitioner.
William D. Little and Mort P. Ames III, Asst. Attys. Gen., for Respondent.
Dissenting Opinion by Justice Houston January 18, 1996.
PER CURIAM.
Leroy Hill petitions this Court for a writ of mandamus directing Judge Braxton Kittrell of the Mobile Circuit Court to vacate his December 18, 1995, order staying all proceedings in the civil fraud action brought against Hill by the State of Alabama. In its complaint, the State alleged that Hill had fraudulently caused the State to sell him certain land at an undervalued price and then had harvested and sold the land's timber crop for a large profit.
Hill purchased an 80-acre tract of land from the Department of Mental Health and Mental Retardation for $48,400 on August 25, 1993. In February 1995, an investigator for the attorney general of Alabama, in conjunction with an agent of the Federal Bureau of Investigation (FBI), began interviewing witnesses as part of an investigation of Hill's land purchase. The State issued subpoenas for witnesses to appear and for the production of documents. The State investigator and the FBI agent then jointly interviewed witnesses and obtained documentary evidence pursuant to these state-issued subpoenas.
On June 22, 1995, a deputy attorney general of the State of Alabama, in conjunction with an assistant United States attorney, presented evidence to a federal grand jury in the United States District Court for the Southern District of Alabama. On August 22, 1995, the State brought a fraud action against Hill in the Mobile Circuit Court, seeking to rescind the land sale and seeking compensatory and punitive damages. On September 21, 1995, the federal grand jury returned an indictment against Hill alleging four counts of mail fraud in violation of 18 U.S.C. § 1341.
Hill subsequently sought to conduct discovery in the State court civil action. On November 14, 1995, Hill served a request for production of documents on the State (the plaintiff in the civil case) and then served a notice of deposition of a witness in the case. The State responded by asking the State trial court to stay the civil action until January 29, 1996, the date on which Hill is scheduled to strike a jury in the federal criminal action. The State argued that the stay was necessary in order to prevent Hill from obtaining by discovery in the State civil action information that would also assist his defense in the federal criminal action. The State argued that without the stay Hill would be able to discover under the Alabama Rules of Civil Procedure evidence that he would not be able to obtain under the Federal Rules of Criminal Procedure.
The Mobile Circuit Court entered a temporary stay and, following a hearing on the State's motion, stayed the State civil action until January 29, 1996.
A writ of mandamus is an extraordinary remedy and will be issued only when there is "1) a clear legal right in the petitioner *532 to the order sought; 2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; 3) the lack of another adequate remedy; and 4) properly invoked jurisdiction of the court." Ex parte United Service Stations, Inc., 628 So. 2d 501, 503 (Ala.1993).
Hill argues that he has a clear legal right to an order vacating the trial court's December 18, 1995, order because, he says, the circuit court abused its discretion in granting the State's motion for a stay. He contends that the State did not make the showing of "good cause" he says is necessary to obtain the stay.
The State asserts that it has a right to a stay of its civil case against Hill in order to prevent Hill's discovering evidence that he could use in his defense of the federal criminal charges. The State points out that the Federal Rules of Criminal Procedure do not provide for discovery by deposition of any prosecution witness, and it argues that Hill will gain an unfair advantage in the federal criminal trial if he is allowed discovery by deposition and other means under the State civil discovery practices.
Both parties have directed this Court to cases involving motions for stays of federal civil proceedings pending the outcome of parallel federal criminal proceedings. These cases fall into several categories.
For example, there are cases in which the United States has sought a stay of civil proceedings brought against the United States by an individual who is subject to a federal criminal investigation. In some of these cases, the federal court ordered a hearing to determine whether the criminal investigation was sufficiently related to the civil action to justify a stay of discovery. Afro-Lecon, Inc. v. United States, 820 F.2d 1198 (Fed.Cir. 1987); C3, Inc. v. United States, 4 Cl.Ct. 790 (1984). In other cases, the federal court granted the Government's motion outright, where it was clear that the criminal defendant had filed a civil action against the United States during the pendency of the federal criminal proceeding only to aid himself in the criminal trial by benefit of the broad civil discovery rules. See Campbell v. Eastland, 307 F.2d 478 (5th Cir.1962), cert. denied, 371 U.S. 955, 83 S. Ct. 502, 9 L. Ed. 2d 502 (1963); Founding Church of Scientology of Washington, D.C., Inc. v. Kelley, 77 F.R.D. 378 (D.D.C.1977); United States v. Premises and Real Property at 297 Hawley St., Rochester, N.Y., 727 F. Supp. 90 (W.D.N.Y.1990).
In some of the cases, the United States had brought both criminal and civil actions against an individual and had then sought a stay of the civil proceedings during the pendency of the criminal action. The federal courts denied the stay in cases where they found that the Government had offered only sketchy or conclusory arguments to establish that a stay was needed. United States v. All Right, Title and Interest in the Real Property and Buildings Known as 228 Blair Avenue, Bronx, New York, 821 F. Supp. 893 (S.D.N.Y.1993) (Government's motion for stay based on speculation of prejudice stemming from broad civil discovery was denied); United States v. Swissco Properties, 821 F. Supp. 1472 (S.D.Fla.1993) (United States brought both criminal and civil actions against a defendant and then sought to stay the civil proceeding; the motion was denied for lack of a showing of good cause). In at least one case, however, the federal court granted the Government's motion to stay where it found that the broad discovery available in the civil action could potentially compromise the identity of confidential informants and witnesses not currently required to be disclosed, as well as other confidential law enforcement information. United States v. Property at 297 Hawley St., Rochester, N.Y., supra.
In one case, it was the individual subject to both criminal and civil cases brought by the United States who sought a stay, arguing that the Government's use of the broad discovery process available in the civil action would violate the defendant's Fifth Amendment protection against self-incrimination. The trial court denied the stay because it found that the defendant had supported the motion for a stay with a mere blanket assertion of a Fifth Amendment privilege. See United States v. Lot 5, Fox Grove, Alachua County, Fla., 23 F.3d 359 (11th Cir.1994), *533 cert. denied, ___ U.S. ___, 115 S. Ct. 722, 130 L. Ed. 2d 627 (1995).
This Court has addressed the issue whether a state civil action may be stayed when there exists a parallel criminal proceeding, or even the substantial risk of an impending indictment, based on the same conduct at issue in the civil case. In Ex parte Coastal Training Institute, 583 So. 2d 979 (Ala.1991), an employee brought a civil action against her employers, alleging various tortious acts; the defendants sought a stay of that action pending a criminal investigation of the same acts alleged in the civil action. This Court noted that while the United States Constitution does not automatically require a stay of civil proceedings in such circumstances, under Rule 26(c), Ala.R.Civ.P., the trial court does have discretion to postpone civil discovery when justice requires that it do so to protect a party or person from annoyance, embarrassment, oppression, undue burden, or expense. 583 So. 2d at 980-81.
This Court further recognized in Coastal Training that "`[t]he broad scope of civil discovery may present to both the prosecution, and at times the criminal defendant, an irresistible temptation to use that discovery to one's advantage in a criminal case.'" 583 So. 2d at 981, quoting Afro-Lecon, Inc. v. United States, 820 F.2d at 1203. We concluded that most of the facts material to the civil action would be material in a potential criminal proceeding. After weighing the defendants' interest in postponing the civil action against the prejudice that could result to the plaintiff in that case, we concluded that to allow the civil discovery would result in a forfeiture of the defendants' constitutional protection against self-incrimination. Id.
The State argues that the order granting the stay is justified because it will prevent Hill from "circumventing criminal discovery rules in a federal criminal case in which the state has a strong interest (as the victim of the alleged crime for which the defendant is indicted) through the improper use of broad civil discovery in the [civil] case." (Emphasis added.)
The State has not demonstrated that allowing Hill's requested civil discovery could potentially compromise confidential information in the pending criminal action. Moreover, the State has no Fifth Amendment right against self-incrimination that could be violated by the requested civil discovery. The State has only speculated that the federal criminal action could be affected by information obtained through the civil discovery that Hill requests and concludes that this is sufficient to outweigh Hill's right to conduct discovery to defend himself in the civil action initiated by the State.
We agree with the federal court cases holding that a motion to stay civil discovery during the pendency of a parallel criminal proceeding is not properly granted upon speculative or conclusory grounds. United States v. Swissco Properties, supra; All Right, Title and Interest in the Real Property and Buildings Known as 228 Blair Avenue, Bronx, New York, supra. The State is not a party to the federal criminal proceeding and has no legal interest in the outcome of the federal criminal trial. The State is merely the plaintiff in a civil action against Hill and, as such, has not established "good cause" for granting the motion to stay. The trial judge, therefore, abused his discretion in staying the civil proceeding; we conclude that Hill has a clear legal right to the relief he seeks. Accordingly, we grant his petition for a writ of mandamus; Judge Kittrell is directed to vacate his order staying the proceedings in the civil action.
WRIT GRANTED.
HOOPER, C.J., and ALMON, SHORES, KENNEDY, INGRAM, COOK, and BUTTS, JJ., concur.
MADDOX and HOUSTON, JJ., dissent.
HOUSTON, Justice (dissenting).
The State of Alabama, as the plaintiff in a civil action, moved the trial court to temporarily stay pretrial discovery by the defendant, Leroy Hill. The trial court granted the State's motion. Hill petitioned this Court for a writ of mandamus ordering the trial court to lift the temporary stay, and a majority of this Court has granted his petition.
*534 "The Alabama Rules of Civil Procedure vest broad discretion in the trial court to control the discovery process and to prevent its abuse." Ex parte Thomas, 628 So. 2d 483, 485 (Ala.1993). A petition for a writ of mandamus is a method by which a party disappointed by a trial judge's ruling on a discovery matter can seek redress, but a writ of mandamus, being a drastic and extraordinary remedy, will be issued only if the petitioner can demonstrate "a clear legal right"[1] to the relief sought. The relief sought here is immediate discovery in the civil action.
In Ex parte Coastal Training Institute, 583 So. 2d 979, 981 (Ala.1991), this Court noted that a trial judge, in deciding whether to grant a motion to stay civil proceedings, must weigh the movant's interest "in postponing the civil action against the prejudice that might result to [the other party] because of the delay." The State makes two arguments in support of its contention that the trial court did not abuse its discretion in temporarily staying discovery in the civil action against Hill. First, the State argues that it would be unfair to allow Hill to seek discovery from the State while he refuses to comply with any State discovery requests. Because of Hill's pending federal criminal prosecution, he is constitutionally entitled to assert his Fifth Amendment right against self-incrimination if the State attempts discovery from him before the conclusion of his criminal prosecution. Second, the State argues that Hill is attempting to circumvent the limits placed on discovery by the Federal Rules of Criminal Procedure by obtaining otherwise unobtainable discovery through discovery requests made in a civil action that parallels his federal criminal prosecution.[2]
Without specifically addressing the State's second argument, I am forced to conclude that the trial judge did not abuse his discretion in temporarily staying discovery in the civil action. The prejudice and unfairness to the State inherent in its being subjected to one-sided discovery by Hill is obvious. Furthermore, the only alleged prejudice that Hill can demonstrate from the temporary stay is prejudice to his defense of the federal criminal charges because of his inability to obtain the requested discovery and thereby evade the limits placed on discovery in criminal proceedings by the Federal Rules of Criminal Procedure.[3] In order to outweigh the interest of the State in staying discovery, however, Hill must be able to demonstrate some prejudice to his defense of the civil action. See Ex parte Coastal Training Institute, supra. Given the absence of any demonstrable evidence that the issuance of the temporary stay prejudiced Hill in the civil action, I cannot see how the majority can hold that the trial judge abused his discretion in temporarily staying the discovery.
The majority's reliance on United States v. Swissco Properties, 821 F. Supp. 1472 (S.D.Fla.1993), and United States v. All Right, Title and Interest in Real Property and Buildings Known as 228 Blair Avenue, Bronx, New York, 821 F. Supp. 893 (S.D.N.Y. 1993), to buttress its holding that the trial judge abused his discretion is misplaced. Both of those cases involve civil forfeitures. Hill's case does not involve a civil forfeiture. There are obvious constitutional problems in granting long delays in forfeiture proceedings in which a complainant's property has been either seized or rendered useless.
As Justice Kennedy correctly pointed out in Ex parte Thomas, supra, "to justify issuance of [a writ of mandamus], there must be a clear showing of injury to the petitioner." 628 So. 2d at 485 (emphasis added). Hill has *535 failed to make any showing, much less a clear showing, that he was injured as a result of the trial judge's issuance of an order temporarily staying discovery. The fact that the stay order foils Hill's attempt to evade the limits on discovery set by the Federal Rules of Criminal Procedure is not a cognizable injury. No party to a civil action has a right to use the discovery provisions of the Alabama Rules of Civil Procedure for any purpose other than the furtherance of the party's civil action.
Therefore, because Hill had no "clear legal right" to proceed with discovery in the civil action before the trial of the federal criminal charges against him, I am forced to conclude that Hill's petition for the writ of mandamus should be denied.
MADDOX, J., concurs.
[1] This is the first element of the long-established four-part mandamus test cited by the majority. See Ex parte United Service Stations, Inc., 628 So. 2d 501, 503 (Ala.1993).
[2] Although in the criminal proceeding against Hill the State of Alabama is not the prosecuting authority, the State does have an interest in seeing that Hill is convicted of the federal charges. Not only would the State, as a victim of a crime, have an interest in any possible restitution, but the State's own civil action against Hill would be furthered by the criminal conviction in that the newly effective Alabama Rules of Evidence provide that such a conviction may be admissible against Hill in the civil fraud case. See Ala.R.Evid., Rule 803(22).
[3] No one has argued that the Federal Rules of Criminal Procedure do not in the federal criminal case provide Hill with all the process he is due under the United States Constitution and the Alabama Constitution. | January 18, 1996 |
49363851-a717-4d36-b298-6dba91100a7f | Ex Parte Ingram | 675 So. 2d 863 | 1950060 | Alabama | Alabama Supreme Court | 675 So. 2d 863 (1996)
Ex parte William Thomas INGRAM.
(In re William Thomas Ingram v. State of Alabama.)
1950060.
Supreme Court of Alabama.
February 23, 1996.
*864 Elna Reese, Montgomery, for Petitioner.
Jeff Sessions, Atty. Gen., and J. Thomas Leverette, Asst. Atty. Gen., for Respondent.
PER CURIAM.
William Thomas Ingram was convicted of assault and manslaughter on May 19, 1993, in connection with an alcohol-related automobile accident. Following Ingram's conviction, the lawyer who represented him at trial recommended that he not appeal his conviction, because the lawyer thought that Ingram could possibly be convicted of a more serious offense upon retrial if his first conviction was reversed. On July 6, 1993, Ingram was sentenced to 20 years for his manslaughter conviction and an additional one year for his assault conviction.
After Ingram's time for appeal had expired, he learned that his attorney had incorrectly told him that he could be convicted of a more serious crime on retrial. Once Ingram learned that the fear that had deterred him from appealing his conviction was unfounded, Ingram, on January 21, 1994, filed with the trial judge a motion seeking permission to file an out-of-time appeal. The judge denied that motion. On March 8, 1994, Ingram filed a Rule 32, Ala.R.Crim.P., petition for post-conviction relief, alleging that ineffective assistance of counsel had denied him his right to appeal and again requesting permission to file an out-of-time appeal. The trial judge granted Ingram's request of an out-of-time appeal.
Ingram filed an appeal on June 2, 1994. On June 3, 1994, the trial court appointed new counsel to represent him in the appeal. On June 15, 1994, Ingram's new attorney filed a motion, pursuant to Ex parte Jackson, 598 So. 2d 895 (Ala.1992), to toll the running of the time for filing a new trial motion; the trial court, on that same day, entered an order purporting to grant that motion. Ingram subsequently moved for a new trial, alleging, among other things, that he had been denied the right to effective assistance of counsel at trial. The trial court denied Ingram's motion for new trial.
The Court of Criminal Appeals affirmed Ingram's conviction, holding that his ineffective-assistance-of-counsel claim was procedurally barred. In an unpublished memorandum of August 18, 1995, that Court stated:
We granted Ingram's petition for certiorari review to consider the single issue whether the Court of Criminal Appeals correctly held that his claim of ineffective assistance of counsel was procedurally barred.
In Jackson, supra, this Court held that a trial judge was required to extend a defendant's time for filing a new trial motion if the defendant's newly appointed appellate counsel timely moved for such an extension before the 30-day period allowed by Rule 24.1, Ala.R.Crim.P., had expired. The purpose of the Jackson holding was to facilitate the review of ineffective-assistance-of-counsel claims on direct appeal and thereby cut down on the number of collateral appeals attacking convictions on that basis. The holding was also intended to better protect the rights of convicted persons who have legitimate claims *865 that they have been deprived of the constitutional right to effective assistance of counsel.
Jackson extended the Rule 24.1(b) time limit for making new trial motions in order to give new appellate counsel enough time to review the trial transcript and identify any deficient trial counsel performance and move the trial judge for a new trial before the defendant's case is heard upon appeal. In order to encourage the presentation of ineffective-assistance-of-counsel claims in direct appeals rather than in collateral appeals, it was necessary to grant this additional time to present the issue to the trial judge on a new trial motion, because it has been universally held that "claims of ineffective assistance of counsel may not be considered for the first time on direct appeal." Jackson, 598 So. 2d at 897 (quoting United States v. Stitzer, 785 F.2d 1506, 1520 (11th Cir.), cert. denied, Perna v. United States, 479 U.S. 823, 107 S. Ct. 93, 93 L. Ed. 2d 44 (1986)).
The purposes of the Jackson holding were very noble, and when the Jackson procedure was adopted, it seemed to be very well reasoned and relatively simple to apply. Since that time though, the application of the Jackson procedure has caused innumerable problems[1] and has become a trap for the unwary, potentially frustrating the presentation of some defendants' ineffective-assistance-of-counsel claims,[2] rather than facilitating the presentation of those claims.
In Musgrove v. State, 659 So. 2d 229, 230 (Ala.Cr.App.1995), Judge Taylor, writing for the majority, stated: "The application of Jackson has presented numerous situations that have spawned problems, not only for the trial courts and attorneys, but for this court as well." The confusion and intractable problems that have ensued following our holding in Jackson leave the members of this Court no alternative to overruling Jackson.
Both this Court and the Court of Criminal Appeals have made great efforts to clarify the Jackson holding and to solve the problems that seem to have followed it in a constant stream. In Ex parte Webb, 656 So. 2d 351 (Ala.1995), this Court went so far as to extend the Rule 4(b)(1), Ala.R.App.P., 42-day limit for the filing of a notice of appeal in order to make the Jackson procedure more workable. But our experience has shown that the problems caused by our attempt in Jackson to cut down on the number of collateral appeals greatly outweigh the benefits obtained through the small reduction we have seen in the number of collateral appeals.
We therefore overrule Jackson to the extent that it allows a defendant's newly appointed appellate counsel to move to suspend the Rule 24.1(b), Ala.R.Crim.P., 30-day jurisdictional time limit for new trial motions. We continue to encourage trial judges to attempt to facilitate newly appointed appellate counsel's efforts to make new trial motions based upon an alleged lack of effective counsel before the Rule 24.1(b) time limit expires. However, in any cases in which the defendant is convicted after the date this opinion is released, an ineffective-assistance-of-counsel claim must be presented in a new trial motion filed before the 30-day jurisdictional time limit set by Rule 24.1(b), Ala. R.Crim.P., expires, in order for that claim to be properly preserved for review upon direct appeal.
When a defendant makes a claim of ineffective assistance of trial counsel, and that claim cannot reasonably be presented in a new trial motion filed within the 30 days allowed by Rule 24.1(b), Ala.R.Crim.P., the proper method for presenting that claim for appellate review is to file a Rule 32, Ala. R.Crim.P., petition for post-conviction relief. Although the Court of Criminal Appeals correctly held that the trial judge lacked the jurisdiction to entertain Ingram's new trial motion once the Rule 24.1(b) time limit had expired and correctly held that Ingram's ineffective-assistance-of-counsel claim was not properly before that court on the direct appeal, Ingram is not without recourse. Because Ingram's newly appointed counsel was understandably confused as to how to proceed with Ingram's ineffective-assistance-of-counsel claim,[3] Ingram should be allowed to present his claim in a Rule 32 petition, because the peculiar facts of this case satisfy the Rule 32.2(b), Ala.R.Crim.P., requirement of "good cause" for being allowed to present successive Rule 32 petitions.
AFFIRMED.
HOOPER, C.J., and MADDOX, ALMON, SHORES, HOUSTON, and INGRAM, JJ., concur.
[1] See, e.g., Pardue v. State, 661 So. 2d 263 (Ala. Cr.App.1993) (to what extent does the Ex parte Jackson procedure apply to pre-Jackson cases?), rev'd on other grounds, 661 So. 2d 268 (Ala. 1994); Eldridge v. State, 655 So. 2d 1095 (Ala.Cr. App.1994) (confusion over when new trial motion is due); Alderman v. State, 647 So. 2d 28 (Ala.Cr.App.1994) (whether failure to properly follow the Jackson procedure is ineffective assistance of appellate counsel); Ex parte Webb, 656 So. 2d 351 (Ala.1995) (whether a Jackson motion to suspend the running of the time for a new trial motion also suspends the running of the time to file a notice of appeal); Musgrove v. State, 659 So. 2d 229 (Ala.Cr.App.1995) (the implications of a court reporter's failure to give appellate counsel notice of the completion of the record).
[2] See, e.g., Wilson v. State, 659 So. 2d 152 (Ala. Cr.App.1994); Davenport v. State, 653 So. 2d 1006 (Ala.Cr.App.1994); see also H. Maddox, Alabama Rules of Criminal Procedure (2d ed. 1994), Vol. 1, § 6.0, p. 239 ("If new counsel is appointed to represent an indigent defendant on appeal, an ineffective assistance of counsel claim must be made on motion for new trial or it is waived.").
[3] Language in certain cases attempting to apply our holding in Jackson would seem to support, if not mandate, the actions of Ingram's appellate counsel. In Jackson v. State, 650 So. 2d 593 (Ala.Cr.App.1994), the Court of Criminal Appeals stated that "[t]he Alabama Supreme Court in Jackson also held that if an accused is represented by different counsel on appeal than at trial, appellate counsel will be granted more time to raise a claim of ineffective assistance of counsel on direct appeal." | February 23, 1996 |
4325e18b-2a91-4c0d-97f7-d6db604f4961 | Farmer v. Hypo Holdings, Inc. | 675 So. 2d 387 | 1940610 | Alabama | Alabama Supreme Court | 675 So. 2d 387 (1996)
Billy FARMER and Judy Farmer
v.
HYPO HOLDINGS, INC.
1940610.
Supreme Court of Alabama.
February 9, 1996.
*388 Roger Killian, Fort Payne, for Appellants.
Bruce F. Rogers of Bainbridge, Mims, Rogers & Smith, Birmingham, for appellee.
Garve Ivey, Jr., Jasper, and Barry A. Ragsdale, Birmingham, for amicus curiae Alabama Trial Lawyers Association.
H. Hampton Boles, Michael L. Edwards and Gregory C. Cook of Balch & Bingham, Birmingham, and Laurence D. Vinson, Jr. of Bradley, Arant, Rose & White, Birmingham, for amici curiae Alabama Bankers Association, Automobile Dealers Ass'n of Alabama, Inc. and Alabama Retail Ass'n.
Scott Corscadden, Deputy Atty. Gen., for amicus curiae Alabama State Banking Department.
BUTTS, Justice.
The opinion of November 9, 1995, is withdrawn and the following opinion is substituted therefor.
The plaintiffs, Billy Farmer and his wife Judy Farmer, appeal from a summary judgment entered in favor of the defendant Hypo Holdings, Inc., on the Farmers' claim seeking a judgment declaring that a note and mortgage on their residence was void and unenforceable.
On June 20, 1984, the Farmers contracted with Alexander Development Corporation ("Alexander") to construct a house on land owned by Judy Farmer. The $36,500 construction price of the house was financed by Alexander, to be repaid by the Farmers over a period of 20 years at 14% interest. The Farmers signed a promissory note, which was secured by a mortgage from the Farmers to Alexander. Alexander assigned the note and mortgage to Goldome Credit Corporation; Goldome thereafter assigned the mortgage to Hypo Holdings. Hypo Holdings, like Alexander, was not licensed under *389 Ala.Code 1975, § 5-19-22(a), a section of the consumer finance "Mini-Code," to make consumer loans or to take assignments of consumer credit contracts.
In 1992, the Farmers became delinquent in their payments on the note, and they have made no payments since then. A notice of foreclosure was advertised in October 1993. The Farmers responded by suing Hypo Holdings, claiming that because Alexander and Hypo Holdings were not licensed under the Mini-Code the common law rule of Derico v. Duncan, 410 So. 2d 27 (Ala.1982), rendered the note and mortgage void and unenforceable. The Farmers also alleged that the mortgage was unenforceable because, they alleged, their signatures on it were not properly witnessed or acknowledged.[1]
On December 9, 1994, the trial court entered a summary judgment in favor of Hypo Holdings on the Farmers' claim that the note and mortgage were unenforceable. The trial court ruled that neither Alexander nor Hypo Holdings was required to be licensed under the Mini-Code. The trial court also found no merit in the Farmers' claim regarding their signatures on the mortgage. The court made the summary judgment final pursuant to Rule 54(b), Ala.R.Civ.P. The Farmers appealed.
In order to enter a summary judgment, the trial court must determine that there are no genuine issues of material fact and that the moving party is entitled to a judgment as a matter of law. Rule 56, Ala. R.Civ.P.; Bussey v. John Deere Co., 531 So. 2d 860 (Ala.1988). This case was filed after June 11, 1987; accordingly, the "substantial evidence rule" applies to the ruling on the motion for summary judgment. Ala. Code 1975, § 12-21-12; Bass v. SouthTrust Bank of Baldwin County, 538 So. 2d 794 (Ala. 1989). Thus, in order to defeat a properly supported motion for summary judgment, the nonmovants had to present in support of their position substantial evidence creating a genuine issue of material fact. Betts v. McDonald's Corp., 567 So. 2d 1252 (Ala.1990). "[S]ubstantial evidence is evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." West v. Founders Life Assurance Co. of Florida, 547 So. 2d 870, 871 (Ala.1989). However, in reviewing a summary judgment, this Court is bound to review the evidence in a light most favorable to the nonmovant or nonmovants, in this case the Farmers. Thetford v. City of Clanton, 605 So. 2d 835 (Ala.1992).
As enacted, the Mini-Code provided no specific remedy to the consumer/debtor for a creditor's failure to be licensed. Under the common law rule of Derico, the promissory note and the mortgage would be held void and unenforceable. However, as noted in the special writings directed to this Court's recent "no opinion" affirmance in Johnson v. Alabama Power Co., 664 So. 2d 877 (Ala. 1995), the rule of Derico was abrogated when the legislature amended Ala.Code 1975, § 5-19-11, and created a specific statutory remedy. See Ala.Acts 1990, No. 90-384. As amended, § 5-19-11(b) provides that a debtor may recover only for the actual damage sustained as a result of the creditor's violation of a Mini-Code requirement. Johnson, supra; In re Crotzer, 147 B.R. 252 (Bankr. N.D.Ala.1992).
We must first determine whether Hypo Holdings was required to be licensed under § 5-19-22(a), a part of the Mini-Code. Section 5-19-22(a) states:
(Emphasis added.)
The trial court ruled that the contract between Alexander and the Farmers was an "installment sales contract" rather than a "consumer credit contract" and, thus, that the licensing provision of the Mini-Code did *390 not apply. However, the licensing requirement of the Mini-Code does not contemplate a distinction between an "installment sales contract" and a "consumer credit contract." The word "installment" is used only in § 5-19-18, a section regarding consumer credit transactions of $1,000 or less. Instead of the word "installment," the Mini-Code sometimes uses the term "scheduled payment." See, e.g., §§ 5-19-4 and -7. Moreover, the term "scheduled payment" is not used in antithesis to "consumer credit contract," and the terms are not mutually exclusive. Rather, the "installment sales contract" described by the trial court is just one type of a "consumer credit contract."
Hypo Holdings, a New York corporation, argues that it is exempt from the licensing requirement discussed above for two reasons: (1) because it is not a "creditor" as that term is defined in the Mini-Code, and (2) because it has no business office, agents, or employees in Alabama. We discuss each of these arguments in turn.
Section 5-19-1(3), a part of the Mini-Code, reads, in relevant part:
Hypo Holdings argues that it is not a creditor and, thus, that the Mini-Code's licensing provision is not applicable to it. It has referred this Court to the affidavit of a company representative stating that Hypo Holdings does not make loans or extend credit in Alabama or any other state. Although the Farmers argue that Hypo Holdings is a Mini-Code "creditor," they have offered no evidence that it "regularly extend[s] credit or arrange[s] for the extension of credit for which the payment of a finance charge is required." Accordingly, there is no question of material fact as to whether Hypo Holdings is a Mini-Code creditor. Thus, we conclude that, as a matter of law, the licensing provision of § 5-19-22(a) is not applicable to Hypo Holdings.
Hypo Holdings refers this Court to a letter written in 1973 by Alabama's attorney general advising that out-of-state entities are not subject to the Mini-Code's licensing requirements. However, an attorney general's opinion is only advisory; it is not binding on this Court and does not have the effect of law. See, e.g., Ellis v. State Nat'l Bank of Alabama, 434 F.2d 1182 (5th Cir. 1970), cert. denied, 402 U.S. 973, 91 S. Ct. 1661, 29 L. Ed. 2d 137 (1971); Smith v. Madison County Comm'n, 658 So. 2d 422 (Ala.1995).
Hypo Holdings also argues that the State Banking Department has relied upon and followed the attorney general's opinion for over two decades. It is true that an interpretation placed on a statute by an administrative agency charged with its enforcement will be given great weight and deference by a reviewing court. Alabama Metallurgical Corp. v. Alabama Public Service Comm'n, 441 So. 2d 565 (Ala.1983); Sadie v. Tyson, 539 So. 2d 1066 (Ala.Civ.App. 1988); Director of State Dep't of Industrial Relations v. Winston County Comm'n, 468 So. 2d 177 (Ala.Civ.App.1985). Notwithstanding this rule of construction, where the language of a statute is plain this Court will not blindly follow an administrative interpretation, but will interpret the statute to mean exactly what it says. McCullar v. Universal Underwriters Life Ins. Co., [Ms. 1930246, September 29, 1995] ___ So.2d ___ (Ala. 1995); Director of State Dep't of Industrial Relations, supra.
However, in this case, the attorney general's 1973 advisory opinion, and the State Banking Department's similar interpretation, were followed by the legislature's reenactment of § 5-19-22 in 1983. Acts 1983, No. 83-747, p. 1244, § 1. We have previously stated that because the legislature is presumed to be aware of how an administrative agency has interpreted a statute, the subsequent reenactment of the statute without material change is an indication that the legislature approves the agency's interpretation. Robinson v. City of Montgomery, 485 So. 2d 695 (Ala.1986); Hamm v. Proctor, 281 Ala. 54, 198 So. 2d 782 (1967); Jones v. Phillips, *391 279 Ala. 354, 185 So. 2d 378 (1966). Although in such circumstances the agency's interpretation is not binding on this Court, see Sand Mountain Bank v. Albertville Nat'l Bank, 442 So. 2d 13 (Ala.1983), we consider it especially persuasive. Accordingly, we hold that § 5-19-22(a) does not require creditors with no business locations in Alabama, such as Hypo Holdings, to be licensed under the Mini-Code.
We must next determine the effect Alexander's failure to be licensed under the Mini-Code has on Hypo Holdings. The following clause is contained in the consumer credit contract at issue:
Thus, under this contract the Farmers could raise any claim against Hypo Holdings that they could raise against Alexander, such as Alexander's failure to have a Mini-Code license.
However, it is clear that Alexander was not required to be licensed under the Mini-Code to make a consumer credit sale to the Farmers or any other consumers. The plain language of § 5-19-22(a) indicates that only creditors who make consumer loans[2] or take assignments of consumer credit sales contracts must be licensed. See Derico, supra (differentiating between the portion of the plaintiff's indebtedness representing a consumer loan and the portion representing a credit sale of goods and services). Moreover, even as enacted, the Mini-Code required only that creditors making consumer credit sales who were not licensed had to file a notification with the State Banking Department. Ala.Code 1975, §§ 5-19-27 and -28. However, the statutes imposing this limited consumer protection requirement were repealed by the legislature in 1982. Ala.Acts 1982, No. 82-521, p. 869, § 2. Thus, the Farmers have no claim against Hypo Holdings based on Alexander's failure to be licensed under the Mini-Code.
The Farmers also contend that their mortgage is void and unenforceable because, they say, their signatures on that document were not properly acknowledged (notarized). Their arguments on this issue are twofold. First, they claim that a falsehood appears on the document because it purports to have been acknowledged in Jackson County before Henry Gilmore, while they state that the mortgage was not signed or acknowledged in Jackson County, nor before Henry Gilmore.
Regarding the issue of the acknowledgment of the Farmers' signatures on the mortgage, the trial court stated:
A certificate of acknowledgment on an instrument transferring an interest in real property is presumed correct, and the party contending it is invalid must demonstrate the invalidity by clear and convincing evidence. Central Bank of the South v. Dinsmore, 475 So. 2d 842 (Ala.1985); Henslee v. Henslee, 263 Ala. 287, 82 So. 2d 222 (1955); Lukes v. Alabama Power Co., 257 Ala. 590, 60 So. 2d 349 (1952). Given this standard, the trial court correctly ruled that the Farmers did not meet their burden of proof.
The trial court correctly determined that there are no genuine issues of material fact and that Hypo Holdings is entitled to a judgment *392 as a matter of law. Thus, we affirm the judgment of the trial court.
APPLICATION GRANTED; ORIGINAL OPINION WITHDRAWN; OPINION SUBSTITUTED; AFFIRMED.
HOOPER, C.J., and SHORES, HOUSTON, KENNEDY, INGRAM, and COOK, JJ., concur.
MADDOX, J., concurs in the result.
[1] The complaint also made other claims, but those other claims are not at issue in this appeal.
[2] See, e.g., Johnson v. Alabama Power Co, 664 So. 2d 877 (Ala.1995) (affirming a trial court's ruling that the Mini-Code's licensing provision, § 5-19-22(a), applied to a consumer credit transaction where consumers' purchases of heat pumps from "Alabama Power Company certified dealers" were financed through consumer loans by Alabama Power Company). | February 9, 1996 |
742dfb04-c150-407d-8fbc-2acedff2725f | Gaylard v. Homemakers of Montgomery, Inc. | 675 So. 2d 363 | 1940395 | Alabama | Alabama Supreme Court | 675 So. 2d 363 (1996)
Alice GAYLARD
v.
HOMEMAKERS OF MONTGOMERY, INC., d/b/a Oxford Health Care.
1940395.
Supreme Court of Alabama.
January 12, 1996.
Richard C. Dean, Jr. and Sabrina L. McKinney, Law Offices of Richard C. Dean, Jr., Montgomery, for Appellant.
Amy C. Vibbart and James W. Garrett, Jr. of Rushton, Stakely, Johnston & Garrett, Montgomery, for Appellee.
ALMON, Justice.
The plaintiff appeals from a judgment entered on a jury verdict for the defendant. Alice Gaylard brought an action against Homemakers of Montgomery, Inc., d/b/a Oxford Health Care ("Oxford"), alleging negligence, wantonness, and breach of contract. Before trial, Ms. Gaylard dismissed the breach of contract claim. The circuit court ruled that Ms. Gaylard could not use a statement taken by her attorney from a witness *364 who was an employee of Oxford to cross-examine that witness. The court based its ruling on its holding that the attorney, in taking the statement, had violated Rule 4.2 of the Alabama Rules of Professional Conduct. The issue, therefore, is whether the circuit court erred in limiting cross-examination by prohibiting use of the witness's earlier statement.
Ms. Gaylard contracted with Oxford for Oxford to provide home health care services, including the periodic bathing of Ms. Gaylard. On December 16, 1992, an employee of Oxford, Dorothy Taylor, who was not named as a defendant in the action Ms. Gaylard later filed, was giving Ms. Gaylard a bath and allegedly caused Ms. Gaylard to be burned with hot water. Ms. Gaylard was subsequently hospitalized, and she alleges that the burns she says she sustained on December 16 required the hospitalization and caused her to suffer pain, discomfort, mental anguish, and emotional distress.
Before Ms. Gaylard filed this action against Oxford, Ms. Gaylard's attorney telephoned Ms. Taylor and recorded the ensuing conversation, without informing Ms. Taylor that it was being recorded. Initially, Ms. Taylor refused to discuss the bath and the burns, but, after the attorney persisted, Ms. Taylor began answering questions:
During Ms. Taylor's deposition and during the trial, she testified that she did not regulate the faucets or the water temperature while attending Ms. Gaylard on Wednesday, December 16. Further, at trial, Ms. Taylor testified that Ms. Gaylard had not complained about the alleged burns until at least the following Monday, December 21.
Oxford filed a motion in limine to prevent Ms. Gaylard from introducing the recorded statement into evidence, citing Rule 4.2, Ala. R.Prof. Conduct:
The comment to Rule 4.2 elaborates:
The circuit court granted Oxford's motion in limine, holding that the attorney's action that had resulted in the recorded conversation violated Rule 4.2, Ala.R.Prof. Conduct. Moreover, during the cross-examination of Ms. Taylor by Ms. Gaylard's attorney, the circuit court sustained an objection to the use of a transcript of the recording for impeachment *367 purposes.[1] In addition, Ms. Gaylard raised the issue in her motion for new trial, which was overruled by the circuit court.
Ms. Gaylard contends that because the recorded conversation occurred before her attorney had any indication that Oxford had retained counsel to represent it in defending any claim that might be filed by Ms. Gaylard based on the alleged December 16 burns, her attorney's actions were not unethical and did not violate the Rules of Professional Conduct. Ms. Gaylard argues that even if the attorney's actions violated Rule 4.2, the rule is an internal bar regulation that should not affect the admissibility of the recorded statement. Thus, Ms. Gaylard maintains that the circuit court's ruling barring the admission of the recorded statement constituted reversible error.
We begin our analysis by first determining if the attorney violated Rule 4.2. That rule applies only to communications with a party, and then only when the attorney knows that the party is represented by an attorney. Although the committee comments to Rule 4.2 indicate that the rule should reach an agent or an employee of a corporate party when the corporation's liability will be predicated on the agent's actions, Oxford itself was not a "party" at the time of the communication, because Ms. Gaylard had not yet filed an action against it. The rules do not require an attorney to immediately file an action at law before communicating with the person with whom the attorney's client has a dispute.
Aside from the question whether Oxford was a party, there is no evidence that Ms. Gaylard's attorney knew, or even had reason to think, that Oxford had retained counsel in regard to the matter of Ms. Gaylard's alleged injury. Notwithstanding the fact that Ms. Taylor initially objected and said that she should not talk to the attorney without talking to her supervisor first, she did not say or imply that her employer had retained counsel. Thus, Ms. Gaylard's attorney could not have violated Rule 4.2. Because this was the only basis on which the circuit court sustained the objection, it was error to sustain the objection, made during cross-examination of Ms. Taylor, to the use of her statement as a prior inconsistent statement.
Even if this communication had occurred after Ms. Taylor had been contacted by attorneys for Oxford, and even if Ms. Gaylard's attorney had known that Ms. Taylor was a "party," it would still have been error for the circuit court to sustain the objection and bar admission of the evidence. The Rules of Professional Conduct are "self-imposed internal regulations" and do not play a role in determining the admissibility of evidence. Stringer v. State, 372 So. 2d 378, 382-83 (Ala.Crim.App.), cert. denied, 372 So. 2d 384 (Ala.1979); cf. Terry Cove North, Inc. v. Marr & Friedlander, P.C., 521 So. 2d 22, 23-24 (Ala.1988) ("The sole remedy is the imposition of disciplinary measures.").
This Court has held repeatedly that the burden is on the appellant to establish that errors committed by the circuit court probably prejudiced him. Abbott v. Allstate Ins. Co., 507 So. 2d 905, 908 (Ala.1987); American Furniture Galleries, Inc. v. McWane, Inc., 477 So. 2d 369, 373 (Ala.1985); Watson v. McGee, 348 So. 2d 461, 463 (Ala. 1977).
The circuit court's error in sustaining the objection was not harmless. The jury could have viewed the evidence as presenting essentially a conflict between Ms. Gaylard's testimony and Ms. Taylor's testimony as to whether Ms. Gaylard was scalded in the shower and, if so, how it happened. As to how it happened, Ms. Gaylard contended at trial that Ms. Taylor regulated the water temperature, while Ms. Taylor contended that Ms. Gaylard regulated it. In the first part of her recorded statement, Ms. Taylor said that she had regulated the water temperature:
Although Ms. Taylor later in the conversation asserted that Ms. Gaylard had regulated the temperature of the water herself, the contradictions within the recorded statement simply present a further question for the jury as to which statement by Ms. Taylor it was to believe. The fact that she "corrected herself" later in the conversation does not render the entire recorded statement consistent with Ms. Taylor's trial testimony.
There is also a conflict between the statement and Ms. Taylor's trial testimony regarding when Ms. Gaylard first complained that her legs had been burned in the shower.[2] The alleged scalding would have taken place on Wednesday, December 16. At trial, Ms. Taylor asserted that Ms. Gaylard did not complain of having been burned until the following week on Ms. Taylor's Monday visit, or perhaps later. Oxford sought to prove that Ms. Gaylard did not complain of the alleged burn until well after it had supposedly occurred. In her statement, however, Ms. Taylor stated that Ms. Gaylard complained of the burns the very next visit:
Evidence presented by Ms. Gaylard and her daughter indicated that they tried to treat the burns at home, but that they got worse rather than better. In late December, Ms. Gaylard was admitted to a hospital for treatment of second degree burns on her legs. Oxford contended that this condition was not caused by the alleged scalding, but there was substantial evidence, at least from Ms. Gaylard's testimony, that it was. Further, the record does not support a holding, as suggested by Justice Houston's dissent, that sustaining the objection was harmless error because Ms. Gaylard's feet were not burned. This Court is not in a position to make a finding that, because Ms. Gaylard's feet were not burned, her injuries could not have occurred the way she said they did, so the judgment is not due to be affirmed on this ground in spite of the error in disallowing the use of Ms. Taylor's statement.
In short, the conflicts between the testimony of Ms. Gaylard and that of Ms. Taylor were crucial to the jury's resolution of the case. The recorded statement was inconsistent with Ms. Taylor's trial testimony in at least two material respects, and thus it was not harmless for the circuit court to disallow its use for cross-examination of Ms. Taylor. Consequently, the judgment is hereby reversed and the cause is remanded for a new trial.
REVERSED AND REMANDED.
SHORES, KENNEDY, INGRAM, and BUTTS, JJ., concur.
HOOPER, C.J., and MADDOX and HOUSTON, JJ., dissent.
*369 HOOPER, Chief Justice (dissenting):
I must respectfully dissent. I concur with Justice Houston on all points in his dissent. I address only the issue of Attorney Dean's communication with Ms. Dorothy Taylor.
Alabama Rule of Professional Conduct 4.2 states:
The comment to the rule states:
(Emphasis added.)
The record is unclear as to whether Attorney Richard C. Dean, Jr., knew, when he telephoned Ms. Taylor, who would be one of those persons mentioned in the comment to the rule, whether she was represented by counsel. Dean contends that he spoke with Taylor before he filed the lawsuit, but Taylor was unsure when she spoke with Dean. The record does not affirmatively state that Ms. Taylor was represented by counsel when Dean contacted her. Also, the record does not indicate whether Homemakers of Montgomery, Inc., had attorneys on its staff or on retainer. However, a reasonably prudent attorney should know that corporations routinely have in-house counsel or have retained counsel.
The following things are clear. First, Attorney Dean was procured by Ms. Gaylard for the purpose of filing a lawsuit against Homemakers based on the alleged acts or omissions of Taylor. Second, Dean contacted Taylor by telephone, knowing that her acts or omissions could be imputed to Homemakers, and knowing that her statements could constitute admissions on the part of Homemakers. Third, Dean recorded the telephone conversation without Taylor's consent. Fourth, at the outset of the telephone conversation, Taylor told Dean repeatedly and in plain language that she did not want to speak with him because she believed that her employer would not want her to do so. Fifth, Dean repeatedly violated Taylor's requests to be excused from speaking with him, and he continued to pressure her until she spoke with him. Based upon the facts of this case, it is not clear whether Attorney Dean violated the letter of Rule 4.2. However, it is clear that Dean violated the spirit of Rule 4.2.
Alabama passed the nation's first code of lawyer ethics in 1887, and it has a rich heritage as the leader in legal ethics. Rule 4.2 of our present Rules of Professional Conduct has been passed down from our first Code of Ethics. See 118 Ala. XXIII-XXXIV. This first Code of Ethics was written by Col. Thomas Goode Jones, who was later Governor of Alabama.[3] Benjamin P. Crum, The Alabama Code of Legal Ethics, 2 Ala. Lawyer 245-58 (1941). However, Governor Jones was not the original author of the concepts embodied in his code of lawyer ethics.
In 1836, David Hoffman published Hoffman's Course of Legal Studies, which contains perhaps the first outline of a legal code of ethics for American lawyers. George M. Akers, Hoffman's Fifty Resolutions, 14 Ala.Lawyer 171 (1953). These resolutions are reminiscent of a noble breed of lawyers and should stir the conscience of every Alabama lawyer.
In Hoffman's resolutions, he addressed the issue now before this court:
As quoted at 14 Ala.Lawyer 186. (Emphasis added.)
The lawyer has an advantage over the layman. The lawyer, being more knowledgeable of the law and perhaps more cunning than the layman, can use knowledge and experience to lay a trap for the other. The purpose of cross-examining a witness is often to lay a trap for the witness. I would hope that with both parties' attorneys present and with the judge overseeing the proceeding, such a trap will lead to the truth. The layman being interviewed by an opponent's attorney or a potential opponent's attorney is not on a level playing field.
The spirit of our present Rule 4.2 is to level the legal playing field. In this case, Attorney Dean, knowing that he planned to sue Homemakers and knowing that Ms. Taylor had no attorney to assist her, manipulated Ms. Taylor. Dean felt free to use whatever artifice and coercion was necessary to interrogate Ms. Taylor because he knew that she had no attorney to object to his repeated and uninvited questions. The record shows that Taylor told Dean repeatedly and in certain terms that she did not want to talk with him, could not talk with him, and would not talk with him. Nevertheless, Attorney Dean persisted and coerced her into saying what he wanted her to say. There is little doubt that if Dean had contacted Taylor in the presence of an attorney for Homemakers or Taylor, or by writing only, as Hoffman suggests, this issue would not be before this Court.
Lawyers who find themselves in Attorney Dean's situation should do three things: (1) identify themselves to the prospective defendant; (2) advise the prospective defendant that they represent the prospective plaintiff; and (3) communicate with the prospective defendant in writing only, with no oral response being received. Attorneys who adhere to this three-pronged approach in communicating with unrepresented prospective defendants will not only bring honor to the legal profession, but will preserve the administration of justice, consistent with the Alabama Rules of Professional Conduct. Lawyers should always strive to maintain the Alabama Bar's high standard of ethics; and now, it is time for the Bar to strive for a higher standard. The trial judge in this case has given us an excellent example to follow.
In assessing Attorney Dean's conduct, this Court must decide whether the trial judge erred in granting Homemakers' motion in limine to prevent the use at trial of the recorded telephone conversation. From a thorough review of the transcript and both parties' briefs, I cannot say that Gaylard has met her burden of proving that the trial court erred in granting Homemakers motion in limine. Johnson v. Langley, 495 So. 2d 1061 (Ala.1986).
Even though Dean may not have violated the letter of Rule 4.2, and therefore may not be subject to discipline, the trial judge in this case recognized the egregiousness of Dean's conduct. In granting the motion in limine, he sought to prevent Dean's client from profiting from such an unfair method of obtaining evidence. In addition, his granting the motion acted as a deterrence to other attorneys contemplating use of the same unfair tactic in future cases. I commend the trial judge for his discernment and the careful balancing he *371 used in remedying for this manipulation of the justice system and its rules.
Therefore, I must respectfully dissent.
HOUSTON, Justice (dissenting).
I would affirm; therefore, I dissent.
Even if the trial court erred in granting Oxford's motion in limine and thereby barring the tape-recorded conversation from being introduced into evidence (and I would not hold that it did), from a thorough review of the record I find that error to be harmless.
Black's Law Dictionary, at 1193 (6th ed.1990) defines "[p]rior inconsistent statements" as "prior statements made by the witness which contradict statements made on the witness stand." These prior statements of self-contradiction are not admissible to prove the truth of the matter asserted but only to impeach the credibility of the witness after a foundation has been laid and the witness has been given an opportunity to affirm or deny whether such prior statements were made. See C. Gamble, McElroy's Alabama Evidence, § 155.02(1) (4th ed. 1991).
Taylor's statements in the tape-recorded conversation, concerning who regulated the water faucets and the water temperature, were not inconsistent with her pre-trial deposition testimony or with her testimony at trial. Rather, as shown in that portion of the tape-recorded telephone conversation quoted by the majority, although Taylor initially indicated that she was the one who regulated the water faucets and the water temperature, she later corrected herself and in doing so made it unclear who actually had regulated the water; and she never specified, during the conversation, who regulated the faucets or the water temperature on the day in question.
Furthermore, in my opinion, the critical issue in this case was not who regulated the water faucets or the water temperature, but rather whether hot water actually caused the burns to Gaylard's legs or whether she received the burns in some other way (there was evidence of prior instances of severe redness and swelling in her legs that necessitated medical attention and evidence that she had used certain creams that could have caused burns like those she sustained). Throughout the trial, Oxford argued that the water Taylor used on Gaylard's legs was from the same bowl as the water that Taylor had used on the rest of Gaylard's body, yet the rest of Gaylard's body received no burns. Gaylard also testified that Taylor used the water to wash Gaylard's feet by pouring it down her legs; yet, there were no burns on Gaylard's feet. As Oxford states: "This defies all logic." If the water did not cause the burns to Gaylard's legs, it would make absolutely no difference who regulated the water faucets or the water temperature, because the temperature of the water would have no bearing on Gaylard's injuries.
Accordingly, even if the tape-recorded telephone conversation were technically admissible, the order keeping it out of evidence was not prejudicial error. Abbott v. Allstate Ins. Co., 507 So. 2d 905 (Ala.1987). On appeal, Gaylard had the burden not only to establish error but also to show that she was prejudiced by the error. Abbott v. Allstate; American Furniture Galleries, Inc. v. McWane, Inc., 477 So. 2d 369 (Ala.1985). Gaylard has failed to carry that burden.
MADDOX, J., concurs.
[1] The circuit court sustained this objection after Ms. Taylor had admitted under oath that, when Ms. Gaylard's attorney contacted her, she had not heard that a legal action had been filed regarding the matter and to the best of her knowledge one had not been filed. She also admitted that at that time she had not talked to any other lawyers. There is no indication in the record that at that time Oxford had retained attorneys to represent it in regard to Ms. Gaylard's claim.
[2] Ms. Gaylard testified that at the time Ms. Taylor emptied the pan onto her legs she said, "Oh my Lord, you've burned me; Dot you've burned me." Ms. Taylor denied that Ms. Gaylard made such a statement. This is simply a direct conflict, and the recorded statement was inconsistent with Ms. Taylor's trial testimony.
[3] Thomas Goode Jones of Montgomery lived from 1844 to 1914 and served his State as speaker of the house, Governor, member of the Constitutional Convention of 1901, and United States District Judge of the middle and northern districts. | January 12, 1996 |
a525c89f-bedc-4e59-a201-cef3640b4415 | Ex Parte AmSouth Bank, NA | 675 So. 2d 1305 | 1931211 | Alabama | Alabama Supreme Court | 675 So. 2d 1305 (1996)
Ex parte AmSOUTH BANK, N.A.
(Re L.R. LINDSEY v. AmSOUTH BANK, N.A.)
1931211.
Supreme Court of Alabama.
February 16, 1996.
Larry B. Childs and Randall D. Quarles of Walston, Stabler, Wells, Anderson & Bains, Birmingham, for Petitioner.
W.S. Pritchard, Jr. and William S. Pritchard III of Prichard, McCall & James, Birmingham, for Respondent.
*1306 Michael L. Edwards and N. DeWayne Pope of Balch & Bingham, Birmingham, for Amicus curiae Compass Bank, in support of petitioner AmSouth Bank.
COOK, Justice.
We have granted the petition of AmSouth Bank, N.A. ("AmSouth"), for certiorari review of a judgment of the Court of Civil Appeals, which reversed a summary judgment entered in favor of AmSouth and against L.R. Lindsey. We reverse and remand.
This dispute arose out of the following facts: On July 23, 1987, Lindsey, a Texas resident, executed a promissory note in favor of AmSouth, a "national banking association that has its principal place of business in" Jefferson County. The note evidenced a $70,000 AmSouth loan, the proceeds of which Lindsey invested in "Sequoia Village Apartments, Ltd.," a limited partnership operating in Tennessee. This note, which was executed in Texas, provided that it should "be governed by and construed in accordance with the laws of the State of Alabama." It also provided that 16 payments were to be made semi-annually "at the office of [the] Lender at its address at AmSouth Bank, N.A. 1900 5th Avenue North, Birmingham, Alabama." Lindsey also executed a "Consent Agreement," in which he "consent[ed] to the execution and delivery by the Partnership to AmSouth Bank ... of a Deed of Trust ... whereby the partnership [would] grant to Lender a lien on the real property to be acquired by the Partnership." (Emphasis added.)
Lindsey sent nine scheduled payments to AmSouth. Eventually, however, he defaulted on the note, and AmSouth sued him in the Jefferson Circuit Court to recover the delinquent amount.
Lindsey moved to dismiss the complaint, contending that the "court lacked in personam jurisdiction." After the trial court overruled this motion, AmSouth moved for a summary judgment. Lindsey subsequently filed a "Motion to Dismiss or in the Alternative Motion for Summary Judgment," in which he renewed his contention that he was not subject to the power of the court. On November 5, 1993, the trial court granted AmSouth's summary judgment motion, awarding it $35,466.17, plus interest and costs, and by implication overruling Lindsey's counter motion. Lindsey appealed.
Citing Steel Processors, Inc. v. Sue's Pumps, Inc. Rentals, 622 So. 2d 910 (Ala. 1993), the Court of Civil Appeals reversed the judgment of the trial court; it held that Lindsey's "contacts with the State of Alabama" were insufficient to support the exercise of jurisdiction over his person. Lindsey v. AmSouth Bank, N.A., 675 So. 2d 1303, 1305 (Ala.Civ.App.1994). We granted certiorari review to consider whether the ruling of the Court of Civil Appeals conflicts with this Court's opinion in Keelean v. Central Bank of the South, 544 So. 2d 153 (Ala.1989). AmSouth argues that Keelean controls this case.
Keelean involved the following pertinent facts:
544 So. 2d at 154-55 (footnote omitted). The three nonresident guarantors moved to dismiss the action for lack of personal jurisdiction. *1307 544 So. 2d at 154. After the trial court had overruled their motion, this Court granted permission to appeal, pursuant to Ala. R.App.P. 5(a). 544 So. 2d at 154.
This Court stated as an issue "[w]hether signing a guaranty out of state that will have economic effects in this State will satisfy Alabama's long-arm requirement that a defendant have contacts with Alabama sufficient for an Alabama court to ... exercise jurisdiction over that party." 544 So. 2d at 155 (emphasis added). The Court noted that Ala.R.Civ.P. 4.2(a)(2)Alabama's "longarm rule"authorizes the exercise of personal jurisdiction "so long as the prosecution of the action against a person in this state is not inconsistent with the constitution of this state or the Constitution of the United States." 544 So. 2d at 156. The limits of Rule 4.2 are defined, explained the Court, by the application of the following two-part analysis: "(1) the determination of whether it is foreseeable to that nonresident defendant that he will be sued in this state; and (2) the determination of the degree of contact that the nonresident defendant has with this state." 544 So. 2d at 156-57.
At the outset of its analysis, the Court summarily stated: "It is easily conceivable that the primary obligor (Holdco) could reasonably anticipate being called to defend itself in this state, from which it utilized its economic resources." 544 So. 2d at 157 (emphasis added). Having noted that none of the guarantors had "participated in the promissory note negotiations," id. at 154, the Court, nevertheless, observed "that all guarantors were aware that they were guaranteeing payment of the debts and liabilities of a Florida corporation that was borrowing $4,000,000 from an Alabama corporation." Id. at 157. "[C]learly," the Court stated, "the ... guarantors should have foreseen the effects of their contracts of guaranty in ... Alabama in the event of a default on the promissory note. A clear and firm connection exists between the execution of the promissory note, the subsequent default, the contracts of guaranty, and this litigation." Id. Consequently, the Court held "that the signing of the guarantees was sufficient to create the ... contact required by the 14th Amendment to the U.S. Constitution ... so that the Alabama court [had] in personam jurisdiction." Id. at 158. See also Millette v. O'Neal Steel, Inc., 613 So. 2d 1225 (Ala.1992) (exercise of in personam jurisdiction was proper over nonresident guarantors of a credit purchase of steel from a corporation whose principal place of business was in Alabama).
Although the Court of Civil Appeals cited Keelean, it relied on Steel Processors, Inc. v. Sue's Pumps, Inc. Rentals, 622 So. 2d 910 (Ala.1993), in which this Court affirmed a judgment of dismissal based on the absence of personal jurisdiction. Steel Processors involved the following facts:
622 So. 2d at 911 (footnote omitted).
On appeal, this Court affirmed the dismissal. Applying the two-part test of (1) foreseeability and (2) "degree of contact" set forth in Keelean, 544 So. 2d at 156-57, it held that the contractual relationship between Sue's Pumps and Steel Processors was insufficient to constitute either the degree of foreseeability of a lawsuit or the contact necessary to support the exercise of in personam jurisdiction over Sue's Pumps in this state. 622 So. 2d at 914.
The Court acknowledged that jurisdiction may be premised on the existence of a contractual relationship if the contract is one that "`ha[s] substantial connections with [the forum] State.'" Id. at 913 (quoting McGee v. International Life Ins. Co., 355 U.S. 220, 78 S. Ct. 199, 2 L. Ed. 2d 223 (1957) (emphasis added)). It noted, however, that federal courts had held that "`a mere one-time purchaser of goods from a seller in a forum state cannot be constitutionally subject to the exercise of personal jurisdiction by the courts of the forum state.'" 622 So. 2d at 913. The Court concluded that even the mailing of payments to Alabama did not establish the necessary nexus and foreseeability, where (1) the contractual relationship was initiated by the Alabama plaintiff, (2) "the repair project in Florida was developed by an Ohio business; [3] the repairs were made in Florida; and [4] no goods or services went out of Florida." Id. at 914.
In the present case, the Court of Civil Appeals analogized to Steel Processors and, gleaning from that case the proposition that "merely making payments to an address in the forum state is not a sufficient contact to establish personal jurisdiction," concluded that jurisdiction was lacking in this case. Lindsey v. AmSouth Bank, N.A., 675 So. 2d at 1305. To be sure, this case, like Steel Processors, involved the mailing of payments to Alabama, but that is where the analogy ends. Unlike the relationship dealt with in that case, a one-time contract for the purchase of goods, the relationship created by the contract in this case extends for eight years. Steel Processors expressly acknowledges that a contractual relationship will justify the exercise of personal jurisdiction where that relationship has a "`substantial connection[ ]'" to the forum state. 622 So. 2d at 913. Moreover, although the record does not affirmatively show that Lindsey approached AmSouth for the loan, and, consequently, initiated this relationship with the Alabama company, common experience suggests this scenario, which, of course, is the reverse of the one involved in Steel Processors.
Also significant in this connection is the fact that the nonresident party here was the original obligor on the note, rather than a mere guarantor, as was the case in Keelean, where we stated: "It is easily conceivable that the primary obligor (Holdco) could reasonably anticipate being called to defend itself in this state, from which it utilized its economic resources." 544 So. 2d at 157 (emphasis added).[1] The note also declared that it should "be governed by and construed in accordance with the laws of the State of Alabama."[2] (Emphasis added.) Under these facts, Lindsey should reasonably have foreseen that his default on the note would require him to defend an action in Alabama.
In this connection, Lindsey does not contend that he was unaware that AmSouth was *1309 doing business in Alabama. However, he objects to jurisdiction on the ground that he did not, he insists, subjectively know that Alabama was AmSouth's principal place of business. We find this argument unpersuasive. The application of Lindsey's proposed rule would essentially require a corporation affirmatively and specifically to notify all potential nonresident defendants of the location of its principal place of business in order to justify the exercise of jurisdiction, regardless of the degree of contact established by the nonresident defendant with the forum state.
We hold, therefore, on the basis of the contacts developed by Lindsey with Alabama in this case, that he is subject to the jurisdiction of Alabama's courts regardless of whether he actually knew that Alabama is, in fact, AmSouth's principal place of business. The judgment of the Court of Civil Appeals is reversed, and the cause is remanded for further proceedings consistent with this opinion.
REVERSED AND REMANDED.
HOOPER, C.J., and MADDOX, SHORES, HOUSTON, KENNEDY, INGRAM, and BUTTS, JJ., concur.
[1] For purposes of jurisdiction and venue, a cause of action for default on a note arises in the forum in which the payment is due. Seaboard Surety Co. v. William R. Phillips & Co., 279 Ala. 510, 187 So. 2d 264 (1966).
[2] In Keelean, we held that forum selection clauses were contrary to public policy and, therefore, invalid. 544 So. 2d at 156. That holding does not extend to choice of law provisions, such as the one involved in this case. | February 16, 1996 |
4d875e6f-23bf-4767-b1c1-1eee0e3bee25 | Pryor v. Brown & Root USA, Inc. | 674 So. 2d 45 | 1940431 | Alabama | Alabama Supreme Court | 674 So. 2d 45 (1995)
Willie Mae PRYOR
v.
BROWN & ROOT USA, INC.
1940431.
Supreme Court of Alabama.
September 15, 1995.
Application for Rehearing Overruled February 2, 1996.
Dissenting Opinion on Overruling of Application for Rehearing February 2, 1996.
*46 Tony S. Hebson, Birmingham, for Appellant.
J. Glynn Tubb and Jenny L. McLeroy of Eyster, Key, Tubb, Weaver & Roth, Decatur, for Appellee.
Dissenting Opinion on Overruling of Application for Rehearing by Chief Justice Hooper February 2, 1996.
HORNSBY, Chief Justice.
On July 18, 1993, Jeff Dealy, an employee of Brown & Root USA, Inc., had an automobile accident that also involved Willie Mae Pryor. Dealy was driving a vehicle owned by Brown & Root when the accident occurred. Pryor alleged negligence and wantonness against Dealy and Brown & Root, and she alleged negligent entrustment against Brown & Root.
The trial court entered a summary judgment in favor of Brown & Root on all counts. Pryor appeals. This appeal deals solely with the issue of Brown & Root's liability, and not with Dealy's liability. The sole question presented is whether Pryor met her requisite burdens of proof regarding the issues of respondeat superior liability and negligent entrustment, so as to warrant submitting those issues to the jury.
Jeff Dealy was employed by Brown & Root, a construction company, as a project engineer at the Champion Paper Plant in Courtland, Alabama. Dealy was scheduled to work Monday through Thursday from 6:00 a.m. until 4:30 p.m. and had the option of *47 working on Friday, Saturday, or Sunday. Dealy testified that he was subject to being called in to work by his supervisor on those days. Dealy further testified that if he "was in town" on Friday, Saturday, or Sunday, then he was "on the job." On the day of the accident, Sunday, July 18, 1993, Dealy opted to work from 10:00 a.m. until noon at the Champion Plant. At noon, he left work in his company-supplied vehicle and went to Lucy's Branch, west of Athens off Highway 72. Dealy went to Lucy's Branch to meet friends in order to go sailing on Lake Wheeler. Dealy left Lucy's Branch at 5:30 p.m. to return to his home in Decatur. Dealy admitted to drinking four 12-ounce beers while he was at Lucy's Branch. On his way home from Lucy's Branch, Dealy ran a red light at an intersection in Athens, and his vehicle hit Pryor's vehicle, injuring Pryor. He was given a sobriety test on the scene of the accident and was found not to be intoxicated. Had Dealy gone straight home from the Champion Plant, he would have reached his home in Decatur by around 1:00 p.m., without passing through Athens.
Pryor's claims against Brown & Root are grounded in the law of agency, respondeat superior, and negligent entrustment. Pryor appeals from a summary judgment for Brown & Root on all counts. "In reviewing the disposition of a motion for summary judgment, we utilize the same standard as the trial court in determining whether the evidence before [it] made out a genuine issue of material fact" and whether the movant was "entitled to a judgment as a matter of law." Bussey v. John Deere Co., 531 So. 2d 860, 862 (Ala.1988) (citing Chiniche v. Smith, 374 So. 2d 872 (Ala.1979)); Rule 56(c), A.R.Civ.P. The movant has the burden of "showing material facts, which, if uncontested, entitle the movant to judgment as a matter of law." Berner v. Caldwell, 543 So. 2d 686, 688 (Ala.1989); Woodham v. Nationwide Life Ins. Co., 349 So. 2d 1110, 1111 (Ala.1977). Once the movant has made this showing, the opposing party then has the burden of presenting evidence creating a genuine issue of material fact. Danford v. Arnold, 582 So. 2d 545, 546 (Ala.1991); Bass v. SouthTrust Bank of Baldwin County, 538 So. 2d 794, 797-98 (Ala.1989).
The nonmovant must meet the burden of establishing by substantial evidence the existence of a genuine issue of material fact. Ala.Code 1975, § 12-21-12; Bass v. SouthTrust Bank of Baldwin County, supra. "Substantial evidence" is "evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." West v. Founders Life Assurance Co. of Florida, 547 So. 2d 870, 871 (Ala.1989).
Our review is further subject to the caveat that this Court must review the record in a light most favorable to the nonmovant and must resolve all reasonable doubts against the movant. Hanners v. Balfour Guthrie, Inc., 564 So. 2d 412, 413 (Ala.1990).
Pryor argues that Dealy was acting as an agent of Brown & Root at the time of the accident and that Brown & Root is thus liable for his actions. The agency issue centers upon the fact that Dealy was driving a Brown & Root vehicle when he hit Pryor and had been working for Brown & Root on the morning of the accident.
In response, Brown & Root argues that Dealy was not acting as its agent at the time of the accident. Brown & Root argues that the principle of respondeat superior and not the law of agency governs this case. In Southern Life & Health Ins. Co. v. Turner, 571 So. 2d 1015, 1018 (Ala.1990), judgment vacated, Southern Life & Health Ins. Co. v. Turner, 500 U.S. 901, 111 S. Ct. 1678, 114 L. Ed. 2d 73 (1991), affirmed on remand, Southern Life & Health Ins. Co. v. Turner, 586 So. 2d 854 (Ala.1991), this Court stated "that the relationship between agency and respondeat superior is often confused" because the "distinction between the law of agency and the law of respondeat superior is subtle." This Court, quoting 3 Am.Jur.2d Agency § 280 at 783 (1986), held:
571 So. 2d at 1018.
In Autrey v. Blue Cross & Blue Shield of Alabama, 481 So. 2d 345 (Ala.1985), this Court stated:
481 So. 2d at 347-48, quoting National States Ins. Co. v. Jones, 393 So. 2d 1361, 1367 (Ala. 1980) (quoting in turn from Old Southern Life Ins. Co. v. McConnell, 52 Ala.App. 589, 594, 296 So. 2d 183, 186 (1974)).
In the instant case, the trial court properly held that the principle of respondeat superior was applicable. This Court has held: "To recover for damages for injuries sustained in an automobile accident against the driver's employer upon a theory of respondeat superior, it is incumbent upon plaintiff to prove that the collision occurred while the driver was within the scope of his employment, and happened while he was in the accomplishment of objectives within the line of his duties." Perdue v. Mitchell, 373 So. 2d 650, 653 (Ala.1979), citing Cook v. Fullbright, 349 So. 2d 23 (Ala.1977).
Because Pryor's claims against Brown & Root are based on the doctrine of respondeat superior, the burden is on Pryor to present substantial evidence that the collision occurred while Dealy was acting within the line and scope of his employment. Williams v. Hughes Moving & Storage Co., 578 So. 2d 1281, 1283 (Ala.1991). In this case, Dealy left work and went out of his way home to go sailing with friends. At the time of the accident, he was returning home. Even Pryor concedes that "the evidence without question seems to indicate that Mr. Dealy was on his own personal business" at the time of the wreck. However, Pryor contends that, because Dealy was driving a Brown & Root vehicle, the fact that Dealy was on personal business is not sufficient to sever Brown & Root's liability.
Use of a vehicle owned by an employer creates an "administrative presumption" of agency and a presumption that the employee was acting within the scope of his employment, as that concept is used in the law of respondeat superior liability, but this "administrative presumption" is not in itself evidence. Durbin v. B.W. Capps & Son, Inc., 522 So. 2d 766, 766 (Ala.1988); Rogers v. Hughes, 252 Ala. 72, 75, 39 So. 2d 578, 579 (1949); Tullis v. Blue, 216 Ala. 577, 114 So. 185 (1927). In Durbin, the Court stated:
522 So. 2d at 767, quoting Tullis v. Blue, 216 Ala. at 578, 114 So. at 187. (Citations omitted.) See also Williams v. Hughes Moving & Storage Co., supra.
The Durbin Court further stated:
522 So. 2d at 767, quoting Craft v. Koonce, 237 Ala. 552, 554, 187 So. 730, 731 (1939).
Brown & Root maintains that its evidence that Dealy "was not acting within the scope of his authority or in the course of his employment" was sufficient to rebut the presumption created by Dealy's use of the Brown & Root vehicle. The trial court held that Brown & Root could not be held liable for Dealy's actions because, the court determined, the evidence showed that he was not acting within the line and scope of his employment when he deviated from his normal route home in order to go sailing with friends. The trial court stated:
However, the record reveals additional evidence bearing on the issue of whether Dealy was acting in the line and scope of his authority. Brown & Root's policy was to allow its employees "nominal personal use" of the company-issued vehicles.[1] However, nowhere in the company policy did Brown & Root define what constitutes "nominal personal use." Nevertheless, Brown & Root argues that Dealy's use of the truck on the day of the accident was a departure from the allowable "nominal personal use" and thus prevents any liability to Pryor. Pryor argues that the question whether Dealy's use of the vehicle on July 18, 1993, was "nominal" is one for the jury to determine.
Pryor submitted evidence that Dealy's supervisor knew that Dealy had access to no other vehicle and was using the company vehicle for personal use and that Dealy's supervisor also used his own vehicle for personal use. Dealy had used the company truck as his exclusive vehicle since January 1991i.e., for 30 months before the accident. Dealy testified that he knew that company policy provided that he was to use the vehicle only for travel to and from work and on the job, but that he used it for everything, including pleasure trips, and that his supervisor was fully aware of this. Dealy said that even though his superiors knew he was using the vehicle for pleasure, they never reprimanded him for that use. Moreover, even *50 after the accident, Brown & Root did not, for income tax purposes, treat the value of Dealy's personal use of the vehicle as part of Dealy's compensation.
This case is similar to Williams v. Hughes Moving & Storage Co., supra. In Williams, a company vehicle was involved in an accident, and the injured party sued the owner of the vehicle and the employee in possession of the vehicle. The company policy was for company vehicles to be returned to the office after each day's work. The employee, however, had driven a truck home on several occasions. He did this even though his employer required that "trucks be returned even if the parking lot was locked, in which case the truck was to be left outside the lot and a security guard would bring the truck into the lot later"; the company "policy toward employees who took company vehicles home without specific authorization was to terminate and prosecute them." 578 So. 2d at 1282. The employee apparently never faced discipline in any manner for taking company trucks home, just as Dealy never faced any discipline for his exclusive personal use of the Brown & Root vehicle, even though Brown & Root was fully aware of this use.
The trial court in Williams granted the company's motion for a directed verdict. The employer argued that because the employee took the vehicle home with him, in direct violation of company policy, he could not be considered to have been acting in the line and scope of his employment. This Court disagreed and reversed, holding that "[t]he mere fact that [the employee] was acting against company policy is not ... conclusive as to the question of [the employee's] status at the time of the accident." 578 So. 2d at 1283. See also Lawler Mobile Homes, Inc. v. Tarver, 492 So. 2d 297 (Ala. 1986) (holding a jury question existed as to whether the employee was acting from personal motives or in the line and scope of his employment); Solmica of the Gulf Coast, Inc. v. Braggs, 285 Ala. 396, 232 So. 2d 638 (1970) (holding that an employer could be held liable for the unauthorized acts of the employee).
As in this case, the employer's ownership of the vehicle in Williams was undisputed. Therefore, it was Brown & Root's burden to rebut the presumption that Dealy was acting within the line and scope of his employment. "In order for [the employer] to rebut the presumption and prevent submission of [the plaintiff's] claims to a jury, its evidence must eliminate any question as to whether [the employee] was acting in the scope of his employment by having this truck ... when the accident occurred." 578 So. 2d at 1285.
Brown & Root's only evidence that Dealy was not acting in the scope of his employment was the evidence that company policy prohibited employees from using vehicles for anything other than "nominal personal use." Brown & Root argues that Dealy violated this policy by using the truck to meet with friends, and, therefore, he was acting outside the scope of his employment. However, even aside from the fact that the company policy did not define "nominal personal use," the fact that Dealy was using the Brown & Root vehicle as his sole personal vehicle, with the knowledge of and in the same manner as his supervisor, supports an inference that his use of the vehicle was within the line and scope of his employment. Thus, this case is quite similar to Williams; a suggestion that Dealy's use was not authorized "falls far short of rebutting the presumption that [Dealy] was acting within the scope of his employment, because of the fact that [Brown & Root] had not enforced the policy in the past, with respect to [Dealy], but had virtually condoned [Dealy's] practice of using the company vehicle for personal use. 578 So. 2d at 1285. Since the accident, Dealy had not used a Brown & Root vehicle as his exclusive mode of transportation. He also has use of another vehicle, but he testified that he still uses the Brown & Root vehicle for pleasure trips.
In addition, Pryor argues that Brown & Root ratified the tortious conduct of Dealy and should thus face liability for his actions. As to ratification, Pryor maintains that Brown & Root received a direct benefit from the accident in question. The record shows that it is Brown & Root's policy to charge repair costs to the client for whom it is working when an accident occurs on the job. In this case, Brown & Root was working for *51 the Champion Paper Company in Courtland. Brown & Root charged Champion Paper Company for the cost to repair the damage to Dealy's vehicle sustained in the July 18, 1993, accident. In addition to the cost of repairs, the cost of the truck and the costs of operating and maintaining the truck were charged by Brown and Root as an expense associated with the Champion Paper project. Although it is arguable that the accident provided no benefit to Brown & Root, these facts further support the inference that Brown & Root acknowledged that Dealy was acting within the line and scope of his employment at the time of the accident.
Pryor maintains that had Brown & Root charged Dealy for the repair costs, or had it simply paid for the repairs itself, then ratification would not have occurred. In contrast, by accepting payment from Champion for the cost of repairs, Pryor argues, Brown & Root accepted a benefit that raises a jury question as to whether Brown & Root ratified Dealy's act. This evidence of ratification further supports Pryor's argument that it is a jury question whether the collision occurred while Dealy was acting within the scope of his employment pursuant to the accomplishment of objectives within the line of his duty. Perdue v. Mitchell, 373 So. 2d 650 (Ala.1979).
Given the question whether Brown & Root condoned Dealy's personal use of the vehicle and the question whether it ratified his acts, we conclude that the evidence presents a genuine issue of material fact as to whether Brown & Root is liable under the doctrine of respondeat superior. Thus, as to the claim asserting liability under the doctrine of respondeat superior, the summary judgment is due to be reversed and this case remanded for trial on that claim.
Pryor also alleges that, because of Dealy's prior driving record, Brown & Root was negligent in entrusting him with a company vehicle. In Stanford v. Wal-Mart Stores, Inc., 600 So. 2d 234 (Ala.1992), this Court said:
600 So. 2d at 236-37, quoting Wilbanks v. Brazil, 425 So. 2d 1123 (Ala.1983), quoting in turn Brown v. Vanity Fair Mills, Inc., 291 Ala. 80, 82, 277 So. 2d 893 (1973).
The elements of a cause of action for negligent entrustment are: "(1) an entrustment; (2) to an incompetent; (3) with knowledge that he [or she] is incompetent; (4) proximate cause; and (5) damages." Mason v. New, 475 So. 2d 854, 856 (Ala.1985), citing Chiniche v. Smith, 374 So. 2d 872 (Ala.1979). In Mason, this Court held that the "doctrine of negligent entrustment is founded on the primary negligence of the entrustor in supplying a motor vehicle to an incompetent driver, with manifestations of the incompetence of the driver as a basic requirement of a negligent entrustment action." 475 So. 2d at 856; citing Chiniche, supra; Cooter v. State Farm Fire & Casualty Co., 344 So. 2d 496 (Ala.1977).
The trial court found that Dealy had been charged with DUI in Texas in 1983; that was 10 years before the accident involved in this case. Because he attended an alcohol education class, Dealy was given probation or a "deferred adjudication." The trial court found that in the five years immediately prior to the accident of July 18, 1993, Dealy had received two speeding tickets. Dealy received the first ticket in 1991 in Texas, and he received the second ticket in May 1992, in Hillsboro, Alabama. The trial court further found that there was no record of Dealy's ever having been involved in an accident before July 18, 1993. As a result, the trial court held that Pryor's negligent entrustment claim against Brown & Root was without merit.
*52 We conclude that Dealy's prior driving recordtwo speeding tickets and a suspended prosecution of a DUI charge over a 10-year periodis not sufficient to support a claim of negligent entrustment against Brown & Root. Pryor failed to present substantial evidence that Dealy was an incompetent driver or that Brown & Root had any knowledge that would indicate Dealy was incompetent. Accordingly, Pryor did not overcome Brown & Root's prima facie showing that there was no genuine issue of material fact regarding the negligent entrustment claim; the summary judgment is affirmed as to that claim.
AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.
ALMON, SHORES, KENNEDY, INGRAM, and BUTTS, JJ., concur.
COOK, J., concurs specially.
MADDOX and HOUSTON, JJ., concur in part and dissent in part.
COOK, Justice (concurring specially).
To recover on the theory of respondeat superior, Pryor was required to demonstrate that "the collision occurred while [Dealy] was within the scope of his employment, and happened while he was in the accomplishment of objectives within the line of his duties." Perdue v. Mitchell, 373 So. 2d 650, 653 (Ala.1979). In my view, a question of fact is presented as to whether Dealy, who was on a detour of a personal nature, was, nevertheless, acting "within the scope of his employment."
Specifically, Pryor presented evidence that Brown & Root USA, Inc., maintained a policy, or practice, of charging "repair costs to the client for whom it is working when an accident occurs on the job." 674 So. 2d at 50 (emphasis added). Brown, by charging the cost of repairing Dealy's vehicle to its client, Champion Paper Company, while, at the same time, disclaiming Dealy's actions, takes inconsistent positions as to those activities. A question of fact is presented, therefore, as to whether Brown, itself, by charging its clients for the repairs to Dealy's vehicle, considered Dealy to be operating "within the scope of his employment" at the time of the accident.
HOUSTON, Justice (concurring in part and dissenting in part).
I concur in that portion of the opinion that affirms the judgment on the negligent entrustment claim, but I believe that Williams v. Hughes Moving & Storage Co., 578 So. 2d 1281 (Ala.1991) (Maddox and Steagall, JJ., dissenting) (a case in which I did not participate), was wrongly decided. I believe that the fact that an employee is acting against his employer's company policy at the time of an accident is conclusive evidence that the employee was not acting in the line and scope of his employment at the time of the accident. This case may involve a factual issue of whether Dealy's action in driving his employer's truck at the time of the accident was permitted under the provision allowing "nominal personal use," a use that company policy permitted but did not define. However, even if a jury could find that Dealy's use of the vehicle at the time of the accident was permissible personal use (The policy provided that "The employee may not use the vehicle for personal purposes other than commuting and nominal personal use." (Emphasis added.)), this finding would in no way make such personal use a use within the line and scope of Dealy's employment by Brown & Root.
MADDOX, J., concurs.
PER CURIAM.
APPLICATION OVERRULED.
SHORES, KENNEDY, INGRAM, COOK, and BUTTS, JJ., concur.
HOOPER, C.J., and MADDOX and HOUSTON, JJ., dissent.
HOOPER, Chief Justice (dissenting).
I was not a member of this Court when it originally voted on this case. I would grant the application for rehearing. I think the majority has erred in reversing the defendant's summary judgment, and I think this Court should reconsider its opinion.
On a claim of respondeat superior liability, the plaintiff has the burden of presenting *53 substantial evidence indicating that the employee's action alleged as a basis for imposing liability occurred while the employee was acting within the line and scope of his or her employment. Williams v. Hughes Moving & Storage Co., 578 So. 2d 1281, 1283 (Ala.1991). The argument that Dealy was acting within the scope of his employment is two-fold: First, the plaintiff argues that an employee's use of a vehicle owned by his or her employer creates an "administrative presumption" that the employee was acting within the scope of the employment. Second, the plaintiff argues that Brown & Root had an undefined policy of allowing its employees "nominal personal" use of its automobile and, therefore, that by acquiescence Brown & Root ratified Dealy's actions taken while he was driving a Brown & Root vehicle.
This Court has written the following regarding administrative presumptions:
Durbin v. B.W. Capps & Son, Inc., 522 So. 2d 766, 767 (Ala.1988), quoting Tullis v. Blue, 216 Ala. at 578, 114 So. at 187 (1927). (Citations omitted; emphasis omitted.)
The administrative presumption merely shifts to Brown & Root the burden of proving that Dealy was not acting within the scope of his employment when the accident occurred. The record clearly shows that he was not. Dealy had left work and, instead of going home, went sailing and drinking with friends. Five and a half hours after he had left work and when he was finally on his way home, Dealy was involved in this accident. It occurred at a point Dealy would not have passed if he had gone straight home from work. Even the plaintiff concedes that "the evidence without question seems to indicate that Mr. Dealy was on his own personal business" at the time of the wreck. Clearly Brown & Root met its burden; clearly, Dealy was not acting in the line and scope of his employment at the time of the accident.
Once the defendant has rebutted the administrative presumption, the burden then shifts back to the plaintiff to prove a prima facie case. The majority opinion takes as the plaintiff's proof meeting that burden Brown & Root's policy of allowing its employees "nominal personal use" of company-issued vehicles. The Brown & Root policy stated: "The employee may not use the vehicle for personal purposes other than commuting and nominal personal use." Pryor submitted evidence that Dealy had a pattern of using the vehicle for personal use and that his supervisor was aware of this personal use. The majority cites Williams v. Hughes Moving & Storage Co., 578 So. 2d 1281 (Ala.1991). In Williams, this Court held that "[t]he mere fact that [the employee] was acting against company policy is not ... conclusive as to the question of [the employee's] status at the time of the accident." 578 So. 2d at 1283. Williams involved an employee who was involved in a motor vehicle accident while using his employer's truck. The employer's only defense was that the employee had violated the company's policy regarding use of the truck. This Court held that the employee's violation of that policy alone was not conclusive proof that the employee was acting outside the scope of his employment. Therefore, under Williams, Brown & Root must offer additional evidence to rebut the presumption that the employee was acting within the scope of his employment.
Brown & Root offered abundant additional evidence to rebut that presumption. Its evidence showed that Dealy had left work and was not going to return to work; that he went out of his way to go sailing and drinking with friends; and that five and a half hours after he had left work, he had an accident. To conclude that there is some reasonable possibility that Dealy was acting in the line and scope of his employment is an unwarranted stretch of reasoning. It is also an unwarranted expansion of potential liability *54 for employers. The majority opinion incorrectly asserts that the only evidence that "Dealy was not acting in the scope of his employment was the evidence that company policy prohibited employees from using vehicles for anything other than `nominal personal use.'" 674 So. 2d at 47.
In Williams, this Court stated: "In order for [the employer] to rebut the presumption and prevent submission of [the plaintiff's] claims to a jury, its evidence must eliminate any question as to whether [the employee] was acting in the scope of his employment by having this truck at his home when the accident occurred." 578 So. 2d at 1285. The evidence offered by Brown & Root clearly eliminates any reasonable question as to whether Dealy was acting within the scope of his employment.
The evidence indicates that, beyond any reasonable doubt, that Dealy was not acting in the line and scope of his employment; thus this Court has no sound reason for reversing the defendant's summary judgment. This case was not about whether to follow the standard set out in Williams. The Williams standard, applied correctly, would result in a judgment for Brown & Root. The majority has improperly applied the Williams standard, ignoring all the evidence Brown & Root offered other than the fact that Dealy had violated company policy as to the use of the truck.
Brown & Root denies that it charged the cost of repairing the damaged vehicle to Champion Paper Company, Brown & Root's customer. The majority opinion says that Brown & Root did charge that cost to its customer. Nothing in the record supports the assertion that Brown & Root did so. The record indicates only that Brown & Root charged Champion $500 every month for the cost of regular maintenance for the use of this particular vehicle on the project Brown & Root was working on for Champion. Even if Brown & Root had charged Champion for the repair of the damage that resulted from the accident, how would its doing so benefit Brown & Root? Brown & Root's charging Champion, if it did so, would merely have restored Brown & Root's vehicle to the condition it was in before the accident. If there was any benefit to anyone, it was to the employee, Dealy, who because of that action might be relieved of having to pay for the damage out of his own pocket. If Brown & Root wrongfully took advantage of Champion, then that is a matter for Champion and Brown & Root to deal with. Brown & Root's charging Champion for the repairif it did charge Championwould not have been a ratification of Dealy's tort by Brown & Root.
I would grant the application for rehearing and reconsider the issue of Brown & Root's respondeat superior liability.
[1] The policy stated, "The employee may not use the vehicle for personal purposes other than commuting and nominal personal use." | February 2, 1996 |
81fc0d0b-6349-4c3c-8b4d-981061fac939 | Allstate Ins. Co. v. Skelton | 675 So. 2d 377 | 1941402 | Alabama | Alabama Supreme Court | 675 So. 2d 377 (1996)
ALLSTATE INSURANCE COMPANY
v.
Glenn E. SKELTON.
1941402.
Supreme Court of Alabama.
February 2, 1996.
*378 Carl Robert Gottlieb, Jr. and William W. Watts III of Reams, Philips, Brooks, Schell, Gaston & Hudson, P.C., Mobile, for Appellant.
Lawrence B. Voit and Thomas G.F. Landry of Silver & Voit, Mobile, for Appellee.
SHORES, Justice.
This case involves the question whether injuries suffered by Glenn E. Skelton arose "out of the ownership, maintenance or use" of an uninsured automobile as required for him to be covered under the terms of an automobile liability insurance policy issued to him by Allstate Insurance Company. We conclude that they did not.
These facts, taken primarily from the trial court's order, are undisputed: On March 10, 1993, between 10:00 and 11:00 p.m., Skelton was driving his automobile south on Interstate Highway 65 in Mobile. He and his 16-year-old son Ian were returning from Birmingham, where they had attended the funeral of Skelton's father-in-law. A family friend, Elaine Mixon, and her 16-year-old son were also driving back to Mobile from the same funeral. They were traveling ahead of the Skelton vehicle on I-65. By prearrangement, the two vehicles were traveling together. As the Mixon vehicle approached the Moffat Road interchange, a third vehicle, driven by Milyce A. Wright and occupied by her husband Dell L. Wright as a passenger, pulled out from Moffat road onto the right south-bound lane of I-65 in front of the Mixon vehicle. The Wright vehicle began engaging in dangerous and reckless maneuvers on the highway, including slowing down abruptly and speeding up rapidly, for no apparent reason. This caused Mixon to slam on her brakes each time the Wright vehicle slowed down abruptly. There was moderate to heavy traffic on I-65 at the time. Mixon flashed her lights once at the Wright vehicle in front of her during these dangerous maneuvers. As soon as she could safely do so, Mixon pulled around the Wright vehicle on the left and passed it; thereupon, the Wright vehicle speeded up and passed the Mixon vehicle at a high rate of speed on the left shoulder of the highway, almost hitting a median barricade. Dell Wright, who was sitting in the passenger's seat, then started throwing objects out of his vehicle; some of those objects hit the Mixon vehicle. Mixon was not sure what the objects were and thought they may have been pieces of gravel or ice. The Wright vehicle then pulled alongside the Mixon vehicle, began sliding to its right toward Mixon, and forced the Mixon vehicle off the road onto the right shoulder of I-65 just north of the Airport Boulevard interchange.
The driver of the Mixon vehicle stopped to avoid colliding with the Wright vehicle, and the Wright vehicle stopped just in front of Mixon. Mixon was then holding her automobile telephone in her hand. Immediately after the two cars stopped, Dell Wright got out of his vehicle and walked in front of the Mixon vehicle. He stood in front of it holding a pistol, which he pointed at Mixon while he shouted obscenities at her and threatened to kill her. He smashed the windshield of Mixon's vehicle with the butt of the pistol he was brandishing.
Glenn Skelton, who had been traveling behind the Mixon vehicle, observed the dangerous and reckless movements of the Wright vehicle and tried to keep up with Mixon as she passed the Wrights. He saw an arm coming out of the passenger window of the Wright vehicle and making a throwing action. *379 He saw the Wright vehicle force the Mixon vehicle off the road. Skelton negotiated through the traffic and stopped ahead of the other two vehicles on the shoulder of I-65. After coming to a stop, he backed his vehicle and stopped three or four feet in front of the Wright vehicle. Skelton immediately got out of his car and walked to the rear, toward the Wright and Mixon vehicles, to assist Mixon. He saw Dell Wright menacing Mixon with the pistol, and he saw Mixon's broken windshield. Dell Wright turned and walked toward Skelton. When Skelton was even with the right rear wheel of the Wright vehicle, Dell Wright struck Skelton with a pistol on the left side of the face. As Skelton staggered and began to fall, Wright struck him again with the pistol in the left jaw. Skelton was dazed and only partially conscious. Milyce Wright was outside her vehicle at the time of the assault on Skelton. She and her husband got back into their automobile and drove off. Mixon dialed 911 on her automobile telephone; law enforcement and medical personnel arrived soon thereafter. Skelton suffered serious and painful injuries. He was flown to the Eye Foundation Hospital in Birmingham for specialized medical attention and was hospitalized for several months. He suffered skull fractures and damage to his sinuses and permanently lost the sight in his left eye. He still requires medical attention and still experiences pain on the left side of his face.
Dell Wright was subsequently convicted of second degree assault, menacing, and reckless endangerment, as a result of these events of March 10, 1993. His convictions have been affirmed on appeal, and he is presently incarcerated.
Allstate is Skelton's automobile insurance carrier. Skelton sued Allstate for benefits under the uninsured motorist coverage included in his Allstate automobile insurance policy. The Wrights were driving an insured vehicle, but their insurance carrier denied coverage. The trial court awarded uninsured motorist benefits based on Skelton's injuries resulting from the encounter with Dell Wright. Allstate appeals.
The issue here is whether, under these undisputed facts, Skelton's injuries arose "out of the ownership, maintenance or use of an uninsured auto." Only if they did is Skelton entitled to the benefits under the uninsured motorist coverage provided by his policy with Allstate.
When a judge in a nonjury case hears oral testimony, a judgment based on findings of fact based on that testimony will be presumed correct and will not be disturbed on appeal except for a plain and palpable error. Griggs v. Driftwood Landing, Inc., 620 So. 2d 582 (Ala.1993); First National Bank of Mobile v. Duckworth, 502 So. 2d 709 (Ala.1987). However, where the facts before the trial court are essentially undisputed and the controversy involves questions of law for the court to consider, the court's judgment carries no presumption of correctness. Beavers v. County of Walker, 645 So. 2d 1365 (Ala.1994). Because no material facts are disputed and this appeal focuses on the application of the law to the facts, no presumption of correction is accorded to the trial court's judgment. Therefore, we review de novo the application of the law to the facts of this case. Beavers, supra; Lake Forest Property Owners' Ass'n v. Smith, 571 So. 2d 1047 (Ala.1990).
Skelton's Allstate policy provides as follows regarding uninsured motorist coverage:
The contract shall be construed liberally in favor of the insured and strictly against the insurer. Tyler v. Insurance Co. of North America, 331 So. 2d 641 (Ala.1976). Exclusions are to be interpreted as narrowly as possible, so as to provide maximum coverage for the insured, and are to be construed most strongly against the insurance company, *380 which drafted and issued the policy. Alliance Ins. Co. v. Reynolds, 494 So. 2d 609 (Ala.1986); Employers Ins. Co. of Alabama v. Jeff Gin Co., 378 So. 2d 693 (Ala.1979).
This case is controlled by United States Fidelity & Guaranty Co. v. Lehman, 579 So. 2d 585 (Ala.1990) ("Lehman I"). In Lehman I, the plaintiff, Lehman, was employed as a salesman at an automobile dealership. He agreed one day to accompany Mark McCauley, who purported to be a potential customer, to McCauley's home in order to pick up McCauley's automobile. Lehman understood that McCauley wanted to use his vehicle as a trade-in on a new car purchase. McCauley and Lehman left the dealership in a vehicle owned by the dealership, with McCauley driving. When they turned onto the street where McCauley lived, McCauley slowed the car, cut Lehman's throat with a switchblade, and said, "I'm going to kill you. You're going to die." After a struggle, Lehman succeeded in getting out of the car, and McCauley drove away. Lehman I, 579 So. 2d at 585. Lehman and his wife sued their insurer, USF & G, seeking benefits under their uninsured motorist coverage. The USF & G policy required, for that coverage, that the insured's injuries "must result from the ownership, maintenance or use of an uninsured vehicle."
The trial court awarded uninsured motorist benefits to the Lehmans. This Court reversed, holding that, as a matter of law, because Lehman's injuries were the result of an independent criminal act by McCauley, they did not result from a "use" of the dealership automobile. Lehman I, 579 So. 2d at 586. Therefore, they were not covered under the dealership's policy of insurance and even assuming that for purposes of the uninsured motorist provisions of their own policy with USF & G, the dealership vehicle could be considered to be an "uninsured" vehicle they were not entitled to recover uninsured motorist benefits. Id.
Like the stabbing in Lehman I, Dell Wright's battery on Skelton was an intervening act that the broke the causal connection between the use of the Wright automobile and the injury. A criminal act, such as the battery in this case, will break the causal chain because no reasonable standard would suggest that an automobile insurer intended to insure against such acts. When an insurance company writes an automobile policy, it covers foreseeable risks associated with the use of the covered automobile. Dell Wright's battery of Skelton was not a foreseeable risk associated with motoring. When Skelton purchased the automobile insurance policy, neither he nor Allstate could reasonably have foreseen the battery and the resulting injuries.
Cases from other jurisdictions construing the phrase "arising out of the ownership, maintenance or use of a motor vehicle" have uniformly required that the injured person establish a causal connection between the use of an automobile and the injury, and that the injury be foreseeably identifiable to the normal use of a vehicle. See generally, Larry D. Schaefer, Annotation, Automobile Liability Insurance: What Are Accidents or Injuries "Arising Out of Ownership, Maintenance, or Use" of Insured Vehicle, 15 A.L.R.4th 10, 42-48, 81-86 (1982).
In Wieneke v. Home Mutual Ins. Co., 397 N.W.2d 597 (Minn.App.1986), the plaintiff and another motorist exchanged heated words at a stoplight, after which the other motorist got out of his car and punched the plaintiff, who was still seated in his own car. In rejecting the plaintiff's arguments that his injuries arose out of the use of the other motorist's car and were therefore covered by the uninsured motorist clause in his own insurance policy, the court stated:
Wieneke, 397 N.W.2d at 599.
In Foss v. Cignarella, 196 N.J.Super. 378, 482 A.2d 954 (1984), Foss was traveling in his motor vehicle down a highway. As he proceeded in the third, or fast, lane of the highway, an automobile being driven by Cignarella attempted to pass him on the left by traveling on the median; in the attempt Cignarella's *381 vehicle sideswiped Foss's vehicle. Both drivers thereafter stopped their cars on the shoulder of the road. However, Foss's vehicle rolled forward, bumping into the rear of Cignarella's car. Cignarella flew into a rage and ran up to Foss's vehicle and stabbed Foss in the chest while he was seated in his vehicle with the door window partially open. Although Foss did not suffer any injury from the impact between the two vehicles, he sought recovery from the insurer of the vehicle operated by Cignarella for the injuries resulting from the stabbing. In holding that the stabbing did not arise out of the "use of an automobile"this term having been used in Cignarella's policy provision for liability coveragethe court reasoned:
Foss, 196 N.J.Super. at 384, 482 A.2d at 957.
In Race v. Nationwide Mutual Fire Insurance Co., 542 So. 2d 347 (Fla.1989), a motor vehicle driven by the insured, Race, was rear-ended at a stoplight by a vehicle driven by an uninsured motorist, Thompson. Race walked back to Thompson, who remained in his car, to exchange identification and insurance information. After a discussion about what to do with the cars and whether to telephone the police, Thompson stepped out of his car and asked Race for identification. As Race reached into his bag to remove his insurance papers and identification, Thompson, thinking Race was pulling out a gun, knocked Race to the ground. When Race tried to get up, Thompson hit him again. Race suffered permanent injuries, including broken teeth, a broken jaw, and a fractured hand. Thompson was uninsured; Race sought uninsured motorist benefits from his own insurer. In analyzing the case, the Race court quoted from Appleman, Insurance Law and Practice (Buckley ed. 1979), § 4317:
Race, 542 So. 2d at 349. In concluding that Race's injuries did not arise out of the use of an automobile, the court stated:
Race, 542 So. 2d at 351. See also Northern Insurance Co. v. Hampton, 510 So. 2d 649 *382 (Fla.Dist.Ct.App.), review denied, 518 So. 2d 1275 (Fla.1987) (motorist's death did not arise out of the ownership, maintenance, or use of the uninsured vehicle; one motorist had shot the other motorist during an altercation that began when one driver made an obscene gesture at the other driver after the other driver had made a sudden lane change); Fowler v. State Farm Mutual Auto. Insurance Co., 548 So. 2d 830 (Fla.Dist. Ct.App.1989) (insufficient connection between the use of the insured's vehicle and the victim's injuries to effect coverage under an automotive liability policy where the insured shot the victim while he was sitting in his car following a near collision between the victim's car and the insured's vehicle); Rustin v. State Farm Mut. Auto. Ins. Co., 254 Ga. 494, 330 S.E.2d 356 (1985) (the insured's shooting and killing a motorist during a confrontation after the deceased's vehicle struck the rear bumper of the insured's vehicle did not arise out of the use of an automobile); Cummings v. State Farm Mut. Auto. Ins. Co., 408 Pa.Super. 381, 596 A.2d 1138 (1991) (injuries sustained as a result of a physical altercation between two drivers after an accident did not arise out of the maintenance or use of a motor vehicle); Stucky v. Long, 783 P.2d 500 (Okla.App.1989) (causal connection between use of motor vehicle and injuries suffered in fight after an automobile collision was too remote to invoke coverage under automobile liability policy); United Services Automobile Association v. Ledger, 189 Cal. App. 3d 779, 234 Cal. Rptr. 570 (1987) (insured's stabbing of another motorist who followed the insured five miles to complain about a sudden lane change did not arise out of the ownership, maintenance, or use of a vehicle; the stabbing occurred after both parties had exited their vehicles); State Farm Mut. Auto. Ins. Co. v. Fernandez, 767 F.2d 1299 (9th Cir. 1985) (insured was not entitled to recover uninsured motorist benefits for a stabbing wound sustained in a confrontation with an uninsured motorist who had failed to dim his headlights).
This court also finds persuasive the analysis in Couch on Insurance 2d § 45:57 (rev. ed 1981):
(Emphasis added.) See also Couch on Insurance 2d § 45:78 (rev. ed. 1981) ("[w]hen the insured, through irritation or anger, strikes or injures another person, it has been held that such injury does not arise from the use of the insured automobile").
The authorities cited above recognize that there must be some causal connection between the use of a motor vehicle, as a motor vehicle, and the injury. Courts also recognize that, for an injurious act to be covered under automobile liability insurance provisions or uninsured motorist provisions, the act must have been within the contemplation of the insurer and the insured.
We conclude that Skelton's Allstate policy provides no coverage for the injuries he suffered in the battery committed by Dell Wright. The injuries caused by Dell Wright did not arise out of the ownership, maintenance, or use of an automobile. Therefore, the circuit court erred in awarding uninsured motorist benefits under the policy. The judgment of the circuit court is reversed and a judgment is rendered for Allstate.
REVERSED AND JUDGMENT RENDERED.
HOOPER, C.J., and MADDOX, KENNEDY, and COOK, JJ., concur. | February 2, 1996 |
746c58d9-481d-46bf-b50c-7bbf16dc3681 | Ex Parte Alfa Mut. General Ins. Co. | 684 So. 2d 1281 | 1941403 | Alabama | Alabama Supreme Court | 684 So. 2d 1281 (1996)
Ex parte ALFA MUTUAL GENERAL INSURANCE COMPANY.
(In re John B. LEDBETTER v. ALFA MUTUAL GENERAL INSURANCE COMPANY).
1941403.
Supreme Court of Alabama.
January 5, 1996.
Terry A. Sides of Hill, Hill, Carter, Franco, Cole & Black, P.C., Montgomery, for Petitioner.
James R. Bowles, Tallassee, for Respondent.
INGRAM, Justice.
Alfa Mutual General Insurance Company ("Alfa") petitions for a writ of mandamus directing the Montgomery Circuit Court to vacate an order purporting to set aside a summary judgment entered for Alfa in an action filed against it by John B. Ledbetter.
The writ of mandamus is an extraordinary writ that applies "where a party seeks emergency and immediate appellate review of an order that is otherwise interlocutory and not appealable." Rule 21(e)(4), Ala. R.App.P. In order for this Court to issue a writ of mandamus, the petitioner must show that there is: "(1) a clear legal right in the petitioner to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) properly invoked jurisdiction of the court." Ex parte Alfab, Inc., 586 So. 2d 889, 891 (Ala.1991).
Ledbetter filed a fraud action against Alfa, claiming that one of Alfa's agents had made misrepresentations to him concerning the cancellation of an automobile insurance policy. In deposition testimony, Ledbetter stated that he had spoken with no one at Alfa except his Alfa insurance agent concerning the policy. However, Ledbetter admitted in the deposition that the agent did not lie to him and that he considered the agent to have been helpful and honest.
*1282 On July 29, 1994, Alfa moved for a summary judgment, based upon Ledbetter's deposition testimony. The court held a hearing on October 18, 1994, concerning the motion, and on January 9, 1995, granted Alfa's motion and entered a summary judgment in its favor. On January 13, 1995, Ledbetter filed a "motion to reconsider," requesting simply that the trial court "reconsider its decision granting [the summary judgment]" and contending that "this is a fraud case involving genuine issues of material fact and [that] the Defendant is not entitled to a judgment as a matter of law." The court conducted a hearing on the motion on March 6, 1995, and on May 31, 1995, entered an order purporting to set aside Alfa's summary judgment.
Alfa contends that the trial court on May 31 had no jurisdiction to enter the order setting aside its summary judgment, because, it says, Ledbetter's "motion to reconsider" had been denied on April 13, by operation of law, 90 days after it was filed, pursuant to Rule 59.1, Ala.R.Civ.P.
Rule 59.1 provides, in pertinent part:
The Alabama Rules of Civil Procedure do not specifically provide for a "motion to reconsider." However, this Court looks to the essence of a motion, rather than its title, to determine how that motion is to be considered under those rules. The "character of a pleading is determined and interpreted from its essential substance, and not from its descriptive name or title." Union Springs Telephone Co. v. Green, 285 Ala. 114, 117, 229 So. 2d 503, 505 (1969). See also Simmons v. Holliday, 226 Ala. 630, 148 So. 327 (1933); Swain v. Terry, 454 So. 2d 948 (Ala.1984).
In Cleveland v. Hare, 369 So. 2d 1226 (Ala. 1979), this Court examined a motion styled as a "motion for reconsideration and motion for stay"; in that motion the movants asked the trial court to review a summary judgment against them. This Court determined the motion to be a Rule 59 motion and therefore subject to Rule 59.1. In Holt v. First Nat'l Bank of Mobile, 372 So. 2d 3 (Ala.1979), this Court examined motions to set aside the dismissals of the appellant's cases and held that they were Rule 59(e) motions. As such, they had been automatically denied 90 days after their filing, pursuant to Rule 59.1. In Ex parte Colonial Life & Acc. Ins. Co., 410 So. 2d 73 (Ala.Civ.App.1982), the Court of Civil Appeals noted this Court's holdings in Cleveland and Holt and held that a motion styled as an "application for rehearing" and filed within 30 days of the entry of a summary judgment was a Rule 59 motion and was therefore subject to Rule 59.1. See also Ex parte Johnson Land Co., 561 So. 2d 506 (Ala.1990) (holding that a "motion for rehearing" of the dismissal of an action was a Rule 59 motion).
In Ex parte Hornsby, 663 So. 2d 966 (Ala. 1995), this Court, relying upon Ex parte Johnson Land Co., supra, issued a writ of mandamus directing the trial court to vacate an order purporting to set aside a default judgment. Hornsby held that the trial court's order was a nullity because it was a ruling on a post-trial motion subject to Rule 59.1 and was entered more than 90 days after the motion had been filed. The motion, not ruled on for 90 days, was denied by operation of Rule 59.1 on the 90th day.
It may be helpful to review pertinent events in this case:
*1283 It is clear from the substance of Ledbetter's motion, particularly when that motion is examined in light of this Court's prior decisions regarding Rule 59.1, that that motion is a Rule 59(e) motion to alter, amend, or vacate the judgment. It is not a Rule 60 motion, which seeks relief from a judgment upon the grounds of mistake, inadvertence, or other such reasons. A Rule 60 motion is not governed by Rule 59.1. However, a Rule 59(e) motion is clearly subject to the provisions of Rule 59.1. Although the 90-day period for the trial court to rule could have been extended either through the mutual consent of the parties or by an order of this Court, pursuant to Rule 59.1, no consent appears of record and this Court had not extended the time. Therefore, Ledbetter's motion was deemed denied by operation of law on April 13, 1995, 90 days after it was filed, and the trial court was without jurisdiction to rule on the motion after April 13, 1995. Its May 31, 1995, order purporting to vacate the summary judgment was a nullity. Hornsby; Ex parte Johnson Land Co., supra.
Alfa has shown a clear legal right to the relief it seeks. Ex parte Alfab, supra. The trial court's order of May 31, 1995, purporting to vacate the summary judgment is due to be set aside.
WRIT GRANTED.
HOOPER, C.J., and ALMON, HOUSTON, and BUTTS, JJ., concur. | January 5, 1996 |
66044b9f-70f8-4e45-ad49-93a80566e238 | Travelers Home & Marine Ins. Co. v. Gray | N/A | 1130035 | Alabama | Alabama Supreme Court | REL: 12/19/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
____________________
1130035
____________________
Travelers Home and Marine Insurance Company
v.
Dianne Gray and Martin Gray
Appeal from Elmore Circuit Court
(CV-12-900062)
MURDOCK, Justice.
Travelers
Home and
Marine
Insurance
Company
("Travelers")
appeals a summary judgment entered by the Elmore Circuit Court
in favor of Dianne Gray and Martin Gray in the Grays' action
arising from injuries Dianne suffered as the result of a
1130035
motor-vehicle accident. We reverse the judgment of the trial
court.
I. Facts and Procedural History
On February 14, 2010, Lawana Levirt Williams Coker and
Dianne were involved in a motor-vehicle accident in Elmore
County; Coker was without motor-vehicle insurance at the time
of the accident. On February 7, 2012, the Grays filed in the
trial court a three-count complaint naming as
defendants
Coker
and Travelers and a fictitiously named defendant. In count I,
Dianne alleged that Coker's negligent and/or wanton operation
of her motor vehicle caused the accident and that, Dianne
said, as a result of the accident, she suffered, "among other
things, numerous serious physical injuries; substantial
medical
expenses
including
multiple
bills
to
Baptist
Hospital;
future medical bills; past and future physical pain and mental
anguish; permanent disability and diminished ability to do
things that she could do before the collision." In count II,
Dianne alleged that she was owed uninsured-motorist ("UM")
benefits from Travelers, her motor-vehicle insurer. In count
III, Martin alleged a claim of loss of consortium. Travelers
answered the complaint, denying the material allegations
2
1130035
therein and asserting certain affirmative defenses. Coker,
however, failed to answer the complaint.
On January 25, 2013, the trial court entered the
following order:
"Plaintiff is given 15 days to file Motion for
Default against Defendant Lawana Coker. Plaintiff
shall submit an evidentiary affidavit in support of
damages and proposed order via 'proposed order'
que[ue]. The affidavit may be submitted as a
supplement to the motion for default. In the event
that this order is not complied with, Lawana Coker
will be dismissed as a Defendant."
On February 7, 2013, the Grays moved the trial court to
enter a default judgment in their favor and against Coker,
requesting that the trial court assess damages in the amount
of $500,000 for Dianne and $50,000 for Martin. The Grays
supported their motion for a default judgment with Dianne's
affidavit, in which Dianne alleged that, among other things,
the accident had caused her to suffer numerous physical
injuries; caused her to be unable to sleep; caused her to
suffer from depression; and caused a breakdown of her marriage
to Martin. The Grays' February 7, 2013, motion requested no
relief as to Travelers.
On February 8, 2013, the trial court entered a default
judgment in favor of the Grays and against Coker for the
3
1130035
amounts requested by the Grays in their motion for a default
judgment.
On April 8, 2013, the Grays filed a new summary-judgment
motion in which, for the first time, they sought relief
against Travelers. The Grays did not base their summary-
judgment motion against Travelers on the ground that there was
no genuine issue of fact as to whether tortious conduct on the
part of an uninsured third party, Coker, had caused them to
suffer injury. Instead, they based their summary-judgment
motion against Travelers solely on the fact that they
previously had obtained a default judgment against Coker. In
this regard, the Grays argued that they were entitled to a
judgment as a matter of law against Travelers because, they
said, "Travelers as a party defendant had notice and adequate
opportunity to intervene and present any defenses and
arguments necessary to protect its position with respect to
the entry of or the amount of damages in the Default Judgment.
By failing to do so, Defendant Travelers legally is bound by
the judgment." The Grays argued as follows:
"The law is well settled that when plaintiffs
join their own liability insurer as a party
defendant in a suit against the uninsured motorist
'the insurer would be bound by the factfinder's
4
1130035
decisions on the issues of liability and damages.'
Lowe v. Nationwide Ins. Co., 521 So. 2d 1309, 1310
(Ala. 1988) .... The law is also clear that the
UM-insurer is bound by a Default Judgment so long as
'it had full notice and adequate opportunity to
intervene and present any defenses and arguments
necessary to protect its position.' Champion Ins.
Co. v. Denney, 555 So. 2d 137, 139-40 (Ala. 1989).
Here, Travelers had 'had full notice and adequate
opportunity' but chose to do nothing to 'protect its
position.' Accordingly Travelers is bound by the
Default Judgment."
On May 15, 2013, Travelers responded to the Grays'
summary-judgment motion, arguing that it was not bound by the
default judgment, which had been entered against only Coker.
Specifically, Travelers argued:
"Champion [Insurance Co. v. Denney, 555 So. 2d 137
(Ala. 1989),] stands for the proposition that a UM
insurance carrier is bound by a default judgment
only if the carrier is provided notice of the
insured's action against the tortfeasor and it
elects not to participate in the action. Bailey [v.
Progressive Speciality Ins. Co., 72 So. 3d 587, 594
(Ala. 2011)] (emphasis added)."
Travelers further argued:
"In
this case,
Travelers chose
to
participate
in
the action by filing an Answer to the plaintiffs[']
Complaint, in which it denied the allegations and
asserted any substantive defenses that would be
available to the tortfeasor, as allowed under State
Farm [Mutual Automobile Insurance Co.] v. Bennett,
974 So. 2d 959, 962 (Ala. 2007)[. ] By filing this
1
"'[I]n
a
direct
action
against
an
insurer
for
1
[uninsured-motorist] benefits "'the insurer would have
5
1130035
Answer, Travelers has indicated its willingness to
participate in the action and protect its position,
as contemplated in Champion [Insurance Co. v.
Denney, 555 So. 2d 137 (Ala. 1989)]."
After holding a hearing on May 21, 2013, the trial court
entered a summary judgment in favor of the Grays and against
Travelers. In its judgment, the trial court, citing Lowe v.
Nationwide Insurance Co., 521 So. 2d 1309, 1310 (Ala. 1988),
Champion Insurance Co. v. Denney, 555 So. 2d 137, 139-40 (Ala.
1989), and Bailey v. Progressive Specialty Insurance Co., 72
So. 3d 587 (Ala. 2011), first concluded that Travelers was
bound by the default judgment entered against Coker because
(1) Travelers failed to defend against the default judgment
and (2) Travelers failed to contest the amount of damages.
The trial court further concluded "the undisputed facts
support a judgment as a matter of law," stating:
"In this case, the [Grays] have produced
substantial evidence negating the existence of any
genuine issue of material fact. Travelers has not
produced any evidence to rebut the [Grays']
evidence. Instead, as Travelers admitted at the
Hearing, it was relying on its Answer. However, the
available, in addition to policy defenses, the substantive
defenses that would have been available to the uninsured
motorist.'"'" State Farm Mut. Auto. Ins. Co. v. Bennett, 974
So. 2d 959, 962 (Ala. 2007) (quoting State Farm's brief, at
19, quoting in turn State Farm Auto Ins. Co. v. Baldwin, 470
So. 2d 1230, 1233 (Ala. 1985) (emphasis omitted)).
6
1130035
law is clear that Travelers may not rest upon mere
denials in its Answer, but must produce substantial
evidence to prove a genuine issue for trial. Proof
by [sic] is required. Travelers did not do so and
thus, has not met its burden.
"Accordingly, the Court concludes that there is
no genuine issue for trial. The evidence is
undisputed that Defendant Williams-Coker was at
fault; that Defendant Williams-Coker was uninsured;
that Dianne Gray was not guilty of contributory
negligence; that the injuries Dianne and Martin Gray
suffered and will suffer in the future were caused
by this wreck; that the injuries were very severe;
and that the [Grays] are covered under the UM
provisions of [their] policy with Travelers. The
Court further concludes that an award of damages of
$500,000.00
for
Plaintiff
Dianne
Gray,
and
$50,000.00 for Plaintiff Martin Gray is appropriate
under the undisputed facts of this case."
On June 21, 2013, Travelers, pursuant to Rule 55(c), Ala.
R. Civ. P., moved the trial court to set aside its February 8,
2013, default judgment "to the extent [the Grays] seek to bind
Travelers" or, in the alternative, to "enter an Order
specifically holding that the Default Judgment Order shall
have no binding effect on Travelers." In that motion,
Travelers again argued that it should not be bound by the
default judgment entered against Coker because, Travelers
said, "[it] filed a timely and proper Answer to [the Grays']
Complaint" and "[it]
ha[d]
fully participated in this action."
Travelers also filed, pursuant to Rule 59(e), Ala. R. Civ. P.,
7
1130035
a motion to alter, amend, or vacate the trial court's summary
judgment in favor of the Grays and against Travelers and
supported that motion with several evidentiary attachments.
The trial court entered separate orders denying Travelers'
Rule 55(c) and Rule 59(e) motions. Travelers appealed.
II. Analysis
Travelers contends that the default judgment entered
against Coker is not binding on Travelers and that the trial
court's judgment concluding otherwise is contrary to this
Court's decision in Bailey v. Progressive Specialty Insurance
Co., supra. We agree.
In Lowe, supra, this Court explained the process that
must be followed for both the insured and the UM–insurance
carrier to protect their rights when the insured wishes to
make a claim for UM benefits in connection with an action by
the insured against the alleged tortfeasor:
"A plaintiff is allowed either to join as a party
defendant his own liability insurer in a suit
against the underinsured motorist or merely to give
it notice of the filing of the action against the
motorist and of the possibility of a claim under the
underinsured motorist coverage at the conclusion of
the trial. If the insurer is named as a party, it
would have the right, within a reasonable time after
service of process, to elect either to participate
in the trial (in which case its identity and the
8
1130035
reason for its being involved are proper information
for the jury), or not to participate in the trial
(in which case no mention of it or its potential
involvement is permitted by the trial court). Under
either election, the insurer would be bound by the
factfinder's decisions on the issues of liability
and damages. If the insurer is not joined but
merely is given notice of the filing of the action,
it can decide either to intervene or to stay out of
the case. The results of either choice parallel
those set out above -- where the insurer is joined
as a party defendant."
521 So. 2d at 1310 (emphasis omitted and emphasis added).
In Bailey, the plaintiff, Ginger Bailey, sued an
uninsured driver and tortfeasor, Luvert Caver, and notified
her automobile insurer, Progressive Specialty Insurance
Company ("Progressive"), of the action. Progressive elected
to intervene as was its right under Lowe. Bailey attempted
service upon Caver several times, eventually serving him by
publication. Subsequently, Bailey filed a motion for a
default judgment against Caver, and the trial court granted
the motion. Bailey then filed a motion to set a hearing for
the determination of damages on the default judgment. She
filed an affidavit averring that her damages amounted to
$125,000. Progressive responded by filing a "Motion to Set
Aside Entry of Default Judgment" in which it expressly asked
the trial court "'to set aside the default judgment entered
9
1130035
against Luvert Caver ... to the extent that [Bailey] seeks to
bind Progressive by that judgment.'" Bailey, 72 So. 3d at
589. Although the trial court entered an order denying
Progressive's motion and setting the amount of
damages
against
Caver,
it
nonetheless
specifically
stated
that
Progressive
was
not bound by the default judgment entered against Caver.
Bailey subsequently filed what she styled a "Supplemental
Complaint" against Progressive for UM benefits, alleging
breach of contract and bad-faith failure to pay the UM
benefits she alleged were due her based on the default
judgment. Progressive eventually filed a motion for a summary
judgment as to Bailey's "supplemental complaint" in which it
argued that it was not liable because the trial court had
stated that the default judgment against Caver was not binding
upon Progressive and Progressive was contesting liability and
damages. The trial court granted Progressive's motion for a
summary judgment. Bailey appealed the judgment to this Court.
This Court affirmed the trial court's judgment in Bailey.
In the course of doing so, the Court explained:
"'[T]he insured must be able to establish
fault on the part of the uninsured motorist
and must be able to prove the extent of the
10
1130035
damages to which he or she would be
entitled.'
"LeFevre v. Westberry, 590 So. 2d 154, 159 (Ala.
1991). Thus, the plaintiff's claim for UM benefits
is dependent upon a determination, that is binding
on the UM–insurance carrier, as to the extent, if
any, of the tortfeasor's liability to the plaintiff.
"This Court has made it clear that, although the
plaintiff's
'legal[]
entitle[ment]
to
recover
damages from owners or operators of uninsured motor
vehicles because of bodily injury, sickness or
disease, including death, resulting therefrom,' §
32–7–23(a), Ala. Code 1975, is dependent upon
establishing
the
tortfeasor's
fault
and
the
certainty of damages, the claim for UM benefits is
based on the contractual obligations of the
insurance policy. See, e.g., Ex parte Barnett, 978
So. 2d 729, 734 (Ala. 2007) (observing that 'a UM
insurance carrier's liability to the insured is
based solely on its contractual obligations as laid
out in the policy' and that, '[a]lthough the
tortfeasor's
liability
triggers
the
insurer's
obligation to pay, that liability serves only to
establish that the insured "is entitled to recovery
under the terms of the policy."' (quoting Howard v.
Alabama Farm Bureau Mut. Cas. Ins. Co., 373 So. 2d
628, 629 (Ala. 1979))).
"[In Lowe v. Nationwide Ins. Co., 521 So. 2d
1309 (Ala. 1988), t]his Court ... provided a
specific process that must be followed for both the
insured and the UM–insurance carrier to protect
their rights when the insured wishes to make a claim
for UM benefits in connection with an action by the
insured against the alleged tortfeasor:
"'....'
"....
11
1130035
"Progressive argues that it was not bound by the
default judgment and the damages award of $125,000
assessed against Caver. Progressive argues that
'there was no fact-finding on the issues of
liability and damages' because the trial court
simply entered a default judgment. Progressive
notes that this Court in Ex parte Progressive
Specialty Insurance Co., 985 So. 2d 897 (Ala. 2007),
held that the plaintiff's underinsured-motorist-
insurance carrier was not bound by a settlement
between the plaintiff and the tortfeasor's liability
insurer because 'there has been no fact-finding on
the issues of liability and damages as underscored
in Lowe.' 985 So. 2d at 899.
"[The plaintiff] Bailey responds by citing
Champion Insurance Co. v. Denney, 555 So. 2d 137
(Ala. 1989). In Champion, the plaintiff, did not
name her UM–insurance carrier, Champion, in her
action against the uninsured tortfeasor, but she did
provide Champion notice of the action. Champion
elected not to intervene or otherwise to participate
in the action. Denney obtained a default judgment
against the tortfeasor in the amount of $100,000.
Denney then filed a separate action against Champion
seeking UM benefits. The trial court entered a
summary judgment against Champion based upon the
previous default judgment against the tortfeasor. On
appeal, this Court concluded that the default
judgment was binding upon Champion, explaining in
part:
"'The insured in this case obtained a
valid and enforceable judgment against the
uninsured motorist. An insurer, however,
should not be bound by such a judgment
unless it had full notice and adequate
opportunity to intervene and present any
defenses
and
arguments
necessary
to
protect
its position. We are of the opinion that
the insurer in this case had such notice
and opportunity.'
12
1130035
"555 So. 2d at 139–40.
"Progressive
argues
that
Champion
stands
for
the
proposition that a UM–insurance carrier is bound by
a default judgment only if the carrier is provided
notice
of
the
insured's
action
against
the
tortfeasor and it elects not to participate in the
action.
This
case
is
different,
Progressive
contends, because it did intervene in the action in
order to exercise its right to defend its own
interests. We agree.
"... The plaintiff in this case, Bailey, after
obtaining a default judgment that by its terms was
binding against the alleged tortfeasor but not
against the UM–insurance carrier, had every right to
prosecute her claims on the merits against the
carrier. Bailey has not attempted to do that in
this case, however. Instead, Bailey has attempted
to rely solely on the existence of the default
judgment
she
obtained
against
the
alleged
tortfeasor. ...
"We do not agree that the trial court lacked
subject-matter jurisdiction over the claims by
Bailey that remained pending against Progressive in
the wake of the trial court's entry of a default
judgment in favor of Bailey against the tortfeasor.
5
Nonetheless, by limiting herself to a claim against
Progressive based solely on that default judgment
(which the trial court had determined was not
binding on Progressive), rather than seeking to
prove her entitlement to recover on the merits,
Bailey was attempting to pursue a claim against
Progressive that was not cognizable. ...
"_______________
" ... [T]he plaintiff here attempts to ground
5
her bad-faith claim against the UM–insurance carrier
on a default judgment that has established, although
13
1130035
only as against the tortfeasor, the amount of
damages the plaintiff may recover ...."
Bailey, 72 So. 3d at 593-95 (some emphasis added).
Bailey stands for the proposition that, when a UM carrier
has elected to participate in a lawsuit against both it and a
third-party tortfeasor, the taking of a default judgment
against the third-party tortfeasor only simply is not binding
on the UM carrier. A UM carrier has no relationship with the
third-party tortfeasor and thus cannot control the fact that
the tortfeasor might never answer the complaint against it.
Indeed, there really is no way for a UM carrier to "defend"
against a default judgment being taken against a third-party
tortfeasor who chooses not to answer the complaint.
Under Bailey, the UM carrier may choose to defend a case
in which it has been named as a defendant or in which it has
intervened. When the UM carrier makes the decision to defend
rather than leaving the lawsuit to be "worked out" between the
insured and the tortfeasor, the UM carrier effectively says to
its insured -- the plaintiff -- that the insured must prove as
against it the merits of its claim. That is, a UM carrier is
insisting that the plaintiff meet its burden of proof as
against the UM carrier and show that he or she (the
14
1130035
plaintiff/insured) did in fact suffer damage of a certain
amount as a result of the tortious conduct of the third-party
tortfeasor. Only then can the plaintiff expect to obtain a
judgment against and collect from the carrier (as opposed to
collecting a default judgment, if it can, from the
tortfeasor).
In this case the Grays' motion for a summary judgment
against Travelers was based solely on the incorrect notion
that the nonfinal, default judgment sought and obtained by the
Grays as to Coker only was automatically binding on Travelers.
It was not a summary-judgment motion against Travelers
presenting
evidence
of
liability,
causation,
damages,
etc.,
in
relation to the acts of an uninsured third-party tortfeasor.
Had it been, then Travelers would have had to meet the
evidence presented against it with contrary evidence of its
own. In this case, however, Travelers appropriately
responded
to the single, mistaken legal position asserted by the Grays
in the only motion ever filed by them against Travelers by
arguing that, under Bailey, it was not bound by the default
judgment that previously had been entered against Coker. The
15
1130035
trial court erred in disagreeing with Travelers and in
entering a judgment against it on this limited ground.
III. Conclusion
Because Travelers, the Grays' UM carrier, was not bound
by the default judgment entered against Coker,
the
third-party
tortfeasor, Travelers was not required to submit evidence in
opposition to a motion for a summary judgment that relied
solely on that default judgment. Consequently, the trial
court erred in entering a summary judgment in favor of the
Grays and against Travelers. The summary judgment is
reversed, and the cause is remanded for further proceedings
consistent with this opinion.
REVERSED AND REMANDED.
Stuart, Bolin, Parker, Shaw, Wise, and Bryan, JJ.,
concur.
Moore, C.J., concurs in the result.
16 | December 19, 2014 |
e9ea31c0-8a4d-46ee-b3ed-94777edbc71a | Broadus v. Chevron USA, Inc. | 677 So. 2d 199 | 1941310 | Alabama | Alabama Supreme Court | 677 So. 2d 199 (1996)
Harry BROADUS
v.
CHEVRON USA, INC., and Larry Ayres d/b/a Regency Chevron.
1941310.
Supreme Court of Alabama.
February 2, 1996.
Rehearing Denied April 12, 1996.
*200 L. Bratton Rainey III of Sintz, Campbell, Duke & Taylor, Mobile, for Harry Broadus.
Gregory C. Buffalow and Scott A. Browning of Johnstone, Adams, Bailey, Gordon & Harris, L.L.C., Mobile, for Chevron USA, Inc.
Thomas M. Galloway, Jr. and Nicholas Nagrich, Mobile, for Larry Ayres.
HOOPER, Chief Justice.
Harry Broadus sought to recover damages for tort liability based on the criminal acts of a third party. The trial court entered a summary judgment for the defendants, Chevron USA, Inc. and Larry Ayres d/b/a Regency Chevron gasoline station and store. Broadus appealed.
A shooting and robbery attempt occurred just after midnight on the morning of February 21, 1992, at Regency Chevron, a dealer-leased service station-store located at 4686 Airport Boulevard in Mobile. Broadus, a customer of the store, was rendered a permanent paraplegic by the shooting.
Broadus stated the following in his answers to interrogatories:
(C.R. at 509-10.)
Larry Ayres had leased the store premises from Chevron USA, Inc., and was doing business under the name "Regency Chevron." Chevron USA owned the premises and had remodeled them as a "foodmart" in the 1980's. Chevron USA imposed certain restrictions and regulations upon Ayres.
Chevron furnished the foodmart with all equipment and furnishings, including office furniture, shelving, coolers, cash register, signs, and decals. From time to time, Chevron inspected the premises and the operation. Chevron required that the store be open for business 24 hours per day, seven days per week. Chevron required Ayres to attend training programs, which included training about robbery prevention.
Chevron regulated the types of merchandise sold at Regency Chevron and the business that could be conducted there. Chevron was responsible for purchasing, installing, and maintaining certain equipment at the store, including robbery prevention hardware.
In 1988, Chevron implemented a foodmart security program, focusing upon robbery prevention. Under this program, Chevron performed crime risk assessments of its foodmarts to determine the likelihood of a customer or employee's being the victim of a robbery or other violent crime. Chevron also began training programs for its employees and lessees, required that certain security hardware be installed, and set in place procedures designed to prevent crime.
Chevron, through its Chevron Corporate Security Unit, required that its retail facilities be evaluated and that security recommendations be made to the Chevron Marketing Department to protect customers and employees. These recommendations were based on the risk of various crimes occurring; those risks were determined by the Security Unit. The Marketing Department had the responsibility to carry out the recommendations and was provided the necessary funding for doing so. Chevron's security manual indicates that Chevron took responsibility for good security practices.
Chevron implemented risk assessments as to each of its retail establishments nationwide to evaluate the likelihood of robbery or other crimes occurring and to implement measures to minimize that likelihood. Among such measures were improved lighting, particularly during late evening or early morning hours, certain push-button door locks, and dead bolts that could be operated by a cashier, a bullet resistant exterior at cashier locations, an exterior transaction drawer, a time-delay cash dispenser, floor safe in the back office, a view device in the back room door, locks on beer coolers, robbery prevention decals, and use of robbery training procedures, including keeping only a minimum amount of cash on hand at the cashier's desk or register.
Chevron began this program in 1988, and by 1991 it had begun assessing the implementation of its security recommendations.
In January 1990, Chevron's regional office in Atlanta received an assessment of some 20 service station/foodmarts in the Alabama-Mississippi area. The stations were rated "low," "medium," or "high" (C.R.281); the Regency Chevron station was rated "medium."
Thirteen suggested improved security measures were sent to various locations (Broadus Exhibits 67, 91, and 71); by 1990 Regency Chevron had incorporated eleven of these. (Bowers Dep. 197-199) (Toliver Dep. 225). The security assessment did not recommend any further security procedures. (Bowers Dep.) As a result of new security measures implemented by Chevron from 1988 to 1994, Chevron found that robberies dropped from 314 to 104, or about 66 percent. (Berry Dep. 119.)
There had been no shootings at Regency Chevron before the shooting that injured *202 Broadus. (Ayres Dep. 146.) Also, there had been no violent assaults there within the 12 months preceding this incident on February 21, 1992. (Ayres Dep. 156.)
The only known criminal activities at this location were a few "drive offs" (a party fills a car with gasoline and departs without paying), shoplifting, one case of criminal mischief, resulting in damage to Regency Chevron's property, and one instance of an individual's grabbing money from the cash register. (Ayres Dep. 109.) (Umfleet Dep. 37-39.)
Broadus presented no evidence of previous shootings or violent crimes occurring on the premises of Regency Chevron. Moreover, Broadus presented no crime statistics or other data to show either the frequency or the nature of prior criminal acts occurring at this station.
In Saccuzzo v. Krystal Co., 646 So. 2d 595 (Ala.1994), this Court stated the general rules regarding motions for summary judgment and claims of liability based on third-party criminal activity:
646 So. 2d at 596-97.
In Moye v. A.G. Gaston Motels, Inc., 499 So. 2d 1368 (Ala.1986), this Court gave a detailed explanation of when this type of duty may arise:
499 So. 2d at 1371-72.
Chevron USA and Ayres had no duty to protect Broadus from the criminal acts of a third party. Broadus presented no evidence to show that Chevron USA, or Ayres d/b/a Regency Chevron knew or should have known that Broadus was in danger of being shot by someone in Chevron's store. No "special circumstances or relationship" existed between Broadus and Chevron USA or Ayres d/b/a Regency Chevron. In some other cases noted in this opinion, the plaintiff presented evidence of an extremely high level of criminal activity at the locations *204 at which the plaintiffs had been injured, but the plaintiff did not present such evidence in this case. To the contrary, only minor criminal activity was shown to have occurred at Regency Chevron in the 12 months preceding Broadus's injury.
Broadus also argues that he was a business invitee of Chevron and Larry Ayres d/b/a Regency Chevron and argues that a "special relationship" existed between him and the defendants. As above noted, no special relationship was established by the facts of this case. No evidence suggested "special circumstances" or a "special relationship" between Broadus and Chevron USA or Ayres analogous to the relationships and circumstances that existed in Thetford v. City of Clanton, 605 So. 2d 835 (Ala.1992), and Young v. Huntsville Hospital, 595 So. 2d 1386 (Ala. 1992).
The summary judgment in favor of Chevron USA, Inc., and Larry Ayres d/b/a Regency Chevron is affirmed.
AFFIRMED.
MADDOX, HOUSTON, and KENNEDY, JJ., concur.
COOK, J., concurs in the result.
BUTTS, J., dissents. | February 2, 1996 |
81ba8792-a025-4637-9904-da0b7a920a05 | Ex Parte Eaton | 675 So. 2d 1300 | 1941540 | Alabama | Alabama Supreme Court | 675 So. 2d 1300 (1996)
Ex parte Robert EATON.
(Re Robert EATON v. John M. KENNEMER and Lacey S. Kennemer.)
1941540.
Supreme Court of Alabama.
February 2, 1996.
A. Stewart O'Bannon, Jr. and A. Stewart O'Bannon III of O'Bannon & O'Bannon, Florence, for Petitioner.
Gene M. Hamby, Jr., Sheffield, for Respondents.
MADDOX, Justice.
This case, here on certiorari review from the Court of Civil Appeals, presents a question about the power of a trial judge to grant a motion for new trial on the specific ground that the moving parties had been prejudiced by a three-week recess in the middle of the trial, in view of the fact that the moving parties had objected to the trial court's granting of a mistrial requested by the other party during the trial, and had objected to the trial court's offer "on several occasions to grant a mistrial." The issue is whether a party can oppose the granting of a mistrial, assent to a continuation of the trial, even though the trial judge offers to declare a mistrial and to grant a new trial, and then claim that the delay of the trial was prejudicial.
John Kennemer and Lacy Kennemer sued Robert Eaton, a contractor, seeking damages for alleged defects in a house he had built for them. The trial judge had told the parties *1301 before the trial began that he would have to recess the trial for two weeks if the parties decided that they wanted to start the trial on the scheduled date of February 15, 1994.[1] The record shows that the parties agreed to proceed, cognizant that there would be an adjournment in the middle of the trial.
The trial began as scheduled and continued through February 18; on that date the trial was recessed until March 7. During this adjournment of the trial, on March 1, 1994, one of the plaintiffs, John Kennemer, suffered a heart attack and was hospitalized. Because of Kennemer's hospitalization, the trial court extended the recess until March 21.
On March 1, the defendant, Eaton, moved for a mistrial based on the extension of the recess, arguing that this delay would impair the jury's ability to render a decision; the trial court overruled this motion. On March 7, Mr. Eaton orally renewed his motion for a mistrial, which the trial court likewise denied. On March 21, the day the trial resumed, an altercation occurred between the parties; responding to the altercation, the trial judge stated that he was going to reconsider Eaton's motion for a mistrial. Counsel for both sides requested that the trial judge not declare a mistrial at that time, because the trial was almost completed. The trial judge resumed the trial, which ended the next day and the jury returned a $10,000 verdict for the plaintiffs.
Following the verdict, the plaintiffs moved for a new trial, citing nine grounds, among them the argument that the long delay had prejudiced the jury. The trial judge agreed and granted the plaintiffs' motion, stating that "due to the long delays that occurred during the course of this trial ... the jury was most likely to forget the evidence that had been presented in court."[2] Eaton appealed this ruling to the Court of Civil Appeals, which affirmed without an opinion, as authorized by Rule 53, Ala.R.App.P. We granted Eaton's petition for certiorari review.
It is undisputed that the plaintiffs, dissatisfied with the jury verdict, were given a new trial because the trial judge found that the long delay in the middle of the trial had prejudiced the plaintiffs. It is also undisputed that the plaintiffs had opposed the granting of Eaton's motion for a mistrial during the course of the trial and had assented to allowing the jury to render a verdict on the evidence presented, even though the trial judge had offered the day before to declare a mistrial on the grounds that the long delay could affect the jury's ability to fairly decide the case.
Eaton argues that the plaintiffs should not have been allowed to oppose his motion for mistrial, gamble on the verdict of the jury, and then, after being disappointed with the verdict, move for a new trial on the same grounds they had previously opposed. We agree with this argument. In Rush v. Eason Plumbing & Electrical Contractors, Inc., 361 So. 2d 516, 518 (Ala.1978), this Court held that "[a] motion for a new trial cannot replace a timely objection or exception which could, and should, properly be made during the trial." Although Rush is factually distinguishable from this case, it stands for the proposition that a party cannot allow a trial to be conducted, and then, on a motion for a new trial, raise arguments that should have been presented during trial.
This Court has assiduously applied the rule that a party may not wait until after a verdict has been rendered before objecting to a procedural defect, if the objection could *1302 have been raised in a timely manner. See, e.g., Ritchey v. State, 293 Ala. 265, 302 So. 2d 83 (1974); Tucker v. Tucker, 248 Ala. 602, 28 So. 2d 637 (1946); Geter v. Central Coal Co., 149 Ala. 578, 43 So. 367 (1907); Hall v. Hall, 421 So. 2d 1270 (Ala.Civ.App.1982). For example, in Davis v. Davis, 474 So. 2d 654, 656 (Ala.1985), this Court held that "[t]he law does not permit a litigant with knowledge of previously unserved pleadings and documents to go to trial, gamble on a favorable outcome at the hands of the jury, and then, if he loses, raise this deficiency for the first time on a post-trial motion for a new trial." This rule is necessary to ensure fairness at trial, and it supports the public interest in judicial economy.
In the case sub judice, the plaintiffs had three opportunities to object to the delay in the trial and to claim that such a delay would be prejudicial, but they did not object. Instead, the plaintiffs objected to the trial court's declaring a mistrial based on the delay and they assented to the continuation of the trial, even though the trial judge offered "on several occasions to grant a mistrial."
As we read our prior cases, they require that a party not be given a new trial based on facts such as those presented in this case. Although the plaintiffs argue that they raised eight additional grounds for a new trial, the record, particularly the order entered by the trial judge, reflects that the judge granted the new trial based solely on the delay that had occurred during the trial. Therefore, we find unpersuasive the fact that the plaintiffs may have offered eight other grounds for a new trial.
Based on the foregoing, we reverse the judgment of the Court of Civil Appeals and remand the cause to that Court for proceedings consistent with this opinion.
REVERSED AND REMANDED.
HOOPER, C.J., and HOUSTON, KENNEDY, and COOK, JJ., concur.
[1] The initial delay was a result of previous obligations of the trial judge, which had arisen before this case came to trial.
[2] In granting the motion, the trial judge made the following findings of fact:
"It is further the opinion of the Court, and this Court offered on several occasions to grant a mistrial, however, the attorneys chose not to allow the Court to allow a mistrial. The Court at the time was of the opinion that due to the long delays that occurred during the course of this trial that the jury was most likely to forget the evidence that had been presented in court. Prior to the conclusion of the case beginning on March 21, the Court was of the opinion that the delay may have caused the jury to forget some of the evidence that had been presented and would unduly prejudice the parties involved. The Court is still of that opinion, which was not the fault of any of the parties, the attorneys, or the Court." | February 2, 1996 |
9f39e35c-bac2-42b6-9cee-c7e77f3889f6 | Ex parte Water Works Board of the City of Birmingham. | N/A | 1131094 | Alabama | Alabama Supreme Court | Rel: 12/19/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
____________________
1131094
____________________
Ex parte Water Works Board of the City of Birmingham
PETITION FOR WRIT OF MANDAMUS
(In re: Water Works Board of the City of Birmingham
v.
Alabama Surface Mining Commission and Shepherd Bend, LLC)
(Jefferson Circuit Court, CV-13-902078)
PARKER, Justice.
The Water Works Board of the City of Birmingham ("the
Board") petitions this Court for a writ of mandamus directing
1131094
the Jefferson Circuit Court ("the circuit court") to vacate
its order granting the motion filed by the Alabama Surface
Mining Commission ("ASMC") seeking to transfer the underlying
action to Walker County; Shepherd Bend, LLC, joined ASMC's
transfer motion. We grant the petition and issue the writ.
Facts and Procedural History
The facts are undisputed. ASMC is a State agency
responsible for administering and enforcing the Alabama
Surface Mining Control and Reclamation Act of 1981, § 9-16-70
et seq., Ala. Code 1975 ("the ASMCRA"). ASMC maintains its
principal office in Walker County as required by § 9-16-73(h),
Ala. Code 1975. On October 19, 2010, ASMC issued to Shepherd
Bend, an Alabama limited-liability company with its principal
office in Walker County, a surface-coal-mining permit ("the
permit"). The permit allowed Shepherd Bend to perform surface
coal mining in Walker County on approximately 286 acres; any
discharge of effluent from this mine would discharge into the
Mulberry Fork of the Black Warrior River or a tributary
thereof.
The Board, an Alabama public corporation with its
principal office in Jefferson County, operates a raw-water-
2
1131094
intake facility within Walker County; this raw-water-intake
facility is approximately 4,200 feet downstream from the
nearest sediment-basin-discharge point as established by the
permit. Water withdrawn by the Board from the raw-water-
intake facility is filtered, screened, and eventually pumped
to the Board's Western Filter Plant in Jefferson County for
distribution to the Board's customers.
On November 17, 2010, the Board filed an administrative
appeal challenging the issuance of the permit and requested a
hearing with a hearing officer of ASMC's Division of Hearings
and Appeals. The hearing was held, and, on March 5, 2013, the
hearing officer affirmed the issuance of the permit. Pursuant
to § 9-16-79(1)d., Ala. Code 1975, the Board then filed a
petition with ASMC for administrative review of the hearing
officer's decision. ASMC took no action and, pursuant to § 9-
16-79(3)a., Ala. Code 1975, the Board's petition for
administrative review was deemed denied by operation of law 30
days after the petition was filed.
On
May
24,
2013,
after
it
had
exhausted
its
administrative
remedies,
the
Board
appealed
ASMC's
decision
to
the circuit court. In response, ASMC filed a "motion to
3
1131094
dismiss and alternative motion to transfer," which Shepherd
Bend joined. In its motion, ASMC argued that venue in
Jefferson County was not proper and, in the alternative, that,
even if venue was proper in Jefferson County, a transfer to
Walker County was nevertheless compelled by reason of the
convenience of the parties and witnesses and in the interest
of justice under § 6-3-21.1, Ala. Code 1975, the forum non
conveniens statute. On August 19, 2013, the Board filed a
response to ASMC's motion, arguing that venue in Jefferson
County was appropriate by virtue of § 6-3-7, Ala. Code 1975,
and § 41-22-20(b), Ala. Code 1975.
On September 26, 2013, the circuit court entered an order
transferring the Board's action to Walker County. The circuit
court's order stated, in pertinent part:
"Plaintiff asserts Walker County is an improper
venue as to ASMC under Alabama Code [1975,] §
41-22-20(b)[,] and as to Shepherd Bend under Alabama
Code [1975,] § 6-3-7.
"A. Transfer of ASMC claims under ... §
41-22-20(b).
"Plaintiff claims transfer is improper as to
ASMC pursuant to ... § 41-22-20(b). Section
41-22-20(b) reads as follows:
"'(b) All proceedings for review may
be instituted by filing of notice of appeal
4
1131094
or review and a cost bond with the agency
to cover the reasonable costs of preparing
the transcript of the proceeding under
review, unless waived by the agency or the
court on a showing of substantial hardship.
A petition shall be filed either in the
Circuit Court of Montgomery County or in
the circuit court of the county in which
the agency maintains its headquarters, or
unless otherwise specifically provided by
statute, in the circuit court of the county
where a party other than an intervenor,
resides or if a party, other than an
intervenor, is a corporation, domestic or
foreign, having a registered office or
business office in this state, then in the
county
of
the
registered
office
or
principal place of business within this
state.'
"....
"An agency of the state may only be sued in the
county of the official residence of such agency in
the absence of specific statutory authority to the
contrary. Ex parte Neely, 653 So. 2d 945, 947 (Ala.
1995); Alabama Youth Services Board v. Ellis, 350
So. 2d 405, 407 (Ala. 1988). ASMC maintains its
principal office in Walker County as required by
Alabama Code [1975,] § 9-16-73(h).
"Appeal of Administrative decisions of ASMC are
governed by Alabama Code [1975,] § 9-16-79, which
states, 'Procedures for hearings and appeals under
this article shall be made as herein provided and in
accordance with such general rules and regulations
as the regulatory authority (ASMC) may prescribe.
These procedures shall take precedence over the
Alabama Administrative Procedure Act.' ([E]mphasis
added.) After then describing in considerable detail
what that procedure is to be, the statute adds: 'The
procedure provided in this article for hearings and
5
1131094
appeals shall be exclusive except as otherwise
specified.' § 9-16-79(10) (emphasis added).
"Section 41-22-25(a)[, Ala. Code 1975,] of the
AAPA [the Alabama Administrative Procedure Act]
expresses the intent of the legislature as to how
the AAPA is to be construed and applied. This
section reads as follows:
"'(a) This chapter shall be construed
broadly to effectuate its purposes. Except
as expressly provided otherwise by this
chapter or by another statute referring to
this chapter by name, the rights created
and the requirements imposed by this
chapter shall be in addition to those
created or imposed by every other statute
in existence on the date of the passage of
this chapter or thereafter enacted. If any
other statute in existence on the date of
the passage of this chapter or thereafter
enacted
diminishes
any
right
conferred
upon
a person by this chapter or diminishes any
requirements imposed upon an agency by this
chapter,
this
chapter
shall
take
precedence
unless
the
other
statute
expressly
provides
that it shall take precedence over all or
some specified portion of this named
chapter.'
"Ala. Code § 41-22-25(a) (emphasis added).
"The legislature expressed its unequivocal
intent that the rights created and requirements
imposed by the Alabama Administrative Procedure Act
shall be applicable only if another statute does not
expressly provide otherwise.
"The hearings and appeals procedure of ASMCRA §
9-16-79 refers to the AAPA by name and specifically
provides that the procedure embodied in ASMCRA takes
precedence over the AAPA. A clearer expression of
6
1131094
legislative intent is not possible. Thus the venue
provisions of the AAPA have no application to the
present appeal arising under the provisions of
ASMCRA.
"Section 9-16-79 makes no specification of the
venue
for
securing
judicial
review
of
an
administrative order. Judicial review is invoked by
filing a notice of appeal 'in circuit court,' §
9-16-79(4)b. However, the absence of a specific
venue does not mean the case can be unequivocally
brought in any venue. In enacting statutes, the
legislature is presumed to know the state of the
existing law. See Wright v. Childree, 972 So. 2d
771, 778 (Ala. 2006). Therefore, the Court is
constrained to find the omission of a specific venue
provision within this section of ASMCRA was
intentional and that the legislature was content to
leave matters of venue of actions brought pursuant
to § 9-16-79 to the rules of venue applicable to
state agencies in the absence of a specific venue
statute. Ala. Code § 41-22-20 does not expressly
provide statutory authority for the filing of this
appeal in Jefferson County. To the contrary, ASMCRA
controls proper venue. There being no express
statutory authority to the contrary, an appeal of an
administrative determination of ASMC pursuant to §
9-16-79 may only be brought in the county of the
official residence of ASMC, which by statute is
Walker County. Ala. Code § 9-16-73(h)."
The circuit court also determined that venue was not proper in
Jefferson County under § 6-3-7. However, for reasons
explained below, we need not consider that portion of the
circuit court's order.
On November 7, 2013, the Board filed a petition for a
writ of mandamus with this Court requesting that we vacate the
7
1131094
circuit court's order transferring the case to Walker County.
On May 22, 2014, this Court determined that the Court of Civil
Appeals had jurisdiction over the Board's petition and
transferred the matter to that Court. On June 20, 2014, the
Court of Civil Appeals issued an opinion denying the Board's
petition. See Ex parte Water Works Bd. of Birmingham, [Ms.
2130694, June 20, 2014] ___ So. 3d ___ (Ala. Civ. App. 2014).
Pursuant to Rule 21(e), Ala. R. App. P., the Board then filed
a petition for a writ of mandamus with this Court.
Standard of Review
"A petition for a writ of mandamus is the proper
means for challenging an order transferring an
action to another county. Ex parte Wilson, 854 So.
2d 1106, 1109 (Ala. 2002). '"[A] writ of mandamus is
an
extraordinary
remedy,
which
requires
the
petitioner to demonstrate a clear, legal right to
the relief sought, or an abuse of discretion."' Ex
parte Leasecomm Corp., 886 So. 2d 58, 62 (Ala.
2003)(quoting Ex parte Palm Harbor Homes, Inc., 798
So. 2d 656, 660 (Ala. 2001))."
Ex parte Miller, Hamilton, Snider & Odom, LLC, 978 So. 2d 12,
13-14 (Ala. 2007).
Discussion
The Board first argues that venue in Jefferson County was
proper under § 41-22-20(b), Ala. Code 1975, which is part of
8
1131094
the Alabama Administrative Procedure Act, § 41–22–1 et seq.,
Ala. Code 1975 ("the AAPA"). Section 41-22-20(b) provides:
"(b)
All
proceedings
for
review
may
be
instituted by filing of notice of appeal or review
and a cost bond with the agency to cover the
reasonable costs of preparing the transcript of the
proceeding under review, unless waived by the agency
or the court on a showing of substantial hardship.
A petition shall be filed either in the Circuit
Court of Montgomery County or in the circuit court
of the county in which the agency maintains its
headquarters, or unless otherwise specifically
provided by statute, in the circuit court of the
county where a party other than an intervenor,
resides or if a party, other than an intervenor, is
a corporation, domestic or foreign, having a
registered office or business office in this state,
then in the county of the registered office or
principal place of business within this state."
Section 41-22-25(a), Ala. Code 1975, a part of the AAPA,
states:
"(a) This chapter shall be construed broadly to
effectuate
its
purposes.
Except
as
expressly
provided otherwise by this chapter or by another
statute referring to this chapter by name, the
rights created and the requirements imposed by this
chapter shall be in addition to those created or
imposed by every other statute in existence on the
date of the passage of this chapter or thereafter
enacted. If any other statute in existence on the
date of the passage of this chapter or thereafter
enacted diminishes any right conferred upon a person
by this chapter or diminishes any requirement
imposed upon an agency by this chapter, this chapter
shall take precedence unless the other statute
expressly provides that it shall take precedence
9
1131094
over all or some specified portion of this named
chapter."
(Emphasis added.)
In § 9-16-79, Ala. Code 1975, the ASMCRA expressly
provides that it shall take precedence over the AAPA: "These
procedures
shall
take
precedence
over
the
Alabama
Administrative Procedure Act." See also § 9-16-79(10), Ala.
Code 1975 ("The procedure provided in this article for
hearings and appeals shall be exclusive except as otherwise
specified."). Section 9-16-79 sets forth the extensive
hearings and appeals procedure of the ASMCRA. Included in the
appeals procedure set forth in § 9-16-79 is the right of a
party to appeal to a circuit court after its administrative
remedies are exhausted. § 9-16-79(4)b., Ala. Code 1975
("[A]ny party to the proceeding may secure a judicial review
thereof by filing a notice of appeal in circuit court. ... No
circuit court shall permit an appeal unless the person filing
such appeal has exhausted his administrative remedies as
provided by this article."). However, absent from § 9-16-79
is a provision dictating to which circuit court a party may
appeal; in other words, § 9-16-79 lacks a venue provision.
10
1131094
Because § 9-16-79 lacks a venue provision, we must look
elsewhere to determine where venue is proper in this case.
The circuit court in the present case refused to consider the
AAPA to answer the venue question based on the language in §
9-16-79
stating
that
"[t]hese
procedures
shall
take
precedence
over the Alabama Administrative Procedure Act." For the same
reason, the Court of Civil Appeals also refused to consider
the AAPA in order to determine where venue was proper. It
appears that the circuit court and the Court of Civil Appeals
concluded that, by indicating that the appeals procedure set
forth in § 9-16-79 takes precedence over the AAPA, the
Legislature forbade entirely consideration of the AAPA when a
party seeks judicial review by appealing a decision of the
ASMC pursuant to § 9-16-79(3)a. See Ex parte Water Works Bd.
of Birmingham, ___ So. 3d at ___ ("The ASMCRA specifically
exempts appeals from the actions taken by or decisions of the
ASMC from the procedures outlined in the AAPA."). The circuit
court and the Court of Civil Appeals have misinterpreted the
plain language used by the Legislature in § 9-16-79.
11
1131094
In Billingsley v. State, 115 So. 3d 192, 196 (Ala. Crim.
App. 2012), the Court of Criminal Appeals, relying upon this
Court's precedent, stated:
"In Soles v. State, 820 So. 2d 163 (Ala. Crim.
App. 2001), this Court stated:
"'"The
first
rule
of
statutory construction is that
the intent of the legislature
should be given effect. Ex parte
McCall, 596 So. 2d 4 (Ala. 1992);
Volkswagen of America, Inc. v.
Dillard, 579 So. 2d 1301 (Ala.
1991). However, when possible,
the intent of the legislature
should be gathered
from
the
language of the statute itself.
Dillard, supra. Thus, where the
language of the statute is plain,
the court must give effect to the
clear meaning of that language.
Ex parte United Service Stations,
Inc., 628 So. 2d 501 (Ala. 1993);
IMED
Corp. v.
Systems
Eng'g
Associates Corp., 602 So. 2d 344
(Ala. 1992)."
"'Beavers v. County of Walker, 645 So. 2d
1365, 1376–77 (Ala. 1994). See also
Tuscaloosa
County
Comm'n
v.
Deputy
Sheriffs' Ass'n of Tuscaloosa County, 589
So. 2d 687, 689 (Ala. 1991) ("Words used in
[a] statute must be given their natural,
plain, ordinary, and commonly understood
meaning, and where plain language is used
a court is bound to interpret that language
to mean exactly what it says. If the
language of the statute is clear and
unambiguous, then there is no room for
12
1131094
judicial construction and the clearly
expressed intent of the legislature must be
given effect." (citations omitted)).'
"820 So. 2d at 164–65. 'Principles of statutory
construction instruct this Court to interpret the
plain language of a statute to mean exactly what it
says and to engage in judicial construction only if
the language in the statute is ambiguous.' Ex parte
Pratt, 815 So. 2d 532, 535 (Ala. 2001). '[O]nly if
there is no rational way to interpret the words
stated will we look beyond those words to determine
legislative intent.' DeKalb County LP Gas Co. v.
Suburban Gas, Inc., 729 So. 2d 270, 276 (Ala.
1998)."
Section 9-16-79 states that it takes "precedence" over
the AAPA. The word "precedence" means "[t]he act or state of
going before; adjustment of place. The right of being first
placed in a certain order." Black's Law Dictionary 1176 (6th
ed. 1990). Further, "precedence" is defined in Webster's
dictionary as "the act, right, privilege, or fact of preceding
in time, place, order, or importance." Webster's New
Universal Unabridged Dictionary 1416 (2d ed. 1983). In other
words, according to the plain language used by the
Legislature, § 9-16-79 must be considered first, before the
AAPA. The Legislature, however, did not state that § 9-16-79
was to be applied "exclusively," which means "in an exclusive
manner; to the exclusion of all others; only." Webster's, at
13
1131094
638. The Legislature's use of the word "precedence" in § 9-
16-79 indicates that the AAPA may be considered but that the
appeals procedure set forth in § 9-16-79 must be given
precedence over any similar procedure in the AAPA. Section 9-
16-79 does not state that the AAPA may not be considered in
any circumstance, as the Court of Civil Appeals and the
circuit court concluded.
Based on the flawed assumption that the AAPA cannot be
considered, ASMC and Shepherd Bend, relying upon Ex parte
Neely, 653 So. 2d 945 (Ala. 1995), and Alabama Youth Services
Board v. Ellis, 350 So. 2d 405, 407 (Ala. 1977), argue that
this Court should look to the general rule that venue in an
action against a State agency is proper in the county in which
the agency is headquartered. However, the parties have not
directed this Court's attention to any authority indicating
that the general rule set forth in Neely and Ellis determines
venue when a party who has exhausted his administrative
remedies seeks judicial review. Instead, this Court has
stated that the AAPA, specifically § 41-22-20, "provides the
procedure for soliciting judicial review of final
decisions of
administrative agencies within the State." Ex parte Worley,
14
1131094
46 So. 3d 916, 919 (Ala. 2009). Therefore, given that the
ASMCRA lacks a venue provision, we will look to § 41-22-20(b),
a part of the AAPA, to determine whether Jefferson County is
the appropriate venue for the Board's appeal.
Under the plain language of § 41-22-20(b), venue is
proper in Montgomery County, Walker County (the county in
which ASMC has its principal office), and Jefferson County
(the county in which the Board has its principal office).
ASMC agrees with the above interpretation of § 41-22-20(b).
Therefore, we conclude that venue was proper in Jefferson
County under § 41-22-20(b).
Having concluded that venue was proper in Jefferson
County under the ASMCRA and under § 41-22-20(b), we need not
consider the Board's argument that venue was proper in
Jefferson County pursuant to § 6-3-7, Ala. Code 1975.
ASMC and Shepherd Bend argue that, should this Court
determine that venue was proper in Jefferson County, transfer
of the action to Walker County was appropriate pursuant to §
6-3-21.1(a), Ala. Code 1975, which provides for transfers of
cases on the basis of the doctrine of forum non conveniens.
We cannot consider this argument at this time. Essentially,
15
1131094
ASMC and Shepherd Bend are requesting that this Court issue a
writ of mandamus directing the circuit court to transfer the
action to Walker County based on the convenience of the
parties. However, as set forth above, the circuit court
determined that venue in Jefferson County was improper and
transferred the action to Walker County on that basis.
Accordingly, the circuit court did not consider ASMC's and
Shepherd Bend's forum non conveniens argument. See Ex parte
Miller, Hamilton, Snider & Odom, LLC, 978 So. 2d at 14 ("The
doctrine of forum non conveniens is applicable only '[w]ith
respect to civil actions filed in an appropriate venue.' §
6–3–21.1(a) (emphasis added).").
Further, in order for ASMC and Shepherd Bend to prevail,
they must show that the circuit court had an imperative duty
to transfer the action to Walker County based on the doctrine
of forum non conveniens and that the circuit court refused to
do so. See Ex parte Integon Corp., 672 So. 2d 497, 499 (Ala.
1995) ("Mandamus is a drastic and extraordinary writ, to be
issued only where there is ... an imperative duty upon the
respondent to perform, accompanied by a refusal to do so
...."). ASMC and Shepherd Bend cannot meet this burden
16
1131094
because the circuit court did transfer the action to Walker
County, albeit for a different reason. Therefore, we will not
consider ASMC and Shepherd Bend's request for the issuance of
a writ of mandamus directing the circuit court to transfer the
action to Walker County based on the doctrine of forum non
conveniens.
Conclusion
The Board has demonstrated a clear legal right to the
relief it seeks; venue is proper in Jefferson County.
Therefore, we grant the petition and issue the writ directing
the circuit court to vacate its order transferring the action
to Walker County.
PETITION GRANTED; WRIT ISSUED.
Stuart, Bolin, Murdock, Shaw, Main, Wise, and Bryan, JJ.,
concur.
Moore, C.J., dissents.
17 | December 19, 2014 |
6c4b6455-6c36-4b76-b95f-034145ec573d | Hurst v. Alabama Power Co. | 675 So. 2d 397 | 1940097 | Alabama | Alabama Supreme Court | 675 So. 2d 397 (1996)
James B. HURST and Corinne T. Hurst
v.
ALABAMA POWER COMPANY.
1940097.
Supreme Court of Alabama.
February 9, 1996.
*398 Steven F. Schmitt of Schmitt & Harper, Tallassee, for Appellants.
Sterling G. Culpepper and Charles M. Crook of Balch & Bingham, Montgomery, John P. Oliver II of Oliver & Sims, Dadeville, for Appellee.
INGRAM, Justice.
James B. Hurst and Corinne T. Hurst sued Alabama Power Company (hereinafter "APCo") alleging fraud, misrepresentation, and tortious interference with Mrs. Hurst's employment. The trial court entered a summary judgment for APCo on the tortious interference claim. The remaining counts were tried before a jury, which returned a verdict for APCo. The Hursts appealed the summary judgment on the tortious interference claim.
On a motion for summary judgment, the burden is initially on the movant to make a prima facie showing that there is no genuine issue of material fact (i.e., that there is no dispute as to any material fact) and that the movant is entitled to a judgment as a matter of law. Rule 56, Ala.R.Civ.P.; McClendon v. Mountain Top Indoor Flea Market, Inc., 601 So. 2d 957 (Ala.1993); Elgin v. Alfa Corp., 598 So. 2d 807 (Ala.1992). "The burden does not shift to the opposing party to establish a genuine issue of material fact until the moving party has made a prima facie showing that there is no such issue of material fact." McClendon, at 958; Elgin, at 810-11.
Rule 56 must be read in conjunction with the "substantial evidence rule," § 12-21-12, Ala.Code 1975, for actions filed after June 11, 1987. See Bass v. SouthTrust Bank of Baldwin County, 538 So. 2d 794, 797-98 (Ala.1989). In order to defeat a defendant's properly supported motion for summary judgment, the plaintiff must present substantial evidence, i.e., "evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." West v. Founders Life Assurance Co. of Florida, 547 So. 2d 870, 871 (Ala.1989). On an appeal from a summary judgment, this Court reviews the record in a light most favorable to the nonmovant and resolves all reasonable doubts against the movant. Wilma Corp. v. Fleming Foods of Alabama, 613 So. 2d 359 (Ala.1993).
In July 1992, a dispute arose between the Hursts and APCo over a lake lot in Tallapoosa County that the Hursts had leased from APCo. APCo had been selling some of its lake lots to its lessees. The dispute involved representations made to the Hursts over the terms of the sale. During this time, Corinne Hurst was an associate attorney with the law firm of Samford, Denson, Horsley, Pettey, and Martin (hereinafter "Samford, Denson") in Opelika. At the time the dispute arose, APCo had a retainer agreement with Samford, Denson. Mrs. Hurst knew that APCo had been a former client of Samford, Denson. Although Mrs. Hurst had worked closely with John Denson, a partner with the firm, she went to Yetta Samford, the senior partner, to notify him that she and her husband had a problem with APCo. Yetta Samford made several contacts with APCo on behalf of the Hursts.
In August 1993, the Hursts filed this action against APCo, alleging fraud and misrepresentation. The law firm of Balch & Bingham in Montgomery, which also had a retainer agreement with APCo, was hired to defend the lawsuit.
*399 In September 1993, John Denson attended a continuing legal education seminar in Auburn. John Scott, an attorney with Balch & Bingham, was also attending the seminar. Denson and Scott, who knew each other from prior dealings with APCo, spoke with each other at the seminar. During their conversation, Scott asked Denson if he knew that his law firm had sued APCo. Denson said that he did not. Scott then explained that Denson's associate, Corinne Hurst, and her husband, had sued APCo regarding their lake cabin and lot. Denson requested that Scott send him a copy of the complaint filed by the Hursts. Approximately one week later, Charlie Crook, an attorney with Balch & Bingham, had a conversation with Denson regarding the lawsuit. Denson then went to discuss the Hursts' lawsuit with Yetta Samford. Samford told Denson that Corinne Hurst had come to him earlier and discussed with him her problem with APCo.
In October 1993, Denson discussed the lawsuit with Corinne Hurst. After learning of these various conversations, the Hursts' attorney, Steve Schmitt, issued a "Notice of Intent to Serve Subpoena on Nonparty," to the law firm of Samford, Denson. The subpoena requested documents concerning communications between APCo and any attorney with Samford, Denson. APCo objected, asserting that Samford, Denson was acting as counsel for APCo and that, therefore, any such communications were privileged. After receiving the objection, Denson contacted Crook, objecting to the assertion that Samford, Denson was acting as counsel for APCo. After the conversation with Crook, Denson contacted a law firm in Birmingham, seeking advice.
On December 2, 1993, Samford, Denson held a firm meeting. Mrs. Hurst attended the meeting and was questioned regarding the lawsuit. On December 3, 1993, she received a copy of a letter in which Samford, Denson had resigned from representation of APCo. Mrs. Hurst went to discuss the matter with Denson; she resigned from the firm later that day.
The Hursts amended their complaint, alleging tortious interference with Mrs. Hurst's employment. The trial court entered a summary judgment for APCo on the tortious interference claim. A jury found for APCo on the remaining counts.
This Court reviewed the law of intentional interference with contractual relations and the law of intentional interference with business relations in Gross v. Lowder Realty Better Homes & Gardens, 494 So. 2d 590 (Ala.1986), and in that case it adopted a single rule to encompass both causes of action. This Court held that for a plaintiff to recover for intentional interference with business or contractual relations, the plaintiff must show:
494 So. 2d at 597.
We conclude that on its motion for summary judgment, APCo made a prima facie showing that there was no genuine issue of material fact and that it was entitled to a judgment as a matter of law. As to the first and second elements, the Hursts produced evidence that Mrs. Hurst was employed by the law firm of Samford, Denson as an associate attorney and that APCo and Balch & Bingham attorneys had knowledge of the employer-employee relationship. However, the Hursts' claim must fail because they presented no evidence to support a finding of the third elementthat APCo intentionally interfered with Mrs. Hurst's employment relationship. Evidence was presented that APCo had been a former client and that a retainer agreement existed between APCo and Samford, Denson. Attorneys with Balch & Bingham knew of this existing relationship. The first conversation that took place between Samford, Denson and attorneys for APCo was a chance meeting. Samford, Denson initiated further communications in an effort to resolve the dilemma it had been *400 placed in by the Hursts' lawsuit. The Hursts produced no evidence, only speculation, that APCo interfered with Mrs. Hurst's employment relationship with Samford, Denson. Certainly, they presented no evidence of an intentional interference. Therefore, their claim must fail. Because the Hursts produced no evidence as to the third element, we need not address the fourth and fifth elements.
When a party opposing a properly supported motion for summary judgment offers no evidence to contradict that presented by the movant, the trial court must consider the movant's evidence uncontroverted, with no genuine issue of material fact existing. Voyager Guaranty Ins. Co. v. Brown, 631 So. 2d 848 (Ala.1993). Further, mere conclusory allegations or speculation that fact issues exist will not defeat a properly supported summary judgment motion, and bare argument or conjecture does not satisfy the nonmoving party's burden to offer facts to defeat the motion. Crowne Investments, Inc. v. Bryant, 638 So. 2d 873 (Ala.1994).
After carefully reviewing the record, and viewing the evidence in the light most favorable to the Hursts, we conclude that the trial court properly entered the summary judgment for APCo. Therefore, that judgment is due to be affirmed.
AFFIRMED.
HOOPER, C.J., and ALMON, HOUSTON, and BUTTS, JJ., concur. | February 9, 1996 |
19b9dc44-4b80-4a45-8fe4-d618cb158d23 | Ex Parte Colagross | 674 So. 2d 1315 | 1950276 | Alabama | Alabama Supreme Court | 674 So. 2d 1315 (1996)
Ex parte John T. COLAGROSS.
(In re SHOALS COMMUNITY COLLEGE and Dr. Larry McCoy v. John T. COLAGROSS).
1950276.
Supreme Court of Alabama.
February 9, 1996.
Gayle H. Gear of Dawson and Gear, Birmingham, for Petitioner.
Roger L. Bates and Edwin O. Rogers of Tingle, Watson & Bates, P.C., Birmingham, for Respondents.
BUTTS, Justice.
WRIT DENIED.
HOOPER, C.J., and ALMON and INGRAM, JJ., concur.
HOUSTON, J., concurs specially.
HOUSTON, Justice (concurring specially).
I concur in the denial of the writ of certiorari. My understanding of the opinion of the Court of Civil Appeals is that the language therein relating to immunity applied only to Colagross's claims based on state law. See Shoals Community College v. Colagross, 674 So. 2d 1311 (Ala.Civ.App.1995). To the extent that the immunity language of that opinion may be applied to any claim under 42 U.S.C. § 1983, I disagree with that language insofar as that language differs from the following.
Defendants in 42 U.S.C. § 1983 actions must look to federal law in order to establish an immunity defense. The United States Supreme Court in Howlett v. Rose, 496 U.S. 356, 383, 110 S. Ct. 2430, 2447, 110 L. Ed. 2d 332 (1990), in reversing the judgment of a Florida District Court of Appeals, held:
There are two broad types of immunity available to state officials who are being sued under § 1983. Persons being sued in their *1316 "official capacity" are entitled to assert "only immunities ... that the governmental entity possesses." Hafer v. Melo, 502 U.S. 21, 25, 112 S. Ct. 358, 362, 116 L. Ed. 2d 301 (1991). Persons "sued in their personal capacities, unlike those sued in their official capacities, may assert personal immunity defenses such as objectively reasonable reliance on existing law." Id.
Whether governmental immunity exists under § 1983 boils down to whether the entity is considered a "person" for § 1983 purposes. Because States and arms of State government are not considered persons for § 1983 purposes when they are being sued for damages, officials sued in their "official capacities" are likewise not considered persons under § 1983 when they are being sued for damages. Hafer, 502 U.S. at 27, 112 S. Ct. at 362-63. "A state official [sued] in his or her official capacity, when sued for injunctive relief," is considered "a person under § 1983 because `official-capacity actions for prospective relief are not treated as actions against the State.'" Id., 502 U.S. at 27, 112 S. Ct. at 362-63 (quoting Kentucky v. Graham, 473 U.S. 159, 167 n. 14, 105 S. Ct. 3099, 3105-06 n. 14, 87 L. Ed. 2d 114 (1985)).
When an official is sued in his or her "individual" or "personal capacity,"
"Freilich & Carlisle, Section 1983: Sword and Shield, pp. 335-36 (1983). The class of officials entitled to absolute immunity under § 1983 is very limited. "Absolute individual immunity is primarily enjoyed by judges and legislators, and by other officials acting in a judicial, quasi-judicial, legislative, or quasi-legislative capacity." Id. at 336. The Supreme Court in Hafer v. Melo, 502 U.S. at 29, 112 S. Ct. at 363-64, stated:
"A qualified individual immunity is afforded to public officials, other than those with an absolute immunity, who have acted in good faith." Freilich, Section 1983, supra, at 340. In George v. McIntosh-Wilson, 582 So. 2d 1058, 1061 (Ala.1991), Justice Adams wrote:
(quoting Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S. Ct. 2727, 2738, 73 L. Ed. 2d 396 (1982) (emphasis omitted)). He further stated:
582 So. 2d at 1061 (quoting Barts v. Joyner, 865 F.2d 1187, 1190 (11th Cir.1989), cert. denied, 493 U.S. 831, 110 S. Ct. 101, 107 L. Ed. 2d 65 (1989)). "[A]n allegation of lack of good faith is not necessary in the plaintiff's pleadings, as good faith [or qualified immunity] is an affirmative defense." Freilich, Section 1983, supra, at 341 (citing Gomez v. Toledo, 446 U.S. 635, 100 S. Ct. 1920, 64 L. Ed. 2d 572 (1980)). | February 9, 1996 |
36842f71-2cff-4a32-b89c-84e8835a5953 | Asam v. Alabama State Bar | 675 So. 2d 866 | 1940912 | Alabama | Alabama Supreme Court | 675 So. 2d 866 (1996)
Julia McCain Lampkin ASAM
v.
ALABAMA STATE BAR.
1940912.
Supreme Court of Alabama.
February 23, 1996.
*867 Julia McCain Lampkin Asam, pro se.
Robert W. Norris, General Counsel, Alabama State Bar, Montgomery, for Alabama State Bar.
RICHARD L. JONES, Retired Justice.
The unpublished memorandum of November 3, 1995, is withdrawn and the following opinion is substituted therefor.
Julia McCain Lampkin Asam appeals from an order of the Alabama State Bar in a disciplinary proceeding that resulted in her disbarment. We affirm.
Based on grievances filed against Asam, the Alabama State Bar filed five formal complaints against Asam; those complaints contained 28 charges. Following a hearing before the Disciplinary Board of the Alabama State Bar ("the Board"), the Board found Asam guilty of 17 of the 28 charges against her, and, on each of the five complaints, the Board ordered Asam disbarred. The Board also imposed the following additional penalties:
For clarity's sake, each complaint is discussed separately.
Complaint One involved a civil action filed by Asam on behalf of Jessie Edward Williams. Williams was injured on the job in 1973 and, represented by counsel (not Asam), settled a personal injury claim and a workers' compensation case in 1974. Sixteen years later, Williams attempted to reopen his case with "newly discovered evidence"; however, this Court, holding that the "newly discovered" evidence had been generated during the discovery period of Williams's original lawsuit, affirmed the trial court's dismissal of Williams's complaint. See Williams v. Capps Trailer Sales, Inc., 589 So. 2d 159 (Ala.1991).
Thereafter, Asam filed an action "for Mr. Williams" in a circuit court seeking $5 million in damages, again claiming to have "newly discovered evidence." She sued all of the original defendants, as well as two insurance companies that had not insured any of the parties. The trial court dismissed the complaint and imposed sanctions against Asam. The Court of Civil Appeals affirmed and imposed additional sanctions against Asam. See Williams v. Capps Trailer Sales, Inc., 607 So. 2d 1272 (Ala.Civ.App.1992). This Court denied certiorari review. Asam's separate appeal from the award of additional sanctions was resolved against her in Asam v. Capps Trailer Sales, Inc., 631 So. 2d 251 (Ala.Civ.App.1993). This Court again denied certiorari review.
Asam then filed an identical action on behalf of Williams in a federal district court again claiming "newly discovered evidence," but adding the State of Alabama as a defendant. The district court dismissed the complaint; the Court of Appeals for the Eleventh Circuit affirmed the dismissal; and the Eleventh Circuit imposed sanctions against Asam. Over $32,000 in sanctions were imposed against Asam in those two cases.
Complaint One contained nine charges against Asam: Charge Iviolation of DR 1-102(A)(5)[1]; Charge IIviolation of Rule of *869 Professional Conduct 8.4(d)[2]; Charge III violation of DR 7-102(A)(2)[3]; Charge IV violation of DR 7-102(A)(5)[4]; Charge V violation of Rule of Professional Conduct 1.1[5]; Charge VIviolation of Rule of Professional Conduct 3.1(a)[6]; Charge VIIviolation of Rule of Professional Conduct 3.3(a)(1)[7]; Charge VIIIviolation of Disciplinary Rule 1-102(A)(6)[8]; and Charge IX violation of Rule of Professional Conduct 8.4(g).[9]
Asam was found guilty of Charges II, III, V, and VI, and not guilty of the remaining charges of Complaint One.
Complaint Two resulted from grievances filed with the State Bar regarding a lawsuit Asam had filed against Circuit Judge Bernard Harwood. According to Asam's complaint, Harwood, the incumbent judge and Asam's opponent in the 1992 race for judge of the Tuscaloosa County Circuit Court, made libelous remarks about Asam during his campaign. During the discovery phase of that lawsuit, Asam's conduct included avoiding notice and service, and not cooperating with regard to deposition scheduling.
The circuit court granted Harwood's motion for summary judgment. Asam filed a post-judgment motion to alter, amend, or vacate the judgment, alleging that the trial court's order contained false statements and that the trial judge had failed to read pleadings in the case. Asam's post-judgment motion was denied. This Court affirmed the summary judgment, without opinion. Asam filed an identical action against Harwood in a federal district court. The district court dismissed the complaint on res judicata grounds, and the Court of Appeals for the Eleventh Circuit affirmed the dismissal.
Complaint Two, ASB 94-177, contained five charges against Asam: Charge Iviolation of Rule of Professional Conduct 8.4(d)[10]; Charge IIviolation of Rule of Professional Conduct 1.1[11]; Charge IIIviolation of Rule of Professional Conduct 3.1(a)[12]; Charge IVviolation of Rule of Professional Conduct 3.3(a)(1)[13]; and Charge Vviolation of Rule of Professional Conduct 8.4(g)[14].
The Board found Asam guilty of Charges I, III, and V, and not guilty of the remaining charges.
Complaint Three also arose from Asam's 1992 campaign for circuit judge. Tuscaloosa lawyer Al Vreeland wrote to the lawyers of the 6th Judicial Circuit an "open letter" in which he asked the lawyers to support Judge Harwood and in which he expressed the opinion *870 that Asam was "completely and hopelessly unqualified." Asam sued Vreeland; the trial court granted Vreeland's motion for summary judgment. Vreeland moved for sanctions, and, in a hearing to determine reasonable attorney fees, the trial court heard testimony from several local lawyers. Thereafter, Asam added as defendants those lawyers who had testified and Vreeland's secretary,[15] alleging a "conspiracy" against her.
The trial court dismissed Asam's complaint; made findings of fact and conclusions of law regarding Asam's conduct in that action; awarded monetary reimbursement from Asam to Vreeland and one of the co-defendants; and ordered the circuit court clerk to send a copy of the orders in the case to the State Bar Disciplinary Commission. Asam filed three appeals from the orders in that case; as to each appeal this Court affirmed.
Asam filed an identical action in a federal district court against all the co-defendants she had sued in the state court action, seeking $10 million in damages. The district court dismissed the complaint and the Court of Appeals for the Eleventh Circuit affirmed the dismissal.
Based on the allegations Asam had made in her pro se lawsuits against Vreeland and his co-defendants, her conduct during the pendency of those actions, and the result in those actions, the Bar filed five charges against Asam in Complaint Three (ASB 93-476, -378, -379, and -488): Charge Iviolation of Rule of Professional Conduct 8.4(d)[16]; Charge IIviolation of Rule of Professional Conduct 1.1[17]; Charge IIIviolation of Rule of Professional Conduct 3.1(a)[18]; Charge IVviolation of Rule of Professional Conduct 3.3(a)(1)[19]; and Charge Vviolation of Rule of Professional Conduct 8.4(g).[20]
Asam was found guilty of Charges I, III, and V, and not guilty of the remaining charges in Complaint Three.
Complaint Four involved Asam's filing a medical malpractice action on behalf of Ms. Mary H. Stokes. After Stokes had developed a post-operative infection in mid-1989, she consulted a lawyer in Selma about a possible medical malpractice claim. After 10 months, the Selma lawyer returned Ms. Stokes's file to her. Stokes consulted another lawyer in Selma, who referred her to a lawyer in Birmingham. The Birmingham lawyer informed Stokes of the difficulty of proving medical malpractice without the testimony of a medical expert and refused to take her case.
A friend of Stokes recommended that she see Asam. Asam agreed to represent Stokes for a fee of $1,000; however, Stokes signed a 50% contingent fee employment contract with Asam. That contract also contained the notation "$1,000 research in medical and legal non-refundable money to file lawsuit."
Asam filed a medical malpractice action for Stokes, but filed no documents with the court except Stokes's medical records. The circuit court twice warned Asam that the defendants' motion for summary judgment would be granted unless Asam could provide expert medical testimony. Asam then tried to qualify herself as a medical expert in the case and filed an affidavit in which she purported to be a medical expert. However, Asam's affidavit did not refute the affidavit of the defendant doctor. The trial court also pointed out that the articles authored by Asam and offered as proof of her expertise were over 30 years old and that Asam's claimed expertise was in a field not related to the defendants' specialty of obstetrics surgery.
The trial court granted the defendants' motion for summary judgment; it later denied Asam's post-judgment motion to alter, amend, or vacate the summary judgment. Asam billed Stokes for a total of $4,168. On appeal, this Court affirmed the summary *871 judgment without opinion. 622 So. 2d 939 (Ala.1993) (table). Then, without Stokes's knowledge, Asam appealed this Court's decision to the United States Supreme Court. That Court denied certiorari review. Stokes v. Hatch, ___ U.S. ___, 114 S. Ct. 1063, 127 L. Ed. 2d 383 (1994).
Complaint Four (ASB 94-176) contained five charges against Asam: Charge Iviolation of Rule of Professional Conduct 8.4(d)[21]; Charge IIviolation of Rule of Professional Conduct 1.1[22]; Charge IIIviolation of Rule of Professional Conduct 3.1(a)[23]; Charge IVviolation of Rule of Professional Conduct 3.3(a)(1)[24]; and Charge Vviolation of Rule of Professional Conduct 8.4(g).[25]
The Board found Asam guilty of Charges I, II, III, and IV, and not guilty of Charge V.
Complaint Five resulted from Asam's filing two wrongful death actions[26] on behalf of Johnny H. Waters and Joseph Hugh Waters, based on the death of the plaintiffs' wife and mother, respectively. The defendants moved to dismiss, alleging that the complaints were null and void 1) because a wrongful death action must be brought by the deceased's personal representative acting in that capacity, and 2) because the applicable statutory limitations period had expired. The circuit court granted the motions to dismiss, and this Court affirmed the dismissals. Waters v. University of Alabama Hospitals, 591 So. 2d 450 (Ala.1991).[27] Asam filed an action in a federal district court, making identical claims. The complaint was dismissed. The Court of Appeals for the Eleventh Circuit affirmed the dismissal.
Complaint Five (ASB 94-175) stated four charges against Asam based on her actions in regard to those state and federal lawsuits: Charge Iviolation of Rule of Professional Conduct 8.4(d)[28]; Charge IIviolation of Rule of Professional Conduct 1.1[29]; Charge IIIviolation of Rule of Professional Conduct 3.1(a)[30]; and Charge IVviolation of Rule of Professional Conduct 8.4(g)[31].
The Board found Asam guilty of Charges I, II, and III, and not guilty of Charge IV.
In her brief to this Court, Asam states multiple issues involving numerous allegations of error on the part of the Disciplinary Board. Asam has also filed with this Court a motion to supplement the record on appeal with documents that she says this Court must order the Disciplinary Board to produce. Because our disposition of the issues on appeal relates directly to the merits of Asam's motion to supplement the record, we will include our consideration of her motion as part of our analysis and disposition of the merits of the appeal.
Asam contends that she was denied due process of law because, she says, she was not properly served with notice of the disciplinary proceedings. The evidence is to the contrary.
*872 The required procedure for investigating alleged misconduct by a member of the Alabama State Bar and for conducting a hearing based on the investigation is set out in the Alabama Rules of Disciplinary Procedure.
Rule 12(a), Ala.R.Disc.P., requires that the general counsel of the Alabama State Bar investigate complaints of alleged lawyer misconduct and report to the Alabama State Bar's Disciplinary Commission the results of the investigation and the general counsel's decision as to whether formal charges should be filed against the lawyer. In Asam's case, following his report to the Disciplinary Commission, and pursuant to Rule 12(e), Ala. R.Disc.P., the general counsel filed the five complaints with the secretary of the Alabama State Bar.
Also pursuant to Rule 12(e), the secretary of the State Bar signed the five complaints against Asam and five related summonses on June 23, 1994. The five summonses and complaints were received by the Tuscaloosa County Sheriff's Department on June 24, 1994, and were served on June 26, 1994.
Rule 12(e)(1), Ala.R.Disc.P., gives the respondent lawyer 28 days after service of the complaints to file an answer with the general counsel and the Disciplinary Board. Rule 12(e)(1) goes on to provide:
The record reveals that Asam did not file an answer during the 28-day period following June 26, 1994, and did not request permission of the chairman to file an out-of-time answer. Asam does not contend that an answer or response was filed in regard to any of the five complaints.
Pursuant to Rule 12(e)(3), Ala.R.Disc.P., and Rule 5, Ala.R.Civ.P., the first notices of the formal hearing on the five complaints, set for February 23, 1995, were mailed by the Bar to Asam at her home address and at her office addressboth by regular first class mail and by certified mailon January 20, 1995. The regular mail was not returned; however, the certified mail was returned from both addresses, on February 8 and February 24, as "unclaimed." On February 7, notice was sent by Airborne Express; it was delivered to Asam's residence on February 8, 1995. Additionally, the State Bar hired a process server who, after several attempts, personally served the notice on Asam's husband at their home on February 8, 1995.
The record makes it clear that, despite her assertions to the contrary, Asam had sufficient notice of the disciplinary hearing involving the complaints against her, and the record makes it clear that her conduct showed a pattern of avoiding service of process. See Board of Commissioners of the Alabama State Bar v. Tarver, 293 Ala. 343, 302 So. 2d 856 (1974) (and the authorities cited therein).
Asam next argues that her right to due process was violated because, she says, she was not notified that the disciplinary hearing would also be a "surprise sanity hearing." We find no merit in this argument.
Asam's contention that she was subjected to a "sanity hearing" at the February 23, 1995, disciplinary hearing is based, in part, on the discussion that occurred when she attempted to obtain a continuance of the hearing. As one of the grounds for her motion for a continuance, Asam stated that she had been physically disabled by an automobile accident in 1994 and that, as a result, she was in pain, was involved in rehabilitation therapy, and had had to stop the active practice of law at her office.
Based on these assertions, the Board gave Asam the option of postponing the hearing if she chose to be placed on "physical disability status." The Board included in this option the offer to appoint a lawyer to manage Asam's cases and serve her clients during her term of "disability." Asam refused. The record is totally devoid of any mention of Asam's mental competence during the discussion of her motion to postpone the hearing.
*873 Asam also claims that her due process rights were violated by what she calls the "sanity hearing" that she says gave rise to that portion of the Board's disbarment order requiring that, "[p]rior to filing a petition for reinstatement," Asam must be examined by a qualified medical expert, who is "to inquire into and report to the Disciplinary Board the mental competence of the respondent."
We have read the transcript of the disciplinary proceedings and the various documents that gave rise to the five complaints against Asam. The record makes it clear that, while the disciplinary proceeding was not a "surprise sanity hearing," the Board acted properly in adding to its order of disbarment the requirement concerning Asam's mental competence. Further, the Board's order fully complies with Rule 8, Ala.R.Disc. P., which allows sanctions and remedies "consistent with the purposes of lawyer discipline," in addition to the specific sanctions set out in that rule.
The third error alleged by Asam is that the Bar wrongfully failed to produce certain documents relating to the charges against her. The documents to which Asam refers are 1) the "original grievances" filed against her with the State Bar; and 2) the entire file in ASB 94-177. Asam claims that, without these documents, she was obliged to proceed in the disciplinary hearing not knowing what the charges were against her. This argument has no merit.
On June 28, 1994, Asam personally appeared in the office of the general counsel in Montgomery to demand copies of the grievances filed against her (Asam had been served with the five summonses and complaints on June 26). In a written response to this demand, General Counsel Robert W. Norris informed Asam that the five complaints with which she had been served contained the essence of every grievance. In this same written response, Norris suggested that Asam focus her attention on the serious charges contained in the five complaints and that Asam take steps to obtain a lawyer to represent her during the disciplinary proceedings.
Asam made no further attempt to discover documents or other evidence in this proceeding. However, on July 8, 1994, Asam sued the general counsel and others in a federal district court, alleging that they had violated her right to have copies of the original grievances. The district court granted the defendants' motion for summary judgment, and then denied Asam's motion to alter, amend, or vacate its judgment, holding:
Asam v. Alabama State Bar, [Ms. 94-T-859-N, March 1, 1995] (M.D.Ala.1995).
As the State Bar points out, Asam erroneously attempted to use the order of the federal district court enjoining further discovery in the federal case as her excuse for conducting no discovery in the disciplinary proceedings pending against her before the Disciplinary Board of the Alabama State Bar. However, despite Asam's total failure to avail herself of the proper means of discovery, as provided by the Alabama Rules of Civil Procedure, at the hearing on February 23, the chairman of the Disciplinary Board made the following ruling during the discussion of Asam's motion for a continuance:
There is no evidence to support Asam's argument that she was forced to proceed with the disciplinary hearing without full knowledge of the charges against her. Further, quoting with approval In re Sullivan, 283 Ala. 514, 219 So. 2d 346 (1969), this Court held in Board of Comm'rs of the Alabama State Bar v. Tarver, 293 Ala. 343, 302 So. 2d 856 (1974):
293 Ala. at 346-47, 302 So. 2d at 858-59 (quoting earlier cases).
It is clear that Asam was served with complaints framed to specify the charges against her and that she was given a hearing with the opportunity to defend. We find no violation of Asam's right to due process with regard to the documents she claims were withheld from her.
Asam's fourth contention of error is that the failure of Chairman Devereaux and General Counsel Robert Norris to recuse in Asam's disciplinary hearing created a conflict of interest and, therefore, violated Asam's right to due process. We disagree.
Asam bases her "conflict of interest" argument on the claim that her pro se lawsuits against Ms. Devereaux were pending in a state circuit court and that her lawsuits against Gen. Norris were pending in a federal district court during the pendency of her disciplinary proceedingsdespite the fact that judgments in favor of the defendants and against Asam had been entered in both cases.
The standard for determining whether a lawyer should decline to represent a defendant in a criminal action is whether there was an actual, rather than a possible, conflict of interest and whether the conflict would adversely affect the performance of the lawyer in representing the client. See Cuyler v. Sullivan, 446 U.S. 335, 100 S. Ct. 1708, 64 L. Ed. 2d 333 (1980).
This is not an appeal from a criminal proceeding; however, we conclude that, in order to show that in this disciplinary hearing Ms. Devereaux and Gen. Norris should have recused, Asam must prove that there was an actual conflict of interest on the part of Ms. Devereaux and Gen. Norris and that that conflict adversely affected their impartiality or their performance. Asam has produced no proof of a conflict of interest, nor has she shown any misconduct on the part of Ms. Devereaux or Gen. Norris. Ms. Devereaux and Gen. Norris correctly refused to recuse.
Asam's fifth contention of error is that her right to free speech was violated because, she contends, she was disciplined in connection with lawsuits she had filed in two "political" casesthe lawsuits arising from Asam's campaign for a judicial office. There is no merit to this argument.
In complaints ASB 94-177, 93-476, 93-488, 93-378 and 93-379, Asam was found guilty of the charges of engaging in conduct prejudicial to the administration of justice; engaging in conduct that adversely reflected on her fitness to practice law; and filing a lawsuit to *875 "harass or maliciously injure another." While the right of free speech protects political statements made in the context of campaign rhetoric, it does not provide a shelter for a lawyer's abuse of the judicial system as a tool for harassment when his or her political aspirations are thwarted. The disciplinary hearing and the resulting discipline did not violate Asam's right to free speech.
Asam's sixth contention of error charges that Gen. Norris, acting as general counsel for the State Bar, violated Rule 30, Ala.R.Disc.P., when, following Asam's disciplinary hearing, he provided information regarding Asam's disbarment to a newspaper, The Tuscaloosa News.
Before January 1, 1995, Rule 30(a), Ala. R.Disc.P., required that a decision by the Disciplinary Board to impose public discipline upon a lawyer remain confidential until the time for appealing the Board's decision had expired or until the lawyer's appeal had been finally decided by this Court. However, by an order dated October 14, 1994, with an effective date of January 1, 1995, this Court amended Rule 30, so that at the time of Asam's disciplinary hearing, Rule 30(a) provided:
Given the seriousness of the charges contained in the complaints against Asam, we find no compelling reason for the Disciplinary Board to order "continued confidentiality" of the proceedings involving Asam. We hold, therefore, that Gen. Norris did not violate Rule 30, Ala.R.Disc.P., when he informed The Tuscaloosa News of Asam's disbarment.
Asam contends that Chairman Devereaux committed reversible error when she refused to permit Asam to call General Counsel Norris as a witness to testify to what Asam alleged was a conspiracy by Gen. Norris and others to fraudulently divest Asam of her right to practice law. Asam had not submitted Gen. Norris's name to the Board as a prospective witness and, when asked at the hearing, she submitted no proof to support her allegation that Gen. Norris was a "necessary" witness. Ms. Devereaux acted within her discretion in denying Asam's request. We find no error in this regard. See C. Gamble, McElroy's Alabama Evidence § 94.05(3) (4th ed., 1991); and Maund v. State, 254 Ala. 452, 48 So. 2d 553 (1950).
The eighth error alleged by Asam is that a member of the Disciplinary Board panel, lawyer Wade Baxley, was biased against her. Asam contends that Baxley should have been stricken as a member of the panel. We disagree.
Asam bases her allegations regarding Baxley on what she describes as Baxley's personal attack against her during the hearing. The transcript reveals no such attack. Baxley's remarks that Asam complains of were made immediately after an extended discussion of Asam's motion to postpone the hearing and to be allowed access to the documents she alleged had been wrongfully withheld:
R. 1519-24.
The remarks made by Panel Member Baxley, taken in context, appear to be an expression of concern for Asam's rights as an accused and for the integrity of the entire disciplinary proceeding. The record indicates no evidence of bias on the part of Baxley. Further, while Asam did object, she did not ask for any action to be taken with regard to Baxleyshe simply stated her opinion that Baxley was biased. Asam's argument on this issue, therefore, must fail.
Asam argues that Chairman Devereaux erred in allowing a particular witness to testify; she argues that his testimony was hearsay. Specifically, when the witness testified regarding a hearing in one of the lawsuits involving Asam, Asam stated, "[A]s far as I remember, you weren't even there." Chairman Devereaux asked the witness if he had been at the hearing, and the witness said that he had been. Asam made no further hearsay objection to the witness's testimony following his assertion that he had attended the hearing in question. There is nothing for this Court to review, and there is no merit to this issue.
Asam next argues that the Alabama State Bar failed to timely prosecute Complaint One (ASB 92-254). Rule 31, Ala.R.Disc.P., provides that disciplinary proceedings "must be instituted by the filing of formal charges within six (6) years from the ... the offense." The lawsuit that gave rise to Complaint One was filed by Asam on March 12, 1990. Formal charges against Asam based on that lawsuit were filed on Asam on June 26, 1994. There is no merit to this issue.
Asam also claims (1) that the State Bar failed to timely produce a list of witnesses who were expected to testify against her, and (2) that the Bar failed to call certain other witnesses to testify and that this failure to call them resulted in Asam's being unable to confront them.
As to Asam's claim that the State Bar failed to timely produce a list of witnesses, the record shows that the State Bar's list of witnesses was provided to Chairman Devereaux by a facsimile transmission on February 20, 1995. The list was also mailed to Asam, although she had not requested that she be notified of the witnesses who would be called by the State Bar and although Chairman Devereaux had not ordered the parties to *878 notify each other of their prospective witnesses.
As to Asam's claim that she was denied the right to confront the witnesses against her, we first note that Asam's "list" of witnesses, served on the Chairman on February 19, 1995, stated that Asam intended to call the witnesses that the State Bar called. Because the State Bar did not call every witness on its list, Asam claims that her right to confrontation was denied. We disagree.
Asam was given the opportunity to examine each witness called by the State Bar in the disciplinary proceeding. It is the evidence given by these testifying witnesses that was considered by the Board; therefore, Asam was afforded her full right to confront each witness who actually testified. There is no requirement that the State Bar call a particular witness from a list of possible witnesses. Furthermore, Asam made no attempt to call a witness on her behalf. There is no error with regard to this issue.
Asam claims that she had to appear before an "all male disciplinary panel" and that the makeup of the panel resulted in gender discrimination against her, and she claims that the penalties assessed against her result in age discrimination because she cannot apply for reinstatement as a lawyer until she reaches age 69.
Pursuant to Rule 4(a)(1), Ala.R.Disc. P., the five members of the Disciplinary Board are elected by the Board of Bar Commissioners. Rule 4(a)(2) gives the chairman of the Disciplinary Board the authority to appoint temporary members of the Board from the roster of Bar commissioners so as to provide a full five-member panel to hear a particular matter before the Board. The membership of the Board for the proceeding involving Asam was obtained by following the Rules of Disciplinary Procedure, and we find no evidence in the record of any gender-based discriminatory conduct toward Asam. Further, although Asam categorizes the Board as an "all male panel," the chairman of the Board was a woman.
Similarly, Asam's contention of age discrimination is not supported by the evidence. Rule 28(b), Ala.R.Disc.P., clearly provides that, following disbarment, a lawyer may not apply for reinstatement until the expiration of five years from the date of disbarment. The rule applies to all disbarments and does not discriminate against a disbarred lawyer because of the lawyer's age at the time of disbarment. Asam's allegations of gender and age discrimination are without merit.
The standard of review applicable to an appeal from an order of the Disciplinary Board has been stated by this Court in numerous decisions:
Norris v. Alabama State Bar, 582 So. 2d 1034 (Ala.1991) (and see the cases cited therein). Applying this standard, we hold that the decision of the Disciplinary Board of the Alabama State Bar was supported by clear and convincing evidence. Having found no error in the proceeding, we affirm the judgment of the Disciplinary Board in regard to all of the five complaints filed against Julia McCain Lampkin Asam.
During the pendency of this appeal, Asam filed a "motion to supplement the record on appeal of [ASB] 92-254 et al. because Alabama State Bar, Mr. Robert Norris should have given [certain documents] to Dr. Asam when he sent his false formal charges based on no probable cause." Without listing them, we note that all of the documents Asam says "are to be produced" fall into one of two categories: (1) documents requested at the disciplinary hearing that were provided to Asam or that were denied to her because she *879 already had them; and (2) documents requested for the first time on appeal and, therefore, not contained in the record of the disciplinary proceeding. Therefore, Asam's motion to supplement the record on appeal is denied.
This opinion was prepared by retired Justice Richard L. Jones, sitting as a Justice of this Court pursuant to § 12-18-10(e), Ala. Code 1975.
APPLICATION GRANTED; MEMORANDUM WITHDRAWN; OPINION SUBSTITUTED; MOTION TO SUPPLEMENT THE RECORD ON APPEAL DENIED; AFFIRMED.
HOOPER, C.J., and MADDOX, SHORES, HOUSTON, KENNEDY, INGRAM, COOK, and BUTTS, JJ., concur.
[1] "A lawyer shall not engage in conduct that is prejudicial to the administration of justice."
[2] "It is professional misconduct for a lawyer to engage in conduct that is prejudicial to the administration of justice."
[3] "In his representation of a client, a lawyer shall not knowingly advance a claim or defense that is unwarranted under existing law, except that he may advance such claim or defense if it can be supported by good faith argument for an extension, modification, or reversal of existing law."
[4] "In his representation of a client, a lawyer shall not knowingly make a false statement of law or fact."
[5] "A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness, and preparation reasonably necessary for the representation."
[6] "In his representation of a client, a lawyer shall not file a suit, assert a position, conduct a defense, delay a trial, or take other action on behalf of the lawyer's client when the lawyer knows or when it is obvious that such action would serve merely to harass or maliciously injure another."
[7] "A lawyer shall not knowingly make a false statement of material fact or law to a tribunal."
[8] "A lawyer shall not engage in any other conduct that adversely reflects on his fitness to practice law."
[9] "It is professional misconduct for a lawyer to engage in any other conduct that adversely reflects on his fitness to practice law."
[10] See footnote 2.
[11] See footnote 5.
[12] See footnote 6.
[13] See footnote 7.
[14] See footnote 9.
[15] The secretary's part in the alleged conspiracy was typing and mailing Mr. Vreeland's "open letter."
[16] See footnote 2.
[17] See footnote 5.
[18] See footnote 6.
[19] See footnote 7.
[20] See footnote 9.
[21] See footnote 2.
[22] See footnote 5.
[23] See footnote 6.
[24] See footnote 7.
[25] See footnote 9.
[26] One complaint named three physicians as defendants; the other complaint named as defendants "The University of Alabama Birmingham Medical Center; The University of Alabama Hospitals; Dr. Charles McCallum and Dr. L. Clark Taylor, Jr., Administrators, University of Alabama Hospitals."
[27] In the notice of appeal from the judgment for University of Alabama Hospitals, Mrs. Asam stated that the plaintiff was appealing only the judgment for "UAB Hospitals." However, Mrs. Asam's brief on behalf of the plaintiffs argued against the judgment for the other defendants in the case, not against the judgment for University of Alabama Hospitals. In affirming, this Court noted: "We will not address arguments concerning a judgment not appealed from; furthermore, `when the appellant fails to invite the appellate court's review of any issues raised from the court below, the trial court's judgment is due to be affirmed.'" 591 So. 2d at 451.
[28] See footnote 2.
[29] See footnote 5.
[30] See footnote 6.
[31] See footnote 9.
[32] Asam had attempted to have Judge Price order a delay in her disciplinary hearing.
[33] Asam had filed an action in a federal district court against the Alabama State Bar, its general counsel, its executive secretary, its president and president-elect, several lawyers, and a circuit judge, alleging a variety of violations of her constitutional rights.
[34] The record reflects that this concern was shared by Chairman Devereaux who, during the discussion of Asam's motion for a continuance and the Board's offer of the option that Asam accept "disabled inactive status," stated: "We also want to advise you that you are entitled to have an attorney represent you in this proceeding as a disabled inactive status attorney. And, if you cannot afford one or do not have one, we can have one appointed to represent you in that regard." | February 23, 1996 |
6b800d96-5c57-4fcb-be58-872ae461dc09 | Jefferson County v. City of Leeds | 675 So. 2d 353 | 1940255 | Alabama | Alabama Supreme Court | 675 So. 2d 353 (1995)
JEFFERSON COUNTY
v.
CITY OF LEEDS, et al.
1940255.
Supreme Court of Alabama.
November 3, 1995.
As Modified on Overruling of Application for Rehearing March 1, 1996.
*354 Charles S. Wagner, Asst. County Atty., Birmingham, for Appellant.
Billy R. Weathington, Jr. of Weathington & Associates, P.C., Leeds, for Appellees.
KENNEDY, Justice.
This case broadly involves a contract claim by the appellee, City of Leeds, Alabama, and others (collectively "Leeds"), in regard to an agreement to transfer the Leeds Waste Water Treatment Plant ("plant"), to the appellant, Jefferson County ("the County"). Leeds sued the County for, among other things, a declaratory judgment, injunctive relief, and other equitable relief. The evidence indicates that the County charges residents of the City of Leeds who live outside Jefferson County double the standard sewage rate charged Leeds residents who live inside Jefferson County. The Leeds city limits extend beyond Jefferson County into St. Clair and Shelby Counties. The County appeals the ruling of the trial court in favor of Leeds. After negotiations for the transfer of the plant between the County and Leeds in 1973, Jefferson County Commissioner Tom Gloor sent a letter to the mayor of Leeds confirming the parties' decision to enter into an agreement. The trial court found that this letter formed an agreement that legally bound each party to certain commitments. The letter stated that sewer service would be provided at "an equitable rate to all users." After the letter from Gloor in 1973, Leeds conveyed the plant by deed to the County for $1.00. By attaining ownership of the plant, the County became eligible for, and received, Federal grant money for repairs to, and further development of, its sewer system. In 1982, the County adopted a new resolution whereby the County would increase the sewage rate charged to non-Jefferson County residents of Leeds to an amount double the rate charged Jefferson County residents.
The trial court determined that Leeds met all necessary obligations required by the agreement when it conveyed the plant to the County. Leeds argued that the County was in fact in breach when it increased the rate charged to out-of-County customers to an amount double that charged to County customers. The trial court ruled that after receiving the benefit of the bargain, the County attempted to avoid the commitments made by the Jefferson County Commission in 1973 and raised fees as mentioned above.
We note that our review of the trial court's judgment in this matter is governed by the ore tenus rule. Under the ore tenus rule of review, a judgment of the trial court will not be disturbed unless it is based on findings of fact that are plainly and palpably wrong or manifestly unjust. Silverman v. Charmac, Inc., 414 So. 2d 892 (Ala.1982). It is the duty of the trial court to resolve any conflicting testimony and to render a judgment accordingly. "Where the trial court hears ore tenus evidence, a presumption of correctness exists as to the court's findings on issues of fact. Its factual determinations will not be disturbed unless they are clearly erroneous, without supporting evidence, manifestly unjust or against the great weight of the evidence." Gaston v. Ames, 514 So. 2d 877 (Ala.1987). Upon review of the record, we conclude that the trial court correctly applied the law to the facts established by the evidence, and we, therefore, adopt the court's findings, as set out below:
In its final judgment the trial court went further, and, in fact, set a new and distinct rate for the County to charge Leeds residents living outside Jefferson County for sewer service. On this issue we do not address whether the rate set by the trial court is equitable or inequitable; rather, we speak to the trial court's lack of authority to set a sewer service rate by substituting its own judgment for that of the Jefferson County Commission.
The courts have expressly rejected any notion that the judicial branch has the authority or duty to set utility rates. Alabama Metallurgical Corp. v. Alabama Public Service Commission, 441 So. 2d 565, 570 (Ala. 1983); Continental Telephone Co. of the South v. Alabama Public Service Commission, 427 So. 2d 981, 984 (Ala.1982). This Court has stated that the act of rate-making and regulation is a function of, and may be delegated by, the Legislature. City of Birmingham v. Southern Bell Tel. & Tel. Co., 234 Ala. 526, 176 So. 301 (1937). The authority of the judiciary is to ensure that legislative power is confined within constitutional limits and, so long as it is, the courts will have no duty. Id.
Amendment 73, Constitution of Alabama 1901, vests the governing body of Jefferson County with the authority to set reasonable and nondiscriminatory sewer service rates. Also, the state Legislature, under Ala. Acts 1949, Act 619, Regular Session, delegates to the Jefferson County Commission the legislative power to set sewer service rates. "Amendment 73 clearly authorizes the County to set rates for sewer service." Shell v. Jefferson County, 454 So. 2d 1331 (Ala.1984). We, therefore, affirm the judgment in favor of the City of Leeds insofar as it held that the County had violated the contract. We reverse that portion of the judgment imposing a rate adjustment, and we remand with instructions for the trial court to issue an order directing the Jefferson County Commission to establish an equitable rate.
AFFIRMED IN PART; REVERSED IN PART; AND REMANDED WITH INSTRUCTIONS.
HOOPER, C.J., and MADDOX, SHORES, and COOK, JJ., concur. | March 1, 1996 |
fd41ac6e-0471-4cf2-8db5-926182d5683f | Ex Parte Gates | 675 So. 2d 371 | 1941351 | Alabama | Alabama Supreme Court | 675 So. 2d 371 (1996)
Ex parte Reneau L. GATES and Betty A. Gates.
(Re Reneau L. GATES and Betty A. Gates v. PALM HARBOR HOMES, INC., et al.)
1941351.
Supreme Court of Alabama.
January 26, 1996.
*372 Keith A. Howard of Howard, Dunn, Howard & Howard, Wetumpka, for Petitioners.
Michael L. Bell and Lee M. Hollis of Lightfoot, Franklin, White, L.L.C., Birmingham, for Palm Harbor Homes, Inc.
Dennis R. Bailey and William H. Webster of Rushton, Stakely, Johnston & Garrett, P.A., Montgomery, for Bilo Homes, Inc., and Charles Costner.
SHORES, Justice.
Reneau L. Gates and his daughter Betty A. Gates sued Bilo Homes, Inc., Charles Costner, and Palm Harbor Homes, Inc., alleging fraud in the sale of a mobile home, breaches of various warranties, and negligent or wanton installation. Judge Sibley Reynolds, of the Elmore Circuit Court, stayed the action and ordered the parties to arbitrate. The Gateses have petitioned for a writ of mandamus directing Judge Reynolds to vacate his order. We deny the writ.
*373 The Gateses purchased from the defendant Bilo Homes, Inc., a double-wide mobile home that had been manufactured by Palm Harbor Homes, Inc. Charles Costner was the salesman and general manager for Bilo Homes, Inc. The Gateses, after experiencing several structural problems with the mobile home, learned that it was not a new home when they bought it but had been sold previously to another buyer. They sued on November 22, 1992, alleging several defects in the home, particularly that the two halves of the double-wide home did not properly join and that the steel I-beams supporting the home were damaged. Their complaint alleged breach of express and implied warranties, fraud, negligent or wanton installation, and violation of the Magnuson-Moss Warranty Act, 15 U.S.C. 2301 et seq.
Palm Harbor answered the complaint on December 19, 1994; Bilo Homes and Costner answered and counterclaimed on January 12, 1995. On February 15, 1995, Bilo Homes and Costner filed a motion to compel arbitration; subsequently, Palm Harbor filed a motion adopting and incorporating by reference the motion filed by Bilo and Costner. The trial court on May 15, 1995, entered an order compelling arbitration. This petition for the writ of mandamus followed.
The trial court's order compelling arbitration was based upon an arbitration clause found on the back of the "Manufactured Home Retail Installment Contract and Security Agreement" signed by the Gateses and by Costner in his representative capacity as general manager of Bilo Homes. The installment contract lists Bilo Homes as "Seller, Secured Party" and Green Tree Financial Corporation as assignee.[1] The arbitration clause reads as follows:
*374 A petition for a writ of mandamus is the appropriate means by which to challenge a trial court's order compelling arbitration. Ex parte Alexander, 558 So. 2d 364 (Ala.1990). Mandamus is an extraordinary remedy and requires a showing that there is: "(1) a clear legal right in the petitioner to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) properly invoked jurisdiction of the court." Ex parte Edgar, 543 So. 2d 682, 684 (Ala.1989); Ex parte Alfab, Inc., 586 So. 2d 889, 891 (Ala.1991); Ex parte Johnson, 638 So. 2d 772, 773 (Ala.1994).
We note initially that we find no merit to the Gateses' contention that the defendants waived any right to proceed under the arbitration clause. While a party's substantial invocation of the litigation process is a factor that may tend to show that the party has waived the right to arbitrate, that factor must be accompanied by a showing that the party opposing arbitration has been prejudiced by the other party's participation in the litigation. Ex parte Merrill Lynch, Pierce, Fenner & Smith, Inc., 494 So. 2d 1 (Ala.1986). The motions to compel arbitration were timely filed, shortly after the United States Supreme Court ruled in Allied-Bruce Terminix Companies v. Dobson, 513 U.S. ___, 115 S. Ct. 834, 130 L. Ed. 2d 753 (1995), and no prejudice to the plaintiffs has been shown in this case.
In Allied-Bruce Terminix, the United States Supreme Court held that the Federal Arbitration Act, 9 U.S.C. §§ 1-15, governs all contracts within Congress's Commerce Clause power. This holding significantly changed arbitration law in Alabama, because § 8-1-41(3), Ala.Code 1975, precludes the specific enforcement of a predispute arbitration agreement unless federal law preempts state law.
The United States Supreme Court's ruling in Allied-Bruce Terminix reversed an earlier decision by this Court holding that the FAA was inapplicable in that case because the connection between the termite protection agreement involved in that case and interstate commerce was too slight, specifically because the parties had not contemplated substantial interstate activity when they entered into the agreement. Allied-Bruce Terminix Companies v. Dobson, 628 So. 2d 354, 356 (Ala.1993). In reversing the judgment of this Court, the United States Supreme Court held that the FAA did apply to the termite protection agreement and required enforcement of its arbitration provision, stating that the language of § 2 of the FAA, making enforceable an arbitration provision in "a contract evidencing a transaction involving commerce," is applicable "to the limits of Congress' Commerce Clause power." 513 U.S. at ___, 115 S. Ct. at 837; see Lopez v. Home Buyers Warranty Corp., 670 So. 2d 35 (Ala.1995); Terminix International Co. Limited Partnership v. Jackson, 669 So. 2d 893 (Ala.1995). See, Henry C. Strickland, Allied Bruce Terminix, Inc. v. Dobson: Widespread Enforcement of Arbitration Agreements Arrives in Alabama, 56 Ala. Law. 238 (1995).
Did the trial court properly compel arbitration? The answer to that question is a matter of contract interpretation, which is guided by considering the intent of the parties to the mobile home sales contract. Thus, the essential question is whether the arbitration clause in that contract applies to the Gateses' claims. Id.
The arbitration clause, quoted above, is very broad; it provides that "[a]ll disputes, claims, or controversies arising from or relating to this Contract or the relationships which result from this Contract, or the validity of this arbitration clause or the entire Contract, shall be resolved by binding arbitration."
The Gateses allege in their complaint that the defendants made misrepresentations and concealed material facts in order to induce them to purchase the mobile home and that they relied on the defendants' misrepresentations in signing the documents to purchase the home. They also allege that the defendants breached warranties made to them at the time of their purchase, and they allege that they have performed all of their obligations under their "contract" with the defendants. Thus, the Gateses' claims are asserted in connection with the installment *375 contract that sets forth the terms and conditions for financing the sale of the mobile home. The contract evidences a transaction involving interstate commerce. Thus, the FAA is applicable and preempts state law.
For the reasons stated above, and on the authority of the United States Supreme Court's ruling in Allied-Bruce Terminix, we hold that the trial court did not err in compelling arbitration of the Gateses' claims. The petition for the writ of mandamus is due to be denied.
WRIT DENIED.
KENNEDY and COOK, JJ., concur.
HOOPER, C.J., and MADDOX, J., concur in the result.
MADDOX, Justice, concurring in the result.
I concur in the result only because the judgment of the trial court is affirmed. I do not agree that Allied-Bruce Terminix Companies v. Dobson, [Ms. 1920473, Nov. 3, 1995] ___ So.2d ___ (Ala.1995), correctly states the federal law applicable to arbitration. See my special opinion in that case. ___ So.2d at ___.
[1] Green Tree is not a defendant in this action. | January 26, 1996 |
558cb51a-15cd-4793-9d58-87b4a4021922 | Byrd v. Commercial Credit Corp. | 675 So. 2d 392 | 1950015 | Alabama | Alabama Supreme Court | 675 So. 2d 392 (1996)
Louie Frank BYRD
v.
COMMERCIAL CREDIT CORPORATION and Deborah Robertson.
1950015.
Supreme Court of Alabama.
February 9, 1996.
Debbie Lindsey Jared of Jared & Jared, Elba, for Appellant.
Clyde C. Owen, Jr. of Ball, Ball, Matthews & Novak, P.A., Montgomery, for Appellees.
INGRAM, Justice.
On January 29, 1991, Chris Byrd, the 17-year-old son of Louie Frank Byrd, was killed in an accident while driving a motorcycle. An automobile pulled out from behind a school bus and into Chris's traffic lane, hitting him head-on. Louie Frank Byrd sued Commercial Credit Corporation ("Commercial") and one of its employees, Deborah Robertson, contending that, through Commercial's financing of Chris's purchase of the motorcycle, Commercial and its employee had proximately caused Chris's death. The trial court entered a summary judgment for Commercial and Robertson, and Byrd appealed.[1]
The evidence, viewed in a light most favorable to Byrd, see Wilma Corp. v. Fleming Foods of Alabama, Inc., 613 So. 2d 359 (Ala. 1993), suggests the following:
Near the time of his death, Chris had worked at various jobs, and Byrd had helped him finance the purchase of three automobiles. Chris had moved out of Byrd's home and into the home of a friend. When Chris found a used motorcycle that he wanted to purchase, he asked Byrd to help him finance the purchase, but Byrd refused, considering the motorcycle to be dangerous. Chris took possession of the motorcycle from its owner and made payments, although the title was *393 not in Chris's name. Byrd was aware that Chris had the motorcycle. On December 27, 1990, Chris visited Commercial's office and secured a loan to purchase the motorcycle. Deborah Robertson, as an employee of Commercial, assisted Chris in the transaction. Chris used the loan to purchase the motorcycle and took title to the motorcycle. On January 29, 1991, Chris was killed.
Byrd argues that Commercial and Robertson, by financing Chris's purchase of the motorcycle, proximately caused his death.
We disagree. This Court has defined "proximate cause" as an act or omission that in a natural and continuous sequence, unbroken by any new and independent causes, produces the injury and without which the injury would not have occurred. Thetford v. City of Clanton, 605 So. 2d 835, 840 (Ala.1992). Commercial and Robertson, by merely financing Chris's purchase of the motorcycle, did not proximately cause his death. Although the fact that Chris was a minor made the finance contract voidable, so that he could have disaffirmed it, he did not do so. While Commercial's action led to Chris's taking title to the motorcycle, it did not cause Chris's accident or death.
The judgment of the trial court is affirmed.
AFFIRMED.
HOOPER, C.J., and ALMON, HOUSTON, and KENNEDY, JJ., concur.
[1] Byrd joined Shirley Bell, Chris's mother, in a separate action against the driver of the automobile. That case has been settled and is not at issue here. | February 9, 1996 |
c6ec8f89-1480-4670-a739-84ee7b0f131a | Ex parte WMS, LLC, | N/A | 1131216 | Alabama | Alabama Supreme Court | REL:12/12/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
____________________
1131216
____________________
Ex parte WMS, LLC, et al.
PETITION FOR WRIT OF MANDAMUS
(In re: Keri Donald Simms
v.
WMS, LLC, et al.)
(Chambers Circuit Court, CV-13-900050)
MOORE, Chief Justice.
William Mudd, John Whitaker, Phillip Luke, and David
Wells, and the law firm in which they were members, Whitaker,
1131216
Mudd, Simms, Luke, & Wells, LLC ("WMSLW") (hereinafter
referred to collectively as "the defendants"), petition this
1
Court for a writ of mandamus directing the Chambers Circuit
Court either to dismiss this case for lack of subject-matter
jurisdiction based on improper venue or to transfer the case
from Chambers County to Jefferson County based on venue being
improper in Chambers County or on the doctrine of forum non
conveniens. We grant the petition and direct the Chambers
Circuit Court to transfer the case to the Jefferson Circuit
Court because, for the reasons discussed below, venue is not
proper in Chambers County. Because of our disposition of this
petition, we pretermit a discussion of the subject-matter-
jurisdiction argument and the forum non conveniens argument.
Facts and Procedural History
Keri Donald Simms is a resident of Jefferson County and
a practicing attorney in Birmingham, where all the law firms
named as petitioners either have been located or were created.
Effective May 10, 2012, Simms either resigned from WMSLW or
Also named as petitioners are the former law firm of
1
which some of the individual defendants were members, WMS,
LLC, and the current law firm, now known as Whitaker, Mudd,
Luke, & Wells, LLC, referred to by the defendants as WMLW,
LLC.
2
1131216
his
membership
in
the
limited-liability
company
was
terminated
by the other members of WMSLW. Before Simms's departure,
2
WMSLW had been suffering financial troubles. Some of the
members of WMSLW had been arguing over their respective
capital
accounts and discussing
a possible merger with another
law firm. Simms alleges that, at unspecified times before his
departure, the individual defendants had been making secret
payments to themselves, above the amounts they were due under
their membership arrangement. He alleges that the defendants
prepared faulty
income
statements, concealed from him the true
liabilities and debts of WMSLW, concealed from him the details
of the proposed merger, and refused to provide him with
3
copies of WMSLW's state and federal tax returns.
After Simms's departure from the firm, in letters dated
May 10, 2012, WMSLW offered Simms's clients the option to
remain with WMSLW or to continue with Simms as their attorney
The parties present differing accounts about whether
2
Simms resigned or was forced out of the limited-liability
company. Simms's complaint refers at one point to a "forced
buy out" of his membership interest.
An e-mail from Simms to the defendants dated December 11,
3
2009, stated that Simms was "in the dark on the details of the
merger" and asked if "someone [could] bring me [Simms] up to
speed."
3
1131216
at his new place of employment, Webster, Henry, Lyons, White,
Bradwell & Black, P.C. ("WHLWBB"), another Alabama law firm.
Simms alleges that his relationship with the defendants began
to deteriorate when an unspecified number of his clients
informed WMSLW of their intent to remain clients of Simms and
not of WMSLW. He says that he enlisted the services of the
Alabama State Bar to force the defendants to release his
clients' case files to him. According to Simms, between May
14, 2012, and May 17, 2012, WMSLW mailed to him the files of
4
his clients who opted to stay with him.
One of Simms's clients is his cousin, Angie Smith of
Georgia, who had suffered burn injuries in an accident in
Georgia on July 23, 2011; Smith's injuries were the subject of
litigation in Georgia pending at the time of Simms's departure
from WMSLW. Smith had been consulting with Simms since her
accident and became a client of WMSLW, by contract, on
September 7, 2011. Simms was her attorney at WMSLW. In July
2011, Simms discussed Smith's case with his friend Claud E.
"Skip" McCoy, Jr., while the two men were at a wedding in
We recognize that the name of the law firm changed at
4
some point after Simms's departure. However, for ease of
reference, we continue to refer to WMSLW.
4
1131216
Chambers
County, Alabama. McCoy, a resident of Chambers
County
who is licensed to practice law in both Georgia and Alabama,
agreed to assist Simms with the case as cocounsel. McCoy
helped Simms retain the Georgia law firm of Pope, McGlamry,
Kilpatrick, Morrison & Norwood, P.C. ("PMKMN"), with which
McCoy and Simms (on behalf of WMSLW) entered into a fee-
sharing agreement.
Simms was working with McCoy and PMKMN on Smith's
litigation at the time of his departure from WMSLW. He alleges
that WMSLW never mailed Smith the May 10, 2012, letter
informing her of her option to remain with WMSLW or to
continue with Simms at WHLWBB. Smith and her husband Charles
Smith claim in an affidavit that, "[h]ad we been provided an
ethical client notification letter or communication from
anyone associated with [WMSLW], including Defendant Wells, we
would have immediately terminated that entity" as Smith's
legal counsel. Smith's file was one of those turned over to
Simms between May 14, 2012, and May 17, 2012.
WMSLW operated as a limited-liability company in which
each member contributed income based on the operating
agreement of WMSLW. Each member of WMSLW not only received
5
1131216
draws, which were based on the revenue he or she generated for
WMSLW, but also served as a guarantor on a line of credit
financed by ServisFirst Bank and available to WMSLW. Simms's
departure involved a dispute over $146,834, a figure
representing the negative balance in Simms's capital account
with WMSLW. On May 11, 2012, Wells e-mailed Simms to say that
5
"we [the individual defendants] have no objection to your
guarantee being released and we will work with the bank on
this." By May 25, 2012, however, Wells had reversed course,
stating that WMSLW was not willing to release Simms from his
guarantee on the line of credit with ServisFirst Bank until he
made a financial contribution toward the line of credit in an
amount roughly equal to $146,834, the negative balance of his
capital
account.
The
defendants
allegedly
informed
Simms
that,
in exchange for this contribution, they would release him as
a guarantor on the line of credit with ServisFirst Bank. In an
e-mail dated July 27, 2012, Wells averred that the defendants
had initially been amenable to releasing Simms as a guarantor
Only one of the individual defendants, Mudd, had a
5
positive balance. His capital account consisted of $60,238.
Whitaker's capital account consisted of a negative balance of
$54,162; Luke's consisted of a negative balance of $50,442;
and Wells's consisted of a negative balance of $4,456.
6
1131216
until they discovered some unspecified deception on Simms's
part regarding fees owed to WMSLW.
The individual defendants and Simms discussed a variety
of payment-plan options for Simms, who, according to the
defendants, agreed that he and WHLWBB would transfer to WMSLW
a percentage of the contingency fee Simms earned from the
litigation involving Smith. The defendants allege that,
6
despite entering into this agreement with them, Simms
instructed PMKMN to pay the contingency fee from the Smith
litigation directly to Simms rather than to WMSLW and that
Simms, once he received the Smith contingency fee, refused to
transfer that fee to WMSLW. Simms alleges that, in fact, WMSLW
was not entitled to any of the Smith contingency fee because,
he argues, WMSLW had, by contract, discharged the Smith case
to Simms or, alternatively, WMSLW had abandoned the file when
it turned it over to Simms between May 14, 2012, and May 17,
2012. It is undisputed that the amount of the Smith
contingency fee is $54,000, the result of a $600,000
settlement of a portion of Smith's litigation in Georgia. The
Because no evidence of this agreement appears in the
6
record, this Court cannot verify its existence.
7
1131216
defendants became aware of the Smith contingency fee when
McCoy and attorneys at PMKMN inadvertently e-mailed Simms at
his former WMSLW e-mail address regarding the $600,000
settlement.
After receiving this inadvertent e-mail from McCoy and
attorneys at PMKMN, the defendants contacted PMKMN by
telephone in June 2012 regarding the Smith contingency fee. A
member of PMKMN followed up with the defendants by e-mail on
June 22, 2012, stating that PMKMN had been previously unaware
of any disagreement between Simms and WMSLW regarding the
Smith case but that the Smith contingency fee had been
deposited in PMKMN's trust account pending resolution of the
dispute between Simms and WMSLW. Smith contacted WMSLW by
letter dated June 26, 2012, indicating that she was
terminating her relationship with WMSLW because she wanted
Simms to continue representing her. Simms contends that this
7
June 26, 2012, letter was Smith's first opportunity to declare
Simms alleges that, to create a situation in which WMSLW
7
could benefit financially from the Smith litigation, WMSLW
deliberately failed to mail Smith the May 10, 2012, letter
allowing clients to choose to remain with WMSLW or to continue
with Simms at WHLWBB.
8
1131216
her intent to remain Simms's client and to terminate her
relationship with WMSLW.
On May 1, 2013, Simms sued the defendants in the Chambers
Circuit Court, alleging defamation, libel, oppression of a
minority shareholder, misrepresentation, the tort of outrage,
deceit,
fraud,
tortious
interference
with
business
relationships,
breach
of
contract,
and
accounting
irregularities. He sought declaratory and injunctive relief
and requested the appointment of a receiver, an accounting, or
a dissolution of the limited-liability company. On May 12,
2014, he amended his complaint to add a count alleging civil
conspiracy and to dismiss his requests for injunctive relief,
an accounting, and a dissolution. On June 4, 2013, the
defendants moved to dismiss the case for lack of subject-
matter jurisdiction and improper
venue
or, in the alternative,
to transfer the case to Jefferson County, where, they said,
venue was proper. The defendants also moved to strike the
amended complaint, arguing that the original complaint, not
the amended complaint, controlled the disposition of the
motion to dismiss. On May 14, 2014, the trial court held a
hearing on the pending motions and denied the motion for a
9
1131216
change of venue. The defendants now petition this Court for a
writ of mandamus directing the Chambers Circuit Court to
dismiss the case or to transfer it from Chambers County to
Jefferson County.
Standard of Review
"'The proper method for obtaining review of a
denial of a motion for a change of venue in a civil
action is to petition for the writ of mandamus.' Ex
parte Alabama Great Southern R.R., 788 So. 2d 886,
888 (Ala. 2000). 'Mandamus is a drastic and
extraordinary writ, to be issued only where there is
(1) a clear legal right in the petitioner to the
order sought; (2) an imperative duty upon the
respondent to perform, accompanied by a refusal to
do so; (3) the lack of another adequate remedy; and
(4) properly invoked jurisdiction of the court.' Ex
parte Integon Corp., 672 So. 2d 497, 499 (Ala.
1995). Moreover, our review is limited to those
facts that were before the trial court. Ex parte
National Sec. Ins. Co., 727 So. 2d 788, 789 (Ala.
1998).
"'The burden of proving improper venue is on the
party raising the issue and on review of an order
transferring or refusing to transfer, a writ of
mandamus will not be granted unless there is a clear
showing of error on the part of the trial judge.' Ex
parte Finance America Corp., 507 So. 2d 458, 460
(Ala. 1987). In addition, this Court is bound by the
record, and it cannot consider a statement or
evidence in a party's brief that was not before the
trial court. Ex parte American Res. Ins. Co., 663
So. 2d 932, 936 (Ala. 1995)."
Ex parte Pike Fabrication, Inc., 859 So. 2d 1089, 1091 (Ala.
2002). We further note that, "[w]hen ruling on a motion to
10
1131216
transfer, the trial court must determine whether venue was
proper at the time the action was filed," Ex parte Canady, 563
So. 2d 1024, 1025 (Ala. 1990), and that, "[i]f venue is not
proper at the commencement of an action, then, upon motion of
the defendant, the action must be transferred to a court where
venue would be proper." Ex parte Overstreet, 748 So. 2d 194,
196 (Ala. 1999).
Discussion
This case does not involve the merits of Simms's
complaint against the defendants. It involves only one issue:
Whether venue in Chambers County is proper. The defendants are
four individuals and WMSLW, a limited-liability company
("LLC"). In Alabama the proper venue for an action against an
LLC and its members is governed by § 6-3-2, Ala. Code 1975,
which
governs
lawsuits
against
individual
defendants.
Ex
parte
Miller, Hamilton, Snider & Odom, LLC, 942 So. 2d 334, 336-38
(Ala. 2006)(holding that the defendant law firm, an LLC, was
a partnership for purposes of venue and was governed by § 6-3-
2(a)(3)); Ex parte Burr & Forman, LLP, 5 So. 3d 557, 565 (Ala.
2008)("The statute governing venue for individuals, § 6-3-2,
Ala. Code 1975, also governs venue for partnerships. For
11
1131216
purposes of venue, a partnership is deemed to reside where its
partners reside."). Therefore, venue in the present case is
governed by § 6-3-2(a), which provides:
"(a) In proceedings of a legal nature against
individuals:
"(1) All actions for the recovery of
land, of the possession thereof or for a
trespass thereto must be commenced in the
county where the land or a material part
thereof lies.
"(2) All actions on contracts, except
as may be otherwise provided, must be
commenced in the county in which the
defendant or one of the defendants resides
if such defendant has within the state a
permanent residence.
"(3) All other personal actions, if
the defendant or one of the defendants has
within the state a permanent residence, may
be commenced in the county of such
residence or in the county in which the act
or omission complained of may have been
done or may have occurred."
(Emphasis added.) Accordingly, venue is proper in Chambers
County only if one of the individual defendants resides in
Chambers County or any of the acts or omissions of which Simms
complains occurred in Chambers County. It is undisputed that
each of the individual defendants resides in
Jefferson County,
not Chambers County; therefore, we must determine whether the
12
1131216
parties' briefs and the materials before us reveal any act or
omission in Chambers County that would give rise to venue
there.
Although Simms was raised in Chambers County and has
family there, he is not a resident of Chambers County. McCoy,
who is not a party to this lawsuit, is a resident of Chambers
County. In August 2011 Simms and McCoy attended a wedding in
Chambers County at which they agreed to jointly represent
Smith. The Smith litigation took place in Troup County,
Georgia, which is adjacent to Chambers County; however, that
litigation took place entirely in Georgia. Simms alleged in
his
original
complaint
that
the
defendants
conveyed
intentionally false information to McCoy in Chambers County.
The record indicates that this allegedly false communication
appeared in an e-mail from Mudd to McCoy dated January 18,
2013,
concerning the Smith case, Simms's departure from WMSLW,
and the contingency fee being held in PMKMN's trust account.
There is no evidence indicating that McCoy received this e-
mail while in Chambers County.
Simms insists that Chambers County is "the purposeful
climatic [sic] place of defendants' tortious conduct targeted
13
1131216
against Simms," but the only discernible evidence for this
claim is the January 18, 2013, e-mail from Mudd to McCoy, who
may or may not have opened the e-mail in Chambers County.
There is no showing that this allegedly defamatory e-mail was
ever opened in Chambers County or that any injury resulting
from it occurred in Chambers County. Even if Simms had shown
that the e-mail was opened in Chambers County, venue still
would not be proper there because "an individual who makes an
allegedly defamatory statement should be sued where the
defamatory remark was made," not where a recipient possibly
opened an e-mail or otherwise received the defamatory remark.
Ex parte Windom, 840 So. 2d 885, 889 (Ala. 2002).
Although Simms suggests that the defendants intended "to
use the [Smith] case as a means to an end in Chambers County
and [to] conceal the secret payments made among them while
Simms was a minority member of [WMSLW]"; that the defendants
"chose Chambers County and Simms' personal attachment to the
Smith case as the final location of their means to attempt to
keep secret their accounting irregularities and payments made
among them while Smith was a minority member of [WMSLW]"; and
that the defendants "used Chambers County and the Smith case
14
1131216
to extract the most harm to Simms," "to claim all of the
disputed fee" from the Smith settlement, "to interfere with
Simms' economic interest in the fee," "to damage his
profession[al] reputation related to the case," and "to use
the one case [to which] he had the most emotional attachment,
his family's case, to distract him in hopes he would not
discover the self-dealing secret payments," there is no
evidence showing that the defendants acted in
Chambers
County.
Simms's general claims about the defendants' intent to "use"
Chambers County are not substantiated by any particular
evidence indicating that the defendants ever carried
out
their
alleged intent. Simms contends that McCoy and the Smith family
possess "documentary evidence in Chambers County and [in]
nearby LaGrange, Georgia," but no such evidence appears in the
petition, briefs, or materials before us. Nor do the parties
specifically
or
unambiguously
name,
describe,
or
identify
that
evidence.
Simms has not proffered evidence of a nexus with Chambers
County that would justify his filing this lawsuit there. The
fact that Chambers County and Troup County, Georgia, are
contiguous
does
not
satisfy
the
jurisdictional
requirements
of
15
1131216
§ 6-3-2(a) when there is no specific indication that any act
or omission occurred within Chambers County. Likewise, the
fact that McCoy, a nonparty to the action, might have opened
an e-mail within Chambers County will not suffice to establish
jurisdiction in Chambers County. The act complained of –-
sending the e-mail –- occurred in Jefferson County, from where
Mudd sent the e-mail, not in Chambers County, where the e-mail
was possibly received. See § 6-3-2(a)(3); Windom, 840 So. 2d
at 889.
Because no individual defendant is a resident of Chambers
County and no identifiable act or omission occasioning this
litigation took place in Chambers County, there is no basis
for venue in Chambers County under § 6-3-2(a), and the
defendants have a clear legal right to have the case
transferred from Chambers County to Jefferson County.
Overstreet, 748 So. 2d at 197 (holding that the chosen forum
was "not a proper venue for [the] action, and it was,
therefore, an abuse of discretion for the trial judge to deny
[the] motion for a change of venue"). There being no nameable
or observable connection under the law to the venue in which
Simms filed his lawsuit, we grant the petition for the writ of
16
1131216
mandamus. By doing so, we pretermit any discussion of the
defendants' request to transfer the case based on the doctrine
of forum non conveniens, see § 6-3-21.1, Ala. Code 1975,
because the doctrine of forum non conveniens "has a field of
operation only where the action is commenced in a county in
which venue is appropriate." Ex parte Townsend, 589 So. 2d
711, 714 (Ala. 1991). Here, the action was commenced in a
county in which venue was inappropriate; therefore, the trial
court had an imperative duty to transfer the action to
Jefferson
County,
where
venue
was
appropriate.
Overstreet,
748
So. 2d at 197. In light of the foregoing, we direct the trial
court to transfer the action to Jefferson County.
PETITION GRANTED; WRIT ISSUED.
Stuart, Parker, Shaw, and Wise, JJ., concur.
17 | December 12, 2014 |
0643723b-250b-4273-8dfc-cd5542560993 | Barber v. Business Products Center, Inc. | 677 So. 2d 223 | 1931553 | Alabama | Alabama Supreme Court | 677 So. 2d 223 (1996)
Donald J. BARBER, et al.
v.
BUSINESS PRODUCTS CENTER, INC., et al.
1931553.
Supreme Court of Alabama.
February 23, 1996.
Rehearing Denied April 19, 1996.
*225 Stevan K. Goozee and Lawrence T. King of Dillard and Ferguson, Birmingham, for Appellants.
W. Lee Thuston and J. Clinton Pittman of Sadler, Sullivan, Herring & Sharp, P.C., Birmingham, for Business Products Center, Inc.
Leo E. Costello of Costello, Stott & Grayson, Birmingham, for P & S Business Machines, Inc.
Robert G. Tate and Edwin O. Rogers of Burr & Forman, Birmingham, for Canon U.S.A., Inc.
Linda A. Friedman, T. Michael Brown and John W. Smith T of Bradley, Arant, Rose & White, Birmingham, for Panasonic Communications & Systems Corp.
INGRAM, Justice.
Donald Barber and Michael Moore, doing business as Quality Office Equipment (hereinafter referred to as "Moore") [1], sued Canon, U.S.A., Inc. (hereinafter "Canon"), and its local dealer, Business Products Center, Inc. (hereinafter "BPC"), and Panasonic Communications and Systems Company (hereinafter "Panasonic") and its local dealer, P & S Business Machines (hereinafter "P & S"). Moore alleged that the defendants had violated his rights as a third-party beneficiary of certain contracts, that they had intentionally interfered with his business relations, and that they had set out on a course of conduct with a conscious or reckless disregard of Moore's rights. Further, Moore alleged that all defendants were guilty of conspiracy to commit these acts. Ultimately, the trial court entered a summary judgment in favor of all defendants on all claims. Moore appealed.
On a motion for summary judgment, the burden is initially on the movant to make a prima facie showing that there is no genuine issue of material fact (i.e., that there is no dispute as to any material fact), and that he is entitled to a judgment as a matter of law. Rule 56, Ala.R.Civ.P.; McClendon v. Mountain Top Indoor Flea Market, Inc., 601 So. 2d 957 (Ala.1992); Elgin v. Alfa Corp., 598 So. 2d 807 (Ala.1992). "The burden does not shift to the opposing party to establish a genuine issue of material fact until the moving party has made a prima facie showing that there is no such issue of material fact." McClendon, at 958; Elgin, at 810-11.
Rule 56 must be read in conjunction with the "substantial evidence rule," § 12-21-12, Ala.Code 1975, for actions filed after June 11, 1987. See Bass v. SouthTrust Bank of Baldwin County, 538 So. 2d 794, 797-98 (Ala.1989). In order to defeat a defendant's properly supported motion for summary *226 judgment, the plaintiff must present substantial evidence, i.e., "evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." West v. Founders Life Assurance Co. of Florida, 547 So. 2d 870, 871 (Ala.1989). This Court reviews the record in a light most favorable to the nonmovant and must resolve all reasonable doubts against the movant. Wilma Corp. v. Fleming Foods of Alabama, Inc., 613 So. 2d 359 (Ala.1993).
The record, viewed in a light most favorable to Moore, suggests the following facts: In 1987 Donald Barber operated a sole proprietorship, doing business as Quality Office Equipment ("QOE"). In the fall of that year, Barber asked Moore to invest in the business. He did. In accordance with the investment agreement, Barber was to continue operating QOE and to be responsible for daily operations, payroll, purchases, and disbursements. Each was to receive compensation for labor done, and profits were to be split equally. Moore's role included serving as a business consultant to Barber, assisting with decision-making, corresponding on behalf of QOE, and handling litigation on behalf of QOE.
In 1989 and 1990, QOE was awarded service contracts from the General Services Administration ("GSA") of the Federal Government, authorizing QOE to repair Government-owned typewriters in Jefferson County. Those service contracts included repairs to Canon and Panasonic typewriters that had been purchased by the Government pursuant to GSA contracts with the Canon and Panasonic companies.
In 1989, Panasonic and Canon entered into separate contracts with the GSA that permitted them to sell typewriters to the Government and its agencies. Both contracts contained a specific clause addressing the contractor's obligations pertaining to making parts, information, and technical assistance available to businesses, such as QOE, that had Government repair contracts. Specifically, that clause reads:
Neither Canon nor Panasonic excepted to this clause in the contract.
QOE's GSA contract began October 1, 1989. Moore testified that in the following month he became aware of the need to acquire an adequate supply of Canon and Panasonic repair parts in order for QOE to perform its GSA contract. He testified that, in December 1989, he began calling upon Canon and Panasonic's local dealers to try to get the parts. On December 12, 1989, Moore contacted Canon's local dealer, BPC, concerning repair parts and service information; however, BPC refused to sell or provide either. Moore followed up with a letter advising BPC that QOE had a GSA service contract and requesting affirmation that it was Canon's policy, as well as that of its dealers, to refuse to provide parts. Moore also wrote Canon about its dealer's refusal to supply needed parts. Canon responded by letter, stating: "Canon maintains the policy of selling office typewriter parts only to authorized dealers. For this reason we are unable to sell parts to your company." Efforts to acquire needed Panasonic parts met with identical results.
Moore continued attempts to acquire parts from Canon and Panasonic, without success; eventually Moore had to purchase entire used typewriters from which to "rob" parts to perform the repairs required by its GSA contract. On other occasions, the dealers themselves repaired the Government typewriters, leading to Moore's being "backcharged" by the Government. Ultimately, Moore contends that he has had loss and costs in excess of $50,000 resulting from attempts *227 to perform his GSA contract without the ability to buy parts from Canon and Panasonic.
Canon and Panasonic argued before the trial court that Moore lacked standing to maintain this action because, they say, he offered no proof that he was a partner with Barber in QOE. It appears from the evidence that Barber has assigned all of his interests to Moore concerning this lawsuit.
It is clear that we have no settled test for determining whether a partnership exists and that whether one exists is determined by reviewing all the attendant circumstances. Vance v. Huff, 568 So. 2d 745 (Ala.1990). The record reveals that Moore invested in QOE and was entitled to 50% of QOE's profits. Expenses were paid with partnership funds, and the testimony indicates that Moore and Barber intended to be partners. Moore and Barber consulted on business decisions, Moore purchased equipment for QOE, and Moore was QOE's representative in district court litigation. Viewing the evidence in a light most favorable to Moore, we conclude that that evidence, if believed by a jury, would support a finding that Moore was a partner in QOE.
To recover under a third-party beneficiary theory, one must show the following: (1) that the contracting parties intended, at the time the contract was created, to bestow a direct benefit upon a third party; (2) that the claimant was the intended beneficiary of the contract; and (3) that the contract was breached. Sheetz, Aiken & Aiken v. Spann, Hall, Ritchie, Inc., 512 So. 2d 99 (Ala.1987).
Neither P & S nor BPC was a party to the GSA contracts with Canon and Panasonic; therefore, we conclude that the trial court properly entered the summary judgment in their favor as to the third-party beneficiary claim.
However, viewing the evidence in a light most favorable to Moore, we conclude that the trial court erred in entering the summary judgment in favor of Canon and Panasonic as to the third-party beneficiary claim. The Government had with both Canon and Panasonic a contract that contained a clause requiring those companies to make parts available to others holding GSA service contracts. Moore falls within this class, and a jury could find that the availability of parts was to be a direct benefit to Moore in performing his contract with GSA. However, the policy of both Canon and Panasonic was that they would sell parts to "authorized dealers only." In other words, a jury could find that the provision in the Canon-GSA contract and in the Panasonic-GSA contract created a direct benefit to those holding GSA repair contracts, e.g., Moore, and that Canon and Panasonic's refusal to sell parts to Moore constituted a breach.
To recover on a claim of intentional interference with business or contractual relations, a plaintiff must prove the following elements: (1) The existence of a contract or business relation; (2) the defendant's knowledge of the contract or business relation; (3) intentional interference by the defendant with the plaintiff's contract or business relation; and (4) damage to the plaintiff as a result of the defendant's interference. Joe Cooper & Associates, Inc. v. Central Life Assurance Co., 614 So. 2d 982 (Ala.1992). Additionally, plaintiffs must produce substantial evidence of fraud, force, or coercion on the defendant's part. Joe Cooper & Associates, supra.
Viewing the record in a light most favorable to Moore, we find substantial evidence supporting the first two elements of this cause of action as against Canon and Panasonic. Both Canon and Panasonic were aware of the contract between GSA and Moore. However, Moore failed to present substantial evidence of the third element, intentional interference. The record reveals that Canon and Panasonic's refusal to deal with Moore was consistent with, and undertaken pursuant to, an established company policy of selling parts only to authorized dealers.
*228 This Court has consistently held that a mere refusal to deal is not an intentional interference with contractual relations. Bear Creek Enterprises, Inc. v. Warrior & Gulf Navigation Co., 529 So. 2d 959 (Ala.1988).
529 So. 2d at 961, quoting Restatement (Second) of Torts, § 766 (1979).
Therefore, because Moore presented no evidence of any active interference, we hold that the defendants' actions amount to a mere refusal to deal with Moore, and not an "intentional interference" with Moore's contractual relations. The defendants have the right to do business with whoever they choose and, although their refusal to deal may be actionable as a breach of contract, it is not actionable in tort.
What constitutes wantonness depends entirely upon the facts presented in a particular case. Kennedy v. Jack Smith Enterprises, Inc., 619 So. 2d 1326 (Ala.1993). Generally, however, one is guilty of wanton misconduct when, with reckless indifference to the consequences, he consciously does some act that results in damage to another or when he has undertaken conduct with a reckless or conscious disregard of the rights of another. Berry v. Fife, 590 So. 2d 884 (Ala.1991). However, a mere failure to perform a contractual obligation is not a tort.
Moore's only response to the summary judgment motions, as they related to his wantonness claim, was to repeat the bare allegations of his complaint. These allegations alone are insufficient to meet the burden of producing substantial evidence in opposition to the defendants' properly supported motions for summary judgment. We have reviewed the record and conclude that it presents no factual basis for a wantonness claim against the defendants. The trial court properly entered the summary judgment as to this claim.
Liability for civil conspiracy rests upon the existence of an underlying wrong, and if the action alleged to constitute the underlying wrong provides no cause of action, then neither does the conspiracy itself. Jones v. BP Oil Co., 632 So. 2d 435 (Ala.1993). Moore failed to present substantial evidence that the defendants acted together in an attempt to interfere with his contractual relations with the GSA and to cause Moore to suffer damage. The trial court properly entered the summary judgment for the defendants on the conspiracy claim.
The judgment is affirmed in part and reversed in part, and the cause is remanded for proceedings consistent with this opinion.
AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.
HOOPER, C.J., and MADDOX, ALMON, SHORES, HOUSTON, KENNEDY, COOK, and BUTTS, JJ., concur.
[1] During this litigation, Barber divested himself and Quality Office Equipment of any rights or interests in this litigation. He assigned all of those interests to Moore. | February 23, 1996 |
be208a65-f714-4919-b828-941a887af531 | Hodges v. State | 678 So. 2d 1049 | 1941072 | Alabama | Alabama Supreme Court | 678 So. 2d 1049 (1996)
Ex parte State of Alabama.
Re Freddie Wayne HODGES
v.
STATE
1941072.
Supreme Court of Alabama.
January 26, 1996.
Rehearing Denied April 19, 1996.
*1050 Jeff Sessions, Atty. Gen., and J. Thomas Leverette, Asst. Atty. Gen., for Petitioner.
James M. Byrd, Mobile, for Respondent.
INGRAM, Justice.
The trial court denied Freddie Wayne Hodges's motion to suppress the evidence recovered during a "patdown" search, and Hodges was convicted for first degree possession of marijuana and possession of cocaine. The Court of Criminal Appeals held that the police did have sufficient justification to "stop" Hodges under Terry v. Ohio, 392 U.S. 1, 88 S. Ct. 1868, 20 L. Ed. 2d 889 (1968), and were justified in conducting a patdown search for weapons. Hodges v. State, 667 So. 2d 145 (Ala.Crim.App.1995). However, the Court of Criminal Appeals reversed the convictions, determining that the police exceeded the scope of search allowed under Terry. That court held that the search was more intrusive than allowed by the Fourth Amendment. Specifically, the Court of Criminal Appeals stated:
667 So. 2d at 148.
We granted the State's petition for certiorari review. The question on this review is whether the police officer's search of Hodges's boots crossed the bounds allowed for a protective patdown search for weapons.
The record reveals that the police received a disorderly conduct complaint about a white male driving a burgundy and white school bus that had "rammed" several vehicles in a restaurant parking lot. A police officer went to the parking lot and talked with a person who stated that the man who had rammed the vehicles was in the restaurant; that person pointed out Hodges as the driver of the bus. The police officer testified that as he approached the restaurant, he saw Hodges through the window and that Hodges also saw him. The police officer testified that he saw Hodges pull out an object from behind his back, wrap it in a blue handkerchief, and hand it to the woman sitting across the table. Hodges then came outside. When the police officer questioned Hodges, Hodges stated that he owned the burgundy and white bus, but he denied passing any object to the woman he was with. At this time, the police officer asked Hodges to turn around so that he could pat him down for weapons. The police officer testified that as he was patting down Hodges, he pulled up Hodges's right pants leg and that as he did so a plastic zip-lock bag of green plant-like material that *1051 appeared to be marijuana fell out. The officer stated that he then asked Hodges to walk to the patrol car and remove his boots; when Hodges removed his boots, the officer discovered 12 more bags of what appeared to be marijuana. The police officer then put Hodges under arrest for possession of marijuana. He then searched Hodges's jacket and found an envelope containing crack cocaine.
The Court of Criminal Appeals concluded that the police officer could have reasonably inferred that Hodges had a weapon and that he was justified in conducting a patdown search for weapons. That issue is not before us. Rather, the only question is whether the officer exceeded the scope of search allowed by Terry by pulling up Hodges's pants leg.
In situations involving an investigative or protective search pursuant to Terry, the question is always whether the search is reasonable, considering all the circumstances. Michigan v. Long, 463 U.S. 1032, 103 S. Ct. 3469, 77 L. Ed. 2d 1201 (1983). We must look to the particular circumstances of each case and determine if the officer acted reasonably in taking preventive measures to ensure that there were no weapons within the suspect's immediate grasp.
After reviewing the record and the applicable case law, we conclude that the police officer's search did not exceed the bounds permitted for a protective patdown search for weapons. Hodges was wearing what the officer described as "hard leather" boots at the time of the patdown search. Clearly, weapons can be easily concealed in boots, and, under the circumstances of this case, we hold that the officer was completely justified in pulling up Hodges's pants leg to determine if Hodges had a weapon hidden inside his boot. Unlike the Court of Criminals Appeals, we do not consider it significant that the police officer did not pat down the outer part of the boot before pulling up Hodges's pants leg. In fact, we cannot determine from the record whether the police officer did or did not pat down the outer part of the boot. Nevertheless, we do not find this to be relevant, given that weapons can be easily hidden inside hard leather boots. A patdown of the hard leather boots might have revealed nothing to indicate that a weapon was there and would not have lessened the police officer's concerns for his own safety.
The balancing required by Terry clearly weighs in favor of allowing the police officer to pull up Hodges's pants leg because the officer could reasonably have believed that Hodges was potentially dangerous and could have had a weapon in his boot. This search was not the type of privacy intrusion that the United States Supreme Court intended to prevent in Terry. Therefore, we conclude that the Court of Criminal Appeals erred in holding that the patdown search was excessive. That court's judgment is reversed and the case is remanded.
REVERSED AND REMANDED.
HOOPER, C.J., and MADDOX, HOUSTON, KENNEDY, COOK, and BUTTS, JJ., concur. | January 26, 1996 |
c9904ab8-3731-456c-8da6-6f9e77e13bce | Wint v. Alabama Eye & Tissue Bank | 675 So. 2d 383 | 1941309 | Alabama | Alabama Supreme Court | 675 So. 2d 383 (1996)
Gladys WINT
v.
ALABAMA EYE & TISSUE BANK.
1941309.
Supreme Court of Alabama.
February 2, 1996.
Bob Sherling of Sherling, Browning & York, P.C., Mobile, for Appellant.
David A. Hamby, Jr. and Harry V. Satterwhite of Gillion, Brooks & Hamby, P.C., Mobile, for Appellee.
HOUSTON, Justice.
Gladys Wint appeals from a summary judgment entered for Alabama Eye & Tissue Bank, which was one of three defendants in an action alleging conversion and trespass to chattels.
On April 9, 1991, at approximately 10:35 a.m., Mrs. Wint's husband, Leroy Wint, Jr., died after having been admitted to Providence Hospital in Mobile. The supervising nurse on duty that morning approached Mrs. Wint shortly thereafter and asked her whether she would consider allowing Mr. Wint's body to be used for organ donations, specifically mentioning the possibility of donating Wint's eyes. She refused. The supervising nurse notified Alabama Eye & Tissue Bank of the refusal at approximately 11:00 a.m.
*384 At approximately 3:00 p.m. that same day, Dr. Leland C. Edmonds, a Providence Hospital pathologist, performed an autopsy on the body of Leroy Wint at Providence Hospital. In his autopsy report, he wrote "Eyes have previously been collected by the Eye Bank." The body was then sent to the Radney Funeral Home in Saraland for embalming.
In July 1991, a copy of Dr. Edmonds's autopsy report was sent to the Wint family. The family noticed Edmonds's statement regarding the eyes and contacted Providence Hospital. The hospital administration informed the family that it had no records indicating that Mr. Wint's eyes had been removed and that Edmonds's statement was in error. After being asked by the hospital administration to review his notes from the Wint autopsy, Edmonds issued a statement indicating that his initial statement about the eyes was the result of an error in transcribing the autopsy report and that he believed Mr. Wint's eyes had not been removed when he examined the body.
Mr. Wint's body was exhumed on November 23, 1994, after Mrs. Wint had filed this action. Dr. Leroy Riddick, a state medical examiner, examined the body, finding that both eyes were absent and finding in the eye sockets only plastic eye caps used to support the eyelids. At his deposition, Dr. Riddick testified that the enucleation procedure performed on Mr. Wint's body did not seem to be consistent with the procedures normally followed in removing an organ donor's eyes. He stated (1) that cotton was not used to pack under the eye caps and (2) that none of the muscle or tendon tissue that connects the eye to the eye socket was left in the socket.
After reviewing Dr. Riddick's report from the exhumation, Dr. Edmonds again changed his story. He stated that he again believed that his initial statement that Mr. Wint's eyes had been removed, made at the time of the autopsy, was correct, but that his statement that the eye bank had taken the eyes was based merely upon an assumption.
On December 17, 1993, Gladys Wint sued Providence Hospital and Alabama Eye & Tissue Bank, alleging conversion and trespass to chattels. She settled her claims against Providence Hospital in 1994. On January 9, 1995, she amended her complaint to add Radney Funeral Home as a defendant.
Alabama Eye & Tissue Bank filed its initial motion for summary judgment on December 22, 1994, arguing a lack of substantial evidence to support the plaintiff's conversion and trespass to chattel claims against it. It supported its motion by an affidavit from Alabama Eye & Tissue Bank's vice president of operations and by excerpts from deposition testimony by various of the plaintiff's witnesses.[1] In January 1995, Alabama Eye & Tissue Bank filed a supplemental brief in support of its summary judgment motion, arguing that the plaintiff had filed her complaint beyond the two-year period allowed by Ala.Code 1975, § 6-2-38(n), for claims based upon the doctrine of respondeat superior. The trial judge granted the eye bank's summary judgment motion on April 5, 1995, citing no grounds for his decision. Gladys Wint appeals from the summary judgment.
This appeal presents two issues: (1) Whether the plaintiff presented substantial evidence tending to show that anyone associated with Alabama Eye & Tissue Bank took Leroy Wint's eyes against his family's wishes, and (2) whether Ala.Code 1975, § 6-2-38(n), which provides a two-year statute of limitations for respondeat superior actions, applies to bar the plaintiff's claims against Alabama Eye & Tissue Bank.
Because "[t]he difference between trespass to chattels and conversion is immaterial *385 when there is a `wrongful taking and carrying away of the property of another,'" there is no need to treat the trespass to chattels and conversion claims separately. Roberts and Cusimano, Alabama Tort Law Handbook, § 29.0, p. 598 (1990) (citing Roberson v. Harris, 45 Ala.App. 537, 233 So. 2d 96 (1970)). In order to recover from Alabama Eye & Tissue Bank under either of her theories, Mrs. Wint must prove that someone from the eye bank took or carried away Leroy Wint's eyes.
Once Alabama Eye & Tissue Bank made a prima facie showing that none of its employees took or carried away Leroy Wint's eyes, "the burden shift[ed] to the nonmovant [Mrs. Wint] to produce `substantial evidence' creating... a [genuine] dispute" as to whether one of Alabama Eye & Tissue Bank's employees took or carried away the eyes. Mardis v. Ford Motor Credit Co., 642 So. 2d 701, 704 (Ala.1994) (citing § 12-21-12, Ala.Code 1975; Bean v. Craig, 557 So. 2d 1249, 1252 (Ala.1990)).
To rebut Alabama Eye & Tissue Bank's prima facie showing, Mrs. Wint proffered evidence indicating the following: (1) Alabama Eye & Tissue Bank was contacted by a nurse from Providence Hospital at 11:00 a.m. and informed of Leroy Wint's death and of the family's refusal to donate his eyes; (2) The hospital did not before the autopsy inform anyone outside the hospital of Mr. Wint's death, other than his family and the eye bank; (3) Leroy Wint's eyes were not present at 3:00 p.m. when the first autopsy was done, and Dr. Edmonds assumed that Alabama Eye & Tissue Bank had taken his eyes; (4) Alabama Eye & Tissue Bank is the only entity authorized to harvest donated eyes at Providence Hospital and is the only entity that does so in Alabama; (5) The enucleation procedure takes only 10 to 15 minutes and is usually done in the morgue, but occasionally is done in the deceased's hospital room; (6) Dr. Edmonds, under pressure, recanted his earlier statement that Mr. Wint's eyes were missing at the time of the initial autopsy, but, after the exhumation report confirmed that Mr. Wint's eyes had been taken, reaffirmed his original statement that Mr. Wint's eyes had been missing at the time of the autopsy.
In Smoyer v. Birmingham Area Chamber of Commerce, 517 So. 2d 585 (Ala. 1987), this Court upheld a summary judgment based upon the trial court's conclusion that the plaintiff had produced insufficient evidence of causation to support her negligence claim; this Court held: "Evidence that affords nothing more than a mere speculation, conjecture, or guess is completely insufficient to warrant the submission of a case to the jury." 517 So. 2d at 588 (citing Sprayberry v. First National Bank, 465 So. 2d 1111 (Ala.1984); Headrick v. United Insurance Co. of America, 279 Ala. 82, 181 So. 2d 896 (1966)). Mrs. Wint's claims against Alabama Eye & Tissue Bank are based merely upon conjecture or guess.
After ample time to discover and search the records of Alabama Eye & Tissue Bank, Providence Hospital, and the American Red Cross,[2] the plaintiff had found no document connecting Alabama Eye & Tissue Bank with the disappearance of Mr. Wint's eyes. The plaintiff was unable to find records of any eye tissue collected by Alabama Eye & Tissue Bank that was not documented to have come from a legitimate donor. In fact, the plaintiff could not find any record showing that an eye bank employee was present anywhere in Providence Hospital on the day of Leroy Wint's death.[3] Even though the eyes must have been taken between 11:00 a.m. and 3:00 p.m. in a busy metropolitan hospital, the plaintiff failed to locateand thus produced no testimony fromanyone who saw an Alabama Eye & Tissue Bank employee at Providence Hospital that day.
*386 The plaintiff failed to produce "substantial evidence" tending to show that any employee of Alabama Eye & Tissue Bank was in any way connected with the taking of Leroy Wint's eyes. Evidence that is sufficient only to raise speculation or conjecture is not "substantial evidence" and is insufficient to create a genuine issue of fact.
Gladys Wint also argues that the summary judgment cannot be upheld on the basis that her action was barred by Ala.Code 1975, § 6-2-38(n). Section 6-2-38(n) states:
Alabama Eye & Tissue Bank argues that Mrs. Wint's claims are based totally upon a theory of respondeat superior.
The problem of distinguishing between a direct trespass or conversion action governed by the six-year statute of limitations found in § 6-2-34 and a trespass or conversion action based upon respondeat superior governed by the two-year statute of limitations of § 6-2-38(n) is virtually identical to the problem of distinguishing between trespass and trespass on the case. Before Alabama's current statute of limitations scheme went into effect, Alabama courts were forced to distinguish between trespass and trespass on the case in applying a now repealed statute of limitations that made such a distinction. Trespass actions against employers premised totally upon a theory of respondeat superior were held to be trespass-on-the-case actions, while trespass actions based upon a theory that the employer took "personal hand in the trespass, by directing, aiding, participating in, or ratifying the trespass committed by that person's active agent or joint participant" were held to be trespass actions, not trespass-on-the-case actions. Hatfield v. Spears, 380 So. 2d 262, 264 (Ala.1980) (citing C.O. Osborn Contracting Co. v. Alabama Gas Corp., 273 Ala. 6, 135 So. 2d 166 (1961); Trognitz v. Fry, 215 Ala. 609, 112 So. 156 (1927)).[4]
In Sasser v. Dixon, 290 Ala. 17, 18, 273 So. 2d 182, 182 (1973), this Court wrote, "It is settled in our law that an action of trespass on the case is governed by the statute of limitations of one year, while if the allegation and proof show trespass the six year statute applies." The case of Citizens Bank & Savings Co. v. Wolfe Sales Co., 394 So. 2d 941 (Ala.1981), involved an action alleging trespass to realty. The plaintiff alleged that employees of Wolfe Sales had "inflicted excessive damage to the realty" to which was affixed certain equipment that Wolfe Sales employees repossessed. 394 So. 2d at 942. This Court held that "the action sued upon is governed by the one-year statute of limitations set out in § 6-2-39(a)(5) [now repealed]..., [because] the allegations of the plaintiff's complaint show trespass on the case, as distinguished from trespass." Id.
Likewise, the two-year limitation of § 6-2-38(n) applies to bar a plaintiff's claims against an employer based upon the intentional torts of the employer's servants, unless the plaintiff's "allegations and proof show" that the defendant employer directed, aided, participated in, or ratified the alleged tortious conduct of the servant. See, e.g., Hatfield v. Spears, supra; C.O. Osborn Contracting Co., supra, 273 Ala. at 8, 135 So. 2d at 168.
Mrs. Wint asserts two theories to support her contention that Alabama Eye & Tissue Bank ratified the tortious conduct of its employeeunknown to Mrs. Wintwho she alleges took Leroy Wint's eyes. First, she claims that the receipt by Peter Green, an employee of Alabama Eye & Tissue Bank, of the nurse's telephone call notifying the eye bank of Leroy Wint's death and notifying it that the family did not wish to donate his eyes constitutes an "act of ratification" of the tortious taking of Mr. Wint's eyes. This claim is incorrect, because it is not possible for a ratification of a tort to occur before the *387 tort itself. Neither can it be argued that the receipt of the routine telephone notification of the death and of the family's wishes constituted corporate participation in, aid toward, or direction to commit, the alleged tort itself.
Second, Mrs. Wint alleges that Alabama Eye & Tissue Bank sold Leroy Wint's eyes and she says this sale constituted ratification of the eye bank's unknown servant's tortious taking. There is no evidence of such a sale. If Mrs. Wint could produce substantial evidence tending to establish that an Alabama Eye & Tissue Bank manager or corporate official sold the missing eyes with knowledge of their wrongful taking, then she would certainly be able to establish ratification, but mere speculation or conjecture as to what happened to the missing eyes is not sufficient to establish corporate ratification and thereby cause her claim against the eye bank to be governed by § 6-2-34, which provides a longer limitations period.
Because Gladys Wint failed to sue Alabama Eye & Tissue Bank within two years of the alleged taking or carrying away of Mr. Wint's eyes by some unknown employee of the eye bank, her claims are barred by § 6-2-38(n).
For the foregoing reasons, the summary judgment is affirmed.
AFFIRMED.
HOOPER, C.J., and ALMON and INGRAM, JJ., concur.
BUTTS, J., concurs in the result.
[1] These included excerpts from the deposition of Randall Wayne Betsch, vice president of operations of the eye bank, who testified that a donation of Mr. Wint's eyes would have been turned down even if made by his family, because Mr. Wint's hospital charts showed that he was suffering from a serious infection and had an elevated white blood count when he died. Betsch testified that eye bank technicians are trained to check a potential donor's charts and to consult with the physician who pronounced the donor dead to verify that the eyes are usable, before ever removing them.
[2] Deposition testimony indicated that Alabama Eye & Tissue Bank sends a blood sample from every donor to the Red Cross for tests to determine if the donor was a carrier of any bloodborne diseases, such as hepatitis and HIV. The Red Cross's search of its own records showed that there had been no blood samples sent to it from the Mobile area by the eye bank for testing from any person who died on the date of Leroy Wint's death.
[3] The eye bank produced security records of the hospital morgue. Those records failed to show that any of the eye bank's employees were present at the morgue that day for any purpose.
[4] This is the law in Alabama, notwithstanding any contrary statement of the law of trespass made by the Alabama Court of Civil Appeals in Collum v. Argo, 599 So. 2d 1210, 1212 (Ala.Civ. App.1992), which we cannot reconcile with our prior cases discussing the distinction between trespass and trespass on the case. | February 2, 1996 |
beda9031-e06d-479f-9486-8f0cf2684ad6 | Grimes v. Saban | N/A | 1130758 | Alabama | Alabama Supreme Court | Rel: 12/12/14
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
____________________
1130758
____________________
Sarah Grimes
v.
Kristen Saban
Appeal from Tuscaloosa Circuit Court
(CV-12-900538)
BRYAN, Justice.
Sarah Grimes appeals a summary judgment entered by the
Tuscaloosa Circuit Court in favor of Kristen Saban in Grimes's
civil action against Saban seeking damages for assault and
battery. Viewing the evidence in the light most favorable to
Grimes, the nonmovant, as we must when reviewing a summary
1130758
judgment, we conclude that there are genuine issues of
material fact in this case. Therefore, we reverse the summary
judgment and remand the cause for further proceedings.
Facts and Procedural History
In the early morning hours of August 29, 2010, Grimes,
Saban, and others were gathered in the kitchen at Saban's
apartment after returning from Rounders, a bar located in
Tuscaloosa. Both Saban and Grimes had been drinking alcohol.
At one point, Grimes offended Saban by telling her to "shut
up" and saying that Grimes and the others were tired of
listening to her. Saban went to her bedroom and, according to
Grimes, as she did so, Saban shouted that no one liked Grimes
and that Grimes did not have any friends. Grimes told Saban
that Saban needed to get therapy, to which Saban replied:
"Because that worked really well for you." According to
Saban, Grimes then called Saban a "psycho."
Saban locked herself in her bedroom. Some time later,
Hannah Muncher went to Saban's bedroom to check on her. Saban
let Muncher into her bedroom and locked the door behind her.
Grimes, McKinnon Moultrie, and Courtney Reigel, one
of
Saban's
2
1130758
roommates, were all sitting in Reigel's bedroom, which was
across the hall from Saban's bedroom.
While Saban was locked in her bedroom, she posted the
following statement on her Facebook social-medium page: "No
one likes Sarah, Yayyyyy!" When Grimes saw the Facebook post,
she got up and moved toward Saban's door, saying "I'm done."
Reigel told Grimes not to confront Saban. Grimes replied:
"[I]f she touches me, I'll kill her." Grimes testified that
this statement was a figure of speech, that it was not a
threat directed at Saban, and that she did not know whether
Saban even heard it. Grimes went to Saban's door, with her
telephone in her hand, and began banging on the door with her
hand, shouting to Saban to remove the post from her Facebook
page.
A few seconds later, Saban opened the door and showed
Grimes her telephone, stating that she had removed the post.
A physical altercation ensued. The facts as to how the
altercation began and the extent of it are disputed. Grimes
testified that Saban came out of her bedroom to show Grimes
that she had removed the post and that Grimes replied
"something to the effect of, okay, that's fine, we're done,
3
1130758
and ... called [Saban] crazy." According to Grimes, Saban
then "used both of her hands and shoved [Grimes] into
[Reigel's] open door frame" and that Grimes "hit [her] head on
the door when [Saban] threw [her] back." Grimes testified
that she then put "[o]ne hand on [Saban's] throat, one hand on
her chest, and threw her back ... toward the door to get her
away." Grimes testified further that "immediately
after
[she]
threw [Saban] back [Saban] start[ed] punching [her]" in the
face. Grimes testified that Saban hit her in the face more
than five times and that Grimes "did not swing back" but put
her arm up to defend herself.
The two women were eventually separated. Grimes
testified that, after they were separated, Saban threw
Grimes's telephone against the wall and went into her room.
Grimes followed her to talk to her. Grimes testified that she
was bleeding and that blood was "all over the floor and all
over [her]" and that it had run down her face and into her
bra. Grimes testified that Saban was not bleeding. After a
brief conversation with Saban, Grimes determined that she
needed to go the hospital. Reigel and Beth Terry, another of
Saban's roommates, drove her there and stayed with her until
4
1130758
Grimes's parents arrived. She testified that her injuries
were "extensive," including considerable swelling on her left
temple and a black eye.
Saban, on the other hand, testified that after she put
the post about Grimes on Facebook:
"[Grimes] came banging on my door.
"....
"She banged on my door for a few seconds, maybe
almost a minute. I wasn't answering the door. I
didn't want to until I -– she was screaming at me to
take it off and cursing, and I finally took it off,
and I opened the door, and I showed her. I had my
phone out, and I said, 'It's off. It's off.'
"....
"And then she took both of her hands and put
them around my throat.
"....
"I believe we both had a hold of each other's
hair at that point after she grabbed me."
Saban went on to testify that after Grimes grabbed her throat
there was "[j]ust a lot of slapping and punching, not many
landing, and scratching." Saban testified that she had not
touched Grimes before Grimes "put her hands on [Saban's] neck"
and that, when Grimes had her hands on Saban's neck, Saban
"put[] [her] arms out to try to push [Grimes] off of [her]."
5
1130758
Saban testified that Terry pulled Saban and Grimes apart and
that she, Saban, went back to her bedroom, crying. Saban
testified that her nose was bleeding and that she had
scratches on her back. She did not remember seeing any blood
on Grimes, but she did testify that Grimes's eye was a little
swollen. Saban testified that Grimes said she needed to go to
the hospital to document her injuries.
In June 2012, Grimes sued Saban, alleging assault and
battery. Grimes argued, among other things, that, "[a]s a
result of the beating and the head injuries [she] sustained by
Kristen Saban, [Grimes] has had repeated night terrors,
anxiety, physical trembling, fears of dying from brain
injuries,
trouble
sleeping,
and
intrusive
recollections
of
the
event." Grimes also alleged that her migraine headaches had
increased since
the altercation with Saban, that she
sustained
"severe emotional trauma," and that "the middle of [Grimes's]
nose was deformed, was shifted, and it was a direct result of
the beating that [Grimes] received from [Saban]."
Saban moved the circuit court to dismiss the action,
pursuant to Rule 12(b)(6), Ala. R. Civ. P., and shortly
thereafter filed an answer to the complaint. Saban argued,
6
1130758
among other things, that "Grimes instigated, or otherwise
brought on this altercation by uttering hateful words to
[Saban]" and that "Saban acted in self defense." On July 18,
2012, the circuit court denied Saban's motion to dismiss. In
December 2013, Saban moved the circuit court for a summary
judgment. She included with her motion, among other things,
affidavits from Reigel, Moultrie, Muncher, Terry, and Meaghan
Williams, who had also been at the apartment on the morning of
August 29, 2010, giving their account of events related to
Grimes's and Saban's altercation. Grimes opposed
the
summary-
judgment motion and attached, among other items, as evidence
in support of her arguments in opposition the deposition
testimony of Grimes and Saban; photographs that Grimes
alleged
were of the injuries she received during the altercation with
Saban; and medical records from Grimes's hospital visit after
the altercation. Saban moved to strike those exhibits. The
circuit court did not rule on Saban's motion before it entered
a summary judgment in Saban's favor on the assault and battery
claims.
In its summary-judgment order, the circuit court stated:
"Findings
7
1130758
"In the early morning hours of August 29, 2010,
[Grimes] and [Saban], along with some mutual
girlfriends, returned to [Saban's] apartment after
a night of socializing at a local bar. As they sat
in the kitchen discussing the night's events, an
argument ensued between [Grimes] and [Saban], which
prompted [Saban] to leave the room, go upstairs to
her bedroom, and lock her door.
"While in her room, [Saban] posted on Facebook,
'No one likes Sarah, yayyyyy!' apparently in
reference to [Grimes]. Sometime later, [Grimes] saw
this post, became angry, went to [Saban's] bedroom
and began yelling and pounding on the locked door,
demanding the post be removed. When [Saban] opened
the door to her bedroom and attempted to show
[Grimes] her phone and that the post had been
removed, [Grimes] advanced toward [Saban], got
within inches of [Saban's] face, and continued
yelling. As [Saban] pushed [Grimes] away, [Grimes]
grabbed [Saban] by the throat, and the physical
altercation began.
"Conclusions
"[Saban] was in her home, locked in her bedroom,
when [Grimes] sought out [Saban] and initiated the
confrontation. [Grimes's] response to [Saban's]
Facebook post was unreasonable and excessive.
[Grimes] initiated the confrontation when she sought
out [Saban] after [Saban] had left the room where
the argument had taken place, and by going to
[Saban's] locked bedroom door yelling and demanding
the post be taken down. When [Saban] opened the
door to an angry [Grimes] within inches of her face,
it was reasonable for [Saban] to believe imminent
use of unlawful physical force by [Grimes] was about
to be used against her. [Saban] had a right to be
in her home, had no duty to retreat and had the
right to stand her ground. Therefore, [Saban] was
justified in using physical force to defend herself
from what she reasonably believed to be the use of
8
1130758
unlawful physical force by [Grimes]. Furthermore,
[Saban] was justified in using a degree of force
that she reasonably believed was necessary to repel
[Grimes's] use and threat of physical force.
"Due to these facts, Alabama Code [1975,] § 13A-
3-23[,]
presumes
that
[Saban's]
actions
were
justified and necessary to repel the use of physical
force against her. [Grimes] failed to present
evidence to rebut this presumption. Therefore, it
is ORDERED, ADJUDGED AND DECREED that [Saban's]
Motion for Summary Judgment is hereby GRANTED with
costs taxed as paid."
(Capitalization in original.)
Grimes moved the circuit court to alter, amend, or vacate
its judgment. The circuit court denied that motion on March
18, 2014, and Grimes appealed.
Discussion
"'The
standard
of
review
applicable
to
a
summary
judgment is the same as the standard for granting
the motion ....' McClendon v. Mountain Top Indoor
Flea Market, Inc., 601 So. 2d 957, 958 (Ala. 1992).
"'A summary judgment is proper when
there is no genuine issue of material fact
and the moving party is entitled to a
judgment as a matter of law. Rule
56(c)(3), Ala. R. Civ. P. The burden is on
the moving party to make a prima facie
showing that there is no genuine issue of
material fact and that it is entitled to a
judgment
as
a
matter
of
law.
In
determining whether the movant has carried
that burden, the court is to view the
evidence in a light most favorable to the
nonmoving party and to draw all reasonable
9
1130758
inferences in favor of that party. To
defeat
a
properly
supported
summary
judgment motion, the nonmoving party must
present "substantial evidence" creating a
genuine issue of material fact -- "evidence
of such weight and quality that fair-minded
persons in the exercise of impartial
judgment
can
reasonably
infer
the
existence
of the fact sought to be proved." Ala.
Code 1975, § 12–21–12; West v. Founders
Life Assurance Co. of Florida, 547 So. 2d
870, 871 (Ala. 1989).'"
Pritchett v. ICN Med. Alliance, Inc., 938 So. 2d 933, 935
(Ala.
2006)
(quoting
Capital
Alliance
Ins.
Co.
v.
Thorough–Clean, Inc., 639 So. 2d 1349, 1350 (Ala. 1994)).
Grimes argues that the circuit court erred in entering a
summary judgment in favor of Saban because, she says, genuine
issues of material fact exist as to whether Saban acted in
self-defense, under § 13A-3-23, Ala. Code 1975. Section 13A-
3-23 provides, in pertinent part:1
"(a) A person is justified in using physical
force upon another person in order to defend himself
or herself or a third person from what he or she
reasonably believes to be the use or imminent use of
unlawful physical force by that other person, and he
or she may use a degree of force which he or she
reasonably believes to be necessary for the purpose.
...
"....
Section 13A-3-23 was amended effective August 1, 2013.
1
That amendment affected parts of § 13A-3-23 not quoted above.
10
1130758
"(b) A person who is justified under subsection
(a) in using physical force, including deadly
physical force, and who is not engaged in an
unlawful activity and is in any place where he or
she has the right to be has no duty to retreat and
has the right to stand his or her ground.
"(c)
Notwithstanding
the
provisions
of
subsection (a), a person is not justified in using
physical force if:
"....
"(2) He or she was the initial
aggressor, except that his or her use of
physical force upon another person under
the circumstances is justifiable if he or
she withdraws from the encounter and
effectively communicates to the other
person his or her intent to do so, but the
latter person nevertheless continues or
threatens the use of unlawful physical
force.
"....
"(d) A person who uses force, including deadly
physical force, as justified and permitted in this
section is immune from criminal prosecution and
civil action for the use of such force, unless the
force was determined to be unlawful."
The circuit court determined that Grimes "sought out
[Saban] and initiated the confrontation"; that Saban "was
justified in using physical force to defend herself from what
she reasonably believed to be the use of unlawful physical
force by [Grimes]";
and "that [Saban's] actions
were justified
11
1130758
and necessary to repel the use of physical force against her."
These conclusions were apparently based on the
circuit
court's
findings that, after she saw Saban's Facebook post about her,
Grimes
"became angry, went to [Saban's] bedroom and began
yelling and pounding on the locked door, demanding
the post be removed. When [Saban] opened the door
to her bedroom and attempted to show [Grimes] her
phone and that the post had been removed, [Grimes]
advanced toward [Saban], got within inches of
[Saban's] face, and continued yelling. As [Saban]
pushed [Grimes] away, [Grimes] grabbed [Saban] by
the throat, and the physical altercation began."
These findings are supported by Saban's deposition
testimony and by the affidavits of Reigel, Moultrie, Muncher,
Terry, and Williams, which she attached to her motion for a
summary judgment. However, they are disputed by Grimes's
deposition testimony, which was attached to Grimes's brief
filed in opposition to Saban's summary-judgment motion. As
noted previously,
"[i]n determining whether the movant has carried
that burden [of showing that there is no genuine
issue of material fact and that the movant is
entitled to judgment as a matter of law], the court
is to view the evidence in a light most favorable to
the nonmoving party and to draw all reasonable
inferences in favor of that party."
Capital Alliance Ins., 639 So. 2d at 1350 (emphasis added).
12
1130758
Grimes testified in her deposition that after she banged
on Saban's door, insisting that Saban take down the Facebook
post, Saban opened the door and came out of her bedroom to
show Grimes that the post had been removed. Grimes testified
that Saban was in the hall when she showed Grimes her
telephone and that "[Grimes] had backed away from [Saban's]
door when [Saban] came out of her room." Grimes also
testified that she and Saban were "in close proximity" and
"[c]loser than [arms' length]," but her testimony does not
indicate that she was "within inches of [Saban's] face" or
that she continued yelling or threatening Saban once Saban
told her the post had been removed.2
Grimes also testified in her deposition that, after Saban
told her that the Facebook post had been removed, she said to
Saban "something to the effect of 'I don't care, okay, but
we're done,' and I called her crazy." Grimes testified that
Saban then "used both of her hands and shoved [Grimes] into
[Reigel's] open door frame." Grimes testified that, after
Saban pushed her, she grabbed Saban, putting one hand on her
throat and one hand on her chest "and threw [Saban] back ...
The statement that Grimes was yelling at Saban "within
2
inches of Saban's face" appears only in Reigel's affidavit.
13
1130758
toward the door to get her away." According to Grimes, when
she put her hands on Saban's throat and chest to push her
away, Saban started punching her and hit her in the face
"[m]ore than five times."
Grimes testified that, after the first punch, she told
Saban that "[she] was calling the cops." Grimes stated:
"I'm not sure how many blows were after that. I did
not swing back. I know I had my arm up to defend
myself. She had a grip on my hair. And we were
somehow moving along the wall .... [Muncher] at
this point ... tried to pull her off, and it wasn't
working.
"And at some point, the closer we got towards
the living room, [Terry], who was asleep, got up out
of bed and they somehow managed to pull [Saban] off
of me."
Grimes also testified in her deposition that she may have
scratched Saban and pulled her hair to "get away from her and
get her off of me."
When viewed in the light most favorable to Grimes and
when all reasonable inferences are drawn in favor of Grimes,
see Pritchett, supra, Grimes's deposition testimony raises
genuine issues of material fact as to whether Saban reasonably
believed the use of force was necessary to defend herself
against Grimes, whether Saban used a degree of force she
14
1130758
reasonably believed was necessary, and whether Saban was the
initial aggressor in the altercation. See § 13A-3-23(a) and
(c)(2), supra. Thus, Saban was not entitled to a summary
judgment pursuant to § 13A-3-23 on the ground that she acted
in self-defense.
Saban argues that Grimes's deposition testimony alone is
not "substantial evidence" creating a genuine issue of
material fact as to whether Saban acted in self-defense. She
cites Blackburn v. State Farm Automobile Insurance Co., 652
So. 2d 1140 (Ala. 1994), Mitchell v. Torrence Cablevision USA,
Inc., 806 So. 2d 1254 (Ala. Civ. App. 2000), and Walsh v.
Douglas, 717 So. 2d 807 (Ala. Civ. App. 1998), in support of
that argument. Her reliance on those cases is misplaced.
In Blackburn, this Court noted that the undisputed
evidence in the record disproved the plaintiff's claim that
the defendant had acted in bad faith. In Mitchell, the Court
of Civil Appeals determined that the plaintiff's
own
testimony
supported the defendants' claim that there was no genuine
issue of material fact as to their affirmative defenses.
Here, the evidence related to Grimes's assault and battery
claims and Saban's claim that she acted in self-defense is
15
1130758
highly disputed and raises genuine issues of material fact as
to whether Saban is entitled to protection under § 13A-3-23.
In Walsh, the Court of Civil Appeals concluded that the
"unsupported allegations" in the testimony of one of the
defendants "[did] not constitute substantial evidence" and
that that testimony "was insufficient to create a factual
issue precluding summary judgment." 717 So. 2d at 810. The
Court of Civil Appeals stated: "Mere conclusory allegations
that a fact exists will not defeat a properly supported
summary judgment motion." Id. Grimes's
deposition
testimony,
however, is not composed of "[m]ere conclusory allegations."
Instead, she sets forth specific facts that, when viewed in
the light most favorable to Grimes, as they must be, see
Pritchett, supra, constitute substantial evidence of genuine
issues of fact as to whether Saban acted in self-defense,
pursuant to § 13A-3-23, see Rule 56, Ala. R. Civ. P., i.e.,
evidence from which "fair-minded persons in the exercise of
impartial judgment can reasonably infer the existence of the
fact sought to be proved." Pritchett, supra. Thus, the
circuit court erred in entering a summary judgment in Saban's
favor based on § 13A-3-23. In so holding, we should not be
16
1130758
understood as expressing a view as to the merits of the
underlying claims or affirmative defenses; we merely
hold that
there remain genuine issues of material fact for resolution by
the fact-finder so as to preclude the entry of a summary
judgment.
Conclusion
In light of the foregoing, we reverse the circuit court's
judgment and remand the cause for further proceedings
consistent with this opinion.
REVERSED AND REMANDED.
Moore, C.J., and Bolin, Parker, and Main, JJ., concur.
17 | December 12, 2014 |
c1cd76dd-8957-43ed-9da0-85f81da35d89 | Paint Rock Turf, LLC v. First Jackson Bank et al. | N/A | 1130480 | Alabama | Alabama Supreme Court | REL:11/26/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
____________________
1130480
____________________
Paint Rock Turf, LLC
v.
First Jackson Bank et al.
____________________
1130528
____________________
First Jackson Bank
v.
Paint Rock Turf, LLC
Appeals from Madison Circuit Court
(CV-10-900076)
1130480, 1130528
MOORE, Chief Justice.
Paint Rock Turf, LLC ("Paint Rock"), appeals from a
judgment as a matter of law ("JML") entered by the Madison
Circuit Court on its claim for emblements under § 35-9-2, Ala.
Code 1975, against First Jackson Bank ("First Jackson") and
Wayne A. Goodson and his wife Christian Goodson. First
1
Jackson cross-appeals from the trial court's denial of its
postjudgment motion for a JML on Paint Rock's claim alleging
conversion of pallets of sod.
I. Facts and Procedural History
On April 30, 2004, Paint Rock purchased a sod farm and
related farm equipment from Eufala Corporation. The sod farm
consisted of 1,171 acres of land upon which were grown 580
acres of Bermuda and Zoysia sod grasses. To partially finance
the purchase, Paint Rock borrowed $1,706,250 from First
Although Gerald T. Jones, Jr., whose father is the sole
1
member of Paint Rock, is designated as an appellant on the
notice of appeal and on Paint Rock's briefs, only Paint Rock
asserted an emblements claim in the trial court. Jones did not
appeal the jury verdicts on the claims he brought in the trial
court. Thus, none of his claims are before us on appeal.
Cherry Jones, Gerald's wife and a third-party plaintiff in the
trial court, has not appealed. Functionally, Paint Rock is the
only appellant in case no. 1130480, and we have restyled the
appeal to reflect that.
2
1130480, 1130528
Jackson. The loan was secured by a mortgage on the sod farm
and a security interest in the equipment used on the farm.
By February 2009, reflecting in part a drop in demand for
sod caused by the collapsing market for new homes, Paint Rock
had defaulted on the loan. On February 11, 2009, Paint Rock
filed a Chapter 11 bankruptcy petition in the United States
Bankruptcy Court for the Northern District of Alabama. The
filing of the petition operated as an automatic stay of "any
act to obtain possession of property of the estate or of
property from the estate or to exercise control over property
of the estate." 11 U.S.C. § 362(a)(3). The stay precluded
First Jackson from foreclosing on the sod farm or retaking the
equipment. The petition was dismissed August 12, 2009. On
October 30, 2009, First Jackson published in the Madison
County Record the first of three notices of a foreclosure sale
on the property scheduled for noon on November 19, 2009. On
the morning of November 19, 2009, Paint Rock filed a second
bankruptcy petition, which stayed the scheduled November 19
sale, and which was dismissed on December 8, 2009, for failure
to file the proper schedules and statements. On December 18,
2009, First Jackson published a notice that the foreclosure
3
1130480, 1130528
sale was rescheduled for December 30, 2009. On December 26,
2009, Paint Rock filed its third bankruptcy petition. Four
days later, the bankruptcy court lifted the automatic stay,
expressly finding that Paint Rock had misused "the bankruptcy
process in an attempt to wrongfully hinder and delay [First
Jackson's] efforts to foreclose its mortgage and security
agreement." See Barclays-American Bus. Credit, Inc. v. Radio
WBHP, Inc. (In re Dixie Broad., Inc.), 871 F.2d 1023, 1026
(11th Cir. 1989) (noting that "a petition filed in bad faith
... justifies relief from a stay").
The same day, December 30, 2009, immediately following
the lifting of the stay by the bankruptcy court, First
Jackson, as the high bidder, purchased the property at the
foreclosure sale. On January 7, 2010, First Jackson sent Paint
Rock a letter demanding possession of the sod farm within 10
days. Paint Rock claimed that it did not receive First
Jackson's demand-of-possession letter until January 16, 2010.
On January 14, 2010, Jimmy Blevins, president of First
Jackson, arrived at the sod farm to take possession of the
farm and the equipment on behalf of First Jackson. When
Blevins arrived at the sod farm, Paint Rock employees were
4
1130480, 1130528
loading harvested sod onto a flatbed tractor-trailer for
delivery to a customer. Blevins informed the Paint Rock
employees that First Jackson now owned the sod farm, that the
employees could not remove the harvested sod, and that the
employees would be arrested for trespassing if they returned
to the sod farm.
On January 21, 2010, First Jackson filed an ejectment
action against Paint Rock. On the same day, Paint Rock by
letter demanded access to the sod farm "to recover the
emblements in the form of sod which is being grown on the real
property recently foreclosed upon ...." Paint Rock also
2
requested the return of its equipment. First Jackson denied
Paint Rock's request. Paint Rock, relying on a section of the
Alabama Code that permits a tenant at will to harvest its
crop, counterclaimed for damages for harm suffered as the
3
result of being unable to harvest the sod. As relevant to this
"Emblements" are "[t]he growing crop annually produced
2
by labor, as opposed to a crop occurring naturally." Black's
Law Dictionary 636 (10th ed. 2014).
"The tenant at will is entitled to his emblements, if the
3
crop is sowed before notice to quit by the landlord, or the
tenancy otherwise suddenly terminated, as by sale of the
estate by the landlord, or by judicial sale, or death of the
landlord or tenant." § 35-9-2, Ala. Code 1975.
5
1130480, 1130528
appeal, Paint Rock also sought damages for conversion of
"plats of sod" contained on the sod farm. On March 4, 2010,
First Jackson sold the sod farm to Mrs. Goodson. The deed
stated that the sale was subject to any claim Paint Rock may
have to the emblements growing on the property. On October 12,
2010, Paint Rock and Gerald T. Jones, Jr., filed a joint
third-party complaint against First Jackson and Mr. Goodson.4
Paint Rock alleged conversion and detinue, as well as the
emblements claim, against Goodson; Jones alleged conversion
and detinue against both First Jackson and Goodson. The third-
party complaint was later amended to add claims of wantonness
and negligence against both First Jackson and the Goodsons.
After the trial court denied motions for a summary
judgment filed by First Jackson, Mr. Goodson, and Mrs.
Goodson, who had been added as a party, the case proceeded to
trial. At the close of Paint Rock and Jones's case, the trial
court granted a motion for a JML filed by First Jackson and
the Goodsons on Paint Rock's counterclaim for emblements on
Mrs. Goodson was not initially named as a third-party
4
defendant because Paint Rock and Jones mistakenly believed
that Mr. Goodson was the purchaser of the sod farm. In a later
amendment to
the third-party complaint, Mrs. Goodson was added
as a third-party defendant and Cherry Jones, wife of Gerald T.
Jones, Jr., was added as a third-party plaintiff.
6
1130480, 1130528
the ground that Paint Rock was not an at-will tenant as
required by § 35-9-2. After Paint Rock withdrew its detinue
claims and the trial court granted a JML on the wantonness
claims,
only the conversion and negligence claims remained
for
the jury to resolve.
The jury awarded Paint Rock damages against First
Jackson, consisting of $18,500 for conversion of a sod cutter
and $10,890 for conversion of cut sod that had been loaded on
a tractor-trailer when First Jackson took possession of the
property on January 14, 2010. The jury also awarded Paint Rock
a total of $1,059 against the Goodsons for conversion of
business
property and equipment.
The jury entered verdicts for
First Jackson and the Goodsons on Jones's conversion and
negligence claims. Paint Rock appealed the JML in favor of the
defendants on the emblements claim; First Jackson cross-
5
appealed the judgment awarding Paint Rock damages for
conversion of the cut sod.
II. Standard of Review
In reviewing a JML, "[w]e must decide whether there was
substantial evidence, when viewed in the light most favorable
See supra note 1.
5
7
1130480, 1130528
to the plaintiff, to warrant a jury determination." Alabama
Power Co. v. Aldridge, 854 So. 2d 554, 560 (Ala. 2002).
"[S]ubstantial evidence is evidence of such weight and
quality
that fair-minded persons in the exercise of impartial judgment
can reasonably infer the existence of the fact sought to be
proved." West v. Founders Life Assurance Co. of Florida, 547
So. 2d 870, 871 (Ala. 1989). Questions of law are reviewed de
novo. Alabama Republican Party v. McGinley, 893 So. 2d 337,
342 (Ala. 2004).
III. Analysis
A. Paint Rock's appeal of the denial of its emblements claim
(case no. 1130480)
Paint Rock's claim for emblements arises under § 35-9-2:
"The tenant at will is entitled to his emblements, if the crop
is sowed before notice to quit by the landlord, or the tenancy
otherwise suddenly terminated, as by sale of the estate by the
landlord, or by judicial sale, or death of the landlord or
tenant." (Emphasis added.) The purpose of this statute is to
protect a farmer from economic harm caused by the sudden
termination of a month-to-month tenancy by the landlord
between the time a crop is planted and the time the crop is
8
1130480, 1130528
ready for harvest. So long as the crop was sown "before
6
notice to quit by the landlord," the tenant at will may still
harvest the crop even though the tenancy in the land has
ended. Paint Rock's relationship with First Jackson, however,
was that of mortgagor to mortgagee, not tenant to landlord.
In Lamar v. Johnson, 16 Ala. App. 648, 81 So. 140 (1919),
citing § 4733, Ala. Code 1907, the predecessor statute to §
35-9-2, the Court of Appeals held that a defaulted mortgagor
7
who was permitted to remain on the land by its mortgagee
assumed the status of a tenant at will.
"In the absence of notice to quit possession or
other steps by the mortgagee to recover possession,
the mortgagor is not a wrongdoer or trespasser, but
is a mere tenant at will of the mortgagee, and as
such is entitled to claim the fructus industriales
or emblements, if the crop is sown before notice to
quit by the mortgagee."
16 Ala. App. at 649, 81 So. at 141. Thus, if, as Paint Rock
argues, its continuing occupation of the sod farm after its
"The purpose of the emblements doctrine is to protect the
6
interests of farmers to harvest crops on land that they
planted with the expectation that its bounty would be
available to them, but whose possessory rights have failed
through no fault of their own before the time for harvesting."
21A Am. Jur. 2d Crops § 26 (2014).
The language of § 4733, Ala. Code 1907, is identical to
7
that of § 35-9-2, Ala. Code 1975.
9
1130480, 1130528
default in early 2009 was with First Jackson's permission,
Paint Rock was potentially entitled to harvest any crop sown
between the default on the mortgage and the notice to quit
mailed on January 7, 2010. "If the mortgagor is permitted to
remain in possession, he is the mere tenant at will of the
mortgagee." Buchmann v. Callahan, 222 Ala. 240, 242, 131 So.
799, 801 (1930). Without such permission, however, "he would
be a tenant at sufferance only." Miller v. Faust, 250 Ala.
545, 548, 35 So. 2d 162, 165 (1948).
Paint Rock remained in possession of the sod farm from
the default in January 2009 until First Jackson ousted it from
the property on January 14, 2010. Whether that possession was
"at will" or "at sufferance" controls the resolution of Paint
Rock's
emblements claim. Critical to this determination is
the
effect on Paint Rock's at-will-tenancy argument of the
automatic stay in the bankruptcy proceeding. Although Paint
Rock does not address the effect of the bankruptcy stay in its
brief, it did make the following argument to the trial court:
"Paint Rock Turf was a debtor in possession in this bankruptcy
proceeding. That means they were there with the permission of
10
1130480, 1130528
the creditors. So ... that makes them a tenant at will." First
Jackson and the Goodsons disagree.
"The real import of the so-called 'automatic stay'
was that [Paint Rock] (being in default and subject
to foreclosure before it filed bankruptcy) was
certainly not in possession of the real estate with
the consent of [First Jackson], but was being kept
in possession by the force of the Bankruptcy Code."
First Jackson's brief, at 23. "While the automatic stay
provisions of 11 U.S.C. § 362 do prevent creditors from
pursuing collection activity against a debtor (at least until
relief from the automatic stay may be granted), it does not
create an implied consent on the part of the creditor."
Goodsons' brief, at 18.
"[A]s the automatic stay is essentially a court-ordered
injunction, any person or entity who violates the stay may be
found in contempt of court." Carver v. Carver, 954 F.2d 1573,
1578 (11th Cir. 1992). "An individual injured by any willful
violation of a stay ... shall recover actual damages,
including costs and attorneys' fees, and, in appropriate
circumstances, may recover punitive damages." 11 U.S.C. §
362(h). In the face of these sanctions, the notion that First
Jackson "consented" to Paint Rock's continuing occupation of
the sod farm during the bankruptcy proceedings is fanciful.
11
1130480, 1130528
Submission to force majeure is not the same as consent to its
imposition. Because the automatic stay cannot be construed as
a grant of permission by First Jackson for Paint Rock as a
defaulting debtor in possession to remain on the property,
Paint Rock, while in bankruptcy, was not a tenant at will of
First Jackson, and Lamar is inapplicable. Section 35-9-2,
therefore, created neither a right of ingress for Paint Rock
to harvest its emblements after being ejected from the
property nor a corresponding claim for conversion when it was
denied such access.
The trial court correctly entered a JML for the
defendants on Paint Rock's emblements claim.
B. First Jackson's cross-appeal of the denial of its motion
for a JML to reverse the jury's award of $10,890 for
conversion of pallets of sod (case no. 1130528)
On January 14, 2010, two weeks after the foreclosure sale
and a week after First Jackson sent a notice to quit to Paint
Rock, employees of First Jackson noticed that sod was being
harvested and loaded onto a tractor-trailer on the foreclosed
property. The president of First Jackson, Jimmy Blevins,
ordered the Paint Rock employees off the property and secured
12
1130480, 1130528
the tractor-trailer containing the cut sod. In response to
8
First Jackson's subsequent action for ejectment, Paint Rock
counterclaimed for the value of "the plats of sod on the real
property at issue." The jury awarded Paint Rock $10,890 in
damages for "conversion of tractor trailer sod."
First Jackson argues that the tractor-trailer sod was its
property by reason of the December 30, 2009, foreclosure.
First Jackson's brief, at 27. Paint Rock responds that the
trial court correctly ruled that First Jackson's motion on
this issue was untimely. Paint Rock's brief, at 13-31. First
Jackson argues in reply that pursuant to Rule 50, Ala. R. Civ.
P., its motion for a JML on the cut-sod claim was timely.
First Jackson's reply brief, at 3-5.
During the discussion on a JML at the close of Paint
Rock's case, the trial court, though equivocating, decided to
let the issue of the conversion of the tractor-trailer sod go
to the jury. First Jackson did not specifically object. Later
that day during the jury-charge conference the trial court
stated that Paint Rock had a claim of "conversion of the
Blevins testified that, although he placed a new padlock
8
on the gate to the farm on January 14, 2010, the lock was
found cut the next day and the tractor-trailer and sod
removed.
13
1130480, 1130528
tractor-trailer of sod of January 14, 2010." First Jackson did
not object. Following the charge conference, closing argument
occurred but was not completed when the court adjourned for
the day. The next morning, before closing argument resumed,
First Jackson moved to dismiss the claim alleging conversion
of the sod on the truck on the ground that the JML denying
Paint
Rock's claim for emblements necessarily meant that after
the foreclosure sale First Jackson owned the sod farm
outright. Paint Rock argued that the motion was untimely
because First Jackson did not raise its objection at the
charge conference and that a change in the court's ruling
would prejudice Paint Rock, who had already delivered its
closing argument.
The trial court denied the motion as untimely. Counsel
for First Jackson stated: "We take exception to the
untimeliness because a motion for a judgment notwithstanding
a verdict is to be made at the conclusion of the evidence and
before the case is submitted to the jury. ... And we fall
within that parameter." The trial court indicated that First
Jackson could submit a postjudgment motion on the issue, if
necessary. Closing argument then resumed, followed by the
14
1130480, 1130528
court's instructions to the jury, which included a charge on
"conversion of a tractor-trailer load of sod." After the jury
awarded Paint Rock $10,890 for conversion of the cut sod,
First
Jackson filed a postjudgment motion renewing its
request
for a JML on this issue. The trial court denied the motion.
"Motions for judgment as a matter of law may be made at
any time before submission of the case to the jury." Rule
50(a)(2), Ala. R. Civ. P. First Jackson's motion to dismiss
the sod-on-the-truck claim occurred toward the end of closing
argument and before the jury was charged or had begun to
deliberate. Thus, by the plain language of Rule 50(a)(2), the
motion was timely. To preserve for appellate review an issue
raised by a preverdict JML motion, a party must also renew the
motion after the verdict is rendered. King Mines Resort, Inc.
v. Malachi Mining & Minerals, Inc., 518 So. 2d 714, 716 (Ala.
1987). First Jackson satisfied this requirement.
First Jackson's preverdict JML motion was timely, and the
denial of that motion was properly preserved for review. We
thus address the merits of the motion. Because the trial court
correctly entered a JML on Paint Rock's claim for emblements,
it follows that Paint Rock did not have a property interest in
15
1130480, 1130528
the sod on the farm after First Jackson's purchase of the
property at the foreclosure sale on December 30, 2013. See §
35-10-1, Ala. Code, 1975 (stating that a conveyance of lands
to a purchaser at a foreclosure sale vests the legal title in
such purchaser). Thus, First Jackson could not be liable on
January 14, 2010, for conversion of what was then its own
property.9
IV. Conclusion
In case no. 1130480, the judgment of the trial court is
affirmed. In case no. 1130528, the judgment of the trial court
is reversed, and the case is remanded to the trial court to
enter judgment in favor of First Jackson.
1130480 -- AFFIRMED.
1130528 -- REVERSED AND REMANDED.
Main, J., concurs.
Murdock, J., concurs specially.
Bolin and Bryan, JJ., concur in the result.
Gerald T. Jones, Jr., testified at trial that sod has to
9
be cut, shipped, and laid the same day for the product to be
marketable. Thus, the sod on the truck on January 14, 2010,
was of necessity harvested after December 30, 2013.
16
1130480, 1130528
MURDOCK, Justice (concurring specially).
I concur with the main opinion. I write separately to
question whether resolution of the question raised by the
assertion by Paint Rock Turf, LLC, that Paint Rock is entitled
to the sod emblements turns not, at least not per se, on
whether Paint Rock's interest in the land in the context of a
bankruptcy stay should be considered a tenancy at will or a
tenancy at sufferance, but instead on the issue of fault.
First, there is some Alabama authority that the doctrine of
emblements applies both to tenants at will and to tenants at
sufferance. See First Nat'l Bank v. Federal Land Bank of New
Orleans, 225 Ala. 387, 389, 143 So. 567, 568 (1932) (stating
that "after default in the mortgage, the mortgagor became the
tenant at will of, or a tenant at sufferance of, the
mortgagee, one or the other depending upon the facts of the
case, and as such was entitled to the crops"); Bates v. Bank
of Moulton, 226 Ala. 679, 682, 148 So. 150, 153 (1933) (same).
Second, the Court in Gardner v. Lanford, 86 Ala. 508,
510, 5 So. 879, 880 (1889), found a tenant to be entitled to
emblements where "the term of the lessees, contingent from its
inception on the exercise of the statutory privilege of
17
1130480, 1130528
redemption by the debtor ... was itself uncertain, and, if the
tender and offer to redeem were made in compliance with the
law, was terminated at a time and in a manner which in legal
contemplation was unexpected to the lessor and lessees."
(Emphasis added.) Likewise, in Florala Sawmill Co. v. J.T.
Parrish, 155 Ala. 462, 465, 46 So. 461, 462 (1908), the Court
observed that, "as between landlord and tenant, where the
termination of the tenancy is uncertain, as where the lease is
for life, when the tenancy is brought to an end by the
happening of the uncertain event, the tenant is entitled to
emblements ...." (Emphasis added.) Query whether a
termination of a tenancy due to the fault of the tenant can be
"in legal contemplation ... unexpected" to the tenant and
whether it is this gravamen, i.e., fault, that is dispositive,
rather than the seemingly metaphysical choice, at least in
the present circumstances, between the tenancy-at-will label
and the tenancy-at-sufferance label.
Other authorities consider the issue whether a tenant has
lost possession as a result of his or her fault. As one
treatise explains:
"It is a general rule that if one's estate in
land comes to an end at a time which he could not
18
1130480, 1130528
have previously ascertained, without his fault and
without any action on his part to bring about such
a result, he is entitled to take the annual crops
planted by him before the termination of the estate
...."
2 Basil Jones, Tiffany Real Property § 599 (3d ed. 1939)
(emphasis added). See, e.g., 25 C.J.S. Crops § 16 (2012)
(stating that "[t]he purpose of the emblements doctrine is to
protect the interests of farmers to harvest crops on land that
they planted with the expectation that its bounty would be
available to them but whose possessory rights have failed
through no fault of their own before time for harvesting"
(emphasis added)); 141 A.L.R. 1243 (1942) (observing that
"[t]he doctrine or right of emblements entitles one who holds
land for a period subject to termination at a time which he
cannot ascertain beforehand to remove from the land after the
termination of his tenancy the annual crops or emblements
which he has planted thereon prior to such termination, if the
termination is brought about without any fault on his part"
(emphasis added)).
It is undisputed that Paint Rock defaulted on its
mortgage obligation. I therefore agree that it was not
entitled to the sod emblements in question.
19 | November 26, 2014 |
cf5e7d83-7329-436b-a8c5-dee557dfb46a | Ex parte David Bronner, et al. | N/A | 1110472 | Alabama | Alabama Supreme Court | REL:" 12/31/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
____________________
1110472
____________________
Ex parte David Bronner, in his official capacities as chief
executive officer and secretary-treasurer of the Employees'
Retirement System of Alabama and as chief executive officer
and secretary-treasurer of the Teachers' Retirement System
of Alabama, et al.
PETITION FOR WRIT OF MANDAMUS
(In re: Tonya Denson and Venius Turner
v.
David Bronner et al.)
(Montgomery Circuit Court, CV-11-900738)
MURDOCK, Justice.
1110472
The ERSA and the TRSA are part of the RSA. See Ala. Code
1
1975, § 16-25-22(a) and § 36-27-3.
2
Tonya Denson, a member of the Employees' Retirement
System of Alabama ("the ERSA"), and Venius Turner, a member of
the Teachers' Retirement System of Alabama ("the TRSA"),
brought this action on behalf of themselves, individually, as
well as similarly situated members of the Retirement Systems
of Alabama ("the RSA"), in the Montgomery Circuit Court
against (1) David Bronner, in his official capacities as chief
executive officer and secretary-treasurer of the ERSA, the
TRSA, and the RSA and (2) the officers and members of the
1
respective boards of control of the TRSA and the ERSA, in
their official capacities (Bronner and the officers and
members of the boards of control are hereinafter referred to
collectively as "the RSA defendants").
The RSA defendants filed a motion to dismiss the
complaint, which the trial court denied. The RSA defendants
then filed a petition for a writ of mandamus with this Court,
asking that we direct the trial court to vacate its order
denying their motion to dismiss and to grant the motion. We
grant the petition.
1110472
3
I. Facts and Procedural History
The RSA includes the TRSA, which is administered for the
benefit of public-education employees who are members of the
TRSA, and the ERSA, which is administered for the benefit of
state employees who are members of the ERSA. See supra
note 1. Denson is a member of the ERSA; Turner is a member of
the TRSA. The board of control of the TRSA is charged by
statute with making and overseeing investments on behalf of
the TRSA, just as the board of control of the ERSA is tasked
with the same responsibility and authority as to the ERSA.
See Ala. Code 1975, § 16-25-2(b) and § 36-27-2(b).
Section 16-25-20, Ala. Code 1975, provides:
"(a)(1) The Board of Control [of the TRSA]
shall be the trustees of the several funds of the
Teachers' Retirement System created by this chapter
as provided in Section 16-25-21, and shall have full
power to invest and reinvest the funds, through its
Secretary-Treasurer, in the classes of bonds,
mortgages, common and preferred stocks, shares of
investment companies or mutual funds, or other
investments as the Board of Control may approve,
with the care, skill, prudence, and diligence under
the circumstances then prevailing that a prudent man
acting in a like capacity and familiar with the
matters would use in the conduct of an enterprise of
a like character and with like aims; and, subject to
like
terms,
conditions,
limitations,
and
restrictions, the Board of Control, through its
Secretary-Treasurer, shall have full power to hold,
purchase, sell, assign, transfer, and dispose of any
1110472
4
investments in which the funds created herein shall
have been invested, as well as the proceeds of the
investments and any moneys belonging to the funds.
"(2) The Secretary-Treasurer shall have the
authority and it shall be his or her duty to carry
out the investment policies fixed by the Board of
Control, and pursuant thereto he or she shall
examine all offers of investments made to the funds,
shall initiate inquiries as to available investments
therefor, shall review periodically the investment
quality and desirability of retention of investments
held, and shall make purchases and sales of
investments as he or she shall deem to the best
interests of the funds and as the investment
committee hereinafter provided for, and as the
consultant to the Secretary-Treasurer, if any,
appointed by the Board of Control hereunder, to the
extent of the purpose for which it is appointed,
shall approve. ...
"(3) The Board of Control shall elect an
investment committee which shall consist of three
members of the board, one of whom shall be the
Director of Finance. The investment committee shall
act as agent for the board and shall consider all
investment
recommendations
made
by
the
Secretary-Treasurer and shall either approve or
disapprove the same in accordance with policies set
by the board. ...
"(4) The Board of Control may appoint and
employ as consultant to the Secretary-Treasurer, in
the purchase, sale, and review of investments of the
funds, to the extent the board may designate, a bank
having its principal office in the State of Alabama,
having capital, surplus, and undivided profits of
not
less
than
three
hundred
million
dollars
($300,000,000), and having an organized investment
department."
1110472
A regulation governing the ERSA provides, in part, as
2
follows:
"(1) The fiduciary standards of staff and Board
of Control members [are] to be of the highest
degree.
"(a) All investments are to be made
within
the
'prudent
man'
concept
of
fiduciary trusteeship;
"(b)
The
fiduciary
standards
are
governed by any federal law, Securities and
Exchange Commission rulings, and general
laws of the State of Alabama, in addition
to any specific rulings of the Alabama
Ethics Commission such as 'Advisory Opinion
No. 230.'"
Ala. Admin. Code (RSA), Rule 800-2-3-.09. No comparable
regulation exists as to the TRSA. The plaintiffs do not rely
upon the above-quoted regulation in their complaint, and no
party addressed it in the briefs to the trial court or
addresses it in the briefs to this Court. As discussed infra,
a version of the "'prudent man' concept" is embodied in § 16-
25-20 and § 36-27-25, which are applicable to the TRSA and the
ERSA, respectively.
5
See also Ala. Code 1975, § 36-27-25(a), (c), (d), and (e)
(substantially similar provisions as to the board of control
of the ERSA).2
In their complaint, the plaintiffs alleged that the RSA
defendants had violated their fiduciary duties. Quoting Ala.
Code 1975, § 16-25-20(a)(1), governing the TRSA, and citing §
36-27-25(a), governing the ERSA and which, in all material
1110472
6
respects, is identical to § 16-25-20(a)(1), the plaintiffs
alleged that the RSA defendants are obligated to invest the
respective retirement funds being managed by them "'with the
care, skill, prudence, and diligence under the circumstances
then prevailing that a prudent man acting in a like capacity
and familiar with the matters would use in the conduct of an
enterprise of a like character and with like aims.'"
The plaintiffs also alleged that the RSA has adopted a
policy
statement
entitled
"Investment
Policies
and
Procedures"
that states, in part, as follows:
"The Boards of Control, as Trustees of the
Teachers'
Retirement
System
and
Employees'
Retirement
System
(Systems), have full power,
through each System's secretary-treasurer, to invest
and reinvest System funds in accordance with the
Prudent Man Rule: 'with the care, skill, prudence,
and
diligence
under
the
circumstances
then
prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in
the conduct of an enterprise of a like character and
with like aims.' Other funds currently and
hereafter under the management of the Systems will
be governed by this Investment Policy Statement
within each System's limitations and/or by other
applicable legislated restrictions.
"It is the objective of the Boards [of Control
of the TRSA and the ERSA] that funds be invested in
such a manner as to maximize the total return of
each System within prudent risk parameters. Also,
the Systems recognize that a stronger Alabama
equates to a stronger Retirement System, and as
1110472
In addition, the plaintiffs alleged that the RSA has
3
adopted the following mission statement: "The mission of the
Retirement Systems of Alabama is to serve the interests of our
members by preserving the excellent benefits and soundness of
the Systems at the least expense to the State of Alabama and
all Alabama taxpayers."
7
such,
investments
in
Alabama
businesses
are
encouraged to the extent the investment meets the
criteria delineated by this policy statement."
3
The plaintiffs alleged that, "for as much as the most
recent fifteen year period," the RSA defendants have made
investments
"in
Alabama
golf
courses,
office
buildings,
condominiums, hotels, resorts and stock and debt
holdings in companies conducting business in Alabama
(collectively referred to as 'Alabama Investments'),
which investments have historically yielded lower
returns than investments which could or should have
been made in compliance with the mandates of the
law, the Prudent Man Rule, the Investment Policy of
the RSA, and its Mission Statement."
(Emphasis added.) In this regard, the plaintiffs contended
that "up to ... approximately 15%" of the investments made by
the boards of control have been in such Alabama-based
investments. They contend that the ERSA and the TRSA received
lower returns on those investments than could have been
realized on other investments, which, in turn, made it
necessary for members of the ERSA and the TRSA and the State
of Alabama to pay more to enable the ERSA and the TRSA to meet
1110472
8
their obligations to retirees. They alleged that, "though the
Alabama Investments may have been well intended, and may serve
as a vehicle for creating goodwill, they have not been made in
compliance with the Prudent Man Rule."
The plaintiffs asked the trial court to enter a judgment
declaring
"that the duties of the [RSA] Defendants, separately
and severally, are specifically subject to the
statutory provisions, mandates and restrictions
specified in § 36-27-25 and § 16-25-20, Code of
Alabama,
and
that
any
deviation
from
those
provisions, mandates and restrictions [is] unlawful"
and declaring further that it is "beyond the authority" of the
boards of control to invest "any assets and funds ... in
Alabama Investments which the [RSA defendants] expected or
were aware would yield less of a return than alternative or
other investments." Similarly, the plaintiffs requested in
their complaint that the trial court enjoin the RSA defendants
from, among other things, investing "any assets" within their
control in a manner not in accord with the "Prudent Man Rule"
and from investing "in Alabama Investments ... which the [RSA
defendants] expect or are aware will yield less of a return
than alternative or other investments."
1110472
The RSA defendants also asserted that the plaintiffs had
4
failed to allege a cognizable claim based on violations of the
"prudent-man rule." As this Court noted in American Suzuki
Motor Corp. v. Burns, 81 So. 3d 320, 321 (Ala. 2011), however,
the denial of a motion to dismiss for failure to state a claim
upon which relief can be granted generally is not subject to
appellate review unless this Court has granted permission to
appeal pursuant to Rule 5, Ala. R. App. P. The RSA defendants
did not seek permission to appeal pursuant to Rule 5, Ala. R.
App. P., and they have not argued the failure-to-state-a-claim
9
The RSA defendants filed a motion to dismiss the
complaint. The motion, as initially filed, asserted two
grounds for dismissal of the complaint. First, the RSA
defendants asserted that State, or sovereign, immunity
precluded prosecution of the claims. See Art. I, § 14, Ala.
Const. 1901; Ala. Code 1975, §§ 16-25-2(b) and 36-27-2(b)
(recognizing that the boards of control of the TRSA and the
ERSA are instrumentalities of the State, that the TRSA and the
ERSA are funded by the State, and that their officers and
employees are immune from suit in their official capacities to
the same extent as the State, its agencies, and its officers
and employees). According to the RSA defendants, the
plaintiffs' claims do not fall within any of the recognized
"exceptions" to State immunity applicable to State officials.
Second, the RSA defendants asserted that Denson and Turner
lacked standing.
4
1110472
issue in their petition. Thus, we will not address that
issue.
10
Denson and Turner filed a reply in opposition to the
motion to dismiss, contending that the plaintiffs' claims did
in fact fall within recognized "exceptions" to State immunity.
They
also
contended
that
they
had
standing,
relying
principally on a 1981 decision of this Court, Lee v. Bronner,
404 So. 2d 627 (Ala. 1981).
The RSA defendants filed a response to Denson and
Turner's reply in opposition, adding arguments that the
plaintiffs' claims were nonjusticiable and that Denson and
Turner had failed to exhaust administrative remedies.
In December 2011, the trial court denied the motion to
dismiss. The RSA defendants filed a timely petition for the
writ of mandamus with this Court.
II. Standard of Review
A writ of mandamus is an
"'extraordinary writ that will be issued only when
there is: 1) a clear legal right in the petitioner
to the order sought; 2) an imperative duty upon the
respondent to perform, accompanied by a refusal to
do so; 3) the lack of another adequate remedy; and
4) properly invoked jurisdiction of the court.'"
1110472
11
Ex parte Wood, 852 So. 2d 705, 708 (Ala. 2002) (quoting
Ex parte United Serv. Stations, Inc., 628 So. 2d 501, 503
(Ala. 1993)). "'When we consider a mandamus petition, the
scope of our review is to determine whether the trial court
clearly exceeded its discretion.'" Ex parte Thomas, 110
So. 3d 363, 365-66 (Ala. 2012) (quoting State v. Bui, 888
So. 2d 1227, 1229 (Ala. 2004).
"Subject to certain narrow exceptions ..., we have held
that, because an 'adequate remedy' exists by way of an appeal,
the denial of a motion to dismiss ... is not reviewable by
petition for writ of mandamus." Ex parte Liberty Nat'l Life
Ins. Co., 825 So. 2d 758, 761–62 (Ala. 2002). One of the
recognized exceptions to this general rule is "that mandamus
will lie to compel the dismissal of claim that is barred by
the doctrine of sovereign immunity." Ex parte Blankenship,
893 So. 2d 303, 305 (Ala. 2004). Likewise, the writ may be
issued where the plaintiff's claims fail to present a
justiciable controversy. Gulf Beach Hotel, Inc. v. State ex
rel. Whetstone, 935 So. 2d 1177, 1182 (Ala. 2006).
1110472
12
III. Analysis
The RSA defendants argue that they are entitled to
immunity as to the plaintiffs' claims, that Denson and Turner
lack standing because they "cannot allege an injury in fact,"
that the controversy at issue is nonjusticiable, and that
Denson and Turner have failed to exhaust administrative
remedies. In response to those arguments, the trial court
identified a number of issues that gave it "considerable
concern":
"The issues presented on motion to dismiss are
significant ones, several of which cause the court
considerable concern. These issues include whether
Plaintiffs
have
standing;
whether
[the
RSA]
Defendants are entitled to state sovereign immunity;
whether
a
Prudent
Man
Rule
applies
and
the
parameters of a Prudent Man Rule, if one applies;
whether the Boards of Control, as fiduciaries, have
discretion to consider any factor other than
obtaining the highest rate of return; whether and
how the court might substitute its judgment for the
judgment of the Boards of Control, since investment
policymaking
is
a
function
allotted
by
the
legislature to the Boards of Control; whether the
court can take the responsibility for investment
policymaking from the Boards of Control when
Plaintiffs have the political remedy of electing new
and different members to the Boards of Control; and
whether Plaintiffs are required to exhaust the
available administrative remedy. These issues
should be presented to the court on a motion for
summary judgment with supporting materials and law."
1110472
The appropriateness of our review of these issues at this
5
juncture is a function of the legal nature of the questions
presented, as well as the fact that these issues go to the
subject-matter jurisdiction of the trial court. We also note
that sovereign immunity is a defense that protects the State
and its officials not only from liability, but also from suit.
See, e.g., Burgoon v. Alabama State Dep't of Human Res., 835
So. 2d 131, 133 (Ala. 2002) ("A trial court must dismiss an
action against a State agency or against a State agent acting
in an official capacity at the earliest opportunity.");
Ex parte Auburn Univ., 6 So. 3d 478, 484 (Ala. 2008) (applying
to a defense of sovereign immunity the federal qualified-
immunity principle that "'[t]he privilege is "an immunity from
suit rather than a mere defense to liability"'" (quoting Ryan
v. Hayes, 831 So. 2d 21, 31 (Ala. 2002), quoting in turn
Saucier v. Katz, 533 U.S. 194, 200 (2001))).
13
The issues that gave the trial court concern also give
this Court concern. Unlike the trial court, however, we
conclude that some of those issues are appropriate for
consideration at this juncture in the litigation. In this
regard, we turn first to the corollary questions of sovereign
immunity and separation of powers.
5
Section 14 of the Alabama Constitution of 1901 provides:
"[T]he State of Alabama shall never be made a defendant in any
court of law or equity." As discussed below, the doctrine of
sovereign immunity not only prohibits the State itself from
being named as a defendant in an action, but it also prohibits
State agencies and, as a general rule, State officials sued in
1110472
Section 43, Ala. Const. 1901, states:
6
"In the government of this state, except in the
instances in this Constitution hereinafter expressly
directed or permitted, the legislative department
shall never exercise the executive and judicial
powers, or either of them; the executive shall never
exercise the legislative and judicial powers, or
either of them; the judicial shall never exercise
the legislative and executive powers, or either of
them; to the end that it may be a government of laws
and not of men."
See also Ex parte Cranman, 792 So. 2d 392, 399 (Ala. 2000)
(plurality opinion) (citing Mitchell v. Forsyth, 472 U.S. 511,
521 (1985), for the proposition that the doctrine of sovereign
immunity has "footings" in the doctrine of separation of
powers).
14
their official capacity from being named as defendants in an
action. As discussed further below, the bar of sovereign
immunity aligns with and is buttressed by the doctrine of
separation of powers to the extent the latter prohibits the
judicial
branch,
through
adjudications,
from
usurping
functions dedicated to the executive and legislative branches.
See Art. III, § 43, Ala. Const. 1901.6
It has long been held that the wall of sovereign immunity
erected by § 14 of the Alabama Constitution is formidable:
"The wall of immunity erected by § 14 is nearly
impregnable. Sanders Lead Co. v. Levine, 370 F.
Supp. 1115, 1117 (M.D. Ala. 1973); Taylor v. Troy
State Univ., 437 So. 2d 472, 474 (Ala. 1983);
Hutchinson v. Board of Trustees of Univ. of Alabama,
1110472
15
288 Ala. 20, 24, 256 So. 2d 281, 284 (1971). This
immunity may not be waived. Larkins v. Department
of Mental Health & Mental Retardation, 806 So. 2d
358, 363 (Ala. 2001)('The State is immune from suit,
and its immunity cannot be waived by the Legislature
or by any other State authority.'); Druid City Hosp.
Bd. v. Epperson, 378 So. 2d 696 (Ala. 1979) (same);
Opinion of the Justices No. 69, 247 Ala. 195, 23 So.
2d 505 (1945) (same); see also Dunn Constr. Co. v.
State Bd. of Adjustment, 234 Ala. 372, 175 So. 383
(1937). 'This means not only that the state itself
may not be sued, but that this cannot be indirectly
accomplished by suing its officers or agents in
their official capacity, when a result favorable to
plaintiff would be directly to affect the financial
status of the state treasury.' State Docks Comm'n
v. Barnes, 225 Ala. 403, 405, 143 So. 581, 582
(1932) ...; see also Southall v. Stricos Corp., 275
Ala. 156, 153 So. 2d 234 (1963)."
Patterson v. Gladwin Corp., 835 So. 2d 137, 142 (Ala. 2002)
(emphasis omitted).
It is not merely when an action against a State official
would "affect the financial status of the state treasury,"
however, that such an action is barred by § 14. This Court
has long recognized that actions against State officials sued
in their official capacity are barred by § 14 unless they fall
within certain categories of actions that, as a rule, do not
involve discretionary decision-making by those officials. As
early as 1971, this Court recognized that those categories
included:
1110472
16
"(1) Actions brought to compel State officials to
perform
their
legal
duties.
Department
of
Industrial Relations v. West Boylston Manufacturing
Co., 253 Ala. 67, 42 So. 2d 787 [(1949)]; Metcalf v.
Department of Industrial Relations, 245 Ala. 299, 16
So. 2d 787 [(1944)]. (2) Actions brought to enjoin
State officials from enforcing an unconstitutional
law. Glass v. Prudential Insurance Co. of America,
246
Ala.
579,
22
So.
2d
13
[(1945)]
....
(3) Actions to compel State officials to perform
ministerial acts. Curry v. Woodstock Slag Corp.,
242 Ala. 379, 6 So. 2d 479 [(1943)], and cases there
cited. (4) Actions brought under the Declaratory
Judgments Act, [now Ala. Code 1975, § 6–6–220 et
seq.], seeking construction of a statute and how it
should be applied in a given situation."
Aland v. Graham, 287 Ala. 226, 229–30, 250 So. 2d 677, 679
(1971).
To the four categories of action identified in Aland,
this Court has since added and repeatedly recognized two
additional categories of action against State officials that
do not seek to invade the exercise of discretion delegated to
them by State law and, therefore, do not qualify as "actions
against the State" for purposes of § 14 immunity:
"'"'"(5) valid inverse condemnation actions brought
against State officials in their representative
capacity ...."'"'"; and
"'(6)[] actions for injunction brought against State
officials in their representative capacity where it
is alleged that they had acted fraudulently, in bad
faith, beyond their authority, or in a mistaken
interpretation of law ....'"
1110472
In Ex parte Jackson County Board of Education we also
7
noted that actions for monetary damages against State
officials "'in their individual capacity'" are not properly
deemed actions against the State "'where it is alleged that
[the State officials] had acted fraudulently, in bad faith,
beyond their authority, or in a mistaken interpretation of
law.'" ___ So. 3d at ___ (quoting Ex parte Moulton, 116
So. 3d at 1141). We take this opportunity to clarify that any
action against a State official that seeks only to recover
monetary damages against the official "in [his or her]
individual capacity" is, of course, not an action against that
person in his or her official capacity and would of necessity
fail to qualify as "an action against the State" for purposes
of § 14.
17
Ex parte Jackson Cnty. Bd. of Educ., [Ms. 1130738, Sept. 26,
2014] ___ So. 3d ___, ___ (Ala. 2014) (quoting Ex parte
Moulton, 116 So. 3d 1119, 1131 and 1141 (Ala. 2013), quoting
in turn other cases).
7
Turning then to the present case, the gravamen of the
plaintiffs' complaint is this: "Up to ... approximately 15%"
of the investments made by the boards of control have been
made in Alabama-based assets and, as a group, those
investments have not yielded as much return to the ERSA and
the TRSA as other investments that could have been made by the
RSA defendants. As a consequence, the plaintiffs contend, the
investments pursued by the RSA defendants reflects a violation
of a "legal duty" imposed upon them by State law and
1110472
The plaintiffs also seek to maintain this action under
8
the "exception" to sovereign immunity recognized for actions
brought
against
State
officials under the Declaratory
Judgments Act, seeking the construction of a statute (i.e.,
category (4)). The statutes relevant to that issue are the
same statutes that are at issue in determining whether the
"legal duty" and "beyond ... authority" "exceptions" (i.e.,
category (1) and category (6)) are applicable, and, therefore,
our
resolution
of
whether
those
exceptions
apply
is
dispositive.
18
therefore
those
investments
are
"beyond
the
[lawful]
authority" of the RSA defendants.8
The RSA defendants argue as follows in their initial
brief to this Court:
"By adopting -- and when implementing -- the
part of RSA's investment policy challenged by
Plaintiffs, [the RSA] Defendants made discretionary
decisions that RSA members would be benefitted
indirectly
through
limited
prudent
Alabama
investments, which could increase the revenues of
the funding sources for RSA, i.e., strengthen the
State and the counties and cities and other
governmental entities that participate in RSA. [The
RSA]
Defendants'
investment
policy
recognizes
(1) that whether RSA members' benefits are secure
depends on the ability of the State of Alabama to
pay; (2) that the ability of the State of Alabama to
pay depends on its tax base; and (3) that the State
of Alabama's tax base depends on the financial
strength of the State.
"Plaintiffs' action asks the circuit court to
substitute its judgment for [the RSA] Defendants'
judgment and declare that whether an investment
strengthens Alabama should not be a factor that [the
RSA] Defendants may consider when RSA chooses
1110472
In their reply brief, the RSA defendants summarize their
9
position on this matter as follows:
"[The RSA] Defendants have ... made and make
investment decisions only to benefit the RSA
beneficiaries. Specifically, [the RSA] Defendants
follow their policy to include a small fraction of
their prudent investments in Alabama, recognizing
that 'a stronger Alabama equates to a stronger
Retirement System.' ... Because [the RSA]
Defendants
make
all
RSA
investments
for
the
exclusive purpose of promoting the interests of RSA
beneficiaries, Plaintiffs' arguments fail."
19
investments. Indeed, by focusing on maximizing rates
of return, Plaintiffs seem to assert that the only
factor [the RSA] Defendants (as fiduciaries) are
permitted to consider is maximizing rates of return
(which in turn implies that RSA can only have
investments with predictable returns, such as CDs
and bonds)."
The parties acknowledge that certain Code provisions
relating to trusts may shed light on the duties of the RSA
defendants under the statutes at issue in this case. The
plaintiffs point to, and the RSA defendants acknowledge, the
general principle of trust law
requiring trustees to
"administer the trust solely in the interests of the
beneficiaries." Ala. Code 1975, § 19-3B-802(a). Similarly,
9
both sides acknowledge Alabama's codification for application
to trusts generally of the so-called "prudent-investor rule,"
including § 19-3B-902(c), Ala. Code 1975 (part of Alabama's
1110472
20
version of the Uniform Trust Act). Section 19-3B-902(c)
provides:
"Among circumstances that a trustee may consider in
investing and managing trust assets are such of the
following as are relevant to the trust or its
beneficiaries:
"(1) general economic conditions;
"(2) the possible effect of inflation
or deflation;
"(3) the expected tax consequences of
investment decisions or strategies;
"(4) the role that each investment or
course of action plays within the overall
trust
portfolio,
which
may
include
financial assets, interests in closely held
enterprises,
tangible
and
intangible
personal property, and real property;
"(5) the expected total return from
income and the appreciation of capital;
"(6)
other
resources
of
the
beneficiaries;
"(7) needs for liquidity, regularity
of income, and preservation or appreciation
of capital;
"(8) an asset's special relationship
or special value, if any, to the purposes
of the trust or to one or more of the
beneficiaries;
"(9) the size of the portfolio; and
1110472
21
"(10)
the
purposes
and
estimated
duration of the trust.
The RSA defendants, however, reject the notion that those
general principles of trust law require emphasis upon rate of
return to the exclusion of other factors. Indeed, as
indicated, § 19-3B-902(c) expressly contemplates investment
decisions that take into consideration "the role that each
investment ... plays within the overall trust portfolio"
(which may include not just stocks, bonds, and other financial
instruments, but also "interests in closely held enterprises,
tangible
and
intangible
personal
property,
and
real
property"); "the expected total return from income and the
appreciation
of
capital";
"other
resources
of
the
beneficiaries";
the
"need[]
for
...
preservation
or
appreciation of capital"; "an asset's special relationship or
special value, if any, to the purposes of the trust or to one
or more of the beneficiaries"; "the size of the portfolio";
and "the purposes and estimated duration of the trust."
The RSA defendants likewise take note of caselaw that
explains that the traditional "prudent-investor rule," as
applied in the context of a conventional trust agreement,
allows for competing obligations –- such as preserving the
1110472
22
trust corpus, diversifying investments, avoiding unnecessary
risks and volatility, and planning for tax consequences –- to
be taken into consideration. See, e.g., Withers v. Teachers'
Ret. Sys. of City of New York, 447 F. Supp. 1248, 1258
(S.D.N.Y. 1978), aff'd, 595 F.2d 1210 (2d Cir. 1979) (table)
("In the area of investment decisions, the obligation to
exercise prudence is essentially an obligation to give primacy
to the preservation of the trust estate and the procurement of
a reasonable income while avoiding undue investment risks, see
e.g., King v. Talbot, [40 N.Y. 76] at 86 [(1869)]; In re
Mendleson's Will, 46 Misc. 2d 960, 261 N.Y.S.2d 525, 534
(Surrogate's Ct. 1965)."). As has been aptly stated:
"The record of any individual investment is not to
be viewed exclusively, of course, as though it were
in its own water-tight compartment, since to some
extent individual investment decisions may properly
be affected by considerations of the performance of
the fund as an entity, as in the instance, for
example, of individual security decisions based in
part on considerations of diversification of the
fund or of capital transactions to achieve sound tax
planning for the fund as a whole."
In re Bank of New York, 35 N.Y. 2d 512, 517, 323 N.E.2d 700,
703, 364 N.Y.S.2d 164, 168 (1974).
The RSA defendants further emphasize that the question of
the authority and responsibility of the boards of control is
1110472
23
a function of a specific statutory scheme adopted by our
legislature with respect to the ERSA and the TRSA. In § 16-
25-19 as to the TRSA and in § 36-27-23 as to the ERSA, the
legislature delegated to the applicable board of control
"[t]he general administration and responsibility for the
proper operation of the retirement system and for making
effective the provisions of" the Code applicable to the ERSA
and the TRSA. (Emphasis added.) More specifically, under
§ 16-25-20(a)(1) and § 36-27-25(a) (with minor wording
variations), the legislature has provided that the boards of
control for the TRSA and the ERSA "shall have full power to
invest and reinvest the funds ... with the care, skill,
prudence,
and
diligence
under
the
circumstances
then
prevailing that a prudent man acting in a like capacity and
familiar with the matters would use in the conduct of an
enterprise of a like character and with like aims."
Obviously, there is no single investment strategy that
alone can be said to satisfy the responsibility and authority
that has been delegated to the boards of control under those
statutory
provisions.
Instead,
the
legislature
unquestionably
has delegated to the boards of control discretion in assessing
1110472
24
what overall strategies, and what specific investments, will
best serve the "aims" and "character" of the ERSA and the TRSA
given the nature of the "enterprise" at issue. See, e.g.,
Withers,
supra
(recognizing
an
express
statutory
authorization
of the challenged actions of public-pension fiduciaries, but
also holding that the prudent-investor rule did not prevent
those fiduciaries from considering possible bankruptcy of the
city that contributed to the pension plan if the pension plan
did not purchase the city's municipal bonds).
Ultimately, in fact, the plaintiffs concede that the RSA
defendants may "legally consider factors other than rate-of-
return." In this regard, the plaintiffs do not contend that
the investment strategies and decisions of the boards of
control are not "discretionary" in nature. The plaintiffs
contend only that the discretion that has been delegated to
the boards of control by our legislature is not "unfettered."
This, however, is a proposition with which the RSA defendants
do not disagree.
More specifically, the plaintiffs contend that the
discretion afforded the boards of control is constrained by a
fiduciary obligation to administer the ERSA and the TRSA
1110472
25
solely in the interest of the members of the ERSA and the TRSA
and, as prescribed in §§ 16-25-20(a)(1) and 36-27-25(a), to
invest with the "care, skill, prudence, and diligence under
the circumstances then prevailing" that a "prudent man" acting
in a "like capacity" would use in the conduct of "an
enterprise of a like character" and "with like aims." The RSA
defendants do not disagree with this proposition either.
The difference in the positions of the plaintiffs and the
RSA defendants is that the plaintiffs would have the courts
assume responsibility for examining what the fulfillment of
the aforesaid statutory responsibilities should look like.
For this or any court to be able to engage in such an
examination as it relates to State officials, however, as
opposed to private trustees, we must first surmount the wall
of sovereign immunity that protects executive action from
interference by the judiciary.
We cannot conclude, however, that, by asking the courts
to enforce the general statutory obligations of the nature
described above, the plaintiffs have sought enforcement of a
"legal duty" of the nature contemplated by the first
"exception" or category recognized in Aland. The "prudent-
1110472
26
man rule" is, by its essential nature, a standard that allows
for the exercise of ample discretion. It may provide general,
guiding principles against which a court could assess a claim
of personal liability or perhaps removal of a private trustee
accused of making imprudent investment decisions, but it does
not advance a specific duty that can serve as a basis for an
order by the judicial branch to the executive branch to take
certain action going forward. Compare, e.g., the "legal duty"
cases cited in Aland: Department of Indus. Relations v. West
Boylston Mfg. Co., 253 Ala. 67, 42 So. 2d 787 (1949) (ordering
refund to an employer of specific contributions made to the
State's unemployment-compensation fund pursuant to a statute
providing for such refunds), and Metcalf v. Department of
Indus. Relations, 245 Ala. 299, 16 So. 2d 787 (1944)
(requiring the Director of Industrial Relations to collect no
more than the statutorily prescribed amount pursuant to the
unemployment-compensation contribution rate applicable to a
given employer). Put differently, the general duty to invest
prudently and in the best interests of plan participants,
taking into consideration a variety of competing concerns,
provides no more basis for surmounting the wall of sovereign
1110472
Nor
do
the
internal
"Investment Policies and Procedures"
10
adopted by the RSA ("the investment policy") (or for that
matter the RSA's internal mission statement) create a "legal
duty" or prohibition that alters this conclusion. Even if the
investment policy was in the nature of a formal regulation
and, thus, binding on the boards of control, which it is not,
the investment policy begins by recognizing a need to maximize
"total return" to the ERSA and the TRSA only "within prudent
risk parameters." The investment policy then adds that "the
systems recognize that a stronger Alabama equates to a
stronger retirement system, and as such, investments in
Alabama businesses are encouraged to the extent the investment
meets the criteria delineated by this policy statement." The
RSA defendants note that the "criteria delineated by this
policy statement" include the statutory requirement that the
boards of control act with "care, skill [and] prudence" as
stated by the pertinent statutes and reiterated in the
preceding paragraph of the investment policy itself. The RSA
defendants reject the notion that it was the intent of the
investment policy, which the RSA itself promulgated, to expect
that investment decisions on the part of the boards of control
be for the purpose of maximizing immediate or direct return to
the ERSA and the TRSA. "'[T]he interpretation of an agency
regulation by the promulgating agency carries "'controlling
weight unless it is plainly erroneous or inconsistent with the
regulation.'"'" Fraternal Order of Police, Lodge No. 64 v.
Personnel Bd. of Jefferson Cnty., 103 So. 3d 17, 25 (Ala.
27
immunity than would, for example, the general rule that the
director of any executive agency should prudently administer
assigned resources and employees. If such a director is
performing the task of administering the applicable agency,
poor decision-making does not of itself give cause for legal
action that is not subject to the doctrine of sovereign
immunity.10
1110472
2012) (quoting Brunson Constr. & Envtl. Servs., Inc. v. City
of Prichard, 664 So. 2d 885, 890 (Ala. 1995), quoting in turn
United States v. Larionoff, 431 U.S. 864, 872 (1977), quoting
in turn Bowles v. Seminole Rock Co., 325 U.S. 410, 414
(1945)). A fortiori, the RSA defendants' interpretation and
application of the RSA's own internal policies are entitled to
deference.
28
By the same token, we do not have here a case that
satisfies the "beyond authority" exception to sovereign
immunity identified above. The boards of control have
statutory authority to invest the assets of the ERSA and the
TRSA. They are doing that. The fact that they might not do
that in accordance with the legal standard to which they would
be held liable if they could be sued does not mean that they
can in fact be sued.
The
standard
for
liability
and
the
standard
for
overcoming the bar of sovereign immunity are two different
things. Thus, one might question whether a State official has
acted with sufficient care or prudence in his or her decision-
making, but imprudence or lack of care has never, of itself,
been a basis for overcoming the bar of sovereign immunity.
Were it otherwise, the protection afforded State officials in
their making of discretionary decisions would cease to exist.
The "nearly impregnable" wall of immunity would be collapsed
1110472
29
into the bare question of liability itself, e.g., whether a
State official can be adjudged to have acted negligently, or
merely unwisely. And the efficient and effective functioning
of the executive branch free of the "hamstringing" effect of
second-guessing by the judicial branch would be put at risk
accordingly. Cf. Ex parte Cranman, 792 So. 2d 392, 400-01
(Ala. 2000) (plurality opinion) (explaining the correlation
between § 14 immunity and the separation of powers required by
§ 43 and that "the vulnerability of State agents to suit, if
not constrained, could lead to excessive judicial interference
in the affairs of coequal branches of government, contrary to
§ 43").
Finally, even if we could overcome the bar of sovereign
immunity in order to rule in favor of the plaintiffs on the
issue of liability, it is not within the subject-matter
jurisdiction of the courts to grant the relief requested here.
Specifically, granting the remedy sought by the plaintiffs in
this case would run afoul of the constitutionally mandated
principle of separation of powers, a principle that not only
is an underpinning of the doctrine of sovereign immunity, but
also provides an independent basis for concluding that the
1110472
30
trial court lacks subject-matter jurisdiction to act as
requested in this case.
This is not a private-trust case in which the plaintiffs
seek a divestiture of a particular investment, monetary
damages to compensate for a specific investment decision, or
even to remove a trustee from his or her post. Instead, the
essential relief requested by the plaintiffs in this case is
a permanent injunction to be enforced by the court into the
indefinite future that would purport to require the boards of
control to do two things going forward:
1. Follow "the prudent-man rule" and
2. Refrain from investing in any Alabama-based
investment that "the [RSA] Defendants expect or are
aware will yield less of a return than alternative
or other investments."
The latter form of relief is not an accurate statement of
the "prudent-man rule" invoked in the former form of relief
and, in fact, conflicts with it. The "prudent-man rule," or
the "prudent-investor rule," itself, as discussed above, not
only allows, but in fact requires, a trustee to take into
consideration
many
factors other than the direct
and immediate
rates of return. As discussed above, those factors include,
but are not limited to, general economic conditions, the
1110472
31
effects
of
inflation
or
deflation,
the
need
for
diversification and the role each investment plays within the
overall trust portfolio, the need for liquidity, the need for
regularity
of
income,
preservation
or
appreciation
of
capital,
an asset's special relationship or special value to the
purposes of the trust, the size of the portfolio, and the
purposes and estimated duration of the trust. Furthermore,
investments may include real property as well as tangible or
intangible personal property.
Considering the first form of relief noted above, what
the plaintiffs seek is merely a reiteration in a court order
of what is already the statutorily prescribed standard
applicable to the investment decisions of the boards of
control. To simply order the RSA defendants to follow this
statutorily prescribed "prudent-man rule" would provide the
boards of control with no specific guidance as to how to
exercise the discretionary authority invested in them under
that rule. What it would do, however, is put the courts in
the position of analyzing and overseeing the decisions of the
boards of control on a continual and ongoing basis because any
such order must of course be enforced by the courts in the
1110472
32
years to come. It would put the courts in a position
analogous in some ways to the position assumed by the federal
courts in overseeing Alabama's mental-health system for
several decades. See Wyatt ex rel. Rawlins v. Sawyer, 219
F.R.D. 529 (M.D. Ala. 2004). Unlike the federal courts acting
in relation to the State of Alabama, however, Alabama courts
are restricted by the doctrine of separation of powers in
relation to their coequal branches of government.
In what came to be known as the "equity-funding case,"
this Court, in Ex parte James, 836 So. 2d 813 (Ala. 2002),
stepped back from the brink of usurping the authority of a
coordinate branch of our government to make decisions as to
how, to what extent, and to what ends to fund our public
schools. Although the Court acknowledged serious concerns as
to the propriety of its previous judgment of liability, it
ultimately found it unnecessary to resolve
those
concerns
and,
instead, "retreated" from its earlier judgment on the
alternative ground that the remedy that it was being asked to
order, and that it would be required to administer for years
to come, would have put the Court on a collision course with
1110472
33
§ 43 of the Alabama Constitution. As the Court explained in
Ex parte James:
"This
Court
'shall
never
exercise
the
legislative and executive powers, or either of them;
to the end that it may be a government of laws and
not of men.' Ala. Const. 1901, § 43 (emphasis
added). In Alabama, separation of powers is not
merely an implicit 'doctrine' but rather an express
command; a command stated with a forcefulness
rivaled by few, if any, similar provisions in
constitutions of other sovereigns. ... Compelled by
the weight of this command and a concern for
judicial restraint, we hold (1) that this Court's
review of the merits of the still pending cases
commonly and collectively known in this State, and
hereinafter referred to, as the 'Equity Funding
Case,' has reached its end, and (2) that, because
the duty to fund Alabama's public schools is a duty
that –- for over 125 years –- the people of this
State have rested squarely upon the shoulders of the
Legislature, it is the Legislature, not the courts,
from which any further redress should be sought.
Accordingly, we hold that the Equity Funding Case is
due to be dismissed.
"....
"... [T]he issue of the proper remedy in this
case raises concerns for judicial restraint ....
With regard to the remedy, our concern is ... that
the pronouncement of a specific remedy 'from the
bench' would necessarily represent an exercise of
the power of that branch of government charged by
the people of the State of Alabama with the sole
duty to administer state funds to public schools:
the Alabama Legislature. As Justice Houston noted
in Ex parte James[, 713 So. 2d 869 (Ala. 1997), a
previous opinion in the Equity Funding Case]:
1110472
34
"'Circumstances have denied this Court the
opportunity to review the trial court's
liability order. Even so, it is the duty of
the
Judicial
Department
of
Alabama
government only to determine what the
Constitution of Alabama requires. In my
opinion,
the
Legislative
Department
and
the
Executive Department, and not the Judicial
Department, have the power and duty to
implement a plan that would make this
system equitable .... I trust that the
Legislative Department and the Executive
Department will proceed to exercise the
power and perform the duty they have been
called upon to exercise and perform to make
Alabama's
public
educational
system
constitutional. The "Separation of Powers"
provision of
the Constitution of
Alabama of
1901 (Art. III, § 43) prohibits me from
doing
more,
without
resorting
to
unconstitutional judicial activism, which
I have heretofore avoided.'
"713 So. 2d at 895 ... (Houston, J., concurring in
the result in part and dissenting in part).
"... In Ex parte James, the Court recognized
the serious difficulties implicated by judicial
involvement in the administrative details of school
funding. 713 So. 2d at 880–82. ...
"....
"Our conclusion that the time has come to return
the Equity Funding Case in toto to its proper forum
seems a proper and inevitable end, foreshadowed not
only by the obvious impracticalities of judicial
oversight, but also by the Court's own actions in
Ex parte James. While the plurality in Ex parte
James opined that, in the abstract, the judiciary
had the authority to implement a remedy, it did not
attempt
this
task
(which
may
have
proven
1110472
35
illustrative, because its concrete, rather than
abstract, form would have proven its legislative
nature) and instead admitted that 'the legislature
... bears the "primary responsibility" for devising
a constitutionally valid public school system.' Id.
at 882 (quoting McDuffy v. Secretary of the Exec.
Office of Educ., 415 Mass. 545, 619 n. 92, 615
N.E.2d 516, 554 n. 92 (1993) (quoting Edgewood
Indep. School Dist. v. Kirby, 777 S.W.2d 391, 399
(Tex. 1989))). ...
"Continuing
the
descent
from
the
abstract
to
the
concrete, we now recognize that any specific remedy
that the judiciary could impose would, in order to
be effective, necessarily involve a usurpation of
that power entrusted exclusively to the Legislature.
Accordingly, compelled by the authorities discussed
above -- primarily by our duty under § 43 of the
Alabama Constitution of 1901 -- we complete our
judicially prudent retreat from this province of the
legislative branch in order that we may remain
obedient to the command of the people of the State
of Alabama that we 'never exercise the legislative
and executive powers, or either of them; to the end
that it may be a government of laws and not of men.'
Ala. Const. 1901, § 43 (emphasis added)."
836 So. 2d at 815-19 (some emphasis in original, some emphasis
added, and some emphasis omitted; footnotes omitted).
By the same token, the complex task of continually
analyzing, comparing, and choosing from among the myriad of
different
investment
vehicles
available
in
today's
sophisticated investment world is a task delegated by the
legislature to the executive branch and to the boards of
control in particular. The plaintiffs ask us nonetheless to
1110472
36
assume going forward the ongoing responsibility of overseeing
the decisions of the boards of control and evaluating the
extent of their compliance with the "prudent-man rule." To
send this case back to the trial court for further examination
of this request would be to contemplate that the trial court,
in order to enforce a permanent declaratory and injunctive
order of the nature requested, could engage in an ongoing, in-
depth factual inquiry into the advantages and disadvantages of
various Alabama-based investment strategies the boards may
consider from time to time and compare those strategies to the
various advantages and disadvantages of all other alternative
investment opportunities available to the boards, weighing in
the process all relevant factors, including rates of return,
volatility,
security,
diversification, general economic
conditions, the effects of inflation or deflation, the role
each investment would play
within
the overall
trust
portfolio,
the need for liquidity, the need for regularity of income, and
preservation or appreciation of capital. The type of
continual oversight and analysis that would be required of
this Court to assess compliance with permanent orders of the
type sought by the plaintiffs highlights the fact that this is
1110472
37
not a task for which the courts of this State are suited and
is not a task that has been delegated to them. Instead, as
was true in the equity-funding case, the remedy for any
deficiency in the investment strategies pursued by the boards
of control lies elsewhere. One possible remedy would be
recourse to the ballot box for the election of different State
officials who either serve on, or appoint some of the members
of, the boards of control. See §§ 16-25-19(b) and 36-27-
23(b), Ala. Code 1975. More likely, it might mean an even
more direct political recourse in the form of an exercise of
the
"political
power"
specifically
delegated
by
the
legislature to ERSA and TRSA members themselves, who by
statute are directly empowered to elect most of the members of
each board of control. Id. We cannot conclude that it means
the assumption by the courts of the continuing oversight of
the investment decisions made by the boards of control in
response to the actions alleged in this case.
IV. Conclusion
The legislature has delegated broad authority to the
boards of control; it has vested in those boards flexibility
and discretion to be exercised in the context of the
1110472
Our conclusion in this regard is bolstered by the fact
11
that the type and mixture of investments for which the RSA
defendants are now criticized by the plaintiffs have been in
place for approximately 15 years with no objection by the
legislature. Cf. Tennessee Valley Auth. v. Kinzer, 142 F.2d
833, 837 (6th Cir. 1944) (recognizing that, for federal
pension plan, "Congress, by regularly appropriating funds ...,
has demonstrated its intention that the statutory mandate is
to be construed and understood in accordance with the settled
construction placed upon it by the Authority [responsible for
administering the pension plan], as disclosed by the Rules and
Regulations" applicable to the pension plan and that those
rules and regulations "are deemed to have received legislative
ratification and, thereby, to have become embedded in the
law").
38
"character" of the "enterprise" at issue and its "aims." The
doctrines of sovereign immunity and separation of powers
require that the judicial branch honor that delegation and not
take upon itself the task of reviewing the investment
strategies and decisions of the boards of control, at least
not under the circumstances presented here.
11
This Court has long recognized through adherence to the
principle of separation of powers and the political-question
doctrine
"'the
impossibility of a court's undertaking
independent resolution'" of every dispute affecting the
operation of State government "'without expressing lack of the
respect
due
coordinate
branches
of
government.'"
Birmingham-Jefferson Civic Ctr. Auth. v. City of Birmingham,
1110472
39
912 So. 2d 204, 215 (Ala. 2005) (quoting Baker v. Carr, 369
U.S. 186, 217 (1962)). For that matter, any oversight by this
Court of investment choices made by the boards of control
would be a task for which this and other courts are not
equipped. The "[l]ack of judicially discoverable and
manageable standards" supports the conclusion that the making
and oversight of such choices has been, and should be, left to
a branch of government other than the judicial. Id. at 218.
Although the ultimate question decided in Cranman
regarded so-called State-agent immunity, that Court directly
addressed the nature of the protection afforded by §§ 14 and
43 of the Constitution in a manner that is apposite here:
"[W]e cannot ignore the strong policy against
judicial interference in the affairs of State
government as articulated in § 14 and mandated by §
43. Although § 14 is, by its terms, restricted to
prohibiting lawsuits against the State, we cannot
disregard its impact upon our obligation to observe
the constitutional separation of powers."
Ex parte Cranman, 792 So. 2d at 401. "[Section] 14 [is] an
expression of a strong public policy against the intrusion of
the judiciary into the management of the State ...." Id.
Based on the foregoing, we grant the RSA defendants'
petition and issue the writ. We direct the trial court to
1110472
40
vacate its order refusing to dismiss the complaint and to
grant the RSA defendants' motion to dismiss.
PETITION GRANTED; WRIT ISSUED.
Stuart, Parker, and Wise, JJ., concur.
Bolin and Bryan, JJ., concur in the result.
Moore, C.J., and Shaw, J., dissent.
Main, J., recuses himself.
1110472
41
MOORE, Chief Justice (dissenting).
I agree with Justice Shaw that it is premature at this
point in the case to supplant the considered judgment of the
trial court. "[A] Rule 12(b)(6)[, Ala. R. Civ. P.,] dismissal
is proper only when it appears beyond doubt that the plaintiff
can prove no set of facts in support of the claim that would
entitle the plaintiff to relief." Nance v. Matthews, 622
So. 2d 297, 299 (Ala. 1993).
The trial court took into account the concerns expressed
in the main opinion when it stated that among the issues
before it were the following:
"whether and how the Court might substitute its
judgment for the judgment of the Boards of Control,
since investment policymaking is a function allotted
by the legislature to the Boards of Control; [and]
whether the Court can take the responsibility for
investment policymaking from the Boards of Control
when Plaintiffs have the political remedy of
electing new and different members to the Boards of
Control ...."
I would defer to the trial court to adjudge these issues
in the first instance upon a full summary-judgment record.
1110472
42
SHAW, Justice (dissenting).
I respectfully dissent. The motion to dismiss in this
case raised numerous complex issues. Given that fact and the
trial court's holding that "[t]hese issues should be presented
to the court on a motion for summary judgment with supporting
materials and law," I believe that it is premature to hold at
this early juncture in the case that Ala. Const. 1901, art. I,
§ 14, bars this action or that any potential remedy would
violate Ala. Const. 1901, art. III, § 43.
Moore, C.J., concurs. | December 31, 2014 |
3310fb5f-50d3-4169-ac22-bde010561042 | Ex parte Michael Dale Bennett. PETITION FOR WRIT OF CERTIORARI TO THE COURT OF CIVIL APPEALS (In re: H.A. Cox and Lashun Hutson v. Michael Dale Bennett) (Lowndes Circuit Court: CV-12-900024; Civil Appeals : 2121053). Writ Denied. No Opinion. | N/A | 1131440 | Alabama | Alabama Supreme Court | REL: 10/31/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334)
229-0649), of any typographical or other errors, in order that corrections may be made
before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
_________________________
1131440
_________________________
Ex parte Michael Dale Bennett
PETITION FOR WRIT OF CERTIORARI
TO THE COURT OF CIVIL APPEALS
(In re: H.A. Cox and Lashun Hutson
v.
Michael Dale Bennett)
(Lowndes Circuit Court, CV-12-900024;
Court of Civil Appeals, 2121053)
WISE, Justice.
WRIT DENIED. NO OPINION.
1131440
Stuart, Bolin, Parker, Murdock, Shaw, Main, and Bryan,
JJ., concur.
Moore, C.J., dissents.
2
1131440
MOORE, Chief Justice (dissenting).
On June 5, 2012, Michael Dale Bennett filed a complaint
against Officer H.A. Cox and Officer Lashun Hutson of the
Lowndes
County
Sheriff's
Department
("the
sheriff's
department"), in their official capacities, seeking the
release and return of $19,855 in cash he claimed belonged to
him. Bennett alleged that on September 2, 2011, officers of
the sheriff's department had seized the cash during a search
of a vehicle in which he was a passenger. Both Bennett and the
driver were arrested and brought to the sheriff's department;
the driver was held pursuant to an outstanding warrant, and
Bennett was released. Bennett argued in his complaint that no
forfeiture or condemnation action had been promptly filed
against the cash as required by § 20-2-93(c), Ala. Code 1975,
and that, therefore, he was entitled to have the cash returned
to him.
In response to a motion for a summary judgment filed by
Bennett, Cox and Hutson claimed that the federal government
was then in possession of the cash and that a federal
forfeiture proceeding was pending. The trial court granted
Bennett's motion for a summary judgment. Cox and Hutson
3
1131440
appealed to the Court of Civil Appeals, which reversed the
judgment of the trial court. Cox v. Bennett, [Ms. 2121053, May
16, 2014] ___ So. 3d ___ (Ala. Civ. App. 2014). The Court of
Civil Appeals held that "the doctrine of adoptive forfeiture
applied in the present case such that jurisdiction had vested
in the federal district court and, therefore, the trial court
never acquired in rem jurisdiction over the property." ___ So.
3d at ___. Bennett now petitions for a writ of certiorari to
review the Court of Civil Appeals' decision.
In his petition, Bennett argues, among other things, that
§ 20-2-93 does not permit state or local law-enforcement
officials to transfer seized property to the federal
government to initiate a federal forfeiture proceeding in
order to avoid the stricter forfeiture laws in state court.
Bennett also argues that this issue is one of first impression
for this Court. Section 20-2-93(d) provides:
"(d) Property taken or detained under this
section shall not be subject to replevin but is
deemed to be in the custody of the state, county or
municipal law enforcement agency subject only to the
orders and judgment of the court having jurisdiction
over the forfeiture proceedings. When property is
seized under this chapter, the state, county or
municipal law enforcement agency may:
"(1) Place the property under seal;
4
1131440
"(2) Remove the property to a place
designated by it;
"(3) Require the state, county or
municipal law enforcement agency to take
custody of the property and remove it to an
appropriate location for disposition in
accordance with law; and
"(4) In the case of real property or
fixtures, post notice of the seizure on the
property, and file and record notice of the
seizure in the probate office."
(Emphasis added.)
It appears that the sheriff's department transferred
Bennett's cash to the federal government in order that the
federal government could institute a federal forfeiture
proceeding. The Court of Civil Appeals previously has
described this process, known as "adoptive seizure," as
follows:
"The adoptive-seizure process begins when state
or local authorities seize property as part of a
criminal investigation or arrest. Generally, the
state or local officials either make a determination
that forfeiture is not possible under state law or
conclude that it is advantageous to them to transfer
the matter to federal authorities for a federal
administrative forfeiture proceeding. See I.R.S.
Manual 9.7.2.7.3 (July 25, 2007); Asset Forfeiture
Law, Practice, and Policy, Asset Forfeiture Office,
Criminal Division, United States Department of
Justice, Vol. I (1988) at 38 (cited in Johnson v.
Johnson, 849 P.2d 1361, 1363 (Alaska 1993)). Once
5
1131440
state or local officials have determined that an
adoptive seizure is advantageous, they file a
request with federal authorities. The appropriate
federal agency then decides whether to accept or
reject the request. If the adoptive-seizure request
is accepted, the property is taken into the custody
of
federal
agents
and
federal
administrative
forfeiture proceedings begin. At the successful
conclusion of those proceedings, usually 80% of the
forfeited property is given back to the state or
local agency."
Green v. City of Montgomery, 55 So. 3d 256, 258 (Ala. Civ.
App. 2009).
On its face, § 20-2-93(d) does not explicitly authorize
state or local law-enforcement officials to transfer, or
forbid
them from transferring, seized property to federal law-
enforcement officials. The only portion of the statute that
arguably could authorize such a transfer is § 20-2-93(d)(3),
which allows state
or
local law-enforcement officials "to take
custody of the property and remove it to an appropriate
location for disposition in accordance with law." One could
reason, as the Court of Civil Appeals did in Green, that the
phrase "in accordance with law" does not necessarily mean in
accordance with Alabama law and therefore that the transfer is
valid if it is in accordance with federal law. See Green, 55
So. 3d at 261. However, this Court has held that, in
6
1131440
construing a statute, "[i]f a literal construction would
produce an absurd and unjust result that is clearly
inconsistent with the purpose and policy of the statute, such
a construction is to be avoided." City of Bessemer v. McClain,
957 So. 2d 1061, 1075 (Ala. 2006). See also 1 William
Blackstone, Commentaries *60-62; Ex parte Baker, 143 So. 3d
754, 757-59 (Ala. 2013) (Moore, C.J., dissenting and
explaining Blackstone's view of equity in interpreting
statutes).
As the Court of Civil Appeals noted in Green, the
adoptive-seizure process is used when "state or local
officials either make a determination that forfeiture is not
possible under state law or conclude that it is advantageous
to them to transfer the matter to federal authorities for a
federal administrative forfeiture proceeding." Green, 55 So.
3d at 258 (emphasis added). If forfeiture is not possible
under state law, then would it not be absurd to construe § 20-
2-93(d)(3) to allow state or local law-enforcement officials
to circumvent state law by transferring the seized property to
federal
law-enforcement
officials
for
a
proceeding
not
allowed
under state law? Moreover, if state or local law-enforcement
7
1131440
officials could not obtain a person's seized property under
state law, would it not be unjust for the state or local
government entity to transfer that property to the federal
government for forfeiture and then be given 80 percent of the
property back? These concerns compel me to find a probability
of merit to Bennett's first-impression argument, although I
1
would also like to hear arguments from the State regarding the
construction of § 20-2-93. Therefore, I would grant the
petition for a writ of certiorari in order to fully examine
what I believe to be an issue of first impression.
Although this Court repeatedly has addressed the issue
1
of adoptive forfeitures, it never has considered the specific
question whether § 20-2-93 authorizes state or local law-
enforcement officials to transfer seized property to federal
authorities to commence a federal forfeiture proceeding.
Although this Court denied certiorari review in Green, in
which the Court of Civil Appeals addressed this issue, this
Court conducts only a "preliminary examination" when it is
determining whether to grant a petition for a writ of
certiorari. Rule 39(f), Ala. R. App. P. Because this Court has
never conducted a full examination of the issue, it remains an
issue of first impression.
8 | October 31, 2014 |
09f2711f-ad1a-49bf-b222-4ac25eba4872 | Corner Stone Funeral Chapel, Inc. v. MVMG, LLC | N/A | 1130604 | Alabama | Alabama Supreme Court | Rel: 12/5/14
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
____________________
1130604
____________________
Corner Stone Funeral Chapel, Inc.
v.
MVMG, LLC
Appeal from DeKalb Circuit Court
(CV-09-900101)
BRYAN, Justice.
Corner Stone Funeral Chapel, Inc. ("Corner Stone"),
appeals from a judgment ordering a receiver to transfer the
assets of a cemetery business to MVMG, LLC, a competitor of
Corner Stone's. We affirm.
1130604
Mountain View Memory Gardens & Mausoleum, Inc. ("the
corporation"), owned a cemetery in Rainsville known as
Mountain View Memory Gardens and Mausoleum ("the cemetery").
The corporation sold "preneed contracts" to people
planning
to
be interred at the cemetery or planning to have loved ones
interred there. A purchaser of a preneed contract pays for
funeral merchandise, funeral services, cemetery merchandise,
or cemetery services that will be provided upon a person's
death. § 27–17A–2(57), Ala. Code 1975. Preneed contracts in
Alabama are regulated by the Preneed Funeral and Cemetery Act,
§ 27-17A-1 et seq., Ala. Code 1975 ("the Preneed Act"), which
was enacted in 2002.
Jeanette Mince was the sole owner and officer of the
corporation, and she apparently ran the corporation and the
cemetery. Mince died in 2008, leaving the corporation to her
two daughters. However, her daughters were not interested in
operating the corporation, and they expressed an intention to
disclaim any interest in it. After Mince's death, the
corporation failed to renew its certificate permitting it to
sell preneed contracts under the Preneed Act. In 2009, the
Alabama
Department
of
Insurance
("the
Department")
2
1130604
investigated
the
corporation's
records
and
discovered
that
the
corporation was in poor shape. The Department found that the
corporation had underfunded certain trust funds required
to
be
established by the Preneed Act, that the corporation was
insolvent, that the corporation had ceased doing
business, and
that the cemetery had effectively been abandoned. The
Department found that the continued control of the cemetery by
the corporation would be hazardous to preneed-contract
purchasers and beneficiaries in particular and to the people
of Alabama in general.
Based on the Department's findings, Jim Ridling, in his
official capacity as the commissioner of the
Department,
filed
a complaint against the corporation, seeking preliminary and
permanent injunctions. Relying on provisions in the Preneed
Act, Ridling asked the trial court to enjoin the corporation
from conducting business or disposing of its assets. At the
time of the trial, those assets consisted of the cemetery, a
mausoleum at the cemetery, some property next to the cemetery,
a building and storage structure at the cemetery, and less
than $26,000 in cash. Ridling also asked the trial court to
appoint a receiver to take control of the corporation and
3
1130604
eventually to liquidate and dissolve the corporation, subject
to the trial court's supervision.
1
In June 2009, the trial court entered a preliminary
injunction, essentially enjoining the corporation from
operating; the order also appointed Denise Azar, an employee
with the Department, as receiver for the corporation. The
trial court directed Azar to take possession of the
corporation's assets and to attempt to liquidate those
assets,
subject to the trial court's approval. The trial court also
authorized Azar to enter into agreements for the management
and maintenance of the cemetery until the cemetery could be
sold or otherwise liquidated. Shortly after she was appointed
receiver, Azar arranged for Rainsville Funeral Home, Inc., a
local funeral business, to mow, trim, and clean the cemetery;
to locate grave spaces; to open and close graves for burials
at the cemetery; and to place markers and monuments during the
Ridling acted under § 27-17A-17(b), Ala. Code 1975, a
1
part of the Preneed Act. That section provides:
"The commissioner may apply for an order directing
the
commissioner
to
liquidate
a
[preneed]
certificate holder ... when, in the commissioner's
opinion, the continued operation of the certificate
holder would be hazardous either to purchasers,
beneficiaries, or to the people of this state."
4
1130604
receivership period. Rainsville Funeral Home has performed
those services since sometime in 2009.
During the receivership period, the mausoleum located at
the cemetery continued to fall into disrepair. The roof was
rotten and leaking, and parts of the mausoleum's interior had
been badly damaged by leaking water, including the ceiling,
flooring, and furniture. Vandals had broken into the
mausoleum
and further damaged it. Elsewhere in the cemetery, graves had
been driven over and there was some other evidence indicating
that the cemetery was in a generally run-down condition. In
response, individuals owning plots and vaults in the cemetery
formed the MVMG Mausoleum Association ("the Association")
during the receivership period to preserve the cemetery. The
Association collected donations from the community and, with
Azar's permission, made substantial repairs to the mausoleum.
The Association eventually intervened in the underlying case.
Azar unsuccessfully attempted to find a buyer for the
cemetery, and she eventually concluded that the cemetery was
unmarketable. Azar recommended that the cemetery and the
corporation's other assets be transferred to an entity that
would both operate the cemetery and honor, either in whole or
5
1130604
in part, the corporation's approximately 1,155 outstanding
preneed contracts. The extent of outstanding services and
merchandise purchased in those preneed contracts is unknown;
typically a preneed contract covers only a portion of the
services and merchandise available. Two entities presented
proposals to Azar seeking the transfer of the assets, of which
the cemetery is the main asset: Corner Stone and MVMG, LLC
("the LLC"); both of those entities were allowed to intervene
below.
The LLC was formed in 2011 by Keary Chandler, the owner
of Rainsville Funeral Home, which, as noted, provided
maintenance and services at the cemetery during the
receivership period. At times, the trial court treated the
LLC as synonymous with Rainsville Funeral Home and Chandler,
which appears to be a useful observation for purposes of this
Court's review. The differences between the two proposals was
fleshed out at trial and will be discussed in more detail
below. One primary difference is that Corner Stone, unlike
the LLC, agreed to provide, at no extra cost, markers and
monuments that had already been purchased in outstanding
preneed contracts. Azar recommended that the trial court
6
1130604
accept Corner Stone's proposal. Following an ore tenus trial
on the issue held in 2013, the trial court disagreed with Azar
and decided to accept the LLC's proposal. Thus, the trial
court entered a permanent injunction that, among
other
things,
ordered Azar to transfer the corporation's assets to the LLC.
The trial court's order did not completely dispose of the
case; the order noted that the trial court would schedule a
final hearing to resolve issues concerning any claims of
creditors against the corporation and any other pending
issues. Corner Stone subsequently moved the trial court to
certify its order transferring the assets to the LLC as a
final judgment under Rule 54(b), Ala. R. Civ. P. The trial
court certified the order as final under Rule 54(b), and
Corner Stone appealed.
2
The parties disagree as to the proper standard of review.
The trial court received ore tenus evidence at trial. The LLC
Corner Stone filed an appellant's brief and reply brief,
2
and the LLC filed an appellee's brief. Ridling filed a brief
ostensibly as an appellee, but that brief urges this Court to
reverse the trial court's judgment. In substance, Ridling's
brief is an appellant's brief, but Ridling never filed a
notice of appeal, and Corner Stone's notice of appeal lists
only Corner Stone as an appellant. Thus, in fact there
appears to be only one appellant (Corner Stone) and one
appellee (the LLC).
7
1130604
argues that the ore tenus standard of review applies;
conversely, Corner Stone argues that the evidence before the
trial court was undisputed and that therefore our review is de
novo.
The ore tenus standard applies. Corner Stone's assertion
that the evidence is undisputed is contradicted by the record.
As noted, one difference between the two proposals is that
Corner Stone, unlike the LLC, agreed to provide, at no extra
cost, markers and monuments (collectively "markers") that had
already been purchased in outstanding preneed contracts.
William Dalton, Corner Stone's owner, estimated at trial that
assuming liability for the markers would cost Corner Stone
about $60,000. However, Chandler, the owner of the LLC and of
Rainsville Funeral Home, estimated that providing the markers
would cost Corner Stone "more like $150,000." Chandler also
questioned the economic feasibility of Corner Stone's
proposal; when asked about the LLC's proposal, Chandler
indicated that to "do otherwise," i.e., to provide the markers
as Corner Stone proposed, would be unwise and economically
unfeasible. However, Dalton obviously did not think that
Corner Stone's proposal was unfeasible. It is unclear how
8
1130604
many markers had already been paid for in the outstanding
preneed contracts. Both Dalton and Chandler could only
estimate the total cost of the markers –– however many there
are –– and they disagreed on the economic feasibility of
providing the markers at no cost to the preneed-contract
holders. Of course, evidence pertaining to the markers is
relevant in evaluating the two proposals. The evidence
regarding the markers was disputed, thus defeating Corner
Stone's argument that the ore tenus standard does not apply
because, it says, the evidence is undisputed.
"[A] judgment based on findings of fact based on [ore
tenus] testimony will be presumed correct and will not be
disturbed on appeal except for a plain and palpable error."
Allstate Ins. Co. v. Skelton, 675 So. 2d 377, 379 (Ala.
1996). Further, "[w]here the evidence is presented to the
trial court ore tenus, ... the trial court determines the
weight and credibility of the testimony." Wheeler v.
Marvin's, Inc., 593 So. 2d 61, 63 (Ala. 1991).
Further, in attempting to convince this Court to review
the judgment de novo, Corner Stone ignores the fact that the
trial court's decision involved a matter within its
9
1130604
discretion. At its heart, this appeal concerns the trial
3
court's handling of a receivership, which is an equitable
remedy. "A receiver is an impartial officer of the court" who
is "appointed to collect and preserve property and at the
direction of the court to dispose of it and its proceeds."
Ally Windsor Howell, Tilley's Alabama Equity § 31:1(a) (5th
ed. 2012). Generally, "[t]he court has the discretion in
receivership proceedings to do what is best for all
concerned." 65 Am. Jur. 2d Receivers § 135 (2011). This
Court has stated that a trial court may order the sale of
properties possessed by its receiver "when, in the exercise of
judicial discretion, such sale is deemed to the best interest
of those concerned." Darley v. Alabama Pub. Utils. Co., 236
Ala. 463, 465, 183 So. 447, 448 (1938). Although this case
concerns the transfer of assets instead of a sale (the
cemetery was determined to be unmarketable), the same general
principle
regarding
receiverships
applies:
the
trial
court
has
the discretion to do what is in the best interest of those
In its initial brief, Corner Stone mentions in the
3
"facts" section that it argued to the trial court that the
court had exceeded its discretion in transferring the assets
to the LLC. That appears to be the only reference in Corner
Stone's briefs to the trial court's exercise of its
discretion.
10
1130604
concerned. See also Seiple v. Mitchell, 239 Ala. 533, 535,
195 So. 865, 865 (1940) (stating, regarding the compensation
given to the receiver by the court, that that was a matter
"primarily within the sound discretion of the court having the
custody and control of the receivership, having regard to all
the relevant circumstances"). Here, those concerned with the
fate of the cemetery include not only the preneed-contract
holders, but also the general public, especially the local
community. Note that § 27-17A-17(b), Ala. Code 1975, allows
the commissioner of the Department to seek liquidation of a
cemetery business when its continued operation would be
hazardous
either
to
preneed-contract
"purchasers
[or]
beneficiaries, or to the people of this state."
In this case, the trial court was free to manage the
receivership within its discretion. Our review of the trial
court's judgment is limited to determining whether the trial
court exceeded that discretion.
"'A court exceeds its discretion when its ruling is
based on an erroneous conclusion of law or when it
has
acted
arbitrarily
without
employing
conscientious judgment, has exceeded the bounds of
reason in view of all circumstances, or has so far
ignored recognized principles of law or practice as
to cause substantial injustice.'"
11
1130604
Wright Therapy Equip., LLC v. Blue Cross & Blue Shield of
Alabama, 991 So. 2d 701, 705 (Ala. 2008) (quoting Edwards v.
Allied Home Mortg. Capital Corp., 962 So. 2d 194, 213 (Ala.
2007)). The discretion afforded the trial court is only
strengthened by the ore tenus presumption in this case. Given
our deferential review, this is a straightforward appeal in
which the judgment is due to be affirmed.
Certainly there is evidence supporting both Corner
Stone's and the LLC's proposal. For instance, on the Corner
Stone side, Azar (the receiver) concluded that Corner Stone
had the better proposal, and she recommended that the trial
court accept it over the LLC's proposal. Azar based her
opinion on the fact that Corner Stone, unlike the LLC, agreed
to provide any markers that had already been purchased in
outstanding preneed contracts at no additional cost to the
preneed-contract holders. Azar concluded that this fact made
Corner Stone's proposal a better deal for
the
preneed-contract
holders, and that settled the issue for her. At trial Azar
testified that, besides the marker issue, there were no other
differences between the proposals. However, the evidence
12
1130604
indicates otherwise, and that fact may have undermined the
strength of Azar's opinion in the view of the trial court.
Chandler highlighted other differences between the
proposals, one of which involves the endowment-care trust
fund
and the use of remaining funds held by the corporation –– less
than $26,000. The Preneed Act requires each cemetery business
to maintain an endowment-care trust fund to provide for the
endowment care of the cemetery it operates, i.e., the
maintenance and any repairs. § 27-17A-47 and § 27-17A-2(27),
Ala. Code 1975. Regarding the endowment-care trust fund, the
Preneed Act, at the relevant time, provided that "[t]he amount
of each bond shall be a minimum of ... $25,000." § 27-17A-47
(as it read before a 2014 amendment). Chandler testified
that, if the LLC were awarded the assets of the corporation,
the LLC would place $25,000 of the remaining funds immediately
into the endowment-care trust fund. Conversely, Dalton
testified that, if Corner Stone were awarded the assets,
Corner Stone would place $8,971.52 of the remaining funds into
the endowment-care trust fund and then deposit a minimum of
$5,000 per year until the balance reached $25,000.
13
1130604
Chandler's plan to fully fund the endowment-care trust
fund immediately was cited as a factor weighing in the LLC's
favor by Janice Gilbert, one of the Association members who
testified at trial. Gilbert holds a preneed contract, and her
late husband is buried in the cemetery. Gilbert testified
that she wants Chandler and the LLC to take control of the
cemetery. She testified that Chandler had taken care of her
husband's funeral; that she trusted Chandler's family
(Rainsville Funeral Home is family-run); and that Rainsville
Funeral Home is more conveniently located than Corner Stone's
funeral home, which is located in Ider.
Gilbert and others discussed the need for financial
stability in the future operation of the cemetery. Gilbert
noted that Mince, the corporation's previous owner, had
experienced financial difficulties and had had trouble
providing markers that had already been purchased in preneed
contracts. Regarding her own experiences, Gilbert testified
that she could not get the marker for her late husband's grave
site that they had purchased in a preneed contract and that
she eventually had to buy a cheaper one instead. Based on
Mince's track record, Gilbert was doubtful that Corner Stone
14
1130604
would be able to absorb the cost of providing the markers
purchased in the outstanding preneed contracts. As noted,
Chandler opined that Corner Stone's plan to provide the
markers at no cost to the preneed-contract holders was not
economically feasible. The trial court was free to find
Chandler's testimony more credible than Dalton's on this
issue. Deborah Thomas, the president of the Association,
testified about the substantial repairs the Association made
to the mausoleum after the corporation became insolvent and
the mausoleum was allowed to fall into disrepair. She said
that, before the Association made the repairs, the condition
of the mausoleum had become an embarrassment to the community.
See, e.g., Editorial, "Fixing a Disgrace," Times-Journal (Ft.
Payne), June 5, 2013 (describing the situation at the cemetery
as a "disgrace" and an "embarrassing problem"). Both she and
Hubert Tumlin, the treasurer of the Association, testified
that they did not want to go through such an ordeal again.
Concern in the community about future financial stability for
the cemetery was a key issue expressed at trial; the trial
court, in evaluating this concern, was free to place more
15
1130604
weight on evidence, such as Chandler's testimony, questioning
the economic feasibility of Corner Stone's proposal.
Other evidence supports the trial court's decision as
well. At the time of the trial, Chandler had approximately 17
years' experience operating the cemetery in Rainsville and
approximately 34 years' experience in the funeral-home
business. Dalton, although quite experienced, seems to have
less experience. At trial, he testified that Corner Stone
acquired its first cemetery about 4 or 5 years ago and had
since acquired 2 more cemeteries; he also stated that he had
served as a trustee and taken care of a couple of private
cemeteries for the last 10 to 12 years. Although Dalton did
not state how long he had been in the funeral-home business,
he did state that Corner Stone's funeral-home business had
existed for about 15 years. Chandler noted that his funeral
home is located closer than is Corner Stone's funeral home to
the cemetery (both Chandler's funeral home and the cemetery
are in Rainsville). Chandler already has experience working
at the cemetery. Pursuant to the agreement with Azar, during
the receivership period, which began in 2009, Chandler's
funeral home has been opening and closing graves and
16
1130604
maintaining the cemetery grounds. Chandler testified that he
plans to have someone live in the house at the cemetery,
which, he said, would deter vandalism (which has been a
problem) and make maintaining the cemetery easier. Corner
Stone did not make a similar offer. Chandler's experience in
the community, the location of his funeral home, his recent
dealings at the cemetery, and his plan to have someone live at
the cemetery are factors supporting the trial court's
decision. Although the LLC did not offer as much as Corner
Stone in providing the markers already purchased in
outstanding preneed contracts, Chandler did testify that the
LLC would provide markers to preneed-contract holders at
wholesale cost, diminishing the strength of the major selling
point for Corner Stone.
We cannot say that the trial court exceeded its
discretion in ordering the transfer of the corporation's
assets to the LLC. Thus, we affirm.
AFFIRMED.
Moore, C.J., and Parker, Shaw, Main, and Wise, JJ.,
concur.
Murdock, J., concurs specially.
Stuart and Bolin, JJ., dissent.
17
1130604
MURDOCK, Justice (concurring specially).
I agree with the main opinion. I write separately to
take further note of certain aspects of the evidence and the
issues in this case.
As the main opinion observes, the asserted superiority of
the offer of Corner Stone Funeral Chapel, Inc. ("Corner
Stone"), was based on Corner Stone's plan to absorb the cost
of all grave markers already purchased by holders of
outstanding preneed contracts. This plan was in turn based on
the ore tenus testimony of Corner Stone's owner, William
Dalton -- indeed, his opinion testimony -- that included an
"estimate" by him that only 30% of the preneed contracts
Corner Stone would assume as part of the assets of Mountain
View Gardens & Mausoleum, Inc., would include grave markers.
On the basis of this opinion and estimate, Dalton's testimony
was that Corner Stone could afford to provide the markers at
a cost of $60,000.
First, the trial court was free to observe Dalton in his
ore tenus testimony and to find him not to be a credible
witness. On this basis alone, I do not believe that we can
consider the evidence supporting Corner Stone's offer to be
18
1130604
"undisputed." The trial court thus could have found Corner
Stone's plan to pay for all markers to be unreliable, and, as
an appellate court, we are not in a position to second-guess
the trial court's assessment of Dalton's testimony in this
regard.
Aside from the possible credibility or weight concerns
the trial court might have applied to Dalton's testimony, the
main opinion notes that his testimony was directly disputed by
other ore tenus testimony. In addition to the evidence noted
in the main opinion, Keary Chandler, the owner of Rainsville
Funeral Home and of MVMG, LLC ("the LLC"), testified that the
number of markers that might have to be paid for was unknown
and variable. In fact, Chandler estimated that the cost of
the markers might be $150,000, as opposed to the $60,000
Dalton estimated. The trial court could have found the LLC's
approach to the issue of the markers, and, by implication, the
management of the contracts in general, to be more fiscally
sound, and Corner Stone's proposed approach not to be
credible. Janice Gilbert, a member of the MVMG Mausoleum
Association,
also
questioned
whether
Corner
Stone
could
afford
to provide the markers it was promising to provide (suggesting
19
1130604
that the cost of the markers might have been what led the
prior owner into insolvency in the first place).
Given the ore tenus standard of review applicable in this
case, this Court can overturn the trial court's decision as to
which company would better serve the interests of the preneed-
contract holders in the long run only if it can determine as
a matter of law that the seemingly more favorable proposal by
Corner Stone was fiscally sound and based on reliable
estimates. The testimony in favor of Corner Stone as to these
questions was received by the trial court ore tenus and, thus,
was subject to credibility and weight determinations by the
judge and also was disputed by other ore tenus testimony. I
therefore believe that we must affirm the trial court's
judgment as to which company was likely to provide more
beneficial and dependable service to the preneed-contract
holders.
20
1130604
STUART, Justice (dissenting).
The majority opinion affirms the judgment of the DeKalb
Circuit Court declaring Mountain View Memory Gardens &
Mausoleum, Inc. ("the corporation"), to be insolvent and
ordering its liquidation and the transfer of its assets to
MVMG, LLC ("the LLC"), subject to certain conditions set forth
in the trial court's order. However, because the corporation
was certified by the Alabama Department of Insurance ("the
Department") as a seller of preneed contracts pursuant to the
Alabama Preneed Funeral and Cemetery Act, § 27-17A-1 et seq.,
Ala. Code 1975 ("the Preneed Act"), the trial court, in
liquidating the corporation, was required to maximize
financial value for those individuals holding outstanding
preneed contracts. It is undisputed that Corner Stone Funeral
Chapel, Inc. ("Corner Stone"), had submitted an offer to take
over the operations of the corporation that would provide more
financial value to those preneed-contract holders than the
offer submitted by the LLC; accordingly, the trial court
exceeded its discretion in transferring the corporation's
assets to the LLC. I must therefore dissent.
21
1130604
In deciding whether the trial court should have accepted
the proposal of the LLC or the proposal of Corner Stone, it
must first be determined what criteria the trial court should
have employed in evaluating the competing proposals. The LLC
premises its argument on the assumption that the superior
proposal is the proposal "better calculated and more likely to
serve the interests of the stakeholders in [the cemetery]."
The LLC's brief, p. 9. Accordingly, it summarizes its
argument as follows:
"The evidence showed that Corner Stone's offer
provided less security and certainty for the future
maintenance of the Mountain View [Memory Gardens]
cemetery. The evidence further showed that Corner
Stone's offer to provide grave markers at no further
cost to holders of existing preneed contracts
calling for the same was ill conceived and not
economically feasible. There was introduced more
than sufficient evidence from which the trial court
rightly concluded that [the] LLC's offer was much
less likely than Corner Stone's to result in the
Mountain View [Memory Gardens] cemetery operation
again falling into economic ruin, disrepair, and
receivership, thus better serving the paramount
interest of the cemetery stakeholders."
The LLC's brief, pp. 9-10. Thus, it is apparent that the LLC
considers the "cemetery stakeholders" to be a broad group of
people, including those with friends and family already
interred or buried there and those people with plans to have
22
1130604
themselves –– or friends or family –– buried or interred there
at some point in the future, regardless of whether that burial
or internment is the subject of an existing preneed contract.
The LLC argues that these stakeholders will be better served
under its proposal because that proposal, the LLC claims, is
better for the long-term economic health and viability of the
cemetery.
In
contrast,
Corner
Stone
and
Jim
Ridling,
the
commissioner of the Department, argue that the superior
proposal is the proposal that better serves a much more narrow
class of stakeholders –– those who have purchased or who stand
to benefit from outstanding preneed contracts sold by the
corporation before it became insolvent. They argue that the
4
legislature's purpose in enacting the Preneed Act is evident
from the language of the Act –– to provide a mechanism for
protecting the investments of those Alabamians who choose to
purchase
preneed
contracts.
The
various
statutes
constituting
the Preneed Act, such as § 27-17A-10, Ala. Code 1975
(requiring sellers of preneed contracts to be certified), §
Commissioner Ridling filed a brief on appeal; however,
4
he is not named as an appellee on the notice of appeal. See
supra note 2.
23
1130604
27-17A-13, Ala. Code 1975 (requiring such sellers to place a
portion of the funds received from the sale of a preneed
contract into trust), and § 27-17A-15, Ala. Code 1975
(authorizing the Department to examine the business of such
sellers as often as is deemed necessary), Corner Stone and
Commissioner Ridling argue, are all designed with that purpose
in mind. I agree.
In a liquidation proceeding conducted pursuant to the
Preneed Act, it is not the duty of a court, when considering
multiple proposals to take over the operations of an insolvent
seller of preneed contracts, to decide simply which proposal
is better for a community or which proposal will result in a
"better" run cemetery according to some undefined criteria.
Rather, it is the duty of the court in such a situation to
take the action that will better achieve the purpose of the
Preneed Act –– to protect the financial interests of holders
and beneficiaries of preneed contracts. That this is the
purpose of the Preneed Act is manifested by the fact that it
is the Department that supervises the liquidation of any
certified seller of preneed contracts and that, pursuant to §
27-17A-17, Ala. Code 1975, it does so subject to § 27-32-1 et
24
1130604
seq.,
Ala.
Code
1975,
which
chapter
governs
the
rehabilitation, reorganization, conservation,
and liquidation
of an insolvent insurance business. Sections
27-32-37
through
27-32-41 of that chapter establish that, in the liquidation
process, policyholders are preferred creditors and receive
first priority during liquidation, subject to limited
exceptions not applicable here. In the context of this case
–– the liquidation of a certified seller of preneed contracts
–– those individuals who have purchased preneed contracts are
analogous to insurance policyholders inasmuch as they have
purchased a contract, or "policy," providing for a future
benefit. Accordingly, they are given preferred status, and
the object of the liquidation process is to make them whole
above any other interested party or claimant. For that
reason, a trial court overseeing the liquidation process of a
certified seller of preneed contracts should make its
decisions based on how to best preserve value for those
holders of preneed contracts. Protecting their investments
is, after all, the reason the Preneed Act was enacted, and the
relevant statutes should be "liberally construed" to achieve
that goal. § 27-32-2, Ala. Code 1975.
25
1130604
However, although the relevant statutes are unambiguous,
the majority opinion instead adopts the viewpoint that the
trial court is empowered to simply decide what "is in the best
interest of those concerned" and considers all "those
concerned" to include "the general public [and]
especially
the
local community." ___ So. 3d at ___. Although this broad
class of people no doubt includes citizens who are "concerned"
about the cemetery in the general sense that they take pride
in the success and appearance of their community, their level
of "concern" is insufficient from a legal perspective –– the
Preneed Act, read in conjunction with the statutes governing
insolvent insurance businesses, clearly indicates that the
only "concern" that matters in a liquidation proceeding of a
corporation such as the one here is the financial concern of
those who hold preneed contracts. The majority opinion
supports its rationale that the trial court was authorized to
consider community sentiment in making its decision by citing
§ 27-17A-17(b), Ala. Code 1975, which allows the commissioner
of the Department to seek liquidation of a certified seller of
preneed contracts when the seller's continued operation would
be hazardous to purchasers or beneficiaries of preneed
26
1130604
contracts, "or to the people of this state." However, § 27-
17A-17(b) only sets forth the circumstances in which
liquidation is authorized; it does not bear on how that
liquidation should be accomplished or what factors should
govern the liquidation process. Section 27-17A-17(a), Ala.
Code 1975, does address that issue and provides that such a
liquidation should be conducted under the supervision of the
commissioner of the Department "who shall have all powers with
respect thereto granted to the commissioner under Chapter 32
with respect to the liquidation of insurance companies." As
already explained supra, it is evident from § 27-32-1 et seq.
that policyholders, or preneed-contract holders in this
context, are a preferred class, and a trial court should make
its decisions during the liquidation process based on how to
best preserve value for that preferred class –– not based on
the desires of individuals who have no legally recognizable
interest in the proceedings.
In this case, it is undisputed that the proposal put
forth by Corner Stone promises more value to those holding
outstanding preneed contracts sold by the corporation
than the
proposal submitted by the LLC. Denise Azar, the Department
27
1130604
employee responsible for the cemetery while it was under the
Department's control, stated as much in her testimony and
stated that, for that reason, the Department endorsed Corner
Stone's proposal. Corner Stone's owner, William Dalton, also
testified
that
Corner
Stone's
proposal
was
worth
approximately
$60,000 more to those holders of preneed contracts than the
LLC's proposal. Even the LLC's sole member, Keary Chandler,
when asked, willingly agreed that Corner Stone's proposal
offered more benefits, and he in fact estimated those benefits
to be worth far more than $60,000:
"Q.
Well, what would be your estimate that it would
cost him –– or cost you had you included that
in your offer –– to furnish these markers?
"A.
I'd say more like $150,000.
"Q.
Okay. So, in your judgment then, the offer
that he's made would benefit the contract
holders –– assuming he carries those contracts
out and does [what] he says he'll do –– would
be valued at $150,000 more than what yours
would be?
"A.
Yes."
The greater value
of
Corner Stone's proposal being established
without dispute, it was due to be accepted. Any community
sentiment in favor of keeping Mountain View Memory Gardens
under the more "local" control of Rainsville Funeral Home,
28
1130604
which Chandler owns and operates, or any belief that
Rainsville Funeral Home was in some way entitled to Mountain
View Memory Gardens because it has been maintaining it under
contract with the receiver since this process began is
irrelevant. The object of the applicable statutes is to make
5
sure that those who purchased preneed contracts from the
corporation receive what they purchased, and it is undisputed
that Corner Stone's proposal is preferable in that regard.
We further note that although the record contains much
speculation and insinuation that it will be impossible for
Corner Stone to actually deliver what it promises in its
proposal, there is no credible evidence that would indicate
that. See Heisz v. Galt Indus., Inc., 93 So. 3d 918, 931
(Ala. 2012) (stating that "speculation is an insufficient
basis upon which to support a judgment"). The competent
It bears noting that the interests of those in the
5
Rainsville community desiring to keep Mountain View Memory
Gardens under local management are not necessarily aligned
with those holding preneed contracts purchased from the
corporation. That is, those Rainsville residents with future
cemetery business might prefer to take care of it in
Rainsville rather
than make the approximately 17-mile drive to
Corner Stone's offices in Ider; however, the holder of a
preneed contract who stands to save $600 or more that he or
she would otherwise have to spend on a grave marker that had
already been paid for once would presumably be less hesitant
to make that drive.
29
1130604
evidence in the record indicates that Corner Stone has
successfully operated a funeral home since 1998 and has since
grown its business to include three cemeteries. Moreover,
Corner Stone has previously purchased a cemetery out of a
Department-supervised
receivership
in
what
Dalton
described
as
a "[v]ery similar situation," and its performance with regard
to that cemetery has apparently been of sufficient quality
that the Department, which examines, audits, and receives
annual reports from certificate holders, is recommending
Corner Stone to take over another insolvent cemetery and its
preneed contracts.
In fact, the trial court itself recognized the absence of
any evidence that would indicate Corner Stone could not
provide the benefits promised in its proposal, stating that
"no evidence is presented that Mr. Dalton, himself, couldn't
follow through. Now Ms. Mince couldn't follow through,
clearly, or we wouldn't be here. But what evidence is there
that Mr. Dalton can't follow through?" Once the speculation
is properly discarded, there is none. Indeed, it appears from
the record that Corner Stone could have the financial assets
of Wal-Mart Stores, Inc., and General Motors Company combined
30
1130604
–– the majority has not and cannot point to any evidence in
the record that would indicate otherwise. The only testimony
questioning Corner Stone's financial capability comes from a
competitor and an individual who admittedly favors that
competitor; however, that testimony has no factual basis and
is accordingly nothing more than speculation. Ex parte Nathan
Rodgers Constr., Inc., 1 So. 3d 46, 52 (Ala. 2008).
Unfortunately, the majority has now elevated that speculation
to the realm of competent evidence, notwithstanding this
Court's longstanding precedent indicating that speculation is
not evidence that can support a judgment. See, e.g., Heisz,
93 So. 3d at 931 (stating that "speculation is an insufficient
basis upon which to support a judgment").
Moreover, the fact that we are reviewing the trial
court's judgment under the ore tenus rule, as opposed to
reviewing it de novo, should have no effect on the ultimate
outcome. A judgment entered based on ore tenus testimony must
still be supported by credible evidence, Joseph v. MTS Inv.
Corp., 964 So. 2d 642, 646 (Ala. 2006), and statements that
reflect speculation and lack of personal knowledge do not
constitute credible evidence. Ex parte Professional Bus.
31
1130604
Owners Ass'n Workers' Comp. Fund, 867 So. 2d 1099, 1101-1102
(Ala. 2003). There is no evidence in the record indicating
that the proposal made by the LLC will provide more financial
benefits to the remaining preneed-contract holders than the
proposal made by Corner Stone, nor is there any evidence –– as
opposed to speculation –– in the record indicating that Corner
Stone lacks the capability to fulfill the terms of its
proposal. To the contrary, it is undisputed that the proposal
made by Corner Stone offers greater value to preneed-contract
holders, and those parties with some actual knowledge of
Corner Stone's finances –– Dalton and the Department –– are
satisfied that Corner Stone has the wherewithal to fulfill the
terms of its proposal. It is accordingly clear that the goals
and intents of the Preneed Act and relevant liquidation
statutes will be more fully realized by the acceptance of the
Corner Stone proposal. By affirming the judgment of the trial
court in favor of the LLC, this Court is not deferring to the
trial court's evaluation of the witnesses and evidence but is
instead yielding to speculation. Beck v. Beck, 142 So. 3d
685, 695 (Ala. Civ. App. 2013). Accordingly, I must dissent.
I would reverse the trial court's order and remand the cause
32
1130604
for the entry of a liquidation order directing the Department
to transfer the corporation's assets to Corner Stone.
Bolin, J., concurs.
33 | December 5, 2014 |
30b8d121-3168-4938-8e76-d5aa1db43f89 | Ex Parte Stephens | 676 So. 2d 1307 | 1941630 | Alabama | Alabama Supreme Court | 676 So. 2d 1307 (1996)
Ex parte Margaret A. STEPHENS and Paul E. Stephens.
(Re Margaret A. STEPHENS and Paul E. Stephens v. LIFE INSURANCE COMPANY OF GEORGIA, et al.).
1941630.
Supreme Court of Alabama.
March 8, 1996.
*1308 John F. Whitaker, Ted L. Mann and Daniel J. Sullivan of Sadler, Sullivan, Sharp, Fishburne & Van Tassell, P.C., Birmingham, for Petitioners.
J. Mark Hart of Olschner & Hart, P.C., Birmingham; J. Fred Wood, Jr., of Dominick, Fletcher, Yielding, Wood & Lloyd, P.A., Birmingham, for Respondents.
Jack W. Torbert of Torbert & Torbert, Gadsden, President of Alabama Defense Lawyers Association; Bert S. Nettles, Mark D. Hess and A. David Fawal of London & Yancy, Birmingham, for Amicus Curiae Alabama Defense Lawyers Association.
J. Mason Davis, Jr., of Sirote & Permutt, P.C., Birmingham, President of Alabama Association of Life Insurance Companies; and Charles D. Stewart and Howard K. Glick of Spain & Gillon, Birmingham, for American Council of Life Insurance, Amici Curiae Alabama Association of Life Insurance Companies and American Council of Life Insurance.
PER CURIAM.
Margaret A. Stephens and Paul E. Stephens petition this Court for a writ of mandamus directing Judge Thomas R. Jones, of the Circuit Court of Bibb County, to vacate a protective order that imposed certain restrictions on discovery. The restrictions were placed upon informal interviews that the Stephenses intend to conduct with certain former holders of insurance policies issued by the defendant Associated Doctors Health and Life Insurance Company. The issue presented by this petition is whether the circuit court abused its discretion in placing the restrictions on the contacts with the former policyholders.
On August 1, 1995, the Stephenses filed an action against Life Insurance Company of Georgia ("Life of Georgia"), Associated Doctors Health and Life Insurance Company ("Associated Doctors"), and insurance agent Fred Smith, seeking money damages for *1309 fraud, misrepresentation, negligent hiring, and negligent supervision and/or training.[1] The Stephenses contend that agent Fred Smith sold them several health insurance policies that Smith represented would pay as much as, or more than, the policy Margaret Stephens had in force through her employer at that time. The Stephenses further contend that the defendants defrauded them by misrepresenting the facts concerning these policies so as to induce them to buy the policies. To obtain evidence to prove these allegations and evidence of a scheme or plan to defraud, the Stephenses propounded interrogatories to the defendants in which they sought the names of former holders of policies issued by Associated Doctors. The Stephenses limited their request to former policyholders who had purchased their policies from Fred Smith from 1990 through the date of the interrogatories.
The defendants objected to the interrogatories on the grounds that they sought information the defendants said was "irrelevant, immaterial, not reasonably calculated to lead to the discovery of admissible evidence, overbroad, burdensome, and unduly prejudicial to defendant[s] and [their] customers and business relations." In response, the Stephenses filed a motion to compel the defendants to answer the interrogatories, basing their motion on the grounds that "evidence of a pattern or practice of fraud is discoverable" and that they had purposely limited the request to former policyholders so as not to jeopardize the defendants' business or proprietary interests.
The circuit court issued a protective order in which it ordered the defendants to answer the interrogatories regarding former policyholders; however, the court placed restrictions on the contacts that could be made with the former policyholders. The circuit court imposed the following restrictions that are challenged in this petition:
The Stephenses contend that the circuit court abused its discretion when it placed these two restrictions on the contacts with the former policyholders. More specifically, they argue that requiring that opposing counsel or some other representative[2] be present during any and all contacts with the former policyholders infringes upon their right to prepare their case and violates the work-product privilege. Furthermore, they argue that restriction "(B)" will cause "unnecessary logistical obstacles." As to restriction "(C)," the Stephenses claim that it prevents them from conducting any meaningful interviews with the former policyholders regarding Smith's alleged fraudulent conduct in regard to the sale of the policies.
The defendants answer that they have shown good cause to support the restrictions imposed by the circuit court. They argue that requiring that opposing counsel be present when contact is made will protect the former policyholders from "multiple or annoying contacts" since there will need to be only one interview with the former policyholders. The defendants also argue that the restrictions will protect the business interest and reputation of Fred Smith. They claim that even though Smith is no longer an agent with Associated Doctors he could still attempt to sell insurance to one of the former policyholders and that unlimited contact with the former policyholders could create a *1310 "cloud" over Smith's relationship with those people. Last, the defendants argue that the restrictions do not prevent the meaningful questioning of the former policyholders, and they insinuate that the true intentions of the Stephenses in seeking unrestricted contact is to improperly solicit the former policyholders as clients against the defendants. Similarly, the amicus curiae brief submitted by the Alabama Defense Lawyers Association (ADLA) argues that the restrictions may be imposed to prevent the Stephenses' attorneys from improper solicitation of the former policyholders. The ADLA asserts that these restrictions may be seen as unreasonable "only if the intentions of petitioner's counsel [are] to solicit additional litigants."
The Alabama Rules of Civil Procedure, adopted in 1973, were intended to permit very broad and liberal discovery so as to allow parties to obtain information needed in preparation of their case. See Rule 26(b)(1), Ala.R.Civ.P. Furthermore, it is well established that the rules regarding discovery are to be broadly and liberally construed, to ensure that the spirit of the rules is carried out. Assured Investors Life Ins. Co. v. National Union Assocs., Inc., 362 So. 2d 228 (Ala.1978). However, while the rules are to be so construed, the right to discovery is not unlimited and the circuit court does have broad power to control the discovery process to prevent its abuse by any party. Id., 362 So. 2d 228, 231. Rule 26(c) authorizes the circuit court, upon a showing of good cause, to enter a protective order to prevent the abuse of discovery.
Rule 26(c), however, does not authorize the circuit court to set arbitrary limits on discovery, "but instead vests the circuit court with discretion to control the discovery process." Campbell v. Regal Typewriter Co., 341 So. 2d 120, 123 (Ala.1976), modified on other grounds, Sharp Electronics Corp. v. Shaw, 524 So. 2d 586 (Ala.1987). Therefore, decisions affecting discovery are within the sound discretion of the circuit court, and on review the question becomes whether, under all the circumstances, the circuit court has abused that discretion. Id. When one challenges a circuit court's protective order, "mandamus is the proper means of review to determine whether a trial judge abused his discretion in ordering discovery." Ex parte Allstate Insurance Co., 401 So. 2d 749, 751 (Ala.1981).
We conclude that the circuit court did abuse its discretion in placing the restrictions on contacting and interviewing the former policyholders. A review of the petition, the exhibits, and the briefs in opposition reveals that the restrictions were "overly restrictive and unduly limited the discovery of needed information." Ex parte Clarke, 582 So. 2d 1064, 1067 (Ala.1991).
The first step in determining whether a court has abused its discretion is to determine the particularized need for discovery, in light of the nature of the claim. The Stephenses allege fraud. This Court has held that a party alleging fraud is entitled to a broader range of discovery than is usually allowed, because of the greater difficulty in proving fraud. Id. See also Ex parte Rowland, 669 So. 2d 125 (Ala.1995). With this in mind, we will review the contested restrictions.
The first restriction requires that opposing counsel be present each time a former policyholder is contacted in any manner, by either party. The Stephenses argue that the presence of opposing counsel will be an intrusion into their right to freely and strategically plan their case. They contend that to obtain the information they need to develop their case they will have to ask the former policyholders questions that will reveal to defense counsel the plaintiffs' strategy and mental impressions for the case. Thus, the Stephenses are claiming that the presence of opposing counsel will violate the work-product privilege.
Rule 26(b)(3), Ala.R.Civ.P., addresses the discovery of counsel's work product made in preparation for trial:
Rule 26(b)(3) allows for the discovery, upon a showing of "substantial need" and "undue hardship," of relevant facts that are contained in trial preparation materials; however, the last sentence of that rule protects against the disclosure of an attorney's mental impressions or legal theories that may be included in such materials. This Court applied this general principle in Ex parte Alabama Power Co., 280 Ala. 586, 196 So. 2d 702 (1967):
Id., 280 Ala. 586, 592, 196 So. 2d 702, 707-08.
Our work-product rule is a codification of the holding in Hickman v. Taylor, 329 U.S. 495, 67 S. Ct. 385, 91 L. Ed. 451 (1947). See, Committee Comments, Rule 26(b)(3), Ala. R.Civ.P. In Hickman, the Supreme Court refused to allow discovery of both written and oral statements made by witnesses to defense counsel during informal interviews. The Court reasoned that to allow such discovery would allow opposing counsel to peer into the all-important mental impressions and strategies of defense counsel, and that an attorney's mental impressions of a case lie at the very heart of our justice system. Id., 329 U.S. at 510-11, 67 S. Ct. at 393-94, 91 L. Ed. at 462.
The Court expressed the reasons for protecting an attorney's work product in this often-quoted passage:
Id.
The defendants contend that Hickman and various cases following it are inapplicable to this case because, they say, Hickman and Rule 26(b)(3) are concerned only with the disclosure of tangible items or writings under the work-product privilege. They argue that the work-product privilege does not apply because there are no writings or tangible *1312 documents involved in this case; therefore, they say, their counsel or representative should be allowed to be present when the interviews take place. While the defendants are technically correct in arguing that Rule 26(b)(3) provides protection only for tangible items, their argument that the lack of a written document allows them to be present during the interview of witnesses defies the underlying logic of the work-product privilege created by Hickman. The purpose of the privilege is to allow an attorney to prepare the strategies and theories of his or her case without the intrusions of opposing counsel. Therefore, it only makes sense that an attorney's mental impressions should be afforded protection even if they are not in writing. Questions asked by an attorney during a pre-trial interview would seem to exhibit some of the purest forms of mental impressions, conclusions, and formulation of strategy.
Furthermore, while Rule 26(b)(3) technically provides protection only for documents and tangible items, "Hickman v. Taylor continues to furnish protection for work product within its definition that is not embodied in tangible form." 8 C. Wright & A. Miller, Federal Practice and Procedure § 2024, at 337-38 (1994). Hickman is considered to have afforded protection to intangible work product because in that case the Supreme Court expressly prohibited a party from requiring an opposing attorney to provide his oral recollections of what a witness told him during an oral statement. Id., 329 U.S. at 512, 67 S. Ct. at 394, 91 L. Ed. at 463. Furthermore, the Court expressly stated that work product is reflected in "interviews, statements, ... and countless other ... intangible ways" in which an attorney prepares a case, and it held that these forms of work product therefore deserve protection. Id., 329 U.S. at 511, 67 S. Ct. at 393, 91 L. Ed. at 462. See also, 8 C. Wright & A. Miller, Federal Practice and Procedure § 2024, at 337, n. 4 (1994). This statement by the Supreme Court goes to the very issue presented in this case. It would be illogical to afford protection to an attorney's mental impressions that are encompassed in tangible documents while not protecting those same mental impressions as they are being formed.
In International Business Machines Corp. v. Edelstein, 526 F.2d 37 (2d Cir.1975), the United States Court of Appeals for the Second Circuit, on a petition for a writ of mandamus, struck down a protective order that had provisions very similar to the restrictions imposed in this case. In that case the federal district court had prevented IBM attorneys from privately interviewing adverse witnesses. 526 F.2d at 40-41. The district court had ordered that opposing counsel be given the opportunity to be present when counsel for either side attempted to interview a witness and that if opposing counsel could not be present then a stenographer was to be present. Id. The court of appeals relied on Hickman to strike down the requirement that opposing counsel be present during interviews of opposing witnesses, noting that "the legitimate need for confidentiality in the conduct of attorneys' interviews, with the goals of maximizing unhampered access to information and insuring the presentation of the best possible case at trial, was given definitive recognition by the Supreme Court in Hickman v. Taylor," 526 F.2d at 42.
Pre-trial interviews play a major role in the way an attorney formulates the strategy of his case. In these interviews a lawyer attempts to find evidence to support his case or even to determine if he has a case. This requires that the attorney may in some instances reveal his mental impressions or conclusions on the case, often drawing from information he may have already developed from other sources; thus, the need for privacy while conducting these interviews. Requiring the presence of opposing counsel at interviews thwarts the exploratory purpose of conducting pretrial interviews by virtually transforming the interviews into informal depositions. In International Business Machines, supra, the court, in a footnote, pointed out that pre-trial interviews and depositions have entirely different purposes:
Id., 526 F.2d at 41, n. 4.
The attorneys for the Stephenses are attempting to prove a scheme or plan by the defendants to defraud; therefore, they will need to inquire of the former policyholders what they were told by the defendants. In developing their inquiries it may be necessary for the attorneys to reveal their strategies or impressions of the case, in order to obtain the information needed to prove their case. "This is part of an attorney's so-called work product," and accordingly the court shall strive to prevent the disclosure of the attorney's mental impressions or strategies. International Business Machines, 526 F.2d at 41. Furthermore, the mental impressions or strategies that may be revealed through the informal interviews are due to be afforded the same type of protection that is given to "opinion work product." See 8 C. Wright & A. Miller, Federal Practice and Procedure § 2024, at 338 (1994).
The committee comments to Rule 26(b)(3), Ala.R.Civ.P., state that the protection provided by that rule for an attorney's mental impressions and theories is an absolute protection. While intangible work product deserves strong protection, we hold that such protection is not absolute. The Supreme Court's statements in Hickman, supra, imply that the protection is not absolute with regard to the discovery of oral statements. The Court stated: "[A]s to oral statements made by witnesses to Fortenbaugh, whether [they be] in the form of his mental impressions or memoranda, we do not believe that any showing of necessity can be made under the circumstances of this case so as to justify production." Hickman, 329 U.S. at 512, 67 S. Ct. at 394, 91 L. Ed. at 463. Recently, the United States Court of Appeals for the Eleventh Circuit, interpreting Hickman and other cases regarding opinion work product, held that while opinion work product does not have absolute protection it nevertheless "enjoys a nearly absolute immunity and can be discovered only in very rare and extraordinary circumstances." Cox v. Administrator United States Steel & Carnegie, 17 F.3d 1386 (11th Cir.), modified on other grounds, 30 F.3d 1347 (11th Cir.1994), cert. denied, ___ U.S. ___, 115 S. Ct. 900, 130 L. Ed. 2d 784 (1995).
The facts in this case do not present such "rare and extraordinary circumstances" as to justify requiring or allowing opposing counsel to be present during an informal interview of former policyholders in which an attorney is attempting to develop his case. The defendants' reasons supporting the order requiring the presence of opposing counsel are that it will prevent the former policyholders from being subjected to multiple contacts, protect the business interest of Fred Smith, and prevent the improper solicitation of the former policyholders.
The first reason, to prevent multiple contacts, clearly does not present a rare or extraordinary circumstance that would justify the restrictions in the protective order issued by the circuit court. In fact, this Court knows of no reason that would require the former policyholders even to speak with either counsel. It is entirely up to the former policyholders whether to consent to speak with the attorneys; therefore, the anticipated danger of multiple contacts does not justify the restrictions in the protective order. The former policyholders may simply refuse to speak with the attorneys if the contacts become annoying or too frequent or for any other reason.
Second, the argument that the presence of opposing counsel is needed to protect the business interest of Associated Doctors' former agent Fred Smith is not persuasive, and it is not clear how the presence of opposing counsel will protect that interest. First, Smith is a former agent of Associated Doctors. Thus, the two corporate defendants have no true interest in protecting his business interest. Smith, who is a named defendant, might have grounds to make this argument on his own behalf, but he has not made such an argument.[3] Second, it is unclear *1314 to this Court how the mere presence of opposing counsel is supposed to protect the interest of Smith, given that the former policyholders will still be contacted and the questions will pertain to the representations Smith made to them.
Third, the defendants argue that the restrictions in the protective order are appropriate to prevent improper solicitation of the former policyholders. The defendants point out that the Stephenses' lawyers had filed four identical actions against them before filing the Stephenses' action. Furthermore, the Stephenses filed their action after their names had been listed on a witness sheet in one of the earlier actions. From these facts the defendants, and the ADLA as amicus curiae, insinuate that the Stephenses' attorneys may improperly solicit employment by the former policyholders. They argue that the only reason the Stephenses' attorneys want closed-door unrestricted interviews is to solicit these policyholders. These arguments lose sight of the purpose of discovery and the need for all lawyers, whether representing defendants or plaintiffs, to have the ability to develop their cases and prepare case strategy. The defendants' arguments also fail to take into account that a lawyer is an officer of the court and will not be presumed to violate the Rules of Professional Conduct.
The mere fact that a party was a witness in an earlier fraud action and then filed an action alleging the same type of fraud does not mean that the party was improperly solicited. Nothing prevents a lawyer from accepting employment from someone whom he may have interviewed as a witness in another case, so long as the lawyer does not violate Rule 7.3, Ala.R.Prof.Conduct, which reads:
Nothing in this case tends to suggest that the Stephenses' lawyers impermissibly solicited them for employment.
This Court's research has disclosed no Alabama appellate decisions on the use of protective orders to prevent potential unethical conduct. However, the California Supreme Court has addressed the issue in a case with similar facts, Colonial Life & Accident Ins. Co. v. Superior Court, 31 Cal. 3d 785, 647 P.2d 86, 183 Cal. Rptr. 810 (1982). In Colonial, the plaintiff was attempting to discover a list of other insurance claimants whose claims had been handled by a particular claims adjuster. The trial court ordered Colonial to comply with the plaintiff's discovery request, but prohibited any contact with the claimants on the list until they had received a court-approved letter and had consented to the interview. 31 Cal. 3d at 789, 647 P.2d at 88, 183 Cal. Rptr. at 812. Colonial asked the trial court to enter an additional order barring the plaintiff's attorney from seeking employment from any of the other claimants or encouraging them to file a similar lawsuit, arguing that the restriction was needed to prevent the attorney from soliciting the other claimants. Id. The trial court refused to grant such an order, and Colonial petitioned the Supreme Court of California for a writ of mandamus, which the court denied. In denying the writ, the court stated:
31 Cal. 3d at 793-94, 647 P.2d at 91, 183 Cal. Rptr. at 815.
Applying the same reasoning as the California court, this Court cannot join in the *1315 defendants' assumptions that the Stephenses' lawyers will violate their ethical obligations when interviewing the former policyholders. A lawyer is an officer of the court and is charged with the duty to uphold and honor the Rules of Professional Conduct. Furthermore, before being licensed to practice law in this state, a lawyer must take an oath, in which the lawyer swears that he "will demean [himself] as an attorney, according to the best of [his] learning and ability, and with all good fidelity, as well to the court as to the client." Ala.Code 1975, § 34-3-15. This Court will presume, until it is proven otherwise in the appropriate forum, that an attorney at all times acts in an ethical manner and upholds the oath of the profession.[4]
Normally, it is not the role of the circuit court to take steps to prevent unethical conduct; however, that is not to say that in certain situations it would be improper for the court to enforce the rules or take steps to prevent unethical conduct. But if there is no evidence of improper conduct before the court, it would be an abuse of discretion for the court to reach out and place restrictions on counsel simply based on an alleged fear of potential unethical conduct.
There is no evidence that the Stephenses' lawyers have acted unethically. At most, there is a fear on the part of the defendants that the Stephenses' lawyers may seek to solicit employment by the former policyholders or that the interviews may create more litigation. Such a fear, without more, does not justify an intrusion upon such an important aspect of legal representation as discovery. A protective order based on such speculation would be an abuse of discretion and would be due to be vacated. Furthermore, this Court held in Ex parte Asher, Inc., 569 So. 2d 733 (Ala.1990), that fear on the part of an insurance company that its turning over names of other insureds to the plaintiffs would lead to further litigation was not a sufficient ground to support a finding of irreparable harm. 569 So. 2d at 738. Such a fear on the part of the defendants in this case is not sufficient to support the protective order requiring the presence of opposing counsel at the interviews.
The second restriction at issue prevents the parties from "communicat[ing] ... the allegations" of the Stephenses' case to the former policyholders. The Stephenses contend that this prevents them from meaningfully questioning the former policyholders. The defendants argue that the restriction would not prevent meaningful, straightforward questioning regarding the statements made by Smith, but would prevent the attorneys from making prejudicial or inflammatory remarks such as "we represent the Stephenses who were defrauded by Associated Doctors and we think (or want to see if) they defrauded you too."
This restriction has the potential of overly restricting the attorneys in interviewing the former policyholders. It would prevent the attorneys from conveying their reasons for conducting the interview. Furthermore, it would prevent the attorneys from answering questions from the policyholders regarding the purpose of the interview, questions the policyholders are sure to ask. Once again, it appears that the defendants are seeking to prevent unethical conduct by the Stephenses' lawyers. The discussion above regarding the ethical obligations of a lawyer controls this issue as well; thus, the circuit court having been presented no evidence of unethical conduct, that court abused its discretion by restricting the interviews as it did by the second restriction at issue here.
Furthermore, this is a fraud action and, as stated earlier, a plaintiff is accorded a broader range of discovery in a fraud action. Ex parte Clarke, 582 So. 2d 1064 (Ala.1991). In Clarke this Court held that a five-question colloquy created by the circuit court was overly restrictive and had the effect of preventing meaningful discovery. 582 So. 2d at 1068. Clarke was also an insurance fraud *1316 action in which the plaintiffs were attempting to discover a plan or scheme by interviewing other policyholders. 582 So. 2d at 1066. While the Court recognizes that in this case the circuit court did not go so far as to restrict the parties to a limited set of questions, we nonetheless hold that the circuit court, by imposing a blanket prohibition, has created a procedure that has the possibility of preventing meaningful discovery in this fraud action.
Based on the foregoing reasons, we hold that the circuit court abused its discretion in imposing restrictions "(B)" and "(C)" of its protective order, restricting the contacts and communications with the former policyholders. The petition for the writ of mandamus is granted, and the circuit court is directed to set aside restrictions "(B)" and "(C)" of its protective order.
WRIT GRANTED.
ALMON, SHORES, KENNEDY, INGRAM, COOK, and BUTTS, JJ., concur.
HOOPER, C.J., and MADDOX and HOUSTON, JJ., dissent.
HOUSTON, Justice (dissenting).
Counts II and III of the plaintiffs' complaint allege that the defendants' conduct was part of "a scheme to injure the plaintiffs and others similarly situated as a part of a conspiracy, pattern or practice of fraudulent conduct engaged in by the defendants and/or their agents, including fictitious parties A, B, C, D, E, F and G." It is evident from the "Plaintiffs' First Request For Production of Documents" that the plaintiffs know some of the defendant insurers' former or present policyholders, for example, S.L. and Dessar Heard, James Clausell, Mary Alice Moore, and Margaret Rushing.
Insurers' policyholder lists are confidential, proprietary information to which a litigant has no right except through court-ordered discovery. Ex parte Mobile Fixture & Equipment Co., 630 So. 2d 358 (Ala.1993); Ex parte McTier, 414 So. 2d 460 (Ala.1982).
No one contends that the trial court abused its discretion in ordering that the names and addresses of former policyholders be made available to the plaintiffs so that they could obtain evidence of a pattern and practice of fraudulent conduct, even though it is evident that the plaintiffs have the names and addresses of some of these persons, as hereinbefore mentioned. The names and addresses of former policyholders other than those named above would not be available to the plaintiffs but for the trial court's order.
Trial courts are vested with broad discretion to manage discovery. Plitt v. Griggs, 585 So. 2d 1317 (Ala.1991). Accordingly, this Court accords great deference to the trial courts on discovery matters: "`The rule of law, on review of orders entered in matters involving discovery is that this Court will not reverse the trial court's decision ... unless there is a clear showing that the trial judge abused his discretion in making his decision.' " Ex parte Mobile Fixture, 630 So. 2d at 360, quoting Ex parte McTier, 414 So. 2d at 461.
This deferential review is particularly evident in the standard for this Court's consideration of a petition for the writ of mandamus:
Ex parte Bozeman, 420 So. 2d 89, 91 (Ala. 1982), quoting Ex parte Dorsey Trailers, Inc., 397 So. 2d 98, 102 (Ala.1981) (emphasis added).
Absent a showing of a clear abuse of discretion by the trial court in issuing the protective order, no writ of mandamus can be issued. See Ex parte Dorsey Trailers, 397 So.2d at 102-03; Ex parte Mobile Fixture, 630 So. 2d at 360.
In this case, the plaintiffs do not show a clear abuse of discretion. They have the names of some former policyholders that they can interview for the purpose of establishing their allegations of a pattern and practice of fraudulent conduct. Therefore, it *1317 was within the court's discretion to issue the protective order so as to allow defense counsel to be present during the interviews of former policyholders whose names and addresses were furnished by the defendants to the plaintiffs or so as to permit neither party to communicate to the defendants' former policyholders the plaintiffs' allegations in this case.
HOOPER, C.J., and MADDOX, J., concur.
[1] Associated Doctors was an Alabama corporation, with its principal place of business in Birmingham. It merged with Life of Georgia in January 1994 and is now operated as a division of Life of Georgia. The Stephenses bought the policies in question in 1992 from Fred Smith, an agent for Associated Doctors. Associated Doctors no longer conducts any operations in Alabama.
[2] Although the order speaks of a "representative" of the other party, the parties have briefed the case as though a "representative" is an attorney for the other party, so we will decide the case accordingly. We see no legally significant difference in requiring the presence of a party's attorney and requiring the presence of some other representative.
[3] To the extent the corporate defendants' brief can be viewed as making this argument on behalf of Smith individually, we reject it as a ground supporting the protective order, for the reason stated in the following text.
[4] This Court has the responsibility to supervise the conduct of lawyers and has promulgated the Alabama Rules of Disciplinary Procedure to guide the State Bar in disciplinary proceedings. These rules confer on the Disciplinary Commission and the Disciplinary Board of the Alabama State Bar the jurisdiction to discipline lawyers, with review by this Court. Rule 1, Ala.R.Disc.P. Furthermore, Rule 19(a) of those rules states that clear and convincing evidence is the standard of proof required in all disciplinary proceedings. | March 8, 1996 |
8c2dab83-70e1-4bde-8ebf-dc3de3b44415 | Ex Parte ReLife, Inc. | 679 So. 2d 664 | 1950575 | Alabama | Alabama Supreme Court | 679 So. 2d 664 (1996)
Ex parte ReLIFE, INC.
(Re Florence WARREN v. George B. WARREN, Jr., et al.).
1950575.
Supreme Court of Alabama.
June 7, 1996.
Rehearing Denied August 30, 1996.
*665 Charles M. Crook of Balch & Bingham, Montgomery, Archie T. Reeves, Jr. of Reeves & Stewart, P.C., Selma, for Petitioner.
Bruce Boynton, Selma, for Florence Warren.
Jere L. Beasley, Frank M. Wilson and P. Leigh O'Dell of Beasley, Wilson, Allen, Main & Crow, P.C., Montgomery, Robert H. Turner, Marion, and J.L. Chestnut, Jr. of Chestnut, Sanders, Sanders & Pettaway, Selma, for George B. Warren, Sr., George B. Warren, Jr., John T. Sumner and Tricare Rehabilitation Systems, Inc.
MADDOX, Justice.
ReLife, Inc., petitions for a writ of mandamus relating to a lawsuit pending in the Perry Circuit Court. ReLife seeks a writ directing the trial court to set aside its order denying ReLife's motions to strike certain claims of the plaintiff and to strike a third-party complaint, and/or to transfer the case to the Jefferson Circuit Court.
The facts of this case are rather complex. Tricare Rehabilitation Systems, Inc., was an Alabama corporation that provided rehabilitation care through in-patient and out-patient clinics. Its stockholders included George B. Warren, Jr., George B. Warren, Sr., and John T. Sumner, Jr. (referred to collectively as "the Tricare stockholders"). Tricare's principal place of business was in Birmingham, and the corporation never operated within Perry County, where this case was filed. Tricare is now in involuntary bankruptcy.
On May 2, 1991, Tricare borrowed $300,000 from Colonial Bank, giving a promissory note to the bank in that amount. In order to secure this loan, Florence Warren, the wife of George Warren, Sr., and the mother of George Warren, Jr., and who herself is not a stockholder or officer of Tricare, pledged to Colonial Bank various certificates of deposit owned by her that were in the possession of Colonial Bank. Mrs. Warren alleges that she was given guarantee agreements signed by her husband, her son, John Sumner, and Tricare that provided that Mrs. Warren would be made whole by those four signers if she had to pay the Colonial note. The four signers also executed a promissory note in the amount of $40,000 in favor of Mrs. Warren.
In February 1993, ReLife, a Birmingham-based corporation that provides rehabilitation services and that has no operations in, or connections to, Perry County, entered into a purchase agreement in Birmingham in which it agreed to buy all assets from Tricare and its affiliates, none of which did any business in Perry County. Tricare, ReLife, and Brookwood Hospital then entered into an "interim management agreement." Pursuant to this agreement, ReLife agreed to take over the management of a Tricare rehabilitation facility located at Brookwood Hospital in Birmingham. One part of the agreement provided that ReLife would "make up any negative cash flow items" from the operation of the Tricare facility.
Tricare defaulted on the Colonial loan, and Mrs. Warren, who had pledged her assets as collateral, was called upon to pay Colonial $125,413.94.
Mrs. Warren, who is a Perry County resident, then sued in the Perry County Circuit Court, asserting a claim against her son, her husband, and their business associate John Sumner. Her complaint sought the *666 enforcement of the guaranty agreement and promissory note given her by these three defendants in 1991. Of the three, only her husband resided in Perry County. A few days after the complaint was filed, these three Tricare stockholders filed a third-party complaint alleging that "if they owe Florence Warren," then "[ReLife] owe[s] them," based on the interim management agreement.
On April 6, 1994, ReLife filed a motion to strike the third-party complaint, alleging that the third-party plaintiffs' claims against ReLife were not dependent upon the outcome of Mrs. Warren's claim against the third-party plaintiffs. This motion was renewed on May 8, 1995.
In February 1994, petitions for involuntary bankruptcy were filed against Tricare. The bankruptcy court appointed a bankruptcy trustee to oversee Tricare's affairs. On September 25, 1994, Tricare's trustee and ReLife entered into an agreement that purported to resolve any and all disputes. ReLife was granted a release against any claims Tricare may have had against it or any claims purportedly on behalf of Tricare.[1] This release was also filed with the Perry County Circuit Court as an appendix to a joint stipulation of dismissal of any claims; it was signed by Tricare's bankruptcy trustee.
In August 1995, Florence Warren amended her complaint to allege that she was a third-party beneficiary of the contract between Tricare and ReLife. Additionally, the other defendants/third-party plaintiffsthe Tricare stockholdersfiled cross-claims against ReLife reasserting the claims they had made in the third-party complaint. ReLife filed a motion to strike the amended complaint and cross-claims, alleging once again that Mrs. Warren's claim against the Tricare stockholders does not arise out of the same transaction or series of transactions as her alleged claim against ReLife and does not involve issues of law or fact common to her claims against the Tricare stockholders, and also alleging that the Tricare stockholders do not have standing to pursue the third-party claim or cross-claims. The trial court denied ReLife's request to strike the claims as being improperly joined and denied the alternative motion to transfer the case to Jefferson County.
Subsequently, ReLife filed this petition, seeking a writ of mandamus directing the trial court to strike claims made against it by Mrs. Warren and the third-party plaintiffs/cross-claimants, the three Tricare stockholders, or, in the alternative, directing the trial court to transfer the case to the Jefferson Circuit Court.
This Court has stated many times that a writ of mandamus is "a drastic and extraordinary writ to be issued only where there is (1) a clear legal right in the petitioner to the *667 order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) properly invoked jurisdiction of the court." Ex parte Edgar, 543 So. 2d 682, 684 (Ala.1989). Where the exercise of an inferior court's discretion is involved, the writ of mandamus may be issued only to compel the exercise of its discretion. It may not be issued to control the exercise of discretion except where an abuse of discretion is shown. Ex parte Auto-Owners Ins. Co., 548 So. 2d 1029 (Ala.1989). Based on the facts and our review of the law, we believe that this is one of the cases that warrant such a drastic remedy.
The contract upon which the Tricare stockholders base their third-party complaint and their cross-claim is a contract between two corporate entitiesReLife and Tricare. This interim management agreement obligates ReLife to "make up any negative cash flow items" arising out of the operation of the Brookwood Tricare facility. The individual stockholders were not parties to this transaction.[2]
Any action based on that contract must be brought in the name of the corporate entity, Tricare. An action was brought in the name of Tricare, and that action has been settled, as evidenced by the release signed by the bankruptcy trustee acting on behalf of Tricare and the "Joint Stipulation and Motion for Dismissal" signed by the bankruptcy trustee for Tricare and the attorney for ReLife.
"It has long been settled that `[a] corporation, just like an individual, must enforce its own rights and privileges.'" Ramsey v. Taylor, 567 So. 2d 1325, 1327 (Ala. 1990), quoting Russell v. Birmingham Oxygen Service, Inc., 408 So. 2d 90, 93 (Ala.1981). Although George Warren, Sr., George Warren, Jr., and John Sumner are stockholders in Tricare, this fact, standing alone, does not give them standing individually to assert claims based on an alleged harm to the corporation or to recover corporate property. See Ramsey, supra; McDonald v. U.S. Die Casting & Dev. Co., 541 So. 2d 1064, 1068 (Ala.1989); Green v. Bradley Constr., Inc., 431 So. 2d 1226, 1229 (Ala.1983); Stevens v. Lowder, 643 F.2d 1078, 1080 (5th Cir.1981). It appears that the corporation, Tricare, is the only real party in interest and the only entity that can pursue any action arising out of the enforcement of the contract. This action has been pursued and Tricare and ReLife have settled their differences. Therefore, the trial court abused its discretion in not dismissing the third-party complaint and the cross-claim against ReLife, based on Rule 17(a), Ala.R.Civ.P.
Mrs. Warren alleges that she was a third-party beneficiary of the interim management agreement entered into by Tricare and ReLife.[3] As Mrs. Warren affirmatively *668 states in her complaint, she was a creditor of Tricare when ReLife and Tricare entered into the interim management agreement, as was alleged in the third-party complaint. "`To recover under a third-party beneficiary theory, the complainant must show: (1) that the contracting parties intended, at the time the contract was created, to bestow a direct benefit upon a third party; (2) that the complainant was the intended beneficiary of the contract; and (3) that the contract was breached.'" Ramsey, 567 So. 2d at 1327, quoting Collins Co. v. City of Decatur, 533 So. 2d 1127, 1132 (Ala.1988).
In her complaint, Mrs. Warren alleges that she is a creditor, based on the agreement with Tricare and three of its stockholders as individuals. This agreement was executed almost two years before the date of the agreement between ReLife and Tricare, under which Mrs. Warren based her claims that she was a beneficiary. The ambiguous "negative cash flow" clause in the contract between ReLife and Tricare does not specifically mention Mrs. Warren, and neither Mrs. Warren nor the Tricare stockholders contend that it does. To ReLife, Mrs. Warren is only one of many creditors of Tricare that existed at the time of the drafting of the interim management agreement. Tricare has settled its dispute with ReLife, as evidenced by the release. Thus, Mrs. Warren's action as a creditor can be pursued only through an action against her guarantors or in the bankruptcy proceeding against Tricare.
In the alternative, ReLife seeks the transfer of this action to the Jefferson Circuit Court, based on the doctrine of forum non conveniens. We do not have to consider this alternative request.
The writ of mandamus is due to be issued. The trial judge is directed to enter the appropriate orders striking the claims against ReLife filed by Mrs. Warren and the Tricare stockholders.
WRIT GRANTED.
HOOPER, C.J., and SHORES, HOUSTON, and INGRAM, JJ., concur.
KENNEDY and BUTTS, JJ., dissent.
KENNEDY, Justice (dissenting).
I do not believe that ReLife is entitled to a writ of mandamus. Therefore, I must dissent.
A writ of mandamus is a drastic and extraordinary writ, to be issued only when the petitioner has a clear legal right to the order sought. Ex parte Preston Hood Chevrolet, Inc., 638 So. 2d 842 (Ala.1994).
Mrs. Warren's claims against the TriCare shareholders and TriCare's claims against ReLife arose from the same transactions or series of transactions and should be tried in the same case, so as to permit the entire controversy to be disposed of in one action. Allowing factually related claims to be tried in the same case prevents inconsistent judgments arising from identical or similar evidence.
In 1991, TriCare borrowed money from Colonial Bank and secured the loan with collateral pledged by Mrs. Warren. In 1993, ReLife entered into a management agreement with TriCare obligating ReLife for TriCare's "negative cash flow," which would have included the loan from Colonial Bank. ReLife did not make payments on the loan as it had promised to do, and its failure to do so caused Mrs. Warren to lose her collateral. Generally, what constitutes a series of transactions is determined on a case-by-case basis and the question is left to the discretion of the trial judge. Ex parte Rudolph, 515 So. 2d 704 (Ala.1987).
ReLife is not entitled to the writ of mandamus, because it has not shown a clear legal right to the relief requested. The trial court did not abuse its discretion in concluding that the transactions were related.
[1] The release read as follows:
"KNOW ALL MEN BY THESE PRESENTS that the undersigned Tricare Rehabilitation Systems, Inc., (`Tricare'), acting through its duly appointed and authorized Trustee, Max Pope, having been properly authorized by the United States Bankruptcy Court to execute this release on behalf of the foregoing, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, does hereby, for itself and its successors and assigns, generally release, REMISE, ACQUIT and FOREVER DISCHARGE ReLife, Inc., ... and [its] parent, subsidiary and affiliated corporations, successors and assigns, officers, directors, servants, shareholders, attorneys, and agents (all of the foregoing being hereinafter sometimes individually and collectively referred to as `Releasees'), of and from any and all claims, actions, causes of action, demands, rights, damages, costs, attorney[s'] fees, expenses, debts, liabilities and compensation of any and every kind, known or unknown, which Tricare now has, may have or ever had against Releasees, or any of them, the basis for which arose or occurred at any time prior to the date hereof, including, without limitation, any such claims or third party claims which have been asserted or could be asserted in the case of `Warren v. Warren,' Case Number CV-94-14, presently pending in the Circuit Court of Perry County, Alabama.
"This Release shall not, however, release any claim against Purchaser for any alleged medical malpractice in the operation of the Inpatient Unit or the Outpatient Unit, nor shall this release discharge Purchaser from any of its responsibilities under the Indemnification Agreement between Purchaser and Max C. Pope dated March 1, 1994.
"Tricare warrants and represents that it has not sold, assigned, transferred, conveyed or otherwise disposed of any claim, action, cause of action, demand, right, loss, damage or liability covered by this General Release."
[2] The contract in question was signed twice on behalf of Tricare by George Warren, Jr., as president of Tricare. The Tricare stockholders do not dispute this in their reply brief. In fact, in their statement of facts, the Tricare stockholders state the following pertaining to the contract:
"In February 1993, ReLife agreed to purchase all of Tricare's assets. Pending the close of the purchase agreement, ReLife and Tricare entered into an Interim Management Agreement, whereby ReLife agreed to take full control over the management of Tricare's operations...."
There is no mention of any alleged individual interest on behalf of George Warren, Jr., or, for that matter, any of the other Tricare stockholders.
[3] The complaint specifically alleges:
"7. Defendant ReLife, Inc., ... entered into certain contracts with the remaining Defendants [George B. Warren, Jr., George B. Warren, Sr., and John Sumner] as more particularly described in the third-party Complaint in this action.
"9. [sic] Those contracts were intended by the parties to them to benefit Plaintiff in that she was creditor of the Defendants other than ReLife and payment to her made up a part of the negative cash flow items described in those contracts.
"10. One of the principal purposes of the agreements between Defendant ReLife on the one hand and the remaining Defendants on the other was to see that the payments owed to Plaintiff were made.
"11. The parties at the time of entering into the contracts intended to bestow a direct benefit on Plaintiff.
"12. Under these circumstances, Plaintiff occupies the status as a third-party beneficiary to the said contracts." | June 7, 1996 |
5e0ae1ef-1f50-440e-8e7f-f355f500d39e | Ex parte Robert Bosch LLC. | N/A | 1130840 | Alabama | Alabama Supreme Court | Rel: 12/12/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334)
229-0649), of any typographical or other errors, in order that corrections may be made
before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
_________________________
1130840
_________________________
Ex parte Robert Bosch LLC
PETITION FOR WRIT OF MANDAMUS
(In re: Dorothy Kilgo, individually and as personal
representative of the Estate of Ernest Ronald Kilgo, Jr.,
deceased
v.
Donnice Milam Smith et al.)
(Etowah Circuit Court, CV-11-900399)
MAIN, Justice.
1130840
One of the defendants below, Robert Bosch LLC ("Bosch"),
petitions this Court for a writ of mandamus directing the
Etowah Circuit Court ("the trial court") to vacate or, in the
alternative, to amend the provisions of its order granting the
request for production of Bosch's "air bag system Electronic
Control Unit" ("ECU") filed by the plaintiff below, Dorothy
Kilgo
("Kilgo"),
individually
and
as
the
personal
representative of the estate of Ernest Ronald Kilgo, Jr.,
deceased. We grant the petition and issue the writ.
I. Facts and Procedural History
On March 17, 2011, Kilgo and her husband, Ernest Ronald
Kilgo, Jr. ("Ron"), were passengers in a 2008 PT Cruiser motor
vehicle that Ron's stepson was driving in Etowah County.
While they were waiting for an oncoming motor vehicle to pass
through an intersection so that they could make a left turn,
the Kilgos' vehicle was struck from behind by another motor
vehicle. The impact of that collision propelled the Kilgos'
vehicle into the intersection, where it was struck head-on by
an oncoming motor vehicle. Ron, who was sitting in the front
passenger-side
seat,
suffered
severe
injuries
and
died
several
days later as a result of those injuries. The front
2
1130840
passenger-seat air bag failed to deploy during either the rear
or the head-on collisions, and the front passenger-side seat-
belt "pretensioner," which is supposed to cause the seat belt
to "lock" immediately after a collision, did not activate.
However, one of the two front driver-side air bags deployed
during the collisions, and the front driver-side seat-belt
pretensioner was activated as well.
In September 2011, Kilgo filed in the trial court a
wrongful-death
complaint,
naming
several
defendants,
including, among others, Bosch, who designed and manufactured
the ECU in the Kilgos' vehicle. Sometime thereafter, Kilgo
served a notice of taking the deposition of a corporate
representative of Bosch. The deposition notice included
numerous topics for which testimony and documents were
requested. Item no. 5 of the deposition notice requested
"[t]estimony and documents relating to the algorithms which
are used to deploy the supplemental restraint systems of the
2008 Chrysler PT Cruiser, including, but not limited to, the
air
bags
and
seat-belt
pretensioners"
(hereinafter
referred
to
as "the algorithm"). Bosch filed a response objecting to
Kilgo's deposition notice and moved for a protective order
3
1130840
with regard to several of Kilgo's requests for production,
including Kilgo's request for the algorithm. In the motion,
Bosch argued that the algorithm is a trade secret and, thus,
Bosch said, protected from discovery under Rule 507, Ala. R.
Evid.; Rule 26(c)(7), Ala. R. Civ. P.; and the Alabama Trade
1
2
Secrets Act, Ala. Code 1975, § 8-27-1 et seq.
Rule 507, Ala. R. Evid., provides:
1
"A person has a privilege, which may be claimed
by the person or the person's agent or employee, to
refuse to disclose and to prevent other persons from
disclosing a trade secret owned by the person, if
the allowance of the privilege will not tend to
conceal fraud or otherwise work injustice. If
disclosure is directed, the court shall take such
protective measures as the interest of the holder of
the privilege and of the parties and the interests
of justice require."
Rule 26(c)(7), Ala. R. Civ. P., provides:
2
"Upon motion by a party or by the person from whom
discovery is sought, and for good cause shown, the
court
in
which
the
action
is
pending
or,
alternatively, on matters relating to a deposition
or production or inspection, the court in the
circuit where the deposition or production or
inspection is to be taken may make any order that
justice requires to protect a party or person from
annoyance, embarrassment, oppression, or undue
burden or expense, including ... that a trade secret
or other confidential research, development, or
commercial information not be disclosed or be
disclosed only in a designated way ...."
4
1130840
Bosch supported its motion for a protective order with
the affidavit of Matthew Coon, Bosch's "Director of
Engineering for Airbag ECU development." In his affidavit,
Coon stated, in pertinent part:
"5. The Algorithm (referred to as 'the Algorithm'),
and related subroutines, are a set of mathematical
calculations
and
logical
steps
that
the
microprocessor of the ECU goes through to operate
the ECU. Proprietary software inside the ECU runs
and employs the Algorithm. Both the software and the
Algorithm are highly proprietary and unique to
Bosch.
"6. The Algorithm sought by [Kilgo] is an extremely
confidential trade secret that provides Bosch a
competitive advantage over other companies in the
automotive restraint system industry. The Algorithm
and information related to it are owned solely by
Bosch and, to Bosch's knowledge, they are not known
by anyone outside of Bosch, especially Bosch's
competitors, except as described in paragraph 8
below. Only certain Bosch employees on the project
team have access to the Algorithm. Bosch derives
independent economic value, actual and potential,
because the information is not known to other
persons or companies.
"7. To my knowledge, the Algorithm has not been
produced or disclosed to any federal, state or local
agency, nor has it been produced or disclosed in
connection with civil litigation or any court
proceeding, or to any Bosch customer.
"8. I have knowledge about the security controls in
place at the company to ensure that the Algorithm is
protected from disclosure by unauthorized persons.
Access to these documents is tightly controlled
inside the company. A small number of Bosch
5
1130840
employees have access to the information. Only those
Bosch employees who need to know the information to
perform their jobs have access to the information.
Within Bosch, access to this information is limited
electronically to certain designated employees to
ensure it is not disseminated to any person or
entity outside Bosch.
"9. Bosch is heavily engaged in and committed to
research and development of new designs and
performance for the ECU. Disclosure of the Algorithm
and documents related to the Algorithm would allow
other persons to take advantage of Bosch's expertise
and expenditures in new product development.
"10. Bosch has spent over 25 years developing
algorithms like the one requested by [Kilgo]. Over
those years, Bosch has spent hundreds of millions of
dollars researching, designing, and developing and
protecting algorithms like the one requested by
[Kilgo]. Bosch has employed scientists, engineers,
and programmers to research, design, and develop
this
information.
The
Algorithm
cannot
be
ascertained or derived from publicly available
information.
"11. The automotive restraint system industry is a
very competitive industry. Companies such as Bosch
and its competitors stand to gain or lose literally
hundreds of millions of dollars each year based upon
the design and production of state of the art
products such as Bosch's ECUs, which incorporate the
Algorithm like the one in the subject ECU. If data
and information contained in documents relating to
its algorithms were to be disclosed outside of
Bosch, those who obtain such information would be
able to understand the scientific and engineering
thought and design processes employed by Bosch when
designing, programming, and building its ECUs. By
supplying this confidential and secret information,
Bosch would effectively be providing [Kilgo's]
experts with a blueprint to build their own
6
1130840
competitive version of Bosch's ECU. While [Kilgo]
and her counsel may not actually possess the tools
or the knowledge to construct their own ECU,
[Kilgo's] experts most certainly do and would stand
to gain financially if provided with the Algorithm.
"12. If Bosch were ordered to disclose the above
documents and data it would, in effect, hand over
the results of years and millions of dollars worth
of internal research and development at Bosch's sole
cost. If Bosch's Algorithm were to be disclosed
outside of Bosch there is no quantifiable amount of
money that could compensate Bosch for the loss of
revenues, profits, jobs, and competitive advantage
it would suffer as a result of the dissemination of
this information and these design processes. Not
only would the disclosure of this information cause
Bosch to suffer competitive disadvantages, it would
enable any receiving party to unfairly and unjustly
receive a tremendous financial windfall, gain, and
profit from the possession and utilization of this
proprietary information."
Kilgo filed a response objecting to Bosch's motion for a
protective order, arguing, in part:
"12. The results of the December 6, 2013[,]
testing [of the Kilgos' vehicle] showed that the
passenger airbag did not deploy and the passenger
seat belt 'pretensioner or tensioner' did not deploy
-- fully explaining how [Ron's] body was allowed to
contact the forward interior areas of the subject
vehicle. The electrical continuity tests themselves
established that the wiring and electrical systems
of the vehicle were functioning properly. Upon
visual examination of the passenger airbag cannister
itself, the cannister appeared to be equipped with
an airbag and no obvious defects of the actual
airbag were discovered. ...
7
1130840
"13. The airbag system components manufactured
by Robert Bosch[] LLC are intended to sense and
deploy [sic] crashes which can cause significant
injury to occupants of vehicles like the subject
vehicle. These sensors are located in the forward
sections of the vehicle and are connected directly
to the 'ECU.' The ECU is a computer device
containing
microprocessors
which
have
been
programmed (with the use of mathematical algorithms)
to deploy the supplemental restraint system airbags
and seat belt tensioners in the event a deployment
crash is detected. ...
"14. During the subject crash of March 17, 2011,
there was partial deployment of the driver airbag
system and the driver seat belt pretensioner. There
was no deployment of stages 1 or 2 of the passenger
airbag or passenger seat belt pretensioner. ...
"15. Due to the condition of the vehicle's
supplemental restraint system post-accident, it is
apparent that the ECU and/or sensors failed to
properly deploy the passenger seat belt pretensioner
and stages 1 and 2 of the passenger airbag. This
directly points to the failure of the crash sensing
system and the algorithms which discriminate and
define the crash conditions necessary for deployment
of the safety devices used to protect occupants of
the subject vehicle. ...
"16. The design of the crash sensing algorithm
and the specific calibration used to calibrate the
sensors with the algorithm are reasonable inquiries
in this particular case to determine whether the
algorithms and crash sensing calibrations were
defective, thus making the ECU defective in its role
in deployment of the supplemental restraint systems
in the subject Chrysler PT Cruiser."
3
Bosch claims that the algorithm does not "physically
3
deploy[] the airbag[s] or [seatbelt] pretensioners." Rather,
Bosch claims, the algorithm is responsible for making the
8
1130840
Kilgo supported her response to Bosch's motion for a
protective order with certain documentary evidence, including
the affidavit of Chris Caruso, one of Kilgo's experts. In his
affidavit, Caruso stated that he has "personal knowledge,
experience and education with respect to the design and
function
of
supplemental
restraint
systems
and,
in
particular,
airbags" and that he had "review[ed] ... documents in the
above-styled cause and the subject 2008 Chrysler PT Cruiser
... and its supplemental restraint systems." Caruso further
stated:
"15. Based upon the two inspections I have
conducted or participated in, it is apparent to me
that the root cause [of the failure of the front
passenger-side air bag and seat-belt pretensioner to
activate] appears to be a failure in the crash
sensing system to properly detect and discriminate
crash conditions. Based upon my years of experience
in designing these systems, the most probable
failure was a design of the crash sensing algorithm
(mathematical formula) or the specific calibration
used in the subject vehicle.
"16. The deployment of the knee bolster airbag
and the driver seat belt pretensioner (and the
failure of the passenger airbag, driver steering
column airbag and passenger seat belt pretensioner)
clearly indicate a system that was defectively
designed and failed to determine the high level of
"operational
decision
to
deploy
the
airbags
and
pretensioners."
9
1130840
severity experienced in the subject crash of March
17, 2011."4
The trial court held a brief hearing on Bosch's motion
for a protective order. Thereafter, on March 20, 2014, the
trial court entered an order, which stated, in pertinent part:
"[T]he Court determines that said algorithm and
calibrations do in fact constitute a trade secret
and warrant the protection of the Court.
"The Court further determines that [Kilgo] has
shown to this Court the necessity and relevance of
the requested information.
"The Court has weighed the harm to the trade
secret's owner against the need for disclosure. The
need to prevent disclosure does not outweigh the
benefit of the disclosure to what the Court
determines to be relevant evidence.
"The information requested shall be provided to
[Kilgo].
"Said information shall be protected as a trade
secret to the maximum extent practicable.
Kilgo
moved this Court to strike an affidavit of Caruso's
4
attached to Bosch's response as Exhibit 12 because, Kilgo
says, that affidavit, dated June 30, 2014, was not before the
trial court when it issued its last order in this case on
April 22, 2014. We instructed the clerk's office to grant the
motion, which it has done. However, the affidavit of Caruso's
that Kilgo relies on above is attached to her mandamus
petition as part of Exhibit D and is a different affidavit,
dated January 22, 2014. The January 22, 2014, affidavit was
referenced, without objection, during a hearing held by the
trial court on February 28, 2014.
10
1130840
"The information having been designated a trade
secret shall not be shared with any person, firm or
entity outside this litigation.
"The Court in considering measures to limit the
possible harm resulting from disclosure would allow
[Bosch] to submit within 10 days from the date of
this Order a proposed amendment to the Protective
Order entered February 13, 2013[ ] containing any
5
additional safeguards [Bosch] would request."
As allowed by the trial court's March 20, 2014, order,
Bosch filed a motion to amend the trial court's protective
order. Specifically, Bosch sought to amend the protective
order by:
(1) "limit[ing] disclosure of the algorithm code to those
portions of the code that relate to the point in time that a
severe crash has been detected and the decision has been made
to deploy the vehicle's restraints and all algorithm code
thereafter";
(2) "mak[ing] available the calibration parameters that
set forth the deployment of all of the pretensioners and front
airbags when the threshold for deployment is reached";
There is no protective order dated February 13, 2013,
5
attached to any of the filings in this Court. The petition
reveals that, "on September 19, 2012, [Kilgo] and [Bosch]
submitted to [the trial court] a Joint Motion for Protective
Order[,] which [the trial court] subsequently approved and
signed"; the trial court entered that order on September 20,
2012. It appears that the trial court's reference to the
February 13, 2013, protective order was either a clerical
error or a reference to an order that is not before this
Court.
11
1130840
(3) producing "the portions of the algorithm code and
calibration parameters ... at Bosch's facility in Plymouth,
Michigan";
(4) making "the above portions of the algorithm code and
calibration parameters ... available to [Chris] Caruso on
computer hardware maintained by Bosch";
(5) not allowing Caruso to "copy, image, photograph, or
in any way record any portions of the algorithm and
calibration parameters during his inspection";
(6) requiring Caruso to "explicitly submit in writing to
the personal jurisdiction of the Circuit Court of Etowah
County, Alabama for enforcement of the terms of the Protective
Order prior to any inspection of Bosch's algorithm";
(7) requiring that "Caruso agree in writing that he will
not provide any analysis, discussion, opinions, conclusions,
or
communications
relating
to
Bosch's
algorithm
and
calibration parameters to any individual or entity who is not
'a participant' in this litigation without the express
permission of this Court and without first notifying Bosch and
its counsel in this litigation of his desire to do so and
giving Bosch a reasonable opportunity to respond";
(8) requiring that "Caruso agree in writing that he will
not promote, advertise or discuss the production of the
algorithm and calibration settings, or the fact that the
production was made, to anyone other than a 'participant' in
this litigation"; and
(9) requiring that "all 'work product' that Mr. Caruso
creates following his inspection of Bosch's algorithm and
calibration
parameters
be
confidentially
maintained
by
him
and
provided to Bosch's attorneys of record at the conclusion of
this litigation for subsequent destruction."
Kilgo filed a response to Bosch's motion to amend the
protective order, objecting to Bosch's requests to amend the
12
1130840
protective order numbered (1)-(5) above and also objecting to
what Kilgo interpreted as Bosch's limiting to one the number
of experts Kilgo could employ in analyzing the algorithm;
Kilgo wanted both Caruso and Geoff Mahan, who is described as
an expert in "airbag [and] supplemental restraint,"
to
analyze
the algorithm. The trial court entered an order denying
Bosch's motion to amend the protective order and, in that
order, required Kilgo to "submit a proposed Order including
safeguards it will employ to review the requested discovery";
on April 21, 2014, Kilgo submitted to the trial court a
proposed protective order. On the following day, the trial
court entered an amended protective order, which required
Bosch to produce the entire algorithm for inspection by
Kilgo's two experts, subject to 12 confidentiality and
disclosure safeguards set forth in the order. Bosch
petitioned this Court for a writ of mandamus.
II. Standard of Review
"'In Ex parte Norfolk Southern Ry.,
897 So. 2d 290 (Ala. 2004), this Court
delineated the limited circumstances under
which review of a discovery order is
available by a petition for a writ of
mandamus and the standard for that review
in light of Ex parte Ocwen Federal Bank,
FSB, 872 So. 2d 810 (Ala. 2003):
13
1130840
"'"'Mandamus
is
an
extraordinary remedy and will be
granted only when there is "(1) a
clear
legal
right
in
the
petitioner to the order sought,
(2) an imperative duty upon the
respondent
to
perform,
accompanied by a refusal to do
so, (3) the lack of another
adequate remedy, and (4) properly
invoked
jurisdiction
of
the
court." Ex parte Alfab, Inc., 586
So. 2d 889, 891 (Ala. 1991). In
Ex parte Ocwen Federal Bank, FSB,
872 So. 2d 810 (Ala. 2003), this
Court announced that it would no
longer review discovery orders
pursuant to extraordinary writs.
However, we did identify four
circumstances
in
which
a
discovery order may be reviewed
by a petition for a writ of
mandamus.
Such
circumstances
arise (a) when a privilege is
disregarded, see Ex parte Miltope
Corp., 823 So. 2d 640, 644–45
(Ala. 2001); (b) when a discovery
order compels the production of
patently
irrelevant
or
duplicative
documents
the
production
of
which
clearly
constitutes harassment or imposes
a burden on the producing party
far out of proportion to any
benefit
received
by
the
requesting party, see, e.g., Ex
parte Compass Bank, 686 So. 2d
1135, 1138 (Ala. 1996); (c) when
the trial court either imposes
sanctions effectively precluding
a decision on the merits or
denies
discovery
going to a
14
1130840
party's entire action or defense
so that, in either event, the
outcome of the case has been all
but determined and the petitioner
would be merely going through the
motions of a trial to obtain an
appeal; or (d) when the trial
court impermissibly prevents the
petitioner from making a record
on the discovery issue so that an
appellate court cannot review the
effect
of
the
trial court's
alleged error. The burden rests
on the petitioner to demonstrate
that its petition presents such
an exceptional case -- that is,
one in which an appeal is not an
adequate remedy. See Ex parte
Consolidated Publ'g Co., 601 So.
2d 423, 426 (Ala. 1992).'"
"'897 So. 2d at 291–92 (quoting Ex parte
Dillard Dep't Stores, Inc., 879 So. 2d
1134, 1136–37 (Ala. 2003)).'"
Ex parte Nationwide Mut. Ins. Co., 990 So. 3d 355, 360 (Ala.
2008) (quoting Ex parte Orkin, Inc., 960 So. 2d 635, 638 (Ala.
2006)). Kilgo does not dispute that the order challenged here
pertains to a trade-secret privilege and thus is reviewable
under category (a) ("a discovery order may be reviewed by a
petition for a writ of mandamus ... when a privilege is
disregarded").
III. Analysis
15
1130840
Because there is no dispute that the algorithm is a trade
secret, the petition presents only two issues for our review.
First, Bosch argues that the trial court exceeded its
discretion in not issuing a protective order that would
prevent Kilgo from having any access to the algorithm.
Second, Bosch presents the alternative argument that the
trial
court exceeded its discretion in refusing to adopt a
protective order drafted by Bosch and instead issuing a
protective order that, Bosch says, provides inadequate
safeguards to protect Bosch's trade secret.
Bosch presents a lengthy argument as to why the algorithm
should not be disclosed to Kilgo, which may be summarized as
follows:
(1) Bosch argues that Kilgo has not shown that the
algorithm is necessary to prove her claims. Instead, Bosch
claims, Kilgo has alleged only a "mere possibility that [the
algorithm] will prove her case." Bosch notes that, in Kilgo's
objection to Bosch's motion to amend the protective order,
Kilgo stated that "'the forward sensors and central sensor
located in this design may well be implicated with respect to
the algorithm and calibration settings.'" This statement,
Bosch says, runs afoul of Ex parte Michelin North America,
Inc., [Ms. 1121330, January 24, 2014] ___ So. 3d ____, ____
(Ala. 2014), insofar as that case states that "'"[n]ecessity"
means that without discovery of the particular trade secret,
the discovering party would be unable to present its case "to
the point that an unjust result is a real, rather than a
merely possible, threat."'" (Quoting Bridgestone Americas
Holding, Inc. v. Mayberry, 878 N.E.2d 189, 196 (Ind. 2007).)
16
1130840
(2) Bosch argues that the algorithm is an "all-fire"
system that sends a signal to deploy all air bags and seat-
belt pretensioners rather than sending a signal to each air
bag and seat-belt pretensioner; thus, Bosch says, the fact
that some of the air bags and seat-belt pretensioners deployed
shows that the algorithm functioned as designed and that it
was not defective (implicit in this argument is that none of
the air bags or pretensioners would have deployed if the
algorithm were defective). Bosch contends that the front
passenger-side air bag and seat-belt pretensioner did not
deploy because, it says, during the collisions, "four wires to
the passenger side airbag were cut as was the ground wire to
the vehicle's battery," thus "resulting in a disruption of
power and/or signal reference levels."
(3) Bosch argues that the need for disclosure of the
algorithm does not outweigh the harm that would result from
that disclosure. Specifically, Bosch argues that "[Kilgo's]
airbag experts in this case -- both former employees of airbag
system suppliers -- would receive the benefit of years of ECU
scientific and engineering development by Bosch" and that
"[t]here is no quantifiable amount of money that could
compensate Bosch for the loss of revenues, profits, and
competitive advantage it would suffer if the requested
information is
disseminated
and
exploited
by
Bosch's
competitors."
Bosch argues alternatively that the trial court exceeded
its discretion in refusing to adopt the protective order
drafted by Bosch. Specifically. Bosch argues that
"[its] alternative proposal would give [Kilgo's]
experts access to the portions of the algorithm and
calibrations they claim they need without revealing
the entirety of the trade secrets. It also allows
[Kilgo's] expert access in a controlled environment
where Bosch can ensure that the secrets are
protected, while allowing [Kilgo] the ability to
review additional data showing the 'all fire'
17
1130840
system. The trial court exceeded its discretion in
not affording Bosch these protections."
Bosch supports the argument portion of the petition with
numerous citations to the affidavits of Kilgo's experts,
Caruso and Mahan, and its own expert, Tom Livernois.
In her response, Kilgo presents argument and evidence
disputing the contentions of error set forth in Bosch's
petition. In response to Bosch's initial argument -- that
Kilgo should have no access to the algorithm -- Kilgo argues:
(1) That Kilgo has shown that the algorithm is necessary
to prove her claims. Specifically, Kilgo notes that one of
her experts, Caruso, stated in his affidavit that "'the
specific algorithm physical principles and the calibration
settings are key factors in determining why the system
incorrectly assessed the total severity of the subject crash
and failed to deploy the passenger airbag, the driver steering
column airbag and the passenger seat pretensioner.'" In
addition, Kilgo argues that the need for disclosure does
outweigh the harm that would result from such disclosure
because, she says, "there is no evidence that [Kilgo's]
attorneys or expert witnesses would violate the strict
protective order," and that, for "independent consulting
engineers" such as Caruso and Mahan, "it is commonplace to
review trade secret information under the limitations of a
protective order." Kilgo further argues that "what is at
issue is the algorithm and calibrations for an ECU in a 2008
model year vehicle. By the time the matter is before [this
Court], the 2015 model year automobiles will be for sale and
the information will be seven years old." Kilgo notes (and it
is undisputed) that there have been "updates" to the algorithm
that existed in the 2008 PT Cruiser.
(2) That "Bosch's arguments are merely an assertion that
[Kilgo] and this Court must simply trust [Bosch] when it says
18
1130840
that the ECU cannot be defective," without Kilgo's having the
opportunity to verify that the ECU is, in fact, an "all-fire"
system that cannot signal less than all the air bags and seat-
belt pretensioners to deploy. As to Bosch's argument that the
cutting of four wires to the front passenger-side air bag and
the ground wire to the vehicle's battery during the collisions
caused the front passenger-side air bag and seat-belt
pretensioner not to deploy, Kilgo replies:
"The reason the 'electrical system' argument
isn't meaningful can be shown by examining its
parts. First, the cutting of wires running to the
passenger airbag doesn't explain why the passenger
seatbelt pretensioner and the driver's steering
seatbelt pretensioner and the driver's steering
wheel airbag failed to activate -- as they operate
from their own wiring connections. ... Second, those
systems are designed such that the airbag needed to
fire within milliseconds after the crash was sensed
and thus before the wires could be cut in the
impact, or else the ECU was defective by firing too
late, suggesting another defect in the algorithm.
...
"The issue of the severed ground wire from the
battery also does not explain the failure of the
restraint system. These systems are designed to
compensate for such an occurrence by the inclusion
of a reserve energy capacitor within the ECU that
contains enough power to activate all of the
restraint components. ..."
(Bold typeface in original.)
In response to Bosch's second argument -- that Kilgo may
be entitled to some of, but not all, the algorithm -- Kilgo
argues that the proposed protective order drafted by Bosch
19
1130840
"excludes the most relevant and most needed information."
Specifically, Kilgo argues that
"[t]he information that Bosch offers to provide
fails to include the algorithm and calibrations
regarding
the
actual
'crash
discrimination
thresholds.' ... Chris Caruso explained by affidavit
that
the
'crash
sensing
algorithm
and/or
calibrations' were needed. ... He testified that the
most probable failure was a design of the crash
sensing algorithm[] and that 'the specific algorithm
physical principles and calibration settings for the
crash determination thresholds are key factors in
determining the [sic] why the system incorrectly
assessed the total severity of the subject crash.'
... The data Bosch would agree to provide, beginning
at the point in time when the 'all-fire' command was
sent, omits this key information."
Having considered the compelling and well supported
arguments presented by both Bosch and Kilgo, we agree with
Bosch insofar as it argues that the trial court exceeded its
discretion by entering a protective order that provides
insufficient protection for the algorithm, which, as
noted,
is
undisputedly a trade secret. Therefore, the petition is due
to be granted to that extent. See Ex parte W.L. Halsey
Grocery Co., 897 So. 2d 1028, 1035 (Ala. 2004) ("Because [the
petitioner] has shown that it has a clear legal right to the
relief sought, we grant the petition and order the trial court
to protect [the petitioner's] trade-secret information to the
20
1130840
maximum extent practicable, striking a fair and reasonable
balance between [the petitioner's] legitimate interest in
confidentiality and the defendants' equally legitimate
interest in defending the claims against them with the benefit
of discovery.").
IV. Conclusion
We grant Bosch's petition and direct the trial court to
vacate its protective order and to enter a more comprehensive
and restrictive protective order with regard to
the
algorithm.
See Ex parte W.L. Halsey Grocery Co., supra. This opinion,
however, is not to be read as directing the trial court to
enter the proposed protective order previously offered by
Bosch as the governing protective order in this case.
PETITION GRANTED; WRIT ISSUED.
Stuart, Bolin, Parker, and Wise, JJ., concur.
Murdock, Shaw, and Bryan, JJ., concur in the result.
Moore, C.J., dissents.
21
1130840
SHAW, Justice (concurring in the result).
I agree with the implicit holding in the main opinion
rejecting the arguments of Robert Bosch LLC that Dorothy
Kilgo's discovery of the algorithm Bosch claims as a trade
secret is not "necessary" in Kilgo's case and that the need
for disclosure of the algorithm does not outweigh the
potential harm to Bosch from its disclosure. I further agree
that the protective order entered by the trial court was
insufficient to protect Bosch's trade secrets. See Rule 507,
Ala. R. Evid. ("If disclosure is directed, the court shall
take such protective measures as the interests of the holder
of the privilege and of the parties and the interests of
justice require.").
I believe that the amendments to the protective order
requested by Bosch were appropriate in this case, except to
the following extent:
(1) The trial court should consider allowing more
than a single expert, Chris Caruso, to review the
algorithm information. However, it should be made
clear that the broad category of "qualified persons"
set forth in the April 22, 2014, protective order,
is not entitled to review that information.
(2) The algorithm information that Bosch offered to
provide should include information identified in
22
1130840
Caruso's
affidavit
as
"crash
discrimination
thresholds."
Although I have some concerns that Bosch's proposed
limitations on the ability of Kilgo's experts to copy or
otherwise record the algorithm may hamper their ability to
effectively examine the materials, the trial court could, if
possible, craft a solution that would allow the experts to
retain the minimum amount of information required to
adequately examine this information.
Murdock and Bryan, JJ., concur.
23
1130840
MOORE, Chief Justice (dissenting).
"The utilization of a writ of mandamus to compel or
prohibit discovery is restricted because of the discretionary
nature of a discovery order. The right sought to be enforced
by mandamus must be clear and certain with no reasonable basis
for controversy about the right to relief." Ex parte Dorsey
Trailers, Inc., 397 So. 2d 98, 102 (Ala. 1981). In this case,
the trial court crafted a protective order that allowed
Dorothy Kilgo to obtain the information she needed, subject to
12 confidentiality safeguards that were designed to protect
Robert Bosch LLC ("Bosch"). Consequently, I cannot say that
Bosch had a "clear and certain right" to even more protection
or that there is "no reasonable basis for controversy about
the right to relief." Dorsey Trailers, 397 So. 2d at 102. I
continue to maintain the position that mandamus is improper
for discovery matters except in the most extreme of
circumstances. See, e.g., Ex parte Mobile Serv. Gas Corp., 123
So. 3d 499, 516 (Moore, C.J., dissenting); Ex parte Ocwen
Fed. Bank, FSB, 872 So. 2d 810, 817 (Ala. 2003) (Moore, C.J.,
concurring in the result). Therefore, I respectfully dissent.
24 | December 12, 2014 |
59bbfd7c-1e01-4713-be39-395fb1400667 | Ex parte C.B. Grant, as admin. of the Estate of Phillip Frazier | N/A | 1131150 | Alabama | Alabama Supreme Court | Rel: 12/12/14
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334)
229-0649), of any typographical or other errors, in order that corrections may be made
before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
_________________________
1131150
_________________________
Ex parte C.B. Grant, as administrator of the Estate of
Phillip Frazier, deceased
PETITION FOR WRIT OF MANDAMUS
(In re: C.B. Grant, as administrator of the Estate of
Phillip Frazier, deceased
v.
Wiley Sanders Trucking Lines, Inc., et al.)
(Montgomery Circuit Court, CV-13-901245)
BRYAN, Justice.
1131150
C.B. Grant, the administrator of the estate of Phillip
Frazier, deceased, filed this wrongful-death action in the
Montgomery Circuit Court. Mitarazza Davis, Frazier's widow,
1
moved to intervene in the lawsuit, alleging that Grant had
secured his appointment as administrator of the
estate
through
fraud and requesting that the wrongful-death action be stayed
pending the resolution of the dispute over the administration
of the estate by the Lowndes Probate Court. The Montgomery
Circuit Court entered an order declaring Grant's appointment
as administrator of the estate void and declaring Davis to be
the rightful party to serve as administrator of the estate.
The Montgomery Circuit Court stayed the wrongful-death action
pending the Lowndes Probate Court's appointment of Davis as
the administrator of Frazier's estate. Grant petitions this
Court for a writ of mandamus directing the Montgomery Circuit
Court to vacate its order and to lift the stay. We grant the
petition in part and deny it in part.
Facts and Procedural History
At various places in the materials before this Court,
1
Frazier's widow is referred to as Mitarazza Davis and
Mitarazza Davis Frazier. For ease of reference, we refer to
Frazier's widow as "Davis."
2
1131150
Frazier, a resident of Lowndes County, died in a traffic
accident on June 9, 2013. Frazier's father, C.B. Grant,
petitioned the Lowndes Probate Court for letters of
administration. With his petition, Grant filed a "Waiver of
Notice
and
Consent
of
Appointment
of
Administrator"
purportedly executed by Davis. The Lowndes Probate Court
granted letters of administration to Grant on June 14, 2013.
On December 24, 2013, Grant, as administrator of
Frazier's estate, filed a wrongful-death action in the
Montgomery Circuit Court against Wiley Sanders Truck Lines,
Inc.,
Ronald
Herbst,
and
several
fictitiously
named
defendants, alleging that their negligence and wantonness
caused the accident resulting in Frazier's death. On March
14, 2014, Davis filed a motion to intervene in the wrongful-
death action. In her motion, Davis asserted that Grant had
secured his appointment as administrator of Frazier's estate
through fraud and informed the court that she had petitioned
the Lowndes Probate Court to void Grant's appointment as
administrator of Frazier's estate and to appoint her as
administrator. Davis also moved the Montgomery Circuit Court
to stay the wrongful-death action pending resolution of the
3
1131150
petition filed in the Lowndes Probate Court. Grant opposed
2
the motion to intervene and the motion to stay the wrongful-
death action.
On April 9, 2014, the Montgomery Circuit Court conducted
an evidentiary hearing on Davis's motions to intervene and to
stay. The court took testimony from witnesses, including
Davis, Grant, several of Frazier's family members, and a
handwriting expert. On April 11, 2014, the Montgomery Circuit
Court entered the following order:
"Based
upon the
testimony
and
evidence
which
was
presented, this Court hereby determines that C.B.
Grant was wrongfully appointed as the Administrator
of the Estate of Phillip Frazier in Lowndes County
Probate Case No. 2013-34. It is determined by this
Court that C.B. Grant's appointment ... is hereby
void and that the rightful party in interest to be
appointed as the Administrator of the Estate of
Phillip Frazier is Mitarazza Davis Frazier, the wife
of Phillip Frazier. ...
"Therefore, it is hereby ordered that this
proceeding is hereby stayed pending the appointment
of Mitarazza Davis Frazier as the Administrator of
the Estate of Phillip Frazier."
On July 21, 2014, the Lowndes Circuit Court granted
2
Davis's petition to remove the administration of Frazier's
estate to the Lowndes Circuit Court. The administration of
the estate remains pending in the Lowndes Circuit Court.
4
1131150
Grant's motion to reconsider was denied, and he
subsequently filed this petition for the writ of mandamus,
seeking relief from the Montgomery Circuit Court's April 11,
2014, order.
Standard of Review
"'"'A writ of mandamus is an
extraordinary
remedy
that
requires a showing of: (1) a
clear
legal
right
in
the
petitioner to the order sought;
(2) an imperative duty on the
respondent
to
perform,
accompanied by a refusal to do
so; (3) the lack of another
adequate remedy; and (4) the
proper invoked jurisdiction of
the court.'"'"
Ex parte Siderius, 144 So. 3d 319, 323 (Ala. 2013)(quoting Ex
parte Punturo, 928 So. 2d 1030, 1033 (Ala. 2002), quoting in
turn Ex parte Bruner, 749 So. 2d 437, 439 (Ala. 1999), quoting
in turn Ex parte McNaughton, 728 So. 2d 592, 594 (Ala. 1998)).
Analysis
In his petition, Grant argues that the Montgomery Circuit
Court
has
no
subject-matter
jurisdiction
over
the
administration of Frazier's estate pending in Lowndes County.
We agree.
5
1131150
In the present case, the administration of Frazier's
estate was initiated in the Lowndes Probate Court. It is
undisputed that that court was the proper court to initiate
administration of the estate. At the time the Lowndes
3
Probate Court issued letters of administration to Grant, it
assumed jurisdiction over the administration of Frazier's
estate,
including
jurisdiction
over
the
"repeal
or
revocation"
of such letters and the resolution of all controversies
related to the administration of Frazier's estate. § 12-13-1,
Ala. Code 1975; see also DuBose v. Weaver, 68 So. 3d 814,
4
The administration of an estate must be initiated in the
3
probate court. Ex parte Smith, 619 So. 2d 1374, 1376 (Ala.
1993). Because Frazier was a resident of Lowndes County at
the time of his death, venue was proper in the Lowndes Probate
Court. § 43-8-162, Ala. Code 1975.
Section 12-13-1, Ala. Code 1975, provides, in pertinent
4
part:
"(b) The probate courts shall have original and
general jurisdiction over the following matters:
"....
"(2)
The
granting
of
letters
testamentary and of administration and the
repeal or revocation of the same.
"(3) All controversies in relation to
the
right
of
executorship
or
of
administration.
6
1131150
821-22 (Ala. 2011) (holding that an estate administration
begins, and the probate court obtains jurisdiction over the
administration,
when
the
court
issues
letters
of
administration). Davis has since removed the administration
of the estate to the Lowndes Circuit Court under the
procedures provided for in § 12-11-41, Ala. Code 1975, and has
filed a petition in the Lowndes Circuit Court seeking the
revocation of the letters of administration issued to Grant.
Therefore, up to the time of removal, the Lowndes Probate
Court was the sole court with jurisdiction over matters
relating to the appointment of an administrator and to the
administration of Frazier's estate, including whether the
letters of administration issued to Grant are due to be
revoked. Since the removal of the administration to the
Lowndes Circuit Court, the exclusive jurisdiction over the
administration of th estate, including issues involving the
appointment of an administrator, rests with the Lowndes
Circuit Court. The Montgomery Circuit Court never obtained
"....
"(c) All orders, judgments and decrees of
probate courts shall be accorded the same validity
and presumptions which are accorded to judgments and
orders of other courts of general jurisdiction."
7
1131150
subject-matter jurisdiction over the administration of
Frazier's estate. DuBose, 68 So. 3d at 821 ("The circuit
court can obtain jurisdiction over a pending
administration of
an estate only by removing the administration from the probate
court to the circuit court pursuant to § 12-11-41 ...."). Nor
does it have subject-matter jurisdiction to entertain
collateral attacks on the administration of the estate. See
Martin v. Clark, 554 So. 2d 1030, 1032 (Ala. 1989).
Accordingly, to the extent that the Montgomery
Circuit
Court's
April 11, 2014, order declared the appointment of Grant as
administrator of Frazier's estate void and declared Davis to
be the "rightful party in interest to be appointed as the
Administrator of the Estate of Phillip Frazier," that order is
a nullity.
Next, Grant contends that the Montgomery Circuit Court
exceeded its discretion when it ordered the wrongful-death
action stayed, because, he argues, Davis did not have
"standing" to request a stay of the wrongful-death action. We
note that a trial court has broad discretion to stay
proceedings in a civil action pending the resolution of
proceedings elsewhere. See Landis v. North American Co., 299
8
1131150
U.S. 248, 254 (1936) ("[T]he power to stay proceedings is
incidental to the power inherent in every court to control the
disposition of the causes on its docket with economy of time
and effort for itself, for counsel, and for litigants."). In
5
his petition, Grant cites no authority suggesting that, under
the circumstances of this case, Davis could not request a stay
of the wrongful-death action or that the Montgomery Circuit
Court exceeded its discretion by ordering a stay. To the
contrary, the proceedings in the Lowndes Circuit Court will
decide
who
controls
the
litigation
in
this
case.
6
Accordingly, Grant has failed to establish that he has a clear
legal right to relief from the stay entered by the Montgomery
Circuit Court.
Conclusion
For the above reasons, we grant Grant's petition insofar
as it challenges the Montgomery Circuit Court's purported
Nevertheless, a stay may not be "immoderate." Ex parte
5
American Family Care, Inc., 81 So. 3d 682, 683 (Ala. 2012).
The materials before us indicate that Grant and Davis
6
disagree as to how the wrongful-death action should be
handled, including whether Frazier's brother, who was also
Grant's son and the driver of the vehicle in which Frazier was
riding at the time of the fatal accident, should be added as
a defendant.
9
1131150
exercise of jurisdiction over matters related to the
appointment of an administrator and the administration of
Frazier's estate. To the extent the circuit court's April 11,
2014, order declared the letters of administration issued to
Grant to be void and declared Davis the proper administrator
of Frazier's estate, we order the circuit court to vacate that
part of its order. As to Grant's request for relief from the
stay, however, we deny the petition.
PETITION GRANTED IN PART AND DENIED IN PART; WRIT ISSUED.
Moore, C.J., and Bolin, Murdock, and Main, JJ., concur.
10 | December 12, 2014 |
d3fd2e16-dd8b-4105-b912-06ae5408fd0c | Ex Parte Counts | 683 So. 2d 968 | 1940186 | Alabama | Alabama Supreme Court | 683 So. 2d 968 (1996)
Ex parte Braxton C. COUNTS III.
(Re GLENN ARMENTOR LAW CORPORATION and Marshall J. Stockstill v. Braxton C. COUNTS III).
1940186.
Supreme Court of Alabama.
May 31, 1996.
Rehearing Denied August 30, 1996.
Braxton C. Counts III, Mobile, for Petitioner.
Marshall J. Stockstill, Lafayette, Louisiana, for Respondents.
KENNEDY, Justice.
We granted certiorari review to determine whether the Court of Civil Appeals correctly reversed the trial court's award of attorney fees.
On or about March 14 or 15, 1993, Marshall J. Stockstill, a Louisiana attorney, contacted Alabama attorney Braxton Counts III about associating Counts as local counsel to help in Stockstill's representation of Roselynn Presley and Jane Vincent. Presley and Vincent had been involved in an automobile accident in Baldwin County and had retained Stockstill to represent them in their action against the other driver and that driver's insurance company. Stockstill expressed to Counts concern that the statutory limitations period for Presly and Vincent's claims would expire on March 17, 1993.
Stockstill explained that he would be in charge of the case but would want Counts to file the complaint, assist in discovery, and serve as local counsel. At that time, Stockstill also informed Counts that settlement negotiations were underway with one of the defendants, State Farm Insurance Company. He said State Farm had made an offer to settle the Presley claim, but that the offer was not enough. Stockstill told Counts that he would keep him informed of the settlement negotiations with State Farm.
The contingency fee agreement between Stockstill and the clients was for Stockstill to receive 1/3 of any amount they recovered. The two attorneys then orally agreed that *969 Stockstill would receive 60% and Counts 40% of any contingent fee received. On the following day, Counts received a letter from Stockstill confirming that fee arrangement. At that point, Counts filed the complaint on behalf of Presley and Vincent, just within the period allowed by the statute of limitations.
On or about March 29, 1993, Counts received from Stockstill, a letter dated March 23, 1993, informing him that the Presley claim had been settled, but the letter did not mention the date of the settlement or the amount. Counts contacted Stockstill and asked how much the Presley claim had been settled for and when he could expect his 40%. Stockstill told him it was settled for $55,000 but that it had been settled before Counts filed the complaint and that Counts had not helped in discovery or trial and therefore was entitled only to compensation based on a theory of quantum meruit. Counts disagreed; Stockstill asked him to put his position in writing. Counts did so, by a letter mailed to Stockstill on March 30, 1993. Later, on the same day, Counts received from Stockstill a fax that included a letter from Stockstill to Presley, dated March 15, 1993, and confirming settlement of her claim for $55,000. But, in an affidavit dated December 28, 1993, Stockstill admitted that he could not unequivocally say that the Presley settlement occurred on March 15, 1993, and he went on to say the settlement may have been around March 22 or 23, 1993.
Following Stockstill's denial of the 40% fee, Counts filed a "notice of attorney's lien," pursuant to § 34-3-61, Ala.Code 1975, in Baldwin County. Counts then filed a complaint in the trial court, and following a hearing and presentation of the evidence by both parties, the trial court entered a judgment in favor of Counts for $7,333.33. Stockstill appealed the judgment to the Court of Civil Appeals. The Court of Civil Appeals reversed the judgment and remanded the cause for the trial court to hold a hearing to determine the amount of attorney fees due to Counts based on the theory of quantum meruit. Glenn Armentor Law Corp. v. Counts, 683 So. 2d 964 (Ala.Civ.App.1994). We granted Counts's petition for certiorari review.
Regarding the issue of whether the attorney's lien statute, § 34-3-61, Ala.Code 1975, applies in this case, this Court adopts the holding of the Court of Civil Appeals on this issue. We conclude that it does not apply.
The dispositive issue we address is answered by basic contract law; the question is whether Counts was entitled to 40% of the contingent fee received by Stockstill from the settlement of Presley's claim, as outlined in the agreement between the attorneys. The record indicates a valid fee contract between Stockstill and Counts, by which Stockstill agreed to pay Counts 40% of the 1/3 contingency fee received from Presley and Vincent.
The terms of the attorneys' agreement are not in dispute. The dispute is over the parties' interpretation of that agreement. The letter from Stockstill to Counts setting out their agreement reads, in pertinent part, as follows:
Stockstill contends that Counts's right to receive a fee was conditioned upon his performing discovery and trial work. Because the Presley claim was settled before any discovery or trial proceedings occurred, Stockstill asserts that Counts is not entitled to any of the fee collected from the Presley settlement.
Counts argues that the agreement between him and Stockstill clearly entitles him to 40% of any contingent fee collected by Stockstill in connection with the Presley or Vincent claims. Counts also states that, contrary to established law, the Court of Civil Appeals gave the contract an interpretation that, in effect, "made a new contract" for these parties. Counts asserts that "[i]t is not a function *970 of the courts to make new contracts for the parties, or raise doubts where none exist," quoting Johnson v. Cervera, 508 So. 2d 257, 259 (Ala.1987), and Commercial Union Ins. Co. v. Rose's Stores, Inc., 411 So. 2d 122, 124 (Ala.1982).
Whether the terms of a contract are ambiguous is a question of law to be determined by the trial court. Johnson, supra. If the terms are certain and clear, the court's duty is to determine the meaning of those terms. Johnson, supra. It is apparent that the trial court determined that the terms of the agreement meant Counts would receive 40% of any contingent fees collected by Stockstill in connection with the claims of Presley or Vincent. We agree.
From the language of the contract, one cannot reasonably conclude that Stockstill sought to limit or qualify Counts's recovery of 40% of any contingent fees. No limiting or qualifying language is found within the four corners of the contract between Stockstill and Counts. If the parties intended to limit Counts's 40% fee, they could have specifically said so in the agreement. See Baker v. Blue Circle, Inc., 585 So. 2d 868, 870 (Ala. 1991). The contract letter stated that settlement negotiations were already underway and that Stockstill would keep Counts updated on the progress of those negotiations. If there were any question as to the true meaning of the wording of this agreement, then well-established law would require that the ambiguity be construed against the drafting party, Stockstill. Johnson, 508 So. 2d at 257.
One cannot reasonably interpret the clear and plain wording of this contract to mean anything except that Counts is entitled to 40% of Stockstill's 1/3 contingent fee on Presley's settlement. Stockstill drafted the fee agreement and now must accept its terms and its results. A different conclusion would run contrary to fundamental contract law.
REVERSED AND REMANDED.
HOOPER, C.J., and MADDOX, SHORES, HOUSTON, INGRAM, COOK, and BUTTS, JJ., concur. | May 31, 1996 |
2b686501-6cfa-4c4c-a7be-ccad695f958a | Ex Parte Prendergast | 678 So. 2d 778 | 1941301 | Alabama | Alabama Supreme Court | 678 So. 2d 778 (1996)
Ex parte Ian D. PRENDERGAST and Patricia A. Prendergast.
(In re Ian D. PRENDERGAST and Patricia A. Prendergast v. KNOBLOCH, INC.).
1941301.
Supreme Court of Alabama.
May 31, 1996.
*779 Jonathan E. Lyerly, Birmingham, and Robert O. Driggers, Birmingham, for Petitioners.
Douglas Corretti and Mary Douglas Hawkins of Corretti & Newsom, Birmingham, for Respondent.
INGRAM, Justice.
Ian D. Prendergast and Patricia A. Prendergast petition for a writ of mandamus directing the Jefferson Circuit Court to vacate orders requiring the Prendergasts to arbitrate their claim against Knobloch, Inc. The Prendergasts contend that Knobloch waived its right to arbitration.
A petition for a writ of mandamus is a proper method by which to challenge a trial court's order compelling arbitration. Gates v. Palm Harbor Homes, 675 So. 2d 371 (Ala.1996). The writ of mandamus is an extraordinary writ available "where a party seeks emergency and immediate appellate review of an order that is otherwise interlocutory and not appealable." Rule 21(e)(4), Ala.R.App.P. In order for this Court to issue a writ of mandamus, the petitioner must show that there is: "(1) a clear legal right in the petitioner to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) properly invoked jurisdiction of the court." Ex parte Alfa Mut. Ins. Co., [Ms. 1941403, January 5, 1996] ___ So.2d ___ (Ala.1996). We must review the trial court's decision for an abuse of discretion. See Ex parte Alexander, 558 So. 2d 364 (Ala.1990).
The Prendergasts contracted with Knobloch for the construction of a house and site improvements on their lot. The contract contained the following arbitration provision:
(Emphasis added.)
The Prendergasts and Knobloch later executed a construction loan contract, and the Prendergasts executed a note and mortgage covering their lot and securing advances of principal to Knobloch for the construction and improvements. Construction was completed on April 30, 1994. On May 2, 1994, the Prendergasts took possession and found what they believed to be defects resulting in breach of express and implied warranties. *780 They then claimed a set-off against money owed to Knobloch because of the defects.
Knobloch then filed a lien on the property in June 1994. In July 1994, the Prendergasts filed a declaratory judgment action concerning the dispute, and Knobloch began foreclosure proceedings on the mortgage. The Prendergasts amended their complaint to ask for a preliminary injunction to stop the foreclosure. At an August 1994 hearing, Knobloch successfully argued for the denial of that injunction.
On August 24, 1994, Knobloch answered and filed a counterclaim against the Prendergasts. On that same day, the Prendergasts closed on the construction loan and satisfied Knobloch's claim of $207,418.30, in order to prevent foreclosure. This satisfied Knobloch's counterclaim. The Prendergasts' claim against Knobloch remained pending.
On September 22, 1994, after it had received the money it had claimed from the Prendergasts, Knobloch served the Prendergasts with a written demand for arbitration and filed a motion in the Prendergasts' pending action against it, to enforce the arbitration provision. Knobloch mailed a copy of its written demand to the American Arbitration Association, but paid no filing fee to begin arbitration, as is required by that Association; the record indicates a September 26, 1994, form letter from the Association stating, "[W]e cannot process the case until the full filing fee is paid." The Prendergasts objected to arbitration, contending in part that Knobloch had waived its right to compel arbitration.
On December 14, 1994, the circuit court granted Knobloch's motion to compel arbitration, stating that Knobloch had "forty-two (42) days to begin proceedings towards arbitration and, failing to do so within said time frame, the arbitration provision will be deemed waived." The 42 day was January 25, 1995. On February 7, 1995, the Prendergasts again argued in a hearing that Knobloch had waived its right to compel arbitration. On February 13, 1995, the circuit court extended its previous order to require the completion of arbitration by May 12, 1995. The Prendergasts were not served with this order until March 10, 1995. Knobloch did not pay its filing fee to the American Arbitration Association until March 20, 1995. The Prendergasts filed a motion to stay the February order, and the trial court granted that motion pending a ruling by this Court on this petition for the writ of mandamus.
This Court determines on a case-by-case basis whether a waiver of a right to compel arbitration has occurred. Ex parte Merrill Lynch, Pierce, Fenner & Smith, Inc., 494 So. 2d 1 (Ala.1986); Companion Life Ins. Co. v. Whitesell Mfg., Inc., 670 So. 2d 897 (Ala.1995). In Companion Life Ins. Co., this Court stated the law on waiver of the right to compel arbitration:
670 So. 2d at 899. See also Huntsville Golf Dev., Inc. v. Aetna Cas. & Sur. Co., 632 So. 2d 459, 461 (Ala.1994) (for one party to show that the other party has waived or abandoned an arbitration agreement, the party must show that the other party has "substantially involved the litigation process" and that the one claiming the waiver or abandonment has "suffered prejudice as a result" of that invocation of the litigation process.)
We must determine whether the trial court abused its discretion in compelling the Prendergasts to arbitrate their claim against Knobloch. As noted above, the arbitration provision of the contract provided that notice of arbitration "shall be made within a reasonable time after the dispute has arisen." Because of that statement in the provision, a waiver of arbitration could be found under these facts, either (1) if it is determined that Knobloch failed to provide notice to the Prendergasts within a reasonable time after their dispute arose, or (2) it is determined *781 that Knobloch's actions substantially invoked the litigation process to the Prendergasts' prejudice.
The Prendergasts maintain that the dispute arose on December 25, 1993, which was within 120 days from the beginning of construction; they contend that their home should have been completed by this time pursuant to their original contract. Knobloch contends that the dispute arose when the Prendergasts took possession and refused to pay the loan amount on May 2, 1994. From the evidence before us, it appears clear that the very latest the dispute could have arisen was in early May 1994, as contended by Knobloch. Assuming, but not deciding, that the dispute arose in May 1994, we will consider that date as the beginning of the dispute for purposes of considering this petition.
The evidence indicates that Knobloch waited until September 22, 1994almost five months after the dispute arose and after it had received the money that it had demanded in its counterclaim against the Prendergaststo serve notice to the Prendergasts that it intended to enforce the arbitration provision. The Prendergasts' original claim was the sole remaining claim left pending in the circuit court. The trial court's December 1994 order stated that the arbitration provision would be considered to have been waived if the arbitration proceedings were not initiated within 42 days. That period passed with no commencement of arbitration proceedings. In its February 1995 order, the trial court extended the time for completion of the arbitration. Arbitration proceedings were not actually commenced until March 20, 1995, when Knobloch provided the American Arbitration Association with its filing fee; this was nearly 11 months after the dispute arose.
We further note that in response to the dispute, Knobloch, in June 1994, filed a lien on the Prendergast property; in July 1994, it initiated foreclosure proceedings on the property; in August 1994, it filed an answer and counterclaim in response to the Prendergast action; and on the same day of that filing it received payment from the Prendergasts for the amounts it alleged to be due for the construction. Only after it had received the payment on the property, while the Prendergasts' claim was pending in the court, did Knobloch serve notice on the Prendergasts of its desire to have the dispute solved through arbitration.
The evidence indicates that a waiver of arbitration could be found in either Knobloch's failure to give the Prendergasts notice of arbitration within a reasonable time after their dispute arose, as provided by their contract, or by Knobloch's actions in response to the dispute, which evinced an intention to abandon its arbitration right in favor of litigation. Certainly, when combined, these two circumstances clearly demonstrate that Knobloch waived its right to compel arbitration. Knobloch's notice to the Prendergasts that it intended to arbitrate, given nearly five months after the dispute aroseKnobloch during those months having given all appearances of having decided to forgo arbitration in favor of litigationwas not given within a reasonable time, as required under the contract's arbitration provision. Knobloch's actions indicated an abandonment of its right of arbitration and prejudiced the interests of the Prendergasts, who would be forced to arbitrate their claim only after Knobloch had already received, through the litigation process, the amount it had claimed from the Prendergasts. Neither the law of arbitration nor equity will permit this result, under the circumstances of this case.
For these reasons, the Prendergasts are entitled to the relief they seek. Ex parte Alfa Mut. Ins. Co., supra. The trial court abused its discretion by enforcing the arbitration provision and extending the time for arbitration. Therefore, the trial court is directed to vacate its orders compelling arbitration of the Prendergasts' claim against Knobloch.
WRIT GRANTED.
ALMON, SHORES, KENNEDY, COOK, and BUTTS, JJ., concur.
HOOPER, C.J., and MADDOX and HOUSTON, JJ., dissent.
*782 HOUSTON, Justice (dissenting).
I cannot hold that the Prendergasts made a clear showing that the trial court abused its discretion. Ex parte McKinney, 515 So. 2d 693 (Ala.1987). Therefore, I would not grant the Prendergasts' petition for the extraordinary writ of mandamus.
Insofar as the contract that contained the arbitration clause is concerned, the following is all that Knobloch, Inc., did: On August 24, 1994, Knobloch, Inc., filed an answer and a counterclaim. On September 22, 1994, it responded to a discovery request, made a demand for arbitration, and filed a motion to enforce the arbitration provision in the contract.
Merely answering on the merits and asserting a counterclaim, or participating in discovery, without more, does not constitute a waiver, unless the other party is prejudiced by such an action. Ex parte Costa & Head (Atrium), Ltd., 486 So. 2d 1272, 1277 (Ala. 1986). Where was the prejudice to the Prendergasts? There was none. This case is clearly distinguishable from Huntsville Golf Development, Inc. v. Aetna Casualty & Surety Co., 632 So. 2d 459 (Ala.1994). The Prendergasts had no clear legal right to the order sought and there was no imperative duty upon the trial court to perform; therefore, there should be no writ of mandamus issued.
I respectfully dissent.
MADDOX, J., concurs. | May 31, 1996 |
fe9b148f-d043-4b53-841c-4b3c4ee514bf | Ex parte Progressive Direct Insurance Company. | N/A | 1130805 | Alabama | Alabama Supreme Court | rel: 12/05/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
____________________
1130805
____________________
Ex parte Progressive Direct Insurance Company
PETITION FOR WRIT Of MANDAMUS
(In re: Ira Sentell Robinson
v.
Amber Nykole Clayton and Progressive Direct Insurance
Company)
(Wilcox Circuit Court, CV-12-900032)
BOLIN, Justice.
Progressive Direct Insurance Company ("Progressive")
petitions this Court for a writ of mandamus directing the
Wilcox Circuit Court to vacate its order dated March 25, 2014,
1130805
denying Progressive's motion to transfer this action from the
Wilcox Circuit Court to the Tuscaloosa Circuit Court and to
enter an order granting the motion. We grant the petition and
issue the writ.
I. Facts and Procedural History
The underlying action arises out of a motor-vehicle
accident that occurred in Tuscaloosa County on November 11,
2010, between an automobile driven by Ira Sentell Robinson and
an
automobile
driven
by Amber Nykole Clayton.
On July 5, 2012,
Robinson filed a complaint in the Wilcox Circuit Court against
Clayton, a resident of Tuscaloosa, and Progressive, a foreign
1
corporation doing business in both Tuscaloosa and Wilcox
Counties. In his complaint Robinson alleged that he was a
resident of Wilcox County and that he had suffered injuries as
a result of the negligent and/or wanton conduct of Clayton
when the vehicle she was driving collided with the vehicle he
was driving. Additionally, Robinson alleged that at the time
of the accident he had a policy of insurance with Progressive,
which included uninsured/underinsured-motorist coverage.
The claims asserted against Clayton were subsequently
1
dismissed, leaving Progressive as the only defendant.
2
1130805
On August 8, 2012, Progressive filed a motion to transfer
the action to Tuscaloosa County, alleging that venue in Wilcox
County was improper because, it claimed, the accident occurred
in Tuscaloosa County and both Robinson and Clayton resided in
Tuscaloosa County at the time of the accident. Alternatively,
Progressive claimed that the action was due to be transferred
to Tuscaloosa County on the ground of the doctrine of forum
non conveniens, as that doctrine is codified at Ala. Code
1975, § 6–3–21.1. In support of its motion to transfer,
Progressive attached a copy of the complaint stating that
Robinson resided in Wilcox County and a copy of the Alabama
Uniform Traffic Crash Report, which listed Robinson's address
as 1800 Links Boulevard in Tuscaloosa.
On May 9, 2013, the trial court entered an order denying
the motion for a change of venue without prejudice.
Progressive asserts that the trial judge "informed counsel for
Progressive verbally he could conduct some additional
discovery, namely regarding the residence of Robinson, and
renew his motion on behalf of Progressive at a later date, if
necessary." (Petition, p. 8.) Robinson does not dispute
Progressive's assertion in this regard. On March 19, 2014,
3
1130805
Progressive filed a renewed motion to transfer the case to
Tuscaloosa County, reasserting that venue was improper in
Wilcox County. On March 25, 2014, the trial court entered an
order denying Progressive's renewed motion to transfer the
case.
On April 3, 2014, Progressive petitioned this Court for
a writ of mandamus directing the Wilcox Circuit Court to
vacate its March 25, 2014, order denying Progressive's motion
to transfer this action to Tuscaloosa County and to enter an
order transferring the action to Tuscaloosa County. Robinson
filed a motion to dismiss Progressive's petition for a writ of
mandamus, along with a brief in support thereof, arguing that
Progressive's petition is untimely pursuant to Rule 21(a)(3),
Ala. R. App. P., because, he says, the petition was not filed
within 42 days of the May 9, 2013, order denying the first
motion for a change of venue. Specifically, Robinson asserts
that Progressive did not ask the trial court to reconsider the
denial of the its May 9, 2013, order; that the mandamus
petition does not include a statement of circumstances
constituting good cause for this Court's review given the
untimeliness of the petition; and that the renewed motion for
4
1130805
a change of venue alleges no new arguments, grounds, or other
evidence other than the fact that Robinson has since moved to
Shelby County, Alabama, subsequent to filing his complaint.
It is noted that in Ex parte Jones, 147 So. 3d 415 (Ala.
2013), the petitioner moved unsuccessfully for a summary
judgment on grounds of immunity; this Court denied his
petition for a writ of mandamus as untimely pursuant to Rule
21(a)(3), Ala. R. App. P. The petitioner unsuccessfully filed
a "renewed" motion for a summary judgment asserting no new
grounds, argument, evidence, or change in the applicable law.
The petitioner then filed a subsequent petition for a writ of
mandamus with this Court. We denied the second petition,
concluding that to allow the petitioner to petition this Court
for a writ of mandamus would in essence grant the petitioner
a second bite at appellate review because this Court had
already determined that the previously filed mandamus petition
challenging the denial of his first summary-judgment motion
was untimely and that to allow the second petition would
undermine the spirit and purpose of Rule 21(a)(3) and render
that rule meaningless. In this case, however, Progressive is
not seeking a second bite at appellate review because
5
1130805
Progressive did not appeal the May 9, 2013, order. Instead,
Progressive represents that the trial judge orally allowed it
the option to renew its motion to transfer after conducting
additional discovery relating to where Robinson resided at the
time of the accident. Robinson does not dispute in his motion
to dismiss that the trial court gave Progressive the option to
renew its motion to transfer the action. Accordingly, because
Progressive is seeking appellate review of the trial court's
March 25, 2014, order, we conclude that its petition for a
writ of mandamus was timely under Rule 21(a)(3).
II. Standard of Review
In Ex parte Pike Fabrication, Inc., 859 So. 2d 1089, 1091
(Ala. 2002), we stated the standard of review for the denial
of a motion for a change of venue as follows:
"'The proper method for obtaining review of a
denial of a motion for a change of venue in a civil
action is to petition for the writ of mandamus.' Ex
parte Alabama Great Southern R.R., 788 So. 2d 886,
888 (Ala. 2000). 'Mandamus is a drastic and
extraordinary writ, to be issued only where there is
(1) a clear legal right in the petitioner to the
order sought; (2) an imperative duty upon the
respondent to perform, accompanied by a refusal to do
so; (3) the lack of another adequate remedy; and (4)
properly invoked jurisdiction of the court.' Ex parte
Integon Corp., 672 So. 2d 497, 499 (Ala. 1995).
Moreover, our review is limited to those facts that
6
1130805
were before the trial court. Ex parte National Sec.
Ins. Co., 727 So. 2d 788, 789 (Ala. 1998).
"'The burden of proving improper venue is on the
party raising the issue and on review of an order
transferring or refusing to transfer, a writ of
mandamus will not be granted unless there is a clear
showing of error on the part of the trial judge.' Ex
parte Finance America Corp., 507 So. 2d 458, 460
(Ala. 1987). In addition, this Court is bound by the
record, and it cannot consider a statement or
evidence in a party's brief that was not before the
trial court. Ex parte American Res. Ins. Co., 663
So. 2d 932, 936 (Ala. 1995)."
III. Discussion
"When ruling on a motion to transfer, the trial court must
determine whether venue was proper at the time the action was
filed." Ex parte Canady, 563 So. 2d 1024, 1025 (Ala. 1990).
Venue of actions against corporations is governed by § 6-
3-7, Ala. Code 1975, which provides:
"(a) All civil actions against corporations may
be brought in any of the following counties:
"(1) In the county in which a substantial part
of the events or omissions giving rise to the claim
occurred, or a substantial part of real property that
is the subject of the action is situated; or
"(2) In the county of the corporation's
principal office in this state; or
"(3) In the county in which the plaintiff
resided, or if the plaintiff is an entity other than
an individual, where the plaintiff had its principal
office in this state, at the time of the accrual of
7
1130805
the cause of action, if such corporation does
business by agent in the county of the plaintiff's
residence; or
"(4) If subdivisions (1), (2), or (3) do not
apply, in any county in which the corporation was
doing business by agent at the time of the accrual of
the cause of action."
(Emphasis added.)
It is undisputed that, at the time of the accident giving
rise to this action, Robinson was working in Tuscaloosa, where
he stayed during the week at an apartment located at 1800
Links Boulevard, and that he returned on the weekends to his
parents' home in Wilcox County. Robinson maintains that venue
was proper in Wilcox County under § 6-3-7(3) because, he says,
he has always lived in Wilcox County and Progressive does
business in Wilcox County. Progressive, on the other hand,
argues that venue is improper in Wilcox County under § 6-3-
7(3) because, it says, the events giving rise to the action
occurred in Tuscaloosa County and Robinson resided in
Tuscaloosa County at the time; thus, Progressive contends that
the only venue appropriate for filing the action would have
been Tuscaloosa County. It is undisputed that Progressive
does business by agent in both Tuscaloosa and Wilcox Counties.
Accordingly, Wilcox County would be an appropriate venue for
8
1130805
this action pursuant to § 6-3-7(3), provided Robinson resided
there at the time of the accident. See Ex parte Blount, 665
So. 2d 205, 208 (Ala. 1995)("[V]enue for a personal injury
action against a corporate defendant is proper in either the
county where the injury occurred or the county where the
plaintiff resides, if the defendant does business in that
county.").
In Ex parte Coley, 942 So. 2d 349 (Ala. 2006), this Court
elaborated regarding the terms "residence" and "domicile" in
the context of determining venue:
"'Generally, the terms "residence" and
"domicile"
are
not
considered
synonymous.... However, when determining
venue,
most
jurisdictions,
including
Alabama,
do
consider
the
terms
synonymous.... The terms denote the place
where the person is deemed in law to live
and may not always be the place where the
person is actually dwelling.'
"Ex parte Sides, 594 So. 2d 93, 95 (Ala. 1992)
(citing Ex parte Weissinger, 247 Ala. 113, 22 So. 2d
510 (1945)). Thus, our focus is on where Coley was
domiciled, not on where she actually resided, at the
time of the accident.
"'A person's domicile is that place in
which his habitation is fixed, without any
present intention of removing, and it
embraces (1) the fact of residence and (2)
the intention to remain. As a general
proposition a person can have but one
9
1130805
domicile,
and
when
once
acquired
is
presumed to continue until a new one is
gained facto et animo, and what state of
2
facts constitutes a change of domicile is a
mixed question of law and fact.'
"Weissinger, 247 Ala. at 117, 22 So. 2d at 514.
"....
"'A change of domicile cannot be
inferred from an absence, temporary in
character, and attended with the requisite
intention to return. To the fact of
residence in the new locality there must be
the added element of the animus manendi3
before it can be said that the former
domicile has been abandoned. The intention
to
return
is
usually
of
controlling
importance in the determination of the
whole question.... Or ... there must be an
absence of any present intention of not
residing in the new domicile permanently or
for an indefinite time.'
"Weissinger, 247 Ala. at 117, 22 So. 2d at 513.
"_____________________
" 'Facto et animo' means 'in fact and intent.'
2
Black's Law Dictionary 630 (8th ed. 2004).
" 'Animus manendi' means '[t]he intention to
3
remain; the intention to establish a permanent
residence.' Black's Law Dictionary 97 (8th ed.
2004)."
942 So. 2d at 352-53.
Like the focus in Ex parte Coley, our focus in this case
"is on where [Robinson] was domiciled, not on where [he]
10
1130805
actually resided, at the time of the accident." 942 So. 2d at
352. As the movant, Progressive had the burden of making a
prima facie showing that "[Robinson] had abandoned [Wilcox]
County as [his] county of residence and reestablished
permanent residence in [Tuscaloosa] County." 942 So. 2d at
353. Once Progressive carried its burden, the burden shifted
to Robinson to rebut the prima facie showing. See Ex parte
Pike Fabrication, 859 So. 2d at 1092.
Progressive asserted in its motion for a change of venue
that Robinson represented to Officer Darryl Bethea, who
investigated the accident, that he lived at "1800 Links
Boulevard" in Tuscaloosa; that the Uniform Traffic Crash
Report listed Robinson's address as 1800 Links Boulevard in
Tuscaloosa; that Robinson sought treatment in Tuscaloosa
County for the injuries he sustained in the accident; that
Robinson represented to his health-care providers that he was
a resident of Tuscaloosa County; that the Progressive policy
of automobile-liability insurance issued to Robinson showed
his address as 1800 Links Boulevard in Tuscaloosa; that
Robinson purchased his license-plate tag in Tuscaloosa County
using the 1800 Links Boulevard address; that Robinson listed
11
1130805
the 1800 Links Boulevard address on his Alabama Department of
Transportation permit while he was working for a trucking
company located in Tuscaloosa County; that Robinson obtained
a marriage license in Tuscaloosa County in 2008 because, he
said, he did not want to get married in Wilcox County; that,
following the accident, Robinson had his vehicle towed to
"Pop's Shop" in Tuscaloosa; that Robinson registered to vote
in Tuscaloosa County in either 2008 or 2009, using the 1800
Links Boulevard address; and that the custody arrangement for
Robinson's minor daughter was determined by a Tuscaloosa
County Court in either 2009 or 2010. Robinson also testified
in his deposition that, in 2007, he used the 1800 Links
Boulevard address for setting up his business, Robinson
Trucking--a sole proprietorship. He testified specifically
that the 1800 Links Boulevard address was the address he
"always used."
To rebut Progressive's prima facie showing, Robinson
asserted in his response that he has always lived in Wilcox
County with his parents; that, at the time of the accident, he
and his minor daughter were living with his parents in their
house in Wilcox County; that his daughter attended school in
12
1130805
Wilcox County; that he has never permanently resided at 1800
Links Boulevard in Tuscaloosa; that the 1800 Links Boulevard
address was an apartment his father had owned, rented, and/or
leased in Tuscaloosa for the purpose of attending football
games and for other family activities; that he stayed at the
apartment only temporarily during the workweek, returning to
Wilcox County on the weekends; and that he did not return to
Tuscaloosa after the accident. Other than Robinson's
2
assertion that he has always lived in Wilcox County, the only
other essential fact that he offers in rebuttal is that his
daughter resides with his parents in Wilcox County and attends
school there.
We conclude that Progressive met its burden of proof in
demonstrating not only that Robinson had established residency
in Tuscaloosa County (facto et animo), but also that he had
the intention of residing there permanently (animus manendi).
By Robinson's own admission, the 1800 Links Boulevard address
was the address he "always used." Robinson admitted that he
As noted, the accident in this case occurred on November
2
11, 2010. Although Robinson asserted that he never returned
to Tuscaloosa after the accident, he testified that the "lease
[on the apartment at 1800 Links Boulevard] was up in 2010."
Progressive notes that Robinson moved to Calera, Alabama,
shortly after filing his complaint in this case.
13
1130805
had represented to Progressive, to his employers, to medical
providers, to the State of Alabama, to the Alabama Department
of Transportation, to the Tuscaloosa Police Department, and to
the County of Tuscaloosa that he lawfully resided in
Tuscaloosa. Those admissions clearly demonstrate that
Robinson not only physically resided in Tuscaloosa County
during the workweek but also had the intention to remain there
permanently, thereby abandoning Wilcox County as his former
domicile. Another significant and compelling indication of
Robinson's intent to establish his domicile in Tuscaloosa
County is the fact that he registered to vote there in either
2008 or 2009. See, e.g., Harris v. McKenzie, 703 So. 2d 309,
311 (Ala. 1997), in which this Court stated:
"Registration to vote is a 'potent consideration' for
a court to take into account when determining one's
domicile. Ambrose v. Vandeford, 277 Ala. 66, 70, 167
So. 2d 149, 153 (1964). See also Parr v. Shoemaker,
545 So. 2d 37 (Ala. 1989), and Wilkerson v. Lee, 236
Ala. 104, 181 So. 296 (1938). '[V]oting is indicative
of intention with respect to the question [of
domicile] and is regarded as importantly bearing upon
the place of domicile.' Ex parte Weissinger, 247
Ala. 113, 117, 22 So. 2d 510, 514 (1945).
Furthermore,
"'Exercising
the
right
of
elective
franchise, dependent upon citizenship and
domicile, is regarded as having weight in
settling the question of a person's legal
14
1130805
residence. Such act is a deliberate public
assertion of the fact of residence and is
said to have decided preponderance in a
doubtful case upon the place the elector
claims
as,
or
believes
to
be,
his
residence.'
"Weissinger, 247 Ala. at 117–18, 22 So. 2d at 514."
(Emphasis added.)
Because the foregoing evidence overwhelmingly indicates
that, at the time of the accident giving rise to this action,
Robinson was permanently residing in Tuscaloosa County, he
could not rely on § 6-3-7(3) as establishing venue in Wilcox
County, where he filed his complaint against Progressive.
Accordingly, the trial court exceeded its discretion in
denying Progressive's motion to transfer the action to
Tuscaloosa County. Moreover, because venue was improper in
Wilcox County, the doctrine of forum non conveniens, §
6–3–21.1, Ala. Code 1975, has no application in this case.
See Ex parte Townsend, 589 So. 2d 711, 714 (Ala. 1991) ("[The]
doctrine [of forum non conveniens] has a field of operation
only where the action is commenced in a county in which venue
is appropriate.").
IV. Conclusion
15
1130805
If venue for an action is shown to be improper, the action
must be transferred. Ex parte Overstreet, 748 So. 2d 194
(Ala. 1999). We hold that, based on the evidence before the
trial court at the time of its ruling, the court should have
granted Progressive's motion for a change of venue, and we
direct the trial court to vacate its order denying the motion
and to transfer the action to Tuscaloosa County. Because
under § 6-3-7, Ala. Code 1975, venue was improper in Wilcox
County, we pretermit discussion of Progressive's alternative
argument that the action should be transferred based on § 6-3-
21.1, Ala. Code 1975, the forum non conveniens statute.
MOTION TO DISMISS DENIED; PETITION GRANTED; WRIT ISSUED.
Stuart, Parker, Shaw, Main, Wise, and Bryan, JJ., concur.
Murdock, J., concurs in the result.
Moore, C.J., dissents.
16 | December 5, 2014 |
4b2550f1-5add-4346-bbd6-6cb10b54063b | Anderson v. Jackson Hospital & Clinic | N/A | 1130342 | Alabama | Alabama Supreme Court | REL: 11/07/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
____________________
1130342
____________________
Ex parte Jackson Hospital & Clinic, Inc., et al.
PETITION FOR WRIT OF MANDAMUS
(In re: Joanne Anderson
v.
Jackson Hospital & Clinic, Inc., et al)
____________________
1130357
____________________
Ex parte Joanne Anderson
PETITION FOR WRIT OF MANDAMUS
(In re: Joanne Anderson
v.
Jackson Hospital & Clinic, Inc., et al)
(Montgomery Circuit Court, CV-12-1044)
STUART, Justice.
Joanne Anderson sued Jackson Hospital and Clinic, Inc.,
Dr. Stephen K. Kwan, and Dr. Kwan's practice group, Capital
Cardio-Thoracic,
P.C.
(hereinafter
referred
to
collectively
as
"the Jackson Hospital defendants"), in the Montgomery Circuit
Court, asserting medical-malpractice claims against them.
Thereafter, the trial court granted a motion to substitute
bankruptcy trustee Daniel G. Hamm for Anderson as the real
party in interest pursuant to Rule 17, Ala. R. Civ. P.,
because Anderson had filed a petition for Chapter 7 bankruptcy
pursuant to 11 U.S.C. § 701 et seq. after her medical-
malpractice claim had accrued. The Jackson Hospital
defendants subsequently petitioned this Court for permission
to file an interlocutory appeal pursuant to Rule 5, Ala. R.
App. P., arguing that Hamm's attempt to be substituted as the
real party in interest was untimely under Rule 17; Anderson
filed a separate Rule 5 petition for permission to appeal,
2
1130342, 1130357
challenging the trial court's decision to remove her as the
plaintiff in this case. We granted both petitions; however,
as explained infra, we now treat the parties' petitions for
permissive appeals as petitions for writs of mandamus, and we
deny those petitions.
I.
On October 5, 2010, Anderson presented herself at the
Jackson Hospital emergency room complaining of chest pain.
Anderson had previously been diagnosed with coronary heart
disease, and it was ultimately determined that she now needed
coronary-artery-bypass surgery; on October 8, 2010, Dr. Kwan
performed the procedure. Anderson thereafter had circulation
issues in her feet; however, she was discharged from the
hospital on October 25, 2010. Dr. Kwan conducted follow-up
examinations with Anderson on November 2, 2010, and November
23, 2010, and on those visits she complained of continuing
pain and circulation issues with her feet. During those
examinations, Dr. Kwan determined that parts of Anderson's
feet, including at least some toes, would likely have to be
amputated; however, a final decision on the matter was delayed
3
1130342, 1130357
because the swelling and blistering on Anderson's feet made it
difficult to fully evaluate them.
On November 24, 2010, Anderson was again admitted to
Jackson Hospital. On November 27, 2010, Dr. Kwan examined her
again. He noted at that time that circulation in her legs was
fine above the ankles, but that she had developed gangrene and
that parts of her feet were dead with no circulation at all.
After waiting for her overall condition to improve –– she was
also experiencing kidney and respiratory failure at this time
–– Dr. Kwan performed surgery on December 8, 2010, to amputate
parts of Anderson's feet. During the course of the surgery,
he ultimately determined that the feet were no longer viable
and
he
accordingly
performed
bilateral
below-the-knee
amputations.
For all that appears, Anderson thereafter recovered to
some extent and was discharged from Jackson Hospital. On
November 8, 2011, Anderson filed a petition for Chapter 7
bankruptcy in the United States Bankruptcy Court for the
Middle District of Alabama. As part of that petition,
Anderson completed schedules detailing her debts and her
assets. Those schedules indicated that she had approximately
4
1130342, 1130357
$28,000 of unsecured debt, consisting mostly of medical and
consumer debt, and that she had no significant assets.
Notably, she did not include among her assets any potential
cause of action against the Jackson Hospital defendants, even
though she was required by bankruptcy law to do so. See,
e.g., Transouth Fin. Corp. v. Murry, 311 B.R. 99, 102 (M.D.
Ala. 2004) ("One who files bankruptcy must disclose all of his
assets, including causes of action, lawsuits, or potential
lawsuits."). On March 1, 2012, the bankruptcy court granted
Anderson a complete discharge of her debts,
presumably
putting
an end to those bankruptcy proceedings.
On October 9, 2012, Anderson initiated the instant
medical-malpractice action against the Jackson Hospital
defendants. On approximately May 2, 2013, Anderson filed
responses to interrogatories served upon her by the Jackson
Hospital defendants in which she revealed that she had
recently filed for bankruptcy. The Jackson Hospital
defendants then
obtained
the
records
from
Anderson's
bankruptcy
proceedings
and,
upon
discovering
that
Anderson
had
not disclosed a potential cause of action against them in the
list of assets filed with the bankruptcy court, prepared a
5
1130342, 1130357
motion asking the trial court to enter a summary judgment in
their favor on judicial-estoppel grounds. See, e.g., Luna v.
Dominion Bank of Middle Tennessee, Inc., 631 So. 2d 917, 919
(Ala. 1993) ("The doctrine of judicial estoppel
applies,
where
a debtor in bankruptcy proceedings fails to disclose any claim
that may be presented in a nonbankruptcy contest, to estop the
debtor from presenting the claim.").
On Friday, May 24, 2013, one of the attorneys for the
Jackson Hospital defendants notified one of Anderson's
attorneys of the substance of the summary-judgment motion he
had prepared to file. In an affidavit contained in the
record, the attorney for the Jackson Hospital defendants
states that Anderson's attorney asked him not to file the
motion until after the impending Memorial Day weekend and
that, as a courtesy, he waited until Tuesday, May 28, 2013, to
file the motion. Prior to the filing on the afternoon of May
28 of an amended answer and the summary-judgment motion
asserting judicial estoppel as a ground, however, Anderson
filed a motion in the bankruptcy court seeking to reopen her
bankruptcy case, along with amended schedules listing as an
asset her cause of action against the Jackson Hospital
6
1130342, 1130357
defendants. Two days later, on May 30, 2013, Hamm filed a
similar motion seeking to reopen Anderson's bankruptcy case
and to be reappointed trustee, and he thereafter moved the
bankruptcy court to authorize him to employ one of the
attorneys who had been retained by Anderson in her action
against the Jackson Hospital defendants as his attorney in
that action as well. The bankruptcy court eventually approved
all of those motions, reopening Anderson's bankruptcy case on
June 14, 2013, and, on July 8, 2013, authorizing Hamm to use
Anderson's attorney in the instant action.
After first learning of Anderson's medical-malpractice
claim, Hamm also, on May 31, 2013, filed a motion with the
trial court in this action, notifying it that he had just
learned of Anderson's medical-malpractice claim and that he
was seeking to reopen Anderson's bankruptcy case and to be
reappointed trustee in the case. Hamm further stated in that
motion that he was in current "discussions with an attorney to
represent ... the plaintiff/trustee's interest" and he
requested that the case be stayed until a decision was made as
to representation. It is not clear whether the trial court
7
1130342, 1130357
ever explicitly ruled on Hamm's request for a stay, but the
discovery process appears to have continued during this time.
On November 4, 2013, Hamm filed a motion to formally
intervene in this action, asserting that he was the real party
in interest under Rule 17. The Jackson Hospital defendants
thereafter filed an objection, arguing that Rule 17 allows a
real party in interest to be substituted for the original
party only if the motion seeking to make the substitution is
made within "a reasonable time" after the issue is raised,
and, they argued, Hamm's more than five-month delay was not a
"reasonable time." On November 14, 2013, the trial court
conducted a hearing at which it heard arguments on the issues
raised by the parties in connection with the Jackson Hospital
defendants' summary-judgment motion and Hamm's motion to
intervene. On December 9, 2013, the trial court entered an
order resolving those issues, stating as follows:
"[W]ith regard to defendants' motion for summary
judgment, the court notes that such motion is based
upon the doctrine of judicial estoppel (contending
that the plaintiff failed to disclose her cause of
action to the bankruptcy court during her Chapter 7
proceedings) and on the contention that plaintiff
Joanne Anderson is not the real party in interest.
... [T]he plaintiff has now amended the complaint
and [Hamm,] the trustee in bankruptcy has been
permitted to intervene as the real party in
8
1130342, 1130357
interest. Pursuant to Hamm v. Norfolk Southern
Railway Co., 52 So. 3d 484 (Ala. 2010), the
defendants' motion for summary judgment is denied in
part, such that [Hamm] shall be permitted to pursue
Joanne Anderson's claims against the defendants for
a recovery up to the amount necessary to pay the
claims
of
Anderson's
creditors
and
expenses
associated with the related bankruptcy proceedings.
The motion for summary judgment is granted in all
other respects, and summary judgment is hereby
entered in favor of the defendants and against
Plaintiff Joanne Anderson as to all claims brought
by her."
However, the trial court recognized that there
was
substantial
ground for difference of opinion regarding its conclusions of
law, and it accordingly certified its order for an
interlocutory appeal pursuant to Rule 5.
On December 23, 2013, the Jackson Hospital defendants
petitioned this Court for permission to appeal
immediately
the
trial court's order insofar it held that Hamm's motion to
intervene was timely under Rule 17 (case no. 1130342), and, on
December 24, 2013, Anderson petitioned this Court for
permission to appeal immediately the trial court's order
insofar as it held that she –– as opposed to Hamm acting on
behalf of her creditors –– was judicially estopped from
proceeding with her medical-malpractice claim (case no.
1130357). On May 27, 2014, this Court granted both petitions
9
1130342, 1130357
and ordered briefing. This Court has now elected to treat
both petitions for permission to appeal as petitions for a
writ of mandamus. The Jackson Hospital defendants and Hamm
1
have now filed briefs in case no. 1130342, and the Jackson
Hospital defendants and Anderson have filed briefs in case no.
1130357.
Although this Court granted both the Jackson Hospital
1
defendants'
petition and
Anderson's petition
to
file
permissive appeals pursuant to Rule 5, upon further
examination it is apparent that a petition for a writ of
mandamus is the appropriate means by which to seek review of
the issues they raise –– whether Hamm timely moved to
substitute himself as the real party in interest and whether
Anderson should be allowed to proceed as the real party in
interest regardless of her bankruptcy filing and initial
failure to disclose her claim in those
bankruptcy
proceedings.
See Ex parte U.S. Bank Nat'l Ass'n, [Ms. 1120904, Feb. 7,
2014] ___ So. 3d ___, ___ (Ala. 2014) (listing issues this
Court has held to be appropriate for mandamus review); Ex
parte Tyson Foods, Inc., 146 So. 3d 1041 (Ala. 2013)
(reviewing, on petition for writ of mandamus, the trial
court's ruling on a motion seeking to add a real party in
interest); and Ex parte Chemical Lime of Alabama, Inc., 916
So. 2d 594, 596-97 (Ala. 2005) (considering, on petition for
writ of mandamus, whether plaintiffs had timely moved to
substitute defendant for a fictitiously named defendant).
Accordingly, we now exercise our discretion to treat the
parties' permissive appeals as petitions for the writ of
mandamus. See, e.g., Ex parte Watson, 37 So. 3d 752, 757
(Ala. 2009) ("This Court ordered that the
defendants'
petition
for permission to appeal be treated as a petition for a writ
of mandamus ...."), and Ex parte G & G Steel, Inc., 601 So. 2d
990, 991 (Ala. 1992) ("This Court has elected to treat the
Rule 5 petition for permission to appeal as a petition for a
writ of mandamus.").
10
1130342, 1130357
II.
In Hamm v. Norfolk Southern Ry. Co., 52 So. 3d 484, 493
n. 3 (Ala. 2010), this Court indicated that it reviews a trial
court's decision regarding what constitutes "a reasonable
time" for purposes of Rule 17 to determine whether the court
exceeded its discretion:
"[T]he question whether a 'reasonable time' would
have passed and whether the action should have been
dismissed at that juncture for a failure of
substitution are questions as to which a trial court
is to exercise discretion based on its assessment of
the type of case and its facts and the procedural
history of the case. [6A Charles Alan Wright,
Arthur R. Miller & Mary Kay Kane,] Federal Practice
& Procedure at § 1555 [(2d ed. 1990)] ('What
constitutes a reasonable time is a matter of
judicial discretion and will depend upon the facts
of each case.')."
We further quoted in Hamm the United States Court of Appeals
for the Eleventh Circuit:
"'"[W]e review the district court's application of
judicial estoppel for abuse of discretion." Burnes
[v. Pemco Aeroplex, Inc.], 291 F.3d [1282,] 1284
[(11th Cir. 2002)]. "The abuse of discretion
standard includes review to determine that the
discretion was not guided by erroneous legal
conclusions." Talavera v. School Bd. of Palm Beach
County, 129 F.3d 1214, 1216 (11th Cir. 1997).'"
52 So. 3d at 489 (quoting Parker v. Wendy's Int'l, Inc., 365
F.3d 1268, 1271 (11th Cir. 2004)). See also Hughes v.
11
1130342, 1130357
Mitchell Co., 49 So. 3d 192, 203 (Ala. 2010) (stating that
"there is no general formulation of principle dictating when
the doctrine of judicial estoppel applies [and] such a
decision is left to the court's discretion"). Thus, we review
the trial court's decision on both the Rule 17 and judicial-
estoppel issues to determine whether it exceeded its
discretion.2
In Lumpkin v. City of Gulf Shores, 964 So. 2d 1233 (Ala.
2
Civ. App. 2006), the Court of Civil Appeals affirmed a summary
judgment entered in favor of the appellee, in part because
that court concluded that the appellants had failed to timely
substitute the real party in interest as a plaintiff. It
appears in that case that the trial court had not articulated
its reasons for entering the summary judgment, and it is not
clear that the issue whether the plaintiffs had been given the
Rule 17(a)-mandated "reasonable time" to make substitution of
the proper real party in interest had been considered by the
trial court or even raised by the parties before the summary
judgment was entered. Accordingly, the Court of Civil Appeals
appropriately considered that issue de novo. See Lumpkin, 964
So. 2d at 1236 (stating that the appellants prefaced their
argument that they should still be allowed to substitute the
real party in interest by stating: "'[I]f the trial court's
rationale for dismissing [their] appeal was that [the
Association] instead of the [appellants] was the real party in
interest, then [the Association] should be joined or
substituted to prevent what is at present a gross miscarriage
of justice.'" (quoting the appellants' brief) (emphasis
added)). In the instant case, however, it is apparent from
the trial court's order ruling on the Jackson Hospital
defendants' summary-judgment motion and Hamm's motion to
intervene that the trial court had affirmatively considered
the timeliness issue and found that Hamm had moved within a
reasonable time to be named the real party in interest.
Accordingly, for the reasons explained in Hamm, 52 So. 3d at
12
1130342, 1130357
III.
We first consider the Jackson Hospital defendants'
arguments in case no. 1130342 concerning the timeliness of
Hamm's intervention. The issue presented in this case was
aptly stated by the trial court as being "whether [Hamm's]
motion for leave to intervene and to file [an] amended
complaint was timely and properly filed pursuant to Rules 17
and/or 24 of the Alabama Rules of Civil Procedure and the
applicable statute of limitations." Rule 17(a) provides, in
pertinent part:
"No action shall be dismissed on the ground that it
is not prosecuted in the name of the real party in
interest until a reasonable time has been allowed
after objection for ratification of commencement of
the action by, or joinder or substitution of, the
real party in interest; and such ratification,
joinder, or substitution shall have the same effect
as if the action had been commenced in the name of
the real party in interest."
In this case, the first "objection" to Anderson's status as
the real party in interest to assert the medical-malpractice
claim against the Jackson Hospital defendants came on May 28,
2013, when the Jackson Hospital defendants filed an amended
answer succinctly asserting that "[Anderson] is not the real
489 n. 3, we review that decision for an excess of discretion.
13
1130342, 1130357
party in interest in this case." It is thereafter undisputed
that Hamm did not formally move to take Anderson's place as
the real party in interest until November 5, 2013 –– over five
months after the initial objection was made. It is apparent
that Hamm became aware of the objection at approximately the
same time the objection was made because, on May 30, 2013, he
moved the bankruptcy court to reopen Anderson's bankruptcy
case; accordingly, the relevant question for the trial court
was whether that five-month delay was reasonable.
The Jackson Hospital defendants essentially argue that a
five-month delay is per se unreasonable and, in support of
that argument, cite Lumpkin v. City of Gulf Shores, 964 So. 2d
1233 (Ala. Civ. App. 2006), and Wilson v. Tucker, No. 10-CV-
0714-CVE-FHM (N.D. Okla. Jan. 5, 2011) (not reported in F.
Supp. 2d). In Lumpkin, the Court of Civil Appeals indicated
3
that a summary judgment was due to be affirmed because, in the
The
United
States
District
Court
in
Wilson
considered
the
3
meaning of "a reasonable time" in Rule 17(a), Fed. R. Civ. P.,
which is substantially similar to Rule 17(a), Ala. R. Civ. P.
We have stated that "[b]ecause the Alabama Rules of Civil
Procedure are patterned after the Federal Rules of Civil
Procedure, federal cases construing the Federal Rules
of
Civil
Procedure are persuasive authority in construing the Alabama
Rules of Civil Procedure." Ex parte Alabama State Pers. Bd.,
54 So. 3d 886, 893 (Ala. 2010).
14
1130342, 1130357
two-month period after the appellee had articulated a real-
party-in-interest challenge, the appellants "did nothing" to
remedy the issue by moving either to substitute or to join the
identified real party in interest. 964 So. 2d at 1236.
Similarly, in Wilson, the United States District Court for the
Northern District of Oklahoma granted the defendant's motion
to dismiss after neither the plaintiff nor the trustee
appointed in the plaintiff's separate bankruptcy case "made
any effort to substitute the trustee as the real party in
interest" in the two-month period after the defendant had
asserted a real-party-in-interest challenge. The Jackson
Hospital defendants argue that the principle to be gleaned
from these cases is that, if a two-month delay is
unreasonable, then a five-month delay surely is unreasonable.
We disagree. After reviewing these and other relevant
cases, we think the principle that is most apparent is that
trial courts are best equipped to decide what constitutes "a
reasonable time" under Rule 17(a) in any particular case based
on their familiarity with the facts and specific history of
the case, and, accordingly, an appellate court should
generally defer to the trial court's exercise of that
15
1130342, 1130357
discretion. Given the facts of a particular case, a trial
court may decide that two months is not a reasonable time, or
it may decide that an even shorter period is not reasonable,
or that a longer period is reasonable. For example, in
Killmeyer v. Oglebay Norton Co., 817 F. Supp. 2d 681 (W.D. Pa.
2011), the United States District Court for the Western
District of Pennsylvania considered the same general issue
raised in this case –– what was a reasonable time for a
bankruptcy trustee to move to substitute himself as the real
party in interest in an action brought by a Chapter 7 debtor.
After noting that what constitutes a reasonable time is a
matter of judicial discretion dependant on the facts of the
case, the federal district court concluded that the trustee's
motion to substitute, made approximately four months
after
the
defendants had asserted a formal real-party-in-interest
challenge and five months after the trustee first learned of
the action, was nevertheless timely. 817 F. Supp. 2d at 690.
The federal district court further noted that, as in the
instant case, part of any delay was attributable to the fact
that the trustee had not known of the action at the time it
was filed and, upon learning of the action, the trustee
16
1130342, 1130357
subsequently had to seek the bankruptcy court's approval to
have counsel appointed to prosecute the claim on the trustee's
behalf. Id.
4
Thus, the Killmeyer court concluded that a trustee's
motion to substitute himself as plaintiff for a Chapter 7
debtor was timely even though that motion was filed
approximately five months after the trustee first
learned
that
the Chapter 7 debtor had initiated the action. The trial
court in this action made essentially the same conclusion, and
we cannot say that it exceeded its discretion by doing so.
Accordingly, the action should proceed as if it had been
commenced in the name of Hamm, the real party in interest.
Rule 17(a). See also Board of Water & Sewer Comm'rs of City
of Mobile v. McDonald, 56 Ala. App. 426, 430-31, 322 So. 2d
717, 721 (Ala. Civ. App. 1975) (stating that, when Rule 17(a)
is applied, it is unnecessary to resort to Rule 15(c), Ala. R.
We further note that Hamm notified the trial court on May
4
31, 2013 –– just days after learning that Anderson had
initiated an action against the Jackson Hospital
defendants
––
that
he
was
seeking
counsel
to
represent
"the
plaintiff/trustee's interest" in that case moving forward.
Thus, Hamm essentially notified the trial court at that time
that he ratified Anderson's commencement of the action and
would be taking it over.
17
1130342, 1130357
Civ. P., to determine whether an amended pleading relates back
to the date of an original pleading).
IV.
We next consider Anderson's argument in case no. 1130357
that she should be allowed to prosecute this action in her
individual capacity. The trial court stated the issue in that
regard as follows:
"Whether [Anderson] is barred from prosecuting this
action in her individual capacity: (a) based on the
doctrine of judicial estoppel, by virtue of her not
disclosing the presently advanced cause of action
during her Chapter 7 proceedings, and/or (b) based
on her not being the real party in interest."
Anderson essentially argues to this Court that the Jackson
Hospital defendants failed to establish that the doctrine of
judicial estoppel should apply and that the trial court's
ruling unfairly prevents her from petitioning the bankruptcy
court for permission to prosecute the medical-malpractice
action herself as the real party in interest. Neither of
those arguments has merit.
First, our decision in Hamm illustrates that the trial
court's application of the doctrine of judicial estoppel was
proper. In Hamm, the plaintiff filed a bankruptcy petition in
October 2004; that petition did not disclose any potential
18
1130342, 1130357
causes of action in the list of assets submitted to the
bankruptcy court. 52 So. 3d at 487. Nevertheless, in January
2005, the plaintiff initiated an action against his former
employer, and, in March 2005, he received a complete discharge
of debts and his bankruptcy case was closed. Id. In January
2006, the plaintiff's former employer learned of the
bankruptcy case during a deposition, and it
thereafter
amended
its answer to assert the affirmative defense of judicial
estoppel and filed a motion for a summary judgment on that
same ground. Id. Thereafter, the plaintiff moved the
bankruptcy court to reopen his bankruptcy estate, and he also
filed amended schedules listing the cause of action against
his former employer as an asset of the bankruptcy estate. 52
So. 3d at 488. Nevertheless, the trial court granted the
employer's
summary-judgment
motion,
and,
after
the
trial
court
also denied a postjudgment motion seeking to substitute the
bankruptcy trustee as the real party in interest, the
plaintiff and the trustee filed a joint appeal to this Court.
Id.
After holding that the bankruptcy trustee was in fact the
real party in interest, 52 So. 3d at 491-92, this Court
19
1130342, 1130357
considered what effect the doctrine of judicial estoppel
should have in the case:
"'In Ex parte First Alabama Bank, [883 So. 2d
1236 (Ala. 2003),] this Court "embrace[d] the
factors set forth in New Hampshire v. Maine[, 532
U.S. 742, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001),]
and join[ed] the mainstream of jurisprudence in
dealing with the doctrine of judicial estoppel."'
Middleton v. Caterpillar Indus., Inc., 979 So. 2d
53, 60 (Ala. 2007) (quoting Ex parte First Alabama
Bank, 883 So. 2d at 1246). For judicial estoppel to
apply (1) 'a party's later position must be "clearly
inconsistent" with its earlier position'; (2) the
party must have been successful in the prior
proceeding 'so that judicial acceptance of an
inconsistent position in a later proceeding would
create "the perception that either the first or
second court was misled"'; and (3) 'the party
seeking to assert an inconsistent position would
derive an unfair advantage or impose an unfair
detriment on the opposing party if not estopped.'
New Hampshire, 532 U.S. at 750–51 (citations
omitted); see Middleton, 979 So. 2d at 60–61; Ex
parte First Alabama Bank, 883 So. 2d at 1244–45.
This Court has stated that '[t]he purpose of
judicial estoppel is "'to protect the integrity of
the judicial process' by 'prohibiting parties from
deliberately changing positions according to the
exigencies of the moment.'"' Middleton, 979 So. 2d
at 59 (quoting New Hampshire, 532 U.S. at 749–50;
other citation omitted).
"It is evident that the trial court properly
applied the doctrine of judicial estoppel to [the
plaintiff] when it entered the summary judgment
against him. After he filed the ... action [against
his former employer], [the plaintiff] failed to
amend his bankruptcy schedules to reflect his ...
claim as a potential asset, and thereafter he
received a 'no-assets' discharge in the bankruptcy
20
1130342, 1130357
proceeding. Despite this outcome, [the plaintiff]
continued to prosecute the ... action. Thus, [the
plaintiff] had taken
clearly inconsistent positions;
he was successful in his bankruptcy proceeding; and
he potentially could have received the unfair
advantage of a possible $750,000 'windfall' if he
succeeded
in
his
claim
against
[his
former
employer].
"The fact that the trial court properly applied
the
doctrine
of
judicial
estoppel
to
[the
plaintiff], however, does not mean that that
doctrine
necessarily
is
applicable
to
[the]
bankruptcy trustee. ... The trustee has never
taken inconsistent positions with regard to the ...
claim because he did not know about the claim until
the bankruptcy schedules were amended to reflect the
existence of the claim as a potential asset to the
estate. Therefore, [the trustee] cannot be
judicially estopped from pursuing the claim."
52 So. 3d at 494. Thus, Hamm clearly indicates that the
doctrine of judicial estoppel can operate to bar a party from
pursuing an action if that party previously failed to disclose
the cause of action as an asset during bankruptcy proceedings
that take place after the cause of action arises.
Anderson nevertheless argues that the doctrine of
judicial estoppel should not apply to her for three reasons.
First, she argues that, unlike the plaintiff in Hamm, she did
not know of the existence of her cause of action until after
her bankruptcy case was closed. Thus, she argues, she has
21
1130342, 1130357
never knowingly asserted inconsistent positions so as to
implicate the doctrine of judicial estoppel.
However, this Court has indicated that the crucial
inquiry is not whether a plaintiff actually knew of a
potential claim, but whether a reasonable person should have
known about the potential claim. See Hamm, 52 So. 3d at 498
(citing Jinright v. Paulk, 758 So. 2d 553, 559 (Ala. 2000),
for the proposition that "among the questions of fact
essential to a determination of the applicability of the
doctrine of judicial estoppel is 'whether a debtor who is
engaged in bankruptcy proceedings knew or should have known
about claims or causes of action that should be disclosed as
assets'"), and Luna, 631 So. 2d at 919 ("[The plaintiff]
further contends that the doctrine of judicial
estoppel
should
not be applied to him because, he says, he was unaware of his
claims against [the defendant] until after his bankruptcy
discharge. This argument is also without merit. Certainly,
if the facts ... were as he says they were, then [the
plaintiff], acting as a reasonable person, would have known,
when he filed his bankruptcy proceeding, that he had a claim
against [the defendant]."). In this case, Anderson alleges
22
1130342, 1130357
that
the
Jackson
Hospital
defendants'
negligence
following
the
October 2010 heart surgery resulted in the amputation of her
feet in December 2010. Thus, the result of the alleged
negligence was admittedly apparent by December 2010, and, if
the facts are as Anderson has asserted them to be, a
reasonable person should accordingly have been aware by that
time that a possible cause of action against the Jackson
Hospital defendants existed. Moreover, Anderson essentially
agreed with this conclusion in a January 2013 amendment to her
complaint in which she stated that "[p]laintiff's injury and
defendants' substandard care [were] not discovered and could
not have reasonably been discovered prior to December of
2010." "'"Normally, factual assertions in pleadings and
pretrial orders are considered to be judicial admissions
conclusively binding on the party who made them."'" Noland
Health Servs., Inc. v. Wright, 971 So. 2d 681, 685-86 (Ala.
2007) (quoting Jones v. Kassouf & Co., 949 So. 2d 136, 142
(Ala. 2006) (Lyons, J., dissenting), quoting in turn White v.
ARCO/Polymers, Inc., 720 F.2d 1391, 1396 (5th Cir. 1983)).
Accordingly, we find no merit in Anderson's argument that the
trial court should not have applied the doctrine of judicial
23
1130342, 1130357
estoppel against her because she alleges she was not aware
that she had a possible claim against the Jackson Hospital
defendants at any time during the pendency of her bankruptcy
case.5
We further note that we are not impressed by Anderson's
5
contention that, "[a]fter the cause of action against
appellees became known to [her], she took the extraordinary
measure of reopening her bankruptcy case and amending her
bankruptcy schedules to list the cause of action against
appellees." Anderson's brief in case no. 1130357, p. 21-22.
Anderson does not dispute that she moved to reopen her
bankruptcy case in May 2013 only after being notified that the
Jackson Hospital defendants were preparing to move for a
summary
judgment
on
a
judicial-estoppel
ground;
she
undisputedly took no action to do so on her own initiative in
the seven months following the initiation of her lawsuit. In
Hamm, we warned against the incentives that would be created
if the initial failure to disclose assets in bankruptcy
proceedings was excused by giving effect to subsequent
amendments without consequence:
"'"Allowing [a debtor] to back-up, re-open the
bankruptcy case, and amend his bankruptcy filings,
only after his omission has been challenged by an
adversary, suggests that a debtor should consider
disclosing potential assets only if he is caught
concealing them. This so-called remedy would only
diminish the necessary incentive to provide the
bankruptcy court with a truthful disclosure of the
debtor's assets." Burnes[ v. Pemco Aeroplex, Inc.,
291 F.3d 1282,] 1288 [(11th Cir. 2002)] (citation
omitted). As such, [the debtor's] disclosure upon
re-opening
the
bankruptcy
estate
deserves
no
favor.'"
52 So. 3d at 495 (quoting Barger v. City of Cartersville, Ga.,
348 F.3d 1289, 1297 (11th Cir. 2003)).
24
1130342, 1130357
Anderson next argues that the doctrine of judicial
estoppel should not have been applied against her because, she
argues, she will gain no unfair advantage if she is allowed to
pursue her action against the Jackson Hospital defendants in
that the first $28,000 of any judgment awarded would go to
those entities holding her discharged debt. However, she
fails to recognize that she has already had $28,000 of debt
discharged and that the bankruptcy court, though it granted
her motion to reopen her bankruptcy case, denied her motion to
set aside the judgment discharging her debts. In Hamm, we
noted that the unfair-advantage prong of the Ex parte First
Alabama Bank, 883 So. 2d 1236 (Ala. 2003), judicial-estoppel
test was satisfied because the plaintiff "potentially could
have received the unfair advantage of a possible $750,000
'windfall'" if he was successful in prosecuting the claim
omitted from his bankruptcy petition. 52 So. 3d at 494. That
same potential for a windfall was present in this case as
well, and, as we explained in Hamm, it is sufficient to
establish the unfair-advantage prong of the judicial-estoppel
test; accordingly, Anderson's argument on this point is
without merit.
25
1130342, 1130357
Anderson's final argument regarding the doctrine of
judicial estoppel is that the Jackson Hospital defendants
suffer from unclean hands in this matter, which, she says,
should
estop
them
from
asserting
judicial
estoppel.
Essentially, Anderson argues that the Jackson Hospital
defendants
fraudulently
concealed
mistakes
that,
she
generally
alleges, were made during her coronary surgery and/or her
follow-up care until after her bankruptcy case was completed
and that they accordingly should not be allowed to profit from
their wrongful conduct by invoking the doctrine of judicial
estoppel against her. However, as discussed above, we have
already
concluded,
based
partly
upon
Anderson's
own
statements
in her amended pleadings, that the Jackson Hospital
defendants' alleged negligence could reasonably have been
discovered by December 2010. Thus, Anderson cannot attribute
to the Jackson Hospital defendants her failure, in November
2011, to disclose to the bankruptcy court a claim based upon
that alleged negligence.
Moreover, this Court has stated that "'the doctrine of
unclean hands cannot be applied in the context of nebulous
speculation or vague generalities; but rather it finds
26
1130342, 1130357
expression in specific acts of willful misconduct which is
morally reprehensible as to known facts.'" Retail Developers
of Alabama, LLC v. East Gadsden Golf Club, Inc., 985 So. 2d
924, 932 (Ala. 2007) (quoting Sterling Oil of Oklahoma, Inc.
v. Pack, 291 Ala. 727, 746, 287 So. 2d 847, 864 (1973)).
Although Anderson has generally accused the Jackson Hospital
defendants of fraudulently hiding their alleged negligence,
she does not, in her initial brief to this Court, cite any
"specific acts of willful misconduct." After the Jackson
Hospital defendants identified this deficiency, Anderson
attempted to correct it in her reply brief; however, that
attempt comes too late. As the Court of Criminal Appeals
explained in L.J.K. v. State, 942 So. 2d 854, 868-69 (Ala.
Crim. App. 2005):
"'Recitation of allegations without citation to any
legal authority and without adequate recitation of
the facts relied upon has been deemed a waiver of
the arguments listed.' Hamm v. State, 913 So. 2d
460, 486 (Ala. Crim. App. 2002). [The appellant]
cites no legal authority in support of his argument.
He also fails to provide an adequate recitation of
the facts relied upon in support of his argument;
merely referring to the record without setting forth
the facts in support of an argument is not
sufficient to comply with Rule 28(a)(10), Ala. R.
App. P. Moreover, although [the appellant] cites
Strickland v. Washington, 466 U.S. 668, 104 S.Ct.
2052, 80 L.Ed.2d 674 (1984), in his reply brief, and
27
1130342, 1130357
lists four specific allegations of ineffective
assistance of counsel, because his initial brief
fails to comply with Rule 28(a)(10), and he did not
include those specific allegations in his initial
brief, we consider them to have been raised for the
first time in his reply brief. ... As noted above,
'an appellant may not raise a new issue for the
first time in a reply brief.' Woods v. State, 845
So. 2d [843] at 846 [(Ala. Crim. App. 2002)]. See
also James v. State, 788 So. 2d 185, 192 n. 2 (Ala.
Crim. App. 2000) (noting that an appellant may not
raise for the first time in his reply brief specific
allegations of ineffective assistance of counsel
that were not raised in his initial appellate
brief)."
We agree with the Court of Criminal Appeals' recitation of the
applicability of Rule 28(a)(10), Ala. R. App. P. Anderson has
not established that the trial court exceeded its discretion
in the manner in which it applied the doctrine of judicial
estoppel against her.
Anderson's final argument is that the summary judgment
should be reversed because, she argues, she should be given
the opportunity to ask the bankruptcy court if she, instead of
Hamm, the trustee, can pursue her claim against the Jackson
Hospital defendants. Anderson acknowledges that Hamm is
properly viewed as the real party in interest; however, she
argues that debtors are nevertheless sometimes allowed to
prosecute claims themselves if the trustee abandons the claim
28
1130342, 1130357
or the bankruptcy court authorizes the debtor to prosecute the
claim instead of the trustee. See Hamm, 52 So. 3d at 491. It
is evident by Hamm's actions in this case that he has no
intention of abandoning the action and leaving
its
prosecution
to Anderson, but Anderson argues that the bankruptcy court
might nevertheless authorize her to pursue the action instead
of Hamm and urges us to reverse the order entered by the trial
court so she can pursue this possibility with the bankruptcy
court.
Although we have no desire to remove this issue from the
bankruptcy court's purview, Anderson's argument simply comes
too late. Anderson could have made her request to the
bankruptcy court at any time before the entry of the judgment
that is the subject of these petitions but failed to do so.
Moreover, Anderson completely failed to raise this issue with
the trial court, and we cannot hold the trial court in error
for failing to give Anderson time to pursue this avenue with
the bankruptcy court when she never asked the trial court for
that additional time. See Andrews v. Merritt Oil Co., 612 So.
2d 409, 410 (Ala. 1992) ("This Court cannot consider arguments
raised for the first time on appeal; rather, our review is
29
1130342, 1130357
restricted to the evidence and arguments considered by the
trial court."). Anderson's argument is without merit.
V.
Anderson sued the Jackson Hospital defendants in October
2012 alleging that both of her feet were amputated as a result
of Dr. Kwan's negligence. However, because Anderson failed to
disclose this potential cause of action when she filed for
bankruptcy in November 2011, the Jackson Hospital defendants
moved the trial court to enter a summary judgment in their
favor on the ground of judicial estoppel. Thereafter, Hamm,
the bankruptcy trustee, moved to be substituted as the real
party in interest in the action initiated by Anderson based on
well established law holding that causes of action held by a
debtor in bankruptcy become the responsibility of
the
trustee.
The trial court subsequently entered an order substituting
Hamm as the plaintiff, and both the Jackson Hospital
defendants and Anderson sought review of that decision in this
Court: The Jackson Hospital defendants argue that Hamm waived
his right to be substituted as the real party in interest and
Anderson argues that she should be allowed to pursue her claim
instead of Hamm. However, as explained above, the parties
30
1130342, 1130357
have failed to establish that the trial court exceeded its
discretion with regard to either decision, and we accordingly
deny the parties' petitions for the writ of mandamus.
1130342 –– PETITION DENIED.
1130357 –– PETITION DENIED.
Bolin, Shaw, Main, Wise, and Bryan, JJ., concur.
Murdock, J., concurs specially.
Moore, C.J., concurs in the result.
Parker, J., recuses himself.
31
1130342, 1130357
MURDOCK, Justice (concurring specially).
I concur in the main opinion, but I write separately to
address note 2 of that opinion. In note 2, the main opinion
summarizes the actions of the Court of Civil Appeals in
Lumpkin v. City of Gulf Shores, 964 So. 2d 1233 (Ala. Civ.
App. 2006), as follows:
"[T]he Court of Civil Appeals affirmed a summary
judgment entered in favor of the appellee, in part
because that court concluded that the appellants had
failed to timely substitute the real party in
interest as a plaintiff. It appears in that case
that the trial court had not articulated its reasons
for entering the summary judgment, and it is not
clear that the issue whether the plaintiffs had been
given the Rule 17(a)-mandated 'reasonable time' to
make substitution of the proper real party in
interest had been considered by the trial court or
even raised by the parties before the summary
judgment was entered. Accordingly, the Court of
Civil Appeals appropriately considered that issue
de novo."
___ So. 3d at ___ n. 2. The notion that "the Court of Civil
Appeals appropriately considered [the stated] issue de novo"
would be correct only if it could be ascertained from the
record, including filings made in the trial court and the
trial court's order, that the trial court's summary-judgment
order was not based on that issue and, further, only if the
issue was one that could be invoked sua sponte by the
32
1130342, 1130357
appellate court because it presented an alternative valid
"legal ground" for affirming the trial court's order and, in
addition, could be so invoked without implicating the due-
process rights of the parties adversely affected by that
invocation. I do not read note 2 as saying anything other
than this.
33 | November 7, 2014 |
6573aa4a-bc81-40ac-b676-eb566e01d75c | Victor Deng and DM Technology & Energy, Inc. v. Clarence "Buddy" Scoggins and Complete Lighting Source, Inc. | N/A | 1121415 | Alabama | Alabama Supreme Court | Rel: 12/5/14
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
____________________
1121415
____________________
Victor Deng and DM Technology & Energy, Inc.
v.
Clarence "Buddy" Scroggins and Complete Lighting Source,
Inc.
Appeal from Jefferson Circuit Court, Bessemer Division
(CV-07-0563)
BRYAN, Justice.
Victor Deng and DM Technology & Energy, Inc. ("DM"),
appeal from a judgment based on the jury's verdict entered by
the Jefferson Circuit Court in favor of Clarence "Buddy"
Scroggins and Complete Lighting Source, Inc. ("Complete
1121415
Lighting"), on their claims against Deng and DM alleging
breach of contract and fraud. We affirm the judgment as to
the breach-of-contract claim but reverse the judgment as to
the fraud claim, and we remand the case to the circuit court
for a new trial on that claim.
Facts and Procedural History
Scroggins is the owner of Complete Lighting, an Atlanta-
based company that sells lighting equipment, including lamps,
ballasts, and fixtures. Deng is the owner of DM, a
California-based company that also sells lighting equipment.
Scroggins began to work as a sales representative for DM in
late 2004 or early 2005. Scroggins testified that the parties
originally intended for Scroggins to sell DM's fluorescent
products but that he had difficulty selling those products
because DM did not have the necessary stock to fill the orders
he generated.
As part of its business, Complete Lighting sold lighting
equipment to owners of aquariums. Scroggins became aware of
concerns expressed by aquarium owners related to high energy
consumption, costs, and heat caused by existing aquarium-
lighting fixtures. Scroggins testified that, in response to
2
1121415
those concerns, he developed an idea for an LED lamp tube that
could be used in aquariums. Scroggins did not have the
ability to manufacture the LED lamp tube, so he communicated
his idea to Deng, who owned a company in China with
manufacturing capabilities. Deng developed a prototype of
the
LED lamp tube, which he sent to Scroggins. Scroggins
testified that the first prototype was "not even close" to his
original idea. He discussed his concerns with Deng, who,
according to Scroggins, sent him a second prototype that was
better. However, Scroggins still was not satisfied with the
prototype. Scroggins testified that the third prototype Deng
sent him was something that Scroggins thought was marketable.
While the prototype for the LED lamp tube was in
development, a friend of Scroggins's, Skip Busby,
suggested an
alternative use for the LED lamp tubes in display counters in
retail
businesses,
such
as
Wal-mart
Stores,
Inc.
("Wal-mart").
Busby arranged a meeting for Deng and Scroggins in
Bentonville, Arkansas, with one of Wal-mart's suppliers,
Leggett & Platt, Inc., to demonstrate the LED lamp tubes. In
July 2006, while in Bentonville but before the meeting with
Leggett & Platt, Scroggins and Deng executed an agreement that
3
1121415
had been drafted by Scroggins ("the exclusivity agreement").
The exclusivity agreement provided, among other things:
"1. [DM] gives the right to sell to Complete
Lighting exclusively for one year from the signed
date. At the end of this term, said contract will
be reviewed and re-negotiated if needed.
"2. [DM] guarantees 5% commission for present
and future sales from any and all customers
[Complete Lighting] brings of the LED [lamp] [t]ube.
"3. [DM] guarantees to deliver product in
quality condition.
"4. [DM] guarantees not to sell [to]
customer[s]
direct[ly]
without
commissions
to
[Complete Lighting] under any circumstances."
As a result of their meeting with Leggett & Platt,
Gabriel Logan, a limited liability company that sells to Wal-
mart through Leggett & Platt, expressed interest in the LED
lamp tube and, in November 2006, purchased 25 samples, or
$88,940.22 worth of product, from DM. The samples were to be
used in a test run in stores. Scroggins testified that he had
received very positive feedback from Wal-mart and "Zales,"
presumably Zales Jewelry Company, to whom Scroggins testified
he had sent a sample.
From July 2006 to March 2007, there were no further sales
of LED lamp tubes. Scroggins testified that he had trouble
4
1121415
getting working samples from DM that could be delivered to
customers. Another difficulty in selling the LED lamp tubes
was that the drivers in the samples kept burning out. In
1
August 2006, Deng applied for a patent for the LED lamp tube
in the United States. Deng was listed as the sole "inventor"
of the LED lamp tube. Scroggins was not named in the patent
application.
In March 2007, Deng sent Scroggins a letter, stating:
"It is with regret that we find the need to
terminate the contract of 'exclusiveness' regarding
the LED Lamp Tubes as manufactured by us. It is our
belief that the conditions of said agreement have
not been fulfilled. Over an eight month period only
one customer has been produced. As with you, we
also believed the future potential of this customer
could have been vastly significant. However, [DM]
has invested a large amount of dollars for this
product's
R[esearch]
&
D[evelopment].
And
unfortunately, to help continue this new product's
growth,
DM
feels
it
need[s]
to
have
more
sales/customers by this time.
"This termination will be effective March 31,
2007. All commissions accrued up to that date will
be paid as per our agreement."
Deng did not pay Scroggins a commission on the November 2006
sale to Gabriel Logan.
It was later discovered that the problem was not in the
1
design of the LED lamp tube but in the LED lighting itself,
which was not manufactured by DM.
5
1121415
In April 2007, Scroggins and Complete Lighting sued Deng,
DM, and BARTCO Lighting ("BARTCO"), a company to whom Deng and
DM had sold some "Retrofit LED tubes." Scroggins and Complete
Lighting alleged in the complaint:
"14. Upon information and belief, and prior to
the ... unilateral termination of the [exclusivity
agreement], DM Technology and Deng and BARTCO
entered into a conspiracy to not only defraud
Scroggins and Complete Lighting of the proprietary
LED Lamp Tubes technology they created, but also any
and all future commissions or sales associated with
the LED Lamp Tubes.
"15. Upon information and belief, and in
furtherance of the conspiracy, DM Technology and
Deng entered into an agreement with BARTCO wherein
BARTCO would [sell] the LED Lamp Tubes that were
created by Scroggins and Complete Lighting and
subsequently manufactured by DM Technology and Deng.
"16. Scroggins and Complete Lighting also
completed sales to Gabriel Logan and are owed back
commissions for sales.
"17. Scroggins and Complete Lighting are owed
past and future commissions on sales of all LED Lamp
Tubes by DM Technology and Deng and BARTCO.
"18.
Upon information
and
belief,
DM
Technology
and Deng have sold BARTCO over 2.8 million dollars
of LED Tubes, for which Scroggins and Complete
Lighting are owed a five percent (5%) commission of
$140,000.00.
"19.
Upon
information
and
belief,
DM
Technology, Deng and BARTCO have continued the
conspiracy by continuing to market the LED Lamp
6
1121415
Tube[s], by effectuating further sales of LED Lamp
Tubes."
Scroggins and Complete Lighting sought an injunction
preventing Deng, DM,
and
BARTCO from manufacturing, making, or
selling the LED lamp tubes. They also sought damages for,
among other claims, breach of contract and fraud. BARTCO was
eventually dismissed from the case and is not a party to this
appeal.
The action was removed to federal court but was remanded
to the Jefferson Circuit Court because of "fatal procedural
defects in the removal." Deng and DM moved the circuit court
to dismiss the claims against them, arguing that the court did
not have jurisdiction over them. The circuit court initially
granted their motion but later set aside the dismissal on
Scroggins and Complete Lighting's motion to alter, amend, or
vacate the judgment.
In March 2013, the case was tried before a jury. At
trial, questions were posed regarding an alleged promise by
Deng to include Scroggins's name on the patent for the LED
lamp tubes. Scroggins testified that he and Deng had
discussed patenting the idea for LED lamp tubes but did not
discuss a time frame for securing that patent.
7
1121415
Prior to trial, Scroggins had testified by affidavit in
June 2007 and again in May 2008 that
"[a]pproximately a year to a year and a half
into th[e] process [of developing the LED lamp tube]
Deng suggested that the LED light needed to be
patent[ed].
"I did not have the funds available to pay for
the patent, so we agreed that the patent would be
submitted in DM Technology's name.
"It was during this time period that I became
concerned that once the technology was patented
there would be nothing to prevent Deng from stealing
my idea.
"Therefore, in exchange for the patent being
issued to DM Technology's name instead of mine, we
agreed that I would be the exclusive agent
throughout the United States to [sell] the LED Lamp
Tubes [that] DM Technology manufactured. We
subsequently
entered
into
[the
exclusivity]
agreement."
However,
Scroggins
testified
at
trial
that
the
exclusivity agreement was executed in exchange for allowing
Deng to put his name as well as Scroggins's name on the LED-
lamp-tube patent. Scroggins further testified at trial that
the exclusivity agreement was "a temporary thing while we
worked on ... getting [me] on the patent, whatever we had to
do. It was more of a short-term protection for me."
Scroggins also testified that if Deng had not agreed to
8
1121415
include him on the patent, Scroggins "would have looked for
another source" to manufacture the LED lamp tube.
Scroggins testified that around November 2006 he learned
that a patent application for the LED lamp tube was pending in
China. The Chinese patent application did not name Scroggins
as an inventor. Scroggins testified that he called Deng about
the omission and that Deng assured him that this was the
"standard process" in China and that it "would not affect
[their] relationship and the plans that [they] had,"
presumably related to securing the United States patent.
Scroggins also testified that Deng told him the application
for the patent in China was unrelated to the United States
patent application.
Deng testified at trial that he did not include
Scroggins's name on the United States patent application
because the LED lamp tube was not Scroggins's idea. Deng
testified that Scroggins was a sales representative and that
he, Deng, "never had an intent to put Buddy Scroggins'[s] name
on th[e] patent" because "[i]t [was] not [Scroggins's]
business."
9
1121415
At the close of Scroggins and Complete Lighting's case-
in-chief, Deng and DM, on the one hand, and Scroggins and
Complete Lighting, on the other, separately moved for a
judgment as a matter of law ("JML"), which motions were
denied. They renewed those motions at the close of all the
evidence. The circuit court denied the renewed motions for a
JML as well and submitted only the breach-of-contract and
fraud claims to the jury. The breach-of-contract claim was
based on Deng and DM's alleged failure to pay Scroggins the
commission owed on the sale to Gabriel Logan, and the fraud
claim was based on Deng's alleged fraudulent promise to put
Scroggins's name on the patent. The jury returned a verdict
in Scroggins and Complete Lighting's favor on both claims and
awarded them $4,750 in compensatory damages on the breach-of-
contract claim, $1.5 million in compensatory damages on the
fraud claim, and $1.5 million in punitive damages on the fraud
claim.2
Deng and DM argue that the $1.5 million in compensatory
2
damages was actually an award for "nominal compensatory
damages." Deng and DM's brief, at 28. Scroggins and Complete
Lighting argue that the verdict form identified those damages
as "Nominal/Compensatory" damages and that the jury clearly
chose compensatory rather than nominal damages. Deng and DM
cite no evidence to the contrary. The circuit court described
the damages awarded for the fraud claim as "compensatory
10
1121415
On May 1, 2013, Deng and DM filed a motion, renewing
their request for a JML or, in the alternative, requesting a
new trial. Scroggins and Complete Lighting opposed Deng and
DM's motion and moved the circuit court to strike evidence
attached to Deng and DM's motion related to an allegedly fake
2003 Chinese patent for the LED lamp tubes and unauthenticated
tax returns for DM. They also moved for sanctions against
Deng and DM. After a hearing, the circuit court entered an
order denying Deng and DM's motion for a JML or, in the
alternative, a new trial and also denying Scroggins and
Complete Lighting's motion for sanctions. The circuit court
went on to grant Scroggins and Complete Lighting's motion to
strike evidence of the 2003 Chinese patent and the
unauthenticated tax returns. The circuit court also entered
a separate order awarding Scroggins and Complete Lighting
court costs in the amount of $4,133.44. Deng and DM have
damages" in its judgment based on the jury's verdict, and Deng
and DM refer to them as "compensatory damages" in their
renewed motion for a JML or, in the alternative, for a new
trial. In fact, they raise the argument that the damages are
"nominal compensatory damages" for the first time on appeal.
"'An issue may not be raised for the first time on appeal.'"
Allsopp v. Bolding, 86 So. 3d 952, 962 (Ala. 2011).
11
1121415
appealed only the denial of the motion for a JML or a new
trial.
Issues
Deng and DM allege that the circuit court erred in
denying their motion for a JML or, in the alternative, a new
trial because, they argue, (1) the fraud claim is preempted by
federal patent law and, therefore, the circuit court did not
have jurisdiction over that claim; (2) Scroggins and Complete
Lighting changed the basis of their fraud claim during the
course of the trial, which, Deng and DM argue, constituted
"trial by ambush"; (3) the fraud claim was based on
contradictory testimony by Scroggins; (4) Scroggins and
Complete Lighting did not present evidence of
several
elements
of a fraud claim; (5) the compensatory-damages award for the
fraud claim was based on speculative evidence; (6) the
punitive-damages award was not supported by clear and
convincing evidence; and (7) the punitive-damages award was
the result of prejudice, bias, passion, or other improper
motive. Deng and DM also argue, in the alternative, that the
punitive-damages award
is excessive and that they are
entitled
to a remittitur of those damages.
12
1121415
Standards of Review
"When reviewing a ruling on a motion for a JML,
this Court uses the same standard the trial court
used initially in deciding whether to grant or deny
the motion for a JML. Palm Harbor Homes, Inc. v.
Crawford, 689 So. 2d 3 (Ala. 1997). Regarding
questions of fact, the ultimate question is whether
the nonmovant has presented sufficient evidence to
allow the case to be submitted to the jury for a
factual resolution. Carter v. Henderson, 598 So. 2d
1350 (Ala. 1992). The nonmovant must have presented
substantial evidence in order to withstand a motion
for a JML. See § 12–21–12, Ala. Code 1975; West v.
Founders Life Assurance Co. of Florida, 547 So. 2d
870, 871 (Ala. 1989). ... In reviewing a ruling on
a motion for a JML, this Court views the evidence in
the light most favorable to the nonmovant and
entertains such reasonable inferences as the jury
would have been free to draw. Id. Regarding a
question of law, however, this Court indulges no
presumption of correctness as to the trial court's
ruling. Ricwil, Inc. v. S.L. Pappas & Co., 599 So.
2d 1126 (Ala. 1992)."
Waddell & Reed, Inc. v. United Investors Life Ins. Co., 875
So. 2d 1143, 1152 (Ala. 2003).
With regard to a motion for a new trial, this Court has
stated:
"'"It is well established that a ruling on a motion
for a new trial rests within the sound discretion of
the trial judge. The exercise of that discretion
carries with it a presumption of correctness, which
will not be disturbed by this Court unless some
legal right is abused and the record plainly and
palpably shows the trial judge to be in error."'"
13
1121415
Baptist Med. Ctr. Montclair v. Whitfield, 950 So. 2d 1121,
1126 (Ala. 2006) (quoting Curtis v. Faulkner Univ., 575 So. 2d
1064, 1065–66 (Ala. 1991), quoting in turn Kane v. Edward J.
Woerner & Sons, Inc., 543 So. 2d 693, 694 (Ala. 1989), quoting
in turn Hill v. Sherwood, 488 So. 2d 1357, 1359 (Ala. 1986)).
"Furthermore, a jury verdict is presumed to be
correct, and that presumption is strengthened by the
trial court's denial of a motion for a new trial.
In reviewing a jury verdict, an appellate court must
consider the evidence in the light most favorable to
the prevailing party, and it will set aside the
verdict only if it is plainly and palpably wrong."
Delchamps, Inc. v. Bryant, 738 So. 2d 824, 831 (Ala. 1999)
(citations omitted).
Analysis
As a threshold matter, we note that Deng and DM allege no
error in either the jury's verdict or the circuit court's
judgment as they relate to the breach-of-contract claim or the
compensatory-damages award related to that claim. "'An
argument not made on appeal is abandoned or waived.'" Muhammad
v. Ford, 986 So. 2d 1158, 1165 (Ala. 2007) (quoting Avis Rent
A Car Sys., Inc. v. Heilman, 876 So. 2d 1111, 1124 n.8 (Ala.
2003)). Therefore, the judgment is affirmed insofar as it
relates to Scroggins and Complete Lighting's breach-of-
14
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contract claim, and the remaining arguments will be addressed
only as they relate to the fraud claim.
Deng and DM argue that the circuit court "lacked subject
matter jurisdiction over the case because [Scroggins and
Complete Lighting's] claims attacked the validity and
ownership of a patent." Deng and DM's brief, at 12. The
United States Code, 28 U.S.C. § 1338(a), provides, in
pertinent part, that "[t]he [federal] district courts shall
have original jurisdiction of any civil action arising under
any Act of Congress relating to patents" and that "[n]o State
court shall have jurisdiction over any claim for relief
arising under any Act of Congress relating to patents."3
Deng and DM argue that, "prior to trial, Scroggins
maintained that the LED Lamp Tube was his idea. Scroggins
also testified that he and Deng agreed that the patent would
be submitted in DM Technology's name, only. In return,
Scroggins would be the exclusive agent throughout the United
States to sell the LED Lamp Tube." Deng and DM's brief, at
Again, we note that the breach-of-contract claim did not
3
relate to the patent for the LED lamp tube, but to Deng and
DM's alleged failure to pay Scroggins and Complete Lighting
the commission owed under the exclusivity agreement. Thus,
our analysis of this jurisdiction issue is limited to the
fraud claim.
15
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14. However, Deng and DM argue, at trial "Scroggins[ and
Complete Lighting's] counsel told the jury that the case
centered on who actually invented the LED Lamp Tube," id., and
"[Scroggins] testified that Deng had obtained the patent of
Scroggins's
idea
without
Scroggins's
knowledge
or
permission."
Id., at 15. Deng and DM argue that "[t]his ... changed
[Scroggins's] case from one based upon the [exclusivity
agreement] to one attacking the validity of the patent
itself." Id. Therefore, Deng and DM argue, Scroggins and
Complete Lighting's fraud claim is federally preempted under
§ 1338(a) and the circuit court did not have jurisdiction over
that claim.
Deng and DM also cite the statement from University of
Colorado Foundation, Inc. v. American Cyanamid Co., 196 F.3d
1366, 1372 (Fed. Cir. 1999), that "the field of federal patent
law preempts any state law that purports to define rights
based on inventorship" and argue that,
"[i]n returning a verdict in Scroggins[ and Complete
Lighting's] favor on the fraud count, the judgment
necessarily had to have determined that Scroggins,
not DM Technology, was the 'inventor' of the LED
Lamp Tube. In doing so, the jury stepped into a
field that is within the exclusive jurisdiction of
the federal courts, rendering the judgment as void
as a matter of law."
16
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Deng and DM's brief, at 15.
However, in HIF Bio, Inc. v. Yung Shin Pharmaceuticals
Industrial Co., 600 F.3d 1347, 1354 (Fed. Cir. 2010), the
United States Court of Appeals for the Federal Circuit ("the
Federal Circuit") stated: "Despite th[e] broad language [in
American Cyanamid], this court has emphasized that a claim
arises under the patent laws only if the inventorship issue is
essential to the resolution of the claims." The Federal
Circuit noted:
"The district court's jurisdiction under § 1338(a)
'extend[s] only to those cases in which a well-
pleaded complaint establishes either that federal
patent law creates the cause of action or that the
plaintiff's right to relief necessarily depends on
the resolution of a substantial question of federal
patent law, in that patent law is a necessary
element of the well-pleaded claims.'"
HIF Bio, 600 F.3d at 1352 (quoting Christianson v. Colt Indus.
Operating Corp., 486 U.S. 800, 808-09 (1988)).
Citing American Cyanamid, among others, the Federal
Circuit concluded in HIF Bio that the plaintiffs' claims for
a declaratory judgment as to inventorship and slander of title
were preempted by federal patent law because a determination
of inventorship was essential to the resolution of those
claims. The Federal Circuit went on to conclude, however,
17
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that "patent law [was] not essential to plaintiffs' remaining
causes of action," including their fraud claims,
because
"each
cause of action could be resolved without reliance on the
patent laws." 600 F.3d at 1355. The Federal Circuit concluded
that, even though the question of inventorship may be relevant
to a claim, that claim is not preempted where "a determination
of inventorship is not essential to any of the ... elements of
[the claim]." HIF Bio, 600 F.3d at 1356.
The issue of the inventorship of the LED lamp tube may be
relevant to Scroggins and Complete Lighting's fraud
claim,
but
it is not essential to the particular elements of that claim.
"'Fraud'
is
defined
as
(1)
a
false
representation (2) of a material existing fact (3)
relied upon by the plaintiff (4) who was damaged as
a proximate result of the misrepresentation. If
fraud is based upon a promise to perform or abstain
from performing in the future, two additional
elements must be proved: (1) the defendant's
intention,
at
the
time
of
the
alleged
misrepresentation, not to do the act promised,
coupled with (2) an intent to deceive."
Coastal Concrete Co. v. Patterson, 503 So. 2d 824, 826 (Ala.
1987) (citation omitted).
Scroggins and Complete Lighting's fraud claim is based on
Deng's allegedly false promise to put Scroggins's name on the
patent application for the LED lamp tube, his alleged lack of
18
1121415
intent when he made the promise to fulfill that promise, and
the damage Scroggins and Complete Lighting allegedly suffered
by relying on that promise. Scroggins's status as the actual
inventor of the LED lamp tube is not essential to proving any
of those allegations or any other element of a fraud claim
based on an allegedly false promise. Thus, although the issue
of inventorship may be relevant to the fraud claim in this
case, it is not essential to a resolution of that claim, and
"[Scroggins and Complete Lighting's] right to relief [does
not] necessarily depend[] on the resolution of a substantial
question of federal patent law." Christianson, 486 U.S. at
809. Thus, the fraud claim is not federally preempted under
§ 1338(a), and Deng and DM are not entitled to have that claim
dismissed for lack of subject-matter jurisdiction. See HIF
Bio, supra.4
Deng and DM also cite Hunter Douglas, Inc. v. Harmonic
4
Design, Inc., 153 F.3d 1318 (Fed. Cir. 1998), for the
proposition that "if a state-law cause of action requiring a
'false statement' as an element attacks the validity of a
patent, it necessarily depends on a question of federal patent
law and the federal courts have exclusive subject matter
jurisdiction over the action, even where no federal cause of
action is otherwise involved." Deng and DM's brief, at 13.
However, Scroggins and Complete Lighting have not challenged
the validity of the patent or requested any changes be made to
the patent or sought a declaration of rights under the patent.
Instead, they have alleged that Deng fraudulently promised to
19
1121415
Deng and DM also argue that even if the circuit court has
jurisdiction over the fraud claim, they are entitled to a JML
on that claim because "Scroggins [and Complete Lighting]
failed to ... present evidence of reasonable reliance,
proximate cause of damages, or intent to deceive." Deng and
DM's brief, at 42. With regard to reasonable reliance, Deng
and DM argue that "Scroggins's testimony that he relied on
Deng's alleged promise that Scroggins would be put on the
Patent is unreasonable as a matter of law. Scroggins drafted
the [exclusivity] [a]greement. That [a]greement stated that
only Deng would be listed on the patent." Deng and DM's
brief, at 46.
However, the exclusivity agreement does not address the
acquisition of a patent for the LED lamp tube or state who
would be listed on any patent. Scroggins testified at trial
that Deng promised him that "[he] would be a partner" and that
"[he] would be on [the patent]." Scroggins testified that "if
[Deng] had not made that promise," Scroggins would have
located a different source to manufacture the LED lamp tube.
include Scroggins on the patent application for the LED lamp
tube and that Scroggins and Complete Lighting suffered damage
as a result of that false promise. Thus, Deng and DM's
reliance on Hunter Douglas is misplaced.
20
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When the evidence is viewed in the light most favorable to
Scroggins and Complete Lighting as nonmovants, see Waddell,
supra, Scroggins's testimony is sufficient to create a jury
question as to whether Scroggins reasonably relied on Deng's
alleged promise. Thus, Deng and DM have not demonstrated that
they are entitled to a JML in this regard.5
Deng and DM next argue that they are entitled to a JML on
the fraud claim because "Scroggins [and Complete Lighting]
presented no evidence that any alleged misrepresentations by
Deng proximately caused damage to Scroggins [and Complete
Lighting]." Deng and DM's brief, at 47. Deng and DM argue
that, "[u]nder federal patent law, co-inventors of a patent
are not accountable to one another for profits or sales of the
Deng and DM also argue that Scroggins's reliance on
5
Deng's promise to put his name on the patent was unreasonable
because, they say, Scroggins was on notice of the alleged
misrepresentation. However, it is unclear how the evidence
they cite in support of this argument –- i.e., that Scroggins
believed that a retrofit LED tube was essentially the same as
an LED lamp tube, that Scroggins was aware that Deng had sold
retrofit LED tubes to BARTCO a few months before the
exclusivity agreement was signed, that Scroggins prepared the
exclusivity agreement to protect his interest in the LED lamp
tube, and that "Scroggins could not reasonably have believed
that Deng agreed that the Retrofit and LED Lamp Tube[s] were
the same product," Deng and DM's brief, at 47, –- would put
Scroggins on notice that Deng's alleged promise to put his
name on the patent was false.
21
1121415
patented product. Thus, even [if] Scroggins had been listed
on the Patent of the LED [l]amp [t]ube, Deng would have had no
duty to pay Scroggins any royalties." Deng and DM's brief, at
48. However, Scroggins and Complete Lighting did not allege
injuries in the form of lost royalties but, instead, alleged
that Deng and DM had essentially stolen the idea for the LED
lamp tubes by not including Scroggins on the patent and that
Scroggins and Complete Lighting were entitled to recover
damages based on "the value of the stolen product" and lost
opportunities for future sales of that product. Scroggins and
Complete Lighting's brief, at 67.
Deng and DM also make the following argument in their
brief:
"Scroggins did not present any evidence that he
ever attempted to apply for a patent on the LED Lamp
Tube; nor did Scroggins present any evidence that he
ever tried to stop the patent application process;
nor did he complain to the Patent and Trademark
Office that Deng was attempting to patent his idea.
Thus, it is illogical to conclude the Deng's alleged
misrepresentation that he would put Scroggins on the
Patent was the proximate cause of any damage[]
Scroggins may have suffered."
Deng and DM's brief, at 48.
However, Scroggins testified that Deng had promised to
include him on the patent that he, Deng, was going to apply
22
1121415
for, that Scroggins learned that Deng had applied for a patent
in China in Deng's name only some months after the application
had been filed, and that when Scroggins asked Deng about it,
Deng assured him that everything would be as they had planned
(i.e., that both Scroggins and Deng would be included on the
United States patent application for the LED lamp tube). This
testimony is sufficient to create a question of fact as to
whether Deng's allegedly false promise to include
Scroggins on
the
patent proximately
caused Scroggins and
Complete
Lighting's alleged injuries. Therefore, Deng and DM have not
demonstrated that they are entitled to a JML in that regard.
Deng and DM also argue that they are entitled to a JML on
the fraud claim because, they say, Scroggins and Complete
Lighting "failed to present substantial evidence that, when
Deng allegedly promised to put Scroggins on the Patent, Deng
had a present intent to deceive Scroggins and not perform his
promise. Deng's alleged failure to perform a promised act is
not sufficient proof of a present intent to deceive." Deng
and DM's brief, at 49. However, Deng testified at trial that
he never intended to include Scroggins's name on the patent.
Deng and DM do not argue or cite any authority indicating that
23
1121415
this testimony, combined with Scroggins's testimony that Deng
had promised to put his name on the patent, is insufficient to
create an issue of fact for the jury as to Deng's intent at
the time the alleged promise was made. Thus, Deng and DM have
not demonstrated that the circuit court erred in denying their
motion for a JML on that basis.
Deng and DM argue that they are entitled to a new trial
"because [the jury's verdict] was based upon pure speculation
by Scroggins." Deng and DM's brief, at 22. Deng and DM argue
that, "[i]n Alabama, damages cannot be based
upon speculation;
rather, they must be direct and reasonably certain." Deng and
DM's brief, at 22.
This Court has stated:
"[D]amages may be awarded only where they are
reasonably certain. Damages may not be based upon
speculation. ... However, 'this does not mean that
the plaintiff must prove damages to a mathematical
certainty .... Rather, he must produce evidence
tending to show the extent of damages as a matter of
just and reasonable inference.' C. Gamble, Alabama
Law of Damages § 7-1 (2d ed. 1998), as cited in
Industrial Chemical [& Fiberglass Corp. v. Chandler,
547 So. 2d 812, 820 (Ala. 1988)]. The rule that one
cannot recover uncertain damages relates to the
nature of the damages, and not to their extent. If
the damage or loss or harm suffered is certain, the
fact that the extent is uncertain does not prevent
a recovery."
24
1121415
Jamison, Money, Farmer & Co. v. Standeffer, 678 So. 2d 1061,
1067 (Ala. 1996). See also Alabama Power Co. v. Alabama
Public Serv. Comm'n, 267 Ala. 474, 478, 103 So. 2d 14, 17
(1958) ("One of the fundamental rules of damages is that to be
compensable they must be direct and reasonably certain, not
remote and speculative."); Crommelin v. Montgomery Indep.
Telecasters, Inc., 280 Ala. 391, 394, 194 So. 2d 548, 551
(1967) ("[N]either the fact nor amount of damages, nor the
cause of the damages, can rest solely on speculation.").
"'This Court has held that "the general rule is that
compensatory damages are intended only to reimburse one for
the loss suffered by reasons of an injury to a person or
property." Sessions Co. v. Turner, 493 So. 2d 1387, 1390
(Ala. 1986). It is equally well established that damages may
not be awarded where they are remote or speculative.'" Torsch
v. McLeod, 665 So. 2d 934, 940 (Ala. 1995) (quoting United
Servs. Auto. Ass'n v. Wade, 544 So. 2d 906, 912 (Ala. 1989)).
In a fraud action, "[t]he purpose of damages ... is to place
the defrauded person in the position he would occupy if the
representations had been true. All naturally resulting
damages, including expenses incurred as a result of the fraud,
25
1121415
are recoverable, but they must be actual damages proved at
trial." Wilhoite v. Franklin, 570 So. 2d 1236, 1237 (Ala.
Civ. App. 1990) (citation omitted).
Scroggins and Complete Lighting argue that, as a result
of Deng's fraudulent promise to include him on the patent for
the LED lamp tubes, they lost out on the value of that
product, including future sales of the product. At trial,
Scroggins testified as follows:
"Q: When ... you and [Deng] first started
talking about this product and you told him about
your idea as it developed, did y'all ever discuss
either of y'all's opinions about the value of the
product?
"A: Yes, sir, we both did.
"Q: And what, if anything, did [Deng] say about
the value –- his opinion of the value of the
product?
"A: We both agreed it was in the millions."
Scroggins also testified that the possibility that the
LED lamp tubes could be used for more than aquarium lighting
substantially increased Scroggins's opinion of its value. He
stated:
"When [Wal-mart] looked at what they were
looking at, they come out telling me what else it
could be used for. What I thought it was worth
multiplied by 100-fold because we were talking now
26
1121415
not only –- not only displays, we were talking
refrigerator cabinets. We were talking shoe
displays. We were talking sporting displays. We
were talking every display you could think of in the
store and that was only one customer, so you know."
When asked what his opinion as to the value of the LED
lamp tubes was based on, Scroggins responded:
"That you had one trial store that was crazy
about it for one particular part of that store and
when they came out and brought out everything else
that it could be done with, things I hadn't even
thought of, that I realized that one store had just
quadrupled or whatever the word is and that was only
one store out of all of them in the United States,
all the different people."
Scroggins cited no other basis for his testimony that the
LED-lamp-tube idea was worth millions, and Scroggins and
Complete Lighting presented no other evidence as to the value
of the LED lamp tubes or the amount of the loss they incurred
as a result of the alleged fraud. During closing arguments,
Scroggins and Complete Lighting's counsel attempted to
establish a formula that would support Scroggins's testimony
that the value of the LED lamp tubes was "in the millions."
Scroggins's counsel stated:
"[L]et's talk about the damages and why there is
sort of a legitimate basis. ... We know that there
was a Gabriel Logan sale that consisted of $90,000
for 25 stores.
27
1121415
"Now, for 25 stores, that's approximately or
exactly $3,600 per store. ... So Walmart at the time
had over 5,200 stores and Buddy testified about
that. ...
"....
"Now, 5,200 at $3,600 per store, that's how much
it is, $18,720,000, a big number, a substantial
number. You can do that for all sorts of stores.
Gabriel Logan would have been selling to everybody.
I
think
-–
I
think
-–
who
knows,
Target
[Corporation] has thousands of stores talking about
thousands of stores, 1.2 million –- I mean, excuse
me, 6.12 million.
"Well, what would the commission be on ideas
like that, talking about times .05. I mean, we're
just talking about what he would be entitled to
under an exclusive agreement. We're not even
talking about what he would be entitled to if he
owned half the patent like he was supposed to. I'm
trying to be pretty conservative here and when
you're conservative here, you're talking about
almost one million dollars just on Walmart, just on
Walmart. So there is evidence of damages that you
could say yes, that is a reasonable amount of
damages."
The arguments of counsel are not evidence. Scroggins did
not testify as to the per unit value of the LED lamp tubes or
indicate that he had reached his estimate of the value by
taking the per unit cost and multiplying it by the number of
stores Wal-mart had in operation. No evidence was presented
that would corroborate counsel's statement that there was
5,200 Wal-mart stores in operation at the time Scroggins and
28
1121415
Deng sold the 25 samples to Gabriel Logan or that Target
6
Corporation had "thousands" of stores in operation.
Moreover, there was no evidence presented other than
Scroggins's conjecture
that future sales to Wal-mart
or
Target
were pending or likely to happen or that the LED lamp tubes
had been marketed to or sought after by any customers for any
purposes other than aquarium or display-case lighting. In
fact, Deng and DM presented undisputed evidence that, in spite
of the apparent initial enthusiasm of the "one trial store,"
no sales of the LED lamp tubes were made beyond the 25 samples
sold to Gabriel Logan in 2006. Deng and DM received
$88,940.22 for that sale, and that amount did not include the
cost of repairs that had to be made to the 25 samples as a
result of problems with the LED lighting. Thus, Scroggins's
testimony as to the value of the LED lamp tubes was highly
speculative and was insufficient to justify the jury's award
of $1.5 million in compensatory damages on the fraud claim.
Scroggins was asked during trial to give a "ballpark"
6
figure of how many stores Wal-mart had, to which he responded:
"Five thousand, you know, sticks out." Scroggins did not
testify as to the basis of that estimate, and no other
evidence was presented to support it.
29
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Scroggins and Complete Lighting argue that Scroggins's
testimony as to the market value of the LED lamp tubes was in
the nature of opinion evidence, pursuant to § 12-21-114, Ala.
Code 1975, and Delmore v. Gonzales, 903 So. 2d 140 (2004), and
that such testimony is sufficient to support
the
compensatory-
damages award. Section 12-21-114 provides: "Direct testimony
as to the market value is in the nature of opinion evidence;
one need not be an expert or dealer in the article, but may
testify as to value if he has had an opportunity for forming
a correct opinion." In Delmore, this Court determined that
the testimony of the plaintiffs as to the value of certain
property they had inherited from their mother and that, they
argued, had been converted by their stepfather was admissible
to prove damages.
This Court stated:
"[A]ll that is required under §12-21-114, Ala. Code
1975; Rule 701, Ala. R. Evid., and Williamson[ v.
Stephens, 577 So. 2d 1272 (Ala. 1991),] is that a
person's testimony as to value be rationally based
on their perception or based on an opportunity to
form a correct opinion. The evidence, when viewed
in light most favorable to [the plaintiffs], shows
that their testimony was rationally based on their
perceptions or that they had an opportunity for
forming a correct opinion as to the value of their
mother's personal property because their mother
owned some of the property when [one of the
30
1121415
plaintiff's] lived with her and they both visited
their mother's home on a frequent basis. The manner
in which [the plaintiffs] determined the value of
their mother's personal property goes to the weight
that will be assigned by the jury but is not a
question of admissibility. The trial court
erroneously excluded the list of personal property
that included [one of the plaintiff's] determination
of the value of the personal property. The judgment
is reversed as to this issue, and the case is
remanded for further proceedings consistent with
this opinion."
Delmore, 903 So. 2d at 144.
Deng and DM's argument here is not that Scroggins's
testimony as to the value of the LED lamp tubes was
inadmissible but that the testimony, by itself, is not
competent evidence supporting the jury's $1.5 million
compensatory-damages award. See Johnson v. Harrison, 404 So.
2d 337, 340 (Ala. 1981) ("The rule has long been established
that the party claiming damages has the burden of establishing
the existence of and amount of those damages by competent
evidence. ... The award of damages cannot be made upon
speculation, and the plaintiff has the burden of offering
evidence tending to show to the required degree, the amount of
damages
allegedly
suffered.").
Moreover,
unlike the
plaintiffs' testimony in Delmore, Scroggins's testimony that
the LED lamp tubes were worth "millions" was not a statement
31
1121415
as to the actual market value of the LED lamp tubes but as to
the potential market value of that product based on
speculation as to potential uses and future sales. Delmore is
distinguishable in that regard.
Scroggins and Complete Lighting also argue that Deng and
DM's failure to object to Scroggins's testimony that the value
of the LED lamp tubes was "in the millions" "pretermits"
consideration
of
their
argument
on
appeal
that
the
compensatory-damages award is based on speculative evidence.
Scroggins and Complete Lighting's brief, at 39. They cite
Robbins v. Sanders, 890 So. 2d 998 (Ala. 2004), in support of
that argument. However, in Robbins, this Court addressed
whether a failure to object to evidence of certain damages
presented at trial precluded the defendant from arguing on
appeal that "the trial court improperly awarded damages for
claims that were not pleaded in the plaintiffs' complaint."
890 So. 3d at 1009. Robbins does not stand for the
proposition that a failure to object to specific testimony as
to the amount of damages when that testimony is given
precludes an argument on appeal that that testimony is
32
1121415
insufficient, by itself, to support the damages award. Thus,
Scroggins's reliance on Robbins is misplaced.
Moreover, although Deng and DM did not object when
Scroggins testified that the LED lamp tubes were worth
"millions," they did argue in their motion for a JML at the
close of Scroggins and Complete Lighting's case-in-chief and
in their renewed motion for a JML at the close of all the
evidence that the claimed damages were based on "pure
speculation." Deng and DM also objected during closing
arguments to figures presented by Scroggins and Complete
Lighting's counsel, purportedly giving a "legitimate basis"
for the damages. Deng and DM argued that the figures were
"just pure speculation. There's no testimony about that."
This objection and the arguments made in the motions for a JML
were sufficient to preserve this issue for appellate review.
See Ex parte Couilliette, 857 So. 2d 793, 794 (Ala. 2003)
("'"[T]o preserve an issue for appellate review, it must be
presented to the trial court by a timely and specific motion
setting out the specific grounds in support thereof."'"
(quoting McKinney v. State, 654 So. 2d 95, 99 (Ala. Crim. App.
1995)).
33
1121415
The jury's award of $1.5 million in compensatory damages
on the fraud claim was based on speculative evidence as to
possible future uses and the value of potential future sales
of the LED lamp tubes. "Although they need not be proved to
a mathematical certainty, 'damages [for fraud] may not be
awarded where they are remote or speculative. A jury must
have some reasonable basis for the amount of its award.'"
Systrends, Inc. v. Group 8760, LLC, 959 So. 2d 1052, 1075
(Ala. 2006) (quoting Parsons v. Aaron, 849 So. 2d 932, 949
(Ala. 2002)). Therefore, "[t]here being no evidentiary basis
for the compensatory damages awarded [to Scroggins and
Complete Lighting on the fraud claim]," the circuit court
erred plainly and palpably in denying Deng and DM's motion for
a new trial. See Systrends, 959 So. 2d at 1079.
Moreover, "[b]ecause the compensatory-damages award has
been eliminated, the punitive damages awarded on this claim
must also be vacated." Systrends, 959 So. 2d at 1079 (citing
Life Ins. Co. of Georgia v. Smith, 719 So. 2d 797, 806 (Ala.
1998) ("We now require ... that a jury's verdict specifically
award either compensatory damages or nominal damages in order
for an award of punitive damages to be upheld."). Our
34
1121415
decision in this regard pretermits consideration of Deng and
DM's arguments that they were entitled to a new trial because
the award of punitive damages was not supported by clear and
convincing evidence, was excessive, or was the result of
prejudice, bias, passion, or other improper motives. Our
holding in this regard also pretermits consideration of Deng
and DM's arguments that they were entitled to a new trial
because, they argue, Scroggins and Complete Lighting changed
the nature of their fraud claim at trial or because, they say,
Scroggins's testimony at trial contradicted his earlier
affidavit testimony.
Conclusion
For the foregoing reasons, we reverse the circuit court's
judgment based on the jury's verdict in favor of Scroggins and
Complete Lighting on the fraud claim and remand the case for
the entry of an order granting a new trial as to that claim.
We affirm the circuit court's judgment as to the breach-of-
contract claim.
AFFIRMED IN PART; REVERSED IN PART; AND REMANDED WITH
DIRECTIONS.
Moore, C.J., and Stuart, Bolin, Parker, Murdock, Shaw,
Main, and Wise, JJ., concur.
35 | December 5, 2014 |
e8542b67-21e1-42b3-889e-7c821f7ee739 | Edwin B. Lumpkin, Jr. v. State of Alabama | N/A | 1131000 | Alabama | Alabama Supreme Court | REL:12/19/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
____________________
1130999
____________________
Edwin B. Lumpkin, Jr.
v.
State of Alabama
____________________
1131000
____________________
Edwin B. Lumpkin, Jr.
v.
State of Alabama
____________________
1131001
____________________
Edwin B. Lumpkin, Jr.
v.
State of Alabama
Appeals from Jefferson Circuit Court, Bessemer Division
(CV-13-10; CV-13-11; and CV-13-12)
STUART, Justice.
Edwin B. Lumpkin, Jr., appeals the orders of the
Jefferson Circuit Court dismissing three cases he had
initiated challenging property-tax assessments made by the
Jefferson County Board of Equalization and Adjustments ("the
Board"). We affirm.
I.
Lumpkin owns and operates Metro Mini Storage, a chain of
self-storage
facilities
with
locations
throughout
the
Birmingham metropolitan area. In 2012, Lumpkin received
notice from Jefferson County regarding the assessed value of
three of his properties located in that county. One property
was
valued
at
$1,268,000;
three
contiguous
parcels
constituting another location were valued at $131,600,
2
1130999, 1131000, 1131001
$130,000, and $142,700, respectively; and six more contiguous
parcels at a third location were valued at $312,000, $243,500,
$854,300, $657,500, $493,200, and $397,900, respectively.
Believing the assessed values of these properties to be too
high, Lumpkin elected to protest their valuation, and, on
August 16, 2012, the Board heard his arguments. On October
18, 2012, the Board issued its rulings on Lumpkin's three
appeals, granting him relief only as to the first property, on
which the assessed value was lowered from $1,268,000 to
$995,400.
On November 16, 2012, Lumpkin, acting pro se, filed three
appeals in the Jefferson Circuit Court (one for each of the
three locations), arguing that the Board's decisions did not
reflect the true market value of the properties and that a
reduction in assessed value was warranted based on the
evidence he had presented. Such appeals are governed by § 40-
3-25, Ala. Code 1975, which provides, in pertinent part:
"All appeals from the rulings of the board of
equalization fixing value of property shall be taken
within 30 days after the final decision of said
board fixing the assessed valuation as provided in
this chapter. The taxpayer shall file notice of
said appeal with the secretary of the board of
equalization and with the clerk of the circuit court
and shall file bond to be filed with and approved by
3
1130999, 1131000, 1131001
the clerk of the circuit court, conditioned to pay
all costs, and the taxpayer or the state shall have
the right to demand a trial by jury by filing a
written demand therefor within 10 days after the
appeal is taken. When an appeal is taken, the
taxpayer shall pay the taxes due as fixed for
assessment for the preceding tax year before the
same becomes delinquent; and, upon failure to do so,
the court upon motion ex mero motu must dismiss the
appeal, unless at the time of taking the appeal the
taxpayer has executed a supersedeas bond with
sufficient sureties to be approved by the clerk of
the circuit court in double the amount of taxes,
payable to the State of Alabama, conditioned to pay
all taxes, interest, and costs due the state,
county, or any agency or subdivision thereof."
Lumpkin's notices of appeal, submitted within 30 days of the
Board's final decisions, were timely filed; however, Lumpkin
did not file the bonds required by § 40-3-25 until April 4,
2014 –– in response to the State's March 17, 2014, motions
moving the trial court to dismiss Lumpkin's appeals based on
his failure to file those bonds. Lumpkin, who had retained
counsel in August 2013, opposed the State's motions to
dismiss, arguing that he had now paid the bonds and that the
failure to do so earlier should not be considered a
jurisdictional defect; however, on April 16, 2014, the trial
court entered an order of dismissal in each of the three
cases. On May 28, 2014, Lumpkin appealed those judgments to
this Court.
4
1130999, 1131000, 1131001
II.
The trial court dismissed the underlying cases based on
Lumpkin's failure to file the bonds required by § 40-3-25.
Thus, the trial court effectively determined that it lacked
subject-matter jurisdiction over the cases. See Ex parte
Shelby Cnty. Bd. of Equalization, [Ms. 1130017, April 11,
2014] ___ So. 3d ___ (Ala. 2014) (noting that a challenge to
a trial court's ruling on a motion to dismiss for failing to
comply with the requirements of § 40-3-25 presented a
"question of subject-matter jurisdiction"). In Newman v.
Savas, 878 So. 2d 1147, 1148-49 (Ala. 2003), this Court set
out the standard of review for a ruling on a motion to dismiss
for lack of subject-matter jurisdiction:
"A ruling on a motion to dismiss is reviewed
without a presumption of correctness. Nance v.
Matthews, 622 So. 2d 297, 299 (Ala. 1993). This
Court must accept the allegations of the complaint
as true. Creola Land Dev., Inc. v. Bentbrooke
Housing, L.L.C., 828 So. 2d 285, 288 (Ala. 2002).
Furthermore, in reviewing a ruling on a motion to
dismiss we will not consider whether the pleader
will ultimately prevail but whether the pleader may
possibly prevail. Nance, 622 So. 2d at 299."
III.
Lumpkin adequately states the issue before this Court in
these appeals as follows:
5
1130999, 1131000, 1131001
"Whether
the
requirement
for
payment
of
security
for costs in [§ 40-3-25] is procedural (an
interpretation that is consistent with other areas
of appellate practice) or jurisdictional, and
therefore required to perfect an appeal."
Lumpkin's briefs, at p. 4. He argues that § 40-3-25 is
1
ambiguous with regard to whether the required bond must be
paid within the 30-day period for taking an appeal from a
ruling of the board of equalization; therefore, he argues,
this Court should apply the rules of statutory construction,
which rules, he argues, mandate a holding that the bond does
not have to paid within that 30-day period. In support of his
argument, Lumpkin notes that the filing of a bond is generally
considered to be a procedural requirement, as opposed to a
jurisdictional requirement, in other appellate proceedings,
including general appeals to this Court or to the Court of
Civil Appeals, appeals to a circuit court from a district
court, and appeals to a circuit court from decisions of state
agencies such as the Alabama Real Estate Commission and the
Department of Human Resources. He further argues that the
bond serves no purpose because taxpayers are required to pay
their court costs and their taxes while any appeal is pending
Lumpkin
filed
substantially
identical
briefs
in
all
three
1
appeals.
6
1130999, 1131000, 1131001
and that the legislature has generally indicated that tax
statutes should be liberally construed to allow disputes to be
decided on their merits.
However, approximately one month before Lumpkin filed
these appeals, this Court released its opinion in Ex parte
Shelby County Board of Equalization, in which this Court
considered the language of § 40-3-25, determined it to be
unambiguous, and held that the failure to timely comply with
its plain-language requirements resulted in the failure to
invoke the trial court's jurisdiction. The specific issue in
Ex parte Shelby County Board of Equalization was whether the
notice of appeal had to be filed with the secretary of the
board of equalization (as well as the circuit court) within 30
days of the final assessment –– not whether the required bond
had to be filed within that same time frame –– but our opinion
made clear that all the requirement of § 40-3-25 had to be
timely met in order to properly invoke the trial court's
jurisdiction. Specifically, we stated:
"The Board maintains that, pursuant to §
40–3–25, a taxpayer, in order to timely challenge a
final tax assessment, must file a notice of appeal
with both the secretary of the Board and the clerk
of the circuit court within 30 days of the final
assessment being challenged. No notice of appeal
7
1130999, 1131000, 1131001
was filed by Central Shelby [LTD.] with the
secretary of the Board; although the Board received
a copy of the notice from the Shelby Circuit Court
clerk, that notice was not mailed to or received by
the Board until after the 30–day period had elapsed.
On the other hand, Central Shelby counters that its
timely filing of its notice of appeal with the
circuit clerk was sufficient to invoke the trial
court's subject-matter jurisdiction even though the
Board indisputably did not receive 'notice' of
Central Shelby's appeal within 30 days of the date
of the final assessment. It further contends that
because the statutory requirement of 'notice' to the
Board appears in a separate sentence, the 30–day
time frame for taking the appeal does not apply to
the notice to the Board.
"This Court has stated that, in applying a Code
section:
"'"'Words used in a statute must
be given their natural, plain,
ordinary, and commonly understood
meaning, and where plain language
is used a court is bound to
interpret that language to mean
exactly what it says. If the
language
of
the
statute
is
unambiguous, then there is no
room for judicial construction
and the clearly expressed intent
of the legislature must be given
effect.'"
"'Blue Cross & Blue Shield v. Nielsen, 714
So. 2d 293, 296 (Ala. 1998) (quoting IMED
Corp. v. Systems Eng'g Assocs. Corp., 602
So. 2d 344, 346 (Ala. 1992)); see also
Tuscaloosa
County
Comm'n
v.
Deputy
Sheriffs' Ass'n, 589 So. 2d 687, 689 (Ala.
1991); Coastal States Gas Transmission Co.
v. Alabama Pub. Serv. Comm'n, 524 So. 2d
8
1130999, 1131000, 1131001
357, 360 (Ala. 1988); Alabama Farm Bureau
Mut. Cas. Ins. Co. v. City of Hartselle,
460 So. 2d 1219, 1223 (Ala. 1984); Dumas
Bros. Mfg. Co. v. Southern Guar. Ins. Co.,
431 So. 2d 534, 536 (Ala. 1983); Town of
Loxley v. Rosinton Water, Sewer, & Fire
Protection Auth., Inc., 376 So. 2d 705, 708
(Ala. 1979). It is true that when looking
at a statute we might sometimes think that
the
ramifications
of
the
words
are
inefficient or unusual. However, it is our
job to say what the law is, not to say what
it should be. Therefore, only if there is
no rational way to interpret the words as
stated will we look beyond those words to
determine legislative intent. To apply a
different policy would turn this Court into
a legislative body, and doing that, of
course, would be utterly inconsistent with
the doctrine of separation of powers. See
Ex parte T.B., 698 So. 2d 127, 130 (Ala.
1997).'
"DeKalb Cnty. LP Gas Co. v. Suburban Gas, Inc., 729
So. 2d 270, 275–76 (Ala. 1998).
"The initial sentence of § 40–3–25 clearly
establishes a 30–day time frame for appealing the
Board's final assessment to the circuit court. The
sentence that follows provides that, in order to
perfect the appeal, the requisite notice of appeal
must be filed with both the Board and with the
circuit clerk. In light of the plain language of
the Code section, this Court finds persuasive the
Board's reliance on the analysis of the Court of
Civil Appeals in State v. Crenshaw, 47 Ala. App. 3,
249 So. 2d 617 (1970), in which, in considering the
identical language of the predecessor statute to §
40–3–25, that court explained:
"'[A] taxpayer may perfect an appeal from
a final assessment of the Board so long as
9
1130999, 1131000, 1131001
he files, within thirty days, a notice of
appeal with the Secretary of the Board and
Clerk of the Circuit Court, a bond for
costs, and, either files a supersedeas
bond, or pays the taxes based on the prior
year's assessment. Such a construction
would require that all of these procedures
would have to be complied with at the same
time for the appeal to be perfected.'
"47 Ala. App. at 5, 249 So. 2d at 619. See, e.g.,
Ex parte State Dep't of Revenue, 102 So. 3d 396,
398–99 (Ala. Civ. App. 2012) (interpreting a similar
provision in § 40–2A–9(g), Ala.Code 1975, as
'requir[ing]
the
party
appealing
from
[an
administrative law judge's] order to file a notice
of appeal with both the [Alabama Department of
Revenue's Administrative Law Division] and the
circuit court within 30 days of the entry of the ...
order'); State Dep't of Revenue v. Welding Eng'g &
Supply Co., 452 So. 2d 1340, 1342 (Ala. Civ. App.
1984) (concluding that former § 40–2–22, Ala. Code
1975, which provided for taxpayer appeals from
assessments by the department of revenue, 'clearly
provides that a timely filing of a notice of appeal
with the secretary of the department is one of the
prerequisites which must be met by a taxpayer in
order to perfect an appeal to the circuit court from
the department's final tax assessments,' that such
filing 'is a jurisdictional requirement, and [that]
there must be compliance with it before a circuit
court has jurisdiction over the subject matter,' and
stating that, 'if such a notice of appeal is not
filed with the secretary of the department within
thirty days from the entry of the final tax
assessment, the taxpayer's appeal to the circuit
court should be dismissed').
"Central Shelby argues that it properly invoked
the trial court's jurisdiction by taking the
underlying appeal to the appropriate circuit court
within 30 days of the challenged final assessment.
10
1130999, 1131000, 1131001
But that is not what § 40–3–25 or the foregoing
authorities require. Central Shelby faults the
circuit clerk for her alleged untimely mailing of
the notice of appeal to the secretary of the Board.
However, the Code section clearly charges the
appealing taxpayer with the responsibility of filing
the notice of appeal with the secretary of the
Board.
"'The right of appeal in tax proceedings is a
right conferred by statute and must be exercised in
the mode and within the time prescribed by the
statute.' Denson v. First Nat'l Bank, 276 Ala. 146,
148, 159 So. 2d 849, 850 (1964). See also Canoe
Creek Corp. v. Calhoun Cnty. Bd. of Equalization,
668 So. 2d 826, 827–28 (Ala. Civ. App. 1995)
(finding, where the appeal bond required by §
40–3–25 was not filed within the 30–day period, that
the appeal of a final tax assessment to the circuit
court was not perfected); Welding Eng'g, 452 So. 2d
at 1342–43 ('When the legislature has prescribed the
means and method of perfecting an appeal from a tax
assessment to the circuit court, that procedure must
be followed.'); Coughlin v. State, 455 So. 2d 17, 18
(Ala. Civ. App. 1983), aff'd, 455 So. 2d 18 (Ala.
1984) ('The rule is that the right to appeal in a
tax proceeding is a right conferred by statute and
must be exercised in the manner and within the time
required by the statute.'); State v. Colonial
Refrigerated Transp., Inc., 48 Ala. App. 46, 50, 261
So. 2d 767, 770 (Ala. Civ. App. 1971) (same). Here,
§ 40–3–25 plainly prescribes that a notice of appeal
from a final assessment of the Board must be filed
with both the circuit court and the secretary of the
Board within 30 days; clearly, both did not occur in
this case.
"As a result of Central Shelby's failure to
comply with the provisions of § 40–3–25, its appeal
was not perfected and the trial court's jurisdiction
was never invoked. Therefore, the appeal was due to
be dismissed as the Board requested."
11
1130999, 1131000, 1131001
___ So. 3d at ___ (emphasis omitted). The Court of Civil
Appeals has similarly interpreted § 40–3–25 when considering
the exact issue we now confront. See Canoe Creek Corp. v.
Calhoun Cnty. Bd. of Equalization, 668 So. 2d 826, 827 (Ala.
Civ. App. 1995) ("[W]e have never held that strict compliance
with a statutory requirement of filing a cost bond in a tax
case is not necessary."). We now adhere to our previous
holding in Ex parte Shelby County Board of Equalization and
reaffirm that the unambiguous language of § 40–3–25 mandates
that the required bond be filed within 30 days after the final
decision fixing the assessed valuation in order to perfect an
appeal pursuant to that statute.
We note, however, Lumpkin's argument, echoed in Chief
Justice
Moore's
dissent,
that
similarly
constructed
notice-of-
appeal statutes have not been interpreted to make the filing
of a cost bond a jurisdictional requirement. We recognize
that the filing of a bond is considered to be a procedural
requirement
as opposed to a jurisdictional requirement in
many
other
appellate
proceedings,
including
general
appeals
to
this
Court or the Court of Civil Appeals, appeals to a circuit
court from a district court, and appeals to a circuit court
12
1130999, 1131000, 1131001
from decisions of certain state agencies. However, it must be
recognized that the basis of each of those types of appeals
stems from a statute other than § 40–3–25, and, although in
some cases the relevant statutes are similar, they are never
identical, and the language of each statute must be
interpreted individually. Indeed, the cost-bond requirements
for appeals to this Court and the Court of Civil Appeals are
governed not by statute but by the Alabama Rules of Appellate
Procedure, and the Committee Comments to Rule 7, Ala. R. App.
P., specifically provide that "[i]t is intended that the
security [for costs] shall be deposited with the filing of the
notice of appeal, but the failure to file such security
contemporaneously is not fatal to the jurisdiction of the
appellate court." This Court has interpreted Rule 7
accordingly. See Bryan v. Brown, 339 So. 2d 577, 579 (Ala.
1976) ("Rule 7, however, pertains only to costs on appeal, and
the failure to give security for costs is not fatal to
appellate jurisdiction.").
Moreover, the other right-of-appeal statutes cited by
Lumpkin, many of which have admittedly been interpreted by the
appellate courts as not requiring the cost bond to be filed
13
1130999, 1131000, 1131001
within the defined period for taking the appeal, generally
also have such explicit language stating that the filing of
the bond is not jurisdictional or, at least, have differences
in their language and construction so as to render the statute
ambiguous on that point, thus allowing a court to interpret
the statute pursuant to the standards for doing so. For
example, in Mallory v. Alabama Real Estate Commission, 369 So.
2d 23 (Ala. Civ. App. 1979), the Court of Civil Appeals held
that the requirement in § 34-27-38, Ala. Code 1975, that a
bond be filed when appealing a decision of the Alabama Real
Estate Commission to the circuit court was merely procedural.
However, the language of § 34-27-38 at that time provided:
"'Findings made by the commission are deemed
conclusive, unless within 30 days after notice of
the decision of the commission has been given to an
applicant or accused, said applicant or accused
shall appeal said finding or ruling to the circuit
court of the county of his residence. In the event
of such an appeal, the circuit court shall hear the
same de novo. Such appeal shall be taken by the
filing of notice of appeal with the clerk of the
circuit court of the county to which the appeal is
taken. Any party taking an appeal shall post a
satisfactory bond in the amount of $200.00 with the
clerk of the circuit court, with at least one
solvent surety, conditioned to prosecute such appeal
to effect and, upon failure to do so, to pay all
costs and damages which may be adjudged against said
party by the circuit court on such appeal. ...'"
14
1130999, 1131000, 1131001
369 So. 2d at 24 (emphasis omitted). Thus, § 34-27-38
unambiguously provided that the appeal "shall be taken by the
filing of notice of appeal with the clerk of the circuit court
of the county to which the appeal is taken." Notably, § 34-
27-38 did not require the contemporaneous completion of any
other act to perfect the appeal –– only the filing of a notice
of appeal with the appropriate circuit court –– although it
thereafter stated that "[a]ny party taking an appeal shall
post a satisfactory bond in the amount of $200.00." Based on
this language, the Court of Civil Appeals was at liberty to
apply the philosophy of the Alabama Rules of Appellate
Procedure and to hold that the posting of the bond was a
procedural requirement because the statute did not dictate
otherwise:
"Of course the appeal in question is not
governed by the [Alabama Rules of Appellate
Procedure] but is instead purely statutory. We,
however, feel that the principle embodied in the
[Alabama Rules of Appellate Procedure] can be
applied by analogy to the statute before us.
Section 34-27-38, Code of Alabama (1975) provides
that 'appeal shall be taken by the filing of notice
of appeal with the clerk of the circuit court of the
county to which the appeal is taken.' Although the
statute contains other language which requires an
appellant to post a $200 bond and have the bond
approved by the circuit clerk, the appeal is
perfected and jurisdiction of the circuit court
15
1130999, 1131000, 1131001
attaches upon the filing of a notice of appeal. The
posting of a satisfactory bond of $200 is merely
procedural."
369 So. 2d at 25.
In contrast, the first sentence of § 40-3-25 provides
that "[a]ll appeals from the rulings of the board of
equalization fixing value of property shall be taken within 30
days after the final decision of said board fixing the
assessed valuation as provided in this chapter." The next
sentence of the statute explains how such an appeal is taken:
"The taxpayer shall file notice of said appeal with the
secretary of the board of equalization and with the clerk of
the circuit court and shall file bond to be filed with and
approved by the clerk of the circuit court, conditioned to pay
all costs ...." Thus, whereas § 34-27-38 required only one
act to take the appeal –– the filing of a notice of appeal
with the circuit court –– § 40-3-25 requires multiple acts to
take the appeal: 1) the filing of a notice of appeal with the
secretary of the board of equalization; 2) the filing of a
notice of appeal with the circuit court; and 3) the filing of
a bond with the circuit court. Thus, based on the different
language employed by the legislature in these two statutes,
16
1130999, 1131000, 1131001
they have been properly interpreted to hold that the filing of
a cost bond was not required to perfect an appeal made
pursuant to § 34-27-38 but is required to perfect an appeal
made pursuant to § 40-3-25.
Lumpkin has also cited Ex parte Doty, 564 So. 2d 443
(Ala. 1990), in which this Court interpreted § 25-4-95, Ala.
Code 1975, and held that the requirement of that statute that
the appealing party file notice of his or her appeal with the
director of the Department of Industrial Relations was
procedural only and need not be completed within the 10-day
period for appealing a decision of that department's board of
appeals. However, the language and structure of § 25-4-95 is
fundamentally similar to § 34-27-38 and was therefore subject
to being similarly interpreted:
"'Within ten days[ ] after the decision of the
2
Board of Appeals has become final, any party to the
proceeding including the director who claims to be
aggrieved by the decision may secure a judicial
review thereof by filing a notice of appeal in the
circuit court of the county of the residence of the
claimant .... In such action, the notice of appeal
need not be verified, but shall state the grounds
upon which a review is sought. A copy shall be
served upon the director or upon such person as the
director may designate (and for the purpose hereof,
Effective July 1, 1995, this period was changed to "30
2
days." In all other respects the quoted language is the same.
17
1130999, 1131000, 1131001
mailing a copy addressed to the director at
Montgomery by registered or certified mail shall be
deemed service on the director), and such service
shall be deemed completed service on all parties
...."
564 So. 2d at 445 (emphasis omitted). Thus, § 25-4-95
provides that an aggrieved party "may secure a judicial
review" of a decision made by the department's board of
appeals merely by "by filing a notice of appeal in the circuit
court of the county of the residence of the claimant" within
the 10-day (now 30-day) period required by the statute. No
other action is explicitly required to "secure a judicial
review," and the other action later required by the statute is
merely incidental to securing that appellate review, that is,
it is procedural as opposed to jurisdictional. Section 25-4-
95 is distinguishable from § 40-3-25.
We next consider Finch v. Finch, 468 So. 2d 151 (Ala.
1985), cited by Chief Justice Moore in his dissent. In Finch,
this Court held that the filing fee for an appeal taken from
the probate court to the circuit court did not have to be paid
within the 42-day appeal period specified in § 12-22-21(5),
Ala. Code 1975. "[A]lthough payment of a filing fee is
required," we stated, "we do not find a jurisdictional defect
18
1130999, 1131000, 1131001
in this case for failure to pay the fee within the time
allowed for the appeal." 468 So. 2d at 154. This case is
akin to Mallory and Ex parte Doty however, inasmuch as the
relevant statutes governing the appeal did not indicate that
the payment of a filing fee was a jurisdictional requirement
to the taking of the desired appeal. Rather, the Finch Court
explicitly noted that neither § 43-2-354, Ala. Code 1975,
which grants an appeal to the circuit court from a judgment of
a probate court, nor §§ 12-22-20 and -21, Ala. Code 1975,
which grant the general right to take an appeal from the
probate court to the circuit court, "provide[] for the
procedure to be followed in taking the appeal." 468 So. 2d at
152. Thus, the Finch Court was not constrained by any
statutory language from applying the more lenient view
generally applied by the appellate courts operating under the
Alabama Rules of Appellate Procedure that "only timely notice
of appeal is jurisdictional." 468 So. 2d at 154. Moreover,
Finch further recognized that § 12-22-25, Ala. Code 1975,
explicitly provides that "'the filing of security for costs is
not a jurisdictional prerequisite'" to an appeal to a circuit
court of a probate court decision. 468 So. 2d at 154.
19
1130999, 1131000, 1131001
Finally, we consider State Department of Human Resources
v. Funk, 651 So. 2d 12 (Ala. Civ. App. 1994). In that case,
the Department of Human Resources argued that the trial court
erred in failing to dismiss an appeal of a decision made by
its administrative hearing officer because the appellant had
not filed the required cost bond within the 30-day period
allowed for taking such an appeal. The statute governing that
appeal, § 41-22-20, Ala. Code 1975, provided as follows at
that time:
"'(b) Except in matters for which judicial
review is otherwise provided for by law, all
proceedings for review shall be instituted by filing
of notice of appeal or review and a cost bond, with
the agency ....
"'....
"'(d) The notice of appeal or review shall be
filed within 30 days after the receipt of the notice
of or other service of the final decision of the
agency upon the petitioner or, if a rehearing is
requested under section 41–22–17, within 30 days
after the decision thereon. The petition for
judicial review in the circuit court shall be filed
within 30 days after the filing of the notice of
appeal or review ....'"
651 So. 2d at 14. The Court of Civil Appeals ultimately held
that there was no jurisdictional requirement that the cost
bond be filed within the 30-day period for perfecting an
20
1130999, 1131000, 1131001
appeal; however, in doing so it distinguished the case from
Baird v. State Department of Revenue, 545 So. 2d 804 (Ala.
Civ. App. 1989). In Baird, the Court of Civil Appeals
interpreted § 40-2-22, Ala. Code 1975, the statute governing
the appeal of a Department of Revenue decision, and held that
"[a] separate and distinct condition [precedent to perfecting
an appeal] is the payment of the assessment or the filing of
a supersedeas bond ...." 545 So. 2d at 806. The Funk court
3
distinguished Baird by noting that, in Funk, the statute
governing the appeal –– § 41-22-20 –– failed to mention the
cost bond in the subsection setting forth the 30-day period
for initiating an appeal, instead providing only that "'[t]he
notice of appeal or review shall be filed within 30 days.'"
Section 40-2-22 at that time read as follows:
3
"'If any taxpayer against whom an assessment is made
by the department of revenue ... is dissatisfied
..., he may appeal ... by filing notice of appeal
with the secretary of the department of revenue and
with the clerk or register of the circuit court of
the county to which the appeal shall be taken within
30 days from the date of said final assessment ...
and, in addition thereto, by giving bond conditioned
to pay all costs to be filed with and approved by
the clerk or register of the court to which the
appeal shall be taken. ...'"
545 So. 2d at 805 (emphasis omitted).
21
1130999, 1131000, 1131001
651 So. 2d at 14. Accordingly, the Court of Civil Appeals
concluded that "nothing in the above-cited statute suggests
that posting security for costs within the statutory time
limit is a jurisdictional requirement for perfecting an
appeal." Id. Thus, the Court of Civil Appeals' decision in
4
Funk was based on the different language and structure of §
41-22-20, whereas the statute in the instant case –– § 40-3-25
–– is clearly more similar to § 40-2-22, which was interpreted
in Baird and acknowledged in Funk to mandate the payment of
the required bond within the 30-day period allowed for appeal.
However, although Mallory, Ex parte Doty, Finch, and
Funk, are distinguishable based on differences in the
statutory language, Luce v. Huddleston, 628 So. 2d 819 (Ala.
Civ. App. 1993), is more problematic. In Luce, the Court of
5
Civil Appeals interpreted § 12-12-70(a), Ala. Code 1975, and
held that filing a cost bond beyond the period allowed for
filing a notice of appeal from a district court to a circuit
court was not a fatal jurisdictional defect. Section 12-12-
Funk also relied in part upon Luce v. Huddleston, 628 So.
4
2d 819 (Ala. Civ. App. 1993), which is discussed infra.
The Court of Civil Appeals reaffirmed its holding in Luce
5
as recently as 2013 in Penick v. Southpace Management, Inc.,
121 So. 3d 1015 (Ala. Civ. App. 2013).
22
1130999, 1131000, 1131001
70(a) provides in pertinent part that "[a]ny party may appeal
from a final judgment of the district court in a civil case by
filing notice of appeal in the district court, within 14 days
from the date of the judgment or the denial of a posttrial
motion, whichever is later ... together with security for
costs as required by law or rule." This language and
structure is materially similar to § 40-3-25 inasmuch as both
statutes include, in the same paragraph setting forth the time
limit for taking the appeal, a requirement that the notice of
appeal and cost bond be filed together. However, despite
these similarities, the Court of Civil Appeals in Luce
interpreted language in § 12-12-70(a) to conclude that the
required cost bond did not have to be filed within the
statutory time for taking an appeal, while in Canoe Creek
Corp., supra, the Court of Civil Appeals interpreted the
similar language in § 40-3-25 to conclude that the required
cost bond did have to be filed within the statutory time for
taking an appeal –– even while citing Luce.6
In Canoe Creek Corp., the Court of Civil Appeals
6
distinguished Luce by noting that it "did not involve an
appeal in a tax case." 668 So. 2d at 827.
23
1130999, 1131000, 1131001
However, upon reviewing these cases, it is apparent that
if there is any error, the error is in Luce. In concluding
that the cost bond required by § 12-12-70(a) could be filed
outside the time for taking the appeal, the Court of Civil
Appeals in Luce cited Bryan and the Alabama Rules of Appellate
Procedure, Finch and other cases involving an appeal from a
probate court to a circuit court, and Mallory. As already
explained, the Alabama Rules of Appellate Procedure do not
apply to appeals from a district court to a circuit court, and
Finch and Mallory are distinguishable. Nevertheless, after
reviewing these cases, the Luce court concluded:
"Nothing in the above-cited statutes and cases
suggests that posting security for costs within the
statutory time limit for appeal is a jurisdictional
requirement for perfecting appeal. Timely posting
of security is not required in appellate cases, nor
in probate to circuit court appeals, nor in
misdemeanor conviction appeals from district to
circuit court. To require contemporaneous posting
of security for costs with the appeal from district
to circuit court would be to continue a vestige from
an earlier era of strict pleading and practice."
628 So. 2d at 820. However, the Luce court failed to
recognize why timely posting of security is not required in
these cases –– timely posting is not required in appellate
cases because the Alabama Rules of Appellate Procedure do not
24
1130999, 1131000, 1131001
require it, and it is not required in appeals from a probate
court to a circuit court because the language of § 12-22-25,
Ala. Code 1975, explicitly provides as much. The Court of
7
The Luce court also stated that timely posting of
7
security was not required in appeals of misdemeanor
convictions from the district court to the circuit court
because, it held, § 12-12-70(b), Ala. Code 1975, provides that
"the filing of an appeal bond is not a jurisdictional
requirement." 628 So. 2d at 820. In support of that
conclusion, Luce cited Ex parte Buckner, 435 So. 2d 1197, 1197
(Ala. 1982), which held:
"Under § 12-12-70(b) it is only a 'bond required
by law or rule' that must accompany the notice of
appeal. Yet, the State has cited no law or rule
requiring a bond to perfect an appeal. We must
conclude that the filing of an appeal bond is not a
jurisdictional
requirement
for
appeal
of
a
misdemeanor conviction from district to circuit
court. This holding is consistent with the practice
in the former county courts, where the purpose of
the appeal bond was 'not to confer jurisdiction on
the circuit court but to enable the defendant to
release himself from custody pending the appeal,' Ex
parte Rodgers, 12 Ala. App. 218, 226, 67 So. 710,
713 (1915) (construing Code 1907, § 6725, Code 1940,
Tit. 13, § 349, Repealed by Acts 1975, No. 1205, §
4-134). Similarly, our holding is consistent with
present
practice
in
appeals
of
misdemeanor
convictions from circuit to appellate courts, for
which Code of Ala. 1975, § 12-22-171, makes posting
bail discretionary with the defendant at any time
pending the appeal."
At the time Ex parte Buckner was decided, § 12-12-70(b)
provided that "'[a] defendant may appeal from a final judgment
in a criminal case by filing notice of appeal, together with
any bond required by law or rule, within 14 days from the date
of judgment or the date of a posttrial motion, whichever is
25
1130999, 1131000, 1131001
Civil
Appeals erred by concluding that, because timely
posting
of security is not required in this small subset of cases, it
is not required in other types of cases that are reliant on
different statutes. In fact, whether a mandated cost bond is
required to be filed within the statutory period for taking an
appeal always depends on the language of the applicable
statute authorizing that particular appeal.
Thus, in the case before us involving § 40-3-25, which is
unambiguous, that statute is the only statute relevant to our
inquiry. For the reasons explained herein and previously in
Ex parte Shelby County Board of Equalization and Canoe Creek
Corp., we hold that a party aggrieved by a decision of a
county board of equalization fixing the assessed value of his
or her property must file the cost bond required by § 40-3-25
within the 30-day period after the board of equalization's
final decision fixing the assessed valuation in order to
later, unless the appeal is to an appellate court.'" 435 So.
2d at 1197. However, the State in Ex parte Buckner cited no
law or rule requiring a bond to perfect an appeal, and its
argument accordingly was
unsuccessful.
In 1986, § 12-12-70(b)
was amended to its current form, which provides that "[a]
defendant may appeal from a final judgment of the district
court in a criminal ... case by filing notice of appeal within
14 days from the date of judgment or from the date of denial
of a post-trial motion, whichever is later, together with such
bond as may be fixed by the court ...." (Emphasis added.)
26
1130999, 1131000, 1131001
perfect an appeal to the circuit court. The language of § 40-
3-25 leaves us no room to hold otherwise, and it would be
inconsistent with our judicial role to attempt to supersede
the statute by applying the philosophy of the Alabama Rules of
Appellate Procedure in spite of clear statutory language to
the contrary. As we reiterated in Ex parte Shelby County
Board of Equalization:
"'It is true that when looking at a statute we might
sometimes think that the ramifications of the words
are inefficient or unusual. However, it is our job
to say what the law is, not to say what it should
be. Therefore, only if there is no rational way to
interpret the words as stated will we look beyond
those words to determine legislative intent. To
apply a different policy would turn this Court into
a legislative body, and doing that, of course, would
be utterly inconsistent with the doctrine of
separation of powers.'"
___ So. 3d at ___ (quoting DeKalb Cnty. LP Gas Co. v. Suburban
Gas, Inc., 729 So. 2d 270, 275–76 (Ala. 1998) (emphasis
omitted)).8
Having concluded that § 40-3-25 is unambiguous, it is
8
unnecessary to consider Lumpkin's arguments that the bond
required by § 40-3-25 serves no purpose or that tax statutes
should be liberally construed to allow disputes to be decided
on their merits.
27
1130999, 1131000, 1131001
IV.
Lumpkin appeals the orders of the trial court dismissing
three appeals he had initiated challenging property-tax
assessments made by the Board of property he owned in
Jefferson County. However, because Lumpkin's appeals are
governed by § 40-3-25 and because he failed to comply with all
the requirements of § 40-3-25 for perfecting his appeals, the
trial court properly dismissed the cases. We affirm.
1130999 –– AFFIRMED.
1131000 –– AFFIRMED.
1131001 –– AFFIRMED.
Bolin, Parker, Shaw, Main, Wise, and Bryan, JJ., concur.
Moore, C.J., and Murdock, J., dissent.
28
1130999, 1131000, 1131001
MOORE, Chief Justice (dissenting).
The issue raised by these three appeals is whether filing
a cost bond within the 30-day statutory period for taking an
appeal to the circuit court from a property-assessment
decision by a county board of equalization is a jurisdictional
requirement for perfecting the appeal. Because I believe that
filing a bond for costs is merely a procedural requirement,
namely a correctable deficiency, I respectfully dissent from
this Court's opinion affirming the judgments of the trial
court.
Facts and Procedural History
Edwin B. Lumpkin, Jr., owns three self-storage facilities
in Birmingham, which correspond with these three identical
appeals. He filed timely notices of appeal from property-tax
assessments by the Jefferson County Board of Equalization and
Adjustments, but he did not file cost bonds until the State's
trial brief alerted him to that omission some 17 months after
the notices of appeal had been filed. The State moved to
dismiss the appeals as jurisdictionally barred for failure to
file the cost bonds within the 30-day appeal period. The trial
court agreed and dismissed the appeals. The majority affirms.
29
1130999, 1131000, 1131001
Discussion
The pertinent portion of the relevant statute reads as
follows:
"All appeals from the rulings of the board of
equalization fixing value of property shall be taken
within 30 days after the final decision of said
board fixing the assessed valuation as provided in
this chapter. The taxpayer shall file notice of said
appeal
with
the
secretary
of
the
board
of
equalization and with the clerk of the circuit court
and shall file bond to be filed with and approved by
the clerk of the circuit court, conditioned to pay
all costs, and the taxpayer or the state shall have
the right to demand a trial by jury by filing a
written demand therefor within 10 days after the
appeal is taken."
§ 40-3-25, Ala. Code 1975 (emphasis added).
In Ex parte Shelby County Board of Equalization, [Ms.
1130017, April 11, 2014] ___ So. 3d ___ (Ala. 2014), this
Court recently stated:
"The
initial
sentence
of
§
40-3-25
clearly
establishes a 30-day time frame for appealing the
Board's final assessment to the circuit court. The
sentence that follows provides that, in order to
perfect the appeal, the requisite notice of appeal
must be filed with both the Board and with the
circuit clerk. In light of the plain language of the
Code section, this Court finds persuasive the
Board's reliance on the analysis of the Court of
Civil Appeals in State v. Crenshaw, 47 Ala. App. 3,
249 So. 2d 617 (1970), in which, in considering the
identical language of the predecessor statute to §
40-3-25, that court explained:
30
1130999, 1131000, 1131001
"'[A] taxpayer may perfect an appeal from
a final assessment of the Board so long as
he files, within thirty days, a notice of
appeal with the Secretary of the Board and
Clerk of the Circuit Court, a bond for
costs, and, either files a supersedeas
bond, or pays the taxes based on the prior
year's assessment. Such a construction
would require that all of these procedures
would have to be complied with at the same
time for the appeal to be perfected.'
"47 Ala. App. at 5, 249 So. 2d at 619."
(Emphasis omitted; emphasis added.)
Thus, in Shelby County, this Court quoted approvingly an
opinion of the Court of Civil Appeals that required a cost
bond to be filed within the 30-day statutory period to perfect
the appeal. Further, this Court stated 50 years ago:
"The right of appeal in tax proceedings is a
right conferred by statute and must be exercised in
the mode and within the time prescribed by the
statute. Here, the appeal bond required by § 110 was
not filed within the thirty days, so the appeal was
not perfected and the bond filed on July 19 was not
in time."
Denson v. First Nat'l Bank of Birmingham, 276 Ala. 146, 148,
159 So. 2d 849, 850 (1964) (citations omitted; emphasis
added). In 1995, the Court of Civil Appeals quoted this
passage from Denson and stated: "[W]e have never held that
strict compliance with a statutory requirement of filing a
31
1130999, 1131000, 1131001
cost bond in a tax case is not necessary." Canoe Creek Corp.
v. Calhoun Cnty. Bd. of Equalization, 668 So. 2d 826, 827
(Ala. Civ. App. 1995).
Notwithstanding the above, Lumpkin asks us to reject
Shelby County's approval of Crenshaw insofar as it would apply
to cost bonds and also to reject predecessor cases like Denson
and Canoe Creek. Lumpkin argues in this Court, as he did in
opposing the motion to dismiss in the trial court, that
similarly constructed notice-of-appeal statutes have not been
interpreted to make the filing of a cost bond a jurisdictional
requirement. Instead, he contends, cases construing those
similar statutes have treated the failure to file a cost bond
as a procedural lapse that can be cured even after expiration
of the statutory time within which to file the notice of
appeal.
Rule 7, Ala. R. App. P., adopted in 1975, states that "in
civil cases security for costs on appeal shall be filed with
the notice of appeal by the appellant in the trial court."
Although failure to file the cost bond coterminous with the
notice of appeal is a procedural error, such omission does not
32
1130999, 1131000, 1131001
forfeit the appeal but may be corrected on motion or notice by
the court. The Committee Comments to Rule 7 state:
"It is intended that the security shall be
deposited with the filing of the notice of appeal,
but
the
failure
to
file
such
security
contemporaneously is not fatal to the jurisdiction
of the appellate court. The failure to file such
security would be the subject of appropriate action
upon notice on motion or notice by the court
itself."
(Emphasis added.)
A year after adoption of the Rules of Appellate
Procedure, this Court stated: "[T]he failure to give security
for costs is not fatal to appellate jurisdiction." Bryan v.
Brown, 339 So. 2d 577, 579 (Ala. 1976). Filing of a cost bond,
therefore, though required by the appellate rules, is not a
jurisdictional requirement subject to the time period for
filing the notice of appeal. Under the practice prior to the
adoption of the appellate rules, "[t]he taking of an appeal
[was] perfected upon the filing of a good and sufficient
surety for costs of appeal." Taylor v. Major Fin. Co., 292
Ala. 643, 649, 299 So. 2d 247, 251 (1974). See also Cooper v.
Acuff, 285 Ala. 437, 439, 233 So. 2d 223, 224-25 (1970) ("The
decisions of this Court are uniform to the effect that the
33
1130999, 1131000, 1131001
appeal dates from the proper filing of security for costs.").
Today that requirement is relaxed.
"Before [the Alabama Rules of Appellate Procedure],
it was the filing of security for costs which
perfected the appeal and fixed the appellate court's
jurisdiction in reviewing decrees from circuit
courts. Tit. 7, § 766, Code of Alabama (1940)
(Recompiled 1958). The rule is now that the failure
to give security for costs is not fatal to appellate
jurisdiction, but it is the timely filing of a
notice of appeal that is jurisdictional."
Mallory v. Alabama Real Estate Comm'n, 369 So. 2d 23, 25 (Ala.
Civ. App. 1979).
In Mallory, the appeal in question, as in this case, was
not to the higher appellate courts and thus was not governed
by the Alabama Rules of Appellate Procedure. Nonetheless, the
Court of Civil Appeals stated: "Of course the appeal in
question is not governed by the [Alabama Rules of Appellate
Procedure] but is instead purely statutory. We, however, feel
that the principle embodied in the [Alabama Rules of Appellate
Procedure] can be applied by analogy to the statute before
us." 369 So. 2d at 25. Also, the appeal in Mallory, like the
one in this case, was from an administrative agency -- in that
case the Alabama Real Estate Commission -- to the circuit
court.
34
1130999, 1131000, 1131001
In Finch v. Finch, 468 So. 2d 151 (Ala. 1985), this Court
held that the filing fee for an appeal taken from the probate
court to the circuit court did not have to be paid within the
42-day appeal period specified in § 12-22-21(5), Ala. Code
1975. "[A]lthough payment of a filing fee is required," we
stated, "we do not find a jurisdictional defect in this case
for failure to pay the fee within the time allowed for the
appeal." 468 So. 2d at 154. "[I]n view of the practice of the
higher appellate courts that only timely notice of appeal is
jurisdictional," this Court reversed the judgment of the
circuit court dismissing the appeal. Id.
Along the same lines, in Luce v. Huddleston, 628 So. 2d
819 (Ala. Civ. App. 1993), the Court of Civil Appeals held
that filing a cost bond beyond the period allowed for filing
a notice of appeal from the district court to the circuit
court was not a fatal jurisdictional defect, even though the
statute at issue there mentioned security for costs and the
notice-of-appeal deadline in the same paragraph. The relevant
statute, § 12-12-70(a), Ala. Code 1975, states, in pertinent
part:
"Any party may appeal from a final judgment of the
district court in a civil case by filing notice of
35
1130999, 1131000, 1131001
appeal in the district court, within 14 days from
the date of the judgment or the denial of a
posttrial motion, whichever is later ... together
with security for costs as required by law or rule."
(Emphasis added.) The court noted, citing Mallory, that "the
principles found in Rule 7, [Ala.] R. App. P., can be
applied." Luce, 628 So. 2d at 820. Surveying other statutes
that do not consider the filing of a cost bond as a
jurisdictional requirement, the court stated:
"Timely posting of security is not required in
appellate cases, nor in probate to circuit court
appeals, nor in misdemeanor conviction appeals from
district
to
circuit
court.
To
require
contemporaneous posting of security for costs with
the appeal from district to circuit court would be
to continue a vestige from an earlier era of strict
pleading and practice."
628 So. 2d at 820 (emphasis added). See also State Dep't of
Human Res. v. Funk, 651 So. 2d 12, 14 (Ala. Civ. App. 1994)
(citing Luce and noting that the cost-bond requirement is not
mentioned in the section of the appeal statute, § 41-22-20,
Ala. Code 1975, that states the time limit for filing a notice
of appeal from the Department of Human Resources to the
circuit court); Penick v. Southpace Mgmt., Inc., 121 So. 3d
1015, 1019 (Ala. Civ. App. 2013) (quoting Luce for the
proposition that "failure to pay costs or give security in
36
1130999, 1131000, 1131001
lieu of costs within the time frame allowed for filing an
appeal was not a jurisdictional defect" in an appeal from the
district court to the circuit court). This Court has also
favorably cited Luce. See Womack v. Estate of Womack, 826 So.
2d 138 (Ala. 2002) (quoting Luce for the proposition that a
cost bond is not jurisdictional and applying that rationale to
an appeal from probate court to circuit court).
That the legislature can expressly distinguish between a
jurisdictional and a nonjurisdictional requirement for
perfecting an appeal is evident in § 40-2A-7(b)(5), Ala. Code
1975 (amended effective October 1, 2014), which governs
appeals to the circuit court from tax assessments of the
Alabama Department of Revenue. This statute removes all
uncertainty as to which requirements for taking an appeal are
jurisdictional and which are procedural. The statute requires
the taxpayer to file a "notice of appeal within 30 days from
the date of mailing or personal service, whichever occurs
earlier, of the final assessment with both the secretary of
the department and the clerk of the circuit court in which the
appeal is filed." § 40-2A-7(b)(5)b.1. (emphasis added). The
next paragraph is equally forthright: "If the appeal is to
37
1130999, 1131000, 1131001
circuit court, the taxpayer, also within the 30-day period
allowed for appeal, shall do one of the following: ... File a
supersedeas bond .... The supersedeas bond ... shall be
conditioned to pay ... any court costs relating to the appeal
...." § 40-2A-7(b)(5)b.2. (emphasis added). After further
stating
for
clarity
that
these
requirements
"are
jurisdictional,"
§
40-2A-7(b)(5)c.1.,
the
statute,
in
§
40-2A-
7(b)(5)c.2., then allows the taxpayer 30 days after a court
order to remedy any unsatisfied requirements in § 40-2A-
7(b)(5)b.2.9
The above-cited authority indicates that the filing of a
cost bond is no longer a jurisdictional requirement for
perfecting an appeal unless the statute pursuant to which the
appeal is being taken expressly requires that the bond be
filed within the period for filing the notice of appeal. Under
these circumstances and to harmonize the construction of
appeal statutes by the appellate courts, I would construe the
appeal-bond requirement in § 40-3-25 as procedural and not
jurisdictional. When he first became aware of the bond
Section 40-2A-7 was originally enacted in 1992 as part
9
of the Taxpayers' Bill of Rights. Section 40-3-25, by
contrast, was enacted in 1939 and has remained unchanged since
that date.
38
1130999, 1131000, 1131001
requirement from the State's motion to dismiss, Lumpkin
immediately filed the bond. Admittedly the filing was 17
months late, but this Court has held that when a statute does
not compel filing a cost bond within the time stated for
filing the notice of appeal, the bond should be filed "within
a reasonable time." Ex parte Doty, 564 So. 2d 443, 446 (Ala.
1989). In determining reasonableness, the trial court should
consider prejudice to the agency "and any excusable neglect."
Id.
Because Denson and Crenshaw predate the 1975 adoption of
the Alabama Rules of Appellate Procedure -- and considerable
authority since 1975 has undermined their reasoning -- I would
reverse the trial court's dismissal of Lumpkin's appeal and
hold that his failure to file a cost bond in the time allotted
for filing the notice of appeal is a procedural, and thus
curable, defect that does not affect the jurisdiction of the
trial court to hear the appeal. As the Court of Civil Appeals
stated in 1982, less than 10 years after adoption of the
Alabama Rules of Appellate Procedure: "Myriad changes have
been made in the past decade in an attempt to eliminate, or
soften the effect of, ultra technical rules of civil trial and
39
1130999, 1131000, 1131001
appellate procedures ...." Hand v. Thornburg, 425 So. 2d 467,
469 (Ala. Civ. App. 1982) (quoted in Luce, 628 So. 2d at 820).
In construing appeal statutes, we should not continue to
perpetuate "a vestige from an earlier era of strict pleading
and practice." Luce, 628 So. 2d at 820. Instead, we should
adopt, as stated in Mallory and Finch, the philosophy of the
Alabama
Rules
of
Appellate
Procedure
"to
disregard
technicality and form in order that a just, speedy and
inexpensive
determination
of
every
appellate
proceeding
on
its
merits may be obtained." Committee Comments to Rule 1, Ala. R.
App. P.
Additionally, by construing a statute to create a
jurisdictional barrier to an appeal to the circuit court from
an administrative agency, we should be mindful of Art. I, §
13, Ala. Const. 1901 ("That all courts shall be open; and that
every person, for any injury done him, in his lands, goods,
person, or reputation, shall have a remedy by due process of
law ....").
Conclusion
I would reverse the dismissal of Lumpkin's appeal and
remand this case to the trial court to consider Lumpkin's late
40
1130999, 1131000, 1131001
filing of a cost bond as a procedural, and not a
jurisdictional, defect.
41 | December 19, 2014 |
921e2ddc-a128-4fca-8074-193e7590281f | Saylor v. Saylor | N/A | 1120848 | Alabama | Alabama Supreme Court | REL: 12/05/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
____________________
1120848
____________________
Korie Sterling Saylor
v.
Jonathan Fred Saylor, as personal representative of the
Estate of Woodie Jim Saylor, deceased
Appeal from Marshall Circuit Court
(CV-12-0101)
MURDOCK, Justice.
Korie Sterling Saylor appeals from a summary judgment
denying her claim for an elective share of the estate of her
deceased husband, Woodie Jim Saylor. We affirm.
1120848
I. Facts and Procedural History
Woodie and Korie married in October 2005. Woodie died in
May 2011. In addition to Korie, Woodie was survived by
Jonathan Fred Saylor, an adult son from Woodie's previous
marriage.
A few weeks after Woodie's death, Jonathan filed a
petition to probate Woodie's will in the Marshall Probate
Court. The petition also requested that the probate court
1
appoint
Jonathan
as
personal
representative
of
Woodie's
estate
("the estate").
Woodie's will requests that Jonathan be appointed as
personal representative of the estate, and the will relieves
the personal representative of the obligations to provide a
bond and to file an inventory. In regard to the distribution
2
of the estate, Woodie's will states:
"I GIVE, DEVISE AND BEQUEATH all my property of
whatever nature and wherever situated, including any
property over which I may have a power of
Woodie's will appears to be self-proving. See Ala. Code
1
1975, § 43-8-132.
See Ala. Code 1975, § 43-2-851(c) (providing that a will
2
may "exempt the personal representative from giving bond");
Ala. Code 1975, § 43-2-311 (providing that a will may "exempt
an executor from filing an inventory"); see also Ala. Code
1975, § 43-2-835(b) (exemption from filing an inventory).
2
1120848
appointment, to my son, JONATHAN FRED SAYLOR, if he
survives me. HOWEVER, I GIVE, DEVISE AND BEQUEATH
a life estate in and to my home and real property
where my wife and I reside at the time of my death,
to my wife, KORIE STERLING SAYLOR."
(Capitalization in original.)
Contemporaneously with the filing of the petition to
probate Woodie's will, Jonathan also filed a
document
executed
by Korie. In that document, Korie acknowledged that she had
received notice of the filing of the petition to probate
Woodie's will, and she consented to the admission of the will
to probate without further notice to her. See Ala. Code
3
The document executed by Korie states:
3
"I, THE UNDERSIGNED, being one of the heirs at
law and next of kin of WOODIE JIM SAYLOR, deceased,
do hereby acknowledge that I have notice of the
filing by JONATHAN FRED SAYLOR of the petition to
Probate the Last Will and Testament of said decedent
and the undersigned does hereby request the Court to
immediately admit said Last Will and Testament to
probate and record without further notice to me."
(Capitalization in original.)
Pursuant to the language of the above-quoted document,
Korie waived the right to further notice as to the admission
of Woodie's will to probate. In their appellate briefs, the
parties address whether the document also waived
Korie's
right
to claim an elective share from Woodie's estate. See Ala.
Code 1975, § 43-8-70 et seq. (statutes governing elective
share). This court has held that a waiver of the right to
claim an elective share must "clearly show[] an intention to
release" that right. Garrard v. Lang, 489 So. 2d 557, 561
3
1120848
1975, § 43-8-164 (notice requirements for hearing to probate
a will).
On June 13, 2011, the probate court entered an order
admitting Woodie's will to probate and appointing Jonathan as
the personal representative of the estate ("the personal
representative").
Korie did not file a petition for an elective share
within six months after the will was admitted to probate. See
Ala. Code 1975, § 43-8-73(a) (elective-share petition must be
filed "within six months after the date of death, or within
six months after the probate of the decedent's will, whichever
limitation last expires"). On December 22, 2011, Korie filed
a "Request for Extension of Time to File Petition for Elective
Share." In that document, she asserted:
"2. The estate is still under administration
and has not been settled.
(Ala. 1986); see also Horne v. TGM Assocs., L.P., 56 So. 3d
615, 624 (Ala. 2010) ("'[A] waiver consists of a "voluntary
and intentional surrender or relinquishment of a
known
right,"
and the burden of proof in establishing a waiver rests upon
the party asserting the claim.'" (citations omitted)). No
language in the document Korie executed states, or might be
construed as stating, that Korie was waiving her right to
claim an elective share.
4
1120848
"3. No accounting or inventory has been
filed;
the assets and liabilities are unsettled at
[4]
this point.
"4. An extension is necessary to enable the
widow to acquaint and familiarize herself of the
condition of her husband's estate and make an
intelligent election thereof.
"5. The spouse is not guilty of any conduct
which would tend to negate her right to an
extension.
"6. Refusing to extend the period would impose
an undue hardship upon the spouse.
"7. Spouse first consulted counsel on December
20, 2011, and first learned of her right to dissent
from the Will. Spouse had not been apprised of her
election right and files this request as soon as
practical with diligence upon notice. The widow is
entitled to the requested relief in equity.
"8. Alabama Code [1975,] § 43-8-73[,] is
remedial in nature and should be construed liberally
so as to give the broadest possible protection to
the surviving spouse."
Korie requested "a reasonable time to file a Petition for
Elective Share."
On January 12, 2012, the personal representative filed an
objection to Korie's request for an extension of time. The
As noted above, Woodie's will relieved the personal
4
representative from the statutory obligation to file an
inventory. Also, as of the date on which she filed her
request for an extension of time, Korie had not sought an
accounting from the personal representative.
5
1120848
personal
representative
contended
that,
pursuant
to
"§ 43-8-73, [Ala. Code 1975,] any extension of time to file
notice of election must be granted before the election period
has expired" and that, "[i]n order to be timely, the said
petition for elective share would have had [to have] been
filed by December 13, 2011." The personal representative
requested that the probate court deny Korie's request for an
extension of time.
Section § 43-8-73(a) provides:
"The surviving spouse may elect to take his elective
share by filing with the court and mailing or
delivering to the personal representative, if any,
a petition for the elective share within six months
after the date of death, or within six months after
the probate of the decedent's will, whichever
limitation last expires.
"The court may extend the time for election for
cause shown by the surviving spouse before the time
for election has expired."
(Emphasis added.)
On January 23, 2012, Korie filed a "Petition for Elective
Share," stating that she was claiming an elective share of the
estate and noting that she had filed a request for an
extension of time to do so on December 22, 2011.
6
1120848
On February 14, 2012, the probate court entered an order
granting Korie's request for an extension of time and an order
allowing Korie's claim to take an elective share of the
estate. The latter order did not adjudicate the amount of
that elective share; it set a date on which the probate court
would conduct a hearing to determine that amount and then
enter a further order with respect thereto. See Ala. Code
1975, § 43-8-70(a) (providing that a surviving spouse's
elective share is "the lesser of (1) All of the estate of the
deceased reduced by the value of the surviving spouse's
separate estate; or (2) One-third of the estate of the
deceased"); see also Ala. Code 1975, § 43-8-73(d) ("After
notice and hearing, the court shall determine the amount of
the elective share and shall order its satisfaction from the
assets of the estate."); Ala. Code 1975, § 43-8-75(a) ("In the
proceeding for an elective share, values included in the
estate which pass or have passed to the surviving spouse, or
which would have passed to the surviving spouse but were
renounced, are applied first to satisfy the elective share and
to reduce any contributions due from other recipients of
transfers included in the estate.").
7
1120848
In May 2012, the personal representative filed, in the
Marshall Circuit Court, a petition to remove the estate
administration from the probate court to the circuit court.
See Ala. Code 1975, § 12-11-41. Thereafter, the circuit court
entered an order removing the administration of the estate
from the probate court to the circuit court; the probate court
had not yet held a hearing to determine the amount of Korie's
elective share.
In November 2012, the personal representative filed in
the circuit court a motion for a summary judgment as to
Korie's claim for an elective share. The motion alleged that
the probate court should have denied Korie's claim on the
grounds that her petition was not timely filed and that, under
the circumstances presented, the probate court had no
authority to extend the time for Korie to exercise her right
of election.
Korie filed a response to the personal representative's
summary-judgment motion. Her response alleged:
"1. At some point on or before June 13, 2011,
the widow met with the attorney for the estate for
execution of a consent to probate the Will as
requested. ... Neither at that time, nor at any
time, did he advise her that he represented the
estate and that she should seek independent legal
8
1120848
counsel nor was there any discussion of the assets
of the estate which would have allowed her to make
an informed decision where she was aware of her
options. Under the Will, she received a life estate
in the marital residence for which she is paying a
mortgage payment of $986.00 a month (26 years
remaining) as well as paying for half of a tractor
($22,000) in which she has no interest and which is
an asset of the estate.[5]
"....
"3. On or about the 20th day of December, 2011,
the widow first consulted with counsel regarding her
situation. Aside from having lost her husband seven
months before, she was unaware of the assets of the
estate and extent of his holdings. ... Counsel
immediately filed on the 22nd day of December, 2011,
a request for extension to file her petition for an
elective share of the decedent's estate (nine days
after the election period expired). Shortly
thereafter, counsel for the respondent reviewed the
probate records of Marshall County regarding the
real estate holdings of the decedent and ... filed
the widow's petition for elective share. Said
petition was granted by Order of the Probate Court
on February 14, 2012, granting the respondent's
petition for an elective share.
"4. Ala. Code 1975, § 12-22-21, provides the
basis for appeal from the Order, Judgment or Decree
of the Probate Court may be taken by the party
aggrieved to the Circuit Court or Supreme Court in
the cases specified and within the time frame for an
appeal, generally within forty-two days after a
determination. No appeal, timely or otherwise, has
been made regarding the Order of the Probate Court
regarding the extension of time granted or the order
granting the elective share requested by the widow."
The record does not reflect the bases for Korie's
5
obligations as to the mortgage and the tractor.
9
1120848
In support of her response, Korie filed an affidavit that
states:
"I am Korie Sterling Saylor, widow of the
decedent, Woodie Jim Saylor, and respondent in this
case. This case involves an elective share
regarding my deceased husband's estate. At the time
of his death, my husband was in the cattle business;
after his death I worked as a waitress at the El
Rancho restaurant. I was aware that he owned cattle
and llamas, equipment and land, I was unaware of the
specifics of the business operation and the
condition of his estate. At some point on or before
June 13, 2011, I met with Clint Maze, the attorney
for the estate, regarding execution of the consent
to probate the Will as he requested. Neither at
that time nor at any time, did he advise me that he
represented the estate and that I should seek
independent legal counsel nor was there any
discussion of the assets or composition of the
estate. Under the terms of the Will, I received a
life estate in our residence. I am currently paying
$986.00 a month with 26 years remaining on the
mortgage for our house and the 9.09 acres, as well
as, paying for half of a tractor ($22,000) that
belongs to the estate."
In January 2013, the circuit court entered an order
granting the personal representative's motion for a summary
judgment. The order states that Korie
"claims that the attorney for the estate obtained
her signature on the waiver and consent to probate
the will without explaining that said attorney
represented the estate, and further, that his estate
consisted of much more than she was aware. Counsel
for the estate argued in oral arguments, without
objection from Korie, that he provided her with a
copy of the will for her to read and he did not
10
1120848
advise her. The waiver is clear and unambiguous as
to its content and clearly consents to admitting the
will to probate.
"[Korie] then waited more than six months to
seek legal counsel relating to taking any action
relating to taking an elective share. The statute
within which to file requesting an extension of time
had already run before she took any action to elect.
Her attorney promptly took action and filed a motion
the day following her first visit with her attorney.
[Korie] claims that the Probate Court of Marshall
County issued an order allowing an extension of time
and that such was an appealable order to this Court
and that the personal representative's failure to
appeal the order timely makes it a final order and
that this Court has no authority to set the order
aside. This case was removed from probate to this
Court after the order allowing the extension of time
was granted and after the appeal time for an order
from probate court that must be appealed.
"The
probate
Court
without
question
has
jurisdiction over granting or refusing to grant the
right to elect a distributive share, but there are
certain types of orders appealable from probate
court to this Court or the Alabama Supreme Court as
set out in §§ 12-22-20 and -21, Code of Alabama
1975, and the Court finds the order granting an
extension of time to file an elective share is not
one of the specified orders that must be appealed.
Therefore, since the estate was removed from probate
to this Court, the Court determines it has
jurisdiction to determine the issue of whether or
not the order granting an extension of time should
be altered, amended, or vacated.
"....
"The Court ... find[s] that the Estate has
raised an affirmative defense of the applicable
statute of limitations and having found no fraud or
11
1120848
undue influence and the undisputed evidence shows
clearly [Korie] did not rely on legal advice from
the estate's attorney, as well as having failed to
file her election within the initial six months
allowed by § 43-8-7[3], Code of Alabama 1975, after
having been furnished with a copy of the will and
waiving a hearing on admitting the will to probate,
this Court determines the following:
"1.
There is no genuine issue of material
fact relating to this issue, and
"2.
The Estate is entitled to a judgment
as a matter of law."
The order concludes by setting aside the order granting Korie
an extension of time in which to file her claim for an
elective share and by dismissing Korie's petition for an
elective share. Korie filed a postjudgment motion, which the
circuit court denied. Korie appeals.
II. Discussion
A.
Appealability of February 2012 Order Granting An Elective
Share
Korie first argues that the probate court's February 2012
order "granting" her petition for an elective share was an
appealable order under § 12-22-21(4), Ala. Code 1975, which
provides for an appeal "on the decision of the [probate]
court, in proceedings instituted to compel the payment of a
legacy or distributive share, at any time within 42 days after
12
1120848
such decision." (Emphasis added.) Korie contends that the
personal
representative's
failure
to
appeal
that
February
2012
order resulted in that order becoming the law of the case.
Korie's argument misapprehends the nature of the probate
court's orders that are at issue and/or the import of § 12-22-
21(4).
Assuming for the sake of argument that § 12-22-21(4)
applies to a surviving spouse's claim for an "elective share,"
the condition otherwise described in that statute is not met
here. The probate court entered two preliminary orders, an
order granting an extension of time for Korie to petition for
an elective share and an order stating that Korie was entitled
to an elective share. As noted, the latter order did not
adjudicate the amount of that elective share but set a date on
which the probate court would conduct a hearing to determine
the amount of the elective share.
As also noted, a surviving spouse's elective share is
determined through the application of a formula. Pursuant to
the elective-share formula, a surviving spouse's elective
share is "the lesser of (1) All of the estate of the deceased
reduced by the value of the surviving spouse's separate
13
1120848
estate; or (2) One-third of the estate of the deceased." Ala.
Code 1975, § 43-8-70(a). Based on the nature of the elective-
share formula, determining a surviving spouse's right to
receive an elective share of the estate requires the court
considering the issue to determine the value of the share to
which the surviving spouse is entitled. See also Ala. Code
1975, § 43-8-73(d) ("After notice and hearing, the court shall
determine the amount of the elective share and shall order its
satisfaction from the assets of the estate.").
But neither of the probate court's February 2012 orders
determined the share, if any, to which Korie might be
entitled. That is, they did not resolve Korie's claim for an
elective share. Neither order compelled any payment, or
denied any claim for payment, of any portion of the estate.
Neither order represents "the decision" of the probate court
"in [a] proceeding[] instituted to compel the payment of a
legacy or distributive share" contemplated by the statute.
Neither order was appealable as "the decision" of the probate
court in the "proceeding[] instituted to compel the payment of
a legacy or distributive share" under § 12-22-21(4). See,
e.g., Dempsey v. Dempsey, 899 So. 2d 1272, 1273 (Fla. Dist.
14
1120848
Ct. App. 2005) (holding that an order determining entitlement
to an elective share, but not the amount of the share, is a
"nonfinal
and
nonappealable"
order).
See
generally
Dzwonkowski v. Sonitrol of Mobile, Inc., 892 So. 2d 354, 361-
62 (Ala. 2004) (holding that, where the amount of a monetary
claim is at issue, a judgment that adjudicates liability, but
not the amount of the claim, is not a final judgment); Banyan
Corp. v. Leithead, 41 So. 3d 51, 54 (Ala. 2009) (noting that
an appealable judgment is one that finally and conclusively
adjudicates the substantive rights of the parties). As a
result, the February orders were not appealable and, indeed,
remained subject to revision by the probate court or, as in
this case, by the circuit court upon proper removal of the
administration of the estate. See Rule 54(b), Ala. R. Civ. P.
See also Ala. Code 1975, § 12-13-12 (stating that the rules of
practice in circuit courts generally are applicable
in
probate
courts); Ala. Code 1975, § 12-11-40 (stating that the Alabama
Rules of Civil Procedure generally are applicable in
proceedings for the administration of estates removed to the
circuit court).
6
Rule 1(a), Ala. R. Civ. P., was amended effective January
6
1, 2013, to provide that, subject to certain exceptions, the
15
1120848
In
contrast,
the
circuit
court's
eventual
order
dismissing Korie's petition fully adjudicated Korie's claim
that she was entitled to receive an elective share of Woodie's
estate, and that order is appealable. See Rogers v. McLeskey,
225 Ala. 148, 149, 142 So. 526, 527 (1932) (noting that order
denying "right of homestead and exemption by the alleged widow
of decedent, after she had filed an alleged dissent as widow
from the will," was "final" and "appealable").
B.
Extension of Time to Exercise Right of Election
Korie next argues that the circuit court erred because it
"failed to apply principles of equity as a basis to allow
Korie additional time beyond the six-month limitation of
§ 43-8-73 to make a decision regarding taking an elective
share." Specifically, Korie argues that equity requires a
court to allow an untimely filed claim for an elective share
where:
1. The surviving spouse was "ignorant" of her right
to dissent from the will and to claim an elective
share;
Alabama Rules of Civil Procedure apply in probate court
proceedings. See Committee Comments to Amendment to
Rule 1(a), effective January 1, 2013.
16
1120848
2.
The attorney for the estate did not inform the
surviving spouse of her right to dissent from the
will and to claim an elective share;
3. The attorney for the estate did not "advise" the
surviving spouse to obtain independent counsel; and
4. The surviving spouse filed her request for an
extension of time nine days after the limitations
period applicable to her request for an extension of
time.7
Korie supports her argument by asserting the general
principle that "'[t]he widow is a favorite of the law'" and
Korie also states that "the denial of an elective share
7
would impose an economic hardship upon" her, and Korie notes
that she "worked as a waitress at a Mexican restaurant when
these issues were before the circuit court." Although Korie's
affidavit avers that she worked in a Mexican restaurant after
Woodie's death, she made no averment that, and presented no
other evidence that would support the conclusion that, "the
denial of an elective share would impose an economic hardship
upon" her.
Also, Korie concedes that Woodie left an investment
account as a nonprobate asset and that the account was equally
divided between her and Jonathan. The record contains no
information concerning the amount of the investment account.
In his appellate brief, the personal representative describes
the account as "very sizeable"; in Korie's reply brief, she
"denies" that the amount she received from the account could
be described as even being "sizeable," much less "very
sizeable." But the existence of the investment account and
any impact it might have as to the matters at issue were not
among the matters presented to the circuit court. Thus, we
will not consider those matters either. See, e.g., Andrews
v. Merritt Oil Co., 612 So. 2d 409, 410 (Ala. 1992) ("This
Court cannot consider arguments raised for the first time on
appeal; rather, our review is restricted to the evidence and
arguments considered by the trial court.").
17
1120848
that statutes governing dower rights should be liberally
construed. Perrine's Ex'rs v. Perrine, 35 Ala. 644, 647
(1860). More specifically, she argues that the "liberality"
of equity as to the rights of a widow "is reflected in the
comments made by this Court" in Adams v. Adams, 39 Ala. 274
(1864), and in Steele v. Steele's Adm'r, 64 Ala. 438 (1879),
both of which discuss the widow's right to dower, a common-law
right the elective share has displaced. Further, Korie
8
references Ala. Code 1975, § 43-8-3, which states: "Unless
displaced by the particular provisions of this chapter, the
principles of law and equity supplement its provisions." And
Korie refers to a few cases from other jurisdictions in which
courts have applied principles of equity and allowed an
untimely claim for an elective share. As discussed below,
however, those cases are distinguishable.
As the Commentary to § 43-8-70 states:
8
"Under the common law, a widow was entitled to
dower, which was a life estate in a fraction of
lands of which her husband was seized of an estate
of inheritance at any time during the marriage.
Dower encumbers titles and provides inadequate
protection for widows in a society which classifies
most wealth as personal property. Hence states have
tended to substitute a forced share in the whole
estate for dower and the widower's comparable
common-law right of curtesy."
18
1120848
As noted above, the elective share is a creation of the
legislature, and the statutes creating the "right
of
election"
also establish the conditions applicable to the exercise of
that right. See, e.g., § 43-8-70(a) ("If a married person
domiciled in this state dies, the surviving spouse has a right
of election to take an elective share of the estate."); Ala.
Code 1975, 43-8-71 ("The right of election of the surviving
spouse may be exercised only by the surviving spouse during
his lifetime."). Those conditions include filing a claim for
an elective share or a request for an extension of time within
the limitations period imposed by § 43-8-73(a).
Provided a request for an extension of time is timely
filed, § 43-8-73(a) gives the trial court discretion to
"extend the time for election for cause shown." As one court
has explained:
"The elective share statute is like a statute of
limitations in that it delineates a specified period
of time during which a party must act. However, the
statute is more explicit than a 'statute of
limitations' in that it expressly permits the court
to extend the election period, whereas a statute of
limitations is silent on the rights of the court to
extend any such period. Further, the elective share
statute gives explicit instructions to the court
regarding when it may act, limiting this ability to
'[b]efore the time for election has expired.' [N.J.
Stat. Ann. §] 3A:38A–5(a)."
19
1120848
McKay v. Estate of McKay, 184 N.J. Super. 217, 222-23, 445
A.2d 473, 475 (Law Div. 1982), aff'd, 188 N.J. Super 44, 455
A.2d 1142 (App. Div. 1983); see also, e.g., Moise v. Moise's
Ex'r, 302 Ky. 843, 845, 196 S.W.2d 607, 608 (1946) ("[T]he
Court ... is without power to grant additional time to
determine whether or not to renounce, unless application be
made therefor within the time prescribed by Statute for the
election."); see also Bunker v. Murray, 182 Mass. 335, 336, 65
N.E. 420, 421 (1902)("The statute has pointed out the way for
an extension of time, and the probate court has no power,
after the expiration of six months from the first probate of
the will, to allow the widow to waive the provisions of the
will, or to claim such portion of his estate as she would have
been entitled to if her husband had died intestate."); In re
Estate of Zweig, 145 Misc. 839, 856-57, 261 N.Y.S. 400, 419-20
(Sur. Ct. 1932)("[T]he statute has granted surrogates a
discretionary power to extend the period for making the
election only before the expiration of the initial statutory
six months allowed for the purpose. On fundamental principles
of statutory construction, inclusio unius est exclusio
alterius. No power is given for an extension after the
20
1120848
expiration of the time, and in the absence of such a grant of
power, it cannot be held to exist. ... [T]he court is
powerless to grant relief after the expiration of the initial
six months' period in the absence of a demonstration of active
fraud having been practiced upon the surviving spouse.").
The McKay court further noted that
"[p]laintiff did not apply to the court for an
extension of time to elect, as she should have under
[N.J. Stat. Ann. §] 3A:38A–5(a). Even assuming that
the information she needed to make a reasoned
decision was not made available within the six-month
period (a situation which plaintiff did not convey
to the executor), the burden is on the surviving
plaintiff/spouse to apply for an extension of the
period for 'good cause' within the six months. Id.
If
plaintiff
believed
she
lacked
sufficient
information, she should have, for that reason alone,
made application to the court for an extension.
Plaintiff's argument that she was not provided with
sufficient information could be construed as 'good
cause' under the statute, enabling her to apply for
an extension. The Legislature anticipated such
circumstances and provided a procedure with which
plaintiff did not comply.
"....
"The denial
of
plaintiff's
motion
may
seem harsh
in that she was apparently prepared to make an
election against the Will only one month after
expiration of the time period. However, it is a
legislative prerogative to amend a statute, not the
court's."
21
1120848
McKay, 184 N.J. Super. at 223-24, 445 A.2d at 475-76; see also
In re Estate of Rehfuss, 65 Wis. 2d 409, 414, 222 N.W.2d 617,
620 (1974)("The power granted to the trial court [as to an
extension for filing an election] by [Wis. Stat. Ann.
§] 861.11(3) ... could not be exercised because the one-year
period had expired."); In re Estate of Faller, 407 Pa. 73, 77,
180 A.2d 33, 35 (1962) ("[One-year] time requirement [for
election] is mandatory and cannot be extended except upon
proof that the surviving spouse, by actual fraud, has been
induced or misled to delay the election.").
Likewise, in In re Estate of Hartt, 75 Wyo. 305, 295 P.2d
985 (1956), Pearl Hartt, the surviving spouse, filed an
"action in equity ... to permit [her] to dissent
from the will [of her deceased husband]. ... She
alleged in substance that she did not know of her
right to elect to take against the will of the
deceased; that she did not know the extent and value
of the estate; that she was ignorant of the impact
of Federal taxes on the estate; that she was not
advised of her rights by the executors of the estate
in whom the testator and plaintiff had reposed trust
and confidence, nor was she advised of her rights by
any one else."
75 Wyo. at 329, 295 P.2d at 989. The pertinent Wyoming
statute required the surviving spouse to file his or her
election within six months after the probate of the deceased
22
1120848
spouse's will. Pearl did not file her equity action until
15 months after the probate of her husband's will.
Nevertheless, the trial court granted Pearl's petition, and
the personal representative and one of the decedent's heirs
appealed.
The Wyoming Supreme Court surveyed the law of other
jurisdictions concerning whether equity might be invoked to
provide relief under such circumstances, and noted:
"The decisive decisions on the point, pro and con,
are absolutely irreconcilable, although we have
diligently sought some ground on which they could be
reconciled. ... There are but few points on which
the courts are generally agreed, namely, when fraud
and the like appears by reason of which the widow
has been silent, relief may be granted, for fraud
vitiates everything. No fraud or the like appears
in the case at bar. So, too, the courts hold that
if the widow wants to change her mind during the
period fixed in the statute, she may do so. ...
There also may be very exceptional circumstances
under which the time fixed by statute is not
controlling."
75 Wyo. at 330-31, 295 P.2d at 990.
The Hartt court noted that some courts had concluded that
equity could intervene to allow an untimely election because
those courts adhered to the common-law rules concerning
election. In contrast, as to those courts that had rejected
the intervention of equity, the Hartt court stated that that
23
1120848
"class of cases seems to have two sources. In the
first place we have the general rule that mandatory
statutes must be obeyed and that the courts have no
right to make a law contrary to that prescribed by
the legislature. In the second place the beginning
at least of considering statutes mandatory in cases
such as before us is clearly found in the fact that
such statutes were enacted for the express purpose
of remedying the evils of the law of election in
such cases under the common law. ... The earlier
cases are clear on the subject. Stephens v. Gibbes,
14 Fla. 331, 357, 358 [(1873)], discusses the common
law at some length. It points out that at common
law no election was necessary except in certain
cases; again that there was no limit of time in
which an election by a widow was necessary to be
made. The court states that any one who knows
anything about the history of election in such cases
knows the mischief that existed at common law, and
that the enactment of statutes by the legislature on
the subject 'originated in the desire and necessity
for curing the evils incident to the common law
rules upon these subjects.'"
75 Wyo. at 333, 295 P.2d at 991; accord Hilliard v. Bindford's
Heirs, 10 Ala. 977, 991 (1847) ("The evil intended to be
obviated" by the legislature's enactment of a statutory time
limit as to the assertion of the widow's right to receive her
dower interest "was the difficulty which previously
existed
of
ascertaining when and how an election was to be made by her.
... This seems to have been the only change made by the
statute in the existing law -– a fixed, a definite term was
introduced within which she is compelled to signify her
24
1120848
dissent to the will; and if this is not made, it then, if any
provision [in the will] is made inconsistent with her right
under the statute, becomes obligatory on her.").
The Hartt court further reasoned:
"[T]he courts have held that a statute like ours
fixing the time in which a surviving spouse must
dissent from the will has been held to be a statute
of limitation, and it is said that a court of equity
may not give relief from such a statute no matter
what hardship may be created, unless, perhaps, it be
by reason of fraud or the like. In re Zweig's Will,
145 Misc. 839, 261 N.Y.S. 400 [(Sur. Ct. 1932)].
Thus the Colorado Supreme Court, which, as noted,
held the failure to elect to be conclusive on the
rights of the widow, in the later case of In re
Stitzer's Estate, 103 Colo. 529, 87 P.2d 745, 120
A.L.R. 1266 [(1939)], designates the statute as a
statute of limitation. Other cases to the same
effect are Schweer v. Schweer, Mo. App., 86 S.W.2d
969 [(1935)]; Ludington v. Patton, 111 Wis. 208, 86
N.W. 571 [(1901)]; In re Zweig's Estate, 145 Misc.
839, 261 N.Y.S. 400; Akin v. Kellogg, 119 N.Y. 441,
23 N.E. 1046 [(1890)]. ...
"....
"Numerous cases announce the rule that under a
statute similar to ours, the surviving spouse must
dissent from the provisions of the will within the
time fixed by statute, excepting cases involving
fraud or the like. ...
"....
"In Stearns v. Stearns, 103 Conn. 213, 130 A.
112, 116 [(1925)], the court stated:
25
1120848
"'The statute is too plain to require
construction. The will did give to the
husband a portion of the estate of the
testatrix. The husband made no election in
writing as to whether he would accept or
reject the provisions of the will in lieu
of his statutory share as husband of the
testatrix. The terms of this statute are
explicit, and however unfortunate the
result, the facts of record bring the case
exactly within the statute and require us
to hold that the husband "shall be taken to
have accepted the provisions of the will,
and shall be barred of said statutory
share."'
"[In] In re Daub's Estate, 305 Pa. 446, 157 A.
908, 911, 81 A.L.R. 735 [(1931)], the court stated:
"'No matter how hard the decision in
a particular case may seem to be, if a
widow does not make her election within the
statutory period, the courts, because of
that act, must declare that she is deemed
to have made an election to take under the
will, for this "statute here fixes the time
as definitely as does that relating to
taking appeals, and both are mandatory. ...
In view of the positive provisions of the
statute we are not persuaded that relief
could be granted ex gratia." In re
Minnich's Estate or Sherwood's Estate, 288
Pa. 354, 358, 136 A. 236, 237 [(1927)].
"'A different conclusion will, of
course, be reached in cases where actual
fraud has been committed to obtain the
widow's election, and no laches appears,
for fraud vitiates everything it touches.'
"....
26
1120848
"Notwithstanding
[a]
great
array
of
authorities[] in which the courts have considered
the statutory provisions to be mandatory, counsel
for respondents contend that we should follow the
common law rule of election, in which time is not
considered to be of the essence, and that equity
will give relief. We have already seen that
Stephens v. Gibbes, 14 Fla. 331 [(1873)], and
Collins v. Carman, 5 Md. 503 [(1854)], followed by
another Maryland case, hold the contrary. Perhaps
the leading case on the subject before us, because
of the comprehensive discussion of all the phases on
this subject, is In re Zweig's Estate, 145 Misc.
839, 261 N.Y.S. 400. Counsel for respondents say
that the case is distinguishable because the probate
court of New York has no equitable jurisdiction.
But it has jurisdiction, by statute, to extend the
time within a limited period, which itself seems to
be equitable in its nature. Further the court
expressly considers the subject of whether or not a
court of equity can give relief after the expiration
of the time fixed by statute, and states that courts
of equity are powerless to vary the direct mandate
of legislative enactments as are courts of law, and
that this has been determined on innumerable
occasions."
75 Wyo. at 339-43, 295 P.2d at 995-96 (emphasis added;
emphasis omitted).
The Hartt court concluded that it was "constrained to
hold that our statute hereinbefore quoted is mandatory, and
that [Pearl] Hartt had no right to dissent from the will after
the expiration of six months mentioned in the statute." 75
Wyo. at 346, 295 P.2d at 998. And, of particular import to
27
1120848
our consideration of Korie's arguments in the present case,
the Hartt court noted that Pearl
"contends that the executors should have advised her
of her rights. It is stated in 90 C.J.S., Trusts,
§ 247, p. 225 that: 'By accepting the trust, a
trustee (executors are trustees) becomes bound to
administer it, or to execute it, in accordance with
the provisions of the trust instrument and the
intent of the settlor.' In determining his duty,
the intention of the testator is of controlling
importance. ... Hence the first and primary duty
of the executors in this case was to see that the
intent of the testator was carried out. It was not
their duty, in fact it would have been a violation
of their duty, to do anything that would nullify the
provisions of the will. True the executors had no
right to defraud the widow or by chicanery induce
her not to dissent from the will. But no fraud or
chicanery is shown herein. The court in Stephens v.
Gibbes, 14 Fla. 331, 356 [(1873)], stated:
"'Neither the executors, the other
devisees or legatees, not the creditors,
are in any legal sense under an obligation
to give the widow notice of the provisions
of the will. The law presumes her
knowledge of the will and its contents as
well as her knowledge of her right of dower
and its nature, and she is bound to know
that if she omits for the space of one year
to signify her dissent, she cannot claim
dower.'
"That, of course, applies as well to her right
to
take
under
the
statute
or
descent
and
distribution."
75 Wyo. at 348, 295 P.2d at 999; see also, e.g., In re Estate
of Pritchard, 37 Kan. App. 2d 260, 272-73, 154 P.3d 24, 33
28
1120848
(2007)
(holding
that,
absent
a
statutorily
created
obligation,
a personal representative or his or her attorney has "no duty
... to inform or give notice to [the surviving spouse] of [his
or] her homestead and/or spousal rights"). See also Allen
9
v. Guthrie, 469 So. 2d 204, 205-06 (Fla. Dist. Ct. App. 1985)
("A surviving spouse has no right to an elective share absent
a timely election to take that share. Order and finality in
the administration of estates, as is reflected in [the
elective-share
statute's]
time
limits,
are
paramount
concerns;
In
some
states,
the
personal
representative
is
9
statutorily required to disclose the financial status of the
estate to the surviving spouse where the surviving spouse
requests such disclosure. See, e.g., Tenn. Code Ann. § 31-4-
103. In such states, where the spouse requests disclosure and
the personal representative fails timely to provide the
information required by the statute, "the statutory time for
filing a dissent will not bar the widow from making that
election." Merriman v. Jones, 620 S.W.2d 88, 91 (Tenn. Ct.
App. 1981). Alabama has no such requirement as part of its
elective-share statutory scheme.
Also, we note that Korie is not arguing that the attorney
for the estate had a legal duty to inform her that she had a
right to claim an elective share; Korie states in her reply
brief that "that argument has actually never been made."
Nevertheless, Korie states that this Court should "recommend"
that counsel for the estate inform the surviving spouse of his
or her right to claim an elective share "in every instance.
... A counsel for the estate should not favor the individual
rights of the person named as administrator of the estate."
We must decline Korie's invitation.
29
1120848
and failure to elect within the period prescribed by the
Legislature bars a claim."); Downes v. Downes, 388 Md. 561,
578, 880 A.2d 343, 353 (2005) ("When [the] period [for filing
a request for an extension of time] expires, the authority to
extend it expires as well. The same underlying principles
apply: there has been no retreat from the principle that the
ability to renounce a Will in favor of a statutory share is to
be strictly construed and the law still favors the expeditious
administration and early settlement of Estates." (citation
omitted)); In re Estate of Kruegel, 551 N.W.2d 718, 719
(Minn. 1996) (affirming the denial of an untimely filed
"notice of election" where the surviving spouse failed to
timely request an extension of the time in which she must
elect and rejecting surviving spouse's argument that equity
should relieve her of the pertinent time limitations because
she had been "actively engaged in negotiations with the estate
as to how the distributions should be made"); In re Estate of
Hesemann, 214 Neb. 842, 336 N.W.2d 568 (1983) (affirming the
denial of the surviving spouse's untimely claim for an
elective share where the surviving spouse failed to establish
that the attorney for the estate had made any material
30
1120848
misrepresentation in response to the surviving spouse's
inquiries concerning his right to file a claim for an elective
share); Simpson v. Sanders, 314 S.C. 413, 445 S.E.2d 93
(1994)(requiring
strict
compliance
with
elective-share
statute
and denying untimely petition); and In re Estate of
Lingscheit, 387 N.W.2d 738, 741 & n. (S.D. 1986) (holding that
the trial court should have denied the surviving spouse's
petition for an elective share where it was filed three weeks
after the pertinent time limit and she "could have requested
an extension before her time expired" but did not).10
As to the Alabama cases cited by Korie in support of her
argument, we first note that in Adams this Court addressed the
issue whether a widow who had timely filed a claim for dower
could prosecute that claim even though she had accepted money
that had been bequeathed to her in her deceased husband's
will: "Can she, while retaining all the property bequeathed
to her ..., recover dower in the probate court?" 39 Ala. at
279. The Adams Court concluded that she could not. In so
doing, the Court noted that the widow had "elected" to receive
Estate of Lingscheit was superseded, in part, on other
10
grounds, as recognized in In re Estate of Geier, 809 N.W.2d
355, 358 (S.D. 2012).
31
1120848
what the will provided for her by accepting property pursuant
to the terms of the will. But, the Court continued:
"Although she may have made an election, she is
not concluded by it, if made in ignorance of the
circumstances calculated to influence her choice.
But we are not to infer from the expression that she
is not concluded by an election unadvisedly made,
that she can treat her election as a nullity, while
she retains all that she may have received by virtue
of the election. On the contrary, it is manifest
justice, that she should avoid the election, only
upon a restoration of what she has received. Such
is also the teaching of the cases upon the subject.
Having made an election, she must abide by it as
long as she retains the legacy which she has
received. If she has been defrauded, or if she has
made an unadvised election, her remedy is in equity,
to obtain relief upon the restoration of the benefit
she has taken under the will."
39 Ala. at 280 (citations omitted).
The foregoing discussion from Adams is of no avail to
Korie. Unlike Korie, the widow in Adams timely asserted her
right to dower. The issue in Adams was not whether equity
permitted a widow to pursue an untimely claim for her
statutory right to "take against the will," i.e., her claim
for dower, but whether equity permitted a widow to revoke her
decision to receive the property bequeathed her under the will
and to pursue a timely filed claim to take against the will.
As the Adams Court noted, equity did permit such a revocation,
32
1120848
provided the widow "restor[ed] ... the benefit she has taken
under the will." But Adams does not stand for the proposition
that equity allows a widow to pursue an untimely claim for the
statutory rights granted to her.
11
As to Korie's argument from Steele, in which this Court
held that the widow there was not entitled to belatedly assert
her right to dower, Korie contends that this Court impliedly
recognized that equity may excuse an untimely election. She
draws her conclusion from the following statement by the
Steele Court: "[I]f there be an extension of time within
which to elect, under an equitable construction of our
statute, neither the pleadings nor proofs in the present
record justify its exercise." 64 Ala. at 461.
The language quoted by Korie may be read as implying that
equity can be used to evade the statutory time limits
Also, allowing a widow to revoke the exercise of her
11
statutory rights and to accept the provisions of the deceased
spouse's will is materially different than allowing a
surviving spouse to untimely assert her statutory rights and
thereby disrupt the provisions of the deceased spouse's will.
In the former circumstance, the surviving spouse is not
thwarting any purpose expressed by the legislature. In the
latter circumstances, however, the surviving spouse would be
thwarting the legislature's purpose as to the
timely
assertion
of the surviving spouse's rights, and, unlike the former
circumstance, the surviving spouse would also be
thwarting the
execution of the will according to its terms.
33
1120848
applicable to the exercise of a surviving spouse's statutory
rights vis-à-vis the deceased spouse's estate. But a closer
reading of Steele reflects that Korie's claim is nevertheless
unavailing. The Steele Court stated:
"The statute law of this State provides that the
widow, for whom provision has been made by the will
of her deceased husband, may dissent from such
provision, and 'take her dower in the lands, and of
the personal estate such portion as she would have
been entitled to in case of intestacy.' Code of
1876, § 2292. 'Such dissent must be made in
writing, and deposited within one year from the
probate of the will,' &c. -- Ib. § 2293. It would
seem
that
the
language
of
this
statute
is
imperative, and, to be availing, the dissent must be
deposited within one year after the probate of the
will."
64 Ala. at 461 (emphasis added). The Steele Court continued:
12
"But, if there be an extension of time within
which to elect, under an equitable construction of
our statute, neither the pleadings nor proofs in the
present record justify its exercise. There is no
averment, and no attempt at proof, that Mrs. Steele
was
at
any
time
ignorant
of
any
fact
or
circumstance, calculated to influence her choice.
Neither is it shown, or even possible, that she can,
The Steele Court referenced Adams and acknowledged that
12
equity permitted a widow to revoke "'an election ... made in
ignorance of the circumstances calculated to influence her
choice,'" "'upon restoration of what she has received.'" 64
Ala. at 461 (citations omitted). But, as noted above, Adams
did not concern the issue whether a widow could pursue an
untimely filed claim.
34
1120848
by restoration, place the property of the estate in
statu quo. More than twenty years ago, she was in
possession of the property devised to her by the
will, and it is not shown she has ever been
disturbed in its enjoyment. It is clear that no
adverse claim was asserted during the administration
of the executor, which lasted more than thirteen
years. She has no right now to dissent from the
provisions of the will, and claim dower in the lands
of which her husband died seized. -– See Collins v.
Carman, 5 Md. 503 [(1854)]."
64 Ala. at 461-62 (emphasis added).
In turn, in Collins v. Carman, 5 Md. 503 (1854), which
the Steele Court cited in support of the foregoing discussion,
the surviving spouse, who was insane, died four years after
her husband. The administrator of her estate attempted to
belatedly assert the deceased wife's right to dower, i.e., to
take against the will. The trial court rejected the claim,
and the Maryland Court of Appeals affirmed its judgment. The
Collins court noted that "[t]he law admits of no excuse for a
failure to renounce. ... To acquire ... rights in opposition
to the will, the law makes the renunciation [of the will] a
necessary act." 5 Md. at 530-32. See generally 2 John Norton
Pomeroy, Equity Jurisprudence § 513a (5th ed. 1941) ("In very
many of the states statutes have been passed which prescribe
definite periods of time within which the right of election
35
1120848
between dower and a provision made by will must be exercised.
[... If dissent is not indicated within the prescribed time
and in the manner required by law, the widow is conclusively
presumed to have elected to take under the will, no matter how
hard the decision in a particular case may seem to be. This
is so except in cases of fraud, and perhaps under some other
exceptional circumstances.]" (bracketed material added by
Spencer W. Symms, ed.)).
Also, as to any analogy that might be drawn from our
precedents regarding dower, we find it instructive that in
Hilliard, supra, we stated that "the evil intended to be
obviated" by the legislature's enactment of a statutory time
limit as to the assertion of the widow's right to receive her
dower interest
"was the difficulty which previously existed of
ascertaining when and how an election was to be made
by [the widow]. ... This seems to have been the
only change made by the statute in the existing law
-– a fixed, a definite term was introduced within
which she is compelled to signify her dissent to the
will; and if this is not made, it then, if any
provision [in the will] is made inconsistent with
her right under the statute, becomes obligatory on
her."
10 Ala. at 991. Also, in McGhee v. Stephens, 83 Ala. 466, 3
So. 808 (1888), this Court noted that the statutory procedures
36
1120848
enacted regarding dower claims were "intended to provide for
a speedy and summary election" and that "failure to dissent
within one year from the probate of the will bars [the
widow's] right of dower." 83 Ala. at 469, 3 So. at 810. See
also Sanders v. Wallace, 118 Ala. 418, 426, 24 So. 2d 354, 356
(1898)("We are of opinion, that the widow by her failure to
dissent from the provisions of her husband's will, in the time
and manner required by the statute, is barred of her right of
dower in her husband's lands ...."); Vaughan v. Vaughan's
Heirs, 30 Ala. 329, 333 (1857) (holding that surviving
spouse's "failure to signify her dissent from the will, within
one year after its probate, is a bar to her right of dower").
As it did by adopting a time limit for the assertion of
a dower claim, the legislature adopted a limitation period for
the surviving spouse's assertion of his or her right to elect
against the will. There is no indication that the purposes of
the time limitation as to the right of election are any
different from the purposes for a dower claim, namely
certainty as to the assertion of the surviving spouse's rights
that could adversely affect the will and efficiency as to the
administration of the estate. To allow an untimely claim
37
1120848
would be directly contrary to those purposes and unwarranted
in the absence of "fraud or the like." The circuit court in
the present case found "no fraud or undue influence." The
lack of justification for allowing an untimely claim under
such circumstances is bolstered by the fact (1) that a
surviving spouse may timely request an extension of time until
he or she can obtain information concerning the assets
composing the estate, see Ala. Code 1975, § 43-8-73(a)
(providing that a timely filed request for an extension of
time may be granted "for good cause shown") and (2) that the
legislature has limited any prejudice the surviving spouse
might suffer from asserting his or her right of election based
on insufficient information. Ala. Code 1975, § 43-8-73(c)
("The surviving spouse may withdraw his demand for an elective
share at any time before entry of a final determination by the
court.").
In addition to Korie's reliance on the above-referenced
Alabama cases, she also relies on a few cases from other
jurisdictions that have allowed a surviving spouse to pursue
an untimely filed claim for an elective share. We find those
cases either to be distinguishable from the present case or
38
1120848
simply to be contrary to the much greater and more compelling
body of authority described above.
To take one example, Korie cites In re Estate of Bersin,
98 Ohio App. 432, 129 N.E.2d 868 (1955). That decision,
however, was based on the failure of certain statutory
prerequisites (not present here) to the right of a surviving
spouse to make an elective share against the decedent's will.
Similarly, Korie discusses Mann v. Peoples-Liberty Bank
& Trust Co., 256 S.W.2d 489 (Ky. 1953). In Mann, a wealthy
testator had a complicated estate plan, which he failed to
revise after the birth of his youngest child:
"The possible effect of this pretermission on the
powers of the executors and trustees under the will
has resulted in the widow, Frances S. Mann, refusing
to qualify as either co-executor or co-trustee until
it can be determined whether it would be better for
both herself and her children to renounce the will
... and elect to take her dower and distributable
share of her husband's estate. Ordinarily, this
statutory power of renunciation must be exercised
within a year of the probate of the will which
occurred February 5, 1952, but the chancellor
granted her 'to any time within two months after the
determination of her rights in this estate by our
courts by a judgment which shall have become final
by expiration of time for appeal or affirmance on
appeal.'
Where
an
intelligent
election
is
impossible, as we believe it is in the case at bar,
the chancellor has the power to extend the time for
making an election, if requested to do so within the
one-year period."
39
1120848
256 S.W.2d at 492 (citations omitted; emphasis added).
Mann too is distinguishable. In the present case, the
record does not reflect that it would have been impossible for
Korie to make an intelligent election absent
some construction
of the will, nor did she timely request an extension of time
within which to file her elective-share claim so that she
could obtain whatever information she thought she might need.
Korie notes that an accurate inventory and accounting as
to the financial status of the estate would have enabled her
to make an "intelligent choice" as to whether to claim an
elective share. Although that is true, the legislature has
not required that an inventory and accounting be filed as a
precondition to triggering the time periods pertinent to the
elective share. And, as noted above, Korie could have filed
a timely request for an extension of time and concurrently
requested that the court order an accounting so that she could
make an informed decision as to whether to file an elective-
share claim. See § 43-8-73(a) ("The court may extend the time
for election for cause shown by the surviving spouse before
the time for election has expired." (emphasis added)); Ala.
Code 1975, § 43-2-530 (providing that the court may require
40
1120848
the
personal
representative
to
file
an
accounting
"notwithstanding any provision in any will or
other
instrument
to the contrary"). Korie did not seek financial information
concerning the estate, however, until after her right of
election was time-barred.
13
Korie also asserts that she was unaware of her right of
election. But, as the Hartt court discussed, such a claim is
insufficient to entitle the surviving spouse to relief. As
another court has stated:
"In this case the widow pleads that she was
illiterate, and ignorant of the law and of her
rights; that she did not know that, by failing to
renounce her husband's will within a year of its
probate, she was thereby accepting it and electing
to take under it; that the provisions made for her
In
her
argument,
Korie
references
the
personal
13
representative's failure to file an inventory until after he
was ordered to do so by the probate court, and she also takes
issue with the contents of the inventory the personal
representative ultimately filed with the circuit court. As
noted above, however, Woodie's will exempted the personal
representative from the requirement of filing an inventory.
Thus, the personal representative had no legal obligation to
file an inventory until ordered to do so by the court. And no
such order was requested until after the expiration of the
time in which Korie might claim an elective share. Nor is
there
any
evidence
indicating
that
the
personal
representative
actively thwarted any effort Korie might have made to obtain
information about the assets and liabilities of the estate so
that she could evaluate whether it might be in her interests
to file a timely claim for an elective share.
41
1120848
and the infant by the will were less than she was
entitled to under the statute; and that the whole of
her husband's estate was less than, under the
statutes, she, as widow, and her three infants,
would have been entitled to have set apart to them
during her life and their minority. The maxim,
'Ignorance of the law excuses no one,' has not been
applied in this state with the rigor that it has
been elsewhere. ... [But] [t]his court has never
held that one's nonaction, through ignorance of the
law, could extend or enlarge his legal rights. Such
a practice would be not alone to put a premium upon
ignorance, but would be an inducement to perjury, as
well as to unsettle and render insecure titles which
the statute had aimed to fix as of a definite
period, and by not uncertain evidence."
Logsdon v. Haney, 25 Ky. L. Rptr. 245, 245, 74 S.W. 1073, 1073
(1903); see also, e.g., Shelton v. Sears, 187 Mass. 455, 460,
73 N.E. 666, 668 (1905)("The only excuse offered for her
inaction is that she was ignorant of the law, but this is not
sufficient in equity, any more than at law, to overcome the
express limitation fixed by statute within which she must act
or be forever barred." (citation omitted)).
Based on the foregoing, we conclude that the circuit
court correctly rejected Korie's untimely petition for an
elective share. The judgment of the circuit court is
affirmed.
42
1120848
AFFIRMED.
Moore, C.J., and Bolin and Main, JJ., concur.
Bryan, J., concurs in the result.
43 | December 5, 2014 |
82611c92-5fbd-4196-80c1-3e9f5f8d9a8c | Alabama v. $93,917.50 & 376 Gambling Devices | N/A | 1130437 | Alabama | Alabama Supreme Court | REL:12/19/2014
Notice: This opinion is subject to formal revision before publication in the advance
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Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334)
229-0649), of any typographical or other errors, in order that corrections may be made
before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
_________________________
1130437
_________________________
State of Alabama
v.
$93,917.50 and 376 gambling devices et al.
Appeal from Greene Circuit Court
(CV-11-900029)
PER CURIAM.
The State of Alabama appeals from an order dismissing the
underlying forfeiture action, filed by it pursuant to Ala.
Code 1975,
§ 13A-12-30, seeking condemnation of certain gaming
1130437
devices, currency, and other property. We reverse and
remand.
Facts and Procedural History
On June 1, 2011, the State executed a search warrant and
seized certain gaming devices, currency, and other property
from the premises of Greenetrack, Inc. ("Greenetrack"). On
June 7, 2011, Greenetrack filed in the Greene Circuit Court,
pursuant to Rule 3.13, Ala. R. Crim. P., a "Motion for Return
of Seized Property." This motion was referred to Jefferson
1
Circuit Court Judge Houston L. Brown, who had previously been
appointed as a "special circuit judge" for certain gaming-
related cases in Greene County.2
Rule 3.13 provides, in pertinent part:
1
"A person aggrieved by an unlawful search and
seizure may move the court for the return of the
property seized on the ground that he or she is
entitled to lawful possession of the property which
was illegally seized. The judge shall receive
evidence on any issue of fact necessary to the
decision of the motion. If the motion is granted,
the property shall be restored. If a motion of
return of property is made or comes on for hearing
after an indictment or information is filed, it
shall be treated also as a motion to suppress
evidence."
The proceedings on the Rule 3.13 motion predate the
2
filing of the instant case and are discussed in more detail in
this Court's decision in State v. Greenetrack, Inc., [Ms.
2
1130437
On June 22, 2011, the State initiated the instant action
-– filed separately from the proceedings on the Rule 3.13
motion –- by electronically filing in the Greene Circuit Court
a petition seeking the forfeiture and condemnation of the
gambling devices, currency, and property that had been seized
from Greenetrack and that were the subject of Greenetrack's
Rule 3.13 motion. The petition alleged in its style that the
devices, currency, and property listed had been "in
possession
of" Greenetrack. The filings included a summons directed to
Greenetrack, which indicates that service by certified mail
was initiated; the case-action summary indicates that service
by certified mail was issued that day. The signature portion
of the petition appeared as follows:
"Respectfully submitted,
"LUTHER STRANGE (STR003)
"ATTORNEY GENERAL
"By:
"/s/
"HENRY T. REAGAN (REA021)
1101313, April 1, 2014] ___ So. 3d ___ (Ala. 2014), which also
explains the circumstances of Judge Brown's appointment.
Greenetrack's Rule 3.13 motion is found in the records of
those consolidated cases. See R & G, LLC v. RCH IV–WB, LLC,
122 So. 3d 1253, 1258 (Ala. 2013) (taking judicial notice of
record in previous appellate proceedings between same parties
to the extent it pertained to issues in the current appeal).
3
1130437
"Deputy Attorney General
"Counsel for the State of Alabama
"/s/
"J. MATT BLEDSOE (BLE006)
"Assistant Attorney General
"Counsel for the State of Alabama"
As can be seen from the above, the remainder of each line
following the "/s/" was blank.
The certificate of service indicated that the petition
had been served by mail on several attorneys, including the
attorneys who had filed Greenetrack's Rule 3.13 motion. The
signature portion of the certificate of service read as
follows:
"/s/
"HENRY T. REAGAN
"OF COUNSEL"
Again, the remainder of the line following the "/s/" was
blank.
Two days later, on June 24, 2011, the State filed an
"Amended Petition for Forfeiture and Condemnation." The
signature
portion
of
the
amended
petition
appears
substantially the same as that in the June 22 petition and
also lacked any text on each line following the "/s/." The
certificate of service, which, again, lacked any text on the
4
1130437
line following the "/s/," indicated that the amended petition
had been served by mail on the same attorneys identified in
the original petition and on two additional attorneys.
Further, the amended petition in its style again listed
Greenetrack as the party the devices, currency, and property
listed in the petition had been "in possession of"; the
petition added "c/o Luther Winn" and a different address
following Greenetrack's listing as a party. The summons was
3
directed to Greenetrack "c/o Luther Winn"; it further
indicated that service by certified mail was initiated, and
the case-action summary indicates that the petition was sent
by certified mail to Winn on June 24.
The case-action summary indicates that "notice" was sent
to Greenetrack on July 1, 2011, and lists "service by
certified mai[l] on [July 5, 2011,]" for both Greenetrack and
Winn.
On July 6, 2011, Judge Brown held a hearing in the Rule
3.13 proceeding. According to the record in the instant
action, at that hearing, Judge Brown noted that the June 22
After the amended petition was filed, the case-action
3
summary indicates that "Greenetrack c/o Luther Winn"
was
added
as a party defendant.
5
1130437
petition in the case underlying this appeal appeared to lack
signatures. That day, the State electronically filed a
"Second Amended Petition for Forfeiture and Condemnation."
The signature portion of this second amended petition
contained typewritten names following the "/s/," reading as
follows:
"Respectfully submitted,
"LUTHER STRANGE (STR003)
"ATTORNEY GENERAL
"By:
"/s/ Henry T. Reagan
"HENRY T. REAGAN (REA021)
"Deputy Attorney General
"Counsel for the State of Alabama
"/s/ J. Matt Bledsoe
"J. MATT BLEDSOE (BLE006)
"Assistant Attorney General
"Counsel for the State of Alabama"
Similarly, the signature portion
of the certificate of service
attached to the petition appeared as follows:
"/s/ Henry T. Reagan
"HENRY T. REAGAN
"OF COUNSEL"
The certificate of service lists the same counsel as did the
June 24 amended petition. No summons accompanying the second
amended petition appears in the record.
6
1130437
On August 3, 2011, Judge Brown entered an order on
Greenetrack's Rule 3.13 motion directing the State to return
to Greenetrack all the property seized by the State from
Greenetrack's premises. The State appealed, and this Court in
State v. Greenetrack, Inc., [Ms. 1101313, April 1, 2014] ___
So. 3d ___ (Ala. 2014), reversed Judge Brown's decision.
In the meantime, it appears in the instant case that on
August 30, 2011, the State hand-filed summonses with the
circuit court clerk directed to Greenetrack "c/o William Lee"
and to Greenetrack "c/o Luther Winn." Notations by the
process server indicate that the summonses were personally
served on August 30, 2011. With these were copies of the June
22 original petition, the June 24 amended petition, and the
July 6 second amended petition. In all three petitions,
typewritten names followed the "/s/" on the signature lines:
"Respectfully submitted,
"LUTHER STRANGE (STR003)
"ATTORNEY GENERAL
"By:
"/s/ Henry T. Reagan
"HENRY T. REAGAN (REA021)
"Deputy Attorney General
"Counsel for the State of Alabama
"/s/ J. Matt Bledsoe
"J. MATT BLEDSOE (BLE006)
7
1130437
"Assistant Attorney General
"Counsel for the State of Alabama"
The certificates of service for each read as follows:
"/s/ Henry T. Reagan
"HENRY T. REAGAN
"OF COUNSEL"
On September 30, 2011, Greenetrack filed a motion in the
trial court styled as "Respondent Greenetrack's Motion to
Strike and Dismiss State's Petition for Forfeiture, Amended
Petition For Forfeiture, and Falsely Altered Petitions." An
amended motion was filed on October 18, 2011. The amended
motion, among other things, contended that the original
petition and the amended petition were due to be stricken
because they lacked signatures as required by Rule 11(a), Ala.
R. Civ. P. ("Every pleading, motion, or other paper of a party
represented by an attorney shall be signed by at least one
attorney of record ...."), and Rule 30(G), Ala. R. Jud. Admin.
(setting forth what constitutes an electronic signature), and
were thus nullities. Greenetrack further argued that, if the
trial court concluded that the August 30 filings were deemed
to have initiated the forfeiture action, then the action
8
1130437
should be deemed untimely because 14 weeks had elapsed since
the execution of the search warrant.
4
The State filed a response to Greenetrack's amended
motion contending, among other things, that the failure to
include a typewritten name after the "/s/" in the original
petition and the amended petition was merely a scrivener's
error. The State further argued that electronically filing
the complaint under the Alafile system user name and password
5
for the State's counsel itself constituted an electronic
signature.6
The motion further contended that the August 30 copies
4
of the petitions contained forgeries in that typewritten
signatures were included where no such signatures appeared in
the originals. At the later hearing on the motion,
Greenetrack appeared to abandon the argument "that the State
intentionally forged any document." This argument is not
addressed
in
the
trial
court's
subsequent
order
on
Greenetrack's motion or on appeal. Greenetrack also argued
that the petitions were due to be dismissed because the search
warrant pursuant to which the devices, currency, and property
were seized was defective. This argument, again, is not
addressed in the trial court's subsequent order and was in
fact rejected by this Court in Greenetrack, supra.
"Alafile" is the electronic-filing service for the
5
Unified Judicial System.
The addition of the typewritten names on the copies of
6
the original and amended petitions included with the August 30
filing, the State contended, "was simply an effort by the
State to re-file all relevant documents anew with proper
signatures in order
to
prospectively correct the omission that
9
1130437
On December 17, 2013, the trial court held a hearing on
Greenetrack's motions. In an order dated January 15, 2014,
the trial court dismissed "the State's Petition for
Forfeiture, as amended." The State appeals.
Analysis
I.
The State contends that the trial court erred in holding
that the June 22 original petition and the June 24 amended
petition were due to be stricken under Rule 11(a), Ala. R.
Civ. P.
Rule 11(a) provides, in pertinent part:
"Every pleading, motion, or other paper of a party
represented by an attorney shall be signed by at
least one attorney of record in the attorney's
individual name, whose address shall be stated. ...
The
signature
of
an
attorney
constitutes
a
certificate by the attorney that the attorney has
read the pleading, motion, or other paper; that to
the best of the attorney's knowledge, information,
and belief there is good ground to support it; and
that it is not interposed for delay. As provided in
Rule 30(G) of the Alabama Rules of Judicial
Administration,
an
electronic
signature
is
a
'signature' under these Rules. If a pleading,
motion, or other paper is not signed or is signed
with intent to defeat the purpose of this rule, it
may be stricken as sham and false and the action may
had already been identified" and, the State contended, "the
original documents were already part of the record and that
Greenetrack knew what they contained."
10
1130437
proceed as though the pleading, motion, or other
paper had not been served. ..."
There is no dispute that the electronic-signature
provision of Rule 30(G), Ala. R. Jud. Admin., is applicable in
this case. That rule provides, in pertinent part:
"(G)
Electronic
Signatures.
The
requirement
that
any court record or document be signed is met by use
of an electronic signature. An electronic signature
is considered to be the original signature upon the
court record or document for all purposes under
these Rules and other applicable statutes or rules.
Electronic signatures shall either: (1) show an
image of such signature as it appears on the
original document or appended as an image file or
(2) bear the name of the signatory preceded by an
'/s/' typed in the space where the signature would
otherwise appear, as follows: /s/ Jane Doe. The
Administrative Director of Courts may also designate
other means of verification to authenticate a
document. ..."
The State contends on appeal that both the original
petition and the amended petition comply with Rule 11(a) and
Rule 30(G). Specifically, it argues that the "/s/" in the
original and amended petitions was simply "placed above
Reagan's name,
rather
than directly beside it" (State's brief,
at 19). It argues in the alternative that electronically
filing a document using the Alafile system under an attorney's
user name and password is an alternate "means of verification
11
1130437
to authenticate a document" designated by the Administrative
Director of Courts under Rule 30(G).
Rule 11(a) states that "an electronic signature is a
'signature' under these Rules" "[a]s provided in Rule 30(G) of
the Alabama Rules of Judicial Administration." The
requirement of Rule 30(G) is clear: electronic signatures
"shall ... bear the name of the signatory preceded by an '/s/'
typed in the space where the signature would otherwise appear,
as follows: /s/ Jane Doe." (Emphasis added.) Rule 30(G) thus
provides that a name shall follow the "/s/" and provides an
example illustrating that point. Further, the Administrative
Office of Courts' "Administrative Procedure for Filing,
Signing, and Verifying Documents by Electronic Means in the
Alabama Judicial System," dated June 2, 2005, and last
modified May 8, 2006, provides that "[a] pleading or other
document requiring a signature shall be signed in the
following manner: 's/ name.'" It then provides the following
example for such electronic signature:
"s/Neal Smith
"Neal Smith
"Attorney for ABC Law Firm
"123 South Street
"Mobile, Alabama 36602
"Telephone: (251) 123-4567
12
1130437
"Fax: (251) 123-4567
"SMI999
"E-mail: neal_smith@law.com"
Rule 30(G) and the administrative procedures provided by the
Administrative Office of Courts contemplate that the name of
the signatory would immediately follow the "/s/" (or, under
the 2005 procedure, "s/"). Rule 30(G) does not contemplate
7
that the line following the "/s/" may remain blank.
We see no support in the materials before us suggesting
that the act of electronically filing a pleading using
Alafile can itself be deemed to comply with the signature
requirements of Rule 11. Rule 11 incorporates the signature
provision of Rule 30(G), and the latter rule requires an
electronic signature to appear on electronically filed
documents. If the rule requires an electronic signature to
appear on the electronically filed document, it cannot be
implied that the electronic filing of a document itself,
without an electronic signature appearing on its face, can
The Administrative Office of Courts' September 6, 2012,
7
"Administrative Policies and Procedures for Electronic Filing
in the Civil Divisions of the Alabama Unified Judicial
System," which apparently replaces, at least in applicable
part, the 2005 procedure, provides: "The pleading or other
document electronically filed shall indicate a signature,
e.g., '/s/ Jane Doe'...."
13
1130437
suffice as an electronic signature. Further, although Rule
30(G) provides that the Administrative Director of Courts may
also designate other means of verification to authenticate a
document, the only procedures that appear before us require a
name to appear following the "s/" or "/s/." There is no merit
to the State's argument on this point.
The State argues that certain federal court rules provide
that the act of electronically filing a document complies with
the signature provision of the federal version of Rule 11 and
that this Court should adopt a similar rationale. However,
although the federal rules cited by the State explicitly
provide that an electronic filing inherently includes a
signature, the State identifies no such explicit rule in
Alabama. In fact, as noted above, the rules in Alabama
explicitly require an electronic signature to appear on the
electronically filed document. Thus, at best, the signature
blocks in the State's original petition and its amended
petition do not fully comply with the letter of Rule 30(G) and
Rule 11(a).
The State contends that Rule 11(a) must be construed in
light of Rule 1(c), Ala. R. Civ. P., which provides that the
14
1130437
Alabama Rules of Civil Procedure "shall be construed and
administered to secure the just, speedy and inexpensive
determination of every action" and notes that the committee
comments to that rule state that "the policy of rules such as
these is to disregard technicality and form." To conclude
that there were no signatures in this case, the State
contends, "harkens back to the requirements of harsh formal
pleading that were abolished" by the Alabama Rules of Civil
Procedure.
Although it is clear that the State's original petition
and amended petition do not strictly conform with the stated
rules, the above principles lead this Court to conclude that
Rule 11(a) does not require the striking of those petitions in
this case. Here, the State has continually argued in the
trial court and on appeal that the original and amended
petitions were signed in compliance with Rule 11(a); thus, the
designated attorneys have continued to acknowledge that they
were bound by the certification provided within the rule.
Further, upon being alerted to the problem, the State -- that
same day -- filed the second amended petition, which the State
contends served as an amendment to the prior petitions, see
15
1130437
Rule 15(a), Ala. R. Civ. P., that undisputedly contained
proper signatures. The failure to properly sign the petitions
has caused no identified prejudice to Greenetrack. In light
of these considerations and the properly signed
second
amended
petition filed promptly after the issue was raised, there is
nothing before this Court that would convince us to uphold the
striking of the State's original and amended petitions as a
"sham or false" under Rule 11(a). To conclude otherwise would
be contrary to the principles of Rule 1(c) and would elevate
form over substance.
Rule 11(a) provides that, if a pleading is not signed or
is signed with intent to defeat the purpose of the rule, it
"may" be stricken. A trial court, under the rule, is not
required to strike an unsigned pleading. Thus, Rule 11(a)
itself contemplates that even a pleading that violates Rule
11(a) can stand. This disproves Greenetrack's argument that
the failure of the original petition and the amended petition
to conform with Rule 11(a) and Rule 30(G) rendered them
nullities and that that failure could not be amended or cured
by the July 6 second amended petition.
8
In support of its argument, Greenetrack cites several
8
cases for the proposition that, "under Alabama law, a
16
1130437
II.
Greenetrack contended in the trial court that the June 22
original petition and the June 24 amended petition were not
properly served; it repeats that argument on appeal (at least
as to the June 24 amended petition). Specifically,
document, affidavit, pleading, or order that is not signed is
null and void" and that an "amendment of a nullity is a
nullity." (Greenetrack's brief, at 2-3.) We disagree.
Specifically, the cases cited by Greenetrack do not involve
situations were a complaint failed to comply with Rule 11(a)
and are legally inapposite: Kelley v. State, 55 Ala. App. 402,
316 So. 2d 233 (Ala. Crim. App. 1975); Leonard v. State, 52
Ala. App. 212, 290 So. 2d 673 (Ala. Crim. App. 1974); Dennis
v. State, 40 Ala. App. 480, 115 So. 2d 125 (1959); and Sparks
v. State, 39 Ala. App. 517, 104 So. 2d 764 (1958), are
criminal cases predating the Alabama Rules of Criminal
Procedure. They hold that unsigned or unverified warrants and
criminal complaints failed to invoke the jurisdiction of the
trial court over a criminal case. Voudrie v. State, 449 So.
2d 1217, 1218 (Ala. Crim. App. 1984) (opinion on remand),
actually holds that an "unsigned order, judgment, or decree"
-- not a pleading -- "is valid if it is responsive to the
pleadings, and is duly filed and incorporated in the minutes
of the court." (Emphasis added.) Those cases do not
demonstrate
that
an
unsigned
complaint
initiating
a
forfeiture
action is a nullity. Similarly, the cases cited for the
proposition that a nullity cannot be amended -- Off Campus
Bookstores v. University of Alabama in Huntsville, 25 So. 3d
423 (Ala. 2009), and Alabama Department of Corrections v.
Montgomery County Commission, 11 So. 3d 189 (Ala. 2008) --
involve cases where the trial court lacked subject-matter
jurisdiction at the initiation of the case. Similarly, in Ex
parte Owens, 65 So. 3d 953 (Ala. Civ. App. 2010), the trial
court never acquired subject-matter jurisdiction because the
complaining
party
failed
to
meet
certain
statutory
requirements.
17
1130437
Greenetrack contends that the certificates of service
for
both
petitions were directed to counsel for Greenetrack and that
"counsel for Greenetrack had not been asked and had never
agreed to accept service on behalf of Greenetrack."
This argument ignores the fact that the counsel named in
the certificates of service had previously appeared on behalf
of Greenetrack in the Rule 3.13 proceeding directed to the
very seizure at issue in this action and, most importantly,
that service of the original and amended petitions was
effected on Greenetrack itself by certified mail. Rule 5(a),
Ala. R. Civ. P., states, in pertinent part:
"In an action begun by seizure of property, in
which no person need be or is named as defendant,
any service required to be made prior to the filing
of an answer, claim, or appearance shall be made
upon the person having custody or possession of the
property at the time of its seizure."
The "service" or "notice" required under Rule 5(a) in an
in rem proceeding -- like the instant forfeiture action -- is
described in First National Bank of Columbiana v. State, 403
So. 2d 258, 261 (Ala. Civ. App. 1981), as follows:
"The notice we refer to here is not that
required in the service of a summons and complaint
upon a defendant party in a suit at law under Rule
4, [Ala. R. Civ. P.]. It is such notice as is
provided for in Rule 5, [Ala. R. Civ. P.]. In fact,
18
1130437
Rule 5(a) refers to the giving of notice to the
party having custody or possession in actions begun
by seizure of property in which no person is named
as defendant."
403 So. 2d at 261.
Further still, under "the peculiar facts" of this case,
as in First National, the forfeiture action may proceed based
on the actual notice undisputably received by Greenetrack:
"The trial court refused to set aside its judgment
because the [interested party] had actual notice of
the filing of the action against the property. Such
finding is supported by the undisputed evidence.
Vaughan v. Fuller, 278 Ala. 25, 175 So. 2d 103
(1965). The contention of [the interested party]
that the attorney who informed it of the seizure and
subsequent filing of the action was not its retained
counsel begs the question. The [interested party]
had notice and ample time and opportunity to appear
and defend. Goodall v. Ponderosa Estates, Inc., 337
So. 2d 726 (Ala. 1976)."
403 So. 2d at 261-62. Based on the foregoing, Greenetrack's
argument regarding service provides no basis
for
upholding the
trial court's order dismissing the State's forfeiture
proceeding.9
Our decision pretermits any discussion of the remaining
9
issues addressed in the trial court's January 15 order and
raised on appeal, including whether, if the State's August 30,
2011, filings constitute the first proper filing of this
forfeiture action, the action should be deemed as untimely.
19
1130437
Conclusion
The trial court's order dismissing the State's petitions
is reversed, and the case is remanded for further proceedings
consistent with this opinion.
REVERSED AND REMANDED.
Stuart, Bolin, Parker, Murdock, Main, and Wise, JJ.,
concur.
Moore, C.J., concurs specially.
Shaw and Bryan, JJ., concur in part and concur in the
result.
20
1130437
MOORE, Chief Justice (concurring specially).
I agree with the main opinion. I write separately to
clarify the implicit holding of the Court that timeliness is
not an impediment in this case. Because Greenetrack, Inc.,
indisputably received actual notice of intent to forfeit the
property at the time of the filing of the original petition,
which was three weeks after the seizure, the curable defects
in the filing and service of the original petition and the
amended petition did not prevent the original petition from
satisfying the requirement that forfeiture proceedings "shall
be instituted promptly." § 20-2-93(c), Ala. Code 1975. See
Adams v. State ex rel. Whetstone, 598 So. 2d 967, 970 (Ala.
Civ. App. 1992) (noting that "a forfeiture proceeding
instituted four weeks after seizure meets the promptness
requirement" of the statute).
21
1130437
SHAW, Justice (concurring in part and concurring in the
result).
I concur with the main opinion, except as to Part II, as
to which I express no opinion. The trial court did not rule
on the issue discussed in Part II, and I see no need to
address it.
Bryan, J., concurs.
22 | December 19, 2014 |
b0389461-ba2e-44d1-bb66-62d26401fed0 | Ex Parte Franklin County Dept. of Human Resources | 674 So. 2d 1277 | 1940662 | Alabama | Alabama Supreme Court | 674 So. 2d 1277 (1996)
Ex parte FRANKLIN COUNTY DEPARTMENT OF HUMAN RESOURCES.
(Re Alan Rorer v. State of Alabama ex rel. Sandra Hillman).
1940662.
Supreme Court of Alabama.
January 12, 1996.
*1278 William Prendergast, Sharon E. Ficquette and Mary E. Pons, Asst. Attys. Gen., Department of Human Resources, for Petitioner.
John Pilati, Russellville, for Respondent Alan Rorer.
Jeff Sessions, Atty. Gen., and Robert M. Weinberg, Asst. Atty. Gen., for Amici Curiae 36 State boards, departments, and agencies.
PER CURIAM.
The Franklin County Department of Human Resources, after having been denied relief in the Court of Civil Appeals,[1] petitioned this Court for a writ of mandamus and for an immediate stay of an order issued by Judge John D. Jolly, of the 34th Judicial Circuit. Judge Jolly's order had held that the Franklin County Department of Human Resources was not constitutionally immune from a suit brought by Alan Rorer.
Alan Rorer had filed a counterclaim against the Department, alleging that the Department and certain fictitiously named Department employees had "maliciously, willfully and/or wantonly and/or without probable cause therefor, initiated [against him] a paternity action," which he says later ended with a directed verdict in his favor.
The facts are sufficiently set out by the Court of Civil Appeals in its opinion in Ex parte State Department of Human Resources, 674 So. 2d 1274 (Ala.Civ.App.1995), in which that court denied the Defendant the same relief it requests here. We adopt and quote the Court of Civil Appeals' statement of those pertinent facts:
674 So. 2d at 1275.
In denying relief, the Court of Civil Appeals held, in part, as follows:
674 So. 2d at 1276.
We first address the issue whether the Franklin County Department of Human Resources is immune from suit pursuant to the provisions of Art. 1, § 14, Alabama Constitution of 1901.
This Court recognized in Mitchell v. Davis, 598 So. 2d 801, 806 (Ala.1992), that a county department of human resources is considered to be a State agency for purposes of asserting the defense of sovereign immunity. Based on Mitchell, we hold that the Franklin County Department of Human Resources is a State agency. Article I, § 14, Alabama Constitution of 1901, provides that "the State of Alabama shall never be made a defendant in any court of law or equity." Under this provision, the State and its agencies have absolute immunity from suit in any court. Barnes v. Dale, 530 So. 2d 770 (Ala. 1988). At this time, the only actual party named as a defendant in Rorer's counterclaim is the Franklin County Department of Human Resources; no particular employee of the Department has been named as a Defendant, although the complaint fictitiously names three of the Department's employees as defendants.[2]
We now address the second issue in this case, that being whether this Court should adopt the so-called "collateral order doctrine" employed by the federal courts to permit review of rulings denying claims of sovereign immunity. The Department, joined by the attorney general, who has filed *1280 an amicus curiae brief, strongly urges this Court to adopt the collateral order doctrine in Alabama[3] and to treat the petition as an interlocutory appeal.
We have carefully examined the arguments made for adopting the collateral order doctrine, but we decline to adopt it at this time. We point out that Rule 5, Ala.R.App.P., provides an adequate remedy for a state agency or employee seeking review of a lower court order denying a claim of sovereign immunity. In this connection, we would also point out that "Rule 5 is a composite of [Fed.R.App.P.] 5, and 28 U.S.C. § 1292(b)." Comment to Rule 5, Ala.R.App.P.
Based on the foregoing, we decline to adopt the collateral order doctrine, but we issue the writ of mandamus. The Circuit Court of Franklin County is directed to dismiss Rorer's counterclaim against the Franklin County Department of Human Resources.
WRIT GRANTED.
HOOPER, C.J., and SHORES, HOUSTON, and INGRAM, JJ., concur.
COOK and BUTTS, JJ., concur specially.
MADDOX, J., concurs in the judgment and in Part I of the opinion and dissents from Part II of the opinion.
COOK, Justice (concurring specially).
I concur in the issuance of the writ of mandamus, but write separately to express my opinion why this Court should not adopt the "collateral order doctrine," which would allow an immediate appeal for State agencies or State employees acting within their public function where the agency or employee claims immunity and the trial court has rejected the claim. I do not believe it is necessary at this time to engraft onto our rules of procedure this right of immediate appeal. Any needed early review of immunity privileges can be provided by the mandamus procedure (Rule 21, Ala.R.App.P.), as in this case, or by Rule 5, Ala.R.App.P., which allows appeals by permission.
Alabama recognizes absolute immunity, commonly presented with regard to State agencies or public employees, granted under Art. I, § 14, Alabama Constitution of 1901, and qualified immunity, commonly referred to as discretionary function immunity. This Court has held that the question of immunity is a question of law for the courts to decide. Foreman v. State, [Ms. 1931068, March 31, 1995] ___ So.2d ___ (Ala.1995); Smith v. King, 615 So. 2d 69, 72 (Ala.1993); Nance v. Matthews, 622 So. 2d 297, 300 (Ala.1993). See Mitchell v. Davis, 598 So. 2d 801, 806-07 (Ala.1992); White v. Birchfield, 582 So. 2d 1085, 1087 (Ala.1991); Phillips v. Thomas, 555 So. 2d 81, 84 (Ala.1989); and Grant v. Davis, 537 So. 2d 7, 8 (Ala.1988). However, many questions of immunity are fact-driven and cannot be decided on motions to dismiss. Fact-driven immunity questions should be first decided in the trial court, with a developed record. Our mandamus procedure and permissive appeal procedure give us the opportunity to review immunity questions on a case-by-case basis, which is the better procedure, especially where we are not being overrun by questions of immunity in litigation involving State agencies or public employees.
I am not persuaded that we have reached the point in Alabama that we must, either because of the number of cases or for some other reason, search for other ways to deal with questions of immunity. The United States Supreme Court in its most recent interpretation of the collateral order doctrine, in Johnson v. Jones, 515 U.S. ___, 115 S. Ct. 2151, 132 L. Ed. 2d 238 (1995), held that a district court order denying a defendant a summary judgment on the basis of a claimed immunity was a fact-related determination that could not be immediately appealed. The United States Supreme Court appears to be refining the doctrine in such a manner as to come full circle to where that Court began, that is, to determining on a case-by-case basis, in evidence-sufficiency cases, whether a case is appropriate for appeal. Present Alabama practice allows this Court to make such a review and determination. This Court has not been presented with evidence that claims of immunity are falling on deaf *1281 ears, that petitions for permission to appeal are not being adequately considered, or that State agencies or employees are being forced into long and costly litigation in instances where the trial court should have accepted an immunity claim. In the absence of such evidence, to adopt a right of immediate appeal would be to solve a nonexistent problem. Justice Breyer, writing for the Supreme Court in Johnson, cogently pointed out practical problems appellate courts face in immunity cases that present evidence-sufficiency questions:
515 U.S. at ___, 115 S. Ct. at 2158. While this Court should seek cures for ills, where no ill exists, no cure is needed. There is simply no evidence that our present practice is inadequate or that the adoption of the collateral order doctrine would substantially aid in properly and timely resolving immunity issues.
BUTTS, J., concurs.
MADDOX, Justice (concurring in the judgment and in Part I of the opinion; dissenting from Part II of the opinion).
I concur in the judgment directing the circuit court to dismiss Rorer's counterclaim against the Franklin County Department of Human Resources. I must respectfully dissent from the majority's refusal to adopt the collateral order doctrine.
As the majority states, the Franklin County Department of Human Resources, along with the attorney general, has asked this Court to treat its petition as an interlocutory appeal and has urged the Court to adopt the collateral order doctrine employed by the federal courts to determine whether to review orders denying claims of immunity.
The collateral order doctrine was most recently described in Johnson v. Jones, 515 U.S. ___, ___, 115 S. Ct. 2151, 2155, 132 L. Ed. 2d 238 (1995), as applying to "special `collateral orders'" that "`finally determine claims of right separable from, and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated,'" quoting Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 546, 69 S. Ct. 1221, 1225-26, 93 L. Ed. 1528 (1949). The Court further opined in Johnson:
Johnson v. Jones, 515 U.S. at ___, 115 S. Ct. at 2155. Even though this Court has authorized procedures for reviewing certain interlocutory orders (See Rules 5 and 21, A.R.App.P.), it has not addressed the question of expanding the class of reviewable orders to include those where the State or one of its agencies or employees is denied sovereign immunity and where there is no dispute as to the material facts and only a question of law is presented.
Art. I, § 14, Alabama Constitution of 1901, provides that "the State of Alabama shall never be made a defendant in any court of law or equity." This Court has held on many occasions that the State and its agencies possess absolute immunity from suit. Nance v. Matthews, 622 So. 2d 297, 299 (Ala.1993); *1282 Phillips v. Thomas, 555 So. 2d 81, 83 (Ala. 1989); Hickman v. Dothan City Bd. of Educ., 421 So. 2d 1257, 1258 (Ala.1982); Gill v. Sewell, 356 So. 2d 1196, 1198 (Ala.1978); Milton v. Espey, 356 So. 2d 1201, 1202 (Ala. 1978).
Nance v. Matthews 622 So. 2d 297, at 300.
The attorney general, in his amicus curiae brief filed on behalf of the State and 36 State boards, departments, and agencies, contends that this Court should permit interlocutory appeals, as of right, from trial court orders denying immunity, especially where only a question of law is presented, with any factual disputes being resolved in favor of the nonmoving party. In arguing that the denial of a claim of immunity should be immediately appealable, the attorney general relies heavily on Puerto Rico Aqueduct & Sewer Authority v. Metcalf & Eddy, Inc., 506 U.S. 139, 113 S. Ct. 684, 121 L. Ed. 2d 605 (1993).[4] In Puerto Rico Aqueduct, the United States Supreme Court held that the denial of a motion to dismiss asserting sovereign immunity under the Eleventh Amendment was immediately appealable under the collateral order doctrine. The attorney general says that the immunity granted to States by the Eleventh Amendment to the Constitution of the United States is precisely analogous to the immunity granted by Art. I, § 14, Alabama Constitution of 1901, and that the same principles of law that guide federal courts in applying the collateral order doctrine should guide us in determining whether to adopt the collateral order doctrine in Alabama, and if we adopt it, in determining how to apply it. I agree. I would adopt the collateral order doctrine in cases involving claims of sovereign immunity, and, in addition, I would establish the following criteria for determining when, and under what circumstances, to apply it.
In Johnson v. Jones, the Supreme Court of the United States, after noting that the United States Courts of Appeals had held different views about the immediate appealability of pre-trial "evidence sufficiency" claims made by public officials, said that three background principles guided the Court in deciding the issue of immediate appealability: 1) The United States Supreme Court stated that interlocutory appeals are the exception, not the rule, that too many interlocutory appeals can cause harm by making it more difficult for trial judges to do their basic job of supervising trial proceedings and could threaten those proceedings with delay, adding costs and diminishing coherence, and risking additional and unnecessary appellate court work, either when appeals are brought that present less developed records or when courts get appeals that, had the trials simply proceeded, would have turned out to be unnecessary;[5] 2) The United States Supreme Court stated that to be appealable, a collateral order must have conclusively determined the disputed question, must have resolved an important issue completely separate from the merits of the action, and must have been effectively unreviewable on appeal from a final judgment; that is, that a failure to review the order immediately may well cause significant harm; and 3) The United States Supreme Court said that appealability applies when the defendant is a public official *1283 asserting a defense of qualified immunity and the issue presented on appeal concerns not which facts the parties might be able to prove, but, rather, whether certain given facts show a violation of clearly established law.
The question of immunity from suit under § 14 is a question of jurisdiction. Aland v. Graham, 287 Ala. 226, 229, 250 So. 2d 677, 678 (1971). The Legislature cannot waive the State's immunity, and the United States Supreme Court has held that the immunity from suit conferred by the Eleventh Amendment to the United States Constitution is jurisdictional and may be raised at any time. See, Alabama v. Pugh, 438 U.S. 781, 98 S. Ct. 3057, 57 L. Ed. 2d 1114 (1978); Edelman v. Jordan, 415 U.S. 651, 94 S. Ct. 1347, 39 L. Ed. 2d 662 (1974). There are, of course, recognized exceptions to the constitutional prohibition of suits against the State when a State official is sued for injunctive or declaratory relief. See, e.g., Gunter v. Beasley, 414 So. 2d 41 (Ala.1982).
This Court has held that immunity is a question of law for the courts to decide, and I believe that the collateral order doctrine would help to get a speedy, inexpensive, and just determination of sovereign immunity issues. Foreman v. State, [Ms. 1931068, March 31, 1995] ___ So.2d ___ (Ala.1995); Smith v. King, 615 So. 2d 69, 72 (Ala.1993); Nance v. Matthews, 622 So. 2d 297, 300 (Ala. 1993). See Mitchell v. Davis, 598 So. 2d 801, 806-07 (Ala.1992); White v. Birchfield, 582 So. 2d 1085, 1087 (Ala.1991); Phillips v. Thomas, 555 So. 2d 81, 84 (Ala.1989); and Grant v. Davis, 537 So. 2d 7, 8 (Ala.1988). Sometimes fact-specific questions of immunity present questions of law that should be decided by a court at the earliest possible moment. In Aland v. Graham, 287 Ala. 226, 229, 250 So. 2d 677, 678 (1971), this Court said, "[A] trial court or an appellate court should, at any stage of the proceedings, dismiss a suit when it becomes convinced that it is a suit against the State and contrary to Sec. 14 of the Constitution." In Aland, the question of immunity was the threshold issue. Cf. Gunter v. Beasley, 414 So. 2d 41, 48 (Ala.1982), where the Court said, "whether this suit is barred by Article 1, Section 14, of the Alabama Constitution" was actually "the threshold issue."
One of the reasons for the collateral order doctrine is that sometimes "review after trial would come too late to vindicate one important purpose of `qualified immunity'namely, protecting public officials, not simply from liability, but also from standing trial." Johnson v. Jones, 515 U.S. at ___, 115 S. Ct. at 2155, citing Mitchell v. Forsyth, 472 U.S. 511, 105 S. Ct. 2806, 86 L. Ed. 2d 411 (1985). The difficulty in applying the collateral order doctrine, of course, is in resolving the "separability" question, i.e., determining whether the "qualified immunity" issue is "completely separate from the merits of the action." In Johnson v. Jones, the United States Supreme Court quoted from the conclusion reached by the Court in Mitchell, writing:
To see how other jurisdictions treat cases like this one, I have cursorily reviewed the law in other states that have considered the question of immediate appealability of orders denying claims of immunity. My review reveals that the States of Arizona, Arkansas, Florida, and Maine have adopted the right of immediate appeal from the denial of immunity. See Henke v. Superior Court, 161 Ariz. 96, 775 P.2d 1160 (Ariz.App.1989); Virden v. Roper, 302 Ark. 125, 788 S.W.2d 470 (1990); Tucker v. Resha, 648 So. 2d 1187 (Fla.1994) (order denying summary judgment based upon claim of qualified immunity subject to interlocutory review to the extent that order turns on issue of law); Creamer v. Sceviour, 652 A.2d 110, 112 (Me.1995); Organes v. Town of Steuben, 644 A.2d 1047 (Me.1994) (employer immunity under Workers' Compensation Act); Smith v. Yankee Construction Corp., 625 A.2d 904 (Me.1993) (same); Ryan v. City of Augusta, 622 A.2d 74 (Me. 1993) (qualified immunity from action under 42 U.S.C. § 1983); and Polley v. Atwell, 581 A.2d 410 (Me.1990) (discretionary function immunity under Maine Tort Claims Act).
Maryland, Massachusetts, and Minnesota have adopted the right of immediate review as of right from the denial of immunity. See Artis v. Cyphers, 100 Md.App. 633, 642 A.2d 298 (1994), judgment affirmed by Artis v. Cyphers, 336 Md. 561, 649 A.2d 838 (1994) (to the extent the immunity asserted can be determined as a matter of law, an immediate appeal will lie); Breault v. Chairman of Bd. of Fire Com'rs of Springfield, 401 Mass. 26, 513 N.E.2d 1277 (1987); McGowan v. Our Savior's Lutheran Church, 527 N.W.2d. 830 (Minn.1995); McGovern v. City of Minneapolis, 475 N.W.2d 71 (Minn.1991); Martin v. Spirit Mountain Recreation Area Authority, 527 N.W.2d 167 (Minn.App.1995); Martinez v. Minnesota Zoological Gardens, 526 N.W.2d 416 (Minn.App.1995); and S.L.D. v. Kranz, 498 N.W.2d 47 (Minn.App.1993).
New Hampshire, New Mexico, and North Carolina have adopted the collateral order doctrine. See Richardson v. Chevrefils, 131 N.H. 227, 552 A.2d 89 (1988); Oldfield v. Benavidez, 116 N.M. 785, 867 P.2d 1167 (1994); Carrillo v. Rostro, 114 N.M. 607, 845 P.2d 130 (1992) (adopting common law writ of error as "procedural device" for invoking collateral order doctrine when remedy by appeal is "inadequate": "[W]e adopt the Supreme Court's collateral order doctrine as a matter of sound judicial administration, the salutary effects of which are not limited to cases involving federally created claims or defenses," 114 N.M. at 618 n. 10, 845 P.2d at 141 n. 10); Corum v. University of North Carolina, 330 N.C. 761, 413 S.E.2d 276 (1992); Hawkins v. State, 117 N.C.App. 615, 453 S.E.2d 233 (1995); Colombo v. Dorrity, 115 N.C.App. 81, 443 S.E.2d 752 (1994); Clark v. Red Bird Cab Co., 114 N.C.App. 400, 442 S.E.2d 75 (1994); Minneman v. Martin, 114 N.C.App. 616, 442 S.E.2d 564 (1994); Slade v. Vernon, 110 N.C.App. 422, 429 S.E.2d 744 (1993); Northwestern Financial Group, Inc. v. County of Gaston, 110 N.C.App. 531, 430 S.E.2d 689 (1993); and Hickman v. Fuqua, 108 N.C.App. 80, 422 S.E.2d 449 (1992).
Finally, Ohio, Vermont, Wisconsin, and Wyoming have adopted the doctrine. See Larson v. Mullett, No. 94-CA-14, 1994 WL 728579 (Ohio App., Dec. 19, 1994) (unpublished); Murray v. White, 155 Vt. 621, 587 A.2d 975 (1991); Barnhill v. Board of Regents of the UW System, 166 Wis.2d 395, 479 N.W.2d 917 (1992); Baxter v. Wisconsin Dep't of Natural Resources, 165 Wis.2d 298, 477 N.W.2d 648 (Wis.App.1991); Abell v. Dewey, 870 P.2d 363 (Wyo.1994); and Park County v. Cooney, 845 P.2d 346 (Wyo.1992).
The United States Supreme Court's recent opinion in Johnson v. Jones is entirely consistent with the decisions from all of these States that have adopted the collateral order doctrine allowing immediate appeals from the denial of immunity for public officers and *1285 institutions. What is appealable under that doctrine in every one of these jurisdictions is always a purely legal question, not a factual dispute. I note that in Alabama "[t]he question whether a public official is entitled to immunity is one to be decided as a matter of law." Lightfoot v. Floyd, 667 So. 2d 56 (Ala. 1995) (citing White v. Birchfield, 582 So. 2d 1085 (Ala.1991), and Grant v. Davis, 537 So. 2d 7 (Ala.1988)). All the collateral order doctrine does is recognize the gravity of the consequences that flow from the failure to determine the immunity question at the earliest practicable opportunity. This Court has noted the gravity of those consequences:
Barnes v. Dale, 530 So. 2d 770, 780 (Ala.1988). Under the collateral order doctrine, the purely legal question whether a defendant is entitled not to stand trial and not to suffer the other burdens of litigation is the only question over which appellate courts are being asked to assume jurisdiction.
I have reviewed the principles of law relating to the collateral order doctrine as those principles are stated in Cohen v. Beneficial Industrial Loan Corp. and Puerto Rico Aqueduct & Sewer Authority and as they are most recently stated in Johnson v. Jones. I conclude that an immediate appeal in this case would provide the Department a timely resolution of the Department's immunity; that is an important issuea controlling issue completely separate from the merits of the action.
Therefore, I think the Court should adopt the collateral order doctrine so as to allow an appeal from a denial of a claim of immunity, and then treat the Department's mandamus petition as an appeal permitted under that doctrine. I must respectfully dissent from the refusal to adopt the collateral order doctrine. However, because I agree that the Department is entitled to § 14 immunity as to Rorer's counterclaim, I concur in the issuance of the writ.
[1] The Department had initially, on July 28, 1994, filed in the Court of Civil Appeals a document styled "Petition To Appeal from an Interlocutory Order or for Alternative Writ of Mandamus or Other Prohibition or other Extraordinary Writ or Petition to Appeal." In that petition, it sought the same relief that it now seeks in this Court. The Court of Civil Appeals denied the petition on February 3, 1995. See, Ex parte State Department of Human Resources, 674 So. 2d 1274 (Ala. Civ.App.1995).
[2] Rorer amended his counterclaim to fictitiously name Department employees X, Y, and Z. He alleged that these employees had intentionally and in bad faith initiated the paternity action against him in violation of the Department's own policy and/or under a mistaken interpretation of the law. The Department has not objected to Rorer's use of Rule 9(h), Ala.R.Civ.P., which relates to fictitious party practice.
[3] The attorney general states in his brief that 36 boards, departments, and agencies of the State of Alabama join him in his request that this Court adopt the collateral order doctrine.
[4] Johnson v. Jones was decided after this case was orally argued in this Court. The attorney general, in a letter brief, calls our attention to it as the latest case from the United States Supreme Court dealing with the collateral order doctrine.
[5] The United States Supreme Court did recognize that there could be some "countervailing benefits" to an interlocutory appeal, such as avoiding injustice by quickly correcting a trial court error. By authorizing appeals of orders that are made final under the provisions of Rule 54(b), Ala.R.Civ.P., and authorizing appeals by permission under Rule 5, Ala.R.App.P., this Court has recognized the value of quick resolution of issues in certain cases. However, the fact that those procedures are not always sufficient or effective is demonstrated by this case. | January 12, 1996 |
9d326770-35d0-42f5-9248-4375363c2082 | Alabama Mutual Insurance Corporation v. City of Fairfield | N/A | 1110738 | Alabama | Alabama Supreme Court | Rel: 12/19/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334)
229-0649), of any typographical or other errors, in order that corrections may be made
before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
_________________________
1110738
_________________________
Alabama Mutual Insurance Corporation
v.
City of Fairfield et al.
Appeal from Lamar Circuit Court
(CV-10-1)
On Return to Remand
MAIN, Justice.
This is the second time this matter has been before this
Court. In Alabama Mutual Insurance Corp. v. City of Vernon,
[Ms. 1110738, October 11, 2013] ___ So. 3d ____ (Ala. 2013),
Alabama Mutual Insurance Corporation ("AMIC") appealed from
1110738
the trial court's order certifying a class in the action filed
by the City of Vernon ("Vernon") and a class of similarly
situated
entities
that
had
purchased
uninsured-
motorist/underinsured-motorist coverage ("UM/UIM coverage")
from AMIC. Vernon was the original class representative; its
1
claims were straightforward. Vernon claimed that, in 2005,
AMIC "'revis[ed] its Alabama Uninsured Motorist Coverage Form
to
exclude
employees
from
collecting
both
Workers
Compensation, which would be the employees' sole remedy, and
Uninsured Motorist benefits when they were involved in an
automobile accident.'" Alabama Mut. Ins. Corp., ___ So. 3d at
____ (quoting the trial court's class-certification order).
AMIC's revision of its UM/UIM coverage form, Vernon argued,
"'rendered Vernon's UM/UIM coverage illusory[ ] and breached
2
AMIC's contract to provide UM/UIM insurance'" because,
according to Vernon, "'it contracted for UM/UIM insurance and
AMIC "is a non-profit, mutual insurance company that
1
insures municipalities and governmental bodies throughout
Alabama." AMIC's supplemental brief, at 7.
"'Coverage is illusory "[w]hen limitations or exclusions
2
completely contradict the insuring provisions," and such
"coverage" is not countenanced in this State.'" Alabama Mut.
Ins. Corp., ___ So. 3d at ____ (quoting the trial court's
class-certification order).
2
1110738
paid premiums for UM/UIM coverage but received no actual
UM/UIM coverage because AMIC excluded the only individuals
who
had a realistic possibility to collect UM/UIM benefits --
municipal employees and volunteers.'" So. 3d at ____
(quoting the trial court's class-certification order).
As noted, Vernon was the original class representative;
however, after AMIC filed its notice of appeal from the trial
court's class-certification order, Vernon settled its claims
against AMIC and withdrew as the class representative.
Because there was no longer a representative to "fairly and
adequately protect the interests of the class," Rule 23(a),
Ala. R. Civ. P., this Court remanded the cause to the trial
court, allowing 120 days for a new class representative to be
substituted for Vernon. Alabama Mut. Ins. Corp., ___ So. 3d
at ____. On remand, the trial court timely entered an order
substituting the City of Fairfield ("Fairfield") for
Vernon
as
the class representative.
This Court allowed the parties to submit supplemental
briefs on return to remand. Upon review of the parties'
arguments in those briefs, it has become clear to this Court
that there exists a fatal jurisdictional defect in this case.
3
1110738
Specifically, the trial court is without subject-matter
jurisdiction
over
this
dispute;
initial
jurisdiction
over
this
dispute properly lies with the Alabama Department
of
Insurance
and its commissioner. As explained more fully below, we must
vacate the trial court's judgment certifying the class and
dismiss this appeal for lack of subject-matter jurisdiction.
This Court's decision in Ex parte Cincinnati Insurance
Co., 51 So. 3d 298 (Ala. 2010), is highly instructive and on
point with the matter now before us. In Ex parte Cincinnati
Insurance Co., Ray Peacock filed a putative class action
against
Cincinnati
Insurance
Company
("Cincinnati"),
alleging:
"[B]ecause an insured may stack a maximum of three
UM coverages per loss, both by statute and by the
terms of Cincinnati's standard policy forms, UM
coverage for more than three vehicles under a
multi-vehicle policy -- e.g., UM coverage for four,
five, or six vehicles -- is 'unnecessary, illusory,
and provides no benefit to the purchaser of the
policy.' Peacock alleged that Cincinnati 'engages in
a wide-spread and ongoing practice of imposing
premiums for additional UM coverages on additional
vehicles (i.e., beyond three (3)) when issuing
multi-vehicle policies in Alabama, despite the fact
that an insured could never utilize the additional
UM coverages.' (Emphasis in original.) 'Thus,'
Peacock alleged, Cincinnati 'overcharges for UM
coverage it knows it will never have to provide.'"
51 So. 3d at 300-01. Peacock's complaint sought damages for
himself and the putative class in the form of "'restitution or
4
1110738
disgorgement of monies paid for the [allegedly] unnecessary
and illusory UM coverage.'" Id. at 301 (quoting complaint).
Cincinnati moved to dismiss Peacock's action for lack of
subject-matter jurisdiction. Specifically, Cincinnati argued
"that
the
Commissioner
of
Insurance
('the
commissioner')
and
the
Alabama
Department
of
Insurance ('the Department') have broad authority
over the matters made the subject of Peacock's
complaint; that Peacock had failed to exhaust his
administrative remedies; and that Peacock's claims
were barred by the filed-rate doctrine."
Ex parte Cincinnati, 51 So. 3d at 301. Cincinnati supported
its motion with the affidavit of Myra Frick, a rate manager
with the Department. In her affidavit, Frick stated, among
other things, that the Department had approved Cincinnati's
rates for and the forms related to UM coverage. Frick further
stated that, by approving Cincinnati's rates and forms, the
Department had determined that the rates and forms were not
unreasonably high, inadequate, discriminatory, or misleading.
Id. The trial court denied Cincinnati's motion to dismiss.
Cincinnati petitioned this Court for a writ of mandamus
directing the trial court to vacate its order denying the
motion to dismiss and to enter an order granting its motion to
dismiss.
5
1110738
In its mandamus petition, Cincinnati argued that the
trial court lacked subject-matter jurisdiction over Peacock's
claims based on both the "filed-rate doctrine" and on
Peacock's failure to pursue administrative remedies through
the commissioner and the Department. In his answer, Peacock
argued that the filed-rate doctrine did not apply to his
claims and that he was not required to pursue administrative
remedies. Peacock also argued that he was not challenging
Cincinnati's rate calculations or its premiums for UM
coverage;
rather, Peacock
argued,
he
was
challenging
Cincinnati's "business practice" of requiring insureds who
desired multi-vehicle policies to accept UM coverage for
either all or none of the insureds' vehicles. In addressing
the parties' arguments, this Court first undertook an
extensive examination of the applicable statutes and caselaw:
"I. The Statutory Authority of the Commissioner
"....
"The Insurance Code grants the commissioner the
authority to enforce the statutes and regulations
governing insurance providers in Alabama. See §
27–2–7,
Ala.
Code
1975.
Particularly,
the
commissioner,
and
under
the
commissioner's
authority, the Department, has the authority to
regulate insurance rates and forms. See, e.g., §§
6
1110738
27–2–7, 27–2–8, 27–13–1 et seq., 27–14–8, and
27–14–9, Ala. Code 1975.
"UM insurance is a form of casualty insurance
and is, therefore, governed by Chapter 13, Article
3, of the Insurance Code. See §§ 27–5–6(a)(1) and
27–13–61, Ala. Code 1975. That article requires
insurers to 'make rates that are not unreasonably
high or inadequate for the safety and soundness of
the insurer and which do not unfairly discriminate
between risks in this state....' § 27–13–65, Ala.
Code 1975. Insurers must submit all rates and rating
plans to the Department before using or applying any
rates. § 27–13–67, Ala. Code 1975. Section 27–13–68,
Ala. Code 1975, grants the commissioner the
authority and responsibility to examine the rates
and the rating plans submitted to determine whether
they comply with § 27–13–65. Under § 27–13–68, the
commissioner has the authority to order that
noncompliant rating plans be altered. Additionally,
§ 27–13–68 grants the commissioner the authority to
determine whether rating plans that have been
previously approved 'provide for, result in or
produce rates which are unreasonable or inadequate
or which discriminate unfairly between risks in this
state' and to order insurers to alter any rating
plan the commissioner determines does so.
"Once
the
commissioner
approves
a
rate or
rating
plan, the Insurance Code prohibits the insurer from
deviating from that plan. See § 27–13–67 ('From and
after the date of the filing of such rating plans,
every insurer shall charge and receive rates fixed
or determined in strict conformity therewith, except
as in this article otherwise expressly provided.');
§ 27–13–76 ('No insurer, or employee thereof, and no
broker or agent shall knowingly charge, demand or
receive a premium for any policy of insurance except
in accordance with the respective rating systems on
file with, and approved by, the commissioner.').
Insurers may alter rates and rate plans only with
the approval of the commissioner in accordance with
7
1110738
procedures established in § 27–13–76, Ala. Code
1975. Furthermore, the Insurance Code prohibits
insurers from reducing premiums except in accordance
with rating systems approved by the commissioner. §
27–12–14(a), Ala. Code 1975.
"The
Insurance
Code
also
grants
the
commissioner
authority to regulate the insurance contract.
Particularly, § 12–14–8, Ala. Code 1975, requires
that all insurance policies, application forms,
contracts, printed riders, endorsement forms, and
forms of renewal certificates be approved by the
commissioner. Section 27–14–9, Ala. Code 1975,
authorizes the commissioner to disapprove any such
form if the form:
"'(1) Is in any respect in violation
of, or does not comply with, [the Insurance
Code];
"'(2) Contains or incorporates by
reference, where such incorporation is
otherwise permissible, any inconsistent,
ambiguous,
or
misleading
clauses
or
exceptions
and
conditions
which
deceptively
affect the risk purported to be assumed in
the general coverage of the contract;
"'...; [or]
"'(5) Contains provisions which are
unfair, or inequitable, or contrary to the
public policy of this state or which would,
because such provisions are unclear or
deceptively
wor d e d ,
encourage
misrepresentation.'
"Additionally, § 32–7–23(a), [Ala. Code 1975,] the
section of the Motor Vehicle Safety–Responsibility
Act requiring insurers to offer UM coverage,
requires that policy provisions relating to UM
coverage be approved by the commissioner.
8
1110738
"Section 27–2–7(6) of the Insurance Code grants
the commissioner broad investigative authority. That
subsection provide[s]:
"'The
commissioner
shall
...
[c]onduct
such examinations and investigations of
insurance
matters,
in
addition
to
examinations and investigations expressly
authorized, as he or she may deem proper to
determine whether any person has violated
any provision of this title or to secure
information
useful
in
the
lawful
administration of any such provision....'
"Regarding rates, Chapter 13, Article 3, grants the
commissioner even greater authority to inquire into
and to examine the records and business practices of
casualty insurers. Section 27–13–74, Ala. Code 1975,
states:
"'The commissioner may, whenever he
deems it expedient, but at least once in
every five years, make, or cause to be
made, an examination of the business,
affairs and method of operation of each
rating organization doing business in this
state and a like examination of each
insurer making its own rates.... The
officers, managers, agents, and employees
of such rating organization or insurer
making its own rates shall exhibit all its
books, records, documents, or agreements
governing its method of operation, its
rating systems and its accounts for the
purpose
of
such
examination.
The
commissioner, or his representative, may,
for the purpose of facilitating and
furthering
such
examination,
examine,
under
oath, the officers, managers, agents, and
employees of such rating organization or
insurer making its own rates.'
9
1110738
"The
legislature,
therefore,
has
granted
the
commissioner the authority not only to inquire into
the rates applied and premiums charged by casualty
insurers, but also to inquire into a casualty
insurer's
'business,
affairs
and
method
of
operation.' Id.
"The
Insurance
Code
also
grants
the
commissioner
the authority to hold hearings and provides for
judicial review of the commissioner's decisions.
Generally,
the
Insurance
Code
requires
the
commissioner to hold hearings upon written demand of
any person aggrieved by an act, a threatened act, or
a failure of the commissioner. See § 27–2–28(b),
Ala. Code 1975. Once the commissioner has issued a
decision, or if the commissioner refuses to hold a
hearing, the aggrieved party may appeal to the
Montgomery Circuit Court. See § 27–2–32, Ala. Code
1975.
"Specifically regarding rates, the Department
may require insurers to furnish 'all pertinent
information' regarding a rate to persons affected by
the rate. See § 27–13–70, Ala. Code 1975. Section
27–13–71, Ala. Code 1975, requires insurers to
provide a means by which persons affected by a rate
'may be heard on a written application to reduce
such rate.' That section then states:
"'If such rating organization or such
insurer shall refuse to reduce such rate,
the person, or persons, affected thereby
may make a like application to the
commissioner within 30 days after receipt
of notice in writing that the application
for reduction of rate has been denied by
such rating organization or by such
insurer.... The commissioner shall fix a
time and place for hearing on such
application, upon not less than 10 days'
notice by registered or certified mail, for
the applicant and such rating organization
10
1110738
or
such
insurer
to
be
heard.
The
commissioner shall make such order as he
shall deem just and lawful upon the
evidence
placed
before
him
at
such
hearing.'
"Section 27–13–81, Ala. Code 1975, then provides a
means by which the commissioner's decisions may be
reviewed by the Montgomery Circuit Court and then by
the Court of Civil Appeals.
"II. The Filed–Rate Doctrine
"The filed-rate doctrine limits judicial review
of rates that have been approved by regulatory
agencies. Describing the doctrine in a case
involving an insurance rate approved by the
commissioner, this Court has stated: 'The filed-rate
doctrine provides that once a filed rate is approved
by the appropriate governing regulatory agency, it
is per se reasonable and is unassailable in judicial
proceedings.' Birmingham Hockey Club, Inc. v.
National Council on Compensation Ins., Inc., 827 So.
2d 73, 78 n. 4 (Ala. 2002) (emphasis added). The bar
of the filed-rate doctrine goes to the court's
jurisdiction over the subject matter. See Birmingham
Hockey Club, 827 So. 2d at 83 n. 11 ('Because the
filed-rate doctrine prohibits collateral challenges
to rates properly approved by the insurance
commissioner, any such challenge raised in the
courts is due to be dismissed.' (citing Allen v.
State Farm Fire & Cas. Co., 59 F.Supp.2d 1217,
1227–29 (S.D. Ala. 1999))). Accordingly, when an
insured challenges the rates of an insurer that have
been approved by the commissioner, the filed-rate
doctrine precludes judicial review.
"We note that, with regard to the statutory
procedure for seeking a reduction in rates, §
27–13–71 provides a remedy for reduction from the
filed rate if circumstances warrant. Therefore,
proceedings under § 27–13–71 are distinguishable
11
1110738
from an impermissible attack on the rate as filed,
and such proceedings are not subject to the bar of
the filed-rate doctrine. The extent to which §
27–13–71 requires exhaustion of an administrative
remedy is a separate question we address below.
"III. Exhaustion of Administrative Remedies
"When the insured asserts the entitlement to a
reduction from the filed rate, the Insurance Code
provides an administrative remedy, followed by
judicial review commenced by a petition for the writ
of certiorari filed in the Montgomery Circuit Court.
See §§ 27–13–71 and 27–13–81. Based on the extensive
statutory scheme established by the legislature to
regulate insurance, including the administrative
remedies provided in §§ 27–13–71 and 27–13–81, the
commissioner maintains that 'insurance form and rate
approval are only cognizable in the first instance
by the Commissioner and the Department of Insurance,
not the courts.' Commissioner's brief, at 16.
According to the commissioner, therefore, the
Insurance Code vests exclusive jurisdiction over
claims relating to insurance rates and forms in the
commissioner and the Department. Cincinnati agrees.
"In
enacting
the
Insurance
Code,
the
legislature
granted the commissioner wide-ranging authority to
regulate
insurers.
More
specifically,
the
legislature has delegated to the commissioner and
the Department its authority to regulate insurance
rates. City of Birmingham v. Southern Bell Tel. &
Tel. Co., 234 Ala. 526, 530, 176 So. 301, 303 (1937)
('That rate making is a legislative and not a
judicial function is well established.' (emphasis
added)). The authority to regulate rates is
comprehensive. Insurers are prohibited from imposing
rates other than those approved by the commissioner.
See §§ 27–13–67 and 27–13–76. The commissioner also
has the authority to regulate insurance forms,
including UM-policy provisions. See §§ 27–14–8,
27–14–9, and 32–7–23(a). The commissioner has the
12
1110738
authority to investigate violations of the Insurance
Code, including violations relating to insurance
forms and rates. See § 27–2–7(6). Furthermore,
Chapter 13, Article 3, of the Insurance Code grants
the commissioner broad authority to examine the
casualty insurers' business, affairs, and methods of
operation. See § 27–13–74.
"Peacock, citing Tindle v. State Farm General
Insurance Co., 826 So. 2d 144 (Ala. Civ. App. 2001)
..., contends that because § 27–13–71 provides that
an insured 'may' be heard by the insurer and 'may'
apply to the commissioner for a rate reduction,
insureds are not required to seek administrative
review before filing suit. In Tindle, the Court of
Civil Appeals considered whether the trial court
properly dismissed a putative class action against
an insurer challenging the insurer's calculation of
premiums with respect to home insurance. The Court
of Civil Appeals agreed that the insured was
required to exhaust administrative remedies before
seeking redress through the courts. ...
"Section
27–13–71
states
that
if,
upon
application by an insured, an insurer refuses to
reduce the insured's rate, the insured 'may make a
like application to the commissioner within 30
days.' (Emphasis added.) Peacock contends the
legislature's use of the word 'may,' rather than the
word 'shall,' indicates that the insured has the
option of pursuing administrative remedies or
pursuing remedies in court. If, however, the
legislature had used the word 'shall,' § 27–13–71
would impose on an insured a statutory duty to
pursue administrative remedies upon every rejection
of an application for a rate reduction, even where
the insured is satisfied with the insurer's
explanation of the denial or where the insured lacks
the means or is disinclined to pursue further
action. Such a construction would lead to an
unreasonable result. We consider the more reasonable
interpretation of 'may' as used here to be an
13
1110738
expression of the legislature's intent that an
insured lodging a complaint was not required to
pursue the complaint further if it did not so desire
and not the sanction of alternative remedies
independent of the Insurance Code. Accordingly, the
legislature's use of the word 'may' need not be read
so broadly as Peacock contends and, in the context
of the entire Insurance Code and the legislative
authority over rate-making, discussed below, should
not be so read.
"Viewing the Insurance Code as a whole, see
Bright[ v. Calhoun, 988 So. 2d 492, 497-98 (Ala.
2008)], as allowing a court, outside the appellate
review provided for in the Insurance Code, to
determine,
in
proceedings
as
to
which
the
commissioner is not a party, that a rate approved by
the commissioner is unreasonably high would allow
that court to require insurers to apply rates
independently of the commissioner's involvement.
Such a construction of § 27–13–71 would enable
courts to interfere with the regulatory power
granted the commissioner by the legislature under §
27–13–68. Furthermore, it would enable courts to
require insurers in proceedings between an insurer
and an insured to apply unapproved rates and,
therefore, to engage in conduct prohibited by other
sections of the Insurance Code. See §§ 27–13–67 and
27–13–76. However, as this Court has stated in
another context, 'the matter of rate making is
legislative, and the courts have no right to sit as
a board of review to substitute their judgment for
that of the Legislature, or its agents in matters
within the province of either.' City of Birmingham,
234 Ala. at 531, 176 So. at 305.
"The legislature has created a narrow exception
to the principle that rate-making is a legislative
prerogative by the procedures established in §§
27–13–71 and 27–13–81. Under § 27–13–71, an insured
dissatisfied with a rate may apply to the insurer
for a rate reduction and then to the commissioner if
14
1110738
the insured does not receive a reduction from the
insurer. Under § 27–13–81, the insured may,
thereafter,
obtain
judicial
review
of
the
commissioner's decision first by means of a writ of
certiorari to the Montgomery Circuit Court and then
by means of an appeal to the Court of Civil Appeals.
Through these procedures, the legislature has
created a limited means by which courts may review
the commissioner's rate-making decisions. Sections
27–13–71 and 27–13–81 authorize judicial review only
in this context. Peacock's construction of 'may' as
that word is used in § 27–13–71 would sanction an
unbridled expansion of this exception inconsistent
with the general rule that the judicial branch lacks
authority to set rates. We decline to ascribe such
intent to the legislature based solely on the use of
the word 'may' in the context here presented.
Consistent
with
the
authority
granted
the
commissioner by the legislature and the limited
judicial review of the commissioner's decisions, we
conclude that the insured must exhaust his or her
administrative remedies before the commissioner
before turning to the courts for relief."
Ex parte Cincinnati Ins. Co., 51 So. 3d at 303-08 (some
emphasis added; footnotes omitted).
After explaining the authority of the commissioner and
the Department, this Court first concluded that Peacock's
allegations fell within the jurisdiction of the commissioner
because, the Court said, Peacock's allegations challenged
Cincinnati's rates and/or rating systems. Ex
parte
Cincinnati
Ins. Co., 51 So. 3d at 308. Specifically, this Court noted
that Peacock's complaint contained, among others, the
15
1110738
following
allegations:
"'This
action
challenges
[Cincinnati's]
systematic and ongoing practice of improperly imposing and
collecting premiums for certain [UM] insurance coverage when
issuing multi-vehicle auto insurance policies in the State of
Alabama'"; Cincinnati "'overcharg[es] for UM coverage' and
'charg[es] more than is necessary to provide maximum UM
coverage under the contract'"; "Cincinnati receives 'improper
gains ... at the expense of insureds and premium payors'";
Cincinnati "'has engaged in a widespread and systematic
practice of imposing and collecting premiums for certain
unnecessary, improper, and illusory UM coverage when issuing
multi-vehicle
policies
in
Alabama'";
Cincinnati
"'has
breached
contracts with [Peacock] and class members by requiring and
collecting for additional UM coverage for which there was no
consideration flowing from [Cincinnati], as the required
additional coverage was illusory and of no additional
benefit'"; and Cincinnati's "'practice of requiring (and
collecting for) additional UM coverage as described herein is
improper.'" Id. at 308-09. The allegations in Peacock's
complaint, this Court determined, were "a matter squarely
16
1110738
within the exclusive jurisdiction of the commissioner." Id.
at 309 (citing §§ 27–13–65 and 27–13–68 (emphasis added)).
The allegations in the complaint filed by Vernon, as the
original class representative, are nearly identical to the
allegations in Cincinnati's complaint, as set forth above. In
its complaint, Vernon alleged, among other things, that AMIC
"collect[ed] premiums for UM/UIM coverage and fail[ed] to
provide the coverage for which the class members had paid";
that "policyholders paid for UM/UIM coverage and AMIC failed
to provide it"; that the "[p]laintiffs ... have not received
and are not receiving valid UM/UIM coverage while, at all
times relevant hereto, they have paid premiums for such
coverage";
that
"AMIC's
practice
of
collecting
UM/UIM
premiums
and
not
providing
valid
contracted
UM/UIM
coverage
constitutes
a breach of its contracts to Plaintiffs"; and that
"[p]laintiffs failed to obtain the benefit of their bargains,
and AMIC consequently was unjustly enriched." Thus, under Ex
parte Cincinnati Insurance Co., the allegations in the
complaint
originally
filed
by
Vernon
presented
issues
squarely
within the exclusive jurisdiction of the commissioner.
17
1110738
Next, this Court concluded in Ex parte Cincinnati
Insurance Co. that the filed-rate doctrine precluded judicial
review of Peacock's claims because the essence of his claims
was that the commissioner improperly approved Cincinnati's
forms and rating plans regarding UM coverage on more than
three vehicles listed as covered vehicles in a Cincinnati
policy. 51 So. 3d at 305-06 ("'The filed-rate doctrine
provides that once a filed rate is approved by the appropriate
governing regulatory agency, it is per se reasonable and is
unassailable in judicial proceedings.'" (quoting Birmingham
Hockey Club, 827 So. 2d at 78 n. 4)). This Court also
3
rejected Peacock's claim that he was not required to exhaust
his
administrative
remedies
because,
Peacock
claimed,
This
Court
also
rejected
an
alternative
argument
advanced
3
by Peacock regarding application of the filed-rate doctrine
because, this Court stated, "the transcript on which Peacock
now relies was not before the trial court when it ruled on
Cincinnati's motion to dismiss. '[E]vidence not presented to
the trial court will not be considered in [an appellate]
proceeding.' Ex parte Volvo Trucks North America, Inc., 954
So. 2d 583, 587 (Ala. 2006)." Ex parte Cincinnati Ins. Co.,
51 So. 3d at 309. Furthermore, this Court found that
Peacock's alternative argument, the basis of which does not
bear repeating because it was based on evidence not properly
before this Court, was "misdirected." Id.
18
1110738
administrative review would be futile. Ex parte Cincinnati
4
Ins. Co., 51 So. 3d at 310. Accordingly, this Court held
that, "under either of Peacock's alternative contentions the
Tallapoosa Circuit Court exceeded its discretion when it
denied Cincinnati's motion to dismiss," id., and, therefore,
Peacock's action was due to be dismissed under the filed-rate
doctrine and because Peacock had failed to exhaust his
administrative remedies, id. at 310.
In the present case, the allegations set forth in the
complaint are all directly tied to the provision of AMIC's
insurance policy that excluded coverage to any person covered
by the policy who has collected benefits under the Alabama
Workers' Compensation Act. Specifically, by alleging that
AMIC charged for UM/UIM coverage but then deviated from the
agreed-to coverage by amending the insurance policy
to
exclude
from coverage virtually every person who could properly
collect benefits under the policy, Vernon, the original class
representative, claimed that AMIC's rates under the policy
One of the four exceptions to the general rule of
4
exhaustion of
administrative remedies
is that
"'"the
exhaustion of administrative remedies would be futile ...."'"
Ex parte Cincinnati Ins. Co., 51 So. 3d at 310 (quoting Budget
Inn of Daphne, Inc. v. City of Daphne, 789 So. 2d 154, 157
(Ala. 2000)).
19
1110738
were excessive, i.e., that premiums were collected but that
only illusory (effectively nonexistent) coverage was provided
-- that matter is "squarely within the exclusive jurisdiction
of the commissioner." Ex parte Cincinnati Ins. Co., 51 So. 3d
at 309. Because the class plaintiffs take issue with AMIC's
forms and rating plans, both of which involved the
commissioner's approval, the filed-rate doctrine precludes
judicial review. 51 So. 3d at 309 (citing Birmingham Hockey
Club, 827 So. 2d at 78 n. 4).
It is undisputed that Fairfield, as the new class
representative,
has
not
exhausted
its
administrative
remedies.
Fairfield argues, as an exception to the general rule of
exhaustion of administrative remedies, that exhausting its
remedies before the commissioner and the Department is
unnecessary because, Fairfield says, "the action raises only
questions of law and not matters requiring administrative
discretion or an administrative finding of fact." (Quoting Ex
parte Cincinnati Ins. Co., 51 So. 3d at 310, quoting in turn
Budget Inn of Daphne, Inc. v. City of Daphne, 789 So. 2d 154,
157 (Ala. 2000).). Fairfield also argues, as an exception to
the general rule of exhaustion of administrative remedies,
20
1110738
that its "available remedy is inadequate" (quoting id.),
because, Fairfield says, the trial court, rather than the
commissioner and the Department, have the authority to
provide
the requested relief.
Fairfield is incorrect in stating that this action
presents only questions of law and that there are no matters
requiring an administrative finding of fact. As just one
example, which is taken from the briefs filed with this Court,
Fairfield asserts that Steve Wells, president of AMIC, knew
that the exclusionary provision of the UM/UIM coverage was
"contrary to Alabama law" but that, nonetheless, "AMIC failed
to remove the offending exclusion from its UM/UIM policy until
after this action was filed." Fairfield's brief, at 30.
Stated differently, Fairfield asserts that AMIC willingly
placed the exclusionary provision in the insurance policy and
removed it only after its insureds filed suit to recover the
premiums they had paid for the illusory coverage. On the
other hand, AMIC asserts that the exclusionary policy, which
it allegedly knew was "contrary to Alabama law," was added not
because of its desire to add it but, instead, "was added at
the insistence of members of the proposed class!" AMIC's
21
1110738
original appellant's brief, at 27 (emphatic punctuation in
original). There is little doubt that the commissioner and
the Department would find highly factually relevant whether
the class plaintiffs, who now complain of the exclusionary
provision of the insurance policy and the financial loss they
claim to have suffered from that provision, actually insisted
on including the provision in the policy. Furthermore,
Fairfield's argument that it is excepted from exhausting its
administrative remedies because of the alleged lack of an
adequate remedy is meritless. As noted above, Fairfield may
seek redress of an adverse judgment from the commissioner by
filing a petition for a writ of certiorari in the Montgomery
Circuit Court, and then, if redress is not granted, it may
seek relief from the Alabama Court of Civil Appeals. See Ex
parte Cincinnati Ins. Co., 51 So. 3d at 305 (citing § 27-13-
81, Ala. Code 1975).
In sum, this case is quite similar to Ex parte Cincinnati
Ins. Co., supra, and requires the same disposition. The
filed-rate doctrine requires dismissal of this action,
as
does
first Vernon's and now the class plaintiffs' failure to
exhaust its administrative remedies. Cf. Ex parte Cincinnati
22
1110738
Ins. Co., 51 So. 3d at 311 ("[T]he filed-rate doctrine
requires dismissal, as does Peacock's failure to exhaust
administrative remedies with the commissioner and the
Department before seeking redress from the courts.").
Accordingly, we vacate the trial court's class-certification
order and dismiss the appeal.
ORDER VACATED; APPEAL DISMISSED.
Stuart, Bolin, Parker, Murdock, Shaw, Wise, and Bryan,
JJ., concur.
Moore, C.J., dissents.
23
1110738
MOORE, Chief Justice (dissenting).
I respectfully dissent because I believe the circuit
court has subject-matter jurisdiction to hear a claim that an
exclusion in an insurance policy violates State law and this
Court's jurisprudence. Although the complaint initially filed
by the City of Vernon ("Vernon"), the original class
representative, coincides peripherally with portions of the
complaint quoted in Ex parte Cincinnati Insurance Co., 51 So.
3d 298 (Ala. 2010), overall the complaints differ. Unlike the
complaint in Cincinnati, which alleged that the insurer was
charging "excessive" rates, 51 So. 3d at 309, Vernon's
complaint alleges that AMIC fails to provide coverage for
which
insureds
pay.
Allegations
that
the
insurer
"overcharges"
and "charges more than is necessary" for coverage appeared in
the complaint in Cincinnati, 51 So. 3d at 309, but not in
Vernon's complaint.
Vernon's complaint also differs in that it expressly
alleges that AMIC's practice conflicts with the Alabama
Uninsured Motorist Act, § 32-7-23, Ala. Code 1975 ("the Act"),
and cites two decisions of this Court in support of the
proposition that the disputed exclusion is legally void. The
24
1110738
complaint asserts as a question common to the class "whether,
in the absence of a valid written waiver, the common insurance
policy issued by AMIC violates the provisions of the Alabama
Uninsured Motorist Statute."
Because Vernon's complaint challenges the lawfulness of
AMIC's exclusion, and not merely the excessiveness of its
rates, we should look not to Cincinnati, but to a case on-
point: Peachtree Casualty Insurance Co. v. Sharpton, 768 So.
2d 368 (Ala. 2000). In Peachtree, we determined that a claim
challenging an exclusion affecting uninsured motorists is not
necessarily barred by the filed-rate doctrine when it
contravenes the Act, even if the Department of Insurance
approved the exclusion. 768 So. 2d at 369. We reasoned that
the case was not a rate case and therefore that the filed-rate
doctrine was inapplicable. Moreover, "the Department’s
approval of the policy language does not by itself suggest
that [the insurer] may issue a policy that violates the
restrictions in § 32-7-23." 768 So. 2d at 373. I believe that
here, as in Peachtree, the filed-rate doctrine does not apply.
The doctrine of exhaustion of administrative remedies
also does not bar Vernon's, now the City of Fairfield's,
25
1110738
claims because the remedies in §§ 27-2-28 and 27-13-71, Ala.
Code 1975, are permissive and not mandatory. See Tindle v.
State Farm Gen. Ins. Co., 826 So. 2d 144, 149 (Ala. Civ. App.
2001) (Murdock, J., dissenting) (arguing that the exhaustion-
of-remedies doctrine did not apply because the controlling
statute, with language virtually identical to §
27-13-71, does
not provide an exclusive remedy). Courts remain open to hear
a claim that an insurer's exclusion is void under the Act. See
McCollum v. Birmingham Post Co., 65 So. 2d 689, 695 (Ala.
1953) (holding that one of the purposes of Ala. Const. 1901,
§ 13, providing for open courts, is to place "every citizen
... within the protection of the law of the land").5
Even though the parties do not ask this Court to abrogate
5
its application of the exhaustion-of-remedies doctrine in
Cincinnati, I note that
"''[a]ppellate review does not consist of supine
submission to erroneous legal concepts even though
none of the parties declaimed the applicable law
below. Our duty is to enunciate the law on the
record facts. Neither the parties nor the trial
judge, by agreement or passivity, can force us to
abdicate our appellate responsibility."'"
Blue Cross & Blue Shield of Alabama v. Hodurski, 899 So. 2d
949, 960 (Ala. 2004) (quoting Forshey v. Principi, 284 F.3d
1335, 1357 n.20 (Fed. Cir. 2002), quoting in turn Empire Life
Ins. Co. of America v. Valdak Corp., 468 F.2d 330, 334 (5th
Cir. 1972)). See also Ex parte Baker, 143 So. 3d 754, 755 n.2
(Ala. 2013) (Moore, C.J., dissenting) (citing cases in which
26
1110738
Alternatively, I believe an exception to the doctrine of
exhaustion of remedies applies here because "the available
remedy is inadequate," Cincinnati, 51 So. 3d at 310. The City
6
of Fairfield, the new class representative, seeks damages in
the amount of UM/UIM premiums paid during the class period,
plus interest. Section 27-2-28 enables parties aggrieved by
an
act or omission of the commissioner of the Department of
Insurance to be heard before the commissioner but does not
expressly provide for an adversarial hearing in which the
insurer is made a party. Furthermore, § 27-13-71, which
permits a party affected by an insurance rate to apply for a
rate reduction, does not permit that party to seek
reimbursement by an insurance company of the
party's
premiums.
Because
neither
administrative
remedy
authorizes
the
commissioner to grant the relief Fairfield seeks, the
available remedies are inadequate, and the exhaustion-of-
remedies doctrine does not control.
this Court overruled precedent without an invitation to do
so).
Although not argued by the parties, I also believe that
6
the present action may fall within another exception to the
exhaustion-of-remedies doctrine where "the question raised is
one of interpretation of a statute." Cincinnati, 51 So. 3d at
310.
27
1110738
For these reasons, I respectfully dissent from the
decision to dismiss the appeal.
28 | December 19, 2014 |
1fd045d0-e059-41d5-be11-f7405d93c9d7 | America's Home Place, Inc. v. Rampey | N/A | 1130150 | Alabama | Alabama Supreme Court | Rel: 10/24/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334)
229-0649), of any typographical or other errors, in order that corrections may be made
before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
_________________________
1130150
_________________________
America's Home Place, Inc.
v.
Gregory Rampey
Appeal from Chambers Circuit Court
(CV-13-900032)
MAIN, Justice.
The defendant below, America's Home Place, Inc. ("AHP"),
appeals from an order of the Chambers Circuit Court ("the
trial court") denying AHP's motion to compel arbitration of
1130150
the claims brought by the plaintiff below, Gregory Rampey. We
reverse and remand.
I. Facts and Procedural History
In August 2012, Rampey and AHP entered into a contract,
the terms of which provided that AHP would construct a house
for Rampey in Chambers County. AHP constructed the house for
Rampey; however, after he took possession of the house, Rampey
began to notice "settlement and sinking of the foundation,"
which,
according
to
Rampey,
resulted
in
significant
structural
and other damage to the house. AHP attempted to stabilize the
foundation and to repair the damage to the house that had
occurred as a result of the unstable foundation; those
efforts, however, were unsuccessful. On March 3, 2013, Rampey
filed in the trial court a complaint against AHP. The
complaint alleged 10 counts against AHP, each count stemming
from the construction of the house that was the subject of the
parties' August 2012 contract.
AHP moved to compel arbitration of Rampey's claims and to
stay the proceedings in the trial court pending the outcome of
arbitration between the parties. In support of its motion,
AHP attached the contract between AHP and Rampey. The
2
1130150
contract stated that "Contractor and Owner agree as follows"
and then set forth 46 enumerated provisions. Beside each
enumerated provision in the contract (except nos. 4 and 27,
which were inapplicable) there was a line for the "owner"
(i.e., Rampey) to initial. Rampey admittedly wrote his
initials in the line next to every one of the 44 applicable
provisions, including provision no. 37 ("the arbitration
provision"), which states, in toto:
"BINDING ARBITRATION AGREEMENT
"ALL CLAIMS, DISPUTES AND OTHER MATTERS OR QUESTIONS
ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE
BREACH THEREOF, SHALL BE SETTLED BY BINDING
ARBITRATION IN ACCORDANCE WITH THE RULES OF AMERICAN
ARBITRATION ASSOCIATON [sic] (AAA) AND/OR DEMARS &
ASSOCIATES, LTD. (DMA), AND JUDGEMENT UPON THE AWARD
RENDERED BY THE ARBITRATOR OR ARBITRATORS MAY BE
ENTERED IN ANY COURT HAVING JURISDICTION THEREOF.
THE PARTIES EXPRESSLY AGREE THAT THE ARBITRATOR OR
ARBITRATORS SHALL HAVE THE POWER AND AUTHORITY TO
GRANT REASONABLE ATTORNEY'S FEES AND COSTS IN
RESOLUTION
OF
THE
CLAIMS,
DIFFERENCES
AND/OR
CONTROVERSIES ARISING FROM THIS AGREEMENT WHICH THE
PARTIES
HAVE
AGREED
TO
SUBMIT
TO
BINDING
ARBITRATION.
"THE DEMAND FOR ARBITRATION SHALL BE IN WRITING AND
DELIVERED TO THE OTHER PARTY TO THE AGREEMENT AND
THE ARBITRATOR. THE DEMAND FOR ARBITRATION SHALL BE
MADE WITHIN A REASONABLE TIME AFTER THE CLAIM,
DISPUTE OR OTHER MATTER RELATING TO THIS AGREEMENT
HAS ARISEN, AND IN NO EVENT SHALL BE MADE AFTER THE
DATE WHEN INSTITUTION OF LEGAL OR EQUITABLE
PROCEEDINGS BASED ON SUCH CLAIM, DISPUTE OR OTHER
3
1130150
MATTER WILL BE BARRED BY THE APPLICABLE STATUTE OF
LIMITATIONS.
"THE COSTS OF THE ARBITRATOR WILL BE PAID BY THE
PARTY WHO IS AT FAULT ON THE POINT BEING ARBITRATED.
IN THE EVENT OF MULTIPLE POINTS BEING ARBITRATED THE
ARBITRATOR'S FEE WILL BE ALLOCATED ON A PRO RATA
BASIS BY THE ARBITRATOR. IF EITHER PARTY FAILS TO
ATTEND THE ARBITRATION, SUCH PARTY SHALL PAY FOR THE
COSTS OF THE ARBITRATOR, PLUS A $1,000.00 PENALTY
FOR LIQUIDATED DAMAGES FOR LOST TIME OF THE PARTY
THAT ATTENDED THE ARBITRATION. CONTRACTOR MAY SECURE
ITS RIGHTS UNDER THE MECHANIC'S LIEN LAW, AND,
SUBSEQUENT TO THE ARBITRATION AWARD, MAY ENFORCE
SAID RIGHT AND OBTAIN A LIEN FORECLOSURE JUDGEMENT."
(Capitalization in original.) Immediately beneath the
arbitration provision were signature lines for the parties to
the contract, including one for "owner," i.e., Rampey. Rampey
also initialed provision no. 42, which states: "[Rampey]
acknowledges that each paragraph of this contract has been
explained and initials acceptance of same. [Rampey] also
acknowledges receipt of this agreement." (Emphasis added.)
Furthermore, Rampey admittedly signed his name at the bottom
of each of the last two pages of the contract.
Rampey filed a response to AHP's motion to compel
arbitration. Rampey's sole argument in his response was that
his signature on the signature line immediately beneath the
arbitration provision was forged, and, thus, he said, there
4
1130150
exists no proof of his intent to arbitrate any disputes
between himself and AHP. Rampey did not argue that the
contract itself was invalid and/or unenforceable; rather,
Rampey argued only that the arbitration provision in the
contract was unenforceable because, according to Rampey, his
signature immediately beneath the arbitration provision was
forged. Rampey supported his response to the motion to compel
arbitration with, among other evidentiary documents, his own
affidavit, which states:
"My name is Gregory Rampey. I am a resident
citizen of the State of Alabama aged nineteen (19)
years or older and have personal knowledge of the
facts and matters set forth herein which are true
and accurate to the best of my belief and knowledge.
"I am the Plaintiff in the above identified
cause and have personal knowledge of the facts set
forth in this affidavit.
"On August 29, 2012, I entered into a contract
with
America's
Home
Place,
Inc.[,]
for
the
construction of a home located at ___ Springfield
Avenue, Chambers County, Alabama. This contract
contained a binding arbitration agreement on page 5,
paragraph
37.
(See
Contract,
attached
to
Plaintiff[']s Opposition as Exhibit 1). I did not
sign the binding arbitration agreement contained
within the contract. I do not know who signed my
name nor did they have my permission. I had no
intention of agreeing to binding arbitration. The
forged signature appearing within the binding
arbitration clause in no way bears any resemblance
5
1130150
to my actual signature on pages 7-8 of the Contract.
(See Contract)."
After a hearing on AHP's motion to compel arbitration,
the trial court entered the following order: "[AHP's] Motion
to Compel arbitration is denied at this time. [Rampey] has
claimed that the signature on the contract is forged. The
issue of whether an enforceable agreement to arbitrate exists
shall be set for jury trial on the next available jury
docket." AHP appealed.
II. Standard of Review
"Our standard of review of a ruling denying a
motion to compel arbitration is well settled:
"'"This Court reviews de novo the
denial of a motion to compel arbitration.
Parkway Dodge, Inc. v. Yarbrough, 779 So.
2d 1205 (Ala. 2000). A motion to compel
arbitration is analogous to a motion for a
summary judgment. TranSouth Fin. Corp. v.
Bell, 739 So. 2d 1110, 1114 (Ala. 1999).
The party seeking to compel arbitration has
the burden of proving the existence of a
contract
calling
for
arbitration
and
proving that the contract evidences a
transaction affecting interstate commerce.
Id. '[A]fter a motion to compel arbitration
has been made and supported, the burden is
on the non-movant to present evidence that
the supposed arbitration agreement is not
valid or does not apply to the dispute in
question.' Jim Burke Automotive, Inc. v.
Beavers, 674 So. 2d 1260, 1265 n. 1 (Ala.
6
1130150
1995)
(opinion
on
application
for
rehearing)."'"
SSC Montgomery Cedar Crest Operating Co., LLC v. Bolding, 130
So. 3d 1194, 1196 (Ala. 2013) (quoting Elizabeth Homes, L.L.C.
v. Gantt, 882 So. 2d 313, 315 (Ala. 2003), quoting in turn
Fleetwood Enters., Inc. v. Bruno, 784 So. 2d 277, 280 (Ala.
2000)).
III. Analysis
The dispositive issue in this case is whether the trial
court erred in denying AHP's motion to compel arbitration
based on Rampey's allegation that his signature immediately
beneath the arbitration provision in the contract was forged.
We conclude that the trial court did err. As noted, the
contract contains a binding arbitration provision (enumerated
provision no. 37 in the contract); Rampey admittedly wrote his
initials in the line provided next to the arbitration
provision. Also, as noted, provision no. 42 of the contract
states: "[Rampey] acknowledges that each paragraph of this
contract has been explained and initials acceptance of same.
[Rampey] also acknowledges receipt of this agreement"; Rampey
admittedly wrote his
initials
beside
that
provision.
Furthermore, provision no. 39 of the contract states: "This
7
1130150
Agreement constitutes the sole and entire Agreement between
the parties hereto and no modifications of this Agreement
shall be binding unless signed by all parties to this
Agreement. No representation, promise, or inducement not
included in this Agreement shall be binding upon any party
hereto." Moreover, on page 7 of the contract, directly above
one of the two places in which Rampey admittedly signed the
contract, it states, in pertinent part: "This agreement[,
i.e., the contract,] shall be binding on the parties thereto
...." The contract language quoted above shows that Rampey
and AHP entered into a binding contract, which Rampey does not
dispute, that includes two signatures Rampey agrees are
legitimate and that the contract includes a binding
arbitration provision. The fact that Rampey's signature
immediately beneath the arbitration provision was (allegedly)
forged is of no consequence because his signature was not
required immediately beneath the arbitration provision and,
furthermore, Rampey assented to be bound by that provision
when he admittedly wrote his initials on the line next to the
arbitration provision. See, e.g., Stiles v. Home Cable
8
1130150
Concepts, Inc., 994 F. Supp. 1410 (M.D. Ala. 1998), which
aptly explains the fallacy of Rampey's argument:
"Stiles'[s] '[f]irst and foremost' objection is
that he did not sign the arbitration clause at
issue. It is, of course, a matter of general
contract law that a party must agree to a contract
in order to be bound by it. See Old Republic Ins.
Co. v. Lanier, 644 So. 2d 1258, 1260 (Ala. 1994);
Roberson v. Money Tree of Ala., Inc., 954 F. Supp.
1519, 1528 (M.D. Ala. 1997), citing Restatement of
Contracts, 2d. § 17. This provision of general
contract law applies even if the arbitration clause
is subject to the Federal Arbitration Act [('the
FAA')]. See 9 U.S.C. § 2 (arbitration clause not
enforced where invalid 'upon such grounds as exist
at law or in equity for the revocation of any
contract'). In addition, the FAA also requires that
an arbitration clause be written to be enforceable.
9 U.S.C. § 2 (a 'written provision'); Continental
Grain Co. v. Beasley, 628 So. 2d 319, 322 (Ala.
1993).
"While written agreement is required for
arbitration, however, there is no requirement that
every single provision of a contract, including the
arbitration clause, must be signed in order to form
part of the agreement. Indeed, it is axiomatic that
'parties may become bound by the terms of a
contract, even though they do not sign it, where
their assent is otherwise indicated.' 17A Am. Jur.
2d § 185. ... The FAA has no separate requirement of
a signed arbitration clause. As noted by the
Northern District of Alabama, '[i]t is well
established that a written agreement to arbitrate
need not be signed by the parties as a prerequisite
to the enforcement of the agreement.' Middlebrooks
v. Merrill Lynch, Pierce, Fenner & Smith, Inc., [No.
CV 89-HM-5015-NW, April 5, 1989] (N.D. Ala. 1989)
[not reported in F. Supp.].
9
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"Stiles has cited this court to three cases
which allegedly stand for the proposition that he
must sign an arbitration agreement for it to be
enforceable. His reliance is misplaced, however. The
first that he cites, Old Republic Ins. Co., 644 So.
2d at 1260, only stands for the proposition that a
party must agree to a contract to be bound by it.
The second, Continental Grain Co., 628 So. 2d at
322, merely notes that the FAA requires arbitration
clauses to be written. Finally, the third, Ex parte
Jones, 686 So. 2d 1166 (Ala. 1996), only stands for
the proposition that someone who is 'not a party to
the contract containing the arbitration agreement'
may not compel arbitration. None states the
proposition that the arbitration clause itself must
be signed. Indeed, these cases could not state that
proposition. Alabama law is not permitted by the FAA
to treat arbitration clauses any differently than
other contracts. See Doctor's Assoc., Inc. v.
Casarotto, 517 U.S. 681, 686–87, 116 S. Ct. 1652,
1656, 134 L. Ed. 2d 902 (1996) ('Courts may not,
however, invalidate arbitration agreements under
state
laws
applicable
only
to
arbitration
provisions') (emphasis in original); Allied–Bruce
Terminix Co. v. Dobson, 513 U.S. 265, 281, 115 S.
Ct. 834, 130 L. Ed. 2d 753 (1995) (FAA makes
unlawful any state policy that 'would place
arbitration clauses on an unequal "footing"').
Because Alabama law only requires the contract to be
signed (and only certain contracts at that), and
does not require every single provision of every
contract to be signed, it could not require the
arbitration clause at issue here to be signed.
Doctor's Assoc., 517 U.S. at 682–84, 116 S. Ct. at
1654 (holding that Montana law cannot require
special notice provisions in arbitration contracts).
"Stiles assented to the contract as a whole in
this case. That fact is uncontested. ... Stiles has,
therefore, assented to an arbitration clause, even
absent his signature. ... The provision is not
invalid because not signed."
10
1130150
Stiles, 994 F. Supp. at 1416 (initial emphasis added).
Furthermore, it is well settled that
"[a] plaintiff cannot seek the benefits of a
contract but at the same time avoid the arbitration
provision in the contract. Wolff Motor Co. [v.
White], 869 So. 2d [1129,] 1136 [(Ala. 2003)].
Instead, 'she must accept or reject the entire
contract.' Credit Sales, Inc. v. Crimm, 815 So. 2d
540, 546 (Ala. 2001). Britta's claims, including her
breach-of-contract claim, rely on the contract to
support her claims for damages. Therefore, she is
bound by the arbitration provision in the contract.
Infiniti of Mobile, Inc. v. Office, 727 So. 2d 42,
48 (Ala. 1999)[ ]; Delta Constr. Corp. v. Gooden, 714
1
So. 2d 975, 981 (Ala. 1998)."
Bowen v. Security Pest Control, Inc., 879 So. 2d 1139, 1143
(Ala. 2003) (emphasis added). See also Southern Energy Homes,
Inc. v. Ard, 772 So. 2d 1131, 1134-35 (Ala. 2000) ("A
plaintiff cannot simultaneously claim the benefits of a
contract and repudiate its burdens and conditions." (citing
Value Auto Credit, Inc. v. Talley, 727 So. 2d 61 (Ala. 1999);
Infiniti of Mobile, Inc. v. Office, 727 So. 2d 42 (Ala. 1999);
Notably, in Infiniti of Mobile, Inc.,
a plurality of this
1
Court concluded that, "[b]ecause the undisputed evidence
indicates
that
the
second
retail-buyer's-order
form
represents
the final contract between Mr. Office and Infiniti, and
because
Mr.
Office clearly
initialed
the
arbitration
provisions appearing on both the front side and the reverse
side of that contract, we must conclude that Mr. Office agreed
to arbitrate his claims against Infiniti." 727 So. 2d at 47
(emphasis added).
11
1130150
Georgia Power Co. v. Partin, 727 So. 2d 2 (Ala. 1998); Delta
Constr. Corp. v. Gooden, 714 So. 2d 975 (Ala. 1998); and Ex
parte Dyess, 709 So. 2d 447 (Ala. 1997))).
Here, Rampey, whose claims are all predicated on alleged
breaches and violations of the contract, attempts to claim the
benefits of the contract while repudiating one of its
conditions,
i.e.,
the
binding
arbitration
provision.
However,
as noted, Rampey must "'accept or reject the entire
contract.'" Bowen, 879 So. 2d at 1143 (quoting Credit Sales,
Inc. v. Crimm, 815 So. 2d 540, 546 (Ala. 2001)). As was the
case
in
Bowen,
Rampey's
claims,
including
his
breach-of-contract claim, rely on the contract for support.
Thus, Rampey is bound by all the provisions of the contract,
including
the
arbitration
provision.
Accordingly,
we
conclude
that the trial court erred in denying AHP's motion to compel
arbitration.
2
Rampey offers, as an alternative basis for affirming the
2
trial court's denial of the motion to compel arbitration, the
argument that AHP presented no evidence "showing that the
arbitration
agreement
involved
or
affected
interstate
commerce." Rampey's brief, at 13. See, e.g., Elizabeth
Homes, L.L.C. v. Gantt, 882 So. 2d 313, 315 (Ala. 2003) ("'The
party seeking to compel arbitration has the burden of proving
the existence of a contract calling for arbitration and
proving that the contract evidences a transaction affecting
interstate commerce.'" (quoting Fleetwood Enters., Inc., 784
12
1130150
IV. Conclusion
The trial court erred in denying AHP's motion to compel
arbitration. Therefore, we reverse the trial court's order
and remand the cause to that court with instructions to vacate
its order denying the motion to compel arbitration and to
enter an order granting AHP's motion to compel arbitration.
REVERSED AND REMANDED WITH DIRECTIONS.
Stuart, Bolin, Parker, Wise, and Bryan, JJ., concur.
Murdock and Shaw, JJ., concur in the result.
So. 2d at 280)). However, Rampey did not raise that argument
in the trial court; therefore, the argument is waived on
appellate review. See, e.g., Andrews v. Merritt Oil Co., 612
So. 2d 409, 410 (Ala. 1992) ("This Court cannot consider
arguments raised for the first time on appeal; rather, our
review is restricted to the evidence and arguments considered
by the trial court."). Furthermore, even if it were not
waived, we could conclude that the argument is unavailing
because the contract shows that the house was built in Alabama
by AHP, which listed its place of business as being in "Hall
County, Gainesville, GA." See Hurst v. Tony Moore Imports,
Inc., 699 So. 2d 1249, 1257 (Ala. 1997) ("[I]f any effect on
interstate commerce can be found in a commercial transaction,
then the transaction is considered to be one involving
interstate commerce.").
13
1130150
MURDOCK, Justice (concurring in the result).
The main opinion correctly concludes that "Rampey
assented to be bound by [the arbitration] provision when he
admittedly wrote his initials on the line next to [that]
provision" and signed his name in the signature lines at the
end of the contract. ___ So. 3d at ___. I agree, and, based
on general principles of contract law, I find this conclusion
sufficient to the end achieved here. I therefore find it
unnecessary to rely, as does the main opinion, upon the
decision in Stiles v. Home Cable Concepts, Inc., 994 F. Supp.
1410 (M.D. Ala. 1998). In fact, I find Stiles to be
inapposite to the present case.
First, the statements from Stiles quoted in the main
opinion, see ___ So. 3d at ___, were made in the context of an
arbitration clause that, on the one hand, was not accompanied
by a signature line dedicated specifically to that clause and,
on the other hand, was not initialed by the party resisting
arbitration. In this context, the key passage from the
Stiles opinion quoted in the main opinion, i.e., "'there is no
requirement that every single provision of a contract,
including the arbitration clause, must be signed in order to
14
1130150
form part of the agreement,'" ___ So. 3d at ___ (emphasis
omitted), lacks significant probative value in a case, such as
this one, where the arbitration clause is accompanied by an
unsigned signature line dedicated solely to that clause.
In addition to its lack of significant probative value as
to the peculiar facts presented in this case, I am reluctant
to rely upon Stiles for another reason. In Stiles the federal
district court went so far as to impose upon a consumer a
requirement to arbitrate pursuant to a provision in an
original contract that did not mention arbitration
but
instead
purported to allow a credit-card issuer to change any of the
terms of the agreement between it and the consumer by
unilateral notification so long as the consumer did not reject
the proposed changes in writing within a prescribed period
following such notification. Regardless of whatever merit
this holding may have in regard to a consumer contract such as
the one at issue in Stiles, I see no reason to quote with
approval from a decision that goes this far in order to
achieve the result achieved in the present case.
I also find inapposite to the present case the principle
invoked in that portion of the main opinion that follows its
15
1130150
invocation of Stiles. Specifically, the main opinion seizes
upon the proposition that "'[a] plaintiff cannot seek the
benefits of a contract but at the same time avoid the
arbitration provision in the contract.'" ___ So. 3d at ___
(quoting Bowen v. Security Pest Control, Inc., 879 So. 2d
1139, 1143 (Ala. 2003)). The only argument made by Rampey in
the present case, however, is that, because he did not sign
the signature line dedicated to the arbitration
provision,
the
arbitration provision is not "in the contract." He does not
go further and argue that, even if that arbitration provision
is part of the contract, he would not be bound by it for some
reason, even as he seeks to benefit from other parts of the
contract. The stated principle is therefore inapposite.
16 | October 24, 2014 |
1d74cdfe-52f4-4ad4-b70a-1409ec676614 | Ex parte S.L.J.F. PETITION FOR WRIT OF CERTIORARI TO THE COURT OF CIVIL APPEALS (In re: S.L.J.F. v. Cherokee County Department of Human Resources) (Cherokee Juvenile Court: JU-11-131.03; Civil Appeals : 2130543). Writ Denied. No Opinion. | N/A | 1131412 | Alabama | Alabama Supreme Court | REL: 10/31/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
____________________
1131412
____________________
Ex parte S.L.J.F.
PETITION FOR WRIT OF CERTIORARI
TO THE COURT OF CIVIL APPEALS
(In re: S.L.J.F.
v.
Cherokee County Department of Human Resources)
(Cherokee Juvenile Court, JU-11-131.03;
Court of Civil Appeals, 2130543)
STUART, Justice.
1131412
WRIT DENIED. NO OPINION.
Bolin, Murdock, Shaw, Main, Wise, and Bryan, JJ., concur.
Moore, C.J., and Parker, J., dissent.
2
1131412
MOORE, Chief Justice (dissenting).
I respectfully dissent from this Court's denial of the
petition for a writ of certiorari filed by S.L.J.F. ("the
mother"). I believe that the Cherokee Juvenile Court lacked
clear and convincing evidence showing that the mother's
conduct and circumstances warranted the termination of her
fundamental right to the custody and care of her children. I
also believe that the juvenile court may not have considered
all viable alternatives to terminating the mother's parental
rights. I would grant the mother's petition and review the
full record in this case.
The mother has three children: J.R.B. ("the son"), E.R.F.
("the half brother"), and J.L.F. ("the half sister") (the half
brother and the half sister are hereinafter collectively
referred to as "the half siblings"). C.B. ("the father") is
the biological father of the son. The mother was never married
to the father. The mother's husband is E.R.F., Sr. ("the
husband"), who is the biological father of the half siblings.
The Court of Civil Appeals recounted the following relevant
facts:
"In December 2010, before the half sister was
born, [the Cherokee County Department of Human
3
1131412
Resources ('DHR')] became involved with the family
after receiving reports of, among other things,
alcohol abuse and domestic violence in the home.
There is no indication in the record that the mother
abused alcohol; instead, that allegation was against
the husband, with whom the mother had often left the
son and the half brother. At that time, DHR
implemented the first of 'at least' four safety
plans. DHR placed the son with K.M. ('the aunt'),
the father's sister, and it placed the half brother
with B.J.S. ('the maternal stepgrandfather') and
C.S. ('the maternal grandmother') (hereinafter
referred
to
collectively
as
'the
maternal
grandparents'). The maternal grandparents lived in
Georgia. Thereafter, the half sister was born and
the mother participated in a number of services
intended to reunify the family. At times the mother
made progress, and the son and the half siblings
were temporarily reunited with the mother; however,
as already mentioned, DHR implemented at least three
other safety plans. In March 2013 the juvenile court
awarded custody of the son and the half siblings to
DHR, and DHR placed them together in a foster home.
On September 23, 2013, DHR filed petitions seeking
to terminate the parental rights of the father
regarding the son and of the mother regarding the
son and the half siblings.
"The termination-of-parental-rights trial was
held on November 20, 2013. On December 10, 2013, the
juvenile court entered an order reserving its
judgment. The juvenile court required DHR to
evaluate the maternal grandparents and to report the
results
of
a
home
study
of
the
maternal
grandparents' home pursuant to the Interstate
Compact on the Placement of Children ('ICPC'),
codified at § 44-2-20 et seq., Ala. Code 1975. On
March 6, 2014, DHR notified the juvenile court that
placement of the children with the maternal
grandparents was not approved. That same day, the
juvenile
court
entered
separate
judgments
terminating the father's parental rights to the son
4
1131412
and terminating the mother's parental rights to the
son and to the half siblings."
S.L.J.F. v. Cherokee Cnty. Dep't of Human Res., [Ms. 2130543,
August 22, 2014] ___ So. 3d ___, ___ (Ala. Civ. App.
2014)(footnote omitted). On appeal to the Court of Civil
Appeals, the mother
challenged
the termination of her parental
rights to all three of her children. The Court of Civil
Appeals affirmed the judgment terminating the mother's
parental rights to the son and dismissed the appeal from the
judgment terminating her
parental
rights to the half siblings.
S.L.J.F., ___ So. 3d at ___. The mother's petition for a writ
of certiorari concerns only the termination of her parental
rights to the son, not to the half siblings.
The facts before us and in the opinion of the Court of
Civil Appeals do not present clear and convincing evidence so
as to require the termination of the mother's parental rights.
See § 12-15-319(a), Ala.
Code 1975 (providing factors juvenile
courts are to consider in determining whether parents are
unwilling or unable to discharge their parental duties). See
also M.C. v. L.B., 607 So. 2d 1267, 1268-70 (Ala. Civ. App.
1992)(stating that a natural parent's prima facie right to the
care and custody of his or her children can be overcome only
5
1131412
by clear and convincing evidence). It was the husband, not the
mother, who struggled with substance abuse and who had a
history of domestic violence. The children were not the
objects of the husband's domestic violence. The mother points
out that she worked at fast-food restaurants to support her
family
while
undergoing
psychological
treatment
to
improve
her
confidence and self-esteem. The mother later left the husband
because of his substance abuse. Although she began to date
another man who had been charged with domestic violence for an
incident involving his mother, that man did not abuse the
mother or her children, and the Cherokee County Department of
Human Resources ("DHR") did not find it necessary to
investigate the incident between him and his mother. In an
effort to reunite with her children, the mother participated
in several services, including ECA Focus, an in-home service
that assists parents who are in danger of losing their
children. The mother claims to have attended all of her
scheduled meetings with ECA Focus. She acknowledges that she
suffers from financial hardships and that she had been treated
with Prozac for her depression. She points out, however, that
DHR had never accused her of abusing prescription drugs or of
6
1131412
suffering from addiction. The mother states that she has never
refused a drug test and that the results of all of her drug
tests were negative. Moreover, the mother claims that, at the
time of the termination-of-parental-rights hearing, she was
living with her mother and stepfather, who were helping her to
reunite with her children. The mother maintained regular
visitation with the children but was unable to visit the
children for a two-month period because, she says, she had no
transportation; however, she indicates that, since moving in
with her mother and stepfather, she has secured reliable
transportation.
The opinion of the Court of Civil Appeals also does not
recite clear and convincing evidence that supports the
juvenile court's conclusion that no viable alternatives
to
the
termination of the mother's parental rights exist.
"Parents and their children share a liberty interest
in continued association with one another, i.e., a
fundamental right to family integrity. Santosky v.
Kramer, [455 U.S. 745 (1982)]. A state may only
interfere with that right to achieve a compelling
governmental objective using the most narrowly
tailored means available. Roe v. Conn, 417 F. Supp.
769 (M.D. Ala. 1976). Accordingly, parental rights
may be terminated only when 'less drastic measures
would be unavailing.' 417 F. Supp. at 779. Under
Alabama law, a juvenile court may terminate parental
rights only when no viable alternative exists. [Ex
7
1131412
parte] Beasley, [564 So. 2d 950 (Ala. 1990)]. Stated
conversely, if a viable alternative exists to
achieve the compelling governmental objective at
stake, a juvenile court may not terminate parental
rights."
J.B. v. DeKalb Cnty. Dep't of Human Res., 12 So. 3d 100, 115
(Ala. Civ. App. 2008). The mother claims that placement of the
son with his aunt or with his maternal grandmother was a
viable alternative to terminating the mother's parental
rights. The maternal grandmother, however, does not appear to
have been a viable alternative to the termination of the
mother's parental rights because she resides in Georgia,
which, as the potential receiving state, according to the
Court of Civil Appeals, had not approved the proposed
placement of the son with the maternal grandmother. ___ So. 3d
at ___. See Interstate Compact on the Placement of Children,
§ 44-2-20, Article III, subpart (d), Ala. Code 1975 ("[T]he
child shall not be sent, brought or caused to be sent or
brought into the receiving state until the appropriate public
authorities in the receiving state shall notify the sending
agency, in writing, to the effect that the proposed placement
does not appear to be contrary to the interests of the
child."). The son's aunt, on the other hand, does appear to
8
1131412
have been a viable alternative to the termination of the
mother's parental rights to her son.
The aunt, who was willing to be a placement for the son,
has a house and two children of her own. A DHR worker
testified during trial that the son had already been placed
successfully with the aunt for a time and that the juvenile
court could consider the aunt as a viable placement option.
This same DHR worker, the mother says, testified that she did
not have any safety concerns about placing the son with the
aunt. There was disputed testimony at trial regarding whether
the aunt had allowed the father to visit the son without
supervision while the son was staying with her. The father
denied that such visitation had taken place. Such disputed
testimony hardly rises to the level of clear and convincing
evidence that placement with the aunt was not a viable
alternative to terminating the mother's parental rights.
Sometimes courts need to be reminded of the foundational
principles on which our legal system is based. One such
1
"The prima facie right of a natural parent to the custody
1
of his or her child ... is grounded in the common law concept
that this primary parental right of custody is in the best
interest and welfare of the child as a matter of law." Ex
parte Mathews, 428 So. 2d 58, 59 (Ala. 1983). "Proceedings to
9
1131412
principle involves a natural parent's rights to the custody
and care of his or her children. "The laws of nature teach us
that the relation of parent and child is sacred ...."
Montgomery v. Hughes, 4 Ala. App. 245, 247, 58 So. 113, 113
(1911). "God, not the state, ordained the institution of the
family." Ex parte J.M.P., 144 So. 3d 287, 297 (Ala.
2013)(Moore, C.J., dissenting). "Because God, not the state,
has granted parents the authority and responsibility to
govern
their children, parents should be able to do so unfettered by
state interference," Ex parte G.C., 924 So. 2d 651, 677 (Ala.
2005)(Parker, J., dissenting), so long as those same parents
are not "found unfit by clear and convincing evidence" and
have not acted "to voluntarily relinquish this right to
custody." G.C., 924 So. 2d at 679 (Parker, J., dissenting).
"Inasmuch as the termination of parental rights strikes
at the very heart of the family unit, a court should terminate
parental rights only in the most egregious of circumstances."
Ex parte Beasley, 564 So. 2d 950, 952 (Ala. 1990). "The law
terminate parental rights were unknown at common law." In re
Termination of Parental Rights of P.A.M., 505 N.W.2d 395, 397
(S.D. 1993)(citing In re Zink, 264 Minn. 500, 119 N.W.2d 731
(1963)). Such proceedings are creatures of statute and of
recent origin.
10
1131412
recognizes
that
a
higher
authority
ordains
natural
parenthood,
and a fallible judge should disturb the relationship thus
established
only
where
circumstances
compel
human
intervention." Ex parte Sullivan, 407 So. 2d 559, 563-64 (Ala.
1981).
"[E]ach time a court considers a child-custody
dispute it should begin by taking judicial notice of
the fact that parents possess the right and
responsibility to govern and raise their children;
that God, not the state, has given parents these
rights and responsibilities, and, consequently, that
courts should interfere as little as possible with
parental decision-making."
G.C., 924 So. 2d at 677-78 (Parker, J., dissenting). "Parental
rights are indeed cherished and deserve the law's utmost
protection against unwarranted interference." Ex parte
Beasley, 564 So. 2d at 954. As I have stated elsewhere, "the
law favors the natural parents of a child by presuming that a
child's best interests are served by placing the child in the
custody of its natural parents." Ex parte C.V., 810 So. 2d
700, 703 (Ala. 2001) (Moore, C.J., concurring specially).
By denying the mother's petition for a writ of
certiorari, this Court has wrongfully denied this mother, who
has neither abused nor neglected her children, parental
custody of her son, with whom she has labored to reunite.
11
1131412
Furthermore, the fact that the aunt may have allowed the son
unsupervised visitation with the father, who had never abused
the son or the half siblings, is not a sufficient ground for
determining that the aunt is not a viable alternative to the
termination of the mother's parental rights. Finding no clear
and convincing evidence that the mother was unfit for
parenting or that there was no viable alternative to
terminating the mother's parental rights, I dissent. I fear
the Court has disregarded a fundamental and cherished right
that it is bound by law to protect and has presumed what is
best for the son before evaluating the evidence of parental
fitness.
12 | October 31, 2014 |
73ab6227-727a-46e5-bcf8-15051d3d560d | Burns Church, Inc., and Stephen Etheridge v. Alabama District Council of the Assembies of God, Inc., and Burns Assembly of God Church (Appeal from Geneva Circuit Court: CV-13-90082). Affirmed. No Opinion. | N/A | 1130539 | Alabama | Alabama Supreme Court | REL:10/24/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
____________________
1130539
____________________
Burns Church, Inc., and Stephen Etheridge
v.
Alabama District Council of the Assemblies of God, Inc., and
Burns Assembly of God Church
Appeal from Geneva Circuit Court
(CV-13-90082)
PER CURIAM.
AFFIRMED. NO OPINION.
See Rule 53(a)(1) and (a)(2)(F), Ala. R. App. P.
Stuart, Bolin, Parker, Murdock, Shaw, Main, Wise, and
Bryan, JJ., concur.
1130539
Moore, C.J., dissents.
2
1130539
MOORE, Chief Justice (dissenting).
I respectfully dissent from the Court's decision to
affirm the summary judgment in favor of the Alabama District
Council of the Assemblies of God, Inc. ("the District
Council"), and Burns Assembly of God Church in their action
against Stephen Etheridge and Burns Church, Inc. Though this
ecclesiastical dispute incidentally affects property rights,
the courts of the State of Alabama lack jurisdiction to
intervene in this dispute, which is based upon disparate
interpretations
of
church
governing
documents
and
doctrine
and
conflicting claims of church membership. I believe that the
Court should have dismissed this appeal for lack of subject-
matter jurisdiction.
I. The Parties
The District Council, an appellee, is located in
Montgomery and is the governing body of all Assemblies of God
churches in Alabama. The District Council incorporated
in
1942
as a nonprofit religious corporation under Alabama law. The
District Council acts under the General Council of the
Assemblies of God, which is located in Springfield, Missouri,
and is the governing body of all Assemblies of God churches in
3
1130539
the United States ("the General Council"). Burns Assembly of
God Church, the other appellee, is located in Geneva County
and is an unincorporated religious association that acts under
the authority of the District Council and the General Council.
Burns Church, Inc., an appellant, is also located in Geneva
County. It was incorporated in 2006 as a nonprofit religious
corporation under Alabama law. Stephen Etheridge, the other
appellant, is the pastor of Burns Church, Inc.
II. Facts and Procedural History
Burns Assembly of God Church has maintained a house of
worship in Geneva County for close to 100 years. For many
years, Burns Assembly of God Church has been affiliated with
both the District Council and the General Council. In October
2002, the members of Burns Assembly of God Church called
Etheridge to be their pastor. In that capacity, Etheridge also
served as chairman of the board of directors of the church.
At some point, Etheridge and the directors voted to
excommunicate a number of church members whom Etheridge and
the directors believed to be contentious and disruptive, who
were not tithing as required by the standards for church
membership in the bylaws of Burns Assembly of God Church, or
4
1130539
who were no longer actively attending worship services, which
is a cause for discipline under the bylaws. The course of
action chosen by Etheridge and the directors
caused
disharmony
and contention between, on the one side, Etheridge, the
directors, and the remaining members (hereinafter referred to
collectively as "the Etheridge faction") and, on the other
side,
the
excommunicated
members
("the
excommunicated
faction"). The excommunicated faction did not appeal the
decision on excommunication, as allowed by the bylaws.
However, the excommunicated faction did request a
hearing
with
the District Council, whose leaders met with approximately 40
people who expressed their concerns about Etheridge's
leadership.1
The excommunicated faction continued to assemble and to
meet for weekly worship at another location, also under the
name Burns Assembly of God Church. The excommunicated faction
In 2005, Joe Cotton, one of the excommunicated members
1
and a former director, sued Etheridge and Burns Assembly of
God Church, asking the trial court for a judgment declaring
that his excommunication from membership in the church was
improper. Etheridge and Burns Assembly of God Church moved to
dismiss Cotton's action on the ground that matters of church
membership are not to be decided by civil courts. On January
16, 2008, the trial court entered a summary judgment against
Cotton.
5
1130539
associated itself with the District Council, which instructed
Etheridge and the directors to seek to restore the
excommunicated faction to fellowship pursuant to the General
Council's bylaws and the bylaws of Burns Assembly of God
Church. The District Council attempted, without success, to
mediate the dispute between the Etheridge faction and the
excommunicated faction.
The District Council recognized the excommunicated
faction as being the only true members of Burns Assembly of
God Church. The excommunicated faction operated under the
District Council's authority, adhered to Assemblies of God
doctrines, and retained the District Council's suggested
constitution and bylaws. The excommunicated faction appointed
a board of trustees and officers and, in time, chose a pastor.
The Etheridge faction incorporated as a nonprofit corporation
and took the corporate name of Burns Assembly of God, Inc.
Etheridge served as president of Burns Assembly of God,
Inc. He was also serving as pastor of the church operating as
Burns Assembly of God, Inc., when the District Council
announced its decision to remove him as pastor, to revoke his
ministerial credentials, to dissolve the board of trustees of
6
1130539
Burns Assembly of God, Inc., and to place Burns Assembly of
God, Inc., under the supervision of the District Council.
Etheridge challenged his dismissal under a provision of the
bylaws of the General Council, and the District Council
subsequently rescinded its actions.
After further attempts at reconciliation failed, the
Dothan Sectional Committee of the District Council sent
Etheridge and Burns Assembly of God, Inc., a letter in which
it recommended that the church "come under the supervision of
the
Dothan
Sectional
Committee."
Otherwise,
the
letter
warned,
the Committee would "recommend to the District Presbytery the
withdrawal of endorsement of the pastor's credentials, and of
the church's affiliation with the Assemblies of God."
Several days later, the District Council voted to revoke
Etheridge's ministerial license on the grounds of a "general
inefficiency in ministry, a record of assembly breaking
instead of making, a contentious, non-cooperative spirit, and
arbitrary
rejection
of
district
counsel."
The
District
Council
forwarded its decision on Etheridge's dismissal to
the
General
Council's credentials committee for approval and notified
Etheridge of its decision regarding his dismissal.
7
1130539
While Etheridge's dismissal was pending before the
General Council, the members of Burns Assembly of God, Inc.,
voted unanimously to amend the portions of their church
constitution governing affiliation with the District Council
and the General Council and the disposition of property upon
disaffiliation from the Assemblies of God. A
representative of
the District Council testified that Burns Assembly of God,
Inc., had the authority to adopt those amendments and that the
District Council accepted the amendments.2
The following month, the General Council concurred with
the District Council's decision and revoked Etheridge's
ministerial license. Burns Assembly of God, Inc., then held a
special business meeting in which Burns Assembly of God, Inc.,
severed its affiliation with the Assemblies of God. Etheridge
served as chairman of this business meeting, contrary to the
District
Council's constitution
and
minutes.
District
Council
3
representatives were not present at this business meeting,
although the General Council's constitution required their
There is no indication in the record that the General
2
Council accepted those amendments.
"No minister dismissed by the Assemblies of God may be
3
allowed to pastor or have ministry in an Assemblies of God
church." District Council Minutes § 3(b).
8
1130539
attendance. The District Council was notified of the
4
disaffiliation, and the corporate name of the church was
changed to Burns Church, Inc.
Etheridge did not appeal the General Council's revocation
of his ministerial license, as allowed by the General
Council's constitution. However, Etheridge continued to serve
as a pastor, and Burns Church, Inc., continued to use the
property on which the original Burns Assembly of God Church
had operated.
The District Council and the excommunicated faction sued
Etheridge, seeking a judgment declaring that the Burns
Assembly of God Church formed by the excommunicated faction is
a valid congregation under the laws of Alabama and declaring
it to be the rightful owner of the church property. On April
12, 2012, the trial court issued an order, stating:
"Burns Church, Inc., [and] its trustees are
indispensable and necessary parties to this action.
Either Burns Church, Inc.[,] or the Burns Assembly
"In the event the termination of affiliation with the
4
General
Council
of
the
Assemblies
of
God
is
under
consideration by an affiliated assembly, the pastor or board
shall invite the district officers to participate in a
specially-called
business
meeting
for
the
expressed
purpose
of
giving the district officers the opportunity to present the
case for continued General Council affiliation." Art. VI, §
3(D), General Council Const.
9
1130539
of God, Inc.[,] has title to the property in
question, right of possession of the property in
question[,] and [the] right to manage the affairs of
the church and hire or fire pastor and staff.[ ]
5
"....
"THEREFORE, IT IS ORDERED AND ADJUDGED AS FOLLOWS:
"1. That the matter for Declaratory Judgment is
dismissed.
"2. That [the] parties are entitled to a jury
trial on disputed issue [sic] of fact.
"3. If there are no issues as to any material
fact, ... Summary Judgment may lie."
(Capitalization in original.) Burns Church, Inc., was later
added as a defendant. The District Council and the
excommunicated faction filed an amended complaint asserting,
among other claims, claims of trespass and conversion and
seeking an eviction.
The trial court set the case for a jury trial to begin on
May 13, 2013. After a pretrial conference, the trial court
issued an order stating that "[t]he parties agreed that the
The trial court's summary-judgment order of November 12,
5
2013, clarifies that the April 12 order "referred to 'Burns
Assembly of God, Inc.,' which should have been 'Burns Assembly
of God,' the plaintiff." The trial court indicated that its
April 12 order did not determine "who owned the property, but
that either the Plaintiff or the Defendant owned the
property[,] which would be determined at trial or summary
judgment."
10
1130539
most critical issue at this time is a legal issue concerning
ownership of the property that would be best decided by the
Court" and that "all agreed that the jury trial scheduled for
May 13, 2013 should be continued."
The District Council and the excommunicated faction then
filed a separate quiet-title action against Etheridge and
Burns Church, Inc., and moved for a summary judgment in that
action. The trial court consolidated the declaratory-judgment
action and the quiet-title action into an action identified by
a single case number. Burns Church, Inc., and Etheridge
opposed the plaintiffs' motion for a summary judgment, and the
trial court held a hearing on the motion to determine the
rightful owner of the church property.
Burns Church, Inc., and Etheridge argued that the trial
court's April 12, 2012, order was a final judgment that
determined that Burns Church, Inc., was the true owner of the
property. Burns Church, Inc., and Etheridge also argued that
Burns Church, Inc., owned the property on the ground that
Burns Church, Inc., is the proper successor to Burns Assembly
of God, Inc. The District Council and the excommunicated
11
1130539
faction argued that as a result of prior conveyances, the
District Council held title to the church property.
On November 12, 2013, the trial court entered a summary
judgment in favor of the District Council and Burns Assembly
of God Church. Burns Church, Inc., and Etheridge filed a
postjudgment motion to alter, amend, or vacate the judgment,
which the trial court denied after a hearing. This appeal
followed.
III. Discussion
A. Jurisdictional Separation of Church and State
Before considering the merits of this appeal, this Court
should
have
determined whether
it
had
subject-matter
jurisdiction over this ecclesiastical dispute. This Court has
recognized that it is our judicial duty "to consider lack of
subject matter jurisdiction ex mero motu." Ex parte Smith, 438
So. 2d 766, 768 (Ala. 1983). "As is the case with all
churches, the courts will not assume jurisdiction, in fact
[have] none, to resolve disputes regarding their spiritual or
ecclesiastical affairs." Abyssinia Missionary Baptist Church
v. Nixon, 340 So. 2d 746, 748 (Ala. 1976). The courts lack
12
1130539
jurisdiction over ecclesiastical disputes because of the
jurisdictional separation of church and state.
"In
accordance
with
the
principles
of
our
institutions and the organic law [Art. I, § 3, Ala.
Const. 1901 (religious freedom)], the courts refrain
from interfering when the office or functions are
purely ecclesiastical or spiritual, disconnected
from any fixed emoluments, salary, or other
temporalities."
State ex rel. McNeill v. Bibb St. Church, 84 Ala. 23, 33, 4
So. 40, 40 (1888). The jurisdictional separation of the
institution of the church from the institution of the state is
a fundamental part of the English common law; it predates
Magna Carta and remains in force in Alabama. See § 1-3-1,
6
Ala. Code 1975 ("The common law of England, so far as it is
not inconsistent with the Constitution, laws and institutions
of this state, shall, together with such institutions and
laws, be the rule of decisions, and shall continue in force,
except as from time to time it may be altered or repealed by
the Legislature.").
See Yates v. El Bethel Primitive Baptist Church, 847 So.
6
2d 331, 352 (Ala. 2002) (Moore, C.J., dissenting) ("[T]he
principle of the institutional separation of church and state
became firmly established in the common-law jurisprudence of
England and thereafter, as a result, in the jurisprudence of
America."(surveying history of Magna Carta)).
13
1130539
Under § 1-3-1, the jurisdictional separation of church
and state is also "an institution" of Alabama law. The word
institution, as used in § 1-3-1, means "[a]n elementary rule,
principle, or practice." Black's Law Dictionary 918 (10th ed.
2014).
Noah
Webster
defined
"institution"
as
an
"[e]stablishment; that which is appointed, prescribed, or
founded by authority and intended to be permanent.... We apply
the word institution to laws, rites, and ceremonies, which are
enjoined by authority as permanent rules of conduct or of
government." Noah Webster, American Dictionary of the English
Language "Institution" (1828).
Thus, while the jurisdictional separation of church and
state is part of our common law, it is also an "institution,"
i.e., an established, elementary, and permanent rule of law.
The Court should apply this rule of law in this and all
ecclesiastical disputes, with the understanding that the
jurisdictional separation of church and state binds both
church and state to their respective jurisdictions
and
spheres
of authority.
B. Courts Have No Jurisdiction Over This Ecclesiastical
Dispute
14
1130539
The question presented is which faction of members of the
original Burns Assembly of God Church has the right to control
the use and disposition of the property -- the Etheridge
faction or the excommunicated faction. In this intra-church
ecclesiastical dispute, the Court must look to the decisions
made within the structure of church government.
"Where
factional
divisions
occur
in
an
ecclesiastical body, the rule of the civil courts is
that 'the title to church property ... is in that
part of [the ecclesiastical body] which is acting in
harmony with its own law, and the ecclesiastical
laws, and usages, customs, and principles which are
accepted among them before the dispute began, are
the standards for determining which party is
right.'"•
Gewin v. Mount Pilgrim Baptist Church, 166 Ala. 345, 349, 51
So. 947, 948 (1909) (quoting Reorganized Church of Jesus
Christ of Latter-Day Saints v. Church of Christ, 60 F. 937,
953 (1894)) (emphasis added).
The Assemblies of God is a hierarchical church with a
presbyterian form of government, with "authority in an
ascending order of bodies, each of which is composed by
representatives of the laity and the clergy." Calvin Massey,
Church Schisms, Church Property, and Civil Authority, 84 St.
John's L. Rev. 23, 26 n.5 (2010). The Assemblies of God's form
15
1130539
of church government blends elements of congregational
autonomy with a cooperative system of oversight and
accountability provided by ascending levels of church
councils. See Atkins v. Walker, 284 N.C. 306, 314, 200 S.E.2d
641, 646 (1973) ("A denomination may be, in its government,
congregational in part and connectional in part."); Western
Conference of Original Free Will Baptists of N.C. v. Creech,
256 N.C. 128, 140, 123 S.E.2d 619, 627 (1962) ("A church may
be congregational in some respects and connectional in
others."); 66 Am. Jur. 2d Religious Societies § 2 (2014)
(same).
The Assemblies of God has the unquestioned right of
ecclesiastical
government
of
all
the
members,
local
assemblies, and officers within its fellowship.
"'The right to organize voluntary associations to
assist in the expression and dissemination of any
religious doctrine, and to create tribunals for the
decision of controverted questions of faith within
the
association,
and
for
the
ecclesiastical
government
of
all
the
individual
members,
congregations, and officers within the general
association, is unquestioned. ... It is of the
essence of these religious unions, and of their
right to establish tribunals for the decisions of
questions arising among themselves, that those
decisions should be binding in all cases of
ecclesiastical cognizance, subject only to such
appeal as the organism itself provides for.'"
16
1130539
Hundley v. Collins, 131 Ala. 234, 245, 32 So. 575, 579 (1902)
(quoting Watson v. Jones, 80 U.S. (13 Wall.) 679, 729 (1871)).
The Court has stated that "[t]he courts will not interfere
with mere factional differences arising in ecclesiastical
bodies, or in disparate interpretations of doctrine. Such
matters are left for settlement to the societies." Davis v.
Ross, 255 Ala. 668, 671, 53 So. 2d 544, 546 (1951).
"[T]he civil courts will not interfere in case of a
division in a religious society unless property
rights are affected, nor even then if the basis of
the
schism
is
due
merely
to
a
disparate
interpretation of doctrine. Such matters must be
settled by the society itself."
Mount Olive Primitive Baptist Church v. Patrick, 252 Ala. 672,
674, 42 So. 2d 617, 618 (1949) (emphasis added). The basis of
the present dispute is a disparate interpretation of church
doctrine, constitutions, and
bylaws.
In such cases, the United
States Supreme Court has explained:
"There are occasions when civil courts must draw
lines between the responsibilities of church and
state for the disposition or use of property. Even
in those cases when the property right follows as an
incident from decisions of the church custom or law
on ecclesiastical issues, the church rule controls."
17
1130539
Kedroff v. St. Nicholas Cathedral of Russian Orthodox Church
in N. America, 344 U.S. 94, 120-21 (1952) (footnote omitted;
emphasis added).
The District Council classifies mature local churches
within the Assemblies of God as "[s]overeign [a]ssemblies"
with "their full share of responsibility for the maintenance
of Scriptural order." Art. XI, § 2(b), District Council Const.
The District Council also recommends that local church boards
"be authorized ... to remove from the list of active [church]
members all names of those ... who may have fallen into sin
and whose lives may have become inconsistent with the
standards and teachings of the assembly." Art. I, § 6,
Suggested Constitution and By-Laws for Local Assemblies. At
the same time, such assemblies are "organized under the
supervision of the district officiary and shall be amenable to
the district in all matters which affect the peace and harmony
of the fellowship." Id. (emphasis added). Burns Assembly of
God Church was required to "meet the standards approved by the
General Council and the District Council in regard to
membership, doctrine, order, methods, conduct, and all other
18
1130539
matters affecting the harmony of the fellowship as a whole."
Art XI, § 1, District Council Const. (emphasis added).
Accordingly, a ruling by this Court or the trial court
for either the Etheridge faction or the
excommunicated faction
constitutes a usurpation of the District Council's and the
General Council's ecclesiastical jurisdiction over Burns
Assembly of God Church. If, on the one hand, this Court
affirms the judgment of the trial court and rules for the
District Council and the excommunicated faction (as the Court
has done), this Court must necessarily conclude that the
District Council has the authority under its ecclesiastical
constitution to intervene in the local church dispute on
behalf of the excommunicated faction, thus effectively
controlling the church property. The United States Supreme
Court has explained:
"'[C]ivil courts do not inquire whether the relevant
(hierarchical) church governing body has power under
religious law (to decide such disputes).... Such a
determination
...
frequently
necessitates
the
interpretation of ambiguous religious law and usage.
To permit civil courts to probe deeply enough into
the allocation of power within a hierarchical church
so as to decide ... religious law (governing church
polity) ... would violate the First Amendment in
much the same manner as civil determination of
religious doctrine.'"
19
1130539
Serbian E. Orthodox Diocese for United States of America &
Canada v. Milivojevich, 426 U.S. 696, 708-09 (1976) (quoting
Maryland & Virginia Eldership of the Churches of God v. Church
of God at Sharpsburg, Inc., 396 U.S. 367, 369 (1970) (Brennan,
J., concurring)). Likewise, this Court
should have declined in
this case to explore the allocation of ecclesiastical
authority between local Assemblies of God churches and the
District Council, as doing so violates the jurisdictional
separation of church and state.
If, on the other hand, the Court were to reverse the
trial court's judgment, the Court would essentially declare
that the members of the Etheridge faction are true church
members and that the members of the excommunicated faction are
not, even though the District Council recognizes them as such.
This would constitute a rejection of the ecclesiastical
decision
of
the
District
Council,
contrary
to
the
jurisdictional separation of church and state. Because
Alabama's courts have no jurisdiction "to revise
ordinary
acts
of church discipline or pass upon controverted rights of
membership," Gewin, 166 Ala. at 349, 51 So. at 948, this Court
20
1130539
cannot question the District Council's decision to intervene
in the dispute on behalf of the excommunicated faction.
In addition, Etheridge is both chairman of the board of
directors and corporate president of Burns Church, Inc., and
thus the principal officer of the alleged property-holding
corporation. In early June 2008, the General Council revoked
Etheridge's ministerial license with the Assemblies of God.
However, Etheridge continued to pastor Burns Assembly of God,
Inc., after he had been dismissed from the Assemblies of God.
Etheridge presided over the business meeting in which the
members of Burns Assembly of God, Inc., voted to sever
affiliation with the Assemblies of God. If the Court should
conclude that Burns Church, Inc., owns the church property,
the Court would thereby countenance the proceedings Etheridge
led at Burns Assembly of God, Inc., after he had been
dismissed from the Assemblies of God. In effect, the Court
would be overruling Etheridge's dismissal from the Assemblies
of God, which was affirmed by the General Council, the highest
ecclesiastical body in the Assemblies of God. Similar to
Milivojevich, supra, the resolution of the dispute
between
the
Etheridge faction and the excommunicated faction affects not
21
1130539
only
church
property,
but
also
the
structure
and
administration of the Assemblies of God.
"Resolution of the religious disputes at issue
here affects the control of church property in
addition to the structure and administration of the
American-Canadian Diocese. This is because the
Diocesan Bishop controls respondent Monastery of St.
Sava and is the principal officer of respondent
property-holding corporations. Resolution of the
religious dispute over Dionisije's defrockment
therefore determines control of the property. Thus,
this case essentially involves not a church property
dispute, but a religious dispute the resolution of
which under our cases is for ecclesiastical and not
civil tribunals. Even when rival church factions
seek resolution of a church property dispute in the
civil courts there is substantial danger that the
State will become entangled in essentially religious
controversies or intervene on behalf of groups
espousing particular doctrinal beliefs."
Milivojevich, 426 U.S. at 709 (emphasis added); see also Ex
parte Central Alabama Conference, 860 So. 2d 865, 867 (Ala.
2003) ("[T]he First Amendment prohibits a court's resolving
property disputes on the basis of religious practice or
doctrine.").
IV. Conclusion
The mere fact that this intra-church dispute affects
property rights does not give the Court jurisdiction over this
action. This Court
lacks
jurisdiction to adjudicate
the rights
of the parties as to the church property because this church
22
1130539
schism is based upon disparate interpretations of church
governing documents and doctrine and conflicting claims of
church membership. These matters must be settled by the
District Council and the General Council, not by the courts.
I believe that this Court should have dismissed this appeal
for
lack
of
subject-matter
jurisdiction.
Therefore,
I
dissent.
23 | October 24, 2014 |
06c3f9e9-44cc-41a5-914b-953debc64d6e | Ralph Richards, as personal representative of Mary Richards, deceased v. Baptist Health System, Inc., d/b/a Walker Baptist Medical Center | N/A | 1131175 | Alabama | Alabama Supreme Court | Rel: 12/19/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
____________________
1131175
____________________
Ralph Richards, as personal representative of Mary Richards,
deceased
v.
Baptist Health System, Inc., d/b/a Walker Baptist Medical
Center
Appeal from Walker Circuit Court
(CV-09-900332)
MAIN, Justice.
AFFIRMED. NO OPINION.
See Rule 53(a)(1) and (a)(2)(F), Ala. R. App. P.
1131175
Stuart, Bolin, Parker, Shaw, Wise, and Bryan, JJ.,
concur.
Murdock, J., concurs specially.
Moore, C.J., dissents.
2
1131175
MURDOCK, Justice (concurring specially).
Based on the rationale I expressed in my dissent in Wood
v. Wayman, 47 So. 3d 1212, 1219-20 (Ala. 2012), I believe the
trial court erred in entering a summary judgment in favor of
the defendant in the present case. For all that appears, the
trial court based its decision on the opinion of this Court in
Downtown Nursing Home, Inc. v. Pool, 375 So. 2d 465 (Ala.
1979). As I discussed in my dissent in Wood v. Wayman,
however, that case and the opinion of this Court in Strickland
v. Mobile Towing & Wrecking Co., 293 Ala. 348, 303 So. 2d 98
(1974), the case upon which Downtown Nursing Home, Inc. v.
Pool relied, are no longer good law. That said, we do not
have before us a request to overrule Wood v. Wayman nor, for
that matter, an argument similar to the one I made in my
dissent in Wood v. Wayman. I therefore concur in affirming
the summary judgment.
3
1131175
MOORE, Chief Justice (dissenting).
I agree with the appellant Ralph Richards ("Ralph") that
his application for letters of administration naming him
personal representative of the estate of his mother, Mary
Richards, relates back to his timely filing of a wrongful-
death action on her behalf. I therefore respectfully dissent
from the majority's
affirmance of the summary
judgment
entered
for Baptist Health System, Inc., d/b/a/ Walker
Baptist
Medical
Center ("Baptist Health").
I. Factual Background
The facts in this case are undisputed. Mary Richards died
on September 24, 2007. Her son, Ralph, filed a wrongful-death
1
complaint on her behalf on September 23, 2009, one day before
the two-year statute of limitations for a wrongful-death
action expired. See § 6-5-410(d), Ala. Code 1975. The caption
of the complaint describes the plaintiff as "Ralph Richards as
Personal Representative of Mary Richards, deceased." Alabama
law provides that "[a] personal representative may
commence an
action" based on an alleged wrongful death. § 6-5-410(a), Ala.
The complaint alleges that Mary Richards "became choked
1
on food and strangled to death" while she was a patient at
Walker Baptist Medical Center.
4
1131175
Code 1975. Although the caption of the timely filed complaint
identifies Ralph as Mary's personal representative, Ralph did
not apply for letters of administration for his mother's
estate until July 12, 2010, over nine months after the
expiration of the two-year limitations period for filing the
wrongful-death action. The Walker Probate Court issued the
letters of administration on August 3, 2010.
Baptist Health filed its answer on October 15, 2009, and
moved for a summary judgment on March 18, 2014, arguing that
Ralph's formal appointment as personal representative after
the expiration of the statutory limitations period did not
relate back to the timely filing of the wrongful-death action.
In the trial court Baptist Health relied on Downtown Nursing
Home, Inc. v. Pool, 375 So. 2d 465 (Ala. 1979), which cited
Strickland v. Mobile Towing & Wrecking Co., 293 Ala. 348, 303
So. 2d 98 (1974), for the holding that "any action by the
administrator occurring prior
to his appointment was
a
nullity
and therefore there was nothing to which an amendment could
relate back." 375 So. 2d at 466. On June 6, 2014, the trial
court entered a summary judgment for Baptist Health.
5
1131175
II. Standard of Review
"Where, as here, the facts of a case are essentially
undisputed, this Court must determine whether the trial court
misapplied the law to the undisputed facts, applying a de novo
standard of review." Continental Nat'l Indem. Co. v. Fields,
926 So. 2d 1033, 1035 (Ala. 2005).
III. Analysis
A. Relation Back
In Ogle v. Gordon, 706 So. 2d 707 (Ala. 1997), this Court
overruled Strickland v. Mobile Towing & Wrecking Co., supra,
the case upon which Pool had relied. See Pool, 375 So. 2d at
466. Ogle held that the issuance of letters of administration
related back to the time the petition for letters for
administration was filed, which in that case was prior to the
expiration of the statutory limitations period for
a
wrongful-
death action. Because Ralph did not petition for letters of
administration
until
after
the
two-year
limitations
period
for
a wrongful-death action expired, this case is distinguishable
from Ogle on its facts.
Ogle, however, made the larger point that historically
letters of administration relate back to the time of death
6
1131175
"'"and validate the acts of the representative done in the
interim."'" 706 So. 2d at 709 (quoting McAleer v. Cawthon, 215
Ala. 674, 676, 112 So. 251, 253 (1927), quoting in turn 23
C.J. 1180, § 400). This Court described that principle as "a
rule of practically universal recognition." Ogle, 706 So. 2d
at 709 (quoting McAleer, 215 Ala. at 675, 112 So. at 253). See
Nance v. Gray, 143 Ala. 234, 241, 38 So. 916, 918 (1905)
(holding that letters testamentary "related back, and
validated [prior] acts as executor"). Ogle also quoted a
Florida Supreme Court case for the proposition that "'where a
wrongful death action was instituted by a party "as
administrator," his subsequent appointment as such validated
the proceeding on the theory of relation back.'" Ogle, 706 So.
2d at 709 (quoting Griffin v. Workman, 73 So. 2d 844, 846
(Fla. 1954)). That proposition describes the facts of this
case: Ralph instituted the wrongful-death action "as Personal
Representative of Mary Richards," and he was subsequently
formally appointed to that position. See Wood v. Wayman, 47
So. 3d 1212, 1221 (Ala. 2010) (Murdock, J., dissenting)
(noting the majority's "failure to apply the well settled rule
7
1131175
concerning the relation back of a personal representative's
authority to the date of the decedent's death").
Under this ancient doctrine, whether Ralph filed his
2
petition for letters of administration before or after the
expiration of the statutory wrongful-death limitations period
is immaterial. The issuance of the letters testamentary
validated his acts as administrator from the time of Mary's
death. This result is in harmony with § 43-2-831, Ala. Code
1975, which states that "[t]he powers of a personal
representative relate back in time to give acts by the person
appointed which are beneficial to the estate occurring prior
to appointment the same effect as those
occurring thereafter."
In Ogle, this Court cited § 43-2-831 as a codification of the
doctrine of relation back as applied to a personal
representative. 706 So. 2d at 710. In Wayman, the majority
reasoned that § 43-2-831 applied only to actions "beneficial
to the estate" and that a wrongful-death action by contrast
benefited the next of kin and not the estate per se. 47 So. 3d
"The doctrine that whenever letters of administration or
2
testamentary are granted they relate back to the intestate's
or testator's death is an ancient one. It is fully 500 years
old."
J.B.G.,
Annotation,
Relation
Back
of
Letters
Testamentary or of Administration, 26 A.L.R. 1359,
1360 (1923)
(cited in Ogle, 706 So. 2d at 709 n.1).
8
1131175
at 1217. However, a case quoted in Ogle sensibly states: "We
think it idle to urge that the rule cannot apply in this case
because the proceeds of any judgment obtained would go to next
of kin only, and not in the usual course of administration.
There is no valid reason for sustaining the rule in one case
and disregarding it in the other." Archdeacon v. Cincinnati
Gas & Elec. Co., 76 Ohio St. 97, 107, 81 N.E. 152, 154 (1907).
Ralph argues that we should follow our more recent case
on this matter, Ex parte Tyson Foods, Inc. 146 So. 3d 1041
(Ala. 2013), in which we applied the relation-back doctrine of
Rule 17, Ala. R. Civ. P., to cure a capacity defect in a
wrongful-death action. That rule provides:
"No action shall be dismissed on the ground that it
is not prosecuted in the name of the real party in
interest until a reasonable time has been allowed
after objection for ratification of commencement of
the action by, or joinder or substitution of, the
real party in interest; and such ratification,
joinder, or substitution shall have the same effect
as if the action had been commenced in the name of
the real party in interest."
Rule 17(a), Ala. R. Civ. P. Ralph, in his capacity as Mary's
personal representative, is the real party in interest in this
wrongful-death case. He sued as such. However, his status was
imperfect because he lacked formal appointment. In Ogle, this
9
1131175
Court stated that "'"the party plaintiff, though lame in one
particular, might be allowed to cure that defect and proceed
to a determination of the merits."'" 706 So. 2d at 709
(quoting Griffin v. Workman, 73 So. 2d at 846, quoting in turn
Archdeacon, 76 Ohio St. at 107, 81 N.E. at 154).
Because Ralph, the real party in interest, has cured the
defect and because that cure, as explained above, relates back
to the time of Mary's death, he is entitled to "proceed to a
determination of the merits." See Tyson, 146 So. 3d at 1046
(noting that "the goal of relation-back principles is 'to
prevent parties against whom claims are made from taking
unjust advantage of otherwise inconsequential pleading errors
to
sustain
a
limitations
defense'"
(quoting
Advisory
Committee
Note to Rule 15, Fed. R. Civ. P.)). In this case, where the
plaintiff who timely filed and the plaintiff who later
qualified are one and the same, the defendant has suffered no
prejudice. In Tyson, speaking of the addition of a party
under Rule 17(a) after the expiration of the limitations
period, we stated:
"'"As long as defendant is fully apprised of the
claim arising from specified conduct and has fully
prepared to defend the action against him, his
ability to protect himself will not be prejudicially
10
1131175
affected if a new plaintiff is added, and he should
not be permitted to invoke a limitations defense."'"
146 So. 3d at 1045 (quoting Board of Water & Sewer Comm'rs of
the City of Mobile v. McDonald, 56 Ala. App. 426, 430, 322 So.
2d 717, 721 (Civ. App. 1975), quoting in turn 6 Charles A.
Wright & Arthur R. Miller, Federal Practice and Procedure §
1501 (emphasis added)).
The same rule should logically apply where the plaintiff
remains the same and subsequently satisfies the requisite
formalities. "[I]t is usually held that an amendment changing
capacity in which a plaintiff sues does not change the cause
of action so as to let in the defense of limitations."
Annotation, Amendment of
Pleadings after Limitation has Run by
Change in Capacity in which Suit is Prosecuted, 74 A.L.R.
1269, 1270 (1931). See also Baltimore & Ohio Sw. R.R. v.
Carroll, 280 U.S. 491, 494 (1930) (noting that "an amendment
for the first time setting up the right of the plaintiff to
sue as personal representative" did not introduce a new cause
of action, "and therefore it related back to the beginning of
the action" (quoted in Ex parte Godfrey, 275 Ala. 668, 674,
158 So. 2d 107, 113 (1963))); New York Central & Hudson River
R.R. v. Kinney, 260 U.S. 340, 346 (1922) (holding that "when
11
1131175
a defendant has had notice from the beginning that the
plaintiff sets up and is trying to enforce a claim against it
because of specified conduct, the reasons for the statute of
limitations do not exist"); Missouri, Kansas & Texas Ry. v.
Wulf, 226 U.S. 570, 576 (1913) (holding that "an amendment
that, without in any way modifying or enlarging the facts upon
which the action was based, in effect merely indicated the
capacity in which the plaintiff was to prosecute the action"
was a change "in form rather than in substance ....
[T]herefore it related back to the beginning of the suit");
and Deupree v. Levinson, 186 F.2d 297, 301 (6th Cir. 1950)
(applying Wulf and noting that "[a]lso in the instant case
there is no change in the party bringing the action, but
simply an amendment to his capacity").
B. Capacity and Waiver
Had an objection to Ralph's qualification been raised in
Baptist Health's answer of October 15, 2009, the defect in
Ralph's status could have been cured at the outset of the
case. Although Ralph fully qualified as the personal
representative of his mother's estate on August 3, 2010, when
the probate court issued letters of administration and
12
1131175
approved his bond, Baptist Health nonetheless did not raise
the issue of his qualification as personal representative
until the filing of its summary-judgment motion on March 18,
2014, over four years after Ralph filed his complaint. Rule
9(a), Ala. R. Civ. P., states:
"When a party desires to raise an issue as to ...
the authority of a party to sue or be sued in a
representative capacity, the party desiring to raise
the issue shall do so by specific negative averment,
which shall include such supporting particulars as
are peculiarly within the pleader’s knowledge."
(Emphasis added.)
In its answer, the closest Baptist Health comes to
satisfying Rule 9(a) is its "Third Defense," which states:
"Defendant denies the material averments of the complaint and
demands strict proof thereof." Such a general statement is
inadequate to preserve an objection to capacity. "It has long
been held in Alabama that lack of capacity cannot be raised
under a general denial ... and this will continue to be true
under the rule, which requires a 'specific negative
averment.'" Committee Comments on 1973 Adoption of Rule 9,
Ala. R. Civ. P.
"[U]nder Alabama law an administrator or personal
representative is not required to prove his capacity
as such before bringing a wrongful death action, so
13
1131175
long as the administrator alleges in the complaint
that he is the proper party to bring the action and
the defendant does not specifically deny his
capacity. Even before the adoption of the [Alabama
Rules of Civil Procedure], the law in this state was
that proof of capacity was not required until
capacity was challenged and that a plea to the
merits which did not challenge capacity waived that
defense."
Alabama Power Co. v. White, 377 So. 2d 930, 933 (Ala. 1979)
(emphasis added). Further, "by pleading the general
issue,
the
defendant admitted the capacity and title stated in the
complaint." Id. (quoting Louisville & Nashville R.R. v.
Trammell, 93 Ala. 350, 353, 9 So. 870, 872 (1890) (emphasis
added)). Additionally, "'[w]hen the general issue is pleaded
in an action of this sort, ... and there is no special plea
denying the existence of the representative capacity, in
which
the plaintiff sues, NO ISSUE IS THEREBY MADE REQUIRING PROOF
OF THAT RELATION.'" Alabama Power Co., 377 So. 2d at 934
(quoting Dobson v. Neighbors, 228 Ala. 407, 408, 153 So. 861,
861 (1934) (capitalization in original)).
IV. Conclusion
For the above reasons I would reverse the summary
judgment for Baptist Health. Ralph's status as
Mary Richards's
personal representative was averred in the complaint and was
14
1131175
not specifically denied by Baptist Health in its answer.
Furthermore, under well settled doctrine that has been
acknowledged for centuries, Ralph's appointment as personal
representative related back to Mary's death.
15 | December 19, 2014 |
d87f7752-4163-43be-b48b-40236b9c9c1d | Jim Burke Automotive, Inc. v. Beavers | 674 So. 2d 1260 | 1940564 | Alabama | Alabama Supreme Court | 674 So. 2d 1260 (1995)
JIM BURKE AUTOMOTIVE, INC.
v.
Detrecia BEAVERS.
1940564.
Supreme Court of Alabama.
September 29, 1995.
Opinion on Overruling of Rehearing February 23, 1996.
*1261 William A. Davis III and Steven T. McMeekin of Starnes & Atchison, Birmingham, for appellant.
Clay Hornsby of Morris, Haynes, Ingram & Hornsby, Alexander City, for appellee.
KENNEDY, Justice.
The defendant, Jim Burke Automotive, Inc. ("Jim Burke"), sold a used automobile to the plaintiff, Detrecia Beavers, and, as agent of an insurer, also sold her a credit disability policy. Jim Burke appeals from the denial of a motion to compel Beavers to arbitrate the claims presented in her action against Jim Burke.
Beavers's action involves her purchase of the credit disability insurance in conjunction with her purchase and financing of the car. Beavers became disabled, and the insurer did not pay on the policy as she says Jim Burke represented that it would at the time she bought the policy. She sued Jim Burke, alleging fraud in the inducement. Based on a predispute arbitration agreement in the sales contract for the automobile, Jim Burke moved to compel arbitration. As indicated, the trial court denied that motion.
Even if the arbitration provision in the sales contract is broad enough to apply to matters involving the credit life disability policy, as Jim Burke argues on appeal, it still remains to be seen that the sales contract involved interstate commerce. A predispute agreement to arbitrate is not legally enforceable in our state courts unless it is contained in a contract that involves interstate commerce. See Allied-Bruce Terminix Companies, Inc. v. Dobson, ___ U.S. ___, 115 S. Ct. 834, 130 L. Ed. 2d 753 (1995); Ala.Code 1975, § 8-1-41(3).
Jim Burke offered no evidence in the trial court indicating that the contract had any involvement in interstate commerce. However, it argues that an agreement for the sale of an automobile, per se, involves interstate commerce.
It affirmatively appears from the record that Jim Burke has raised this argument for the first time on this appeal. There is no indication in the record that in seeking to compel arbitration Jim Burke asserted that it did not have to demonstrate that the contract involved interstate commerce, on the basis that its involvement with interstate commerce should be assumed, or on any other basis. In light of this, and the fact that Jim Burke did not demonstrate in the trial court that the contract involved interstate commerce, we affirm.
AFFIRMED.
ALMON, SHORES, COOK, and BUTTS, JJ., concur.
MADDOX and HOUSTON, JJ., dissent.
INGRAM, J., recused.
MADDOX, Justice (dissenting).
The majority affirms an order of the trial court refusing to compel arbitration of a dispute among the purchaser of a used automobile, the seller of the automobile, and a credit disability insurance carrier on the ground that the seller "did not demonstrate in the trial court that the contract involved interstate commerce." 674 So. 2d at 1261. Because the majority affirms on this basis, I state some of the basic facts to show that this contract did, in fact, involve interstate commerce and is covered by the provisions of the Federal Arbitration Act.
On June 11, 1993, the plaintiff, Detrecia Beavers, purchased a used 1990 Chevrolet Lumina from the defendant, Jim Burke Automotive, Inc. Simultaneously with Beavers's purchase of the automobile, she also purchased credit disability insurance, to *1262 make payments on the vehicle in the event she became disabled.
Subsequently, Beavers, claiming to have become disabled because of a back injury and depression, filed a claim for disability benefits under the credit disability insurance policy. The insurance carrier, American Bankers Insurance Group, an out-of-state corporation, subsequently denied her claim for benefits.
When Beavers purchased the automobile and the credit disability insurance, she executed a "retail buyer's order," which read, in part:
(Emphasis added.) The reverse side of the buyer's order contained the following description of the dispute resolution process:
After American Bankers' had denied Beavers's claim under the credit disability insurance policy, she sued American Bankers and Jim Burke Automotive, Inc. In Count I, Beavers alleged that both Jim Burke and American Bankers committed fraud when she purchased the automobile and credit disability insurance. Her fraud count includes an allegation of misrepresentation of material facts, suppression, deceit, and fraudulent deceit.
Based upon the arbitration agreement between Beavers and Jim Burke contained in the retail buyer's order, Jim Burke moved on October 10, 1994, to compel arbitration. In the motion, Jim Burke sought require the plaintiff to arbitrate her claims against Jim Burke pursuant to the parties' arbitration agreement, basing its motion to compel arbitration upon § 2 of the Federal Arbitration Act. The trial court held a hearing on the motion on December 13, 1994, and denied it.
Did the trial court err in holding that the predispute arbitration agreement in this case was unenforceable? Clearly, it did. If there was any remaining doubt about the enforceability of such predispute arbitration agreements, and about whether the Federal Arbitration Act preempted conflicting state law, the Supreme Court of the United States removed that doubt in Allied-Bruce Terminix Companies, Inc. v. Dobson, ___ U.S. ___, 115 S. Ct. 834, 130 L. Ed. 2d 753 (1995), a case appealed from this Court. In that case, this Court held, as it had held on several other occasions and as it holds in the present case, that the predispute arbitration agreement was unenforceable. The Supreme Court of the United States plainly and specifically said that this Court had incorrectly *1263 interpreted the provisions of the Federal Arbitration Act:
___ U.S. at ___, 115 S. Ct. at 837.
In interpreting the provisions of the Federal Arbitration Act, specifically § 2 of that Act, "as reaching to the limits of Congress' Commerce Clause power," as Allied-Bruce Terminix requires, the only question is whether this particular agreement is within the purview of the Act. Clearly, it is, especially given the "broader reading" of that Act.
Congress, exercising its power to regulate interstate commerce, has specifically authorized the regulation of the sale of used automobiles, and there could never be a clearer case of coverage of the Federal Arbitration Act. See Code of Federal Regulations, Title 16, Commercial Practices, Chapter 1, Federal Trade Commission, Subchapter D, Trade Regulation Rules, Part 455, Used Motor Vehicle Regulation Rule. 16 C.F.R. 455.
The arbitration agreement involved in this case was included as a part of the retail buyer's order, and because of that I cannot see how there can be any question that the transaction involved interstate commerce, as interpreted in Allied-Bruce Terminix, and that the terms of the predispute arbitration agreement are plain and unambiguous and apply to the claims against Jim Burke. It covers "[a]ll disputes and controversies of every kind and nature between the parties hereto arising out of or in connection with this contract, its subject matter or ... any claim alleging fraud in fact, fraud in the inducement, deceit, or suppression of any material fact" (emphasis added).
Did the plaintiff agree with Jim Burke that any claim alleging fraud in fact, fraud in the inducement, deceit, or suppression of any material fact would be submitted to arbitration? Obviously, she did. Because she did, I dissent, as I have on several other occasions *1264 when this Court has refused to compel arbitration under similar circumstances. See, Ex parte Alabama Oxygen Co., 433 So. 2d 1158, 1168 (Ala.1983) (Maddox, J., dissenting), reversed, York International v. Alabama Oxygen Co., 465 U.S. 1016, 104 S. Ct. 1260, 79 L. Ed. 2d 668 (1984), after remand, 452 So. 2d 860 (Ala.1984). In Continental Grain Co. v. Beasley, 628 So. 2d 319, 323 (1993), in a special concurrence, I stated that this Court should be applying a test like the one now mandated by the United States Supreme Court in its Allied-Bruce Terminix opinion, supra:
628 So. 2d at 323. I realize that the United States Supreme Court denied certiorari review in Ex parte Warren, 548 So. 2d 157 (Ala.1989), cert. denied sub nom. Jim Skinner Ford, Inc. v. Warren, 493 U.S. 998, 110 S. Ct. 554, 107 L. Ed. 2d 550 (1989), which, like this case, involved the sale of an automobile, but in view of that Court's holding in Allied-Bruce Terminix, I do not believe great significance should be attached to that earlier denial of certiorari review in Ex parte Warren.
I realize that some vigorous dissents filed in the Allied-Bruce Terminix would compel the conclusion reached by the majority in this case, but even Justice Scalia said he would no longer dissent. Justice Scalia wrote:
___ U.S. at ___, 115 S. Ct. at 844-45.
A majority of this Court, like the Justices of the United States Supreme Court who dissented in Allied-Bruce Terminix, believe that the majority of the Justices of the Supreme Court of the United States have misinterpreted congressional intent. As I have already pointed out, I have always been of the opinion that the Supreme Court of the United States, in Southland Corp. v. Keating, 465 U.S. 1, 104 S. Ct. 852, 79 L. Ed. 2d 1 (1984), correctly interpreted congressional intent; therefore, I concur only with the result, which remands the cause to the trial court.
Because I believe that I am on the side of the majority of the Supreme Court of the United States, I am going to continue to dissent from judgments such as the one entered today in this case.
HOUSTON, J., concurs.
PER CURIAM.
"The party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and the existence of an arbitrable dispute. In order to prevail on an assertion of arbitrability, the moving party is required to produce some evidence which tends to establish its claim." In re American Freight System, Inc., 164 B.R. 341, 345 (D.Kan.1994), citing Engineers Association v. Sperry Gyroscope Co., 251 F.2d 133 (2d Cir.1957), cert. denied, 356 U.S. 932, 78 S. Ct. 774, 2 L. Ed. 2d 762 (1958), and Banque de Paris et des Pays-Bas v. Amoco Oil Co., 573 F. Supp. 1464, 1468 (S.D.N.Y. 1983). See also Goodwin v. Elkins & Co., 730 F.2d 99 (3d Cir.1984), cert. denied, 469 U.S. 831, 105 S. Ct. 118, 83 L. Ed. 2d 61 (1984); Nederlandse Erts-Tankersmaatschappij, N.V. v. Isbrandtsen Co., 339 F.2d 440, 442 (2d Cir.1964); Liberty University, Inc. v. Kemper Securities Group, Inc., 758 F. Supp. 1148 (W.D.Va.1991); Pioneer Supply Co. v. American Meter Co., 484 F. Supp. 227, 229 (W.D.Okla.1979); Penalver v. Compagnie De Navigation Frutiere, Matouba, 428 F. Supp. 1070, 1072 (E.D.N.Y.1977).[1]
Jim Burke's motion to compel arbitration fails even to allege that the transaction involves interstate commerce; the closest it comes is to say that "when an agreement substantially affects interstate commerce and contains specific provisions requiring arbitration of disputes between the parties, that agreement is specifically enforceable under the Federal Arbitration Act." This is a general statement of the law, not an allegation that the transaction in question involves interstate commerce. Attached to the motion is a copy of the contract, but it does not show on its face that the transaction involves interstate commerce, certainly not so plainly as to require a reversal of the denial of the motion. Co-defendant American Bankers Life Assurance *1266 Company of Florida asserted in its answer that it was "a foreign corporation licensed to do business in the State of Alabama," but this fact is not cited in the record as a ground for granting Jim Burke's motion. A hearing was held, but it was not transcribed; thus, nothing presented at that hearing can be cited as a basis for reversing the denial of arbitration.
In short, Jim Burke has failed to show that on the record it met its burden of supporting its motion to compel arbitration.[2] Under the circumstances, this Court must affirm the circuit court's order denying that motion.
APPLICATION OVERRULED.
ALMON, SHORES, KENNEDY, COOK, and BUTTS, JJ., concur.
HOOPER, C.J., and MADDOX and HOUSTON, JJ., dissent.
HOOPER, Chief Justice (dissenting).
I must respectfully dissent. The majority is mistaken in resisting the strong federal policy in favor of arbitration as established by the Congress and as applied by the United States Supreme Court and the United States Court of Appeals for the Eleventh Circuit. While I agree with the majority that it is reasonable to require the party moving for arbitration to bear the burden of proving the existence of a contract calling for arbitration, I strongly disagree with the proposition that that same party should also bear the burden of proving the existence of an arbitrable dispute. In its opinion, the majority cites a string of weak, ancient, and nonbinding cases. One of the main purposes of arbitration is to avoid the time and expense of a trial. The majority opinion proposes that the parties to an arbitration agreement have a trial to determine whether there should be a trial. That assertion effectively undermines the very purposes for including an arbitration clause in a contract.
The United States Supreme Court is the final arbiter of federal law, including, specifically in regard to the problem now before us, the Federal Arbitration Act ("FAA"). If there is a United States Supreme Court case that offers this Court guidance and an Eleventh Circuit case that also offers it guidance, why does the majority cite a nearly 40-year-old case from the United States Court of Appeals for the Second Circuit?[3] Why cite a Kansas federal district court bankruptcy case that was not even appealed?[4]
It seems to me that the trial judge's determination as to whether a dispute should be arbitrated is best understood through the following analysis: The trial judge should determine two main issues, as a matter of law. First, is there a dispute that is within the scope of an arbitration agreement. Second, if so, is that dispute covered by the FAA, based upon whether the transaction involves interstate commerce.[5]
On the first issue, the party seeking to arbitrate the dispute should bear the burden of proving the existence of a contract calling for arbitration, e.g., by providing the court a *1267 copy of the contract. However, when that party produces that proof, the burden should then shift to the party opposing arbitration, who should then be required to present evidence showing that the dispute is outside the scope of the arbitration agreement.
I do not discuss the second issuewhether the transaction at issue in this case involves interstate commercebut I concur with Justice Maddox's discussion of that issue.
The task of the judicial branch of government is to interpret the law. Alabama Life Ins. & Trust Co. v. Boykin, 38 Ala. 510 (1863). In this case, this Court must determine whether the FAA applies and, if it does, then what effect, if any, it has on burdens of proof.
Section three of the FAA provides:
9 U.S.C. § 3. The Act speaks of the courts' power to decide whether a case is referable to arbitration, but the Act does not say which party has the burden of proving that the case is, or is not, referable to arbitration. The United States Supreme Court, the final interpreter of federal law, addressed this general issue in 1987.
The United States Supreme Court has held in two fairly recent casesShearson/American Express, Inc. v. McMahon, 482 U.S. 220, 107 S. Ct. 2332, 96 L. Ed. 2d 185 (1987), and Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 111 S. Ct. 1647, 114 L. Ed. 2d 26 (1992)that a party opposing arbitration on the basis that a Congressional act supersedes the FAA bears the burden of proving that the act on which that party is basing his claim supersedes the FAA. These cases, while distinguishable, are extremely persuasive.
The plaintiffs in McMahon and Gilmer sought to show that a Congressional act on which those parties were basing their claims superseded the FAA. In McMahon, customers brought tort, securities fraud, and RICO claims against a broker. One of the questions the Supreme Court addressed was whether the party opposing arbitration has the burden of showing that the case is not referable to arbitration. The Supreme Court said:
McMahon, 482 U.S. at 226-27, 107 S. Ct. at 2337-38. (Emphasis added.) See also Gilmer.
The plaintiff in our case, Beavers, does not even allege that a federal law precludes the application of the FAA. If a party asserting that a federal law preempts the FAA must bear the burden of proving the existence of a nonarbitrable dispute, how much more certainly should the burden of proof fall upon a party opposing arbitration, who makes no allegation that the FAA has been preempted? These two United States Supreme Court cases show just how strong a presumption in favor of arbitration that Court has. The rationale of these two cases gives clear guidance to this Court as to where to place the burden of proof. The majority has not followed that guidance.
In 1992, the United States Court of Appeals for the Eleventh Circuit also addressed *1268 the issue whether the party opposing arbitration has the burden to show that the case is not referable to arbitration. In Chastain v. Robinson-Humphrey Co., 957 F.2d 851 (11th Cir.1992), a securities firm had moved to compel arbitration of a customer's securities claims against the firm. The Court held:
957 F.2d at 855. When the Eleventh Circuit says "that party," it is referring to the party who "place[s] the making of the arbitration agreement in issue." According to the Eleventh Circuit, the burden is on the party opposing arbitration to show that the case is not referable to arbitration.
The majority does not cite any United States Supreme Court cases for the proposition that the party seeking arbitration has the burden of proof; it cannot. Furthermore, it does not cite any Eleventh Circuit cases for that proposition; it cannot. It cites only one arguably recent decision from a United States Circuit Court of Appeals, Goodwin v. Elkins & Co., 730 F.2d 99 (3d Cir.), cert. denied, 469 U.S. 831, 105 S. Ct. 118, 83 L. Ed. 2d 61 (1984), discussed below in Part IV.
In Goodwin, a partner who sold his interest in a brokerage firm sued the firm, a partnership, asserting federal securities law violations. The Court of Appeals for the Third Circuit affirmed the district court's reference of the claims to arbitration. The court wrote in a footnote: "Since Elkins [the partnership] raises arbitration as an equitable defense, it is not only proper, but required that it produce evidence to support it." 730 F.2d at 109 n. 20. I agree with the Third Circuit's logic, but in this case the majority's extension of that logic is inappropriate. The majority cites Goodwin for the proposition that "[t]he party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and the existence of an arbitrable dispute." 674 So. 2d at 1265. (Emphasis added.) I agree that the party seeking to compel arbitration should bear the burden of proving "the existence of a contract calling for arbitration,"[6] but the burden should then shift to the party opposing arbitration to prove the existence of a nonarbitrable dispute.
Assuming, arguendo, that Goodwin did stand for the proposition for which the majority cites it, Goodwin would still not be binding upon this Court, and it would be unpersuasive because it predates the United States Supreme Court's opinions in McMahon and Gilmer and the Eleventh Circuit's opinion in Chastain.
The majority cites the Third Circuit's 1984 decision in Goodwin, but fails to mention a 1990 decision from the Third Circuit that would have effectively overruled Goodwin if Goodwin stood for the proposition for which the majority cites it. PaineWebber, Inc. v. Hartmann, 921 F.2d 507, 511 (3d Cir.1990). In PaineWebber, the Third Circuit followed the guidance of the Supreme Court in determining "whether an [arbitration] agreement exists and [whether] the dispute falls within the scope of the agreement," 921 F.2d at 511. The Third Circuit wrote:
921 F.2d at 511 (emphasis added) (quoting AT & T Technologies, Inc., 475 U.S. 643, 106 *1269 S. Ct. 1415, 89 L. Ed. 2d 648, decided after Goodwin). The Third Circuit held in Paine-Webber that when a trial court determines whether an arbitration agreement exists and whether the dispute falls within the scope of the agreement, there is a presumption in favor of arbitrability. That presumption can be defeated only "with positive assurance" by the party opposing arbitration. 921 F.2d at 511.
PaineWebber is directly on point, yet the majority does not mention it. Instead, it cites the old Goodwin case, and for an incorrect proposition.
There is a wealth of recent case law from other United States Courts of Appeals. I summarize here some representative cases:
In 1987, the Court of Appeals for the Second Circuit held that "[a] party resisting arbitration on the ground that no agreement to arbitrate exists must submit sufficient evidentiary facts in support of this claim in order to precipitate [a] trial...." Manning v. Energy Conversion Devices, Inc., 833 F.2d 1096, 1103 (2d Cir.1987).
In 1993, the Court of Appeals for the Fourth Circuit wrote: "The McMahon Court established the framework for determining whether an arbitration agreement is enforceable under the FAA. The [Supreme] Court ruled that the [FAA] standing alone mandates enforcement of arbitration agreements.... The burden is on the party opposing arbitration to show that Congress intended to preclude waiver." Gilmer v. Interstate/Johnson Lane Corp., 895 F.2d 195 (4th Cir.1990), aff'd, 500 U.S. 20, 111 S. Ct. 1647, 114 L. Ed. 2d 26 (1991).
In 1992, the Court of Appeals for the Fifth Circuit wrote, "Certainly, the party resisting arbitration must put the existence of an agreement to arbitrate in issue." Heinhuis v. Venture Associates, Inc., 959 F.2d 551, 554 (5th Cir.1992) (the court did not discuss who bears the burden after the existence of an agreement to arbitrate is put in issue); and see Walker v. J.C. Bradford & Co., 938 F.2d 575 (5th Cir.1991) (court indulges presumption against waiver of contractual right to arbitrate).
The Fifth Circuit also said that that court's "precedent places a `heavy burden' on a party claiming waiver of arbitration rights." Storey v. Shearson-American Express Inc., 928 F.2d 159, 163 (5th Cir.1991). See also Bhatia v. Johnston, 818 F.2d 418 (5th Cir. 1987) (under the FAA, the party resisting arbitration has a heavy burden of showing that he is entitled to a jury trial); and see Tenneco Resins, Inc. v. Davy Int'l, AG, 770 F.2d 416 (5th Cir.1985) (the burden on a party seeking to prove a waiver of arbitration is a heavy one).
In 1993, the Court of Appeals for the Seventh Circuit wrote:
International Brotherhood of Teamsters, Local No. 371 v. Logistics Support Group, 999 F.2d 227, 229 (7th Cir.1993). That same year, the same court also said:
S + L + H S.p.A. v. Miller-St. Nazianz, Inc., 988 F.2d 1518, 1524 (7th Cir.1993). (Emphasis original.)
In 1992, the Court of Appeals for the Ninth Circuit wrote: "Mago, as the party opposing the arbitration, bears the burden of showing `that Congress intended to preclude a waiver of judicial remedies for the statutory rights at issue.'" Mago v. Shearson Lehman *1270 Hutton Inc., 956 F.2d 932, 935 (9th Cir.1992), citing Shearson/American Express, Inc. v. McMahon, supra. See also Britton v. Co-op. Banking Group, 916 F.2d 1405 (9th Cir.1990), appeal after remand, 4 F.3d 742 (9th Cir.1993) (party arguing waiver of arbitration bears heavy burden of proof); and see Toyota of Berkeley v. Automobile Salesmen's Union, Local 1095, 834 F.2d 751 (9th Cir.1987), cert. denied, 486 U.S. 1043, 108 S. Ct. 2036, 100 L. Ed. 2d 620 (1988), amended, 856 F.2d 1572 (1988).
In 1989, the Court of Appeals for the Tenth Circuit wrote: "Parties seeking to prove waiver of arbitration obligations bear a heavy burden; they must show substantial prejudice." Adams v. Merrill Lynch Pierce Fenner & Smith, 888 F.2d 696 (10th Cir. 1989).[7]
See Part III.
The overwhelming majority of cases from the United States Courts of Appeals correctly hold that the party opposing arbitration bears the burden of proving the existence of a nonarbitrable dispute.
In matters of arbitration that involve the FAA, this Court must follow the guidance of the United States Supreme Court. It is clear from the holdings of that Court and the Court of Appeals for the Eleventh Circuit that the burden is on the party opposing arbitration to show that the case is not referable to arbitration. I have cited quite a few cases from the Supreme Court and other federal courts; if my reading of those cases is correct, then I must conclude that a majority of this Court is either misunderstanding or resisting the guidance of the federal courts on issues involving the FAA. Therefore, I must respectfully dissent.
MADDOX, Justice (dissenting).
I dissented from the opinion of the Court on original deliverance, and I desire to add a few comments to what I said then and to explain why I believe the Court should grant Jim Burke's application for rehearing. To further substantiate the legal basis for my dissent, I also desire to state some of the history of the application of the Commerce Clause, and to point out the Court's failure to follow the principles of law set out by the United States Supreme Court's holding in Allied-Bruce Terminix Cos. v. Dobson, ___ U.S. ___, 115 S. Ct. 834, 130 L. Ed. 2d 753 (1995).
The contract in this case, involving the sale of a used automobile, involves interstate commerce, as defined in the Allied-Bruce Terminix case. It is clear that Jim Burke presented to the trial court sufficient evidence that the contract did, in fact, involve interstate commerce. Therefore, I must respectfully disagree with this Court's contrary holding,[8] and I file this additional dissent from the Court's denial of Jim Burke's application for rehearing.
The law states that the proper standard of review for an appellate court to apply in determining whether arbitration should be compelled is a de novo standard. See, Ex *1271 parte Warrior Basin Gas Co., 512 So. 2d 1364 (Ala.1987). Similarly, federal courts have constantly held that "determinations of arbitrability, like the interpretation of any contractual provision, are subject to de novo review." Republic of Nicaragua v. Standard Fruit Co., 937 F.2d 469, 474 (9th Cir.1991), cert. denied, 503 U.S. 919, 112 S. Ct. 1294, 117 L. Ed. 2d 516 (1992). See, e.g., Drake Bakeries, Inc. v. Local 50, American Bakery & Confectionery Wrkrs. Int'l, 370 U.S. 254, 82 S. Ct. 1346, 8 L. Ed. 2d 474 (1962); Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc., 10 F.3d 753 (11th Cir.1993); Luckie v. Smith Barney, Harris Upham & Co., 999 F.2d 509 (11th Cir.1993); Collins & Aikman Products Co. v. Building Systems, Inc., 58 F.3d 16 (2d Cir.1995); Coors Brewing Co. v. Molson Breweries, 51 F.3d 1511 (10th Cir.1995); Tracer Research Corp. v. National Environmental Services Co., 42 F.3d 1292 (9th Cir. 1994); McMahan Securities Co. L.P. v. Forum Capital Markets L.P., 35 F.3d 82 (2d Cir.1994); Britton v. Co-op. Banking Group, 4 F.3d 742 (9th Cir.1993); Saari v. Smith Barney, Harris Upham & Co., 968 F.2d 877 (9th Cir.), cert. denied, 506 U.S. 986, 113 S. Ct. 494, 121 L. Ed. 2d 432 (1992); Storey v. Shearson Lehman Hutton, Inc., 949 F.2d 1039 (8th Cir.1991); Catholic Diocese of Brownsville, Texas v. A.G. Edwards & Sons, Inc., 919 F.2d 1054 (5th Cir.1990); Paulson v. Dean Witter Reynolds, Inc., 905 F.2d 1251 (9th Cir.1990); Nordin v. Nutri/System, Inc., 897 F.2d 339 (8th Cir.1990); United States v. City of Twin Falls, 806 F.2d 862 (9th Cir. 1986), cert. denied, 482 U.S. 914, 107 S. Ct. 3185, 96 L. Ed. 2d 674 (1987).
In discussing the standard of review an appellate court should use in determining whether a trial court has correctly ruled on a question of law, this Court has held that
King Mines Resort, Inc. v. Malachi Mining & Minerals, Inc., 518 So. 2d 714, 716 (Ala. 1987) (emphasis added). See, Otis Elevator of Gadsden, Inc. v. Scott, 586 So. 2d 200 (Ala. 1991). De novo review of a trial court's ruling on a question of law is an important component of a party's Fourteenth Amendment right to due process. "Due process requires, among other things, a hearing consistent with the essentials of a fair trial, which include holding a de novo hearing when required by law." Benton v. Alabama Bd. of Medical Examiners, 467 So. 2d 234, 237 (Ala.1985). See, Medical Services Administration v. Duke, 378 So. 2d 685 (Ala. 1979); Katz v. Alabama State Board of Medical Examiners, 351 So. 2d 890 (Ala.1977). Because a motion to compel arbitration presents a question of law for the trial court,[9] due process requires that we review the trial court's ruling de novo. Therefore, the law mandates that this Court undertake a de novo review to determine whether this contract for the sale of a used car, which contains the signed arbitration clause, evidences interstate commerce.[10] If the majority had used the proper standard of review in this case, as I believe I have, it could reach only one conclusionthat this contract on its face, absent any extrinsic evidence, shows that this transaction involves interstate commerce.
As I stated in my original dissent, there is no question that this contract, which contains an agreement to arbitrate, involves interstate commerce, because the contract was not only for the sale of a used car, which is highly regulated by Congress in the exercise of its enumerated powers, but it is also apparent from the record that a credit disability insurance policy, underwritten by a Florida corporation, was part of the sales agreement. Because all these facts can be ascertained simply by looking at the contract, I cannot agree with the holding of the majority on rehearing that the contract "does not show on its face that the transaction involves interstate commerce, certainly *1272 not so plainly as to require a reversal of the denial of the motion [to compel arbitration]." 674 So. 2d 1261. Based on my thorough research of federal law interpreting Congress's power to regulate interstate commerce, I am convinced that the holding of the majority is erroneous.
The United States Constitution delegates to Congress the power "[t]o regulate commerce with foreign Nations, and among the several states, and with Indian Tribes." U.S. Const., Art. I, § 8, cl. 3. From the outset of constitutional jurisprudence, many questions have been raised concerning the breadth of this provision, in terms of the extent to which Congress may regulate commerce. Chief Justice John Marshall first addressed this provision of the Constitution in the seminal case of Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 6 L. Ed. 23 (1824). In that case, the Chief Justice, noting that the Constitution allowed Congress to "regulate commerce ... among the several states," gave the first interpretation of this constitutional delegation of power, stated:
22 U.S. (9 Wheat.) at 194-95 (emphasis added). Thus, the very first interpretation of Congress's power to regulate interstate commerce held that this power extends to the regulation of commerce "which concerns more states than one."
The contract in this case involved the sale of a used automobile. As I stated in my initial dissent, Congress extensively regulates the sale of both new and used automobiles. Therefore, Congress explicitly recognizes that the sale of a used car involves interstate commerce.
The definition of "interstate commerce" has been greatly extended beyond the original interpretation given by Chief Justice Marshall. Before 1937, the Supreme Court decisions interpreting the Commerce Clause dealt almost entirely with the Commerce Clause as a restriction on state legislation and interpreted the reach of the Commerce Clause in a more narrow manner than more recent decisions. See, e.g., A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495, 55 S. Ct. 837, 79 L. Ed. 1570 (1935); United States v. E.C. Knight Co., 156 U.S. 1, 15 S. Ct. 249, 39 L. Ed. 325 (1895); Kidd v. Pearson, 128 U.S. 1, 9 S. Ct. 6, 32 L. Ed. 346 (1888); Veazie v. Moor, 55 U.S. (14 How.) 568, 14 L. Ed. 545 (1852). In 1937, the Court expanded the interpretation of what was considered interstate commerce in NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 57 S. Ct. 615, 81 L. Ed. 893 (1937), and abandoned the previous distinction that had been made between direct and indirect effects on interstate commerce, so as to expand Congress's regulatory power. See also, Wickard v. Filburn, 317 U.S. 111, 63 S. Ct. 82, 87 L. Ed. 122 (1942); United States v. Wrightwood Dairy Corp., 315 U.S. 110, 62 S. Ct. 523, 86 L. Ed. 726 (1942); United States v. Darby, 312 U.S. 100, 61 S. Ct. 451, 85 L. Ed. 609 (1941). For example, in Wickard v. Filburn the Court held that the powers of Congress under the Commerce Clause extended to the regulation of the activities of a farmer who had violated the Agricultural Adjustment Act of 1938 by harvesting more wheat than was allowed under the Act. Although Filburn had grown this wheat primarily for his family's own consumption and had harvested only 12 more acres than was allowed by the Act, the Court held that this activity had a sufficient effect on interstate commerce to allow the United States to prosecute him for violating the Act. The Court, in determining that Filburn's activities involved interstate commerce, stated:
Wickard, 317 U.S. at 128, 63 S. Ct. at 90. The Supreme Court has not limited this expansive interpretation of "interstate commerce," and the Court's opinions discussing the reach of the Commerce Clause seem to hold that almost any commercial transaction undertaken "affects" interstate commerce, no matter how slight, and therefore can be regulated by Congress. See, e.g., Garcia v. San Antonio Metropolitan Transit Authority, 469 U.S. 528, 105 S. Ct. 1005, 83 L. Ed. 2d 1016 (1985); Hodel v. Virginia Surface Mining & Reclamation Ass'n, Inc., 452 U.S. 264, 101 S. Ct. 2352, 69 L. Ed. 2d 1 (1981); Perez v. United States, 402 U.S. 146, 91 S. Ct. 1357, 28 L. Ed. 2d 686 (1971); Katzenbach v. McClung, 379 U.S. 294, 85 S. Ct. 377, 13 L. Ed. 2d 290 (1964); Heart of Atlanta Motel, Inc. v. United States, 379 U.S. 241, 85 S. Ct. 348, 13 L. Ed. 2d 258 (1964). These cases stand for the proposition that if any effect on interstate commerce can be found in a transaction, then the transaction is considered to be one involving interstate commerce.[11]
In refusing to enforce the arbitration agreement contained in the contract between Jim Burke and Ms. Beavers, on the ground that Jim Burke did not prove the contract involved interstate commerce, this Court is, wittingly or unwittingly, misinterpreting the holding of Allied-Bruce Terminix, supra, and this Court's action suggests that it is involved in a practice condemned in Allied-Bruce Terminix. In that case, the United States Supreme Court held that § 2 of the Federal Arbitration Act, which mandates that all disputes arising from contracts involving interstate commerce that contain arbitration agreements shall be submitted to arbitration, preempts any conflicting state law, and, regarding attempts to frustrate the application of that Act, the Court held: "[T]he statute's language permits the `commerce in fact' interpretation. That interpretation, we concede, leaves little work for the word `evidencing' (in the phrase `a contract evidencing a transaction') to perform, for every contract evidences some transaction." Allied-Bruce Terminix, ___ U.S. at ___, 115 S. Ct. at 842 (emphasis added).
The fact that Jim Burke simply submitted this contract to the trial court was sufficient evidence for the trial court to find that this contract involved interstate commerce,[12] and, unquestionably, the Supreme Court's decision in Allied-Bruce Terminix seems to support this conclusion, because there the Court asked this question: "Why would Congress intend a test that risks the very kind of costs and delay through litigation (about the circumstances of contract formation) that Congress wrote the Act to help the parties avoid?" Allied-Bruce Terminix, ___ U.S. at ___, 115 S. Ct. at 841.
Allied-Bruce Terminix established a major principle regarding the scope of the Federal Arbitration Act in regard to compelling arbitration. As I read that case, the majority of the Supreme Court said that the Act "reach[es] to the limits" of the Congress's *1274 power to regulate interstate commerce. Allied-Bruce Terminix, ___ U.S. at ___, 115 S. Ct. at 837. In determining that a domestic contract for termite protection was a contract involving interstate commerce, the Court stated that "the termite-treating and house-repairing material used by Allied-Bruce in its (allegedly inadequate) efforts to carry out the terms of the Plan, came from outside Alabama." Allied-Bruce Terminix, ___ U.S. at ___, 115 S. Ct. at 843. Comparing the facts of this case, involving as it does the sale of a used automobile (a sale highly regulated by Congress), with the facts of Allied-Bruce Terminix, can there be any question that this contract for the sale of a used automobile involves interstate commerce? I think not.
There are many powers reserved to the States by the Tenth Amendment to the United States Constitution, but the regulation of interstate commerce is not one of them. The United States Supreme Court, in several decisions, has clearly set out the rules of law that govern the interpretation of the reach of the Federal Arbitration Act. There is disagreement on the United States Supreme Court about what Congress intended, but a majority of that Court has unmistakably held that a predispute arbitration agreement appearing in a contract such as this onei.e., in a contract clearly involving interstate commercemust be enforced.
Because this contract clearly involved interstate commerce, the arbitration agreement contained in it is subject to the provisions of the Federal Arbitration Act and must be enforced. Therefore, I must respectfully dissent from this Court's refusal to grant rehearing in this case.
HOOPER, C.J., and HOUSTON, J., concur.
[1] The cases cited in Chief Justice Hooper's dissent are inapposite. Both Shearson/American Express, Inc. v. McMahon, 482 U.S. 220, 107 S. Ct. 2332, 96 L. Ed. 2d 185 (1987), and Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 111 S. Ct. 1647, 114 L. Ed. 2d 26 (1992), concern the burden on a party opposing arbitration to show that a Congressional act on which that party is basing his claim supersedes the FAA in McMahon, the plaintiff argued that RICO claims were not subject to arbitration, and in Gilmer the plaintiff argued that ADEA claims were not subject to arbitration. In Chastain v. Robinson-Humphrey Co., 957 F.2d 851 (11th Cir.1992), the plaintiff opposed the motion to arbitrate by presenting evidence that she had not signed the contract containing the arbitration clause. All three cases apply the principle that, after a motion to compel arbitration has been made and supported, the burden is on the non-movant to present evidence that the supposed arbitration agreement is not valid or does not apply to the dispute in question. None of those three cases, and none of the other cases cited by the dissenting Justices, holds that a party requesting arbitration has no burden at all to support the request by showing, at least prima facie, the existence of a written contract between the parties containing an agreement to arbitrate disputes such as the one at issue and that the contract "evidenc[es] a transaction involving [interstate] commerce," 9 U.S.C. § 2.
[2] This Court recently remanded a factually similar case for reconsideration in light of Allied-Bruce Terminix Cos. v. Dobson, ___ U.S. ___, 115 S. Ct. 834, 130 L. Ed. 2d 753 (1995). First Alabama Bank v. Vandiver [1940612, April 26, 1995, no opinion]. However, the motion to compel arbitration in Vandiver recited that the contract involved interstate commerce because the credit disability insurance policy involved in that case was issued by a Mississippi insurance corporation and because any notices given or proofs of claim made under that policy would be sent to Mississippi. No such recitation is included in Jim Burke's motion.
[3] That case it cites, Engineers Association v. Sperry Gyroscope Co., 251 F.2d 133 (2d Cir.1957), cert. denied, 356 U.S. 932, 78 S. Ct. 774, 2 L. Ed. 2d 762 (1958), predates the recent general policy of the United States Supreme Court in favor of upholding arbitration contracts. See Allied-Bruce Terminix Companies, Inc. v. Dobson, ___ U.S. ___ at ___, 115 S. Ct. 834, at 839 (1995); Southland Corp. v. Keating, 465 U.S. 1, 104 S. Ct. 852, 79 L. Ed. 2d 1 (1984); Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U.S. 1, 103 S. Ct. 927, 74 L. Ed. 2d 765 (1983); Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 87 S. Ct. 1801, 18 L. Ed. 2d 1270 (1967).
[4] In re American Freight System, Inc., 164 B.R. 341 (D.Kan.1994).
[5] This same analysis is also discussed in my special concurrence in Allied Bruce-Terminix Companies v. Jackson, 669 So. 2d 893 (Ala.1995), (on rehearing after remand).
[6] That party might meet this burden by presenting the trial judge with a motion to compel arbitration and attaching to it a copy of the arbitration agreement.
[7] In the Adams case, as published at 888 F.2d 696, the style carries the appellee's name with no commas, although the text of the opinion names the appellee more conventionally as "Merrill Lynch, Pierce, Fenner & Smith."
[8] The majority holds that arbitration in this case will not be compelled because, it says, "Jim Burke offered no evidence in the trial court that the contract had any involvement in interstate commerce." 674 So. 2d at 1261.
Although Jim Burke filed a motion to compel arbitration, submitted the contract to the trial court when it moved for arbitration, and orally argued the motion to the trial judge, this Court wrote:
"There is no indication in the record that in seeking to compel arbitration Jim Burke asserted that it did not have to demonstrate that the contract involved interstate commerce, on the basis that its involvement with interstate commerce should be assumed, or on any other basis. In light of this, and the fact that Jim Burke did not demonstrate in the trial court that the contract involved interstate commerce, we affirm [the ruling of the trial court refusing to compel arbitration]."
674 So. 2d at 1261. Therefore, the Court holds that the failure of Jim Burke to present evidence that the contract containing the arbitration clause involved interstate commerce precluded the trial court from compelling arbitration.
[9] Luckie v. Smith Barney, Harris Upham & Co., 999 F.2d 509, 512 (11th Cir.1993).
[10] On original deliverance, the majority refused to compel arbitration because it found that Jim Burke had not presented sufficient evidence that the contract for the sale of a used car involved interstate commerce.
[11] See, Katzenbach v. McClung, 379 U.S. 294, 85 S. Ct. 377, 13 L. Ed. 2d 290 (1964). In that case, the Court held that a Birmingham barbecue restaurant was involved in interstate commerce, because, among other things, the establishment bought meat from a supplier that had procured the meat from outside Alabama. Id. at 296, 85 S. Ct. at 380.
[12] Federal caselaw supports this interpretation. In Perry v. Thomas, 482 U.S. 483, 489, 107 S. Ct. 2520, 2525, 96 L. Ed. 2d 426 (1987), the Supreme Court wrote: "Section 2 [of the Federal Arbitration Act], therefore, embodies a clear federal policy of requiring arbitration unless the agreement to arbitrate is not part of a contract evidencing interstate commerce...." Id. at 489, 107 S. Ct. at 2525 (emphasis added). Additionally, the Court has held that the FAA "leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed." Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218, 105 S. Ct. 1238, 1241, 84 L. Ed. 2d 158 (1985) (emphasis in original). According to the United States Court of Appeals for the Ninth Circuit, "[t]he standard for demonstrating arbitrability is not a high one; in fact, a district court has very little discretion to deny an arbitration motion, since the [Federal Arbitration] Act is phrased in mandatory terms." Republic of Nicaragua v. Standard Fruit Co., 937 F.2d 469, 475 (9th Cir.1991) (emphasis added). | February 23, 1996 |
81936db1-5922-4057-ba96-a51d826ee6cf | Ex Parte Ikner | 682 So. 2d 8 | 1950558 | Alabama | Alabama Supreme Court | 682 So. 2d 8 (1996)
Ex parte Darron L. IKNER.
(In re Darron L. IKNER v. BLUE CROSS AND BLUE SHIELD OF ALABAMA, a corporation).
1950558.
Supreme Court of Alabama.
July 12, 1996.
*9 Joseph J. Boswell, P.C., Mobile, for Petitioner.
John Chas. S. Pierce of Pierce, Ledyard, Latta & Wasden, P.C., Mobile, for Respondent.
BUTTS, Justice.
We granted Darron L. Ikner's petition for a writ of certiorari to review the Court of Civil Appeals' affirmance of the summary judgment entered by the trial court on claims Ikner brought against Blue Cross and Blue Shield of Alabama ("Blue Cross"). Ikner's complaint against Blue Cross contained three counts alleging fraud, breach of fiduciary duty, and fraudulent suppression. For the reasons discussed below, we affirm.
In 1965 or 1966 Ikner purchased an individual adult medical insurance policy with Blue Cross, which he maintained until 1993. He married in 1967, and the marriage has continued to the present. Ikner has also worked for employers that provided group medical insurance under which he was covered.
Neither Ikner's original policy, nor the replacement policies he received before 1988, made any statement regarding any effect of his marriage or his coverage under an employer's medical insurance had on his eligibility for his Blue Cross insurance. However, in May 1988, Ikner's wife went to her local Blue Cross office to make a premium payment on her husband's policy. A clerk in the office questioned her husband's eligibility for the policy, but then, after speaking with a superior, accepted the premium payment. Then, in December 1988, Ikner received a new replacement policy from Blue Cross. The policy added provisions stating that persons who were married or who were covered under other medical insurance were not eligible for enrollment under the policy, and that any existing insurance coverage for a person who met one of those two conditions was terminated immediately. Ikner did not receive a specific notice from Blue Cross at that time regarding the effect those policy provisions had on him, even though Blue Cross was at least impliedly aware that he was married and had other medical insurance. Ikner continued to make premium payments, which Blue Cross accepted.
In December 1992, Blue Cross provided Ikner with written notice that his coverage under the policy would be terminated in 30 days because his marital status and his coverage under other medical insurance contracts eliminated him from continued enrollment under the kind of policy he had.[1] Blue cross terminated the policy at the end of January 1993. Ikner did not make a claim for benefits during the period December 1988 to January 1993; accordingly, Blue Cross never denied a claim by Ikner during that time.
After his policy was terminated by Blue Cross, Ikner sued Blue Cross, alleging: (1) that Blue Cross had misrepresented to him that he had medical insurance coverage from December 1988 to January 1993 and had done so with the intent to deceive him, (2) that Blue Cross had had a fiduciary duty to inform him that he did not have insurance coverage during that period, and that it had breached that duty, and (3) that Blue Cross had fraudulently suppressed the fact that he had no insurance coverage during that period. The trial court entered a summary judgment for Blue Cross on these claims, and the Court of Civil Appeals affirmed, without opinion. Ikner v. Blue Cross & Blue Shield of Alabama, 681 So. 2d 655 (Ala.Civ.App.1995) (table).
In order to enter a summary judgment, the trial court must determine that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law. Rule 56, Ala.R.Civ. P.; Bussey v. John Deere Co., 531 So. 2d 860 (Ala.1988). In order to defeat a properly supported motion for summary judgment, the nonmovant must present substantial evidence in support of his position creating a *10 genuine issue of material fact. Betts v. McDonald's Corp., 567 So. 2d 1252 (Ala.1990).
The foundation of Ikner's claims against Blue Cross is his contention that while he was making premium payments from December 1988 to January 1993, his policy had actually been terminated by the marital and "other insurance" provisions, but that Blue Cross accepted those payments and allowed him to continue making them even though he no longer had coverage under the policy. He argues that Blue Cross's acceptance of those payments was a misrepresentation that he had insurance coverage. He also argues, in support of his fraudulent suppression and breach-of-fiduciary duty claims, that Blue Cross had a duty to inform him that he had no coverage.
Ikner contends that under Alabama law, Blue Cross did not waive the marital and "other insurance" provisions by accepting his premium payments, and that he could not have used Blue Cross's acceptance of his premium payments as a basis to judicially estop it from denying him coverage if he had made a claim. He cites opinions by this Court holding that coverage under an insurance policy cannot be enlarged by judicial estoppel.
In response, Blue Cross argues that while it may have placed certain provisions in its individual adult medical insurance policy in December 1988 that could have eliminated Ikner from enrollment under that type of policy, it did not enforce those provisions until December 1992, when it sent policyholders such as Ikner a letter informing them that their coverage would be terminated in 30 days. Thus, Blue Cross argues that Ikner actually had medical insurance coverage under his policy from December 1988 to January 1993. Blue Cross says that it paid numerous claims by policyholders situated as Ikner was, until it enforced the marital and "other insurance" provisions at the end of 1992. Moreover, Blue Cross says that under Alabama law an insurer's acceptance of premium payments will estop it from enforcing eligibility exclusions, and, thus, that even if it had wanted to enforce the marital and "other insurance" provisions, it could not have done so while accepting payments.
We conclude that Ikner's claims must fail because there was no misrepresentation or suppression of fact by Blue Cross. Blue Cross did not misrepresent the fact that Ikner had insurance, because that fact was true. Blue Cross did not suppress (or fail to inform Ikner of) the fact that he had no coverage, because he did have coverage. It is well settled under Alabama law that when an insurer has knowledge of a fact or situation that it could use to invoke a provision of its policy that would render the policy void and worthless, but nonetheless continues to accept premium payments from its insured, it will be considered to have waived that provision and will be estopped from using that provision to deny a claim. Howard v. Mutual Savings Life Ins. Co., 650 So. 2d 868 (Ala. 1994); Henson v. Celtic Life Ins. Co., 621 So. 2d 1268 (Ala.1993); Intercontinental Life Ins. Co. v. Lindblom, 571 So. 2d 1092 (Ala. 1990), cert. granted, vacated on other grounds, 499 U.S. 956, 111 S. Ct. 1575, 113 L. Ed. 2d 641 (1991), on remand, 598 So. 2d 886 (Ala.), cert. denied, 506 U.S. 869, 113 S. Ct. 200, 121 L. Ed. 2d 142 (1992); Alabama Farm Bureau Mut. Cas. Ins. Co. v. Hicks, 272 Ala. 574, 133 So. 2d 221 (1961); General Ins. Co. of Am. v. Killen, 270 Ala. 604, 120 So. 2d 887 (1960). Thus, Ikner had insurance coverage under his Blue Cross policy from December 1988 to January 1993; if he had made a valid claim for medical insurance coverage during that period, Blue Cross would have been legally obligated to pay that claim.
Because we conclude that Ikner had insurance coverage under his Blue Cross policy from December 1988 to January 1993, the trial court correctly entered the summary judgment in favor of Blue Cross and the Court of Civil Appeals properly affirmed that judgment.
AFFIRMED.
HOOPER, C.J., and MADDOX, ALMON, SHORES, HOUSTON, KENNEDY, INGRAM, and COOK, JJ., concur.
[1] The insurance policy specifically provided for modification or termination by Blue Cross, given 30 days notice to the policyholder. | July 12, 1996 |
68c70aef-51c6-4af8-ae77-13fa8dcd0cb1 | Ex parte Terry Tatum. PETITION FOR WRIT OF CERTIORARI TO THE COURT OF CRIMINAL APPEALS (In re: Terry Tatum v. State of Alabama) (St. Clair Circuit Court: CC-90-107; CC-90-108; CC-90-109; Criminal Appeals : CR-13-1132). Writ Denied. No Opinion. | N/A | 1131418 | Alabama | Alabama Supreme Court | REL: 10/24/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
____________________
1131418
____________________
Ex parte Terry Tatum
PETITION FOR WRIT OF CERTIORARI
TO THE COURT OF CRIMINAL APPEALS
(In re: Terry Tatum
v.
State of Alabama)
(St. Clair Circuit Court, CC-90-107; CC-90-108; and
CC-90-109; Court of Criminal Appeals, CR-13-1132)
STUART, Justice.
WRIT DENIED. NO OPINION.
1131418
Bolin, Parker, Murdock, Shaw, Main, Wise, and Bryan,
JJ.,concur.
Moore, C.J., dissents.
2
1131418
MOORE, Chief Justice (dissenting).
I respectfully dissent from the Court's decision to deny
Terry Tatum's petition for a writ of certiorari because I
believe that, for purposes of reconsidering an inmate's
sentence pursuant to § 13A-5-9.1, Ala. Code 1975 (repealed
effective March 13, 2014, by Act No. 2014-165, Ala. Acts
2014), a circuit court must require the Department of
1
Corrections to submit an inmate evaluation to the court.
Tatum was convicted of two counts of first-degree sodomy,
violations of § 13A-6-63, Ala. Code 1975, and one count of
first-degree rape, a violation of § 13A-6-61, Ala. Code 1975.
He was sentenced as a habitual felony offender to life
imprisonment without the possibility of parole for each
conviction. In December 2013, he filed the underlying motion
for sentence reconsideration, his second, and the circuit
2
Section 13A-5-9.1 stated: "The provisions of Section
1
13A-5-9 shall be applied retroactively
by
the sentencing judge
or, if the sentencing judge is no longer in office, by any
circuit judge appointed by the presiding judge, for
consideration of early parole of each nonviolent convicted
offender based on evaluations performed by the Department of
Corrections and approved by the Board of Pardons and Paroles
and submitted to the court."
A motion for sentence reconsideration is often called a
2
"Kirby motion." See Kirby v. State, 899 So. 2d 968 (Ala.
2004)(explaining
an
inmate's
eligibility
for
sentence
3
1131418
court denied the motion. Tatum appealed the denial of his
motion to the Court of Criminal Appeals. On August 15, 2014,
the Court of Criminal Appeals affirmed the circuit court's
denial of Tatum's motion in an unpublished memorandum. Tatum
v. State (No. CR-13-1132, August 15, 2014), ___ So. 3d ___
(Ala. Crim. App. 2014)(table). Tatum now petitions this Court
for a writ of certiorari to review the Court of Criminal
Appeals' decision, arguing that the following language from
the Court of Criminal Appeals' unpublished memorandum
conflicts with Holt v. State, 960 So. 2d 726 (Ala. Crim. App.
2006), and Kirby v. State, 899 So. 2d 968 (Ala. 2004):
"Although an inmate's behavior while incarcerated is
a factor in determining whether he is a nonviolent
offender, '§ 13A-5-9.1 does not require a circuit
court to order, or the Department of Corrections to
submit, an inmate evaluation; it merely permits the
consideration by the circuit court of such an
evaluation.'"
(Quoting Holt, 960 So. 2d at 737.) I agree with Tatum that
this language conflicts with Alabama law. As I explained in my
dissent in a similar case, Ex parte Gill, [Ms. 1130649, June
20, 2014] ___ So. 3d ___, ___ (Ala. 2014):
"Kirby implies that a presumption of nonviolence
attaches to a motion for sentence reconsideration by
reconsideration).
4
1131418
holding that 'if the DOC [Department of Corrections]
does not provide the evaluation in a timely fashion,
the State will have waived any input as to the
inmate's
conduct
while
incarcerated
that
the
sentencing judge or the presiding judge might
otherwise have considered in determining whether the
inmate is a nonviolent offender.' Kirby, 899 So. 2d
at 975. Moreover, '[w]hile the information available
to the trial court in the DOC's evaluation will be
helpful in making its determination,' the Department
of Corrections' failure to submit an evaluation
waives the State's input regarding whether the
inmate is a violent offender. 899 So. 2d at 874. If
the Department of Corrections does not submit an
evaluation, then it presents no evidence to rebut an
inmate's claim that the inmate is a nonviolent
convicted offender. I disagree that '§ 13A-5-9.1
does not require a circuit court to order, or the
Department of Corrections to submit, an inmate
evaluation, [and that] it merely permits the
consideration by the circuit court of such an
evaluation.' Holt, 960 So. 2d at 737. The circuit
court is required to order the Department of
Corrections to submit an inmate evaluation."
Because § 13A-5-9.1 requires circuit courts considering a
motion for sentence reconsideration
to
order the Department of
Corrections to submit to the circuit court an evaluation of an
inmate's behavior while in prison, I believe the Court of
Criminal Appeals' unpublished memorandum contradicts Alabama
law. Therefore, Tatum is entitled to certiorari review of its
decision. See Rule 39, Ala. R. App. P.
5 | October 24, 2014 |
241166ef-ec41-4d87-9e39-7290d577d271 | NORFOLK SOUTHERN RY. CO. INC. v. Gideon | 676 So. 2d 310 | 1940766 | Alabama | Alabama Supreme Court | 676 So. 2d 310 (1996)
NORFOLK SOUTHERN RAILWAY COMPANY, INC.
v.
Gloria GIDEON and Bobby Gideon.
1940766.
Supreme Court of Alabama.
March 8, 1996.
*311 Schuyler H. Richardson of Bell Richardson, P.A., Huntsville, for Appellant.
Herman Watson, Jr. and Charles H. Pullen of Watson, Fees & Jimmerson, P.C., Huntsville, Lelia H. Watson and Charles R. Crowder of Cory, Watson, Crowder & Petway, Birmingham, for Appellees.
INGRAM, Justice.
Gloria Gideon and Bobby Gideon sued Norfolk Southern Railway Company for the wrongful death of their son, Jamal Gideon. A jury awarded the Gideons punitive damages in the amount of $500,000. The trial court overruled Norfolk Southern's motion for a new trial. Norfolk Southern appeals from a judgment based on that verdict.
Norfolk Southern first contends that the trial court erred by denying its motion for a new trial based on the trial court's determination that Norfolk Southern's strike of veniremember J.A. violated the principle of Batson v. Kentucky, 476 U.S. 79, 106 S. Ct. 1712, 90 L. Ed. 2d 69 (1986).
*312 At trial, the Gideons made an objection, pursuant to Batson, to Norfolk Southern's use of peremptory strikes against two potential black jurors. The trial court did not require the Gideons to establish a prima facie case of discrimination, but simply requested that counsel for Norfolk Southern state reasons for both peremptory strikes. Without objecting, Norfolk Southern offered explanations for both strikes. The trial court reinstated one of the potential black jurors to the venire.
We note that, initially, the party alleging discriminatory use of peremptory challenges bears the burden of establishing a prima facie case of discrimination. Ex parte Branch, 526 So. 2d 609, 622 (Ala.1987). After a prima facie case has been established, there is a presumption that the peremptory challenges were used to discriminate against black jurors. Ex parte Branch, 526 So. 2d at 623. Where, as in this case, the trial court requires the opposing counsel to state reasons for the peremptory strikes, without first requiring that a prima facie case of discrimination be shown, this Court will review the reasons given and the trial court's ultimate decision on the Batson motion without any determination of whether the moving party met its burden of proving a prima facie case of discrimination. Hernandez v. New York, 500 U.S. 352, 111 S. Ct. 1859, 114 L. Ed. 2d 395 (1991); McLeod v. State, 581 So. 2d 1144 (Ala. Cr.App.1990). When the trial court has required a party to state reasons, that party must articulate a clear, specific, and legitimate reason for the challenge that relates to the particular case to be tried and that is nondiscriminatory. Ex parte Bird, 594 So. 2d 676, 679 (Ala.1991), quoting Batson, 476 U.S. at 97, 106 S. Ct. at 1723. Once the responding party has articulated a race-neutral reason or explanation for eliminating the black jurors, the moving party can offer evidence showing that the reason or explanation is merely a sham or pretext. Ex parte Branch, 526 So. 2d at 624. When the trial court has followed this procedure, its determination will be overturned only if that determination is clearly erroneous. Ex parte Branch, 526 So. 2d at 625.
Accordingly, we will review the relevant portions of the record in determining whether the trial court's determination was clearly erroneous. Counsel for Norfolk Southern stated that it struck black veniremember J.A. because he worked for the Dunlop Tire Company, where a witness was also employed, and because J.A. was probably a union member and union members, counsel said, are generally more "plaintiff-oriented." The record shows that counsel for Norfolk Southern did not question J.A. directly during voir dire. Further, the panel was never asked whether any were union members. Finally, the panel was asked whether they knew the particular witness in question or whether they knew anything about the case. J.A. did not answer affirmatively to either question.
We conclude that the trial court's determination that juror J.A. was struck for discriminatory reasons is not clearly erroneous. Counsel for Norfolk Southern did not engage in any meaningful voir dire on which it could base its explanations. This provided the trial court a proper basis for holding that Norfolk Southern had failed to provide legitimate race-neutral reasons for its strike.
Norfolk Southern also contends that the trial court erred by denying its motion for a new trial based on statements made by two jurors in affidavits obtained after the trial.
Generally, affidavits are inadmissible to impeach a jury's verdict. An affidavit showing that extraneous facts influenced the jury's deliberations is admissible; however, affidavits concerning "the debates and discussions of the case by the jury while deliberating thereon" do not fall within this exception. CSX Transp., Inc. v. Dansby, 659 So. 2d 35, 41 (Ala.1995); Alabama Power Co. v. Turner, 575 So. 2d 551, 557 (Ala.1991). After thoroughly reviewing the affidavits obtained from the jurors in this case, we conclude that they concern the "debates and discussions" involved in the jury's deliberations and thus are not admissible to impeach the jury's verdict. Therefore, the trial court did not err in denying Norfolk Southern's motion for a new trial.
*313 For the foregoing reasons, the judgment of the trial court is affirmed.
AFFIRMED.
COOK and BUTTS, JJ., concur.
HOOPER, C.J., and HOUSTON, J., concur in the result. | March 8, 1996 |
11796509-53de-4f46-bc41-b2026f1ffb0a | Plaintiff v. Defendant | N/A | 1130184 | Alabama | Alabama Supreme Court | REL:11/26/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
____________________
1130184
____________________
Ex parte Alaska Bush Adventures, LLC, et al.
PETITION FOR WRIT OF MANDAMUS
(In re: Guy R. Willis
v.
Alaska Bush Adventures, LLC, et al.)
____________________
1130231
____________________
Alaska Bush Adventures, LLC, et al.
v.
Guy R. Willis
Appellate Proceedings from Elmore Circuit Court
(CV-12-900451)
PER CURIAM.
These consolidated cases arise out of an action brought
in the Elmore Circuit Court by Guy R. Willis against three
defendants: Alaska Bush Adventures, LLC ("Alaska Bush"), Hugh
Les Krank, and Ryan L. Krank (Alaska Bush and the Kranks are
hereinafter
collectively
referred
to
as
"the
defendants");
the
Kranks are the owners and operators of Alaska Bush. In case
no. 1130184, the defendants petition for a writ of mandamus
directing the trial court to vacate its order denying their
motions to dismiss the action for lack of personal
jurisdiction. In case no. 1130231, the defendants appeal from
the trial court's denial of their motion to compel
arbitration. In case no. 1130184, we deny the petition; in
case no. 1130231, we reverse and remand.
Facts and Procedural History
According to the record on appeal and the materials
before us on the petition for the writ of mandamus, Alaska
Bush, a business formed in Alaska, provides guided hunting
trips in that state. In December 2011, Willis entered into a
written contract with Alaska Bush pursuant to which Alaska
2
1130184, 1130231
Bush would lead a guided hunting trip in Alaska. That contract
is entitled "Guide/Outfitter Contract/Security Agreement
between Alaska Bush Adventures LLC and: Guy Willis." Willis
also claims that he entered into a separate oral contract to
hunt black bears during that guided hunting trip. The guided
hunting trip took place in September 2012.
On November 5, 2012, Willis sued the defendants in the
Elmore Circuit Court, seeking damages for breach of contract,
misrepresentation, and suppression. Willis's claims against
1
the defendants centered primarily on his allegations that the
equipment Alaska Bush provided for the hunting expedition was
inadequate in number, unsafe, and inoperable, and he also
alleged that he lost hunting time because the defendants were
providing services to other hunters who were apparently not
included in the guided hunting trip. Willis claimed that he
lost most of his personal hunting equipment and had to leave
the trip early because he "was caused to be thrown from an
improperly repaired, inspected, and/or working motorized boat
...."
Willis
further
alleged
that
the
defendants
Willis also sought damages on a tort-of-outrage theory.
1
3
1130184, 1130231
misrepresented the quantity of wild game that would be
available on the hunt.
On December 19, 2012, Willis filed an application for the
entry of a default judgment against Ryan, and, on the
following day, he filed a similar application against Alaska
Bush and Hugh. On December 21, 2012, the defendants filed an
answer to Willis's complaint and an objection to Willis's
applications for entry of a default judgment.
On January 2, 2013, the defendants filed a motion to
compel Willis to arbitration pursuant to an arbitration
agreement found in the written contract. On January 11, the
defendants each filed an individual motion to
dismiss
Willis's
complaint for lack of personal jurisdiction.
Subsequently, the trial court issued an order denying the
defendants' respective motions to dismiss and their motion to
compel arbitration. In case no. 1130184, the defendants
petition this Court for a writ of mandamus challenging the
denial of their motions to dismiss for lack of personal
jurisdiction; in case no. 1130231, they appeal the trial
court's denial of their motion to compel arbitration.
Case no. 1130184
4
1130184, 1130231
Upon review of the materials submitted in support of this
petition for a writ on mandamus, we deny the petition.
Because we are denying the defendants' petition, we address
the defendants' appeal from the order denying their motion to
compel arbitration.
Case no. 1130231
In case no. 1130231, the defendants appeal from the
denial of their motion to compel arbitration. We reverse and
remand.
A. Standard of Review
"Our standard of review of a ruling denying a
motion to compel arbitration is well settled:
"'"This Court reviews de
novo the denial of a motion to
compel
arbitration.
Parkway
Dodge, Inc. v. Yarbrough, 779 So.
2d 1205 (Ala. 2000). A motion to
compel arbitration is analogous
to
a
motion
for
a
summary
judgment. TranSouth Fin. Corp. v.
Bell, 739 So. 2d 1110, 1114 (Ala.
1999). The
party seeking to
compel arbitration has the burden
of proving the existence of a
contract calling for arbitration
and proving that the contract
evidences a transaction affecting
interstate commerce. Id. '[A]fter
a motion to compel arbitration
has been made and supported, the
burden is on the non-movant to
5
1130184, 1130231
present
evidence
that
the
supposed arbitration agreement is
not valid or does not apply to
the dispute in question.' Jim
Burke
Automotive,
Inc.
v.
Beavers, 674 So. 2d 1260, 1265 n.
1
(Ala.
1995)
(opinion
on
application for rehearing)."'
"Elizabeth Homes, L.L.C. v. Gantt, 882 So. 2d 313,
315 (Ala. 2003) (quoting Fleetwood Enters., Inc. v.
Bruno, 784 So. 2d 277, 280 (Ala. 2000))."
SSC Montgomery Cedar Crest Operating Co. v. Bolding, 130 So.
3d 1194, 1196 (Ala. 2013).
B. Analysis
In this case, the defendants supported their motion to
compel arbitration with, among other evidence, the written
contract between Willis
and
the defendants, which contains the
following arbitration clause:
"Alaska Bush Adventures, LLC agree that they will
try to minimize risk to all customers, but due to
unforeseen circumstances, the undersigned customer
agrees to waive all liability claims against this
company and their affiliates, agreeing that any and
all disputes with Alaska Bush Adventures, LLC be
settled by arbitration conducted in the state of
Alaska where the Corporation's office is located.
Please contact me if you have any questions. If you
have carefully read this contract and are satisfied
with these arrangements and with the terms and
conditions, please sign and return it to me with
your down payment."
6
1130184, 1130231
(Emphasis added.) The defendants presented a properly
supported motion to compel arbitration demonstrating "the
existence of a contract calling for arbitration," see SSC
2
Montgomery Cedar Crest, supra; thus, the burden then shifted
to Willis to present evidence indicating that the arbitration
clause was "not valid or does not apply to the dispute in
question." Id.
Willis argued in the trial court and he now argues on
appeal that the arbitration clause is not
enforceable
because,
he says, "the arbitration agreement in the written contract
between the parties was induced by fraud." Willis argues on
appeal that the arbitration clause was induced by fraud
because, he says, "as an examination of the written contract
between the parties reveals, the arbitration clause in that
contract was obscured in unhighlighted small print at the
bottom of the document." Furthermore, Willis argued in the
trial court and he now argues on appeal that there exists a
separate oral contract to hunt black bears during the guided
hunting trip, and, he says, the oral contract is not governed
by the arbitration clause in the written contract.
There is no dispute that "the contract evidences a
2
transaction affecting interstate commerce."
7
1130184, 1130231
First, as to Willis's claim that the arbitration clause
was induced by fraud on the part of the defendants, the
defendants
correctly
state
that
"[n]o
evidentiary
materials
of
record support Willis'[s] arguments." Indeed, the record on
appeal is entirely devoid of any evidence supporting Willis's
argument on this issue. Notably, Willis's brief provides no
example of the allegedly fraudulent misrepresentations the
defendants used to procure Willis's signature on the
arbitration clause in the written contract. Rather, Willis
generally recites that the arbitration clause was procured by
fraud, recites that he raised that issue in the trial court,
and then concludes that the trial court did not err in denying
the defendants' motion to compel arbitration. None of the
documents in the record to which he cites contains evidence
supporting an allegation that the arbitration clause was
induced by fraud on the part of the defendants.
Next, Willis argues that the arbitration clause was
induced by fraud because the language of that clause was in
"unhighlighted small print" at the bottom of the written
contract. As the defendants
correctly noted:
"The arbitration
clause is set forth in the same size print and the same font
8
1130184, 1130231
as the rest of the contract terms, and is located in the body
of the one-page contract." Therefore, this argument provides
no basis for concluding that the arbitration clause was
induced by fraud or was otherwise unenforceable. See Southern
Energy Homes, Inc. v. Ard, 772 So. 2d 1131, 1135 (Ala. 2000)
("Because, in all other respects, the arbitration language is
just as conspicuous as the other provisions of the warranty
..., we find that it is a binding part of the warranty.").
See also Advance Tank & Constr. Co., v. Gulf Coast Asphalt
Co., 968 So. 2d 520, 528 (Ala. 2006) (noting that no "special
disclosure" is required to point out the existence of an
arbitration provision in a contract).
Finally, we see no merit in Willis's argument that there
exists a separate oral contract and that the existence of that
oral contract supports a denial of the motion to compel
arbitration. First, the arbitration clause provides
that "any
and all disputes" between the parties are to be settled by
arbitration. This broad language alone indicates that the
scope of the arbitration clause would encompass any "dispute"
between the parties related to any subsequent oral contract
between these parties as to this subject. Additionally, and
9
1130184, 1130231
most importantly, the terms of the purported oral contract are
actually found as part of the written contract. Specifically,
the written contract between the parties states that Willis
had "tentatively scheduled the following hunt: A one client to
one guide hunt for Moose, Brown/Grizzly Bear and Fishing." The
written contract also states that "Black Bear can be added to
the hunt for an additional $800.00 each." After executing the
written contract, the defendants sent Willis a document
entitled "Important Contract Addendum & Information," which
required Willis to complete and sign several forms and return
the forms to the defendants. One of the forms Willis was
required to complete, sign, and return to the defendants was
a "Medical Information Form." On that form, Willis was asked
to provide, among other things, "[a]ny information to make
[his] trip more comfortable"; Willis completed that portion
of
the form by stating that he desired to "[g]et a Trophy
Moose/Grizzly/Black Bear[,] Wolf/Wolverine, [and] catch Lots
of fish." (Emphasis added.) The defendants did not object to
Willis's statement on the "Medical Information Form" that he
wanted to hunt black bear, and, in fact, the record on appeal
shows that Willis paid an additional $800 fee to hunt "for a
10
1130184, 1130231
Black Bear." Thus, in the addendum to the written contract,
the parties evidenced their intention to add a hunt for black
bear, wolf, and wolverine to the guided hunting trip for which
the parties had originally contracted. As stated by the
defendants: "Willis merely added another species to
be
hunted,
which was an option set forth in the original contract."
Accordingly, Willis's hunt for black bear was expressly
governed by the provisions of the written contract containing
the arbitration clause.
In sum, after the defendants presented a properly
supported motion to compel arbitration, the burden then
shifted to Willis to present evidence indicating that the
arbitration clause is not valid or that it does not apply to
the dispute in question; Willis failed to do either.
Therefore, the trial court erred in denying the defendants'
motion to compel arbitration.
3
The terms of the arbitration clause cover only disputes
3
between Alaska Bush and Willis. However, the written contract
containing the arbitration clause was signed on behalf of
Alaska Bush by its agents, Hugh and Ryan. See Ex parte
Carter, 66 So. 3d 231 (Ala. 2010) ("[T]his Court has stated
that a 'corporation is a legal entity, an artificial person,
and can only act through agents,' Townsend Ford, Inc. v.
Auto–Owners Ins. Co., 656 So. 2d 360, 363 (Ala. 1995), and
that agents 'stand in the shoes' of their principals and can
enforce
certain
contractual
agreements
...."(emphasis
added)).
11
1130184, 1130231
C. Conclusion
The trial court's order denying the motion to compel
arbitration is reversed and the cause remanded for the trial
court to enter an order granting the motion.
1130184--PETITION DENIED.
Moore, C.J., and Stuart, Parker, and Main, JJ., concur.
Shaw and Bryan, JJ., and Lyons, Special Justice,* concur
specially.
Bolin and Murdock, JJ., dissent.
Wise, J., recuses herself.
1130231--REVERSED AND REMANDED.
Stuart, Parker, Shaw, Main, and Bryan, JJ., and Lyons,
Special Justice,* concur.
Moore, C.J., and Bolin and Murdock, JJ., dissent.
Wise, J., recuses herself.
*Retired Associate Justice Champ Lyons, Jr., was
appointed to serve as a Special Justice in regard to these
appellate proceedings.
12
1130184, 1130231
SHAW, Justice (concurring specially in case no. 1130184).
I concur in case no. 1130184 to deny the petition for a
writ of mandamus filed by Alaska Bush Adventures, LLC, Hugh
Les Krank, and Ryan L. Krank (hereinafter referred to
collectively as "the defendants") challenging the trial
court's denial of their motions to dismiss Guy R. Willis's
action against them for lack of personal jurisdiction. The
main opinion essentially denies the petition without an
opinion; I write specially in that case to explain my
rationale for agreeing to deny the petition.
If the trial court in this case did not initially possess
personal jurisdiction over the defendants, then I
believe
that
the defendants later consented to the trial court's
jurisdiction. Specifically, the defense of lack of personal
jurisdiction is subject to waiver or consent; when a defendant
seeks "affirmative relief from [an Alabama] court," he may be
deemed to have "purposely availed himself of conducting
activities in Alabama ...." Owen v. Owen, 571 So. 2d 1200,
1201 (Ala. Civ. App. 1990). See also Bel-Ray Co. v. Chemrite
(Pty) Ltd., 181 F.3d 435, 443 (3d Cir. 1999) ("[W]here a party
seeks affirmative relief from a court, it normally submits
13
1130184, 1130231
itself to the jurisdiction of the court with respect to the
adjudication of claims arising from the same subject
matter."). In the instant case, the defendants filed their
motion to compel arbitration on January 2, 2013; their motions
to dismiss for lack of personal jurisdiction were filed nine
days later on January 11, 2013. Other courts have determined
that a motion to compel arbitration seeks
"affirmative
relief"
from a court:
"A motion to compel arbitration is a request for
affirmative relief, it is not merely a ministerial
act seeking to preserve the status quo, such as
filing a general denial or asserting affirmative
defenses. See Quanto Int'l Co., Inc. v. Lloyd, 897
S.W.2d 482, 487 (Tex. App.-Houston [1st Dist.] 1995)
(a 'request to compel arbitration is a claim for
"affirmative
relief"')(internal
quotations
omitted);
Arnold v. Garlock Inc., 288 F.3d 234, 237 (5th Cir.
2002) (same); Tri-State Consumer Ins. Co. v. Prop.
& Cas. Mgmt. Sys., Inc., [(No. 11-02-00125-CV, Jan.
23, 2003)(not reported in S.W.3d)] ('A motion to
compel arbitration seeks affirmative relief and
recognizes a trial court's jurisdiction.')."
Garcia v. SSP Partners (Civil Action No. C-06-385, Oct. 3,
2006) (S.D. Tex. 2006) (not reported in F. Supp. 2d). See
also McKinnon v. Doctor's Assocs., Inc., 769 F. Supp. 216, 220
(E.D. Mich. 1991) ("The motion to compel arbitration ...
sought the affirmative relief of compelling the plaintiffs to
submit their claims to arbitration.") By asking the trial
14
1130184, 1130231
court to compel arbitration, the defendants were seeking
affirmative relief; they thus subjected themselves to the
jurisdiction of the trial court. As one court has stated, it
is contradictory for a party to argue that a court has no
personal jurisdiction over it, while at the same time
requesting the court to compel arbitration:
"[G]iven that Defendants have filed a motion to
compel arbitration in this Court, their position
[that the court lacks] personal jurisdiction seems
disingenuous. They cannot argue that they may
consent to personal jurisdiction for purposes of
their own motion to compel arbitration, but object
to the exercise of personal jurisdiction for
purposes of Plaintiff's request for declaratory and
injunctive relief. Both requests raise the same
issue ... and therefore, the Court has personal
jurisdiction to consider either request."
Express Scripts, Inc. v. Apothecary Shoppe, Inc. (No.
4:12CV01035 AGF, Sept. 30, 2013)(E.D. Mo. 2013) (not reported
in F. Supp. 2d). Here, in one motion the defendants
4
As another court has noted:
4
"Here ... the court finds that Haas submitted to
the jurisdiction of this court through its motion to
compel arbitration, constituting a waiver of its due
process right. First of all, the defendant's earlier
motion asked this court to interpret the language of
the contract at issue in this case and order relief
in the form of compelling arbitration, an explicit
request for this court to exercise its power to
affect both the plaintiff and defendant. See
Mississippi
Valley
Dev.
Corp.
v.
Colonial
15
1130184, 1130231
requested that the trial court act and grant them the
affirmative relief of compelling arbitration but later argued
Enterprises, Inc., 300 Minn. 66, 71–72, 217 N.W.2d
760 (1974) (holding that the defendant's filing of
a motion to compel arbitration 'invok[ed] the power
of the court' and waived the defense of lack of
personal jurisdiction); see generally 1 Robert C.
Casad & William B. Richman, Jurisdiction in Civil
Actions § 3–1(iii) (3d ed. 1998) ('A demand for
arbitration has been held to waive personal
jurisdiction defenses'). When a defendant's conduct
does not 'reflect a continuing objection to the
power of the court to act,' the defense of lack of
personal jurisdiction is waived. Yeldell v. Tutt,
913 F.2d 533, 539 (8th Cir. 1990); see also Echo,
Inc. v. Whitson Co., 52 F.3d 702, 707 (7th Cir.
1995)
('The
parties
consented
to
personal
jurisdiction
simply
by
participating
in
the
proceedings before the district court without
protest'); see generally Restatement (Third) of
Foreign Relations Law of the United States § 421(3)
('A defense of lack of jurisdiction is generally
waived by any appearance ... for a purpose that does
not include a challenge to the exercise of
jurisdiction'); Restatement (Second) of Conflict of
Laws § 33 ('A state has power to exercise judicial
jurisdiction over an individual who enters an
appearance as defendant in an action with respect to
a claim that arose out of the transaction which is
the subject of the action or is one that may in
fairness be determined concurrently with that
action.') While this case may be a 'closer call'
than some of the cases cited by the plaintiff in its
response brief, here, the defendant asked this court
to use its power to influence the ultimate
resolution of this matter, amounting to conduct that
acknowledges the court's in personam jurisdiction."
Derse Inc. v. Haas Outdoors Inc. (No. 09–CV–97, Feb. 4, 2011)
(E.D. Wis. 2011) (not reported in F. Supp. 2d).
16
1130184, 1130231
on separate motions that the trial court had no jurisdiction
to act in the first place.
"It is a fundamental rule that
"'when a party invokes the jurisdiction of
a court on an alleged state of facts which
gives the court
jurisdiction, and the court
has
proceeded
to
determine
the
controversy,
the
party
or
parties
invoking
its
jurisdiction will not be permitted to
assume an inconsistent position in the same
proceedings or question the regularity
thereof; and this principle applies on
appeal as well as to the proceedings in the
trial court.'"
Godwin v. Bogart, 674 So. 2d 606, 608 (Ala. Civ. App. 1995)
(quoting Clark v. Holland, 274 Ala. 597, 599, 150 So. 2d 702,
704 (1963)). In this case, the defendants requested that the
trial court decide the "controversy" whether arbitration
should be compelled and thus consented to the trial court's
exercise of jurisdiction to do so. Because they consented to
the jurisdiction of the trial court, they cannot show "a clear
legal right to the order [of dismissal] sought" or "an
imperative duty upon the respondent to perform," which are
necessary to be entitled to mandamus relief. Ex parte BOC
Grp., Inc., 823 So. 2d 1270, 1272 (Ala. 2001). I thus concur
to deny the petition.
Bryan, J., concurs.
17
1130184, 1130231
LYONS, Special Justice (concurring specially in case no.
1130184).
Rule 12(b), Ala. R. Civ. P., expressly authorizes a
defendant to assert a defense of lack of jurisdiction over the
person in its answer, as opposed to doing so by motion filed
pursuant to Rule 12(b)(2), Ala. R. Civ. P. Although a
subsequent motion under Rule 12(b)(2) is not the proper
vehicle when the defense has previously been asserted in an
answer, the command in Rule 1(c), Ala. R. Civ. P., for
construction of the Rules of Civil Procedure to secure the
just determination of every action requires treatment of a
motion under Rule 12(b)(2) as a motion for a preliminary
hearing pursuant to Rule 12(d), Ala. R. Civ. P. See 5C
Charles Alan Wright & Arthur R. Miller, Federal Practice and
Procedure § 1361 n. 8. (3d ed. 2004), for a similar
construction of the applicable federal rule.
As Justice Murdock notes in his dissenting opinion, the
defendants initially set forth the defense of lack of
jurisdiction over the person in an answer filed on December
21, 2012, and the defense was referred to in the defendants'
motion to compel arbitration filed on January 2, 2013. The
defendants there stated that they intended to file a motion
18
1130184, 1130231
seeking
dismissal
based
on
the
absence
of
personal
jurisdiction and that arbitration was being sought only in the
event the court denied their forthcoming motions to dismiss.
The motions to dismiss for want of personal jurisdiction filed
pursuant to Rule 12(b)(2) were filed on January 11, 2013. A
memorandum in support of the defendants' motion to compel
arbitration and in response to Willis's opposition to the
defendants' motion to compel was filed on February 12, 2014.
In the opening paragraph of the response, the defendants again
stated that arbitration was being sought only in the event the
trial court denied their motions to dismiss. Rather than
treat
the
potentially
dispositive motions
to
dismiss
separately, the trial court heard arguments on all the motions
on April 3, 2013, and denied all the motions on October 16,
2013.
The proper procedure would have been for the defendants
to defer presentation of their motion to compel arbitration
until the trial court had ruled on the dispositive motions to
dismiss. However, the defendants invited a ruling on an issue
as to which the trial court lacked jurisdiction to decide if
the motions to dismiss were well taken. I recognize that the
defendants coupled their motion to compel arbitration with
19
1130184, 1130231
language to the effect that the motion would not be ripe for
a ruling if the court granted their motions to dismiss.
However, the undeniable fact remains -- if the trial court had
erroneously denied the motions to dismiss and this Court
overturns that order by issuance of the writ of mandamus in
response to the defendants' petition, the trial court will
have decided a moot issue -- the issue of arbitrability.
In his dissenting opinion Justice Murdock supports his
view that no waiver is here presented by citing Gerber v.
Riordan, 649 F.3d 514 (6th Cir. 2011), in which the court
stated:
"Only those submissions, appearances and filings
that give '[P]laintiff a reasonable expectation that
[Defendants] will defend the suit on the merits or
must cause the court to go to some effort that would
be wasted if personal jurisdiction is later found
lacking,' [Mobile Anesthesiologists Chicago, LLC v.
Anesthesia Associates of Houston Metroplex, P.A.,
623 F.3d 440, 443 (7th Cir. 2010)], result in waiver
of a personal jurisdiction defense."
(Emphasis added.) Gerber therefore supports the view that the
submission of a potentially moot issue for decision by the
trial court along with a challenge to jurisdiction is a waiver
20
1130184, 1130231
of the jurisdictional issue. I find Justice Murdock's
5
attempt to distinguish Gerber to be unpersuasive.
The defendants have tried to have their cake and eat it
too. See Malsch v. Bell Helicopter Textron, Inc., 916 So. 2d
600, 609 (Ala. 2005) (Lyons, J., dissenting):
"Such acrobatic posturing violates the following
equitable principle: 'Thou shalt not have it both
ways.' As the English Court of Exchequer in Cave v.
Mills, 7 H. & W. 927, 31 L.J. Ex. 265 (1862), put
it: 'A man shall not be allowed to blow hot and
cold, to claim at one time and deny at another.'"
If the defendants have waived the defense of lack of
jurisdiction over the person, the only issue for this Court to
decide is whether the trial court erred in denying
arbitration. I concur with the majority's analysis reversing
the trial court’s denial of the defendants' motion to compel
arbitration.
We are not here presented with a defendant who has
5
unsuccessfully moved for dismissal for lack of personal
jurisdiction and then, after the denial of its motion,
defended the action rather than suffer the consequences of a
default while continuing to assert its jurisdictional defense
along
with
its
defense
of
the
merits.
Under
those
circumstances, this Court has recognized a defendant's right
to appeal the denial of the motion to dismiss for lack of
personal jurisdiction after entry of final judgment against
the defendant. See Ex parte United Ins. Cos., 936 So. 2d 1049,
1056 (Ala. 2006).
21
1130184, 1130231
MURDOCK, Justice (dissenting).
As a preliminary matter, I respectfully must disagree
with the suggestion in Justice Lyons's special concurrence
that a motion asserting the defense of lack of in personam
jurisdiction under Rule 12(b)(2), Ala. R. Civ. P., is not
"proper" merely because that defense already has
been asserted
by a defendant in a previously filed answer. Rule 12(b)(2)
provides that such a defense "may at the option of the
pleader" be made in a separate motion. I do not read this
permission to assert such a defense in a separate motion as
conditioned upon the movant having withheld that defense from
the text of a previously filed answer. See, e.g., Lechoslaw v.
Bank of America, N.A., 618 F.3d 49 (1st Cir. 2010) (assertion
of defense of lack of in personam jurisdiction in an answer
followed by specific assertion of it in motion for relief
under Rule 12, Fed. R. Civ. P.).
Similarly, I do not see that the rule of construction
expressed in Rule 1(c), Ala. R. Civ. P. (for the just
determination of every action) in some way
"requires treatment
of a motion under Rule 12(b)(2) as a motion for a preliminary
hearing pursuant to Rule 12(d), Ala. R. Civ. P." ___ So. 3d
at ___ (Lyons, Special Justice, concurring specially). As the
22
1130184, 1130231
rule contemplates, an "application" for a pretrial hearing --
as opposed to waiting for a ruling at trial on the defense
asserted in either an answer or a motion -- is a different
matter than the motion itself.
That said, I write separately primarily to address the
merits of the issue presented and, in that regard, to explain
why I do not believe the defendants waived their defense of
lack of in personam jurisdiction grounded, as it was, on the
inability of the plaintiff to satisfy the so-called "minimum
contacts" test.
Alaska Bush Adventures, LLC, Hugh Les Krank, and Ryan L.
Krank
(hereinafter
referred
to
collectively
as
"the
defendants") asserted their defense of a lack of in personam
jurisdiction in their initial responsive pleading, an answer
filed on December 21, 2012. On January 2, 2013, only a few
days
later (following two
intervening
holidays),
the
defendants, faced with a motion for a default judgment and
pending discovery requests, filed a motion for a stay of the
judicial proceedings and for arbitration; they included in
this motion a statement pointing out that a separate motion to
dismiss based on lack of in personam jurisdiction, as alleged
in their December 21 answer, was about to be filed. Nine days
23
1130184, 1130231
later, the defendants did, in fact, file separate motions
asserting the same minimum-contacts in personam jurisdiction
defense raised in their answer three weeks earlier and in the
motion they had filed nine days earlier. Against this
procedural backdrop, the trial court refrained from ruling on
the defendants' motion regarding arbitration until it issued
a combined order simultaneously denying the defendants'
motions to dismiss for lack of in personam jurisdiction and
the defendants' motion to compel arbitration.
Under these circumstances, I do not believe the
defendants' actions constituted the legal submission to the
jurisdiction of the court contemplated for the submission to
constitute a waiver of the defense of lack of in personam
jurisdiction. What is required -- but is not present in this
case -- is a "failure to assert [the defense] seasonably."
Neirbo Co. v. Bethlehem Shipbuilding Corp., 308 U.S. 165, 168
(1939). In this regard, federal courts have long since
abandoned the notion that a so-called "general appearance"
automatically constitutes a waiver of a defense of lack of
personal jurisdiction. See generally 5B Charles Alan Wright
& Arthur R. Miller, Federal Practice and Procedure § 1344
(3d ed. 2004). So too have our rules. See generally
24
1130184, 1130231
Committee Comments to Rule 12, Ala. R. Civ. P., explaining the
movement away from "special appearances" and the principle
that "neither the filing of a general appearance, nor the
taking of a position looking to the merits, prevents a party
from attacking the jurisdiction of the court or the service of
process."
Federal jurisprudence now widely accepts the notion that
the question of waiver is not answered by the application of
rigid default rules but lies in a "gray area" that must be
examined on a case-by-case basis at the discretion of the
trial court. For example, in Lechoslaw, supra, the United
6
States Court of Appeals for the First Circuit shed the
following light on the issue:
"It is clear that 'a defense of lack of jurisdiction
over the person is waived if not timely raised in
the answer or a responsive pleading.' Id. (quoting
Fed. R. Civ. P. 12(h)) (internal quotations and
marks omitted); see also Mass. R. Civ. P. 12(h)
Because the issue of waiver calls for the exercise of
6
discretion on the part of the trial court, and because in this
case any decision by this Court that a waiver occurred must be
made ex mero motu, to the extent the majority bases its
decision on a finding of waiver I find that decision
unsupportable. I do not believe we can make such a decision
as a matter of law, which we would have to do in order to make
the decision ex mero motu. Concomitantly, I do not believe we
can make such a decision ex mero motu under the circumstances
without implicating the due-process rights of the defendants.
25
1130184, 1130231
(same). However, even if the issue of personal
jurisdiction is raised in its answer or other
responsive pleading, a party may nevertheless waive
jurisdiction if it makes voluntary appearances and
contests the case at all stages until judgment is
rendered. Ingersoll v. Ingersoll, 348 Mass. 209,
202 N.E.2d 820, 821 (1964). Those are the two
extremes; in between lies a wide gray gulf. ...
"....
"... Lechoslaw ... argues that Bank Handlowy is
anyway precluded by its actions and by laches from
raising the issue of personal jurisdiction because
it
propounded
discovery
requests,
negotiated
extensions to the time required to respond to the
discovery requests, solicited a confidentiality
agreement, and because it filed an assented-to
motion to expand the tracking order before filing
its Rule 12 motion [asserting lack of personal
jurisdiction]. ...
"... A determination as to 'waiver [of personal
jurisdiction is] within the discretion of the trial
court, consistent with its broad duties in managing
the conduct of cases pending before it.' United
States v. Ziegler Bolt & Parts Co., 111 F.3d 878,
882 (Fed. Cir. 1997). Thus, '[o]n appeal, this
court defers to the judgment of the trial court on
such matters closely associated with the standard
functions of the adjudicative process, so long as
that judgment is not an abuse of the trial court's
discretion. ...' Id. (internal citations omitted);
see also Hamilton v. Atlas Turner, Inc., 197 F.3d
58, 60 (2d Cir. 1999). ...
"Bank
Handlowy's
answer
to
Lechoslaw's
complaint
included the affirmative defense of lack of personal
jurisdiction. The language ... from Bank Handlowy's
motion[] does not imply that Bank Handlowy had
assented to jurisdiction. The quote makes clear
that Bank Handlowy contested personal jurisdiction
26
1130184, 1130231
in its answer. It only clarifies the reason why
Bank Handlowy chose to file an answer, its first
responsive pleading in this case, before it filed a
Rule 12 motion. There is nothing the matter with
Bank Handlowy's chosen order of filings given that
its answer included the personal jurisdiction
defense. In addition, the fact that Bank Handlowy
assented to a motion to extend the tracking order
before it filed its Rule 12 motion is also not
reason to find waiver, and the cases Lechoslaw cites
are not to the contrary. The trial court did not
abuse its discretion in finding Bank Handlowy did
not
waive
its
defense
of
lack
of
personal
jurisdiction."
618 F.3d at 55-56 (footnotes omitted).
Consistent with the aforesaid analysis, the test to be
applied in this case-by-case-examination basis has been
framed
aptly
by
one
court
as
whether
a
defendant
"substantially
participates
in
the
litigation
without
actively
pursuing its Rule 12(b)(2) defense." Matthews v. Brookstone
Stores, Inc., 431 F. Supp. 2d 1219, 1223 (S.D. Ala. 2006).
Although it has been said that the examination should turn on
"all relevant factors,"
the
examination primarily turns on two
factors: The length of time between an initial appearance and
the assertion of the defense and the nature and extent of
participation in the trial court proceedings before the
assertion of the defense.
27
1130184, 1130231
The United States District Court for the Southern
District of Alabama has compiled the following well researched
and instructive review of federal caselaw in this regard:
"In the typical waiver scenario, a personal
jurisdiction defense is abandoned when a defendant
fails to raise the issue in either a responsive
pleading or a Rule 12 motion. See Stubbs [v.
Wyndham Nassau Resort & Crystal Palace Casino], 447
F.3d 1357, 1364 [(11th Cir. 2006)]; Palmer v. Braun,
376 F.3d 1254, 1259 (11th Cir. 2004) (explaining
that defendant waives personal jurisdiction defense
by not interposing it in responsive pleading or
motion to dismiss); Posner v. Essex Ins. Co., 178
F.3d 1209, 1213, n. 4 (11th Cir. 1999) ('By omitting
this defense from its motion, Essex waived any
challenge it could have asserted to the court's
exercise of personal jurisdiction over it.').3
However, personal jurisdiction may also be waived,
even if a defendant has nominally preserved the
defense by reciting it in an answer, if that
defendant
substantially
participates
in
the
litigation without actively pursuing its Rule
12(b)(2) defense. See Rates Technology Inc. v.
Nortel Networks Corp., 399 F.3d 1302, 1309 (Fed.
Cir. 2005) (noting that 'a party may consent to
personal jurisdiction by extensively participating
in
the
litigation
without
timely
seeking
dismissal'); PaineWebber Inc. v. Chase Manhattan
Private Bank (Switzerland), 260 F.3d 453, 459 (5th
Cir. 2001) (acknowledging 'well-established rule
that parties who choose to litigate actively on the
merits
thereby
surrender
any
jurisdictional
objections'); Hamilton v. Atlas Turner, Inc., 197
F.3d 58, 60 (2nd Cir. 1999) (observing that 'delay
in challenging personal jurisdiction by motion to
dismiss may result in waiver, even where ... the
defense was asserted in a timely answer') (citations
omitted); Peterson v. Highland Music, Inc., 140 F.3d
1313, 1318 (9th Cir. 1998) ('Most defenses,
including
the
defense
of
lack
of
personal
28
1130184, 1130231
jurisdiction, may be waived as a result of the
course of conduct pursued by a party during
litigation.');
Hunger
U.S.
Special
Hydraulics
Cylinders Corp. v. Hardie–Tynes Mfg. Co., 203 F.3d
835
(10th
Cir.
2000)
('After
its
lengthy
participation in this litigation, ... [defendant]
may not pull its personal jurisdiction defense out
of the hat like a rabbit.') (citations omitted).4
"Here, D & M mentioned personal jurisdiction
amidst a laundry list of affirmative defenses in its
answer, but failed to move forward with that defense
for several months. The critical question, then, is
whether that conduct gives rise to an implicit
waiver of the personal jurisdiction defense, even
after it has been properly raised in a responsive
pleading. In synthesizing extant jurisprudence on
this issue, one commentator has observed that 'the
cases are far from uniform' and that 'the result
seems to turn on the particular circumstances of an
individual case.' Charles A. Wright & Arthur R.
Miller, Federal Practice and Procedure: Civil 3d
§ 1391. Thus, '[w]hen considering whether a
defendant has forfeited the defense of lack of
personal jurisdiction, despite that defendant's
technical compliance with Rule 12(h) ..., the court
examines
all
of
the
relevant
circumstances.'
Epperson
v.
Entertainment
Express,
Inc.,
338
F. Supp. 2d 328, 334 (D.Conn. 2004) (identifying
factors such as whether objecting party had
previously requested that court take action in its
favor).
"Despite this rather nebulous framework and the
paucity of Eleventh Circuit guidance, review of
persuasive
authority
from
other
jurisdictions
discloses two clear organizing principles for the
'waiver-by-conduct' analysis. First, courts pay
close attention to the length of time that elapses
between service of process and a defendant's pursuit
of a personal jurisdiction defense via a Rule
12(b)(2) motion. The longer the time interval, the
more likely it is that courts will find a waiver.
29
1130184, 1130231
See Hamilton, 197 F.3d at 62 (determining that
defendant forfeited personal jurisdiction defense by
failing to raise it for four years after inclusion
of defense in answer); Continental Bank, N.A. v.
Meyer, 10 F.3d 1293, 1297 (7th Cir. 1993) (finding
waiver where defendants did not actively contest
personal jurisdiction for more than two and a half
years after listing the defense in their answer);
Hunger, [203 F.3d 835] (defendant waived personal
jurisdiction defense by waiting more than three
years to file motion to dismiss on that basis, after
first timely raising the defense in its answer);
Plunkett v. Valhalla Investment Services, Inc., 409
F. Supp. 2d 39, 41–42 (D. Mass. 2006) (finding that
defendants abandoned personal jurisdiction defense
by referencing it in their answer, then waiting 13
months before litigating the defense); Schwartz v.
M/V GULF SUPPLIER, 116 F. Supp. 2d 831, 835 (S.D.
Tex. 2000) (deeming waiver to have occurred where
defendant listed personal jurisdiction defense in
answer, then failed to file motion to dismiss until
eve of trial, some nine months after action
commenced).
By
contrast,
the
shorter
the
intervening time period, the more likely it is that
no waiver will be construed. See Brokerwood
Products Int'l (U.S.), Inc. v. Cuisine Crotone,
Inc., [104 Fed. App'x 376] (5th Cir. 2004) (finding
that district court erred in holding that defendant
waived challenge to personal jurisdiction where
seven months passed between defendant's answer
raising defense and its motion to dismiss); Sunlight
Saunas, Inc. v. Sundance Sauna, Inc., 427 F. Supp.
2d 1011, 1015 (D. Kan. 2006) (no waiver where
defendant filed Rule 12(b)(2) motion less than two
months after being joined as a party).5
"Second, in addition to the sheer passage of
time, courts assessing whether there is a waiver by
conduct look to the extent of the objecting
defendant's involvement in the action. The more
6
active a defendant has been in litigating a case,
the more likely it is that the defendant will be
deemed
to
have
waived
defects
in
personal
30
1130184, 1130231
jurisdiction and impliedly consented to a court's
jurisdiction. See Hamilton, 197 F.3d at 62 (finding
waiver where defendant had participated in extensive
pretrial
proceedings
before
filing
motion
to
dismiss); Yeldell v. Tutt, 913 F.2d 533, 539 (8th
Cir. 1990) (discerning waiver where defendant
participated
in
discovery,
filed
motions,
participated in five-day trial, and filed post-trial
motions, all before seeking ruling on personal
jurisdiction defense); Continental, 10 F.3d at 1297
(personal
jurisdiction
defense
waived
where
defendants participated in lengthy discovery, filed
various motions, and opposed a number of plaintiff's
motions, before submitting Rule 12(b)(2) issue to
court); Plunkett, 409 F. Supp. 2d at 41–42 (deeming
personal
jurisdiction
defense
abandoned
where
defendant participated in scheduling conference,
conducted discovery, consented to ADR, entered into
discovery-related stipulation and protective order,
and petitioned for pro hac vice status for non-local
counsel); but see Brokerwood, [104 Fed. App'x 376]
(personal jurisdiction defense not waived where case
was dormant during most of its pendency; where
defendant's litigation conduct had been limited to
participating in scheduling conference, filing
initial disclosures, filing motion to strike jury
demand,
and
filing
interrogatories,
document
requests and witness list; and where defendant had
neither filed counterclaims nor sought adjudication
on merits of any claim); Sunlight Saunas, at 1015
(defendants
did
not
actively
participate
in
litigation to extent of waiving right to challenge
personal jurisdiction where their activities were
limited to serving initial disclosures, attending
pretrial conference, and joining in motion to
strike).
_______________
" This result is dictated by Rule 12(h)(1), Fed.
3
R. Civ. P., which provides that a personal
jurisdiction defense is waived if it is neither
consolidated with any other defenses presented in a
31
1130184, 1130231
Rule 12 motion nor recited in a motion to dismiss or
other responsive pleading.
" In this respect, Rule 12(h) merely sets the
4
outer limits of waiver, without precluding waiver by
implication. Indeed, '[a]sserting a jurisdictional
defect in the answer did not preserve the defense in
perpetuity. This defense may be lost by failure to
assert it seasonably, by formal submission in a
cause, or by submission through conduct.' Yeldell
v. Tutt, 913 F.2d 533, 539 (8th Cir. 1990) (internal
citations and quotations omitted). On this point, it
does not suffice to comport with the letter of Rule
12(h); rather, litigants must adhere to its spirit
by pursuing a personal jurisdiction defense in a
reasonably prompt fashion 'to expedite and simplify
proceedings in the Federal Courts.' Id.; see also
Continental Bank, N.A. v. Meyer, 10 F.3d 1293, 1297
(7th Cir. 1993) (similar). If a defendant fails to
do so, then he may be found to have waived his
personal jurisdiction defense, notwithstanding its
inclusion in a responsive pleading.
" One apparent aberration to this pattern is
5
Datskow v. Teledyne, Inc., 899 F.2d 1298 (2nd Cir.
1990), wherein the Second Circuit classified a
four[]-month
delay
in
challenging
personal
jurisdiction as a waiver of the defense. In so
ruling, however, the Datskow court took pains to
point out that the motion to dismiss in that case
contested personal jurisdiction on the basis of
defective
service,
not
lack
of
long-arm
jurisdiction. An important caveat to the Datskow
holding was that 'this is not a case where a
defendant is contesting personal jurisdiction on the
ground that longarm jurisdiction is not available.'
Id. at 1303. Datskow strongly implied that a
four-month delay would be insufficient to create a
waiver in a long-arm circumstance, opining that it
'would be slower to find waiver by a defendant
wishing to contest whether it was obliged to defend
in a distant court.' Id.; see also Hamilton, 197
F.3d at 60 (indicating that Datskow contemplated
32
1130184, 1130231
'enhanced caution' in treatment of waiver issue
where defense challenges jurisdiction under state's
long-arm statute). Thus, far from being an outlier,
Datskow may be neatly harmonized with the foregoing
spectrum of authorities on the temporal criterion.
" The two factors are, of course, logically
6
intertwined. As one court explained, 'the time
period provides the context in which to assess the
significance of the defendant's conduct, both the
litigation
activity
that
occurred
and
the
opportunities to litigate the jurisdictional issue
that were forgone.' Hamilton, 197 F.3d at 61."
Matthews, 431 F. Supp. 2d at 1223-25 (S.D. Ala. 2006).
Applying the foregoing principles, and comparing the
facts and results achieved in the many cases described above
with the facts of this case, I simply cannot justify a
conclusion that the defendants did not "seasonably" assert
their Rule 12(b)(2) defense of lack of personal jurisdiction.
I see no more "substantial participation" in the litigation
process by the defendants in the steps taken by the defendants
in this case, particularly in the compressed time frame in
which they were take, than, for example, occurred in Matthews
(rejecting the waiver argument where the defendant delayed
four months in bringing motion to dismiss, after first raising
defense in its answer, when in the interim it filed required
documents and discovery responses and joined in plaintiff's
request to extend time for its deposition).
33
1130184, 1130231
In a recent case that is consistent with the foregoing
authority, Gerber v. Riordan, 649 F.3d 514 (6th Cir. 2011),
the United States Court of Appeals for the Sixth Circuit held
as follows:
"In deciding whether Defendants waived their
personal jurisdiction defense, we must determine
whether any of Defendants' appearances and filings
in the district court constituted 'legal submission
to the jurisdiction of the court.' Days Inns
[Worldwide v. Patel], 445 F.3d [899] at 905 [(6th
Cir. 2006)]. As an initial matter, we note that
while 'the voluntary use of certain [district] court
procedures' serve as 'constructive consent to the
personal jurisdiction of the [district] court,'
[Insurance Corp. of Ireland, Ltd. v.] Compagnie des
Bauxites de Guinee, 456 U.S. [694] at 704, 102 S.Ct.
2099
[(1982)],
not
all
do.
See
Mobile
Anesthesiologists
Chicago,
LLC
v.
Anesthesia
Associates of Houston Metroplex, P.A., 623 F.3d 440,
443 (7th Cir. 2010). Only those submissions,
appearances and filings that give '[P]laintiff a
reasonable expectation that [Defendants] will defend
the suit on the merits or must cause the court to go
to some effort that would be wasted if personal
jurisdiction is later found lacking,' id. at 443,
result in waiver of a personal jurisdiction
defense."
649 F.3d at 519 (emphasis added). Given the timing and
content of the filings made by the defendants in this case, I
am clear to the conclusion that those filings do not satisfy
the above-quoted standard.
In his special concurrence, however, Justice Lyons posits
that Gerber actually supports the view that the defendants
34
1130184, 1130231
waived their defense of lack of in personam jurisdiction.
Gerber states two circumstances that could have such effect.
The first is the filing by the defendants of a "submission[],
appearance[] [or] filing[] that give[s] '[P]laintiff a
reasonable expectation that [Defendants] will defend the suit
on the merits." 649 F.3d at 519. From the outset, however,
the defendants made it clear that it was their position that
the trial court lacked in personam jurisdiction and that they
would promptly pursue this defense (which they did). The
defendants' filings could not reasonably have led the
plaintiff to believe that the defendants acquiesced to the
trial court as a proper forum for the litigation of the
plaintiff's action.
The second circumstance stated in Gerber that can give
rise to a waiver -- and the circumstance highlighted by
Justice Lyons in his special concurrence -- also is not
present. For the reasons stated above, the filings by the
defendants did not put the trial court in a position where it
became necessary for it to make a ruling that would be wasted
in the event jurisdiction was later found lacking. Moreover,
the second prong of Gerber specifically states that the filing
of the defendant actually "'must cause the court to go to some
35
1130184, 1130231
effort'" before a ruling on a motion to dismiss for lack of
personal jurisdiction "'that would be wasted if personal
jurisdiction is later found lacking.'" 649 F.3d at 519
(quoting Mobile Anesthesiologists Chicago, LLC v. Anesthesia
Assocs. of Houston Metroplex, P.A., 623 F.3d 440, 443 (7th
Cir. 2010) (emphasis added)). Here, it is undisputed that the
defendants did not cause the court to go to any such effort,
and, in point of fact, the trial court did not go to such
effort. Again, from the very outset, the defendants advised
the trial court that they promptly would pursue, and they
promptly did pursue, a defense of lack of in personam
jurisdiction. In accord with that "advisement," the trial
court withheld going to any effort to rule on the defendants'
motion to compel arbitration until it also ruled on the
defendants' motions to dismiss for lack of jurisdiction. The
requirement that the defendants actually cause the
trial
court
to go to some effort prior to a later ruling on a motion to
dismiss for lack of in personam jurisdiction simply is not met
in this case. Thus, in addition to all the other cases cited
above, Gerber supports the conclusion that the defendants did
not waive their defense of lack of personal jurisdiction.
36
1130184, 1130231
Because I do not believe the defense of lack of in
personam jurisdiction was waived in this case, I respectfully
dissent.
Bolin, J., concurs.
37 | November 26, 2014 |
bb9871e8-6737-46be-8543-bc13fbec38c2 | Tender Care Veterinary Hospital, Inc. v. First Tuskegee Bank | N/A | 1131078 | Alabama | Alabama Supreme Court | REL:11/26/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
____________________
1131078
____________________
Tender Care Veterinary Hospital, Inc.
v.
First Tuskegee Bank
Appeal from Montgomery Circuit Court
(CV-09-900425)
STUART, Justice.
Tender Care Veterinary Hospital, Inc. ("TCVH"), appeals
the summary judgment entered by the Montgomery Circuit Court
in favor of First Tuskegee Bank on breach-of-fiduciary-duty
and fraud claims asserted by TCVH stemming from a construction
1131078
loan TCVH received from First Tuskegee in September 2004. We
affirm.
I.
In 2004, TCVH sought financing from First Tuskegee to
construct a veterinary clinic and animal hospital in Pike
Road. TCVH asserts that First Tuskegee ultimately agreed to
loan TCVH the requested funds on the condition that TCVH
employ
PJ
Construction
and
Services,
Inc.
("PJ
Construction"),
as the general contractor on the project. TCVH's president,
Dr. Patricia Joyce Patterson, testified in a deposition that
she agreed to that condition after
First
Tuskegee's
president,
James W. Wright, assured her that PJ Construction would "do a
good job." Accordingly, on September 30, 2004, TCVH executed
a loan agreement with First Tuskegee pursuant to which it
borrowed $675,000. TCVH subsequently executed three more
1
First Tuskegee emphasizes to this Court on appeal that
1
the loan agreement makes no mention of PJ Construction. First
Tuskegee further argues that there is no evidence in the
record establishing that First Tuskegee required TCVH to use
PJ Construction as its general contractor in order to receive
the loan. However, because First Tuskegee stated in its
summary-judgment motion that "[this] allegation will be taken
as true for purposes of summary judgment," we will also accept
it as true when reviewing the summary judgment subsequently
entered on that motion.
2
1131078
loan agreements with First Tuskegee, borrowing an additional
$567,000, $75,000, and $9,145, respectively.
TCVH thereafter entered into a construction agreement
with PJ Construction, and, pursuant to that agreement, PJ
Construction began work at TCVH's site in Pike Road. Under
the terms of that construction agreement, the maximum price of
the project was to be $300,000 and work was to be completed
within 180 days, or approximately some time in April 2005.
2
However, almost immediately after work began, TCVH became
concerned
about
the
quality
and
timeliness
of
PJ
Construction's performance. Dr. Patterson stated in her
deposition that by January 2005 she was concerned that PJ
Construction would not complete the project on time. By April
2005, the relationship between TCVH and PJ Construction was
essentially broken; TCVH was unhappy with the work PJ
Construction had performed to date and was unwilling to
authorize First Tuskegee to disburse to PJ Construction the
full amounts it was requesting for the work it had completed.
It appears that PJ Construction performed no significant work
at TCVH's site after April 2005, and it ceased virtually all
Some of the initial loan proceeds were used to pay off
2
an existing mortgage on TCVH's property.
3
1131078
activities related to TCVH by approximately May 11, 2005,
before completely abandoning the project some time in late
July 2005.
3
TCVH subsequently received approval from First Tuskegee
to act as its own general contractor, and it thereafter
supervised construction and managed subcontractors until the
veterinary clinic and animal hospital opened in August 2006.
However, the business was not profitable and, in September
2007, TCVH filed a petition for bankruptcy protection. In
January 2008, First
Tuskegee sued TCVH's owners,
Dr.
Patterson
and Dr. Howard King, seeking to recover on personal guaranty
agreements they had made as part of the loans issued to TCVH,
and in July 2008 First Tuskegee obtained a $1,623,285 judgment
against them. TCVH was also engaged in multiple other
PJ Construction received a total of $111,000 for work
3
performed on behalf of TCVH –– $50,000 in January 2005 and
$61,000 in April 2005. In February 2006, PJ Construction sued
TCVH, alleging that TCVH owed it an additional $137,198 under
their
contract;
however,
that
lawsuit
was
ultimately
dismissed
because PJ Construction was not a licensed
general
contractor.
See, e.g., Twickenham Station, Inc. v. Beddingfield, 404 So.
2d 43, 45 (Ala. 1981) (stating that it is illegal for an
unlicensed contractor to contract to perform the work of a
contractor as defined in § 34-8-1, Ala. Code 1975, and that
any such contract is void and unenforceable).
4
1131078
lawsuits related to the construction of its facility and its
business operations during this time.
On April 7, 2009, TCVH initiated the instant action when
it moved the Montgomery Circuit Court to enter an injunction
enjoining First Tuskegee from selling the TCVH property at a
foreclosure sale later that day. Upon TCVH's agreeing to
deposit one month's interest on the loans –– $11,063 –– with
the court, the trial court enjoined the foreclosure sale for
30 days to allow TCVH additional time to pay the amounts it
owed First Tuskegee. However, after that 30-day period had
expired and TCVH still had not made full payment of the loans
to First Tuskegee, the trial court allowed the foreclosure
sale to be conducted and eventually disbursed to First
Tuskegee the funds being held by the court.
Nothing further happened in the case until approximately
two years later, when TCVH moved the trial court to schedule
a status conference. At that status conference, the trial
court granted TCVH's request for leave to amend its complaint,
and, on December 9, 2011, TCVH filed an amended complaint
asserting breach-of-fiduciary-duty and fraud claims against
First Tuskegee. The gravamen of those claims was that TCVH
5
1131078
had been injured by First Tuskegee's requirement that it use
PJ Construction as the general contractor on the project
because PJ Construction was not licensed as a general
contractor in Alabama and because the quality of its
performance was below the quality one would expect from a
properly licensed general contractor. The trial court then
reinstated the case to its active docket, and, following a
period of discovery, First Tuskegee moved the trial court to
enter a summary judgment in its favor, arguing, among other
things, that TCVH's claims were time-barred. Specifically,
First Tuskegee noted that both of TCVH's claims were subject
to a two-year statute of limitations and that Dr. Patterson
had stated in her deposition that she first learned that PJ
Construction was not licensed as a general contractor in
approximately July 2005, after she took steps to collect on PJ
Construction's surety bond once it formally left the TCVH
site, but TCVH did not initiate an action against First
Tuskegee until almost four years later in April 2009. First
Tuskegee also moved for a summary judgment on a counterclaim
it had asserted against TCVH seeking to recover the deficiency
balance still owed after the foreclosure of TCVH's property.
6
1131078
TCVH opposed
First
Tuskegee's
summary-judgment
motion
and
submitted a new affidavit from Dr. Patterson in which she now
asserted that she actually had not discovered that PJ
Construction was not licensed as a general contractor until
November 2008. Thus, TCVH argued, its claims were in fact
timely. First Tuskegee promptly moved to strike Dr.
Patterson's affidavit on the ground that it was untimely
because it was filed only the day before the summary-judgment
hearing and on the basis of the sham-affidavit doctrine. See
Rule 56(c)(2), Ala. R. Civ. P. (stating that "any statement or
affidavit in opposition [to a summary-judgment motion] shall
be served at least two (2) days prior to the hearing"), and
Panayiotou v. Johnson, 995 So. 2d 871, 879 (Ala. 2008) ("[T]he
so-called
'sham
affidavit
doctrine'
...
prevents
an
individual
from contradicting prior sworn testimony to avoid the entry of
a summary judgment ....").
On April 17, 2014, the trial court granted both First
Tuskegee's motion to strike Dr. Patterson's affidavit and its
motion seeking a summary judgment, stating in relevant part:
"For the reasons set forth in its January 10,
2014, motion for summary judgment, it is ordered,
adjudged, and decreed that summary judgment be
entered in favor of First Tuskegee Bank on all
7
1131078
claims asserted by [TCVH]. Without limiting the
basis for its decision, the court specifically notes
that all claims asserted against First Tuskegee Bank
are
conclusively
barred
by
the
statute
of
limitations. The undisputed evidence of record
reflects that the corporate representative for
[TCVH] admitted in deposition that actual discovery
of the facts giving rise to the claims in this case
was made more than two years before suit was filed
in April 2009. In addition, the court finds that
the undisputed evidence of record further reflects
sufficient
facts
that
reasonably
should
have
provoked inquiry into PJ Construction's licensure
status (which was publicly available) more than two
years before suit was filed. Summary judgment
likewise is due to be entered in favor of First
Tuskegee Bank on its February 26, 2014, supplemental
motion for summary judgment on counterclaim. The
counterclaim asserts that [TCVH] is in default of
its various promissory notes to First Tuskegee Bank,
and the court has been presented with no evidence
that would contradict the materials submitted by
First
Tuskegee
Bank
in
support
thereof.
Accordingly, it is ordered, adjudged, and decreed
that
a
total
judgment
in
the
amount
of
$1,239,919.76, plus court costs, is hereby entered
in favor of First Tuskegee Bank and against [TCVH].
Execution
may
issue
in
accordance
with
the
provisions of law.
"With all issues having been resolved by the
court,
this
order
shall
be
deemed
a
final
disposition of this action in its entirety.
"The
Court
finds
that
any
contradictory
statements in the affidavit of Patricia Joyce
Patterson are simply improper [and] cannot be used
to create an issue of fact in light of her
unambiguous deposition testimony. First Tuskegee
Bank's motion to strike is therefore due to be
granted to that extent."
8
1131078
On May 13, 2014, the trial court denied TCVH's motion to
alter, amend, or vacate the order entering the summary
judgment in favor of First Tuskegee, and, on June 24, 2014,
TCVH filed this appeal.
II.
We review a summary judgment pursuant to the following
standard:
"This Court's review of a summary judgment is de
novo. Williams v. State Farm Mut. Auto. Ins. Co.,
886 So. 2d 72, 74 (Ala. 2003). We apply the same
standard of review as the trial court applied.
Specifically, we must determine whether the movant
has made a prima facie showing that no genuine issue
of material fact exists and that the movant is
entitled to a judgment as a matter of law. Rule
56(c), Ala. R. Civ. P.; Blue Cross & Blue Shield of
Alabama v. Hodurski, 899 So. 2d 949, 952-53 (Ala.
2004). In making such a determination, we must
review the evidence in the light most favorable to
the nonmovant. Wilson v. Brown, 496 So. 2d 756, 758
(Ala. 1986). Once the movant makes a prima facie
showing that there is no genuine issue of material
fact, the burden then shifts to the nonmovant to
produce 'substantial evidence' as to the existence
of a genuine issue of material fact. Bass v.
SouthTrust Bank of Baldwin County, 538 So. 2d 794,
797-98 (Ala. 1989); Ala. Code 1975, § 12-21-12."
Dow v. Alabama Democratic Party, 897 So. 2d 1035, 1038-39
(Ala. 2004).
III.
9
1131078
TCVH argues that the summary judgment should be reversed
because, it argues, the trial court erred in holding that
TCVH's claims were time-barred. Although TCVH acknowledges
that both of its claims are subject to a two-year statute of
limitations, it argues that the trial court erred by
concluding that the claims accrued in approximately
July 2005,
when First Tuskegee alleges TCVH discovered that PJ
Construction was not a licensed general contractor. Rather,
TCVH argues that its breach-of-fiduciary-duty claim did not
accrue until First Tuskegee initiated foreclosure proceedings
in early 2009 and their relationship turned adversarial and
that its fraud claim did not accrue until November 2008, when
TCVH asserts it actually learned that PJ Construction was not
a licensed general contractor. TCVH argues that its December
2011 amended complaint asserting those claims relates back to
its April 2009 filing and that its claims were therefore
asserted within two years of their accrual in early 2009 and
November 2008, respectively. See Weber v. Freeman, 3 So. 3d
825, 834-35 (Ala. 2008) ("[The plaintiff's] clarified second
amended complaint was filed after the statutory period had
run; therefore, the claims against [the defendant] set forth
10
1131078
in the amended complaint are time-barred unless Rule 15, Ala.
R. Civ. P., applies. Under Rule 15(c)(2), an amendment
relates back to the original complaint when 'the claim ...
asserted in the amended pleading arose out of the conduct,
transaction, or occurrence set forth or attempted to be set
forth in the original pleading ....'").
We first consider the timeliness of TCVH's breach-of-
fiduciary-duty claim. In support of its argument that the
limitations period on this claim did not begin to run until
its fiduciary relationship with First Tuskegee turned
adversarial in early 2009, TCVH cites Tonsmeire v. AmSouth
Bank, 659 So. 2d 601, 604 (Ala. 1995), for the proposition
that "'[t]he [limitations period] for [an action based on]
breach of fiduciary duty begins to run once the fiduciary
relationship is terminated and possession of trust
property by
the trustee becomes adverse'" (quoting with approval the
order of the trial court). However, TCVH fails to recognize
that both Tonsmeire and Benners v. First National Bank, 247
Ala. 74, 22 So. 2d 435 (1945), upon which Tonsmeire relied,
concerned the alleged breach of fiduciary duties owed by a
trustee to the beneficiary of the trust administered by the
11
1131078
trustee. In the instant case, there is no "trustee" or
4
"trust property," and it is a different class of fiduciary
duties that are alleged to have been breached. In cases
alleging a breach-of-fiduciary-duty claim not involving a
trust, this Court has not considered the date the parties
terminated their fiduciary relationship when considering the
application of the two-year statute of limitations;
rather,
it
has focused on when the aggrieved party was damaged. See,
e.g., System Dynamics Int'l, Inc., 683 So. 2d 419, 421 (Ala.
1996) ("[I]n situations where the act itself is not a legal
injury, not a completed wrong, and the plaintiff's injury
comes only as a result of what the defendant has done, the
cause of action accrues and the limitations period begins to
run when damage is sustained."). However, as further
explained by the United States District Court for the Middle
District of Alabama in Davis v. Dorsey, 495 F. Supp. 2d 1162,
1171 (M.D. Ala. 2007), even though a breach-of-fiduciary-duty
claim will accrue when damage is sustained, the two-year
statute of limitations can still be tolled based on the
This tolling
of
the
limitations
period
for
claims
against
4
trustees has now been codified in § 19-3B-1005, Ala. Code
1975.
12
1131078
aggrieved party's ignorance. Thus, like its fraud claim, the
timeliness of TCVH's breach-of-fiduciary-duty claim will
ultimately hinge on when TCVH was damaged and TCVH's knowledge
of the relevant facts.
Dr. Patterson gave unequivocal testimony regarding both
of those points in her deposition. With regard to the damage
sustained by TCVH, Dr. Patterson testified that by June 2005
it was clear that PJ Construction's work product was not what
one would expect from a licensed general contractor because,
she stated, PJ Construction was committing obvious violations
of building codes and was not completing its work in a
workmanlike manner. When asked by First Tuskegee's attorney
specifically whether TCVH had, at that point in time, been
damaged by the actions of PJ Construction, she readily agreed
that it had:
"Q.
Did you feel, as of June 2005, that these
delays that failed to meet your expectations
for [PJ Construction] had caused harm to
[TCVH]?
"A.
Yes.
"Q.
That harm being financial?
"A.
Yes.
"Q.
And physical?
13
1131078
"A.
Yes."
When asked to clarify when TCVH learned that PJ Construction
was not a licensed general contractor, Dr. Patterson also made
it clear that she had become aware of that fact in
approximately July 2005:
"Q.
Did you ever attempt to do any investigation as
to whether [PJ Construction] was a licensed
general contractor with the state licensing
board?
"A.
After their departure, I made an effort to find
out about their guarantee –– bond surety so
that we would be able to file to get enough
funds to complete it. And at that time, I
found out that they were not licensed general
contractors. I went to every agency in
Montgomery County, and no one had ever –– they
weren't recorded as a general contractor's
license anywhere in the state of Alabama.
"Q.
And when did that take place?
"A.
After their departure, when I was trying to get
the surety bond to make sure it was in force.
After I spoke with Ms. Sutton,
she gave me a
[5]
copy of the surety bond. And I called that
company, and then I went about getting the
information to have a meeting with Mr. Wright.
"Q.
And this would have been at some point shortly
after July 2006?
"A.
Yes.
Vanessa Sutton is a branch manager employed by First
5
Tuskegee.
14
1131078
"Q.
I'm sorry. 2005.
"A.
2005. Yes."
Thus,
Dr.
Patterson,
TCVH's
corporate
representative,
acknowledged that, by approximately July 2005, TCVH was aware
1) that the misrepresentation First Tuskegee allegedly made ––
that PJ Construction was a licensed general contractor that
would do a good job –– was false and 2) that TCVH had been
injured as a result of that misrepresentation. The breach-of-
fiduciary-duty and fraud claims subsequently asserted in the
April 2009 action were accordingly untimely because they were
not asserted for more than two years after they accrued in
approximately July 2005.
We further note, with regard to TCVH's argument that, via
her affidavit contradicting her deposition testimony, Dr.
Patterson created a genuine issue of material fact regarding
when TCVH learned that PJ Construction lacked a general
contractor's license, that this argument is not properly
before us. The trial court struck Dr. Patterson's affidavit
pursuant to the sham-affidavit doctrine (although it did not
specifically invoke that doctrine by name), and it also
appears to be undisputed that the affidavit was untimely. See
15
1131078
Van Voorst v. Federal Express Corp., 16 So. 3d 86, 90-92 (Ala.
2008) (noting that there were "multiple valid grounds" for the
trial court to strike an affidavit that contradicted a party's
previous sworn testimony and that was also untimely filed).
Nevertheless, TCVH continues to cite the affidavit, although
it has not offered any argument as to whether the trial court
erred by striking the affidavit. In Gonzalez v. Blue
Cross/Blue Shield of Alabama, 689 So. 2d 812, 819 (Ala. 1997),
abrogated on other grounds, as recognized by Ex parte
Prudential Ins. Co. of America, 785 So. 2d 348, 350 (Ala.
2000), this Court considered a similar situation and stated:
"The [appellants'] brief merely cites the affidavit
as if it had been admitted as evidence, but the
[appellants] completely fail to argue why excluding
the affidavit was error and they cite no authority
to support their position. 'When an appellant fails
to properly argue an issue, that issue is waived and
will not be considered on appeal.' Sullivan v. Alfa
Mut. Ins. Co., 656 So. 2d 1233 (Ala. Civ. App.
1995), citing Boshell v. Keith, 418 So. 2d 89 (Ala.
1982)."
See also Chambers v. Advanced Processing Sys., 853 So. 2d 984,
990 (Ala. Civ. App. 2002) ("Given the plaintiffs' failure to
demonstrate that the trial court erred in ordering Chambers's
affidavit stricken, we may not consider the assertions set
forth in that affidavit in our review of this appeal.").
16
1131078
Thus, there is no real dispute regarding the date TCVH
learned that PJ Construction was not licensed, and,
accordingly, both TCVH's breach-of-fiduciary-duty claim and
its fraud claim are untimely.6
IV.
TCVH asserted breach-of-fiduciary-duty and fraud claims
against First Tuskegee stemming from a construction
loan First
Tuskegee made to TCVH in September 2004. The gravamen of
those claims was that TCVH was injured by First Tuskegee's
alleged insistence that TCVH use PJ Construction as the
general contractor on the project although PJ
Construction
was
not licensed as a general contractor in Alabama, that PJ
Construction's work product was below what one would expect
from a properly licensed general contractor, and that using PJ
Construction resulted in delays, cost overruns, and, TCVH
argues, the ultimate failure of its business. However,
because TCVH's claims accrued in approximately July 2005 and
TCVH did not formally assert them until after it initiated
Having held that TCVH's claims are untimely, it is
6
unnecessary for us to consider the other arguments put forth
by First Tuskegee urging us to affirm the summary judgment on
other grounds, such as whether First Tuskegee in fact owed any
fiduciary duties to TCVH.
17
1131078
this action in April 2009, those claims are barred by the two-
year statute of limitations that governs them. Accordingly,
the summary judgment entered by the trial court in favor of
First Tuskegee is hereby affirmed.
AFFIRMED.
Moore, C.J., and Parker, Shaw, and Wise, JJ., concur.
18 | November 26, 2014 |
d8461525-9d63-470d-93f5-423d01d47bb8 | Crawford v. Sundback | 678 So. 2d 1057 | 1940182, 1940185 | Alabama | Alabama Supreme Court | 678 So. 2d 1057 (1996)
Nancy J. CRAWFORD
v.
Ray SUNDBACK, et al.
Joe Charles RAINS
v.
Ray SUNDBACK, et al.
Linda WILKERSON
v.
Ray SUNDBACK, et al.
Connie MARTIN
v.
Ray SUNDBACK, et al.
1940182 to 1940185.
Supreme Court of Alabama.
May 24, 1996.
*1058 M. Clay Alspaugh of Hogan, Smith, Alspaugh, Samples & Pratt, P.C., Lanny S. Vines and Michael L. Allsup of Emond & Vines, Birmingham, for Appellants.
W. Stanley Rodgers and Jeffrey T. Kelly of Lanier Ford Shaver & Payne, P.C., Huntsville, for C.E. Slayton and H.C. Gregg.
J. Glynn Tubb and Jenny L. McLeroy of Eyster, Key, Tubb, Weaver & Roth, Decatur, for Ray Sundback, C.J. Kubina, Bobby A. Malone and David Courington.
ALMON, Justice.
Nancy J. Crawford, Joe Charles Rains, Linda Wilkerson, and Connie Martin ("the plaintiffs") appeal from summary judgments for C.E. Slayton, H.C. Gregg, Ray Sundback, C.J. Kubina, Bobby A. Malone, and David Courington ("the defendants" or "these defendants"), who were substituted as defendants for parties named fictitiously in the complaints. The issue is whether the plaintiffs complied with Alabama's fictitious party practice rules so as to avoid the bar of the statute of limitations on their claims against these defendants. In particular, the defendants argue that the plaintiffs did not exercise *1059 due diligence so as to substitute them in a timely fashion for the fictitiously named defendants.
On July 3, 1989, an explosion at the 3M Corporation chemical plant in Decatur killed John Crawford, Jerry Wilkerson, and James Michael Martin and injured Joe Charles Rains. The four men were attempting to repair a leak in vessel 403-A-23, a 500-gallon chemical-blending tank, when the tank exploded. On July 3, 1991, the widows of the three men killed filed separate actions, each seeking to recover damages for the death of her husband, alleging product liability claims against five corporate defendants, and alleging claims pursuant to § 25-5-11, Ala.Code 1975, against three co-employees. Joe Charles Rains brought an identical action, seeking to recover damages for the injuries he sustained as a result of the explosion. The complaints also alleged claims against an extensive list of fictitiously named defendants. The actions were consolidated for discovery.
On June 25, 1993, Martin, Wilkerson, and Rains filed amendments to their complaints in which they substituted co-employees Sundback, Kubina, Malone, Gregg, and Slayton for several defendants named fictitiously in their original complaints. On September 22, 1993, Crawford amended her complaint to substitute the same co-employees as well as co-employee Courington for various defendants named fictitiously in her original complaint. On October 13, 1993, Martin, Wilkerson, and Rains amended their complaints to substitute co-employee Courington for a fictitiously named defendant. The claims against the substituted co-employee defendants seek damages, pursuant to § 25-5-11, for willfully failing to provide a safe workplace for the four men.
The defendants filed motions for summary judgment in each of the four actions, contending that the claims against them were barred by the statute of limitations. The motions were supported by affidavits and other materials. The circuit court held a hearing on the motions, entered judgments for these six defendants, and certified the judgments as final pursuant to Rule 54(b), Ala.R.Civ.P.
Alabama's fictitious party practice is controlled by Rule 9(h), Ala.R.Civ.P., which provides:
(As amended effective October 1, 1995; the 1995 amendment to Rule 9(h) made no change significant to this case.) Rule 15(c), Ala.R, Civ.P., describes the operation of the practice. At the time applicable to this case, that rule read as follows: "An amendment pursuant to Rule 9(h), Fictitious Parties, is not an amendment changing the party against whom a claim is asserted and such amendment relates back to the date of the original pleading." To invoke the relation-back principle of Rules 9(h) and 15(c), the plaintiff (1) must state a cause of action against the party named fictitiously in the body of the original complaint and (2) must be ignorant of the identity of the fictitiously named party, in the sense of having no knowledge at the time of the filing that the later-named party was in fact the party intended to be sued. Columbia Eng'g Int'l, Ltd. v. Espey, 429 So. 2d 955 (Ala.1983).
The defendants' motions for summary judgment asserted that at the time the actions were filed the plaintiffs were not ignorant of the identities of the fictitiously named parties, or that the plaintiffs were not diligent in determining the true identities of the parties named fictitiously in the original complaints. The plaintiffs responded by arguing that the defendants had failed to make a prima facie showing that they were entitled to a judgment as a matter of law and thus had failed to shift the burden to the plaintiffs to present substantial evidence raising genuine issues of material fact. Further, the plaintiffs argued that the substitutions of these defendants related back to the date of the original complaint. A former attorney for the plaintiffs Wilkerson, Rains, and Martin submitted an affidavit stating that the identity of the defendants as persons who *1060 might have culpably contributed to the explosion was unknown until certain depositions were taken in May and September 1993 and that: "At all times during my involvement with these cases, I exercised due diligence to discover any and all parties legally responsible for the injuries and deaths suffered in the explosion."[1]
The requirement that the plaintiff be ignorant of the identity of the fictitiously named party has been generally explained as follows: "The correct test is whether the plaintiff knew, or should have known, or was on notice, that the substituted defendants were in fact the parties described fictitiously." Davis v. Mims, 510 So. 2d 227, 229 (Ala.1987). This Court has elaborated upon the requirement that the plaintiff be ignorant of the identity of the fictitiously named party by holding that the plaintiff must substitute the named defendant for the fictitious party within a reasonable time after determining the defendant's true identity, see Walden v. Mineral Equip. Co., 406 So. 2d 385 (Ala.1981), and by holding that "the same policy considerations which require a plaintiff to amend his complaint within a reasonable time after learning the defendant's true identity also require the plaintiff to proceed in a reasonably diligent manner in determining the true identity of the defendant." Kinard v. C.A. Kelly & Co., 468 So. 2d 133, 135 (Ala.1985). The determination of whether a plaintiff amended the complaint within a reasonable time may include inquiry into whether the plaintiff's delay unduly prejudiced the substituted defendant. See Wallace v. Doege, 484 So. 2d 404 (Ala.1986); Denney v. Serio, 446 So. 2d 7 (Ala.1984); Peek v. Merit Machinery Co., 456 So. 2d 1086 (Ala.1984).
In support of their motions for summary judgment, the defendants gave affidavits stating that before the accident they had known the four workers as co-employees and that the four workers had known them as co-employees, in some instances for many years. The defendants asserted that the plaintiffs could have found them by routine discovery, for example, by asking in interrogatories to the co-employee defendants originally named in the plaintiffs' complaints the true identities of the parties named fictitiously. Attached to the motions for summary judgment were copies of petitions to obtain and perpetuate evidence, filed in December 1989 by the plaintiffs pursuant to Rule 27, Ala.R.Civ.P., and an affidavit by an attorney for some of the defendants, who stated that on February 7, 1990, he attended an inspection of the 3M plant pursuant to those petitions. Thus, the defendants showed that the plaintiffs had begun discovery shortly after the fatal incident.
The plaintiffs argue that they were diligent and that the defendants' allegations were insufficient to shift the burden to them to produce substantial evidence of their diligence. However, we conclude that the defendants' motions were sufficient to shift the burden. The motion asserted the statute of limitations as a defense; this motion appeared on its face to have merit, because some of the substitutions of these defendants were made almost two years after the date when the statutory period of limitations ordinarily would have run, and some substitutions were made more than two years after that date. Moreover, the motions went further, asserting that the plaintiffs knew when they filed their complaints, or with due diligence could have discovered by that time, that these defendants were the parties named fictitiously in the complaints. These assertions were supported by affidavits of the defendants, three of whom stated that before the accident Rains had known them and had known their responsibilities. The defendants argued that simple discovery, such as interrogatories to the co-employee defendants who were named in the original complaints, would have disclosed their identities. They established that the plaintiffs began conducting discovery within six months *1061 after the incident, but claimed not to have learned of these defendants' alleged culpability until almost four years after the incident, or later.
In response, the plaintiffs made no showing as to why Rains's familiarity with three of the defendants did not lead to earlier substitution at least as to those three, or as to how the alleged failure to discover earlier these defendants' alleged culpability occurred in spite of due diligence. The plaintiffs simply presented a conclusory affidavit of one of their attorneys, stating that these defendants' culpability had only recently come to light in depositions, and stating: "At all times during my involvement with these cases, I exercised due diligence to discover any and all parties legally responsible for the injuries and deaths suffered in the explosion." This was not sufficient to present substantial evidence in response to the defendants' showings.
The plaintiffs cite Merritt v. Cosby, 578 So. 2d 1242, 1244 (Ala.1991), for its holding that a substitution related back because "Merritt had long known who Cosby was, but when the original complaint was filed she did not possess knowledge sufficient to identify Cosby as one who should be a party." The plaintiffs did not make a sufficient showing to come within the principle stated in Merritt; the affidavit of their former attorney stated simply that "certain information was discovered" in depositions on May 11, 1993, and September 1, 1993, "indicating" that these six defendants "could be legally responsible for the injuries and deaths." No explanation was given as to what this "information" was, why it was not discovered earlier, or why the identity of these defendants was not and could not have been otherwise discovered sooner through the exercise of due diligence. The plaintiffs also argue that the defendants have not made a showing of undue prejudice, but the long delaysthe delay between the initial conducting of discovery and the amendments, the delay between the filing of the complaints and the amendments, and the delay between the running of the two-year period that appeared to bar these actions, and the amendmentsare sufficient under the circumstances to support the summary judgments, without any further showing of prejudice by the defendants.
The defendants presented substantial evidence that at the time the complaints were filed the plaintiffs knew or should have known these defendants' identities as the parties described fictitiously, see Harmon v. Blackwood, 623 So. 2d 726 (Ala.1993), Clay v. Walden Joint Venture, 611 So. 2d 254 (Ala. 1992), Sherrin v. Bose, 608 So. 2d 364 (Ala. 1992), Miller v. Norwood Clinic, Inc., 577 So. 2d 860 (Ala.1991), and Hinton v. Hobbs, 349 So. 2d 28 (Ala.1977), or that the plaintiffs did not exercise due diligence in discovering the identities of the fictitiously named defendants, see Jones v. Resorcon, Inc., 604 So. 2d 370 (Ala.1992); Bowen v. Cummings, 517 So. 2d 617 (Ala.1987); Kinard v. C.A. Kelly & Co., 468 So. 2d 133, 135 (Ala.1985). The plaintiffs made no substantial showing in opposition. The circuit court correctly entered the summary judgments for these defendants.
AFFIRMED.
HOOPER, C.J., and MADDOX, HOUSTON, KENNEDY, and COOK, JJ., concur.
BUTTS, J., dissents.
[1] The attorney stated in his affidavit that he learned of Sundback, Kubina, Gregg, Slayton, and Malone as possible defendants at a deposition taken on May 11, 1993, and of Courington at a deposition on September 1, 1993. Thus, he said, he substituted the first five defendants on June 25, after reviewing the transcript of the May 11 deposition, and substituted Courington on October 13, after reading the transcript of the September 1 deposition. Crawford's attorney substituted all six defendants on September 22. | May 24, 1996 |
2c3dbfbd-0213-4062-b6db-0dc6017600a9 | Nelson v. Megginson | N/A | 1121301 | Alabama | Alabama Supreme Court | REL: 09/30/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
SPECIAL TERM, 2014
____________________
1121301
____________________
Madeline Nelson et al.
v.
Ken Megginson et al.
Appeal from Mobile Circuit Court
(CV-12-901475)
MURDOCK, Justice.
Madeline Nelson and 25 other individuals formerly
employed as nontenured teachers or probationary classified
employees in the Mobile County Public School System ("the
school system") appeal from the dismissal by the Mobile
1121301
Circuit Court of their action against the members of the Board
of School Commissioners of Mobile County -- Ken Megginson,
Judy P. Stout, Reginald A. Crenshaw, Levon C. Manzie, and
William Foster -- and against the superintendent of the school
system, Martha Peek. We reverse and remand.
I. Facts and Procedural History
The plaintiffs were nontenured teachers or probationary
classified
employees
in
the
school
system
who
were
terminated/nonrenewed from employment at the end of the
2007-2008 school year. In 2009, the plaintiffs filed an
action against the Board of School Commissioners of Mobile
County ("the Board"). That action was voluntarily dismissed
without prejudice three years later in light of this Court's
decision in Board of School Commissioners of Mobile County v.
Weaver, 99 So. 3d 1210 (Ala. 2012). In Weaver, this Court
concluded that in order for plaintiffs such as those in this
case to receive the relief they have requested, they must name
as defendants the individual members of the respective school
board in their representative or official capacities rather
than naming as a defendant the school board itself "because
the Board is an agency of the State of Alabama [and] it is
2
1121301
entitled to absolute immunity under § 14 [of the Alabama
Constitution]." 99 So. 3d at 1217.
On July 13, 2012, the plaintiffs refiled their action in
Mobile Circuit Court, naming as defendants the members of the
Board and the superintendent of the school system. In their
complaint, the plaintiffs alleged that their employment was
terminated "pursuant to a reduction-in-force implemented by
Defendants in response to alleged financial constraints."
The
plaintiffs further alleged that the failure to rehire them by
the conclusion of the following school year was a violation of
a written policy of the school system.
Section 16-1-33(b), Ala. Code 1975, provides that "[e]ach
board shall adopt a written reduction-in-force policy
consistent with Section 16–1–30[, Ala. Code 1975]. The policy
shall include, but shall not be limited to, layoffs, recalls,
and
notifications
of
layoffs
and
recalls.
The
reduction-in-force policy of the board shall be based on
objective criteria." Section 16-1-33 defines a "layoff" as
"[a]n unavoidable reduction in the work force beyond normal
attrition due to decreased student enrollment or shortage of
revenues." § 16-1-33(a)(3), Ala. Code 1975.
3
1121301
Section 16-1-30, Ala. Code 1975, which is referenced in
§ 16-1-33(b), provides, in part:
"(b) The local board of education shall, upon
the written recommendation of the chief executive
officer,
determine
and
establish
a
written
educational policy for the board of education and
its employees and shall prescribe rules and
regulations for the conduct and management of the
schools. Before adopting the written policies, the
board shall, directly or indirectly through the
chief executive officer, consult with the applicable
local employees' professional organization. Input by
the applicable professional organization shall be
made in writing to the chief executive officer. ...
The written policies, rules, and regulations, so
established, adopted, or promulgated shall be made
available to all persons affected and employed by
the board. Any amendments to the policies, rules,
and regulations shall be developed in the same
manner and furnished to the affected persons
employed by the board within 20 days after
adoption."
In December 2007, the Board adopted a policy pertaining
to reduction-in-force procedures: School Board Policy
No. 6.44 ("the policy"). The policy provides, in relevant
part:
"A reduction in force may take place when the
board determines that a financial exigency, program
change, serious natural disaster or other legitimate
business reason requires the reduction of personnel
through contract termination and approves acting
under this policy. Such a determination constitutes
the necessary cause for dismissal.
"....
4
1121301
"Irrespective of a reduction in force, if a
non-tenured or probationary employee is non-renewed
in accordance with state law, this policy does not
apply
to
those
individuals
and
in
such
circumstances, there will be no right to recall
pursuant to this policy. This policy applies to
non-tenured and probationary employees only to the
extent that the individual would have been rehired
by the school the following year but for the
reduction in force. Otherwise, non-tenured and
probationary employees are not granted any retention
or recall rights by this policy except as provided
under state law. Unless there are no qualified
tenured
or
non-probationary
employees
for
a
particular position, non-tenured and probationary
employees will be reassigned or terminated before
any tenured or non-probationary employee.
"Certified Employees
"....
"2. Non-Tenured Employees
"Again, this policy in no way gives non-tenured
employees a contractual right to employment. The
state law right to non-renew remains with the board
in all respects. However, if a reduction in force
is declared by the board and the principal of a
particular school designates a non-tenured employee
as an individual that would have been rehired but
for the reduction in force, that employee shall have
a one time recall right to a position for which he
or she is certified and legally qualified for one
calendar year from the effective date of his or her
termination or demotion that resulted only because
of a reduction in force IF there is no tenured
employee
legally
qualified
based
on
state
certification and federal highly qualified standards
to teach in the position wherein an employee is to
be recalled. ...
5
1121301
"....
"Support Employees
"....
"2. Probationary Employees
"Again,
this policy
in
no
way
gives
probationary
employees a contractual right to employment. The
state law right to non-renew remains with the board
in all respects. However, if a reduction in force
is declared by the board and the principal of a
particular school designates
a probationary employee
as an individual that would have been rehired but
for the reduction in force, that employee shall have
a one time recall right to a position for which he
or she is certified and legally qualified for one
calendar year from the effective date of his or her
termination or demotion that resulted only because
of a reduction in force IF there is no non-
probationary employee qualified with the appropriate
experience and education for the position wherein an
employee is to be recalled."
(Capitalization in original; emphasis added.)
In their complaint, the plaintiffs alleged:
"Each of the Plaintiffs had a right to have been
recalled to employment with the School System during
the current year because the Defendants retained,
and/or hired new for the current school year,
teacher and non-teacher employees for positions
which should have been offered to the Plaintiffs
under Alabama Code § 16-1-33 and the specific
criteria of [the policy].
"13. Defendants had a non-discretionary, mandatory
duty to provide the Plaintiffs with the rights and
benefits conferred by Alabama Code § 16-1-33 and
6
1121301
[the policy]. They failed to do so with the result
that the Plaintiffs were denied their rights to
re-employment under said policy."
The plaintiffs attached a copy of the policy to their
complaint, which stated three counts against the defendants.
In "Count One," the plaintiffs sought a judgment declaring
that the defendants "failed and refused to accord the
Plaintiffs the rights and benefits to which they were entitled
under [the policy]." They also sought an injunction
"requiring the Defendants to offer each of the Plaintiffs the
next position for which they qualify under the standards of
[the policy]." In "Count Two," which was titled "Make Whole
Relief," the plaintiffs sought permanent injunctive relief
"requiring Defendants to provide the Plaintiffs the full
benefits of said statute and policy, including reinstatement
into the positions in which they had re-employment rights with
backpay, interest and restoration of progress toward
tenure
or
non-probationary
status."
"Count
Three"
was
expressly
labeled
a "Contract Claim" and stated: "Plaintiffs had a contract
right to the benefit of Alabama Code [1975,] § 16-1-33[,] and
Defendants' ... Policy 6.44, under which they were due to have
been re-employed during the 2008-09 school year."
7
1121301
On September 7, 2012, the defendants filed a motion to
dismiss the plaintiffs' complaint based on the affirmative
defense of the expiration of the statute of limitations. The
plaintiffs filed a response in opposition to the motion on
October 29, 2012. The circuit court held a hearing on the
motion on November 30, 2102.
On July 11, 2012, the circuit court entered an order
granting the defendants' motion to dismiss the complaint. The
order provided, in pertinent part:
"All of the Plaintiffs herein were non-renewed
from their employment at the end of the 2007-2008
school year. Even if they had a right of recall
under the Board's Reduction-in-Force Policy the
Plaintiffs' causes of action would have accrued, at
the very latest, no more than one calendar year from
the end of the 2007-2008 school year. That would
have been at the end of May 2009 or the beginning of
June 2009. This civil action was not brought until
July 13, 2012, over three (3) years from the last
date of the possible accrual of the Plaintiffs'
cause of action.
"This
Court
concludes
that
all
of
the
Plaintiffs'
claims
herein
fall
under
either
§ 6-2-38(l) or § 6-2-38(m) of the 1975 Code of
Alabama. Under § 6-2-38(l) all actions for injury
to the person or rights of another not arising from
contract and not specifically enumerated must be
brought within two (2) years. Under § 6-2-38(m) all
actions for the recovery of wages, overtime,
damages, fees, or penalties accruing under laws
respecting the payment of wages, overtime, damages,
8
1121301
fees and penalties must be brought within two (2)
years.
"The essence of the Plaintiffs' argument in
opposition to the Defendants' motion to dismiss is
that their claims are in contract. The Court rejects
that contention. The specific language of [the
policy] attached to the Plaintiffs' complaint
specifically disclaims any contractual rights for
non-tenured employees and probationary employees,
such as the classified Plaintiffs herein. The
[policy] echoes the long established law that
probationary employees have no contractual rights to
continued employment, Lawrence v. Birmingham Board
of Education, 669 So. 2d 910 (Ala. Civ. App 1995),
rehearing denied.
"The case of McCord-Baugh v. Birmingham City
Board of Education, 894 So. 2d 672 (Ala. Civ. App.
2002), held that simply because a Board's policy and
procedure was involved does not automatically mean
that a contract claim is alleged. The Court of
Civil Appeals there held that a contract claim
arises only under appropriate circumstances. The
Court concludes that such circumstances are not
present herein due to the fact that these Plaintiffs
are either non-tenured teachers or probationary
employees and the specific words of [the policy] do
not provide them with any contractual rights
whatsoever. ... Furthermore, these Plaintiffs have
also
not
alleged
any
offer,
acceptance
or
consideration necessary to articulate a contractual
claim against any of these Defendants. Steiger v.
Huntsville City Board of Education, 653 So. 2d 975,
978 (Ala. 1995).
"This action was brought more than three (3)
years from the date of accrual. All of the
Plaintiffs' claims for mandamus, declaratory or
injunctive relief would be barred by the two (2)
year statute of limitations set out in § 6-2-38(l).
Finally, any of the Plaintiffs' claims for backpay
9
1121301
or other monetary relief would be barred by the same
two (2) [year] statute of limitations under
§ 6-2-38(m)."1
The plaintiffs filed a timely notice of appeal of the
circuit court's decision on August 7, 2013.
II. Standard of Review
"In Nance v. Matthews, 622 So. 2d 297, 299 (Ala.
1993), this Court set forth the standard of review
applicable to an order granting a motion to dismiss:
"'The appropriate standard of review under
Rule 12(b)(6)[, Ala. R. Civ. P.,] is
whether, when the allegations of the
complaint are viewed most strongly in the
pleader's favor, it appears that the
pleader
could
prove
any
set
of
circumstances that would entitle her to
relief.
Raley
v.
Citibanc
of
Alabama/Andalusia, 474 So. 2d 640, 641
(Ala. 1985); Hill v. Falletta, 589 So. 2d
746 (Ala. Civ. App. 1991). In making this
determination,
this
Court
does
not
consider
whether the plaintiff will ultimately
prevail, but only whether she may possibly
prevail. Fontenot v. Bramlett, 470 So. 2d
669, 671 (Ala. 1985); Rice v. United Ins.
Co. of America, 465 So. 2d 1100, 1101 (Ala.
1984). We note that a Rule 12(b)(6)
dismissal is proper only when it appears
beyond doubt that the plaintiff can prove
Because the policy was attached to the complaint and the
1
parties did not dispute its authenticity or content, the fact
that the circuit court considered the policy does not require
the conversion of the defendants' motion to dismiss into a
motion for a summary judgment under Rule 12(c), Ala. R. Civ.
P. See, e.g., Carpenter v. Mobile Cnty., 841 So. 2d 1237,
1239 (Ala. 2002).
10
1121301
no set of facts in support of the claim
that would entitle the plaintiff to
relief.'"
Beckerle v. Moore, 909 So. 2d 185, 186-87 (Ala. 2005).
III. Analysis
The plaintiffs primarily contend that the circuit court
erred in concluding that their claims were barred by the
applicable statute of limitations because, they say, they
stated a breach-of-contract claim, which has a six-year
statute of limitations. See § 6-2-34(9), Ala. Code 1975.
"This six-year period begins to run when the contract is
breached." AC, Inc. v. Baker, 622 So. 2d 331, 333 (Ala.
1993). As the trial court correctly observed, the breach
alleged here occurred, at the latest, at the conclusion of the
2008-09 school year, in May 2009. The plaintiffs filed this
action in July 2012, within the six-year limitations period
for a contract action.
The plaintiffs note that under this Court's precedent a
school-board policy can be the basis of a contract. The Court
of Civil Appeals, in Davis v. J.F. Drake State Technical
College, 854 So. 2d 1151, 1158 (Ala. Civ. App. 2002),
11
1121301
summarized this Court's holding in Belcher v.
Jefferson County
Board of Education, 474 So. 2d 1063 (Ala. 1985), as follows:
"In Belcher, two nontenured teachers contended
that the county board of education had failed to
evaluate them as required by the evaluation policy
it had adopted. In that case, the board had adopted
a specific written policy governing the evaluations
of teachers. 474 So. 2d at 1066. The teachers
asserted breach-of-contract claims based on the
board's failure to follow its evaluation policy. The
trial
court
dismissed
the
teachers'
breach-of-contract claims, concluding that the
teachers had failed to state a claim upon which
relief could be granted. See Rule 12(b)(6), Ala. R.
Civ. P. Our supreme court reversed the dismissal of
the teachers' breach-of-contract claims, holding
that 'the Board of Education did not legally have to
follow any particular evaluation policy absent its
own self-imposed procedures. Having adopted a
policy, however, the Board is bound to follow it.'
Belcher, 474 So. 2d at 1068."
Specifically, the Belcher Court held that "the appellants
have
alleged a breach of contract claim upon which relief could be
granted, on the basis of the Board of Education's adoption of
an evaluation policy, and alleged subsequent non-compliance
with that policy." Belcher, 474 So. 2d at 1068.
The plaintiffs argue that their action represents a
straightforward application of the principle established in
Belcher. As this Court subsequently has stated: "A board of
education must comply with the policies it adopts." Ex parte
12
1121301
Board of Sch. Comm'rs of Mobile Cnty., 824 So. 2d 759, 761
(Ala. 2001). The plaintiffs contend that the defendants
violated the plaintiffs' right to recall provided in the
policy and that this violation constituted a breach of
contract.
The defendants counter that not every policy of a school
board creates a contract with school-system employees. They
note that the Court of Civil Appeals has stated that "a
public-school board's adoption of policies and procedures
known to and relied upon by an employee may, under appropriate
facts, give rise to implied contractual terms of employment
between the school board and the employee." McCord-Baugh v.
Birmingham City Bd. of Educ., 894 So. 2d 672, 677 (Ala. Civ.
App. 2002), rev'd in part on other grounds, 894 So. 2d 679
(Ala. 2004). The defendants contend in their appellate brief
that the "appropriate facts" "are not present herein due to
the fact that these Plaintiffs are either
non-tenured
teachers
or probationary employees and the specific words of [the
policy] do not provide them with any contractual rights
whatsoever." Specifically, the defendants refer to the fact
that the policy expressly states that "this policy in no way
13
1121301
gives
non-tenured
employees
a
contractual
right
to
employment"
and that "[t]he state-law right to non-renew remains with the
board in all respects." Likewise, the policy states that
"this policy in no way gives probationary employees a
contractual right to employment." The circuit court adopted
this argument in its order dismissing the complaint.
The defendants' argument ignores, however, the language
of the policy that follows these seemingly categorical
statements. In the portion of the policy that concerns non-
tenured employees, immediately following the reference to
"[t]he state law right to non-renew" remaining with the Board,
the policy provides:
"However, if a reduction in force is declared by the
board and the principal of a particular school
designates a non-tenured employee as an individual
that would have been rehired but for the reduction
in force, that employee shall have a one time recall
right to a position for which he or she is certified
and legally qualified for one calendar year from the
effective date of his or her termination ...."
Likewise, in the portion of the policy that concerns
probationary
employees,
immediately
following
the
reference
to
"[t]he state law right to non-renew" remaining with the Board,
the policy provides:
14
1121301
"However, if a reduction in force is declared by the
board and the principal of a particular school
designates a probationary employee as an individual
that would have been rehired but for the reduction
in force, that employee shall have a one time recall
right to a position for which he or she is certified
and legally qualified for one calendar year from the
effective date of his or her termination ...."
We see no way to read the above-quoted language in the
policy concerning nontenured and probationary employees other
than as an exception to the general statement that the policy
does not give such employees a contractual right to
employment. The exception arises when a reduction in force
2
is declared and the principal of a particular school
designates a nontenured
employee
or a probationary employee as
an individual who would have been rehired but for the
reduction in force. Under those conditions, a nontenured or
The exception is confirmed by language in the policy that
2
precedes
the
subsections
addressing
different
types
of
school-
system employees:
"This policy applies to non-tenured and probationary
employees only to the extent that the individual
would have been rehired by the school the following
year but for the reduction in force. Otherwise,
non-tenured and probationary employees are not
granted any retention or recall rights by this
policy except as provided under state law."
(Emphasis added.)
15
1121301
probationary employee possesses a "one time recall right ...
for one calendar year from the effective date of his or her
termination."
The defendants are correct that the general rule is that
"[n]on-tenured teachers may be reemployed or terminated
at
the
discretion of the board of education." Belcher, 474 So. 2d at
1066. As the Belcher Court noted in discussing the facts of
that case, however -- a case in which the plaintiffs were non-
tenured and probationary employees -- "the Board of Education
did not legally have to follow any particular evaluation
policy absent its own self-imposed procedures. Having adopted
a policy, however, the Board is bound to follow it." 474
So. 2d at 1068. The same would be true in this case should
the plaintiffs' allegations be proved: the Board did not have
to
provide
any
contractual
right
to
nontenured
and
probationary employees in its reduction-in-force policy, but
having done so, it is bound by the policy.
The defendants in their appellate brief essentially
concede that language in the policy provides a recall right
for nontenured
and probationary employees when they state
that
"[o]nly in the highly contingent situation when a
Reduction-in-Force is declared by the Board, and the
16
1121301
Principal of a particular school designates either
a non-tenured teacher or a probationary classified
employee as an individual who would have been
rehired but for the Reduction-in-Force, could the
Plaintiffs even state a right to recall under that
policy."
The defendants argue, however, that
"[n]owhere in the Plaintiffs' complaint do they
contend that the Principal of any of the schools
where
these
individuals
were
employed
ever
designated them as one who would have been rehired
but for the Reduction-in-Force. The Plaintiffs'
failure to allege that a Principal designated them
as one who would have been rehired but for the
Reduction-in-Force prevents them from even stating
a contractual claim."
It is true that the plaintiffs in their complaint did not
specifically allege that the principals at the schools where
they were employed designated them as individuals who would
have been rehired but for the reduction in force. The
complaint does allege, however, that the "[p]laintiffs were
entitled to the benefit of [the policy]" and that
"[e]ach of the Plaintiffs had a right to have been
recalled to employment with the School System during
the current year because the Defendants retained,
and/or hired new for the current school year,
teacher and non-teacher employees for positions
which should have been offered to the Plaintiffs
under Alabama Code § 16-1-33 and the specific
criteria of [the policy]."
17
1121301
Thus, the plaintiffs in their complaint generally claimed
that
the policy provided a recall right to which they were
entitled. Of course, in order to prevail on such a claim, the
plaintiffs will face the burden of proving that they met the
conditions necessary to qualify for the recall right. As we
noted in the "Standard of Review," in evaluating a motion to
dismiss, a court views the allegations of the complaint most
strongly in the pleader's favor and such a motion should be
granted only when it appears beyond doubt that the plaintiff
can prove no set of facts in support of the claim that would
entitle the plaintiff to relief. It is conceivable that the
plaintiffs could prove a set of facts under which they had a
contractual right the defendants violated and for which they
are entitled to substantive relief.
3
We are not presented here with an issue whether the "one-
3
calendar year" referenced in the policy and the "current year"
referenced in the above-quoted passage of the complaint are
one and the same. Our holding today is limited to the notion
that the specific language of the policy created a contract
between the parties and that the claims asserted by the
plaintiffs based on that contract are not barred on their face
by a statute-of-limitations defense; we do not have before us
any other issue as to the proper construction of the terms of
the contract or any other potential defenses thereto. Nor
should this opinion be construed as expressing any view as to
the availability of any particular form of relief as requested
in the complaint.
18
1121301
Aside from the deference we must accord to the
allegations in the complaint, the defendants' argument
actually addresses potential weaknesses in the plaintiffs'
ability to prove their allegations, not whether their claim is
barred by the applicable statute of limitations. The
defendants acknowledged in their motion to dismiss the
complaint that "[t]he Defendants contend that the right of
recall does not apply to non-tenured and probationary
employees like the Plaintiffs herein. However, that fact is
not relevant for the disposition of this motion." In their
appellate brief, they reiterate that
"[t]he Defendants' assertion that the right of
recall
does
not
apply
to
non-tenured
and
probationary employees is not necessary to decide
the statute of limitations issue in this case. To
determine whether the statute of limitations defeats
these Plaintiffs' claims it is assumed the policy
applies to all of the Plaintiffs for that narrow
purpose alone."
Despite the above-quoted statements, the defendants
proceed to argue that certain facts preclude the application
of the policy to the plaintiffs. The defendants question
whether the plaintiffs can demonstrate that the policy should
19
1121301
have been applied throughout the school system and, if so,
4
whether principals at the plaintiffs' respective schools
designated the plaintiffs as employees who would have been
rehired except for the reduction in force. Whether the
plaintiffs ultimately are able to prove those facts requires
factual development that is not before the court on a motion
to dismiss based on the applicability of the statute of
limitations.
The relevant issue here is whether, construing the
allegations in a light most favorable to the plaintiffs, as we
must, the complaint states a claim of breach of contract
subject to a six-year statute of limitations rather than the
two-year limitations period the circuit court applied to the
plaintiffs' complaint. As we have already stated, based on
the language in the policy and under the principle enunciated
in Belcher, the plaintiffs have stated a breach-of-contract
claim. Whether the plaintiffs can prove that claim is a
matter to be adjudicated by the circuit court.
According to the defendants in their brief, "[t]he
4
Reduction-in-Force was only declared for Central Office
employees, not individuals employed in schools like these
Plaintiffs." Whether this is true, and the ramifications for
the plaintiffs' claims if it is, are questions not before us.
20
1121301
IV. Conclusion
We conclude that the plaintiffs stated a claim of breach
of contract and that therefore their claim was subject to a
six-year, rather than a two-year, statute of limitations.
Because the plaintiffs filed their action within the
applicable six-year limitations period for a contractual
claim, the circuit court erred in dismissing that claim based
on
a
statute-of-limitations
defense.
Accordingly,
the
circuit
court's dismissal of the plaintiffs' action is reversed, and
the cause is remanded for the continuation of the proceedings
in the circuit court.
REVERSED AND REMANDED.
Moore, C.J., and Stuart, Parker, Shaw, and Main, JJ.,
concur.
Bolin, Wise, and Bryan, JJ., dissent.
21 | September 30, 2014 |
7a3c82d3-010e-4dfd-a7ff-f0acf9a121b7 | Wright v. A-1 Exterminating Company, Inc., et al. | N/A | 1130537, 1130538 | Alabama | Alabama Supreme Court | REL: 10/17/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334)
229-0649), of any typographical or other errors, in order that corrections may be made
before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
_________________________
1130537
_________________________
Ex parte Jeffrey Wright
PETITION FOR WRIT OF MANDAMUS
(In re: Jeffrey Wright
v.
A-1 Exterminating Company, Inc., et al.)
(Etowah Circuit Court, CV-12-900782)
_________________________
1130538
_________________________
Ex parte Myron K. Allenstein et al.
PETITION FOR WRIT OF MANDAMUS
(In re: Myron K. Allenstein et al.
v.
A-1 Exterminating Company, Inc., et al.)
(Etowah Circuit Court, CV-12-900784)
WISE, Justice.
The petitioners, the plaintiffs in two separate cases
below, filed petitions for a writ of mandamus requesting that
this Court direct the trial court to rescind its January 7,
2014, protective order and its January 22, 2014, order
compelling immediate compliance with that protective order.
They then filed amended petitions requesting that this Court
direct the trial court to rescind its February 21, 2014, and
February 27, 2014, amended protective orders. We grant the
petitions and issue the writs.
Factual Background and Procedural History
2
1130537 and 1130538
On December 14, 2012, Jeffrey Wright and Myron K.
Allenstein
filed
separate
complaints
against
A-1
Exterminating
Company, Inc. ("A-1 Exterminating"); Terry Buchanan; Edward
Wrenn; and David Wrenn (hereinafter collectively referred to
as "A-1"). In the complaints, the plaintiffs alleged that,
1
on the date of the initial termite bonds issued to the
plaintiffs,
A-1
Exterminating
entered
into
agreements
with
the
plaintiffs in which it agreed to identify and recommend the
appropriate services to protect the plaintiffs' houses or
property from termites; that the plaintiffs had paid for the
initial service, the issuance of the termite bond, and annual
renewal premiums; that, during subsequent periodic visits to
the subject properties, A-1 sprayed liquids and either
represented to the plaintiffs or led the plaintiffs to believe
that those applications were treatments for termites; that,
during the last two years, A-1 had admitted that the periodic
sprays were not to prevent or control termites; and that
Buchanan, a State-licensed pest-control operator who worked
for A-1 Exterminating, had admitted that the spray was a
A-1 Insulating Company and Wrenn Enterprises, Inc., were
1
also named as defendants. However, they were not named in the
motions and orders that are relevant to this case.
3
1130537 and 1130538
regular, watered-down pesticide that might only be strong
enough to kill ants and possibly spiders. The plaintiffs also
alleged that A-1 had led them to believe that, after a proper
and
adequate
periodic
inspections,
the
subject
properties
were
free and clear of active or previous infestations of wood-
destroying organisms, including termites; that A-1 had led
them to believe that the properties had been treated to
prevent termite infestation and damage; and that no initial
termite treatment had been applied at the subject properties
and that A-1 had never applied a termite treatment at the
properties. The plaintiffs further alleged that, to the
extent any house
had
actually received a partial "vaccination"
for termites, the chemical had worn off and no effective
barrier had been placed between the house and the soil either
initially or after the partial "vaccination" had occurred and
that that fact was concealed from the plaintiffs. Finally,
the plaintiffs alleged:
"Because Plaintiff's HOME did not receive a
vaccination and due to the prevalence of termites in
central
Alabama,
hidden
infestations
are
the
presumed consequence and the ongoing and continuous
latent damage that termites will cause as the result
had resulted in an ongoing and continuous injury to
the HOME from the date of the initial service to
present which has been compounded by [A-1] skipping
4
1130537 and 1130538
thorough,
professional,
and
required
annual
inspections to detect and stop infestation and
damage and instead focus on the useless and
deceptive sprays to induce renewal payments."
The two complaints included counts alleging fraud, including
promissory fraud; breach of warranty; negligence, including
negligence per se, and wantonness; breach of contract; and
negligent training, supervision, and retention. It also
included a request for "equitable relief, including unjust
enrichment."
Wright's case, case no. CV-12-900782, and Allenstein's
case, case no. CV-12-900784, were assigned to different
judges. Later in the day on December 14, 2012, the day the
complaints were filed, Wright filed a first amended complaint
in
case
no.
CV-12-900782
that
included
class-action
allegations. Also, on that same day, Allenstein filed a
"First Amended Mass Action Complaint" in case no. CV-12-
900784, and that amended complaint named as plaintiffs
Allenstein and numerous other persons, including Wright.
Subsequently, the trial court entered an order consolidating
the two cases.
5
1130537 and 1130538
On March 5, 2013, A-1 filed motions for protective orders
in both cases. In those motions, A-1 requested that the trial
court enter
"a protective order or otherwise to bar and enjoin
Plaintiffs
and
Plaintiffs'
counsel
from
extrajudicial references to the circumstances of the
above-styled case, to require Plaintiffs' counsel to
remove all mention of the above-styled case and the
surrounding circumstances of the above-styled case
from its website, Facebook page, social media
(including electronic social media), and related web
search
engines;
and
otherwise
refrain
from
referencing
this
case
and/or
its
surrounding
circumstances outside of court."
In the motions for a protective order, A-1 asserted:
"1. A-1 has learned that Plaintiff's [sic]
attorneys have prominently featured the subject-
matter of this case (A-1's annual sprays at
customer's houses) on that law firm's web site ...
The Plaintiff's [sic] attorney's version of this
case is defamatory, contains egregious errors of
fact, uses sensationalistic and inflammatory terms,
and is plainly written to influence prospective
jurors in this case and attract clients for the
Plaintiffs' law firm. The extrajudicial references
to the above-styled case on Plaintiff's [sic]
attorney's
website
violates
Alabama
Rules
of
Professional Conduct 3.6 and 4.1.
"2. The Plaintiffs' attorney's skewed vision of
events in this case claims that A-l's annual sprays
are
a
'fraud,'
that
A-l's
customer
letters
concerning the annual spays 'is actually another
fraud,' that A-l has never performed a proper
termite prevention treatment at its customers'
houses, and that A-l's customers have the choice of
suing now 'or let A-l Exterminating and its owners
6
1130537 and 1130538
get away with a fraud that has drained East Alabama
of tens of millions of dollars over the years.'
(Exhibit 1, web page from Plaintiffs' law firm's web
site).
"3. Apart from the obvious untruths, the web
site
is
transparently
intended
to
influence
prospective jurors. The web site is inflammatory
and will taint any prospective venire. The web site
is clearly designed with the dual intent of tainting
prospective jurors and attracting additional clients
for the Plaintiffs' law firm.
"....
"7. In addition, a Google search of 'A-l
Exterminating'
shows
that
the
link
to
file
aforementioned Plaintiffs' attorney's web site is
the fifth entry on Google. (Exhibit 5, Google web
page). A Google search of 'A-l Exterminating
lawsuit'
(the
search
term
appears,
without
prompting, on a dropdown menu) shows that three of
the first five entries are links to web sites or
Facebook
pages
operated
by
the
Plaintiffs'
attorney's law firm. Because Google places links
according
to
paid
revenue,
it
appears
that
Plaintiffs' attorneys may have paid consideration to
Google to place this information in a prime place on
Google."
A-1 argued that the Web sites were highly prejudicial to it;
that there was "no justifiable reason for the extrajudicial
references to the above-styled case on the web site reference
above, except to attract clients for the Plaintiffs' law firm
and/or to prejudice potential jurors"; and that "A-1's
7
1130537 and 1130538
business reputation and operations are being damaged by the
Plaintiffs' attorney's pretrial tactics."
The plaintiffs filed oppositions to A-1's motions for a
protective order. In their oppositions, the
plaintiffs
argued
that the motions for a protective order were an attempt to
restrict the free-speech rights of the plaintiffs and their
attorneys; that the stories included on the law firm's Web
site and in social media "comment upon the evidence concerning
public trials where [plaintiffs' attorney's law firm]
represented the Plaintiff in a case with identical claims";
that the complaints and amended complaints in this case are
public records and include detailed statements of the
allegations; and that "the facts are contained within dozens
of public complaint files concerning A-1 Exterminating, Co.,
Inc. or its owners and licensees that are on file with the
Alabama Department of Agriculture and Industries ('ADAI')
which
regulate[s]
this
business
and
the
individual
defendants." The plaintiffs also disputed A-1's allegations
regarding how the Google search engine worked.
A-1 subsequently filed three supplements to its motions
for a protective order and included additional exhibits and
8
1130537 and 1130538
arguments in support of the motions. In the second
supplemental motion for a protective order, A-1 asserted:
"On November 4, 2013, Birmingham television station
WBRC-TV 6 aired a 'sting operation' which purported
1
to show that A-1 performed deficient termite
inspections at its customers houses. This 'sting
operation' clearly was prepared with Plaintiffs'
counsel's
collaboration,
if
not
outright
instigation.
"___________________
" The term 'sting operation' comes from the
1
Plaintiffs' attorney."
A-1 went on to assert that the "sting operation" was
objectionable on several grounds; that the "sting operation"
contained "flagrantly erroneous information"; that the "sting
operation" had damaged its business operations and business
reputation; and that the "sting operation" had "poisoned the
jury venire in Etowah County and has prejudiced A-1's right to
a fair trial in this case."
On January 7, 2014, the trial court entered the following
protective order, which carried the styles of both cases:
"This matter came on to be heard on [A-1's]
March 5, 2013 Motion for Protective Order. The
Court has considered that Motion, [A-1's] Supplement
of September 16, 2013, Plaintiffs' September 16,
2013 Reply, [A-1's] Second Supplement filed November
11, 2013, [A-1's] Third Supplement and the arguments
9
1130537 and 1130538
of counsel, the Court finds that the Motion is due
to be GRANTED.
"Accordingly,
it
is
hereby
ORDERED,
ADJUDGED
AND
DECREED that the Motion for Protective Order is
GRANTED. The Plaintiffs and Plaintiffs' counsel are
hereby barred and enjoined from extrajudicial
references to the circumstances of the above styled
cases. Plaintiffs' counsel shall remove all mention
of the above styled cases and the surrounding
circumstances of the above styled case from its
website, Facebook page, social media (including
electronic social media), and related web search
engines. Plaintiffs and Plaintiffs' counsel are
otherwise ordered to refrain from referencing this
case and/or its surrounding circumstances outside of
court."
(Capitalization in original.)
On January 13, 2014, A-1 filed a motion seeking to have
the plaintiffs immediately comply with the trial court's
January 7, 2014, protective order. On January 22, 2014, the
trial court entered an order granting that motion. On January
24, 2014, the plaintiffs filed a "Notice of Compliance with
Gag Order." On January 31, 2014, the plaintiffs filed a
motion to vacate, alter, or amend the trial court's January 7,
2014, protective order. They also filed a motion to stay the
protective order pending a ruling on the motion to vacate,
alter, or amend.
10
1130537 and 1130538
On February 5, 2014, the plaintiffs filed an "Emergency
Motion for Hearing on Motion for Stay, Motion to Vacate, Alter
or
Amend,
and
Motion
for
Disclosure
of
Ex
parte
Communications." On that same date, A-1 filed a motion to
amend the protective order entered on January 7, 2014.
On February 18, 2014, the plaintiffs filed their
petitions for a writ of mandamus in this Court.
On February 21, 2014, the trial court entered the
following amended protective order in case no. CV-12-900784:
"This matter came on to be heard on Defendants,
A-l Exterminating Company, Inc.'s, Edward Wrenn's,
David Wrenn's, and Terry Buchanan's March 5, 2013
motion for protective order. Having considered that
Motion, Defendants' supplement of September 16,
2013,
Plaintiffs'
September
16,
2013
reply,
Defendants' second supplement filed November 11,
2013, and Defendants' third supplement. Having
considered the Motion and the arguments of counsel,
the Court finds that the Motion is due to be
GRANTED.
"Accordingly, it is hereby ORDERED, ADJUDGED,
and DECREED that the motion for protective order is
GRANTED. The Plaintiffs and Plaintiffs' counsel are
hereby barred and enjoined from extrajudicial
references to the circumstances of the above-styled
case, Plaintiffs' counsel and his firm shall remove
all mention of the above-styled case and the
surrounding circumstances of the above-styled case
from the firm's website and from the firm's and/or
his individual Facebook page, Linkedin Page, and all
social media (including electronic social media),
and related web search engines. Plaintiffs and
11
1130537 and 1130538
Plaintiffs' counsel are otherwise ordered to refrain
from referencing this case and/or its surrounding
circumstances outside of court.
"Nothing in this order shall prevent any
attorney, law firm, and/or that law firm's staff
from discussing this case with their respective
clients, internally with persons working at any such
law firm, with other attorneys involved in this
case, including those attorneys' staff, and/or with
any expert witnesses."
(Capitalization in original.)
On February 27, 2014, the trial court entered an amended
protective order in case no. CV-12-900782 that was virtually
identical to the amended protective order entered in case no.
CV-12-900784.
On March 3, 2014, the plaintiffs filed amended petitions
for a writ of mandamus in this Court seeking a rescission of
the February 21 and February 27 amended protective orders.
Standard of Review
"This Court stated in Ex parte Pfizer, Inc., 746
So. 2d 960 (Ala. 1999):
"'The
writ
of
mandamus
is
an
extraordinary remedy, and one petitioning
for that writ must show "(1) a clear legal
right in the petitioner to the order
sought; (2) an imperative duty on the
respondent to perform, accompanied by a
refusal to do so; (3) the lack of another
adequate remedy; and (4) properly invoked
jurisdiction of the court." Ex parte
12
1130537 and 1130538
Alfab, Inc., 586 So. 2d 889, 890 (Ala.
1991); see also, Martin v. Loeb & Co., 349
So. 2d 9 (Ala. 1977); Ex parte Slade, 382
So. 2d 1127 (Ala. 1980) [overruled on other
grounds by Ex parte Creel, 719 So. 2d 783
(Ala. 1998)]; Ex parte Houston County, 435
So. 2d 1268 (Ala. 1983); Ex parte Johnson,
638 So. 2d 772 (Ala. 1994). "Mandamus is
an extraordinary remedy and will lie to
compel the exercise of discretion, but not
to compel its exercise in a particular
manner except where there is an abuse of
discretion." State v. Cannon, 369 So. 2d
32, 33 (Ala. 1979).'
"746 So. 2d at 962."
Ex parte Anderson, 789 So. 2d 190, 193-94 (Ala. 2000).
Discussion
The petitioners argue that the trial court's protective
order and amended protective orders constitute impermissible
prior restraints on speech, in violation of the First
Amendment, and that they are unconstitutionally overbroad.
Specifically, they contend:
"Prior restraints are forbidden by the First
Amendment except in the most extreme circumstances.
Nebraska Press Ass'n v. Stuart, 427 U.S. 539, 559
(1976). A prior restraint on pure speech can be
justified only if the speech to be forbidden
threatens a constitutional value even more precious
than the First Amendment. Procter & Gamble Co. v.
Bankers Trust Co., 78 F. 3d 219, 227 (6th Cir.
1996). Such countervailing values as national
security interests, New York Times Co. v. United
States, 403 U.S. 713, 714 (1971), or the protection
13
1130537 and 1130538
of reputation, Organization for a Better Austin v.
Keefe, 402 U.S. 415, 418 (1971), or the protection
of litigation against public pressure, U.S. v.
Columbia Broadcasting System, 497 F.2d 102 (5th Cir.
1974), or the need for orderly processing of class
actions, Bernard v. Gulf Oil Co., 619 F.2d 459 (5th
Cir. 1980) (en banc), have all been held to be
insufficient justification for prior restraints."
Initially, we note that Rule 3.6, Ala. R. Prof. Conduct,
governs extrajudicial statements by attorneys. Rule 3.6
provides, in pertinent part:
"(a) A lawyer shall not make an extrajudicial
statement that a reasonable person would expect to
be disseminated by means of public communication if
the lawyer knows or reasonably should know that it
will have a substantial likelihood of materially
prejudicing an adjudicative proceeding.
"(b) A statement referred to in paragraph (a)
ordinarily is likely to have such an effect when it
refers to a civil matter triable to a jury, a
criminal matter, or any other proceeding that could
result in incarceration, and the statement relates
to:
"(1) the character, credibility, reputation or
criminal record of a party, suspect in a criminal
investigation or witness, or the identity of a
witness, or the expected testimony of a party or
witness;
"....
"(3)
the
performance
or
results
of
any
examination or test or the refusal or failure of a
person to submit to an examination or test, or the
identity or nature of physical evidence expected to
be presented;
14
1130537 and 1130538
"....
"(5) information the lawyer knows or reasonably
should know is likely to be inadmissible as evidence
in a trial and would if disclosed create a
substantial risk of prejudicing an impartial trial;
or
"(6) the fact that a defendant has been charged
with a crime, unless there is included therein a
statement explaining that the charge is merely an
accusation and that the defendant is presumed
innocent until and unless proven guilty.
"(c) Notwithstanding paragraphs (a) and (b)
(1-5), a lawyer involved in the investigation or
litigation
of
a
matter
may
state
without
elaboration:
"(1) the general nature of the claim or defense;
"(2) the information contained in a public
record;
"(3) that an investigation of the matter is in
progress, including the general scope of the
investigation, the offense or claim or defense
involved and, except when prohibited by law, the
identity of the persons involved;
"(4) the scheduling or result of any step in
litigation;
"(5) a request for assistance in obtaining
evidence and information necessary thereto;
"(6) a
warning
of
danger
concerning
the
behavior
of a person involved, when there is reason to
believe that there exists the likelihood of
substantial harm to an individual or to the public
interest; and
15
1130537 and 1130538
"....
"(8) Notwithstanding paragraphs (a) and (b)
above, a lawyer may make a statement that a
reasonable lawyer would believe is required to
protect a client from the substantial undue
prejudicial effect of recent publicity not initiated
by the lawyer or the lawyer's client. A statement
made pursuant to this paragraph shall be limited to
such information as is necessary to mitigate the
recent adverse publicity."
Additionally, the Comment to Rule 3.6 recognizes:
"It is difficult to strike a balance between
protecting
the
right
to
a
fair
trial
and
safeguarding
the
right
of
free
expression.
Preserving the right to a fair trial necessarily
entails some curtailment of the information that may
be disseminated about a party prior to trial,
particularly where trial by jury is involved. If
there were no such limits, the result would be the
practical nullification of the protective effect of
the rules of forensic decorum and the exclusionary
rules of evidence. On the other hand, there are
vital
social
interests
served
by
the
free
dissemination of information about events having
legal consequences and about legal proceedings
themselves. The public has a right to know about
threats to its safety and measures aimed at assuring
its security. It also has a legitimate interest in
the conduct of judicial proceedings, particularly in
matters of general public concern. Furthermore, the
subject matter of legal proceedings is often of
direct significance in debate and deliberation over
questions of public policy.
"No
body of
rules
can
simultaneously
satisfy
all
interests of fair trial and all those of free
expression. The formula in this Rule is based upon
the ABA former Code of Professional Responsibility
and the ABA Standards Relating to Fair Trial and
16
1130537 and 1130538
Free Press, as amended in 1978. The standard to be
applied in Rule 3.6(a) is the 'serious and imminent
threat' test developed in the case of Chicago
Counsel of Lawyers v. Bauer, 522 F.2d 242 (7th Cir.
1975)."
The United States Supreme Court has allowed limitations
placed upon the speech of parties who are before a court in a
pending case. In Seattle Times Co. v. Rhinehart, 467 U.S. 20
(1984), the United States Supreme Court addressed "the issue
whether parties to civil litigation have a First Amendment
right to disseminate, in advance of trial, information gained
through the pretrial discovery process." 467 U.S. at 22. In
that case, Keith Rhinehart, the spiritual leader of the
Aquarian Foundation, a religious group, brought an action on
behalf of himself and the Aquarian Foundation against the
Seattle Times, the Walla Walla Union-Bulletin, the authors of
certain articles that had appeared in those newspapers, and
the spouses of the authors of the articles. Five female
members of the Aquarian Foundation also joined the suit as
plaintiffs. During the litigation, the defendants filed an
order compelling discovery regarding the financial affairs of
the Aquarian Foundation, the source of its donations, and
other information. The plaintiffs argued that compelling
17
1130537 and 1130538
production of the identities of the Aquarian Foundation's
members and donors would violate the First Amendment rights of
the members and donors and would also violate their right to
privacy, freedom of religion, and freedom of association. The
plaintiffs moved for a protective order that would prevent the
defendants from disseminating any information gained through
discovery.
The trial court initially granted the motion to compel
and refused to issue a protective order. However, the trial
court later issued a protective order
"covering all information obtained through the
discovery process that pertained 'to the financial
affairs of the various plaintiffs, the names and
addresses
of
Aquarian
Foundation
members,
contributors, or clients, and the names and
addresses of those who have been contributors,
clients,
or
donors
of
any
of
the
various
plaintiffs.' ... The order prohibited petitioners
from
publishing,
disseminating,
or
using
the
information in any way except where necessary to
prepare for and try the case. By its terms, the
order did not apply to information gained by means
other than the discovery process."
467 U.S. at 27. The defendants appealed from the protective
order, and the plaintiffs appealed from the trial court's
order granting the motion to compel production. The
Washington Supreme Court affirmed both orders.
18
1130537 and 1130538
The United States Supreme Court granted certiorari in
that case. In its opinion, the United States Supreme Court
stated:
"It is, of course, clear that information
obtained through civil discovery authorized by
modern rules of civil procedure would rarely, if
ever, fall within the classes of unprotected speech
identified by decisions of this Court. In this
case, as petitioners argue, there certainly is a
public interest in knowing more about respondents.
This interest may well include most -- and possibly
all -- of what has been discovered as a result of
the court's order under [Wash. Sup. Ct. Civil] Rule
26(b)(1). It does not necessarily follow, however,
that a litigant has an unrestrained right to
disseminate information that has been obtained
through pretrial discovery. For even though the
broad sweep of the First Amendment seems to prohibit
all restraints on free expression, this Court has
observed that '[f]reedom of speech ... does not
comprehend the right to speak on any subject at any
time.' American Communications Assn. v. Douds, 339
U.S. 382, 394–395 (1950).
"The critical question that this case presents
is whether a litigant's freedom comprehends the
right to disseminate information that he has
obtained pursuant to a court order that both granted
him access to that information and placed restraints
on the way in which the information might be used.
In addressing that question it is necessary to
consider
whether
the
'practice
in
question
[furthers] an important or substantial governmental
interest unrelated to the suppression of expression'
and whether 'the limitation of First Amendment
freedoms [is] no greater than is necessary or
essential to the protection of the particular
governmental interest involved.' Procunier v.
Martinez, 416 U.S. 396, 413 (1974); see Brown v.
19
1130537 and 1130538
Glines, 444 U.S. 348, 354–355 (1980); Buckley v.
Valeo, 424 U.S. 1, 25 (1976).
"A.
"At the outset, it is important to recognize the
extent of the impairment of First Amendment rights
that a protective order, such as the one at issue
here, may cause. As in all civil litigation,
petitioners gained the information they wish to
disseminate only by virtue of the trial court's
discovery processes. As the Rules authorizing
discovery were adopted by the state legislature, the
processes thereunder are a matter of legislative
grace. A litigant has no First Amendment right of
access to information made available only for
purposes of trying his suit. Zemel v. Rusk, 381
U.S. 1, 16–17 (1965) ('The right to speak and
publish does not carry with it the unrestrained
right to gather information'). Thus, continued
court control over the discovered information does
not raise the same specter of government censorship
that such control might suggest in other situations.
See In re Halkin, 194 U.S. App. D.C., at 287, 598
F.2d, at 206–207 (Wilkey, J., dissenting).18
"Moreover,
pretrial
depositions
and
interrogatories are not public components of a civil
trial. Such proceedings were not open to the public
at common law, Gannett Co. v. DePasquale, 443 U.S.
368, 389 (1979), and, in general, they are conducted
in private as a matter of modern practice. See id.,
at 396 (Burger, C.J., concurring); Marcus, Myth and
Reality in Protective Order Litigation, 69 Cornell
L. Rev. 1 (1983). Much of the information that
surfaces during pretrial discovery may be unrelated,
or only tangentially related, to the underlying
cause of action. Therefore, restraints placed on
discovered, but not yet admitted, information are
not a restriction on a traditionally public source
of information.
20
1130537 and 1130538
"Finally, it is significant to note that an
order
prohibiting
dissemination
of
discovered
information before trial is not the kind of classic
prior
restraint
that
requires
exacting
First
Amendment scrutiny. See Gannett Co. v. DePasquale,
supra, at 399 (Powell, J., concurring). As in this
case, such a protective order prevents a party from
disseminating only that information obtained through
use of the discovery process. Thus, the party may
disseminate the identical information covered by the
protective order as long as the information is
gained through means independent of the court's
processes. In sum, judicial limitations on a
party's
ability
to
disseminate
information
discovered in advance of trial implicates the First
Amendment rights of the restricted party to a far
lesser extent than would restraints on dissemination
of information in a different context. Therefore,
our consideration of the provision for protective
orders contained in the Washington Civil Rules takes
into account the unique position that such orders
occupy in relation to the First Amendment.
"___________________________________
" Although litigants do not 'surrender their
18
First Amendment rights at the courthouse door,' In
re Halkin, 194 U.S. App. D.C., at 268, 598 F.2d, at
186, those rights may be subordinated to other
interests that arise in this setting. For instance,
on several occasions this Court has approved
restriction
on
the
communications
of
trial
participants where necessary to ensure a fair trial
for a criminal defendant. See Nebraska Press Assn.
v. Stuart, 427 U.S. 539, 563 (1976); id., at 601,
and n. 27 (Brennan, J., concurring in judgment);
Oklahoma Publishing Co. v. District Court, 430 U.S.
308, 310–311 (1977); Sheppard v. Maxwell, 384 U.S.
333, 361 (1966). 'In the conduct of a case, a court
often finds it necessary to restrict the free
expression of participants, including counsel,
21
1130537 and 1130538
witnesses, and jurors.' Gulf Oil Co. v. Bernard,
452 U.S. 89, 104, n. 21 (1981)."
467 U.S. at 31-34 (footnote omitted).
Ultimately, the Supreme Court held:
"[W]here, as in this case, a protective order is
entered on a showing of good cause as required by
[Wash. Sup. Ct. Civil] Rule 26(c), is limited to the
context of pretrial civil discovery, and does not
restrict the dissemination of the information if
gained form other sources, it does not offend the
First Amendment."
467 U.S. at 37.
Subsequently, in Gentile v. State Bar of Nevada, 501 U.S.
1030 (1991), Dominic Gentile, an attorney, was reprimanded
after a finding by the Disciplinary Board of the Nevada State
Bar that he had violated an attorney disciplinary rule by
making a statement to the press shortly after his client was
indicted on criminal charges. The Nevada Supreme Court
affirmed the Board's decision, and Gentile appealed to the
United States Supreme Court. The Supreme Court was presented
with the issue whether the application of the disciplinary
rule violated the right to free speech guaranteed by the First
Amendment. In addressing that issue, the Supreme Court
stated:
22
1130537 and 1130538
"It is unquestionable that in the courtroom
itself, during a judicial proceeding, whatever right
to 'free speech' an attorney has is extremely
circumscribed. An attorney may not, by speech or
other conduct, resist a ruling of the trial court
beyond the point necessary to preserve a claim for
appeal. Sacher v. United States, 343 U.S. 1, 8
(1952) (criminal trial); Fisher v. Pace, 336 U.S.
155 (1949) (civil trial). Even outside the
courtroom, a majority of the Court in two separate
opinions in the case of In re Sawyer, 360 U.S. 622
(1959), observed that lawyers in pending cases were
subject to ethical restrictions on speech to which
an ordinary citizen would not be. There, the Court
had before it an order affirming the suspension of
an attorney from practice because of her attack on
the fairness and impartiality of a judge. The
plurality opinion, which found the discipline
improper, concluded that the comments had not in
fact impugned the judge's integrity. Justice
Stewart, who provided the fifth vote for reversal of
the sanction, said in his separate opinion that he
could not join any possible 'intimation that a
lawyer can invoke the constitutional right of free
speech
to
immunize
himself
from
even-handed
discipline for proven unethical conduct.' Id., at
646. He said that '[o]bedience to ethical precepts
may
require
abstention
from
what
in
other
circumstances might be constitutionally protected
speech.' Id., at 646-647. The four dissenting
Justices who would have sustained the discipline
said:
"'Of course, a lawyer is a person and
he too has a constitutional freedom of
utterance and may exercise it to castigate
courts
and
their
administration
of
justice.
But a lawyer actively participating in a
trial, particularly an emotionally charged
criminal prosecution, is not merely a
person and not even merely a lawyer.
"'....
23
1130537 and 1130538
"'He is an intimate and trusted and
essential part of the machinery of justice,
an "officer of the court" in the most
compelling sense.' Id., at 666, 668
(Frankfurter, J., dissenting, joined by
Clark, Harlan, and Whittaker, JJ.).
"Likewise,
in
Sheppard
v.
Maxwell,
[384 U.S. 333
(1966),] where the defendant's conviction was
overturned because extensive prejudicial pretrial
publicity had denied the defendant a fair trial, we
held that a new trial was a remedy for such
publicity, but
"'we must remember that reversals are but
palliatives; the cure lies in those
remedial measures that will prevent the
prejudice at its inception. The courts
must take such steps by rule and regulation
that will protect their processes from
prejudicial
outside
interferences.
Neither
prosecutors, counsel for defense, the
accused,
witnesses,
court
staff
nor
enforcement officers coming under the
jurisdiction of the court should be
permitted
to
frustrate
its
function.
Collaboration
between
counsel
and
the
press
as to information affecting the fairness of
a criminal trial is not only subject to
regulation, but is highly censurable and
worthy of disciplinary measures.' 384
U.S., at 363 (emphasis added).
"We expressly contemplated that the speech of those
participating before the courts could be limited.
This
distinction
between
participants
in
the
litigation and strangers to it is brought into sharp
relief by our holding in Seattle Times Co. v.
Rhinehart,
467
U.S.
20
(1984).
There,
we
unanimously held that a newspaper, which was itself
a defendant in a libel action, could be restrained
from publishing material about the plaintiffs and
their supporters to which it had gained access
24
1130537 and 1130538
through court-ordered discovery. In that case we
said that '[a]lthough litigants do not "surrender
their First Amendment rights at the courthouse
door," those rights may be subordinated to other
interests that arise in this setting,' id., at
32-33, n. 18 (citation omitted), and noted that 'on
several occasions [we have] approved restriction on
the communications of trial participants where
necessary to ensure a fair trial for a criminal
defendant.' Ibid.
"Even in an area far from the courtroom and the
pendency of a case, our decisions dealing with a
lawyer's right under the First Amendment to solicit
business and advertise, contrary to promulgated
rules of ethics, have not suggested that lawyers are
protected by the First Amendment to the same extent
as those engaged in other businesses. See, e.g.,
Bates v. State Bar of Arizona, 433 U.S. 350 (1977);
Peel v. Attorney Registration and Disciplinary
Comm'n of Ill., 496 U.S. 91 (1990); Ohralik v. Ohio
State Bar Assn., 436 U.S. 447 (1978). In each of
these cases, we engaged in a balancing process,
weighing the State's interest in the regulation of
a specialized profession against a lawyer's First
Amendment interest in the kind of speech that was at
issue. These cases recognize the long-established
principle stated in In re Cohen, 7 N.Y.2d 488, 495,
199 N.Y.S.2d 658, 661, 166 N.E.2d 672, 675 (1960):
"'Appellant as a citizen could not be
denied any of the common rights of
citizens. But he stood before the inquiry
and before the Appellate Division in
another quite different capacity, also. As
a lawyer he was "an officer of the court,
and, like the court itself, an instrument
... of justice...."' (quoted in Cohen v.
Hurley, 366 U.S. 117, 126 (1961)).
"We think that the quoted statements from our
opinions in In re Sawyer, 360 U.S. 622 (1959), and
Sheppard v. Maxwell, supra, rather plainly indicate
25
1130537 and 1130538
that the speech of lawyers representing clients in
pending cases may be regulated under a less
demanding
standard
than
that
established
for
regulation of the press in Nebraska Press Assn. v.
Stuart, 427 U.S. 539 (1976), and the cases which
preceded it. Lawyers representing clients in
pending cases are key participants in the criminal
justice system, and the State may demand some
adherence to the precepts of that system in
regulating their speech as well as their conduct.
As noted by Justice Brennan in his concurring
opinion in Nebraska Press, which was joined by
Justices Stewart and Marshall, '[a]s officers of the
court, court personnel and attorneys have a
fiduciary responsibility not to engage in public
debate that will redound to the detriment of the
accused
or
that
will
obstruct
the
fair
administration of justice.' Id., at 601, n. 27.
Because lawyers have special access to information
through discovery and client communications, their
extrajudicial statements pose a threat to the
fairness of a pending proceeding since lawyers'
statements are likely to be received as especially
authoritative. See, e.g., In re Hinds, 90 N.J. 604,
627, 449 A.2d 483, 496 (1982) (statements by
attorneys of record relating to the case 'are likely
to be considered knowledgeable, reliable and true'
because of attorneys' unique access to information);
In re Rachmiel, 90 N.J. 646, 656, 449 A.2d 505, 511
(N.J. 1982) (attorneys' role as advocates gives them
'extraordinary power to undermine or destroy the
efficacy of the criminal justice system'). We agree
with
the
majority
of
the
States
that
the
'substantial likelihood of material prejudice'
standard constitutes a constitutionally permissible
balance between the First Amendment rights of
attorneys in pending cases and the State's interest
in fair trials.
"When a state regulation implicates First
Amendment rights, the Court must balance those
interests against the State's legitimate interest in
26
1130537 and 1130538
regulating the activity in question. See, e.g.,
Seattle Times, supra, 467 U.S. at 32."
501 U.S. at 1071-76 (footnote omitted).
In Marceaux v. Lafayette City-Parish Consolidated
Government, 731 F.3d 488 (5th Cir. 2013), current and former
officers ("the officers") of the Lafayette Police Department
("LPD") sued the LPD and other defendants under 42 U.S.C. §
1983. The officers communicated with the media about the
case. They also maintained a Web site that contained an image
of LPD's police chief, who was a party to the suit; "excerpts
of critical statements made in the media" concerning the LPD
and other defendants; and "certain voice recordings of
conversations between the Officers and members of the
Lafayette Police Department" and "other accounts of the
Lafayette PD Defendants' alleged failings." 731 F.3d at 490-
91. The LPD and other defendants requested a protective order
in which they sought to limit the plaintiffs' communications
with the media and to have the Web site taken down.
Subsequently, the magistrate judge
"'ordered that the parties' and their
attorneys' contact and communication with
and through the media shall be limited to
(a) information contained in the public
record; (b) identification of parties and
claims/defenses asserted in this matter;
27
1130537 and 1130538
(c) the scheduling or result of any step in
this
litigation;
(d)
references
that
investigation(s) is in progress, without
disclosure of investigation details; (e)
requests
for
assistance
in
obtaining
evidence or information; (f) warnings of
danger concerning the behavior of persons
who are parties in this case when there is
reason to believe, based on a reasonable
factual inquiry, that there exists a
likelihood of substantial harm to an
individual or the public interest.'
"The magistrate judge 'further ordered that the
website ... shall be closed and removed immediately,
ceasing all operations and publication, and that the
recordings shall not be publicly disclosed outside
the confines of this case and any other pending
legal proceeding, absent leave of court.' The
restrictions on communications with the media were
expressly modeled on Louisiana Rule of Professional
Conduct 3.6 and the language approved in [United
States v.] Brown, 218 F.3d [415,] 429–31 [(5th Cir.
2000)], and Levine v. U.S. District Court, 764 F.2d
590, 598–99 (9th Cir. 1985). The magistrate judge
also 'order[ed] the [W]ebsite be taken down' because
it 'not only contain[ed] comments and information
that would violate [Louisiana Rule of Professional
Conduct] 4.4, it is and has been used as a vehicle
by which to disseminate inappropriate information to
the media and the public.' The primary rationale
for the order was to allow for a fair trial by
avoiding a taint on the prospective jury pool. Over
objection, the district court adopted the magistrate
judge's order, and this appeal followed."
731 F.3d at 491.
In addressing the order, the United States Court of
Appeals for the Fifth Circuit stated:
28
1130537 and 1130538
"When restrictions are sought to be imposed on
litigants after litigation is filed, a district
court must balance a litigant's First Amendment
rights
against
other
important,
competing
considerations. See [United States v.] Brown, 218
F.3d [415,] 424 [(5th Cir. 2000)] ('"[A]lthough
litigants do not surrender their First Amendment
rights at the courthouse door, those rights may be
subordinated to other interests that arise" in the
context of both civil and criminal trials.' (quoting
Seattle Times Co. v. Rhinehart, 467 U.S. 20, 32 n.
18
(1984))).
Court
orders
restricting
trial
participants' speech are evaluated under the prior
restraint doctrine, which requires that the record
establish that the speech creates a potential for
prejudice sufficient to justify the restriction.
See Brown, 218 F.3d at 424–25. In addition, the
restriction must be narrowly tailored and employ the
least restrictive means of preventing the prejudice.
Id. at 425. We note that the Officers represent
that they are willing to accept the application to
them
of
Louisiana
Rules
of
Professional
Responsibility 3.6 and 4.4 in this context, although
those rules ordinarily would not apply to clients
who are not lawyers. They object to the terms of
the court's order only as they support or apply to
the portion of the order mandating that the Website
be removed in its entirety. Thus, we focus our
analysis only on the portion of the order addressing
removal of the entire Website."
731 F.3d at 492. The Fifth Circuit Court of Appeals noted
that this area of law "demands a nuanced approach to the
delicate balance between the necessity of avoiding a tainted
jury pool and the rights of parties to freely air their views
and opinions in the 'market square' now taking the form of the
electronic square known as the Internet." 731 F.3d at 492.
29
1130537 and 1130538
It noted that, although the district court had applied a
careful and nuanced approach in much of the protective order,
with regard to the Web site, "the nuanced approach gave way
to a more wholesale striking of its entire content -- indeed,
the very website itself." Id.
In addressing the district court's wholesale striking of
the Web site in Marceaux, the Fifth Circuit Court of Appeals
stated:
"We
analyze
this
issue
under
the
prior
restraint
doctrine. Court orders aimed at preventing or
forbidding speech 'are classic examples of prior
restraints.' Alexander v. United States, 509 U.S.
544, 550 (1993). Indeed, this court has recognized
that '[d]espite the fact that litigants' First
Amendment freedoms may be limited in order to ensure
a fair trial, gag orders ... still exhibit the
characteristics of prior restraints.' [United
States v.] Brown, 218 F.3d [415,] 424 [(5th Cir.
2000)]; see also Levine[ v. United States Dist.
Court for the Central Dist. of California], 764 F.2d
[590,] 595 [(9th Cir. 1985)](holding that a court's
order prohibiting trial participants from speaking
to the media constituted a prior restraint). The
order here explicitly restricts the expression of
attorneys and parties in this litigation as it
relates to the media and prevents the Officers from
expression in the Website. As a result, the
protective order qualifies as a prior restraint.
"Prior restraints 'face a well-established
presumption
against
their
constitutionality.'
Brown, 218 F.3d at 424–25 (citing Bernard v. Gulf
Oil Co., 619 F.2d 459, 467 (5th Cir. 1980) (en banc)
(citations omitted)); see also Org. for a Better
Austin v. Keefe, 402 U.S. 415, 419 (1971) ('Any
30
1130537 and 1130538
prior restraint on expression comes ... with a
"heavy presumption" against its constitutional
validity.'). We must therefore balance the First
Amendment rights of trial participants with our
'"affirmative constitutional duty to minimize the
effects of prejudicial pretrial publicity."' Brown,
218 F.3d at 423 (quoting Gannett Co. v. DePasquale,
443 U.S. 368, 378 (1979)); see also Sheppard v.
Maxwell, 384 U.S. 333, 363 (1966) ('The courts must
take such steps by rule and regulation that will
protect their processes from prejudicial outside
interferences.')."
731 F.3d at 493 (footnote omitted). Ultimately, the Fifth
Circuit Court of Appeals held that "the district court erred
in concluding that the entirety of the Website was
substantially likely to cause prejudice." Thus, it held that
the district court's finding "'that the entire Website
demonstrat[ed] a substantial likelihood of impacting the jury
venire' is overbroad and clearly erroneous." 731 F.3d at 488.
Although the Fifth Circuit vacated the district court's
wholesale ban on the Web site, it noted:
"[W]e do not intend to tie the hands of the district
court in addressing some of its content, and we
recognize that there may be bases upon which to
order removal of some of the content of the Website.
Recognizing the fact-bound nature of the inquiry and
the limited nature of the record presented here, we
express no opinion on that issue but note only that
any such consideration of the Website's content must
be narrowly tailored and represent the least
restrictive means. [United States v.] Brown, 218
F.3d [415,] 425 [(5th Cir. 2000)] . In other words,
31
1130537 and 1130538
the court must engage in a specific review of any
claimed improper material."
731 F.3d at 495-96.
In this case, A-1 argues that the protective order and
amended protective orders issued by the trial court were
necessary to protect its right to a fair trial. However,
those orders prohibit the plaintiffs and their attorneys from
making any "extrajudicial references to the circumstances of
[these] case[s]." Additionally, the trial court also ordered
plaintiffs' counsel and his firm to "remove all mention of the
above-styled case[s] and the surrounding circumstances of the
above-styled case[s] from the firm's website and from the
firm's and/or his individual Facebook page,
Linkedin
Page, and
all social media (including electronic social media), and
related web search engines." Finally, the trial court ordered
the plaintiffs and their attorneys to refrain from even
"referencing this case and/or its surrounding circumstances
outside of court." Neither the protective order nor the
amended protective orders in this case are narrowly tailored
to protect A-1's right to a fair trial. Further, the orders
do not provide any exceptions for making statements that are
expressly allowed by Rule 3.6(c)(7), Ala. R. Prof. Conduct.
32
1130537 and 1130538
The amended protective orders do specify that they would
not "prevent any attorney, law firm, and/or that law firm's
staff from discussing
this case with their respective clients,
internally with persons working at any such law firm, with
other attorneys involved in this case, including those
attorney's staff, and/or with any expert witness." However,
the amended protective orders would still prevent the
plaintiffs from discussing this case with potential clients;
discussing this case with putative class members; discussing
this case with state regulators; discussing the case with
anyone in an attempt to discover evidence; and discussing the
case with any potential non-expert witnesses.
For these reasons, the trial court's protective order and
the amended protective orders are overbroad. See Johanson v.
Eighth Judicial Dist. Court of State of Nev. ex. rel. County
of Clark, 124 Nev. 245, 252, 182 P.3d 94, 99 (2008) (holding
that a gag order that "prevented 'the parties, their attorneys
and any employees or persons associated with the parties or
their counsel ... from disclosing any documents in this case
or discussing the case with any ... other party or disclosing
any information about this case to any other party or
individual'" was unconstitutionally overbroad); Kemner v.
33
1130537 and 1130538
Monsanto Co., 112 Ill.2d 223, 246, 492 N.E.2d 1327, 1338
(1986) (holding that a gag order that provided that Monsanto
"'shall not,' in any press release, etc., 'mention this case
or intimate its existence or its trial or any particular facts
or circumstances or positions concerning it until judgment is
entered by this court'" was unconstitutionally overbroad).
In holding that the trial court's protective order and
amended protective orders are overbroad, we do not intend to
tie the trial court's hands in its attempt to prevent the jury
venire from being tainted by the use of Web sites, social
media, and pretrial publicity. As the Fifth Circuit Court of
Appeals noted in Marceaux:
"As in criminal matters, civil cases also require
avoiding 'the potential that pretrial publicity may
taint the jury venire, resulting in a jury that is
biased toward one party or another,' [United States
v.] Brown, 218 F.3d [415,] 423 [(5th Cir. 2000)],
and preventing the 'creat[ion] [of] "a 'carnival
atmosphere,' which threatens the integrity of the
proceeding."' Id. at 423 n.8."
731 F.3d at 494. However, the trial court should balance its
interest in protecting A-1's right to a fair trial against the
First Amendment rights of the plaintiffs and their attorneys.
Further, any protective order in this regard must be narrowly
34
1130537 and 1130538
tailored so that it uses the least restrictive means necessary
to protect A-1's right to a fair trial. See Gentile, supra.
Finally, A-1 contends that plaintiffs' counsel included
statements on its Web site and in social media that were false
or misleading. If the trial court finds that the plaintiffs
or their attorneys have made false or deceptive statements, it
has the authority to proscribe such statements.
"While the First Amendment guarantees the right
to free speech, government is not prevented from
proscribing certain speech. To be precise,
demonstrable falsehoods are not protected by the
First Amendment in the same manner as truthful
statements. Brown v. Hartlage, 456 U.S. 45, 60, 102
S. Ct. 1523, 1532, 71 L. Ed. 2d 732 (1982); Gertz v.
Robert Welch, Inc., 418 U.S. 323, 340, 94 S. Ct.
2997, 3007, 41 L. Ed. 2d 789 (1974)."
Dowling v. Alabama State Bar, 539 So. 2d 149, 151-52 (Ala.
1988).
Conclusion
For the above-stated reasons, we conclude that the trial
court's protective order and amended protective orders are
overbroad. Accordingly, we grant the plaintiffs' petitions
and direct the Etowah Circuit Court to rescind its January 7,
2014, protective order; its January 22, 2014,
order
compelling
immediate compliance with the protective order; and its
35
1130537 and 1130538
February 21, 2014, and February 27, 2014, amended protective
orders.
2
1130537 -- PETITION GRANTED; WRIT ISSUED.
1130538 -- PETITION GRANTED; WRIT ISSUED.
Stuart, Parker, and Shaw, JJ., concur.
Murdock, J., concurs in the result.
Moore, C.J., recuses himself.
Based on our holding that the amended protective orders
2
are overbroad, we pretermit any remaining arguments raised by
the parties.
36 | October 17, 2014 |
982704d5-5416-499c-ae31-9be20de74b0b | Lumpkin, Jr. v. Alabama | N/A | 1130999, 1131000, 1131001 | Alabama | Alabama Supreme Court | REL:12/19/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
____________________
1130999
____________________
Edwin B. Lumpkin, Jr.
v.
State of Alabama
____________________
1131000
____________________
Edwin B. Lumpkin, Jr.
v.
State of Alabama
____________________
1131001
____________________
Edwin B. Lumpkin, Jr.
v.
State of Alabama
Appeals from Jefferson Circuit Court, Bessemer Division
(CV-13-10; CV-13-11; and CV-13-12)
STUART, Justice.
Edwin B. Lumpkin, Jr., appeals the orders of the
Jefferson Circuit Court dismissing three cases he had
initiated challenging property-tax assessments made by the
Jefferson County Board of Equalization and Adjustments ("the
Board"). We affirm.
I.
Lumpkin owns and operates Metro Mini Storage, a chain of
self-storage
facilities
with
locations
throughout
the
Birmingham metropolitan area. In 2012, Lumpkin received
notice from Jefferson County regarding the assessed value of
three of his properties located in that county. One property
was
valued
at
$1,268,000;
three
contiguous
parcels
constituting another location were valued at $131,600,
2
1130999, 1131000, 1131001
$130,000, and $142,700, respectively; and six more contiguous
parcels at a third location were valued at $312,000, $243,500,
$854,300, $657,500, $493,200, and $397,900, respectively.
Believing the assessed values of these properties to be too
high, Lumpkin elected to protest their valuation, and, on
August 16, 2012, the Board heard his arguments. On October
18, 2012, the Board issued its rulings on Lumpkin's three
appeals, granting him relief only as to the first property, on
which the assessed value was lowered from $1,268,000 to
$995,400.
On November 16, 2012, Lumpkin, acting pro se, filed three
appeals in the Jefferson Circuit Court (one for each of the
three locations), arguing that the Board's decisions did not
reflect the true market value of the properties and that a
reduction in assessed value was warranted based on the
evidence he had presented. Such appeals are governed by § 40-
3-25, Ala. Code 1975, which provides, in pertinent part:
"All appeals from the rulings of the board of
equalization fixing value of property shall be taken
within 30 days after the final decision of said
board fixing the assessed valuation as provided in
this chapter. The taxpayer shall file notice of
said appeal with the secretary of the board of
equalization and with the clerk of the circuit court
and shall file bond to be filed with and approved by
3
1130999, 1131000, 1131001
the clerk of the circuit court, conditioned to pay
all costs, and the taxpayer or the state shall have
the right to demand a trial by jury by filing a
written demand therefor within 10 days after the
appeal is taken. When an appeal is taken, the
taxpayer shall pay the taxes due as fixed for
assessment for the preceding tax year before the
same becomes delinquent; and, upon failure to do so,
the court upon motion ex mero motu must dismiss the
appeal, unless at the time of taking the appeal the
taxpayer has executed a supersedeas bond with
sufficient sureties to be approved by the clerk of
the circuit court in double the amount of taxes,
payable to the State of Alabama, conditioned to pay
all taxes, interest, and costs due the state,
county, or any agency or subdivision thereof."
Lumpkin's notices of appeal, submitted within 30 days of the
Board's final decisions, were timely filed; however, Lumpkin
did not file the bonds required by § 40-3-25 until April 4,
2014 –– in response to the State's March 17, 2014, motions
moving the trial court to dismiss Lumpkin's appeals based on
his failure to file those bonds. Lumpkin, who had retained
counsel in August 2013, opposed the State's motions to
dismiss, arguing that he had now paid the bonds and that the
failure to do so earlier should not be considered a
jurisdictional defect; however, on April 16, 2014, the trial
court entered an order of dismissal in each of the three
cases. On May 28, 2014, Lumpkin appealed those judgments to
this Court.
4
1130999, 1131000, 1131001
II.
The trial court dismissed the underlying cases based on
Lumpkin's failure to file the bonds required by § 40-3-25.
Thus, the trial court effectively determined that it lacked
subject-matter jurisdiction over the cases. See Ex parte
Shelby Cnty. Bd. of Equalization, [Ms. 1130017, April 11,
2014] ___ So. 3d ___ (Ala. 2014) (noting that a challenge to
a trial court's ruling on a motion to dismiss for failing to
comply with the requirements of § 40-3-25 presented a
"question of subject-matter jurisdiction"). In Newman v.
Savas, 878 So. 2d 1147, 1148-49 (Ala. 2003), this Court set
out the standard of review for a ruling on a motion to dismiss
for lack of subject-matter jurisdiction:
"A ruling on a motion to dismiss is reviewed
without a presumption of correctness. Nance v.
Matthews, 622 So. 2d 297, 299 (Ala. 1993). This
Court must accept the allegations of the complaint
as true. Creola Land Dev., Inc. v. Bentbrooke
Housing, L.L.C., 828 So. 2d 285, 288 (Ala. 2002).
Furthermore, in reviewing a ruling on a motion to
dismiss we will not consider whether the pleader
will ultimately prevail but whether the pleader may
possibly prevail. Nance, 622 So. 2d at 299."
III.
Lumpkin adequately states the issue before this Court in
these appeals as follows:
5
1130999, 1131000, 1131001
"Whether
the
requirement
for
payment
of
security
for costs in [§ 40-3-25] is procedural (an
interpretation that is consistent with other areas
of appellate practice) or jurisdictional, and
therefore required to perfect an appeal."
Lumpkin's briefs, at p. 4. He argues that § 40-3-25 is
1
ambiguous with regard to whether the required bond must be
paid within the 30-day period for taking an appeal from a
ruling of the board of equalization; therefore, he argues,
this Court should apply the rules of statutory construction,
which rules, he argues, mandate a holding that the bond does
not have to paid within that 30-day period. In support of his
argument, Lumpkin notes that the filing of a bond is generally
considered to be a procedural requirement, as opposed to a
jurisdictional requirement, in other appellate proceedings,
including general appeals to this Court or to the Court of
Civil Appeals, appeals to a circuit court from a district
court, and appeals to a circuit court from decisions of state
agencies such as the Alabama Real Estate Commission and the
Department of Human Resources. He further argues that the
bond serves no purpose because taxpayers are required to pay
their court costs and their taxes while any appeal is pending
Lumpkin
filed
substantially
identical
briefs
in
all
three
1
appeals.
6
1130999, 1131000, 1131001
and that the legislature has generally indicated that tax
statutes should be liberally construed to allow disputes to be
decided on their merits.
However, approximately one month before Lumpkin filed
these appeals, this Court released its opinion in Ex parte
Shelby County Board of Equalization, in which this Court
considered the language of § 40-3-25, determined it to be
unambiguous, and held that the failure to timely comply with
its plain-language requirements resulted in the failure to
invoke the trial court's jurisdiction. The specific issue in
Ex parte Shelby County Board of Equalization was whether the
notice of appeal had to be filed with the secretary of the
board of equalization (as well as the circuit court) within 30
days of the final assessment –– not whether the required bond
had to be filed within that same time frame –– but our opinion
made clear that all the requirement of § 40-3-25 had to be
timely met in order to properly invoke the trial court's
jurisdiction. Specifically, we stated:
"The Board maintains that, pursuant to §
40–3–25, a taxpayer, in order to timely challenge a
final tax assessment, must file a notice of appeal
with both the secretary of the Board and the clerk
of the circuit court within 30 days of the final
assessment being challenged. No notice of appeal
7
1130999, 1131000, 1131001
was filed by Central Shelby [LTD.] with the
secretary of the Board; although the Board received
a copy of the notice from the Shelby Circuit Court
clerk, that notice was not mailed to or received by
the Board until after the 30–day period had elapsed.
On the other hand, Central Shelby counters that its
timely filing of its notice of appeal with the
circuit clerk was sufficient to invoke the trial
court's subject-matter jurisdiction even though the
Board indisputably did not receive 'notice' of
Central Shelby's appeal within 30 days of the date
of the final assessment. It further contends that
because the statutory requirement of 'notice' to the
Board appears in a separate sentence, the 30–day
time frame for taking the appeal does not apply to
the notice to the Board.
"This Court has stated that, in applying a Code
section:
"'"'Words used in a statute must
be given their natural, plain,
ordinary, and commonly understood
meaning, and where plain language
is used a court is bound to
interpret that language to mean
exactly what it says. If the
language
of
the
statute
is
unambiguous, then there is no
room for judicial construction
and the clearly expressed intent
of the legislature must be given
effect.'"
"'Blue Cross & Blue Shield v. Nielsen, 714
So. 2d 293, 296 (Ala. 1998) (quoting IMED
Corp. v. Systems Eng'g Assocs. Corp., 602
So. 2d 344, 346 (Ala. 1992)); see also
Tuscaloosa
County
Comm'n
v.
Deputy
Sheriffs' Ass'n, 589 So. 2d 687, 689 (Ala.
1991); Coastal States Gas Transmission Co.
v. Alabama Pub. Serv. Comm'n, 524 So. 2d
8
1130999, 1131000, 1131001
357, 360 (Ala. 1988); Alabama Farm Bureau
Mut. Cas. Ins. Co. v. City of Hartselle,
460 So. 2d 1219, 1223 (Ala. 1984); Dumas
Bros. Mfg. Co. v. Southern Guar. Ins. Co.,
431 So. 2d 534, 536 (Ala. 1983); Town of
Loxley v. Rosinton Water, Sewer, & Fire
Protection Auth., Inc., 376 So. 2d 705, 708
(Ala. 1979). It is true that when looking
at a statute we might sometimes think that
the
ramifications
of
the
words
are
inefficient or unusual. However, it is our
job to say what the law is, not to say what
it should be. Therefore, only if there is
no rational way to interpret the words as
stated will we look beyond those words to
determine legislative intent. To apply a
different policy would turn this Court into
a legislative body, and doing that, of
course, would be utterly inconsistent with
the doctrine of separation of powers. See
Ex parte T.B., 698 So. 2d 127, 130 (Ala.
1997).'
"DeKalb Cnty. LP Gas Co. v. Suburban Gas, Inc., 729
So. 2d 270, 275–76 (Ala. 1998).
"The initial sentence of § 40–3–25 clearly
establishes a 30–day time frame for appealing the
Board's final assessment to the circuit court. The
sentence that follows provides that, in order to
perfect the appeal, the requisite notice of appeal
must be filed with both the Board and with the
circuit clerk. In light of the plain language of
the Code section, this Court finds persuasive the
Board's reliance on the analysis of the Court of
Civil Appeals in State v. Crenshaw, 47 Ala. App. 3,
249 So. 2d 617 (1970), in which, in considering the
identical language of the predecessor statute to §
40–3–25, that court explained:
"'[A] taxpayer may perfect an appeal from
a final assessment of the Board so long as
9
1130999, 1131000, 1131001
he files, within thirty days, a notice of
appeal with the Secretary of the Board and
Clerk of the Circuit Court, a bond for
costs, and, either files a supersedeas
bond, or pays the taxes based on the prior
year's assessment. Such a construction
would require that all of these procedures
would have to be complied with at the same
time for the appeal to be perfected.'
"47 Ala. App. at 5, 249 So. 2d at 619. See, e.g.,
Ex parte State Dep't of Revenue, 102 So. 3d 396,
398–99 (Ala. Civ. App. 2012) (interpreting a similar
provision in § 40–2A–9(g), Ala.Code 1975, as
'requir[ing]
the
party
appealing
from
[an
administrative law judge's] order to file a notice
of appeal with both the [Alabama Department of
Revenue's Administrative Law Division] and the
circuit court within 30 days of the entry of the ...
order'); State Dep't of Revenue v. Welding Eng'g &
Supply Co., 452 So. 2d 1340, 1342 (Ala. Civ. App.
1984) (concluding that former § 40–2–22, Ala. Code
1975, which provided for taxpayer appeals from
assessments by the department of revenue, 'clearly
provides that a timely filing of a notice of appeal
with the secretary of the department is one of the
prerequisites which must be met by a taxpayer in
order to perfect an appeal to the circuit court from
the department's final tax assessments,' that such
filing 'is a jurisdictional requirement, and [that]
there must be compliance with it before a circuit
court has jurisdiction over the subject matter,' and
stating that, 'if such a notice of appeal is not
filed with the secretary of the department within
thirty days from the entry of the final tax
assessment, the taxpayer's appeal to the circuit
court should be dismissed').
"Central Shelby argues that it properly invoked
the trial court's jurisdiction by taking the
underlying appeal to the appropriate circuit court
within 30 days of the challenged final assessment.
10
1130999, 1131000, 1131001
But that is not what § 40–3–25 or the foregoing
authorities require. Central Shelby faults the
circuit clerk for her alleged untimely mailing of
the notice of appeal to the secretary of the Board.
However, the Code section clearly charges the
appealing taxpayer with the responsibility of filing
the notice of appeal with the secretary of the
Board.
"'The right of appeal in tax proceedings is a
right conferred by statute and must be exercised in
the mode and within the time prescribed by the
statute.' Denson v. First Nat'l Bank, 276 Ala. 146,
148, 159 So. 2d 849, 850 (1964). See also Canoe
Creek Corp. v. Calhoun Cnty. Bd. of Equalization,
668 So. 2d 826, 827–28 (Ala. Civ. App. 1995)
(finding, where the appeal bond required by §
40–3–25 was not filed within the 30–day period, that
the appeal of a final tax assessment to the circuit
court was not perfected); Welding Eng'g, 452 So. 2d
at 1342–43 ('When the legislature has prescribed the
means and method of perfecting an appeal from a tax
assessment to the circuit court, that procedure must
be followed.'); Coughlin v. State, 455 So. 2d 17, 18
(Ala. Civ. App. 1983), aff'd, 455 So. 2d 18 (Ala.
1984) ('The rule is that the right to appeal in a
tax proceeding is a right conferred by statute and
must be exercised in the manner and within the time
required by the statute.'); State v. Colonial
Refrigerated Transp., Inc., 48 Ala. App. 46, 50, 261
So. 2d 767, 770 (Ala. Civ. App. 1971) (same). Here,
§ 40–3–25 plainly prescribes that a notice of appeal
from a final assessment of the Board must be filed
with both the circuit court and the secretary of the
Board within 30 days; clearly, both did not occur in
this case.
"As a result of Central Shelby's failure to
comply with the provisions of § 40–3–25, its appeal
was not perfected and the trial court's jurisdiction
was never invoked. Therefore, the appeal was due to
be dismissed as the Board requested."
11
1130999, 1131000, 1131001
___ So. 3d at ___ (emphasis omitted). The Court of Civil
Appeals has similarly interpreted § 40–3–25 when considering
the exact issue we now confront. See Canoe Creek Corp. v.
Calhoun Cnty. Bd. of Equalization, 668 So. 2d 826, 827 (Ala.
Civ. App. 1995) ("[W]e have never held that strict compliance
with a statutory requirement of filing a cost bond in a tax
case is not necessary."). We now adhere to our previous
holding in Ex parte Shelby County Board of Equalization and
reaffirm that the unambiguous language of § 40–3–25 mandates
that the required bond be filed within 30 days after the final
decision fixing the assessed valuation in order to perfect an
appeal pursuant to that statute.
We note, however, Lumpkin's argument, echoed in Chief
Justice
Moore's
dissent,
that
similarly
constructed
notice-of-
appeal statutes have not been interpreted to make the filing
of a cost bond a jurisdictional requirement. We recognize
that the filing of a bond is considered to be a procedural
requirement
as opposed to a jurisdictional requirement in
many
other
appellate
proceedings,
including
general
appeals
to
this
Court or the Court of Civil Appeals, appeals to a circuit
court from a district court, and appeals to a circuit court
12
1130999, 1131000, 1131001
from decisions of certain state agencies. However, it must be
recognized that the basis of each of those types of appeals
stems from a statute other than § 40–3–25, and, although in
some cases the relevant statutes are similar, they are never
identical, and the language of each statute must be
interpreted individually. Indeed, the cost-bond requirements
for appeals to this Court and the Court of Civil Appeals are
governed not by statute but by the Alabama Rules of Appellate
Procedure, and the Committee Comments to Rule 7, Ala. R. App.
P., specifically provide that "[i]t is intended that the
security [for costs] shall be deposited with the filing of the
notice of appeal, but the failure to file such security
contemporaneously is not fatal to the jurisdiction of the
appellate court." This Court has interpreted Rule 7
accordingly. See Bryan v. Brown, 339 So. 2d 577, 579 (Ala.
1976) ("Rule 7, however, pertains only to costs on appeal, and
the failure to give security for costs is not fatal to
appellate jurisdiction.").
Moreover, the other right-of-appeal statutes cited by
Lumpkin, many of which have admittedly been interpreted by the
appellate courts as not requiring the cost bond to be filed
13
1130999, 1131000, 1131001
within the defined period for taking the appeal, generally
also have such explicit language stating that the filing of
the bond is not jurisdictional or, at least, have differences
in their language and construction so as to render the statute
ambiguous on that point, thus allowing a court to interpret
the statute pursuant to the standards for doing so. For
example, in Mallory v. Alabama Real Estate Commission, 369 So.
2d 23 (Ala. Civ. App. 1979), the Court of Civil Appeals held
that the requirement in § 34-27-38, Ala. Code 1975, that a
bond be filed when appealing a decision of the Alabama Real
Estate Commission to the circuit court was merely procedural.
However, the language of § 34-27-38 at that time provided:
"'Findings made by the commission are deemed
conclusive, unless within 30 days after notice of
the decision of the commission has been given to an
applicant or accused, said applicant or accused
shall appeal said finding or ruling to the circuit
court of the county of his residence. In the event
of such an appeal, the circuit court shall hear the
same de novo. Such appeal shall be taken by the
filing of notice of appeal with the clerk of the
circuit court of the county to which the appeal is
taken. Any party taking an appeal shall post a
satisfactory bond in the amount of $200.00 with the
clerk of the circuit court, with at least one
solvent surety, conditioned to prosecute such appeal
to effect and, upon failure to do so, to pay all
costs and damages which may be adjudged against said
party by the circuit court on such appeal. ...'"
14
1130999, 1131000, 1131001
369 So. 2d at 24 (emphasis omitted). Thus, § 34-27-38
unambiguously provided that the appeal "shall be taken by the
filing of notice of appeal with the clerk of the circuit court
of the county to which the appeal is taken." Notably, § 34-
27-38 did not require the contemporaneous completion of any
other act to perfect the appeal –– only the filing of a notice
of appeal with the appropriate circuit court –– although it
thereafter stated that "[a]ny party taking an appeal shall
post a satisfactory bond in the amount of $200.00." Based on
this language, the Court of Civil Appeals was at liberty to
apply the philosophy of the Alabama Rules of Appellate
Procedure and to hold that the posting of the bond was a
procedural requirement because the statute did not dictate
otherwise:
"Of course the appeal in question is not
governed by the [Alabama Rules of Appellate
Procedure] but is instead purely statutory. We,
however, feel that the principle embodied in the
[Alabama Rules of Appellate Procedure] can be
applied by analogy to the statute before us.
Section 34-27-38, Code of Alabama (1975) provides
that 'appeal shall be taken by the filing of notice
of appeal with the clerk of the circuit court of the
county to which the appeal is taken.' Although the
statute contains other language which requires an
appellant to post a $200 bond and have the bond
approved by the circuit clerk, the appeal is
perfected and jurisdiction of the circuit court
15
1130999, 1131000, 1131001
attaches upon the filing of a notice of appeal. The
posting of a satisfactory bond of $200 is merely
procedural."
369 So. 2d at 25.
In contrast, the first sentence of § 40-3-25 provides
that "[a]ll appeals from the rulings of the board of
equalization fixing value of property shall be taken within 30
days after the final decision of said board fixing the
assessed valuation as provided in this chapter." The next
sentence of the statute explains how such an appeal is taken:
"The taxpayer shall file notice of said appeal with the
secretary of the board of equalization and with the clerk of
the circuit court and shall file bond to be filed with and
approved by the clerk of the circuit court, conditioned to pay
all costs ...." Thus, whereas § 34-27-38 required only one
act to take the appeal –– the filing of a notice of appeal
with the circuit court –– § 40-3-25 requires multiple acts to
take the appeal: 1) the filing of a notice of appeal with the
secretary of the board of equalization; 2) the filing of a
notice of appeal with the circuit court; and 3) the filing of
a bond with the circuit court. Thus, based on the different
language employed by the legislature in these two statutes,
16
1130999, 1131000, 1131001
they have been properly interpreted to hold that the filing of
a cost bond was not required to perfect an appeal made
pursuant to § 34-27-38 but is required to perfect an appeal
made pursuant to § 40-3-25.
Lumpkin has also cited Ex parte Doty, 564 So. 2d 443
(Ala. 1990), in which this Court interpreted § 25-4-95, Ala.
Code 1975, and held that the requirement of that statute that
the appealing party file notice of his or her appeal with the
director of the Department of Industrial Relations was
procedural only and need not be completed within the 10-day
period for appealing a decision of that department's board of
appeals. However, the language and structure of § 25-4-95 is
fundamentally similar to § 34-27-38 and was therefore subject
to being similarly interpreted:
"'Within ten days[ ] after the decision of the
2
Board of Appeals has become final, any party to the
proceeding including the director who claims to be
aggrieved by the decision may secure a judicial
review thereof by filing a notice of appeal in the
circuit court of the county of the residence of the
claimant .... In such action, the notice of appeal
need not be verified, but shall state the grounds
upon which a review is sought. A copy shall be
served upon the director or upon such person as the
director may designate (and for the purpose hereof,
Effective July 1, 1995, this period was changed to "30
2
days." In all other respects the quoted language is the same.
17
1130999, 1131000, 1131001
mailing a copy addressed to the director at
Montgomery by registered or certified mail shall be
deemed service on the director), and such service
shall be deemed completed service on all parties
...."
564 So. 2d at 445 (emphasis omitted). Thus, § 25-4-95
provides that an aggrieved party "may secure a judicial
review" of a decision made by the department's board of
appeals merely by "by filing a notice of appeal in the circuit
court of the county of the residence of the claimant" within
the 10-day (now 30-day) period required by the statute. No
other action is explicitly required to "secure a judicial
review," and the other action later required by the statute is
merely incidental to securing that appellate review, that is,
it is procedural as opposed to jurisdictional. Section 25-4-
95 is distinguishable from § 40-3-25.
We next consider Finch v. Finch, 468 So. 2d 151 (Ala.
1985), cited by Chief Justice Moore in his dissent. In Finch,
this Court held that the filing fee for an appeal taken from
the probate court to the circuit court did not have to be paid
within the 42-day appeal period specified in § 12-22-21(5),
Ala. Code 1975. "[A]lthough payment of a filing fee is
required," we stated, "we do not find a jurisdictional defect
18
1130999, 1131000, 1131001
in this case for failure to pay the fee within the time
allowed for the appeal." 468 So. 2d at 154. This case is
akin to Mallory and Ex parte Doty however, inasmuch as the
relevant statutes governing the appeal did not indicate that
the payment of a filing fee was a jurisdictional requirement
to the taking of the desired appeal. Rather, the Finch Court
explicitly noted that neither § 43-2-354, Ala. Code 1975,
which grants an appeal to the circuit court from a judgment of
a probate court, nor §§ 12-22-20 and -21, Ala. Code 1975,
which grant the general right to take an appeal from the
probate court to the circuit court, "provide[] for the
procedure to be followed in taking the appeal." 468 So. 2d at
152. Thus, the Finch Court was not constrained by any
statutory language from applying the more lenient view
generally applied by the appellate courts operating under the
Alabama Rules of Appellate Procedure that "only timely notice
of appeal is jurisdictional." 468 So. 2d at 154. Moreover,
Finch further recognized that § 12-22-25, Ala. Code 1975,
explicitly provides that "'the filing of security for costs is
not a jurisdictional prerequisite'" to an appeal to a circuit
court of a probate court decision. 468 So. 2d at 154.
19
1130999, 1131000, 1131001
Finally, we consider State Department of Human Resources
v. Funk, 651 So. 2d 12 (Ala. Civ. App. 1994). In that case,
the Department of Human Resources argued that the trial court
erred in failing to dismiss an appeal of a decision made by
its administrative hearing officer because the appellant had
not filed the required cost bond within the 30-day period
allowed for taking such an appeal. The statute governing that
appeal, § 41-22-20, Ala. Code 1975, provided as follows at
that time:
"'(b) Except in matters for which judicial
review is otherwise provided for by law, all
proceedings for review shall be instituted by filing
of notice of appeal or review and a cost bond, with
the agency ....
"'....
"'(d) The notice of appeal or review shall be
filed within 30 days after the receipt of the notice
of or other service of the final decision of the
agency upon the petitioner or, if a rehearing is
requested under section 41–22–17, within 30 days
after the decision thereon. The petition for
judicial review in the circuit court shall be filed
within 30 days after the filing of the notice of
appeal or review ....'"
651 So. 2d at 14. The Court of Civil Appeals ultimately held
that there was no jurisdictional requirement that the cost
bond be filed within the 30-day period for perfecting an
20
1130999, 1131000, 1131001
appeal; however, in doing so it distinguished the case from
Baird v. State Department of Revenue, 545 So. 2d 804 (Ala.
Civ. App. 1989). In Baird, the Court of Civil Appeals
interpreted § 40-2-22, Ala. Code 1975, the statute governing
the appeal of a Department of Revenue decision, and held that
"[a] separate and distinct condition [precedent to perfecting
an appeal] is the payment of the assessment or the filing of
a supersedeas bond ...." 545 So. 2d at 806. The Funk court
3
distinguished Baird by noting that, in Funk, the statute
governing the appeal –– § 41-22-20 –– failed to mention the
cost bond in the subsection setting forth the 30-day period
for initiating an appeal, instead providing only that "'[t]he
notice of appeal or review shall be filed within 30 days.'"
Section 40-2-22 at that time read as follows:
3
"'If any taxpayer against whom an assessment is made
by the department of revenue ... is dissatisfied
..., he may appeal ... by filing notice of appeal
with the secretary of the department of revenue and
with the clerk or register of the circuit court of
the county to which the appeal shall be taken within
30 days from the date of said final assessment ...
and, in addition thereto, by giving bond conditioned
to pay all costs to be filed with and approved by
the clerk or register of the court to which the
appeal shall be taken. ...'"
545 So. 2d at 805 (emphasis omitted).
21
1130999, 1131000, 1131001
651 So. 2d at 14. Accordingly, the Court of Civil Appeals
concluded that "nothing in the above-cited statute suggests
that posting security for costs within the statutory time
limit is a jurisdictional requirement for perfecting an
appeal." Id. Thus, the Court of Civil Appeals' decision in
4
Funk was based on the different language and structure of §
41-22-20, whereas the statute in the instant case –– § 40-3-25
–– is clearly more similar to § 40-2-22, which was interpreted
in Baird and acknowledged in Funk to mandate the payment of
the required bond within the 30-day period allowed for appeal.
However, although Mallory, Ex parte Doty, Finch, and
Funk, are distinguishable based on differences in the
statutory language, Luce v. Huddleston, 628 So. 2d 819 (Ala.
Civ. App. 1993), is more problematic. In Luce, the Court of
5
Civil Appeals interpreted § 12-12-70(a), Ala. Code 1975, and
held that filing a cost bond beyond the period allowed for
filing a notice of appeal from a district court to a circuit
court was not a fatal jurisdictional defect. Section 12-12-
Funk also relied in part upon Luce v. Huddleston, 628 So.
4
2d 819 (Ala. Civ. App. 1993), which is discussed infra.
The Court of Civil Appeals reaffirmed its holding in Luce
5
as recently as 2013 in Penick v. Southpace Management, Inc.,
121 So. 3d 1015 (Ala. Civ. App. 2013).
22
1130999, 1131000, 1131001
70(a) provides in pertinent part that "[a]ny party may appeal
from a final judgment of the district court in a civil case by
filing notice of appeal in the district court, within 14 days
from the date of the judgment or the denial of a posttrial
motion, whichever is later ... together with security for
costs as required by law or rule." This language and
structure is materially similar to § 40-3-25 inasmuch as both
statutes include, in the same paragraph setting forth the time
limit for taking the appeal, a requirement that the notice of
appeal and cost bond be filed together. However, despite
these similarities, the Court of Civil Appeals in Luce
interpreted language in § 12-12-70(a) to conclude that the
required cost bond did not have to be filed within the
statutory time for taking an appeal, while in Canoe Creek
Corp., supra, the Court of Civil Appeals interpreted the
similar language in § 40-3-25 to conclude that the required
cost bond did have to be filed within the statutory time for
taking an appeal –– even while citing Luce.6
In Canoe Creek Corp., the Court of Civil Appeals
6
distinguished Luce by noting that it "did not involve an
appeal in a tax case." 668 So. 2d at 827.
23
1130999, 1131000, 1131001
However, upon reviewing these cases, it is apparent that
if there is any error, the error is in Luce. In concluding
that the cost bond required by § 12-12-70(a) could be filed
outside the time for taking the appeal, the Court of Civil
Appeals in Luce cited Bryan and the Alabama Rules of Appellate
Procedure, Finch and other cases involving an appeal from a
probate court to a circuit court, and Mallory. As already
explained, the Alabama Rules of Appellate Procedure do not
apply to appeals from a district court to a circuit court, and
Finch and Mallory are distinguishable. Nevertheless, after
reviewing these cases, the Luce court concluded:
"Nothing in the above-cited statutes and cases
suggests that posting security for costs within the
statutory time limit for appeal is a jurisdictional
requirement for perfecting appeal. Timely posting
of security is not required in appellate cases, nor
in probate to circuit court appeals, nor in
misdemeanor conviction appeals from district to
circuit court. To require contemporaneous posting
of security for costs with the appeal from district
to circuit court would be to continue a vestige from
an earlier era of strict pleading and practice."
628 So. 2d at 820. However, the Luce court failed to
recognize why timely posting of security is not required in
these cases –– timely posting is not required in appellate
cases because the Alabama Rules of Appellate Procedure do not
24
1130999, 1131000, 1131001
require it, and it is not required in appeals from a probate
court to a circuit court because the language of § 12-22-25,
Ala. Code 1975, explicitly provides as much. The Court of
7
The Luce court also stated that timely posting of
7
security was not required in appeals of misdemeanor
convictions from the district court to the circuit court
because, it held, § 12-12-70(b), Ala. Code 1975, provides that
"the filing of an appeal bond is not a jurisdictional
requirement." 628 So. 2d at 820. In support of that
conclusion, Luce cited Ex parte Buckner, 435 So. 2d 1197, 1197
(Ala. 1982), which held:
"Under § 12-12-70(b) it is only a 'bond required
by law or rule' that must accompany the notice of
appeal. Yet, the State has cited no law or rule
requiring a bond to perfect an appeal. We must
conclude that the filing of an appeal bond is not a
jurisdictional
requirement
for
appeal
of
a
misdemeanor conviction from district to circuit
court. This holding is consistent with the practice
in the former county courts, where the purpose of
the appeal bond was 'not to confer jurisdiction on
the circuit court but to enable the defendant to
release himself from custody pending the appeal,' Ex
parte Rodgers, 12 Ala. App. 218, 226, 67 So. 710,
713 (1915) (construing Code 1907, § 6725, Code 1940,
Tit. 13, § 349, Repealed by Acts 1975, No. 1205, §
4-134). Similarly, our holding is consistent with
present
practice
in
appeals
of
misdemeanor
convictions from circuit to appellate courts, for
which Code of Ala. 1975, § 12-22-171, makes posting
bail discretionary with the defendant at any time
pending the appeal."
At the time Ex parte Buckner was decided, § 12-12-70(b)
provided that "'[a] defendant may appeal from a final judgment
in a criminal case by filing notice of appeal, together with
any bond required by law or rule, within 14 days from the date
of judgment or the date of a posttrial motion, whichever is
25
1130999, 1131000, 1131001
Civil
Appeals erred by concluding that, because timely
posting
of security is not required in this small subset of cases, it
is not required in other types of cases that are reliant on
different statutes. In fact, whether a mandated cost bond is
required to be filed within the statutory period for taking an
appeal always depends on the language of the applicable
statute authorizing that particular appeal.
Thus, in the case before us involving § 40-3-25, which is
unambiguous, that statute is the only statute relevant to our
inquiry. For the reasons explained herein and previously in
Ex parte Shelby County Board of Equalization and Canoe Creek
Corp., we hold that a party aggrieved by a decision of a
county board of equalization fixing the assessed value of his
or her property must file the cost bond required by § 40-3-25
within the 30-day period after the board of equalization's
final decision fixing the assessed valuation in order to
later, unless the appeal is to an appellate court.'" 435 So.
2d at 1197. However, the State in Ex parte Buckner cited no
law or rule requiring a bond to perfect an appeal, and its
argument accordingly was
unsuccessful.
In 1986, § 12-12-70(b)
was amended to its current form, which provides that "[a]
defendant may appeal from a final judgment of the district
court in a criminal ... case by filing notice of appeal within
14 days from the date of judgment or from the date of denial
of a post-trial motion, whichever is later, together with such
bond as may be fixed by the court ...." (Emphasis added.)
26
1130999, 1131000, 1131001
perfect an appeal to the circuit court. The language of § 40-
3-25 leaves us no room to hold otherwise, and it would be
inconsistent with our judicial role to attempt to supersede
the statute by applying the philosophy of the Alabama Rules of
Appellate Procedure in spite of clear statutory language to
the contrary. As we reiterated in Ex parte Shelby County
Board of Equalization:
"'It is true that when looking at a statute we might
sometimes think that the ramifications of the words
are inefficient or unusual. However, it is our job
to say what the law is, not to say what it should
be. Therefore, only if there is no rational way to
interpret the words as stated will we look beyond
those words to determine legislative intent. To
apply a different policy would turn this Court into
a legislative body, and doing that, of course, would
be utterly inconsistent with the doctrine of
separation of powers.'"
___ So. 3d at ___ (quoting DeKalb Cnty. LP Gas Co. v. Suburban
Gas, Inc., 729 So. 2d 270, 275–76 (Ala. 1998) (emphasis
omitted)).8
Having concluded that § 40-3-25 is unambiguous, it is
8
unnecessary to consider Lumpkin's arguments that the bond
required by § 40-3-25 serves no purpose or that tax statutes
should be liberally construed to allow disputes to be decided
on their merits.
27
1130999, 1131000, 1131001
IV.
Lumpkin appeals the orders of the trial court dismissing
three appeals he had initiated challenging property-tax
assessments made by the Board of property he owned in
Jefferson County. However, because Lumpkin's appeals are
governed by § 40-3-25 and because he failed to comply with all
the requirements of § 40-3-25 for perfecting his appeals, the
trial court properly dismissed the cases. We affirm.
1130999 –– AFFIRMED.
1131000 –– AFFIRMED.
1131001 –– AFFIRMED.
Bolin, Parker, Shaw, Main, Wise, and Bryan, JJ., concur.
Moore, C.J., and Murdock, J., dissent.
28
1130999, 1131000, 1131001
MOORE, Chief Justice (dissenting).
The issue raised by these three appeals is whether filing
a cost bond within the 30-day statutory period for taking an
appeal to the circuit court from a property-assessment
decision by a county board of equalization is a jurisdictional
requirement for perfecting the appeal. Because I believe that
filing a bond for costs is merely a procedural requirement,
namely a correctable deficiency, I respectfully dissent from
this Court's opinion affirming the judgments of the trial
court.
Facts and Procedural History
Edwin B. Lumpkin, Jr., owns three self-storage facilities
in Birmingham, which correspond with these three identical
appeals. He filed timely notices of appeal from property-tax
assessments by the Jefferson County Board of Equalization and
Adjustments, but he did not file cost bonds until the State's
trial brief alerted him to that omission some 17 months after
the notices of appeal had been filed. The State moved to
dismiss the appeals as jurisdictionally barred for failure to
file the cost bonds within the 30-day appeal period. The trial
court agreed and dismissed the appeals. The majority affirms.
29
1130999, 1131000, 1131001
Discussion
The pertinent portion of the relevant statute reads as
follows:
"All appeals from the rulings of the board of
equalization fixing value of property shall be taken
within 30 days after the final decision of said
board fixing the assessed valuation as provided in
this chapter. The taxpayer shall file notice of said
appeal
with
the
secretary
of
the
board
of
equalization and with the clerk of the circuit court
and shall file bond to be filed with and approved by
the clerk of the circuit court, conditioned to pay
all costs, and the taxpayer or the state shall have
the right to demand a trial by jury by filing a
written demand therefor within 10 days after the
appeal is taken."
§ 40-3-25, Ala. Code 1975 (emphasis added).
In Ex parte Shelby County Board of Equalization, [Ms.
1130017, April 11, 2014] ___ So. 3d ___ (Ala. 2014), this
Court recently stated:
"The
initial
sentence
of
§
40-3-25
clearly
establishes a 30-day time frame for appealing the
Board's final assessment to the circuit court. The
sentence that follows provides that, in order to
perfect the appeal, the requisite notice of appeal
must be filed with both the Board and with the
circuit clerk. In light of the plain language of the
Code section, this Court finds persuasive the
Board's reliance on the analysis of the Court of
Civil Appeals in State v. Crenshaw, 47 Ala. App. 3,
249 So. 2d 617 (1970), in which, in considering the
identical language of the predecessor statute to §
40-3-25, that court explained:
30
1130999, 1131000, 1131001
"'[A] taxpayer may perfect an appeal from
a final assessment of the Board so long as
he files, within thirty days, a notice of
appeal with the Secretary of the Board and
Clerk of the Circuit Court, a bond for
costs, and, either files a supersedeas
bond, or pays the taxes based on the prior
year's assessment. Such a construction
would require that all of these procedures
would have to be complied with at the same
time for the appeal to be perfected.'
"47 Ala. App. at 5, 249 So. 2d at 619."
(Emphasis omitted; emphasis added.)
Thus, in Shelby County, this Court quoted approvingly an
opinion of the Court of Civil Appeals that required a cost
bond to be filed within the 30-day statutory period to perfect
the appeal. Further, this Court stated 50 years ago:
"The right of appeal in tax proceedings is a
right conferred by statute and must be exercised in
the mode and within the time prescribed by the
statute. Here, the appeal bond required by § 110 was
not filed within the thirty days, so the appeal was
not perfected and the bond filed on July 19 was not
in time."
Denson v. First Nat'l Bank of Birmingham, 276 Ala. 146, 148,
159 So. 2d 849, 850 (1964) (citations omitted; emphasis
added). In 1995, the Court of Civil Appeals quoted this
passage from Denson and stated: "[W]e have never held that
strict compliance with a statutory requirement of filing a
31
1130999, 1131000, 1131001
cost bond in a tax case is not necessary." Canoe Creek Corp.
v. Calhoun Cnty. Bd. of Equalization, 668 So. 2d 826, 827
(Ala. Civ. App. 1995).
Notwithstanding the above, Lumpkin asks us to reject
Shelby County's approval of Crenshaw insofar as it would apply
to cost bonds and also to reject predecessor cases like Denson
and Canoe Creek. Lumpkin argues in this Court, as he did in
opposing the motion to dismiss in the trial court, that
similarly constructed notice-of-appeal statutes have not been
interpreted to make the filing of a cost bond a jurisdictional
requirement. Instead, he contends, cases construing those
similar statutes have treated the failure to file a cost bond
as a procedural lapse that can be cured even after expiration
of the statutory time within which to file the notice of
appeal.
Rule 7, Ala. R. App. P., adopted in 1975, states that "in
civil cases security for costs on appeal shall be filed with
the notice of appeal by the appellant in the trial court."
Although failure to file the cost bond coterminous with the
notice of appeal is a procedural error, such omission does not
32
1130999, 1131000, 1131001
forfeit the appeal but may be corrected on motion or notice by
the court. The Committee Comments to Rule 7 state:
"It is intended that the security shall be
deposited with the filing of the notice of appeal,
but
the
failure
to
file
such
security
contemporaneously is not fatal to the jurisdiction
of the appellate court. The failure to file such
security would be the subject of appropriate action
upon notice on motion or notice by the court
itself."
(Emphasis added.)
A year after adoption of the Rules of Appellate
Procedure, this Court stated: "[T]he failure to give security
for costs is not fatal to appellate jurisdiction." Bryan v.
Brown, 339 So. 2d 577, 579 (Ala. 1976). Filing of a cost bond,
therefore, though required by the appellate rules, is not a
jurisdictional requirement subject to the time period for
filing the notice of appeal. Under the practice prior to the
adoption of the appellate rules, "[t]he taking of an appeal
[was] perfected upon the filing of a good and sufficient
surety for costs of appeal." Taylor v. Major Fin. Co., 292
Ala. 643, 649, 299 So. 2d 247, 251 (1974). See also Cooper v.
Acuff, 285 Ala. 437, 439, 233 So. 2d 223, 224-25 (1970) ("The
decisions of this Court are uniform to the effect that the
33
1130999, 1131000, 1131001
appeal dates from the proper filing of security for costs.").
Today that requirement is relaxed.
"Before [the Alabama Rules of Appellate Procedure],
it was the filing of security for costs which
perfected the appeal and fixed the appellate court's
jurisdiction in reviewing decrees from circuit
courts. Tit. 7, § 766, Code of Alabama (1940)
(Recompiled 1958). The rule is now that the failure
to give security for costs is not fatal to appellate
jurisdiction, but it is the timely filing of a
notice of appeal that is jurisdictional."
Mallory v. Alabama Real Estate Comm'n, 369 So. 2d 23, 25 (Ala.
Civ. App. 1979).
In Mallory, the appeal in question, as in this case, was
not to the higher appellate courts and thus was not governed
by the Alabama Rules of Appellate Procedure. Nonetheless, the
Court of Civil Appeals stated: "Of course the appeal in
question is not governed by the [Alabama Rules of Appellate
Procedure] but is instead purely statutory. We, however, feel
that the principle embodied in the [Alabama Rules of Appellate
Procedure] can be applied by analogy to the statute before
us." 369 So. 2d at 25. Also, the appeal in Mallory, like the
one in this case, was from an administrative agency -- in that
case the Alabama Real Estate Commission -- to the circuit
court.
34
1130999, 1131000, 1131001
In Finch v. Finch, 468 So. 2d 151 (Ala. 1985), this Court
held that the filing fee for an appeal taken from the probate
court to the circuit court did not have to be paid within the
42-day appeal period specified in § 12-22-21(5), Ala. Code
1975. "[A]lthough payment of a filing fee is required," we
stated, "we do not find a jurisdictional defect in this case
for failure to pay the fee within the time allowed for the
appeal." 468 So. 2d at 154. "[I]n view of the practice of the
higher appellate courts that only timely notice of appeal is
jurisdictional," this Court reversed the judgment of the
circuit court dismissing the appeal. Id.
Along the same lines, in Luce v. Huddleston, 628 So. 2d
819 (Ala. Civ. App. 1993), the Court of Civil Appeals held
that filing a cost bond beyond the period allowed for filing
a notice of appeal from the district court to the circuit
court was not a fatal jurisdictional defect, even though the
statute at issue there mentioned security for costs and the
notice-of-appeal deadline in the same paragraph. The relevant
statute, § 12-12-70(a), Ala. Code 1975, states, in pertinent
part:
"Any party may appeal from a final judgment of the
district court in a civil case by filing notice of
35
1130999, 1131000, 1131001
appeal in the district court, within 14 days from
the date of the judgment or the denial of a
posttrial motion, whichever is later ... together
with security for costs as required by law or rule."
(Emphasis added.) The court noted, citing Mallory, that "the
principles found in Rule 7, [Ala.] R. App. P., can be
applied." Luce, 628 So. 2d at 820. Surveying other statutes
that do not consider the filing of a cost bond as a
jurisdictional requirement, the court stated:
"Timely posting of security is not required in
appellate cases, nor in probate to circuit court
appeals, nor in misdemeanor conviction appeals from
district
to
circuit
court.
To
require
contemporaneous posting of security for costs with
the appeal from district to circuit court would be
to continue a vestige from an earlier era of strict
pleading and practice."
628 So. 2d at 820 (emphasis added). See also State Dep't of
Human Res. v. Funk, 651 So. 2d 12, 14 (Ala. Civ. App. 1994)
(citing Luce and noting that the cost-bond requirement is not
mentioned in the section of the appeal statute, § 41-22-20,
Ala. Code 1975, that states the time limit for filing a notice
of appeal from the Department of Human Resources to the
circuit court); Penick v. Southpace Mgmt., Inc., 121 So. 3d
1015, 1019 (Ala. Civ. App. 2013) (quoting Luce for the
proposition that "failure to pay costs or give security in
36
1130999, 1131000, 1131001
lieu of costs within the time frame allowed for filing an
appeal was not a jurisdictional defect" in an appeal from the
district court to the circuit court). This Court has also
favorably cited Luce. See Womack v. Estate of Womack, 826 So.
2d 138 (Ala. 2002) (quoting Luce for the proposition that a
cost bond is not jurisdictional and applying that rationale to
an appeal from probate court to circuit court).
That the legislature can expressly distinguish between a
jurisdictional and a nonjurisdictional requirement for
perfecting an appeal is evident in § 40-2A-7(b)(5), Ala. Code
1975 (amended effective October 1, 2014), which governs
appeals to the circuit court from tax assessments of the
Alabama Department of Revenue. This statute removes all
uncertainty as to which requirements for taking an appeal are
jurisdictional and which are procedural. The statute requires
the taxpayer to file a "notice of appeal within 30 days from
the date of mailing or personal service, whichever occurs
earlier, of the final assessment with both the secretary of
the department and the clerk of the circuit court in which the
appeal is filed." § 40-2A-7(b)(5)b.1. (emphasis added). The
next paragraph is equally forthright: "If the appeal is to
37
1130999, 1131000, 1131001
circuit court, the taxpayer, also within the 30-day period
allowed for appeal, shall do one of the following: ... File a
supersedeas bond .... The supersedeas bond ... shall be
conditioned to pay ... any court costs relating to the appeal
...." § 40-2A-7(b)(5)b.2. (emphasis added). After further
stating
for
clarity
that
these
requirements
"are
jurisdictional,"
§
40-2A-7(b)(5)c.1.,
the
statute,
in
§
40-2A-
7(b)(5)c.2., then allows the taxpayer 30 days after a court
order to remedy any unsatisfied requirements in § 40-2A-
7(b)(5)b.2.9
The above-cited authority indicates that the filing of a
cost bond is no longer a jurisdictional requirement for
perfecting an appeal unless the statute pursuant to which the
appeal is being taken expressly requires that the bond be
filed within the period for filing the notice of appeal. Under
these circumstances and to harmonize the construction of
appeal statutes by the appellate courts, I would construe the
appeal-bond requirement in § 40-3-25 as procedural and not
jurisdictional. When he first became aware of the bond
Section 40-2A-7 was originally enacted in 1992 as part
9
of the Taxpayers' Bill of Rights. Section 40-3-25, by
contrast, was enacted in 1939 and has remained unchanged since
that date.
38
1130999, 1131000, 1131001
requirement from the State's motion to dismiss, Lumpkin
immediately filed the bond. Admittedly the filing was 17
months late, but this Court has held that when a statute does
not compel filing a cost bond within the time stated for
filing the notice of appeal, the bond should be filed "within
a reasonable time." Ex parte Doty, 564 So. 2d 443, 446 (Ala.
1989). In determining reasonableness, the trial court should
consider prejudice to the agency "and any excusable neglect."
Id.
Because Denson and Crenshaw predate the 1975 adoption of
the Alabama Rules of Appellate Procedure -- and considerable
authority since 1975 has undermined their reasoning -- I would
reverse the trial court's dismissal of Lumpkin's appeal and
hold that his failure to file a cost bond in the time allotted
for filing the notice of appeal is a procedural, and thus
curable, defect that does not affect the jurisdiction of the
trial court to hear the appeal. As the Court of Civil Appeals
stated in 1982, less than 10 years after adoption of the
Alabama Rules of Appellate Procedure: "Myriad changes have
been made in the past decade in an attempt to eliminate, or
soften the effect of, ultra technical rules of civil trial and
39
1130999, 1131000, 1131001
appellate procedures ...." Hand v. Thornburg, 425 So. 2d 467,
469 (Ala. Civ. App. 1982) (quoted in Luce, 628 So. 2d at 820).
In construing appeal statutes, we should not continue to
perpetuate "a vestige from an earlier era of strict pleading
and practice." Luce, 628 So. 2d at 820. Instead, we should
adopt, as stated in Mallory and Finch, the philosophy of the
Alabama
Rules
of
Appellate
Procedure
"to
disregard
technicality and form in order that a just, speedy and
inexpensive
determination
of
every
appellate
proceeding
on
its
merits may be obtained." Committee Comments to Rule 1, Ala. R.
App. P.
Additionally, by construing a statute to create a
jurisdictional barrier to an appeal to the circuit court from
an administrative agency, we should be mindful of Art. I, §
13, Ala. Const. 1901 ("That all courts shall be open; and that
every person, for any injury done him, in his lands, goods,
person, or reputation, shall have a remedy by due process of
law ....").
Conclusion
I would reverse the dismissal of Lumpkin's appeal and
remand this case to the trial court to consider Lumpkin's late
40
1130999, 1131000, 1131001
filing of a cost bond as a procedural, and not a
jurisdictional, defect.
41 | December 19, 2014 |
b8e1583a-a5f9-46c8-8dbb-beca804367e6 | Cooper v. MTA, Inc. | N/A | 1130698 | Alabama | Alabama Supreme Court | Rel: 10/17/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334)
229-0649), of any typographical or other errors, in order that corrections may be made
before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
_________________________
1130698
_________________________
Ronald L. Cooper
v.
MTA, Inc.
Appeal from Madison Circuit Court
(CV-12-901460)
MAIN, Justice.
Ronald L. Cooper appeals from a summary judgment in favor
of MTA, Inc. ("MTA"), in MTA's action against Cooper seeking
contribution. We reverse and remand.
1130698
I. Facts and Procedural History
In 1999, Cooper and Robert L. Flowers formed C&F
Enterprises, LLC ("C&F"). C&F owned a parcel of property on
Meridian Street in Huntsville, upon which it built a shopping
center known as College Plaza ("the shopping center").
Subsequently, pursuant to an "Amended and Restated Operating
Agreement"
dated
November
9,
2000
("the
operating
agreement"),
MTA became a member of C&F. The operating agreement provided
that MTA, Flowers, and Cooper each owned a one-third interest
in C&F. Section 16.2 of the operating agreement contains a
first right of refusal pursuant to which, after giving proper
notice, MTA could elect to purchase the shopping center.
On December 27, 2000, C&F borrowed $650,000 from the
Southern Development Council, Inc. ("SDC"), a community-
development program; that debt is memorialized by
a
promissory
note ("the note"). On the same day, SDC assigned the note to
the Small Business Administration ("the SBA"). Cooper and
Flowers personally guaranteed the indebtedness owed under the
note.
On July 18, 2003, C&F received a foreclosure letter with
respect to the note. On July 24, 2003, counsel for MTA sent
2
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Cooper a letter informing him of MTA's intent to exercise its
right of first refusal pursuant to section 16 of the operating
agreement.
On October 18, 2012, MTA filed a complaint against Cooper
and Flowers. The complaint set forth the following statement
1
of facts:
"4. On or about December 27, 2000, C&F Enterprises,
LLC ('C&F') executed and delivered to Southern
Development Council, Inc. ('SDC') promissory note
(the 'Note') whereby C&F promised to pay SDC the sum
of $650,000.00, with interest determined on the sale
of the debenture[ ], and agreed to pay reasonable
2
attorney fees for collection. ...
"5. On or about December 27, 2000, [MTA], Cooper,
and Flowers each executed personal guarantees of the
indebtedness owed under the Note.
Flowers is not a party to this appeal. The record on
1
appeal includes what appears to be an affidavit from Flowers,
in which he states, in pertinent part:
"Though I was a member of C&F Enterprise, LLC.
To the best of my knowledge does not exist anymore,
at the request of majority partners, MTA and Ronald
L Cooper. I, Robert L. Flowers, Jr. was removed from
the personal Guarantee of the SBA ... portion of the
loan amount. There is a letter removing me as the
Guarantor, of which they are aware of. I deny owing
any money on this summons of this case."
(Punctuated as in original.)
A "debenture" is "[a] debt secured only by the debtor's
2
earning power, not by a lien on any specific asset." Black's
Law Dictionary 486 (9th ed. 2009).
3
1130698
"6. As such, [MTA] and [Cooper and Flowers] were
each
jointly
and
severally
liable
for
the
obligations owed pursuant to the Note.
"7. On or about June 26, 2008, SDC filed a lawsuit
against [MTA], C&F, and Cooper, asserting that they
were in breach of the Note and Guarantees in the
amount of $767,523.10.
"8. On or about August 12, 2010, SDC obtained
judgment against [MTA] and C&F in the amount of
$767,523.10. Upon information and belief, Cooper was
never served in the lawsuit.
"9. On or about October 21, 2011, SDC withdrew the
sum of $812,706.00 from monies owed to MTA by the
government through the federal offset program.[ ]
3
This amount satisfied the judgment and interest
thereon.
"10. No contribution to this satisfaction has been
made by [Cooper and Flowers]."
The
referenced
"federal
offset
program"
appears
to
be
the
3
"Treasury Offset Program," which "is a centralized offset
program, administered by the Bureau of the Fiscal Service's
Debt Management Services (DMS), to collect delinquent debts
owed to federal agencies and states, ... in accordance with 26
U.S.C. § 6402(d) (collection of debts owed to federal
agencies), 31 U.S.C. § 3720A (reduction of tax refund by
amount of the debts), and other applicable laws." On the date
this opinion was released, this information could be found at
http://fiscal.treasury.gov/fsservices/gov/debtColl/dms/top/d
ebt_top.htm; a copy of the Web page containing this definition
is available in the case file of the clerk of the Alabama
Supreme Court. See Ala. R. Evid. Rule 201(b)(2) (noting that
this Court may take judicial notice of facts "capable of
accurate and ready determination by resort to sources whose
accuracy cannot be reasonably questioned").
4
1130698
The complaint alleged a count of contribution and "demand[ed]
judgment in [MTA's] favor and against Cooper in the amount of
$270,902.00, and Flowers in the amount of $270,902.00." In
the alternative, "[MTA] demand[ed] judgment in its favor and
against Cooper and Flowers for their individual pro rata
contribution shares as determined at trial."
Cooper filed a motion to dismiss; the trial court denied
the motion. Cooper then answered the complaint. Thereafter,
MTA filed a motion for a summary judgment against Cooper and
Flowers. MTA's argument in its motion, in its entirety, is as
follows:
"In Alabama, when a guarantor has paid the debt
of a principal, it is entitled to judgment against
each co-guarantor in the amount of their individual
pro rata shares of the debt. Ala. Code (1975) §
8-3-42(2)(a). The statute specifically states that:
"'Sureties ... are entitled to a summary
judgment
against
their
principal
and
between each other, by motion in the
circuit court on three days' notice thereof
... in the following manner ...
"'(2) Between sureties:
"'a. A surety who has
paid the debt of his
principal may recover
of
each
of
his
c o s u r e t i e s
t h e i r
aliquot proportion of
5
1130698
the debt, and, if any
of the cosureties are
i n s o l v e n t ,
t h e
proportion
of
such
insolvent
must
be
excluded
from
the
estimate, and judgment
be entered against the
remaining
solvent
sureties
for
their
proportion of the debt
as if such insolvent
were not a cosurety.'
"Id. Although the statute in question sets out
remedies between 'sureties,' it has been clearly
established in Alabama that the terms 'surety' and
'guarantor' are interchangeable in this context.
Specifically, the meaning of 'surety' for the
purpose of Ala. Code [1975,] § 8-3-1 et [seq.,] is
'one who has been forced to pay a debt that was the
primary obligation of another, and which the latter
ought to have paid in exoneration of the former.'
Moody v. Hinton, 603 So. 2d 912 (Ala. 1992) (Shores,
J., dissenting); see also, Bradley v. Bentley, 163
So. 351, 355 (Ala. 1935); City of Birmingham v.
Trammel, 101 So. 2d 259, 260 (Ala. 1958).
"Alabama law specifically provides that this
remedy is to be granted in the form of summary
judgment. Ala. Code [1975,] § 8-3-42. The right to
contribution
against
co-guarantors
is
a
well-established, historical principle of Alabama
law. See Dubberly v. Black's Adm'r, 38 Ala. 193
(Ala. 1861); Douglass v. Orman, 119 So. 601 (Ala.
App. 1928); Layne v. Garner, 612 So. 2d 404 (Ala.
1992). This right is absolute absent an agreement
between
the
parties
limiting
the
right
of
contribution between co-guarantors. Ex parte Harris,
837 So. 2d 283, 287 (Ala. 2002). No such agreement
exists in this case. ...
6
1130698
"The full amount of the debt and interest which
MTA paid in order to satisfy ... C&F's liability to
SDC is $812,706.00. ... As there were three
guarantors to this debt (MTA, Cooper, and Flowers),
the pro rata share of each guarantor is 1/3 of the
total, or $270,902.00. ... For the reasons stated
above, no genuine issue of material fact exists as
to [MTA's] claim for contribution, and [MTA] is
entitled to judgment as a matter of law against
Cooper in the amount of $270,902.00 and Flowers in
the amount of $270,902.00."
MTA supported its summary-judgment motion with, among
other evidence, the affidavit of Robert Chastine, the
president of MTA. In his affidavit, Chastine stated, in
pertinent part, that, "[o]n or about October 21, 2011, [SDC]
withdrew the sum of $812,706.00 from monies owed to MTA by the
government
through
the
federal
offset
program.
This
withdrawal
satisfied the judgment, as well as the post-judgment interest
that had accrued between the date of the judgment and the date
of the satisfaction." Chastine also stated that "[n]o
contribution to MTA's satisfaction of C&F's debt to SDC has
been made by Cooper or Flowers, and no agreement exists among
MTA, Cooper, and Flowers limiting the right of contribution
between them."
Cooper filed a response to MTA's summary-judgment motion.
In his response, Cooper argued, in relevant part:
7
1130698
"MTA correctly acknowledges in its memorandum
that its right to contribution, if any, is not
absolute if there is an agreement between the
parties, limiting the right of contribution between
the co-guarantors. See Ex parte Harris, 837 So. 2d
283, 287 (Ala. 2002). In this case, MTA chose to
exercise its first right of refusal to purchase the
encumbered property, and in doing so, agreed to
assume full responsibility for the repayment of the
SBA loan. ... As such, MTA has effectively waived
its right, if any, to contribution. ..."
Cooper supported his response to MTA's summary-judgment
motion with his own affidavit, in which he stated, in
pertinent part:
"5. On or about December 27, 2000, C&F borrowed
$650,000.00 from [SDC]. That debt is memorialized by
the promissory note ('the Note')....
"6. On December 27, 2000, the SDC assigned the
Note to the Small Business Administration 'SBA.'
"7. Thereafter, C&F received a foreclosure
letter with respect to the SBA loan. The imminent
sale of C&F's assets triggered the first right of
refusal granted to MTA pursuant to Sections 16.1 and
16.2 of the Operating Agreement. ...
"8. On or about July 24, 2003, MTA notified me
that it intended to exercise its first right of
refusal. ... MTA demanded me to immediately
relinquish and transfer to MTA my entire interest in
C&F. ...
"9. On August 1, 2003, I executed an 'Assignment
Of interest in C&F Enterprises, LLC, wherein I sold,
assigned, and transferred to MTA my entire interest
in C&F. ...
8
1130698
"10. As a result, MTA then assumed full
responsibility of the SBA loan. ...
"11. Notwithstanding the allegations in the
Complaint, I have no knowledge of the factual
circumstances associated with the alleged payment
made, via the federal offset program, to the SBA."
Cooper also supported his response to the summary-
judgment motion with a letter, dated July 24, 2003, that MTA
sent to Cooper, in which MTA stated, in pertinent part:
"As you probably are aware, C&F Enterprises has
received a foreclosure letter with respect to its
SBA loan. This imminent sale of C&F Enterprises'
assets has triggered the right of first refusal
granted to MTA in section 16 of C&F Enterprises'
current Operating Agreement, giving MTA the right to
purchase the College Plaza Shopping Center.
"By this letter MTA is hereby notifying you, as
required by section 16.2 of the Operating Agreement,
of its intent to exercise its right of first
refusal. To this end, MTA expects you to immediately
relinquish and transfer to MTA your entire interest
in C&F Enterprises, MTA will then assume full
responsibility for the repayment of the SBA loan."
Cooper further supported his response to the summary-
judgment motion with a document entitled "Assignment of
Interest in C&F Enterprises, LLC[,] an Alabama Limited
Liability Company." That document, purporting to assign
Cooper's interest in C&F to MTA, signed by Cooper and a
witness, provides:
9
1130698
"For adequate consideration, the receipt of
which is hereby acknowledged, Ronald L. Cooper
hereby sells, assigns and transfers unto MTA, Inc.,
an Alabama corporation, Ronald L. Cooper's entire
interest in C&F Enterprises, an Alabama limited
liability company, constituting thirty three and
one-third membership units and a thirty three and
one-third percentage interest in C&F Enterprises,
LLC, and the undersigned hereby further irrevocably
constitutes and appoints the [sic] Robert Chastine
to transfer the said interests on the books of the
within-named limited liability company, with full
power of substitution in the premises."
MTA filed a reply to Cooper's response to its summary-
judgment motion, stating, in pertinent part:
"SUPPLEMENTAL FACTS
"1. On or about July 24, 2003, D. Ashley Jones,
counsel for [MTA] and its principal, Robert
Chastine, sent Ronald L. Cooper ('Cooper') a letter
informing him of its intent to exercise its right of
first refusal (the 'Demand Letter'). ...
"2. The Demand Letter stated that 'Time is of the
essence,' and gave Cooper a period of seven days in
which to execute and return a transfer of membership
interest. ...
"3. No response was ever received from Cooper, and
no executed assignment of membership interest was
ever received. ...
"4. In further support of [MTA's] Motion for Summary
Judgment, true and correct copies of the collection
letters from the Department of the Treasury
evidencing the transfers referenced in the Complaint
and Motion for Summary Judgment are attached hereto
as Exhibit '2.'
10
1130698
"SUPPLEMENTAL ARGUMENT
"A few days before the initial hearing on
[MTA's] Motion for Summary Judgment, [Cooper] filed
its response to [MTA's] motion, to which was
attached the Demand Letter, as well as a purported
assignment of Cooper's interest in C&F Enterprises,
LLC ('C&F') to [MTA] (the 'Assignment'). ... The
Assignment was never received -- in fact, no
response to the letter requesting the executed
Assignment was received whatsoever. ...
"Regardless of the receipt of the Assignment,
that document is insufficient to constitute a
transfer of the membership of Ronald L. Cooper to
MTA, Inc. Section 9 of the Operating Agreement of
C&F (the 'Operating Agreement') sets out the method
by which a transfer of membership interest in C&F
may be formalized. ... Section 9.1 of the Operating
Agreement provides that any assignment of membership
interest must be:
"'1. Executed both by the assignor and the
assignee;
"'2. Received by the members;
"'3. Recorded on the books of C&F;
"'4. Approved by prior written consent of
at least 75% of outstanding members; and
"'5. Accompanied by an opinion of counsel
that said assignment will not contravene
applicable
law,
terminate
C&F,
or
jeopardize C&F's tax status. ...'
"The Assignment clearly fails to meet these
requirements, as it was not signed by [MTA] ....
Furthermore, the Assignment was never received by
[MTA's] Counsel .... No evidence in support of the
remaining requirements has been submitted by Cooper,
11
1130698
but the sole fact that [MTA] did not sign the
Assignment is enough to render the Assignment
invalid pursuant to Section 9 of the Operating
Agreement.
"It is also clear that the Assignment is not a
transfer pursuant to the first right of refusal set
out in Section 11 of the Operating Agreement. Such
a transfer would require:
"1. Written notice by the seller (in
this case, Cooper) to the purchaser (in
this case, [MTA]) of the seller's intent to
sell, including the price and terms the
seller is willing to accept; ...
"2.
Written
acceptance
from
the
purchaser (MTA) of said notice within 30
days of the seller's notice; ... and
"3. An execution of the purchase
within 75 days of the seller's notice of
intent to sell ....
"No evidence supporting any of these three
requirements has been submitted by Cooper. Finally,
the Court should note that the Demand Letter refers
to a right of first refusal set out in Section 16.2
of the Operating Agreement. ... However, the first
right of refusal set out in Section 16[ ] is only a
4
first right of refusal entitling MTA to purchase a
shopping center owned by C&F, not a right of first
refusal
entitling
MTA
to
purchase
Cooper's
membership interest. As such, any transfer of
membership interest between the members of C&F would
have to be executed pursuant to section 9[ ] or
5
Section 16 of the operating agreement is entitled "First
4
Right of Refusal as to Shopping Center."
Section 9 of the operating agreement is entitled
5
"Transfer of a Member's Interest."
12
1130698
section 11[ ] of the Operating Agreement. As
6
described above, the Assignment, even if it was
executed, would not operate as a transfer of
Cooper's membership interest in C&F to [MTA]."
Cooper filed a supplemental response to his original
response
to
the
summary-judgment
motion,
stating,
in
pertinent
part:
"1. MTA supplements its summary judgment motion
by arguing that Ashley Jones never received Cooper's
assignment of interest in C&F Enterprises, LLC
('C&F'). In support, MTA attaches the Affidavit of
Ashley Jones who claims that he does not recall ever
receiving the Assignment. Nevertheless, Cooper has
previously stated in his Affidavit that he executed
the assignment of his membership interest in
accordance with MTA's instructions. See paragraph 9
of the Affidavit of Ron Cooper ('Cooper Affidavit')
.... Therefore, an issue of fact exists as to
whether MTA exercised its first right of refusal,
thereby
purchasing
Cooper's
interest
in
C&F
Enterprises and assuming responsibility of C&F's
debt.
"2. Further discovery is needed to resolve
issues of fact regarding MTA's exercise of its first
right of refusal and Cooper's assignment of his
membership interest. Specifically, Cooper is issuing
subpoenas to take the depositions of: (i) Erskine
Valrie, the former Small Business [Administration]
officer that handled the loan at issue in this case,
(ii) Robert Flowers, the co-defendant who failed to
appear in this case; and (iii) Ashley Jones, MTA's
former transactional attorney. ...
Section 11 of the operating agreement is entitled "First
6
Right of Refusal as to Member Interest."
13
1130698
"3.
MTA
further
supplements
its
summary-judgment
motion with attached collection letters from the
Department of Treasury that MTA claims purport to
transfer the funds via the federal offset program to
satisfy the C&F debt at issue in this lawsuit.
However, MTA has failed to produce evidence that the
withdrawals via the federal offset program were used
to satisfy the SBA's loan to C&F Enterprises. ...
While MTA attached collection letters from the
Department of Treasury, those collection letters do
not reference C&F Enterprises in any way. Moreover,
there is no explanation from Robert Chastine, MTA's
corporate
representative,
authenticating
these
facts. As such, the deposition of Robert Chastine is
also needed to develop these factual issues. ...
"4. Finally, MTA's supplemental submission
raises additional factual issues regarding the scope
of the first right of refusal. MTA argues that the
first right of refusal found in Section 16.2 of the
Operating Agreement only entitles MTA to purchase
the shopping center and does not entitle MTA to
purchase Cooper's membership
interest. This argument
is inconsistent with MTA's prior position as
articulated by its counsel in his July 24, 2003,
letter. ... Moreover, the SBA loan documents, which
are attached to MTA's Complaint, and the operating
agreement, when read in their entirety, are evidence
that C&F Enterprises was formed to construct and
lease the College Plaza Shopping Center. Therefore,
MTA's last-minute attempt to manipulate the terms of
the Operating Agreement is disingenuous."
After a hearing, the trial court entered an order
granting MTA's summary-judgment motion and stating: "Judgment
is hereby entered in favor of plaintiff MTA, Inc., and against
defendants Ronald Cooper and Robert Flowers in amount of
$270,902.00, plus costs of this action." The trial court's
14
1130698
order included no specific findings of fact. Cooper filed a
Rule 59(e), Ala. R. Civ. P., motion, arguing, in sum, that,
"[i]n this case, MTA chose to exercise its first right of
refusal to purchase the encumbered property, and in doing so,
agreed to assume full responsibility for the repayment of the
SBA loan." The trial court denied Cooper's postjudgment
motion. Cooper appealed.
II. Standard of Review
"Our standard of review of a summary judgment is
well settled:
"'"The standard of review applicable
to a summary judgment is the same as the
standard for granting the motion...."
McClendon v. Mountain Top Indoor Flea
Market, Inc., 601 So. 2d 957, 958 (Ala.
1992).
"'"A summary judgment is
proper when there is no genuine
issue of material fact and the
moving party is entitled to a
judgment as a matter of law. Rule
56(c)(3), Ala. R. Civ. P. The
burden is on the moving party to
make a prima facie showing that
there is no genuine issue of
material fact and that it is
entitled to a judgment as a
matter of law. In determining
whether the movant has carried
that burden, the court is to view
the evidence in a light most
favorable to the nonmoving party
15
1130698
and
to
draw
all
reasonable
inferences in
favor of
that
party. To
defeat a
properly
supported
summary
judgment
motion, the nonmoving party must
present 'substantial evidence'
creating
a
genuine
issue
of
material fact -- 'evidence of
such weight and quality that
fair-minded
persons
in
the
exercise of impartial judgment
can
reasonably
infer
the
existence of the fact sought to
be proved.' Ala. Code 1975, §
12–21–12; West v. Founders Life
Assurance Co. of Florida, 547 So.
2d 870, 871 (Ala. 1989)."
"'Capital
Alliance
Ins.
Co.
v.
Thorough–Clean, Inc., 639 So. 2d 1349, 1350
(Ala. 1994). Questions of law are reviewed
de novo. Alabama Republican Party v.
McGinley, 893 So. 2d 337, 342 (Ala. 2004).'
"Pritchett v. ICN Med. Alliance, Inc., 938 So. 2d
933, 935 (Ala. 2006)."
Smith v. Fisher, 143 So. 3d 110, 122-23 (Ala. 2013).
III. Analysis
We conclude that the trial court erred in granting MTA's
motion for a summary judgment. The legal arguments presented
by the parties and the substantial evidentiary documentation
supporting those arguments show that there exist a number of
7
The parties collectively submitted to the trial court no
7
fewer than seven affidavits, along with numerous other
documentary evidence.
16
1130698
disputed issues of material fact in this case. The following
constitute some of, but perhaps not all, the disputed issues
of material fact that make a summary judgment inappropriate in
this case:
In his affidavit, Chastine, who, as noted, is the
president of MTA, stated that, "[o]n or about October 21,
2011, [SDC] withdrew the sum of $812,706.00 from monies owed
to MTA by the government through the federal offset program.
This withdrawal satisfied the judgment, as well as the
post-judgment interest that had accrued between the date of
the judgment and the date of the satisfaction." However, in
her affidavit,
Deanna Smith, one of Cooper's
attorneys,
stated
that "MTA has failed to produce evidence that the withdrawals
via the federal offset program were used to satisfy the SBA's
loan to C&F Enterprises. While MTA attached
collection
letters
from the Department of Treasury, those collection letters do
not reference C&F Enterprises in any way."
In his affidavit, Cooper stated that, "[o]n August 1,
2003, I executed an 'Assignment Of interest in C&F
Enterprises, wherein I sold, assigned, and transferred to MTA
my entire interest in C&F [Enterprises, LLC]." "As a result,
17
1130698
MTA then assumed full responsibility for the repayment of the
SBA loan." Also, in her affidavit, Dana M. Moore, the
executive director of SDC, stated that she was aware that
"Cooper had executed an assignment transferring his interest
in C&F Enterprises to MTA." However, in his affidavit, D.
Ashley Jones, counsel for MTA and Chastine in July 2003,
stated that he sent a letter to Cooper on July 24, 2003,
"informing
him
of
said
pending
foreclosure
[of
C&F
Enterprises, LLC], and instructing him to execute an
assignment of interest to MTA, Inc. within seven days" but
that Jones "never received any communication in return from
... Cooper and never received the executed Assignment of
Interest ...."
Furthermore, there exists an issue of material fact as to
whether Cooper's purported assignment to MTA of his interest
in C&F was an assignment of Cooper's interest in C&F pursuant
to section 11 of the operating agreement; an assignment of
Cooper's interest in the shopping center operated by C&F
pursuant to section 16 of the operating agreement; or an
assignment of Cooper's interests under both sections 11 and 16
of the operating agreement. In its supplement to its summary-
18
1130698
judgment motion, MTA argued that, "[f]inally, the
Court
should
note that the Demand Letter refers to a right of first refusal
set out in Section 16.2 of the Operating Agreement. ...
However, the first right of refusal set out in Section 16 is
only a first right of refusal entitling MTA to purchase a
shopping center owned by C&F, not a right of first refusal
entitling MTA to purchase Cooper's membership interest."
However, the affidavit of Jones, then MTA's attorney, does not
distinguish between MTA's purchasing Cooper's interest in C&F
as opposed to or in addition to Cooper's interest in the
shopping center owned by C&F. As noted above, Jones stated
only that he "never received the executed Assignment of
Interest." Furthermore, the purported "Assignment of
Interest" document to which Jones referred is not specific as
to whether Cooper assigned to MTA his interest in C&F as
opposed to or in addition to his interest in the shopping
center.
In sum, it is clear that there exist several issues of
material fact that preclude a summary judgment in this case.
Accordingly, the trial court's summary judgment in favor of
MTA is due to be reversed.
19
1130698
IV. Conclusion
Because genuine issues of material fact exist in this
case, the trial court erred in granting MTA's motion for a
summary judgment. Therefore, we reverse the trial court's
judgment and remand the cause for further proceedings
consistent with this opinion.
REVERSED AND REMANDED.
Moore, C.J., and Murdock and Bryan, JJ., concur.
Bolin, J., concurs in the result.
20 | October 17, 2014 |
10635e30-b8a4-4416-923c-4b9217c91094 | Kraselsky v. Calderwood | N/A | 1130902 | Alabama | Alabama Supreme Court | REL: 10/17/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
____________________
1130902
____________________
Steven Alan Kraselsky, personal representative of the estate
of Marcia Kraselsky, deceased
v.
David Calderwood, M.D., and Huntsville Clinic, Inc.
Appeal from Madison Circuit Court
(CV-12-900795)
STUART, Justice.
Steven
Alan
Kraselsky
("Steven"),
personal
representative
of the estate of his deceased mother Marcia Kraselsky
("Marcia"), sued David Calderwood, M.D., and Dr. Calderwood's
1130902
employer, Huntsville Clinic, Inc., in the Madison Circuit
Court, alleging that Dr. Calderwood committed medical
malpractice while treating Marcia following her admittance to
Huntsville Hospital in July 2010 and that his alleged act of
malpractice caused her already poor health to decline further
and ultimately led to her death. The trial court entered a
summary judgment in favor of Dr. Calderwood and Huntsville
Clinic, and Steven appeals that judgment. We affirm.
I.
On July 1, 2010, Marcia, who was 80 years old at the
time, fell and sustained a compression fracture to the T12
vertebra in her spine. She was admitted to Huntsville
Hospital
and,
following
some
initial
treatment,
was
thereafter
discharged and sent to the local HealthSouth Rehabilitation
Hospital for further treatment and therapy.
However,
sometime
after being admitted to HealthSouth, she went into full
cardiopulmonary arrest and had to be resuscitated. On July
12, 2010, Marcia was readmitted to Huntsville Hospital with
extensive pulmonary emboli in both lungs, as well as excess
fluid in the chest cavity and multiple rib fractures as a
result of the resuscitation efforts. She was later determined
2
1130902
to
have
gastrointestinal
bleeding
and
congestive
heart
failure
as well.
At Huntsville Hospital, Marcia was treated by Dr.
Calderwood, who had been her primary-care physician since
2006
and who had seen her approximately 27 times before this
hospitalization, and by Dr. Misbahuddin Siddiqui, a pulmonary
and critical-care specialist. Over the course of the next
week, Marcia experienced pain in her lungs, ribs, back, and
shoulder; however, her breathing did improve to some extent,
although pain still made deep breathing difficult and she
still experienced some shortness of breath. On July 19, 2010,
Marcia was experiencing pain that was sufficiently severe
that, Dr. Calderwood subsequently testified in a deposition,
"she was begging for something for pain." Since being
admitted on July 12, Marcia had been taking Norco, a pain
medication that is a combination of hydrocodone and
acetaminophen, orally and had been receiving morphine
intravenously
as
well;
however,
Dr.
Calderwood
had
discontinued the Norco on July 15, 2010, because Marcia was
having difficulty swallowing.
3
1130902
During her previous consultations with Dr. Calderwood,
and upon being admitted to Huntsville Hospital, Marcia had
indicated that she was allergic to over 20 medications,
including pain medications such as Darvon and Darvocet
(propoxyphene),
Motrin
(ibuprofen),
codeine,
Dilaudid
(hydromorphone), Vicodin (hydrocodone and acetaminophen),
morphine, and Demerol (pethidine). Marcia in fact had been
given a red arm band to wear while at Huntsville Hospital to
alert hospital personnel that she had multiple allergies.
However, in spite of her claimed allergies, Marcia had been
given both morphine and Norco –– which contains the same
active ingredients as Vicodin –– throughout her July 2010
hospitalizations without any apparent allergic reactions.
Accordingly, after visiting with Marcia on the morning of
July 19, Dr. Calderwood ordered that she be given 6.25
milligrams of Demerol intravenously every six hours. When a
1
Dr. Calderwood has stated in an affidavit that he
1
discussed Marcia's alleged Demerol allergy with her during
that July 19 visit and that she explained that she got a
headache when taking Demerol in the past. He concluded that
the headache was no more than a side effect and not
symptomatic of a true allergy. He also stated that Marcia
consented to receiving Demerol at that time. Dr. Siddiqui
testified that he had a similar conversation with Marcia about
her claimed allergies when she was admitted and that he had
also concluded that the headaches and nausea she associated
4
1130902
nurse subsequently reviewed the order, she recognized that
Demerol was a listed allergen on Marcia's chart, and she
accordingly contacted Dr. Calderwood to remind him of that
fact and to verify his orders. Dr. Calderwood did in fact
confirm the order, and hospital records associated with the
order indicate that "M.D. is aware of allergy." The nurse
administered Demerol to Marcia at approximately 5:20 p.m.
Prior to receiving the Demerol, Marcia's vital signs had
been taken at 3:30 p.m. and were relatively normal –– a
respiration rate of 20, pulse rate of 85, and oxygen-
saturation rate of 96%. When her vital signs were taken again
at approximately 8:00 p.m., her respiration rate had
increased
to 44, her pulse rate was up to 118, and her oxygen-saturation
rate was only 86%. She was accordingly moved to the
intensive-care unit, where she subsequently went into
cardiopulmonary arrest and was resuscitated after her family
rescinded a previous do-not-resuscitate order. The family
later agreed to reinstate the do-not-resuscitate order, and
Marcia died on July 22, 2010.
with Demerol and morphine were not true allergic reactions.
5
1130902
On June 15, 2012, Steven initiated a medical-malpractice
action against Huntsville Hospital, Dr. Calderwood, and
Huntsville Clinic, alleging that they had breached "the
standard of care in causing or allowing [Demerol] to be given
to [Marcia] in light of her condition and her sensitivity to
this
medication."
Steven
thereafter
voluntarily
dismissed
his
claim against Huntsville Hospital, and, following a period of
discovery, Dr. Calderwood and Huntsville Clinic moved for a
summary judgment in their favor, arguing that Steven had not
identified
substantial
evidence
indicating
that
Dr.
Calderwood
either breached the applicable standard of care or that any
such breach proximately caused Marcia's death.
Steven
opposed
the motion, and, on April 30, 2014, after conducting a
hearing, the trial court granted Dr. Calderwood
and
Huntsville
Clinic's motion and entered a summary judgment in their favor.
On May 16, 2014, Steven filed his notice of appeal to this
Court.
II.
We review a summary judgment pursuant to the following
standard:
"This Court's review of a summary judgment is de
novo. Williams v. State Farm Mut. Auto. Ins. Co.,
6
1130902
886 So. 2d 72, 74 (Ala. 2003). We apply the same
standard of review as the trial court applied.
Specifically, we must determine whether the movant
has made a prima facie showing that no genuine issue
of material fact exists and that the movant is
entitled to a judgment as a matter of law. Rule
56(c), Ala. R. Civ. P.; Blue Cross & Blue Shield of
Alabama v. Hodurski, 899 So. 2d 949, 952-53 (Ala.
2004). In making such a determination, we must
review the evidence in the light most favorable to
the nonmovant. Wilson v. Brown, 496 So. 2d 756, 758
(Ala. 1986). Once the movant makes a prima facie
showing that there is no genuine issue of material
fact, the burden then shifts to the nonmovant to
produce 'substantial evidence' as to the existence
of a genuine issue of material fact. Bass v.
SouthTrust Bank of Baldwin County, 538 So. 2d 794,
797-98 (Ala. 1989); Ala. Code 1975, § 12-21-12."
Dow v. Alabama Democratic Party, 897 So. 2d 1035, 1038-39
(Ala. 2004).
III.
To prevail in a medical-malpractice action under the
Alabama Medical Liability Act ("AMLA"), § 6–5–480 et seq. and
§ 6–5–541 et seq., Ala. Code 1975, a plaintiff must establish
1) the appropriate standard of care, 2) that the defendant
health-care provider breached that standard of care, and 3) a
proximate
causal
connection
between
the
health-care
provider's
alleged breach and the identified injury. Morgan v. Publix
Super Markets, Inc., 138 So. 3d 982, 986 (Ala. 2013). Thus,
to
survive
a
defendant
health-care
provider's
summary-judgment
7
1130902
motion alleging the absence of substantial evidence
that would
establish any one of these three items, the plaintiff must
submit –– or identify in the existing record –– substantial
evidence that would in fact establish the challenged item or
items. In the instant case, Dr. Calderwood and Huntsville
Clinic alleged in their summary-judgment motion that there
was
not substantial evidence indicating (1) that Dr. Calderwood
had breached the applicable standard of care or (2) that any
such breach proximately caused Marcia's death. After
reviewing the evidence submitted by Steven and the record as
a whole, we agree that there is a lack of substantial evidence
indicating that the alleged breach of the standard of care
committed by Dr. Calderwood –– ordering Demerol to be
administered to Marcia, who had listed it as a medication she
was allergic to –– proximately caused her health to decline
and, ultimately, her death.
2
Our holding that there is a lack of substantial evidence
2
of proximate causation obviates the need to consider the
sufficiency of the evidence on the issue whether Dr.
Calderwood in fact breached the standard of care. Our
proximate-causation analysis will assume that Steven did
adduce substantial evidence of a breach of the standard of
care; however, because it is ultimately unnecessary for us to
make a conclusion in that regard, we express no opinion on
that issue.
8
1130902
With regard to proximate causation in an AMLA case, this
Court has stated that "the plaintiff must prove, through
expert
medical
testimony,
that
the
alleged
negligence
probably
caused, rather than only possibly caused, the plaintiff's
injury." University of Alabama Health Servs. Found. v. Bush,
638 So. 2d 794, 802 (Ala. 1994) (emphasis added). See also
Bradford v. McGee, 534 So. 2d 1076, 1079 (Ala. 1988) ("[T]he
plaintiff [in a medical-malpractice action] must adduce some
evidence indicating that the alleged negligence (the breach
of
the appropriate standard of care) probably caused the injury.
A mere possibility is insufficient."). In this case, Steven
has not retained his own expert to testify regarding
causation; rather, he argues that the deposition testimony of
Dr. Siddiqui is sufficient to establish that Dr. Calderwood's
order that Marcia be administered Demerol proximately caused
the decline in her health leading to her death. When
questioned by Steven's attorney during his deposition, Dr.
Siddiqui testified as follows:
"Q.
Do you see a correlation between the timing of
the Demerol and [Marcia's] breathing problem or
her cardiopulmonary arrest?
"A.
Usually you would expect it to be much sooner
because it was a quick onset drug and it was
9
1130902
given [in an] IV. You usually do not see it
that late.
"Q.
So you don't think there was any relationship?
"A.
Usually we see it much earlier. I'm not sure
that it –– I cannot say for certain that it did
not, 100%, had no impact on her breathing
whatsoever. But it's just too late of a
reaction. Usually with IV administration we
see [it] much sooner than what we did in this
case.
"Q.
Is there anything else you can point to as the
likely cause of her going into a code ... right
after the Demerol had been administered.
"A.
In my judgment the patient was crucially ill
throughout this hospitalization. She came in
with an arrest. She came in with breathing
difficulties. And I actually had talked to the
family and the patient upon admission given her
presentation that the prognosis is going to be
poor. And I'm not sure that, you know, that ––
how much Demerol contributed, but she was
seriously ill with poor prognosis.
"....
"Q.
So with a patient having those comorbidities or
these serious problems [pulmonary emboli and
congestive heart failure], would the addition
of the Demerol be a contributing factor in your
opinion to her respiratory problems in all
likelihood?
"....
"A.
Yes, certainly an excessive dose of any
medication in her case would act as a
suppressant. But from what my understanding
10
1130902
is, ... she received a small dose and the
reaction was much delayed.
"Q.
Can you point us to any evidence that would
lead you to conclude as her attending physician
for the lung situation that she would have gone
ahead and had this cardiopulmonary arrest on
June 19th even if she hadn't been given the
Demerol?
"A.
Probably?
"Q.
You think that probably would have happened at
the same time without the Demerol?
"A.
I cannot, to be honest, correlate the two. But
it was high probability that she would have
arrest again, and it was discussed with the
family and her. ... I think, yes, there was a
high probability it would have happened again.
"Q.
Without the administration of any Demerol or an
allergic medication for pain?
"A.
Yes, sir.
"Q.
So it sounds to me as though you are excluding
any possible relationship of the administration
of the 6.25 milligrams of Demerol and her
arrest, respiratory problem?
"A.
I am not. What I would say is that I –– again,
I'm not –– I wasn't there when it happened. I
did not examine her that night. But she had
the high probability of cardiac arrest even
without getting anything. Certainly any drug
that you will administer that will have impact
on slowing the patient's breathing down can
also act as a factor. But she –– was that the
primary thing that led to the arrest, in my
judgment I do not think so.
11
1130902
"Q.
If not primary, could it have played a
causative role, though, to some degree, so that
it adversely affected what was already in
place?
"A.
It is possible.
"Q.
Possible or probable or certain?
"A.
Possible.
"Q.
Did you discuss that with the family after the
Demerol questions they raised?
"A.
I remember doing so, yes.
"Q.
That there was a possible connection between
the Demerol and her breathing problem that went
on to the coma?
"A.
Yes. They were very concerned about the
Demerol. And, if I remember correctly, my
statement was the same that, yes, she did
receive it. She was ask –– she was hurting,
she was asking for pain medicines. And I think
I mentioned it to them –– I actually remember
very clearly saying that I do not think that
was the primary reason of her arrest.
"Q.
What do you think was the primary reason for
the arrest that went on to the coma and then
her death?
"A.
I think the amount of embolus burden, emboli
burden that she had in her lungs probably has
to do more with it. She had quite a bit of
clot burden. All the emboli that she had, they
were bilateral and they put a strain on her
heart. And that's why she had gone into the
initial arrest, primary arrest, when she came
in."
12
1130902
Dr. Calderwood and Huntsville Clinic's attorney subsequently
questioned Dr. Siddiqui as well:
"Q.
I'm
going
to
hand
you
[Marcia's]
death
certificate
....
Is
that
the
death
certificate that you filled out?
"A.
That's correct.
"....
"Q.
And you indicated that the primary cause of
death was what?
"A.
Cardiopulmonary arrest.
"Q.
Secondary to?
"A.
Patient had pulmonary embolism and respiratory
failure.
"Q.
Did you list any other contributing causes to
her death?
"A.
Sepsis, [gastrointestinal] bleeding.
"Q.
And do you feel that sepsis did contribute to
cause her death?
"A.
As a contributor, yes, to comorbidities.
"Q.
You didn't list an allergic medication reaction
as being in any way responsible for her death?
"A.
I did not list that.
"....
"Q.
And did you find any evidence in the hospital
chart that she suffered a true anaphylactic or
allergic reaction?
13
1130902
"A.
I did not find any such documentation.
"Q.
You feel that the cause of her respiratory
decline that occurred was the embolus burden in
her lungs which was placing a strain on her
heart?
"A.
Primarily, yes."
Steven's attorney then had a few final questions for Dr.
Siddiqui:
"Q.
Doctor, with the primary cause of the embolus
burden placing a strain on her heart, a patient
who is reportedly allergic to Demerol would be
adversely affected by getting that on top of
that burden, wouldn't she?
"A.
She can be.
"Q.
And wasn't she? As you can see in this chart
and putting that on top of that burden was a
problem and sent her over the edge, so to
speak, or into the arrest?
"A.
I can see that it can contribute.
"Q.
I mean, you're familiar with the term 'tipping
point' aren't you?
"A.
Yes.
"Q.
I don't know that that's a medical term. Is it
a medical term?
"A.
No, sir.
"Q.
But when we look at the temporal nature of her
situation in the hospital in July of 2010, the
tipping point appears to have occurred after
having been given Demerol, doesn't it?
14
1130902
"A.
It appears so."
In his brief to this Court, Steven emphasizes the final
excerpt of Dr. Siddiqui's testimony and argues that "Dr.
Siddiqui's testimony that the Demerol could adversely affect
[Marcia] and was the 'tipping point' that sent her over the
edge to her arrest and death is substantial medical evidence
on proximate cause which makes it a jury question." Steven's
brief, at p. 38. We disagree with Steven's characterization
of Dr. Siddiqui's testimony. Although keeping in mind that
our standard of review requires us to review the evidence in
the light most favorable to Steven, the nonmovant, Dow, 897
So. 2d at 1038-39, this excerpt does not indicate that
Marcia's health deteriorated as a result of being given
Demerol; rather, it indicates only that Marcia's health
deteriorated after she was given Demerol. However, the
sequence of events in this case is undisputed, and what Steven
needs to defeat Dr. Calderwood and Huntsville Clinic's
summary-judgment motion is not additional evidence supporting
that time line but some evidence indicating that the
administration of Demerol probably –– not possibly –- caused
the decline in Marcia's health. Even if we were inclined to
15
1130902
interpret the discussion of the "tipping point" in the manner
urged by Steven, it is clear from the entirety of Dr.
Siddiqui's testimony that he did not consider Demerol to have
proximately caused the decline in Marcia's health leading to
her death. Indeed, when specifically asked if it was
"possible," "probable," or "certain" that Demerol had a
"causative role" in Marcia's death, Dr. Siddiqui was
comfortable stating only that it was possible. In Giles v.
Brookwood Health Services, Inc., 5 So. 3d 533, 550 (Ala.
2008), this Court cautioned against the practice of relying on
isolated excerpts from deposition testimony to argue in favor
of a proposition the testimony as a whole does not support,
stating:
"[T]he testimony of [the plaintiff's] medical expert
is not sufficient to satisfy [the plaintiff's]
burden
of
producing
substantial
evidence
demonstrating the existence of a genuine issue of
material fact as to her medical-malpractice claims
.... Even if portions of her expert's testimony
could be said to be sufficient to defeat a
summary-judgment motion when viewed 'abstractly,
independently, and separately from the balance of
his testimony,' 'we are not to view testimony so
abstractly.' Hines v. Armbrester, 477 So. 2d 302,
304 (Ala. 1985). See also Malone v. Daugherty, 453
So. 2d 721, 723–24 (Ala. 1984). Rather, as this
Court stated in Hines:
16
1130902
"'We are to view the [expert] testimony as
a whole, and, so viewing it, determine if
the testimony is sufficient to create a
reasonable inference of the fact the
plaintiff seeks to prove. In other words,
can
we
say,
considering
the
entire
testimony of the plaintiff's expert, that
an inference that the defendant doctor had
acted contrary to recognized standards of
professional care was created?'
"477 So. 2d at 304–05; see also Pruitt v. Zeiger,
590 So. 2d 236, 239 (Ala. 1991) (quoting Hines, 477
So. 2d at 304–05).
"Similarly, in Malone v. Daugherty, supra,
another medical-malpractice case, we noted that a
portion
of
the
plaintiff's
medical
expert's
testimony in that case,
"'when viewed abstractly, independently,
and separately from the balance of his
sworn
statement,
would
appear
sufficient
to
defeat
the
[defendant's]
motion
for
summary
judgment. But our review of the evidence
cannot be so limited. The test is whether
[the
plaintiff's
medical
expert's]
testimony, when viewed as a whole, was
sufficient
to
create
a
reasonable
inference
of the fact Plaintiff sought to prove.
That is to say, could a jury, as the finder
of fact, reasonably infer from this medical
expert's testimony, or any part thereof
when viewed against the whole, that the
defendant doctor had acted contrary to the
recognized standards of professional care
in the instant case.
"'Thus, in applying this test, we must
examine the expert witness's testimony as
a whole.'
17
1130902
"453 So. 2d at 723; see also Downey v. Mobile
Infirmary Med. Ctr., 662 So. 2d 1152, 1154 (Ala.
1995) (noting that portions of a medical expert's
testimony must be viewed in the context of the
expert's testimony as a whole); Pendarvis v.
Pennington, 521 So. 2d 969, 970 (Ala. 1988) ('[W]e
are bound to consider the expert testimony as a
whole.')."
It is clear, when examining Dr. Siddiqui's testimony as
a whole, that he did not consider Demerol to have probably
caused the decline in Marcia's health leading to her death.
There is no other evidence in the record from which a jury
could reasonably infer that fact either. Because such
evidence is lacking, and because proximate causation is an
essential element of Steven's medical-malpractice claim
against Dr. Calderwood and Huntsville Clinic, their summary-
judgment motion was due to be granted, and the trial court
acted properly in doing so.
IV.
Steven sued Dr. Calderwood and Dr. Calderwood's employer,
Huntsville Clinic, alleging that Marcia died as a result of
Dr. Calderwood's order that Marcia be given Demerol in spite
of the fact that Dr. Calderwood knew she had previously
professed to having an allergy to Demerol. The trial court
thereafter entered a summary judgment in favor of Dr.
18
1130902
Calderwood and Huntsville Clinic, and Steven appealed that
judgment to this Court. Assuming, arguendo, that Dr.
Calderwood breached the standard of care by ordering that
Demerol be administered to Marcia, and, noting again that Dr.
Calderwood strongly contests that fact, the summary judgment
entered by the trial court is nevertheless due to be affirmed
because there is no evidence in the record indicating that the
administration of the Demerol to Marcia proximately
caused
the
decline in her health leading to her death. The judgment of
the trial court is accordingly hereby affirmed.
AFFIRMED.
Moore, C.J., and Parker, Shaw, and Wise, JJ., concur.
19 | October 17, 2014 |
1456350c-7027-4610-9149-be19c18ab496 | Ex parte Christie Michelle Scott. PETITION FOR WRIT OF CERTIORARI TO THE COURT OF CRIMINAL APPEALS (In re: Christie Michelle Scott v. State of Alabama) (Franklin Circuit Court: CC-08-344; Criminal Appeals : CR-08-1747). Writ Denied. No Opinion. | N/A | 1120563 | Alabama | Alabama Supreme Court | REL:09/26/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334)
229-0649), of any typographical or other errors, in order that corrections may be made
before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
SPECIAL TERM, 2014
_________________________
1120563
_________________________
Ex parte Christie Michelle Scott
PETITION FOR WRIT OF CERTIORARI
TO THE COURT OF CRIMINAL APPEALS
(In re: Christie Michelle Scott
v.
State of Alabama)
(Franklin Circuit Court, CC-08-344;
Court of Criminal Appeals, CR-08-1747)
SHAW, Justice.
WRIT DENIED. NO OPINION.
Stuart, Bolin, Parker, Murdock, and Bryan, JJ., concur.
Moore, C.J., concurs in part and dissents in part.
Wise, J., recuses herself.*
*Justice Wise was a member of the Court of Criminal
Appeals when that court considered this case.
1120563
MOORE, Chief Justice (concurring in part and dissenting in
part).
Christie Michelle Scott petitions this Court for a writ
of certiorari to review the judgment of the Court of Criminal
Appeals affirming her capital-murder convictions and sentence
of death. Scott v. State, [Ms. CR-08-1747, Oct. 5, 2012] ___
So. 3d ___ (Ala. Crim. App. 2012). In her petition, Scott
raises 22 issues for review. I concur in denying Scott's
petition on all issues except her claim under Rule 404(b),
Ala. R. Evid. Therefore, as to that issue I dissent from the
denial of Scott's petition.
I. Facts and Procedural History
In the early morning hours of August 16, 2008, a fire
broke out in the children's bedroom in the home of Christie
and Jeremy Scott in Franklin County. Jeremy was away on a
business trip.
Four-year-old
Noah was sleeping with his mother
in her bedroom; six-year-old Mason was asleep in his room. As
the fire burned, the mother escaped out of her bedroom window
with her son Noah and knocked on a neighbor's door to call for
help. The neighbor
dialed
emergency 9-1-1. The fire department
put out the fire, but the blaze was too intense for the
2
1120563
firefighters to rescue Mason, who died from burns and smoke
inhalation.
The State charged Scott with three counts of capital
murder: murder committed for pecuniary gain, murder by arson,
and murder of a child under the age of 14. See §§ 13A-5-
40(a)(7), -40(a)(9), and -40(a)(15), Ala. Code 1975. After a
one-month trial, the jury convicted Scott on all three counts
and, in the penalty phase, by a 7-5 vote, recommended a
sentence of life imprisonment without the possibility of
parole.
The
trial
court,
finding
as
an
aggravating
circumstance that a mother's murder of her child by means of
arson is particularly heinous, atrocious, or cruel when
compared to other capital offenses, imposed the
death
penalty.
Scott appealed; the Court of Criminal Appeals affirmed
her convictions and her sentence of death.
II. Discussion
Ordinarily evidence at trial is limited to proof of the
crimes charged or the circumstances leading up to them.1
The larger context of a criminal act is known as the res
1
gestae, namely, "things done" that are inseparably connected
to the act charged and that are necessary to understand it.
See I Charles W. Gamble, McElroy's Alabama Evidence §
70.01(12)(b) (6th ed. 2009) (noting that evidence of acts that
are part of the same transaction as the crime charged is
admissible).
3
1120563
Evidence of independent collateral bad acts, however, is
presumptively inadmissible to suggest that the defendant is
guilty of the crime charged. "Evidence of other crimes,
wrongs, or acts is not admissible to prove the character of a
person in order to show action in conformity therewith." Rule
404(b), Ala. R. Evid. "Evidence of prior bad acts of a
2
criminal defendant is presumptively prejudicial to the
defendant. It interjects a collateral issue into the case
which may divert the minds of the jury from the main issue."
Ex parte Cofer, 440 So. 2d 1121, 1124 (Ala. 1983).
In this case the trial court admitted, over Scott's
objection, evidence of two earlier fires in January 2006 that
had occurred at the house the Scott family was then occupying.
The first, a minor event, was deemed accidental. The second,
which demolished the house, was listed by the insurance
examiner as arson. However, no criminal charges were filed,
and the insurance company paid the claim. The State argued
that evidence of the earlier fires was admissible in the
One
scholar
paraphrased
the
rule:
"That
is,
evidence
that
2
a defendant has done something like this before is not
admissible solely to show his propensity to do things like
this as the basis for inferring that he did it this time."
Jerome A. Hoffman, The Alabama Rules of Evidence: Their First
Half-Dozen Years, 54 Ala. L. Rev. 241, 269 (2002).
4
1120563
capital-murder trial to identify Scott as the perpetrator of
the fire that resulted in the death of her son. Admittedly,
such evidence is relevant to proving the charge. "'Relevant
evidence' means evidence having any tendency to make the
existence of any fact that is of consequence to the
determination of the action more probable or less probable
than it would be without the evidence." Rule 401, Ala. R.
Evid. But the reason such evidence is generally excluded is
that it is too likely to sway the jury to convict upon facts
other than those charged in the indictment. The presumption of
innocence, a bedrock principle of criminal law, requires that
"'a defendant ... be tried for what he did, not for who he
is.'" Allen v. State, 478 So. 2d 326, 331 (Ala. Crim. App.
1985) (quoting United States v. Myers, 550 F.2d 1036, 1044
(5th Cir. 1977)).
Rule 404(b) lists a number of exceptions to the general
rule against admissibility of prior bad acts, "such as proof
of motive, opportunity, intent, preparation, plan, knowledge,
identity, or absence of mistake or accident." In granting the
State's motion to admit evidence of the 2006 fires, the trial
court found "that these fires can be used in regard to show
plan, motive, and identity." The common-plan exception "is
5
1120563
essentially
coextensive
with
the
identity
exception."
Ex
parte
Darby, 516 So. 2d 786, 789 (Ala. 1987). The identity exception
is quite narrow and is applicable only when "the identity of
the person who committed the charged offense is in issue and
the charged offense is committed in a novel or peculiar
manner." Ex parte Baker, 780 So. 2d 677, 679 (Ala. 2000).
Because Scott denied that she had set the fire that
resulted in her son's death but did not contend that someone
else did so, the identity of the person who committed the
alleged crime was not at issue. Instead, the issue was whether
a crime had occurred, not who had committed it.
"The identity of the person who actually
committed the acts with which the defendant was
charged was not at issue. The defendant did not
argue that 'someone else committed the acts with
which he was charged'; instead, he merely denied
that the acts ever occurred. Therefore, because
there was no 'real and open' issue concerning
identity,
the
collateral
acts
could
not
be
admissible as going toward such an issue."
Anonymous v. State, 507 So. 2d 972, 975 (Ala. 1987). See also
Windsor v. State, 110 So. 3d 876, 882 (Ala. Crim. App. 2012)
(admitting evidence of a prior act "with a very high degree of
similarity" to the crime charged when the defendant's
testimony that he was not the one who had robbed a CVS store
"placed at issue his identity as the perpetrator of the
6
1120563
crime"); Mothershed v. State, 596 So. 2d 47, 48 (Ala. Crim.
App. 1991) (reversing a judgment of conviction where the
evidence of collateral acts was admitted to prove "identity or
common plan, scheme, or design," but "[t]he appellant never
alleged that someone else was the perpetrator of the crimes,"
only that the acts never occurred).
Likewise the prior fires and the fire that resulted in
the death of Scott's son were not so "novel and peculiar" as
to mark them as Scott's "'signature crimes' having the
accused's mark and the peculiarly distinctive modus operandi
so that they may be said to be the work of the same person."
Bighames v. State, 440 So. 2d 1231, 1233 (Ala. Crim. App.
1983). See also Hurley v. State, 971 So. 2d 78, 83 (Ala. Crim.
App. 2006) ("'The pattern and characteristics of the crimes
must be so unusual and distinctive as to be like a
signature.'" (quoting 1 McCormick on Evidence § 190 at 803
(4th ed. 1992) (footnotes omitted))). A federal
district
judge
offered this vivid and insightful description of the identity
exception:
"'[B]ut sometimes in criminal offenses, one's method
of doing things, of painting a portrait or of laying
fancy brickwork or of committing a crime, the
methods and artistry involved are so similar that
you can almost say from looking at two of them that
7
1120563
the same hand did both of them. In other words,
similarity of method, similarity of mode of
operation is sometimes almost like a trademark of
its author.'"
United States v. Jackson, 451 F.2d 259, 263 n.6 (5th Cir.
1971) (quoting the trial court's instructions and charge to
the jury regarding identity evidence).
Arson is a property crime that requires that the
defendant possess the intent to damage or recklessly damage a
building. See §§ 13A-7-41 through -43, Ala. Code 1975. One of
the capital offenses charged in this case is "[m]urder by the
defendant during arson in the first or second degree committed
by the defendant." § 13A-5-40(a)(9), Ala. Code 1975. As
applicable to this case, "murder by the defendant" means that,
"[w]ith intent to cause the death of another person, he or she
causes the death of that person or another person." § 13A-6-
2(a)(1), Ala. Code 1975. See § 13A-5-40(b), Ala. Code 1975.
The State's burden in this case was not merely to prove
that Scott committed arson but that she did so "with intent to
cause the death" of her son. The State does not allege that
evidence of the 2006 fires is probative of Scott's intent to
murder her son; it alleges only that that evidence shows a
common scheme or plan to collect insurance proceeds. If Scott
8
1120563
were charged in this case with arson rather than with capital
murder, the State's argument might have some plausibility.
Even then the probative value of the separate acts would be
questionable. See Brasher v. State, 249 Ala. 96, 98, 30 So. 2d
31, 33 (1947) (noting that "proof of another and distinct
offense has ordinarily no tendency to establish the offense
charged"). In this case, however, a supposed
"signature
crime"
of arson is proposed to identify Scott as the author of a
subsequent murder "committed by some novel or extraordinary
means or in a peculiar or unusual manner," Wilder v. State, 30
Ala. App. 107, 109, 1 So. 2d 317, 319 (1941), as to "exhibit
such a great degree of similarity that anyone viewing the two
offenses would naturally assume them to have been committed by
the same person." Brewer v. State, 440 So. 2d 1155, 1161 (Ala.
Crim. App. 1983).
But obviously the dissimilarity between the 2006 and the
2008 events, especially as it relates to the crimes charged --
capital murder in 2008 and no charge at all in 2006 -- makes
the claim that evidence of the 2006 events was offered to
prove a "signature crime" less than convincing. Under the
3
For the same reason, the motive exception is not
3
applicable. As Scott argues, "a motive to collect a
homeowner's insurance claim from a house fire is not the same
9
1120563
guise of proving identity, namely, a novel or peculiar
methodology unique to Scott, the State succeeded in
presenting
to the jury mere propensity evidence. "'But evidence of
accused's commission of other offenses which
does nothing
more
than indicate the accused's inclination or propensity to
commit the type of crime charged is not admissible as tending
to show identity.'" Mason v. State, 259 Ala. 438, 442, 66 So.
2d 557, 560 (1953) (quoting Judge McElroy, The Law of Evidence
in Alabama).
Scott was in effect tried not only for the 2008 fire, but
also for the uncharged 2006 fires, thus inducing the jury to
convict her based on all those events, even though the former
acts were not mentioned in the indictment. See Brewer v.
State, 440 So. 2d 1155, 1164 (Ala. Crim. App. 1983) (holding
that an improperly admitted prior conviction
"had no
probative
value in relation to its inflammatory effect on the
factfinders"). "The District Attorney explained to the
jury in
his opening statement that 'we're going to try to prove [the
2006] fires just as much as we prove [the 2008] fire.'"
Scott's brief, at 93. The tendency of this tactic is to
convict the defendant, not upon proof of guilt of the crime
as a motive to kill one's son." Scott's petition, at 91.
10
1120563
charged, but for a general criminal propensity -- exactly what
Rule 404(b) prohibits.
The introduction of such evidence is peculiarly tempting
when the prosecution's case is far from airtight and the State
needs to nudge the jury to find guilt beyond a reasonable
doubt. That is exactly what occurred in this case. As the
4
Court of Criminal Appeals stated: "Here, Scott denied setting
the fire, and the evidence against Scott was circumstantial.
Evidence of the 2006 fires at Scott's house was crucial to the
State's case to prove the identity of the perpetrator of the
2008 fire and the motive behind the 2008 fire." Scott, ___ So.
3d at ___ (emphasis added). Thus, the State's other evidence
was not so overwhelming as to render the improper admission of
the prior-fires evidence harmless beyond a reasonable doubt.
See Rule 45, Ala. R. App. P. (harmless-error rule); Moore v.
State, 49 So. 3d 228, 234-35 (Ala. Crim. App. 2009).
The issue in the case was whether arson occurred at all,
not who set fire to the house, be it Scott or someone else.
Likewise, a comparison of the 2006 fires and the 2008 fire did
"[I]n many criminal cases evidence of an accused's
4
extrinsic acts is viewed as an important asset in the
prosecution's case against an accused." Advisory Committee
Notes on 1991 Amendment to Rule 404, Fed. R. Evid.
11
1120563
not show "'such a concurrence of common features that the
various acts are naturally to be explained as caused by a
general
plan
of
which
they
are
the
individual
manifestations.'" Mayberry v. State, 419 So. 2d 262, 268 (Ala.
Crim. App. 1982) (quoting Wigmore on Evidence § 304 (3d ed.
1972)). Using a person's prior bad acts to sway the jury to
convict in a close case is generally impermissible for reasons
already discussed.
"'In a large degree the effect of such a proceeding
is to "shut the gates of mercy on mankind," so that
if but once an individual suffers a lapse of virtue,
thenceforward the law will pursue him with the
vindictive zeal of a Javert, using a single
accusation to wreak upon him the cumulative
vengeance of a general inquisition.'"
Brasher, 249 Ala. at 100, 30 So. 2d at 35 (quoting State v.
Start, 65 Or. 178, 192, 132 P. 512, 517 (1913)). This
principle is even more applicable when the prior acts posited
as precursors and exemplars of the charged offense possess no
"novel and peculiar" characteristics of themselves and offer
no hint or foreshadowing of looming infanticide.
"The defendant was entitled to be tried for the crime
with which he was charged and no other." Allen v. State, 478
So. 2d 326, 331 (Ala. Crim. App. 1985). "The worst wretch that
walks the earth is entitled to a fair trial, for the law is
12
1120563
superior to all persons. As much as we may regret some results
of the law, the law must be preserved if this constitutional
democracy is to survive." Watts v. State, 282 Ala. 245, 248,
210 So. 2d 805, 808 (1968).
For the foregoing reasons, I respectfully dissent from
the denial of Scott's petition for a writ of certiorari on the
issue of admission of the prior-fires evidence. In all other
respects, I concur in denying the petition.
13 | September 26, 2014 |
87d983f6-20a2-4897-b031-6c4b40e227b9 | Ex parte Stanford Pritchett. PETITION FOR WRIT OF CERTIORARI TO THE COURT OF CRIMINAL APPEALS (In re: Stanford Pritchett v. State of Alabama)(Marengo Circuit Court: CC-7-112; Criminal Appeals : CR-13-0438). Writ Denied. No Opinion. | N/A | 1131282, 1131282 | Alabama | Alabama Supreme Court | REL: 10/31/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
____________________
1131282
____________________
Ex parte Stanford Pritchett
PETITION FOR WRIT OF CERTIORARI
TO THE COURT OF CRIMINAL APPEALS
(In re: Stanford Pritchett
v.
State of Alabama)
(Marengo Circuit Court, CC-7-112;
Court of Criminal Appeals, CR-13-0438)
STUART, Justice.
1131282
WRIT DENIED. NO OPINION.
Bolin, Parker, Shaw, Wise, and Bryan, JJ., concur.
Moore, C.J., dissents.
Main, J., recuses himself.*
*Justice Main was a member of the Court of Criminal
Appeals when that court considered an earlier appeal in this
case.
2
1131282
MOORE, Chief Justice (dissenting).
The trial court in this case denied Stanford Pritchett's
motion to withdraw his guilty plea. Because, in my view, the
Court of Criminal Appeals' unpublished memorandum affirming
the trial court's judgment, Pritchett v. State (No. CR-13-
0438, June 6, 2014), ___ So. 3d ___ (Ala. Crim. App. 2014)
(table), conflicts with the Alabama Rules of Criminal
Procedure and with our precedent on the requirements for a
guilty-plea colloquy, I respectfully dissent from the denial
of Pritchett's petition for a writ of certiorari.
Facts
Pritchett was charged with murder made capital because it
was committed by shooting into a vehicle; he pleaded guilty to
a lesser-included charge of murder and agreed to a negotiated
sentence of 23 years. During his plea hearing the trial judge
did not mention or review the explanation-of-rights form with
Pritchett or ask if he understood the rights he was waiving by
pleading guilty (except for the right to appeal). The trial
judge also did not review with Pritchett the maximum sentence
or minimum sentence for the crime to which he was pleading
guilty. The "Request for Guilty Plea" form Pritchett submitted
3
1131282
listed the sentencing range for the offense of murder as being
from 10 to 99 years' imprisonment or life imprisonment. In
fact, the range was 20 to 99 years' imprisonment because of an
applicable firearm enhancement. § 13A-5-6(a)(4), Ala. Code
1975.
Acting pro se, Pritchett moved to withdraw his guilty
plea. The trial court denied his motion. The Court of Criminal
Appeals affirmed its denial by an unpublished memorandum.
Pritchett v. State (No. CR-09-1050, Dec. 3, 2010), 92 So. 3d
816 (Ala. Crim. App. 2010) (table). This Court reversed the
Court of Criminal Appeals' judgment on the ground that
Pritchett was not represented by counsel in the proceedings on
his motion for withdrawal of the plea. Ex parte Pritchett, 117
So. 3d 356 (Ala. 2012). On remand, the trial court held a
hearing during which Pritchett's counsel raised the issue of
the
court's
failure
to
discuss
with
Pritchett
the
minimum/maximum
sentencing
range.
The
trial
court
again
denied
Pritchett's motion to withdraw his guilty plea. The Court of
Criminal Appeals again affirmed, by unpublished memorandum,
and Pritchett petitioned this Court for certiorari review.
Discussion
4
1131282
Explaining its most recent affirmance of the denial of
Pritchett's motion to withdraw his guilty plea, the Court of
Criminal Appeals stated in its unpublished memorandum:
"Pritchett filed in the circuit court a request to enter a
guilty plea, which he and his attorneys signed, that clearly
states the sentencing range for murder. Further, Pritchett
pleaded guilty pursuant to a negotiated agreement and
received
the sentence upon which he agreed." Neither of these reasons
is persuasive.
"What is at stake for an accused facing death or
imprisonment demands the utmost solicitude of which
courts
are
capable in canvassing the matter with the accused to make sure
he has a full understanding of what the plea connotes and of
its consequence." Boykin v. Alabama, 395 U.S. 238, 243-44
(1969). Drawing on Boykin, this Court has held that "a
defendant, prior to pleading guilty, must be advised on the
record of the maximum and minimum potential punishment for his
crime." Carter v. State, 291 Ala. 83, 85, 277 So. 2d 896, 898
(1973) (emphasis added). Although at one time the Court of
Criminal Appeals noted that the submission of "a written
explanation of rights signed by appellant was more than
5
1131282
adequate to satisfy the requirements of Boykin," Ireland v.
State, 47 Ala. App. 65, 66, 250 So. 2d 602, 603 (Ala. Crim.
App. 1971), "a signed Ireland form is, alone, insufficient to
establish the voluntariness of a plea." Waddle v. State, 784
So. 2d 367, 370 (Ala. Crim. App. 2000).
Effective January 1, 1991, the Alabama Supreme Court
adopted the Alabama Rules of Criminal Procedure. Rule 14.4 of
those Rules reads as follows, in pertinent part:
"In all other cases [i.e., cases other than minor-
misdemeanor cases], except where the defendant is a
corporation or an association, the court shall not
accept a plea of guilty without first addressing the
defendant personally in the presence of counsel in
open court for the purposes of:
"(1) Ascertaining that the defendant has a full
understanding of what a plea of guilty means and its
consequences, by informing the defendant of and
determining that the defendant understands:
"(i) The nature of the charge and the
material elements of the offense to which
the plea is offered;
"(ii) The mandatory minimum penalty,
if any, and the maximum possible penalty
provided by law, including any enhanced
sentencing provisions ...."
Rule 14.4(a), Ala. R. Crim. P. (emphasis added).
"The court may comply with the requirements of Rule
14.4(a) by determining from a personal colloquy with
the defendant that the defendant has read, or has
6
1131282
had read to the defendant, and understands each item
contained in Form C-44B, CR-51, CR-52, or Form
C-44A, as the case may be."
Rule 14.4(d), Ala. R. Crim. P.
The trial court, though it engaged in a colloquy with
Pritchett, did not discuss with him the maximum and minimum
penalties for the crime of murder, nor did it mention or
discuss the CR-51 (Ireland) form that is used in non-habitual-
offender felony cases. The "Request for Guilty Plea" form
1
introduced at the hearing on Pritchett's motion to withdraw
his guilty plea, and cited by the Court of Criminal Appeals,
is not one of the forms identified in Rule 14.4(d), Ala. R.
Crim. P., as acceptable for use in conjunction with a guilty-
plea colloquy. In any event, that form contained incorrect
information and thus misinformed Pritchett that he faced a
minimum sentence of 10 years if convicted, rather than a
minimum sentence of 20 years.
For a defendant's decision to plead guilty to be
intelligent and voluntary, the defendant must know the
correct
The CR-51 form introduced into evidence at the hearing
1
on Pritchett's motion to withdraw his guilty plea was a blank
form with no particularized information written on it and no
signatures. According to the Court of Criminal Appeals, the
record of Pritchett's previous appeal contains
an
Ireland form
indicating that the minimum sentence for murder is 10 years.
7
1131282
minimum sentence he or she will face by pleading guilty. "When
an accused who pleads guilty does so on the basis of
misinformation as to the range of punishment the guilty plea
is involuntary." Handley v. State, 686 So. 2d 540, 541 (Ala.
Crim. App. 1996). Furthermore, the trial judge did not
personally
address
Pritchett
regarding
either
the
"Request
for
Guilty Plea" form or Form CR-51 as Rule 14.4(d) requires. The
Committee Comments to Rule 14.4 state:
"Section (d) is included to accommodate the
current Alabama practice of informing the defendant
of his rights through a form similar to that
approved in Ireland v. State, 47 Ala. App. 65, 250
So. 2d 602 (1971), and subsequent cases. The rule,
however, specifically retains the requirement that
the trial judge ... specifically question the
defendant concerning the information contained in
each item. Thus, in every case, the record should
affirmatively show a colloquy between the trial
judge and the defendant concerning all such matters.
... This rule requires such a colloquy and requires
that specific inquiry be made with regard to the
rights set out in Rule 14.4(a)(1) and (2)."
(Emphasis added.)
The Court of Criminal Appeals' holding in its unpublished
memorandum in this case that the "Request for Guilty Plea"
form, standing alone, satisfied the requirement that the plea
be voluntary was negated as long ago as 1973 in Carter. Rule
14.4, in effect since 1991, embodies the principle that
8
1131282
without a colloquy to review a true Ireland form stating all
the rights the defendant is forgoing by pleading guilty, a
guilty plea is not voluntary. Furthermore, the unsupported
statement of the Court of Criminal Appeals that the trial
court did not have to inform Pritchett of the minimum and
maximum sentences because he had agreed to a negotiated plea
finds no recognition in the Alabama Rules of Criminal
Procedure or in prior cases. Surely the information that the
minimum sentence, if the defendant is found guilty, is 20
years, as opposed to 10 years, is necessary for a defendant to
make a knowing and intelligent decision either to plead guilty
or to go to trial.2
Recently the Court of Criminal Appeals recognized this
principle in a case Pritchett cites frequently in his petition
for certiorari
review. See Williams v. State,
[Ms. CR-13-0436,
May 2, 2014] ___ So. 3d ___ (Ala. Crim. App. 2014) (holding
The Court of Criminal Appeals also argued that Pritchett
2
did not object to the trial court's failure to inform him of
the firearm enhancement. This objection, however, is included
in Pritchett's objection to the failure to inform him of the
correct sentencing range. See Anderson v. State, 668 So. 2d
159, 159 (Ala. Crim. App. 1995) (equating a failure to inform
a defendant of a sentencing enhancement with a failure to
inform him of "the correct minimum and maximum possible
sentences he could receive").
9
1131282
that a guilty plea was involuntary where the defendant was not
informed that a firearm enhancement would increase
the
minimum
sentence by 10 years). Because informing Pritchett of the
maximum and minimum possible sentences was "an absolute
constitutional prerequisite to acceptance of a guilty plea,"
Carter, 291 Ala. at 85, 277 So. 2d at 897, I believe
Pritchett's petition has merit. "The law in Alabama is clear
that the trial court's failure to correctly advise a defendant
of the minimum and maximum sentences before accepting his
guilty plea renders that guilty plea involuntary." White v.
State, 888 So. 2d 1288, 1290 (Ala. Crim. App. 2004). That the
sentence imposed (23 years) was within the legal range does
not control. "It does not matter that his sentence was legal.
'The accused's right to know the possible sentence he faces is
absolute.'" Bozeman v. State, 686 So. 2d 556, 559 (Ala. Crim.
App. 1996) (quoting Henry v. State, 639 So. 2d 583, 584 (Ala.
Crim. App. 1994)).
Conclusion
I would grant Pritchett's petition for a writ of
certiorari (1) to examine the apparent conflict between the
Court of Criminal Appeals' decision in this case and prior
10
1131282
decisions and (2) to maintain uniformity in our cases applying
Rule 14.4.
11 | October 31, 2014 |
f879a675-cc8a-4c8f-82b7-bec47a2a44c2 | Houston County Economic Development Authority v. Alabama | N/A | 1130388 | Alabama | Alabama Supreme Court | Rel: 11/21/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334)
229-0649), of any typographical or other errors, in order that corrections may be made
before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
_________________________
1130388
_________________________
Houston County Economic Development Authority
v.
State of Alabama
Appeal from Houston Circuit Court
(CV-12-900266)
PER CURIAM.
The Houston County Economic Development Authority
("HEDA") appeals from a judgment condemning 691 allegedly
illegal gambling devices, $288,657.68 in cash, and various
documents allegedly related to illegal gambling. We affirm.
1130388
I. Facts and Procedural History
On July 25, 2012, officers from the Houston County
Sheriff's Office, the Alabama Department of Public
Safety,
and
the Office of the Alabama Attorney General executed a search
warrant at a bingo gaming facility known as Center Stage
Alabama ("Center Stage") located in Houston County. As a
result of the search, the State of Alabama confiscated 691
allegedly
illegal
gambling
devices,
which
included
electronic-
gaming devices, computer servers, and gaming tables used for
a
roulette-style
game
called
"Roubingo";
$288,657.68
in
United
States currency; and various documents allegedly related to
illegal gambling. On July 26, 2012, the State instituted a
civil-forfeiture
proceeding
in
the
Houston
Circuit
Court
under
the provisions of § 13A-12-30, Ala. Code 1975, seeking
forfeiture of the items and currency seized during the July 25
search of Center Stage.
On April 16, 2013, HEDA sought, and was granted, the
right to intervene in the forfeiture action. HEDA is the
operator of Center Stage. The electronic-gaming devices used
1
HEDA leases the facility premises from Center Stage
1
Alabama, Inc. Center Stage Alabama, Inc., was initially named
as a defendant in the forfeiture action, but it was dismissed
on the ground that it had no interest in the seized property.
2
1130388
in the operation of Center Stage were leased by HEDA from each
gaming device's respective manufacturer or developer. HEDA
2
purportedly operated Center Stage under a "Class C Special
Permit to Operate Bingo Games" granted by the Houston County
Commission to operate charitable bingo games under Amendment
No. 569 to the Alabama Constitution of 1901. In addition to
3
offering electronic gaming and Roubingo, Center Stage also
offered traditional "paper bingo," live entertainment, and a
bar.
A bench trial was conducted beginning on August 7, 2013.
Over three days, the trial court heard live testimony from
law-enforcement personnel who had participated in the
investigation and search of Center Stage. The testimony of
several witnesses was received via submission of deposition
Two of the developers, Baron America, LLC, and Select
2
Electronic Development, Inc. ("SED"), intervened in the
forfeiture action, each asserting ownership of some of the
equipment seized from Center Stage. Before trial both Baron
America and SED filed formal notice with the trial court
relinquishing their claims to any of the seized property.
Neither Baron America nor SED participated in the trial of
this matter, and they are not parties to this appeal.
Amendment No. 569 was proposed by Act No. 94-606, Ala.
3
Acts 1994, p. 1120, submitted at the November 8, 1994, general
election, and proclaimed ratified January 6, 1995. See Local
Amendment, Houston County, § 1, Ala. Const. 1901 (Off.
Recomp.).
3
1130388
transcripts; one of those witnesses was HEDA's
expert
witness,
who generally testified that the electronic-gaming devices
seized by the State operated in such a way as to comply with
the definition of "bingo" as defined by this Court in previous
cases discussed infra. The parties also offered into evidence
over 50 exhibits, including video of game play at Center Stage
taken by an undercover officer. Following the close of
evidence, the parties submitted posttrial briefs.
On October 17, 2013, the trial court entered an order and
final judgment. The trial court concluded that the devices,
including the electronic devices, computer servers, and
Roubingo tables, constituted illegal gambling devices. The
trial court further concluded that the United States currency
and other seized "gambling paraphernalia" was being used in
connection with the illegal gambling operation. The trial
court ordered that "the gambling devices ... be destroyed or
otherwise disposed of by the State of Alabama" and ordered the
State to deposit the seized currency into the State's General
Fund. The trial court denied HEDA's postjudgment motion, and
HEDA timely appealed.
4
1130388
II. Standard of Review
The trial court issued its judgment following a bench
trial at which evidence was presented ore tenus.
"Our ore tenus standard of review is well settled.
'"When a judge in a nonjury case hears oral
testimony, a judgment based on findings of fact
based on that testimony will be presumed correct and
will not be disturbed on appeal except for a plain
and palpable error."' Smith v. Muchia, 854 So. 2d
85, 92 (Ala. 2003)(quoting Allstate Ins. Co. v.
Skelton, 675 So. 2d 377, 379 (Ala. 1996)).
"'"The ore tenus rule is grounded upon the
principle that when the trial court hears
oral testimony it has an opportunity to
evaluate the demeanor and credibility of
witnesses." Hall v. Mazzone, 486 So. 2d
408, 410 (Ala. 1986). The rule applies to
"disputed issues of fact," whether the
dispute is based entirely upon oral
testimony or upon a combination of oral
testimony and documentary evidence. Born
v. Clark, 662 So. 2d 669, 672 (Ala. 1995).
The
ore
tenus
standard
of
review,
succinctly stated, is as follows:
"'"[W]here the evidence has been
[presented]
ore
tenus,
a
presumption
of
correctness
attends
the
trial
court's
conclusion on issues of fact, and
this Court will not disturb the
trial court's conclusion unless
it
is
clearly
erroneous and
against the great weight of the
evidence, but will affirm the
judgment if, under any reasonable
aspect,
it
is
supported
by
credible evidence."'
5
1130388
"Reed v. Board of Trs. for Alabama State Univ., 778
So. 2d 791, 795 (Ala. 2000) (quoting Raidt v. Crane,
342 So. 2d 358, 360 (Ala. 1977)). However, 'that
presumption [of correctness] has no application when
the trial court is shown to have improperly applied
the law to the facts.' Ex parte Board of Zoning
Adjustment of Mobile, 636 So. 2d 415, 417 (Ala.
1994)."
Kennedy v. Boles Invs., Inc., 53 So. 3d 60, 67-68 (Ala. 2010).
III. Analysis
HEDA raises a number of issues on appeal. First, HEDA
contends that the language of the constitutional amendment
permitting bingo in Houston County, the related implementing
statute, and the county bingo resolution exempt the property
in this case from seizure and forfeiture under Alabama's
general antigambling laws, including § 13A-12-30. Second,
HEDA argues that a bond-validation proceeding related to the
construction and development of what is now Center Stage
conclusively
established
the
legality
of
the
electronic-gaming
operation. Third, HEDA argues that, even if § 13A-12-30
applies, the State failed to meet its burden to establish that
the seized gaming devices were illegal gambling devices and
that the evidence instead demonstrated that the
devices
played
legal bingo as that game has been defined by this Court.
6
1130388
Finally, HEDA argues that there was no evidence indicating
that the seized currency or documents were used in or related
to illegal gambling.
The central issue in this case is whether the gaming
devices seized by the State were illegal gambling devices or
whether they were used to conduct lawful "bingo" games,
authorized by Amendment No. 569. We address that issue first.
A. Whether the seized gaming devices
played the "traditional game of bingo."
Amendment No. 569 authorizes "bingo" to be played in
Houston County under certain circumstances. Like most of
4
Alabama's local constitutional amendments relating to bingo,
Amendment No. 569 does not expressly define the term "bingo."
The implementing legislation for Amendment No. 569, however,
does provide that the term "bingo" refers to "[t]he game,
commonly known as bingo, where numbers or symbols on a card
are matched with numbers or symbols selected at random." §
45-35-150(1), Ala. Code 1975.
Amendment No. 569 provides, in part: "The operation of
4
bingo games for prizes or money by certain nonprofit
organizations and certain private clubs for charitable,
educational, or other lawful purposes shall be legal in
Houston County, subject to any resolution or ordinance by the
county commission as provided by law regulating the operation
of bingo."
7
1130388
This Court repeatedly has held that "bingo" is a form of
lottery prohibited by Ala. Const. 1901, Art. IV, § 65. See,
e.g., Barber v. Cornerstone Cmty. Outreach, Inc., 42 So. 3d
65, 78 (Ala. 2009); City of Piedmont v. Evans, 642 So. 2d 435,
436 (Ala. 1994). We therefore begin our analysis by
emphasizing once again that the various constitutional
amendments permitting "bingo" are exceptions to the general
prohibition of § 65 and that, as such, they must be "narrowly
construed." As we held in Cornerstone:
"'Since
1980,
Alabama
has
adopted
various
constitutional amendments creating exceptions to §
65, specifically allowing the game of bingo under
certain circumstances. See Ala. Const. [1901],
Amendments 386, 387, 413, 440, 506, 508, 542, 549,
550, 565, 569, 599, and 612.' (Emphasis added.)
Thus, the bingo amendments are exceptions to the
lottery prohibition, and the exception should be
narrowly construed."
42 So. 3d at 78 (quoting Opinion of the Justices No. 373, 795
So. 2d 630, 634 (Ala. 2001)).
In addition to this fundamental principle of "narrow
construction," we also recognized in Cornerstone the need,
"except where the language of a constitutional provision
requires otherwise," to "look to the plain and commonly
understood meaning of the terms used in [the constitutional]
8
1130388
provision to discern its meaning." 42 So. 3d at 79.
Furthermore, we noted that, "'[a]lthough a legislative act
cannot change the meaning of a constitutional provision, such
act may throw light on its construction.'" Id. at 79 (quoting
Jansen v. State ex rel. Downing, 273 Ala. 166, 169, 137 So. 2d
47, 49 (1962)). Based on the above-described rules of
construction, together with an examination of persuasive
authority from other jurisdictions, we held in Cornerstone
that the term "bingo" "was intended to reference the game
commonly or traditionally known as bingo." 42 So. 3d at 86.
Furthermore, we identified six elements that characterize the
game of bingo, the list being nonexhaustive:5
As we explained in Ex parte State, 121 So. 3d 337, 356
5
n.9 (Ala. 2013): "In describing the elements of bingo, our
opinion in Cornerstone went only so far as necessary to decide
the case presented there. Nowhere do we take the position that
the elements listed there are exhaustive. See, e.g.,
Cornerstone, 42 So. 3d at 80 ('For purposes of the present
case, the Riley defendants do not contend that a "bingo game"
must be played only on paper cards, and we, therefore, do not
address that issue.')." As we stated even more recently: "We
identified in Cornerstone and we reaffirm today that the game
of 'bingo' as that term is used in local constitutional
amendments throughout the State is that game 'commonly or
traditionally known as bingo,' 42 So. 3d at 86, and that this
game is characterized by at least the six elements we
identified in Cornerstone. Id." State v. Greenetrack, Inc.,
[Ms. 1101313, April 1, 2014] ___ So. 3d ___, ___ (Ala. 2014)
(emphasis added).
9
1130388
"Based on the foregoing, we must conclude that
the term 'bingo' as used in Amendment No. 674[ ] was
6
intended
to
reference
the
game
commonly
or
traditionally known as bingo. The characteristics of
that game include the following:
"1. Each player uses one or more cards
with spaces arranged in five columns and
five rows, with an alphanumeric or similar
designation assigned to each space.
"2.
Alphanumeric
or
similar
designations
are
randomly
drawn
and
announced one by one.
"3. In order to play, each player must
pay attention to the values announced; if
one of the values matches a value on one or
more of the player's cards, the player must
physically act by marking his or her card
accordingly.
"4. A player can fail to pay proper
attention or to properly mark his or her
card, and thereby miss an opportunity to be
declared a winner.
"5. A player must recognize that his
or her card has a 'bingo,' i.e., a
predetermined pattern of matching values,
and in turn announce to the other players
and the announcer that this is the case
before any other player does so.
The constitutional amendment at issue in Cornerstone,
6
Amendment No. 674, is worded similarly to Amendment No. 569
and states, in part: "The operation of bingo games for prizes
or
money
by
nonprofit
organizations
for
charitable,
educational, or other lawful purposes shall be legal in The
Town of White Hall that is located in Lowndes County, subject
to any resolution or ordinance by the town council."
10
1130388
"6. The game of bingo contemplates a
group activity in which multiple players
compete against each other to be the first
to
properly
mark
a
card
with
the
predetermined winning pattern and announce
that fact."
42 So. 3d at 86.
We have since stated that our analysis in Cornerstone is
applicable to the other local bingo constitutional amendments
in this State. State v. Greenetrack, Inc., [Ms. 1101313,
April 1, 2014] __ So. 3d ___ , ___ (Ala. 2014) ("[T]he game of
'bingo' as that term is used in local constitutional
amendments throughout the State is that game 'commonly or
traditionally known as bingo,' 42 So. 3d at 86, and ... this
game is characterized by at least the six elements we
identified in Cornerstone."). Accordingly, the factors
identified in Cornerstone are controlling in determining
whether the gaming devices in this case are legal "bingo
games" permitted by Amendment No. 569.
There are two general types of gaming devices in this
case: the electronic-gaming devices, which make up the
majority of the items seized by the State, and three
"Roubingo" tables. With regard to the electronic devices,
there were four different types of game systems available for
11
1130388
play at Center Stage: Gateway, Firefox, Imperium, and
Megabucks. Each player terminal consisted of a touch-screen
monitor. In order to play the electronic games at Center
Stage, patrons were first required to visit a cashier and
purchase a personal-identification number ("PIN"). The trial
court's order described in detail how the PINs were used to
play the electronic-gaming devices:
"A.
When a person wished to become a player he or
she obtained a[] PIN code by paying cash or
approved funds to an attendant.
"B.
This attendant or cashier entered the amount of
cash as a credit associated with that PIN code
to the network of computers, servers, and
player terminals to each identified machine
category.
"C.
Each person playing the game activated a
particular player terminal or station by
entering his or her PIN code;
"D.
Upon entry of the PIN code, the player terminal
or play station machine automatically displayed
the amount of credit corresponding to the cash
the player provided to the attendant;
"E.
Each individual person decided how much to bet
and then engaged in a game of chance on the
respective machine;
"F.
If the person playing the game won the game,
cash value credits were awarded to the PIN, and
those credits could be used to play another
game on the respective machine or on another
machine in the Center Stage facility;
12
1130388
"G.
If a person playing the machine had a credit
remaining when he or she completed playing all
the games he or she wished to play, they
returned to the attendant and provided the
assigned PIN code. The attendant entered the
code attached to the network and thereby
determined the amount of credit attached to the
PIN. If there was any remaining credit, the
cashier pays the remaining credit to the player
in cash."
According to the testimony at trial, each type of system
played "basically the same." Indeed, the trial court found
that "the different identified electronic Bingo machines had
a commonality in their form of operation." Once a player
logged into a system by entering his or her PIN, the player
selected between a number of different games. All the games
were "basically the same" but displayed different symbols and
backgrounds, depending on the type of game selected. The
player selected the amount he or she intended to wager on each
game. Each game displayed one or more five-by-five column
grids populated with numbers. When the player touched the
"play button" on the screen, the game rapidly generated
numbers that were displayed on the side and/or bottom of the
screen. The game automatically highlighted matching numbers
within the grid and identified winning patterns by displaying
13
1130388
the word "daub" over the numbers forming those patterns. In
order to win the game, the player was required to touch that
part of the screen displaying the word "daub" and then touch
the "bingo button" on the screen. Touching the screen in any
other location had no effect. Failing to touch the "daub" or
"bingo buttons" within a specified time caused the player to
lose the game. The entire game can be played in a matter of
seconds.
The testimony was disputed as to whether players of the
electronic machines were required to compete against one
another. The machines were networked together, and HEDA's
expert testified that the software required that at least two
players be logged on and playing the same game at the same
time in order for the game to function. One of the State's
witnesses, however, testified that, following a search of
Center Stage during which the gaming facility was cleared of
all patrons, he was able to continue to play the electronic
games by himself, without other players. Furthermore, the
evidence established that there was no way for a player to
know how many other players he or she was competing against,
or what players were involved in the same game. Nor would a
14
1130388
losing player be able to identify who had won a particular
game session, and players were not required to orally announce
a win.
The State also seized three "Roubingo" tables from Center
Stage. Roubingo is a table game that combines elements of
roulette and bingo. A Roubingo table is covered in green felt
and has a numbered grid arranged in three long vertical
columns. To play, players must purchase betting chips, which
he or she then wagers by placing the chips on the numbered
grid. A "table boss," who oversees the play of the game,
determines when betting is stopped. Instead of a roulette
wheel, the table is equipped with a ball blower. The "table
boss" activates the ball blower and then selects two balls -–
a "B" ball and an "O" ball. The winning number is determined
by matching the first number of the "B" ball with the last
number of "O" ball. A player whose chips were placed on the
winning number wins additional chips based on the amount of
chips wagered.
The trial court evaluated both the electronic-gaming
devices and the RouBingo tables and concluded that those
"were not the game commonly or traditionally known as bingo."
15
1130388
First, the trial court addressed the electronic machines and
each of the elements described in Cornerstone and reaffirmed
in subsequent cases.
Electronic Machines
As to the first element, which explains that the game is
7
one that is played on "one or more cards" with certain
characteristics, the trial court found as follows:
"A.
BINGO CARDS. [T]here are no cardboard, paper,
or printed Bingo Cards utilized by the players
in playing any of the electronic machines at
the Center Stage facility. HEDA asserts that
an electronic configuration of the Bingo Cards
satisfies
the
initial
requirement
under
Cornerstone that the games are played with
'cards.' The Court finds no Alabama precedent
which adopts this line of reasoning. An
animated portrayal of a Bingo Card does not
satisfy
the
Bingo
Card
requirement
of
Cornerstone."
In its brief to this Court, HEDA argues that the term
"bingo" does not refer to the "traditional ... play of bingo
set out by the trial court in its order." See, e.g., HEDA's
brief, at 33. Among other things, HEDA specifically argues
In its brief, HEDA repeatedly refers to the elements
7
listed in Cornerstone as "factors," perhaps implying that
something less than all of them must be present in order for
a game to qualify as the traditional game of bingo. These
items are more properly referred to as "elements," in that, as
noted, the game commonly or traditionally known as bingo
includes "at least these six elements."
16
1130388
that the trial court erred in finding that the games here did
not qualify as bingo because they were not played on "cards"
that were "cardboard, paper, or printed." HEDA's brief, at
45.
The trial court's description of a game played with
"cardboard, paper, or printed [b]ingo [c]ards" is in fact a
description of the game "commonly or traditionally known as
bingo" and comports with our fundamental holding in
Cornerstone and subsequent cases that the term "bingo" must
be "narrowly construed." Applying this principle, as well as
the other rules of statutory construction discussed above,
and
in the absence of "language of a constitutional provision
requir[ing] otherwise," we reject HEDA's argument that an
8
electronic depiction of a bingo grid will suffice. We
consider, therefore, as did the trial court, that the term
"bingo" does in fact refer to such a card as the court
described. See also Riley v. Cornerstone, 57 So. 3d 704, 734
(Ala. 2010) (recognizing that the traditional game of bingo is
Compare Ex parte State, 121 So. 3d 337 (Ala. 2013)
8
(noting language in Amendment No. 743, Ala. Const. 1901 (now
Local Amendments, Greene County, § 1, Ala. Const. 1901 (Off.
Recomp.)),
applicable
to
Greene
County
that
expressly
provides
for "electronic marking machines," while also noting the
applicability of all the other elements of bingo).
17
1130388
one "that is not played by or within the electronic or
computerized circuitry of a machine, but one that is played on
physical cards (typically made of cardboard or paper)"). In
9
other words, we find no error in the trial court's finding as
to this element.
As to the second element, the trial court found as
follows:
The trial court's understanding is not only consistent
9
with the tenet of "narrow construction," but also finds ample
support in contemporary dictionaries. The American Heritage
Dictionary 240 (2d college ed. 1991), for example, defines a
"card" as a "[a] small, flat, usually rectangular piece of
stiff paper or thin pasteboard." Other definitions include
the following:
"Card: 'A usually rectangular piece of stiff paper,
thin pasteboard, or plastic for various uses.'"
Random House Dictionary of the English Language (2d ed. 1987).
"Card: 'A flat piece of stiff paper or thin
pasteboard, usually rectangular; used as a surface
to write or draw upon, or for other purposes.'"
Oxford English Dictionary 888 (2d ed. 1989).
"Card: 'Printed stiff paper for games.'"
Encarta World English Dictionary (1999).
"Card .... a flat stiff usu. small and rectangular
piece of material (as paper, cardboard, or plastic)
usu. bearing information ..."
Merriam-Webster's Collegiate Dictionary 186 (11th ed. 2009).
18
1130388
"B.
Alphanumeric
or
similar
designations
are
randomly drawn and announced one by one. First
the pace of the game is not controlled by an
actual physical living announcer or caller of
the randomly drawn Bingo Balls. The Bingo
numbers are randomly selected by a computer
chip or a chip located in the mother board of
the server. This computer controls the speed
of the draws, which is by its nature rapid and
faster than any 'caller' could recognize.
Considering the amendment in question on a
narrow basis required by Cornerstone and
precedent cases, this factor is not satisfied
at any of the machine stations identified."
HEDA argues in its brief to this Court that the trial
court erred by finding that the games were not bingo on the
ground that they are not conducted "by an actual physical,
living announcer or caller" who randomly draws and announces,
one-by-one, the applicable alphanumeric designations. We
reject HEDA's argument. First, the second element itself, as
set out above, implicitly contemplates a "caller" of the
nature described by the trial court: "Alphanumeric or similar
designations are randomly drawn and announced one by one." 42
So. 3d at 86. This is particularly true in the context of our
understanding, as expressed in Cornerstone, that the game
commonly or traditionally known as bingo is one that, by its
nature, involves meaningful human interaction. Furthermore,
however, we made specific reference in the fifth element
19
1130388
stated in Cornerstone to the requirement that a player who
believes he or she has won a game of bingo must declare this
fact "to the other players and the announcer." We also noted
in Greenetrack, Inc., that, "in Cornerstone, we explained
that, among other things, the game commonly or traditionally
known as bingo involved 'each player' utilizing a 'card' with
a certain pattern and universe of alphanumeric or other
designations and that each player must respond to the random
drawings of these designations by an 'announcer' by manually
marking this card." ___ So. 3d at ___ (footnote omitted)
(citing Cornerstone, 42 So. 3d at 86). See also, e.g., Bingo
Bank, Inc. v. Strom, 268 S.C. 498, 502, 234 S.E.2d 881, 883
(1977) (explaining that "[t]he game of bingo is played by the
use of a 'Caller' who announces, one at a time, numbers drawn
at random from a container into which has been placed numbered
balls or objects for that purpose").
HEDA argues, as it does in response to many of the trial
court's findings, that "if an actual living, physical
announcer is required, this criterion can never be met by an
electronic game and there would be no reason to apply
Cornerstone to any machine or electronic device." HEDA's
20
1130388
brief, at 47. HEDA misunderstands the central import of our
holding in Cornerstone and the cases decided since then: The
game of bingo is in fact the game "commonly or traditionally
known as bingo," i.e., one that does involve meaningful human
interaction in a group setting, not one that is played within
the circuitry of electronic machinery.
As to the third element in Cornerstone, the trial court
stated:
"C.
Daubing
or
marking
Bingo
cards.
These
electronic devices fail to satisfy the daubing
requirement enumerated in Cornerstone. The
ball draw is rapid and there is no ability for
the individual player to daub between the ball
draws. Further, the machines allow only
collective
daubing
of
identified
winning
patterns not individual daubing of a single
matching number. Indeed daubing is not
required until the game is concluded and a
winning pattern is identified by the machine."
HEDA argues that the trial court erred in focusing on the
fact that "there is no ability for the individual player to
daub between the ball draws." HEDA contends that "nothing in
Cornerstone required daubing between ball draws." HEDA's
brief, at 47. We disagree. As already noted, the second
element
requires
that
the
alphanumeric
or
similar
designations
being used be randomly drawn and "announced one by one." 42
21
1130388
So. 3d at 86. Moreover, the third element, as noted, requires
that players "must pay attention to the values announced." 42
So. 3d at 86. It clearly contemplates that, following each
announcement of a value that matches a value on the player's
card, "the player must physically act by marking his or her
card." 42 So. 3d at 86. Obviously, if a player is to
physically act by marking his or her playing card, he or she
must have time to do so.
As to the fourth element, the trial court found:
"D.
Requirement to pay attention and mark properly.
In a traditional bingo game, the player is
required to pay attention to the ball drawn by
the caller and daubs, paints, or marks matching
numbers on his cardboard card as they occur in
anticipation of achieving a winning card. In
this case the electronic machines or player
stations at Center Stage are controlled by the
computer chips and the electronic animations
which are displayed by the computer and the
computer
predetermines
the
game-winning
pattern. The player does not physically paint
or write a matching number. In fact, the
players interface with the computer does not
require the players to display any particular
attention or skill. This factor of Cornerstone
is not satisfied by the electronic machines."
As to this element, HEDA takes issue with the trial
court's finding that "the player does not physically paint or
write a matching number" (emphasis in HEDA's brief), noting
22
1130388
no such requirement in the fourth element. Clearly, however,
as stated previously in the same paragraph of its findings,
the trial court applied a standard by which a player was
required to "daub[], paint[], or mark[]" matching numbers.
The essence of the trial court's finding as to this element
was that there was no individual, one-by-one,
physical
marking
of numbers by the player as the game progressed, and we find
no error as to this issue.
HEDA
insists,
however,
that
the
games
meet
the
requirement of the fourth element that a player must "pay
attention" and "properly mark" his card or run the risk of
"miss[ing] an opportunity to be declared a winner." 42 So. 3d
at 86. HEDA argues that this requirement is met by the fact
that, at the conclusion of each game, a player is given 30
seconds to physically "press" a numeric pattern that has been
electronically selected, recorded, and displayed to him
or
her
in the span of several seconds. This, however, is not what
was intended by the fourth element, particularly when that
element is read in pari materia with the other elements.
The fourth element contemplates that, as alphanumeric or
other designations are announced one by one, the player must
23
1130388
physically mark his or her card accordingly and "can fail to
pay proper attention or to properly mark his or her card," 42
So. 3d at 86, in response to an announced value at the time it
is announced. The games at issue in the present case do not
contemplate one-by-one physical marking of the values
announced, but, instead, provide by computer a preselected
winning pattern, and give the player the winning pattern in
its entirety, and then give the player 30 seconds in which to
"press" that pattern. As the State notes: "[P]layers did not
have to pay attention to the numbers drawn" and "could only
mark winning patterns after the computer highlighted
them"
for
the players. As the trial court found, players had no
10
control over the recognition of matching numbers or winning
patterns. The computer identified matching numbers and
winning patterns; the player was merely required to touch the
winning numbers after the computer had identified them for the
player. The trial court concluded that a game of this nature
did not qualify as the game of bingo that has been described
by this Court in Cornerstone and subsequent cases. We agree.
Further, the machines made it physically impossible to
10
mark numbers on the grid unless the computer had identified
those numbers as part of a winning pattern.
24
1130388
As to the fifth element announced in Cornerstone, the
trial court found as follows:
"E.
Recognizing a winning card and announcing
before another player. While playing the
machines in question the Player was not
required to verbally announce to the other
group of players that they had a winning
pattern. In all of the games in question the
individual player pushes a button to claim a
prize. The evidence is clear that on these
electronic devices the individual player and
his play [are] controlled by computer software
generated patterns which dictate the game.
Each individual player is not required to
identify any pattern of play to win. The
player is not in control of the recognition
factor. Hence there is no basis under the
dictated play to verbally announce. The
operation of the machines does not change the
Cornerstone requirement that 'a player must
recognize that his or her card has a Bingo.'"
HEDA argues that the trial court incorrectly injected the
requirement of a "verbal announcement" into this element. We
disagree. This, in fact, is exactly what was intended by the
fifth element in Cornerstone, particularly when all six
elements are read in pari materia and in the context of the
fundamental principle that the game at issue is, in fact,
"that game commonly or traditionally known as bingo." 42 So.
3d at 86. Listening for values that are "announced one by
one," physically acting to mark one's card where appropriate
25
1130388
in response to each such announcement, and, upon discerning a
winning pattern of markings, "announc[ing] to the other
players and the announcer that this is the case before any
other player does so," 42 So. 3d at 86, are all part of that
traditional game. Moreover, as discussed below, the sixth
element expressly provides that the game is, by definition, a
"group activity."
In reference to the sixth element, the trial court found
as follows:
"F.
The
group
play
and
player
competition.
Cornerstone requires a group competition where
a number of players are competing against each
other in order to be first to mark their card
and 'Bingo.' The traditional game of bingo is
a group experience and it is easy to determine
through visual observation that the group is
playing one against another. There is no
testimony or evidence in this case that proves
this type of activity. Indeed, it is clear
that a single player can win the game without
other competitors being physically present.
While these machines are networked through a
common
computer
interface
there
is
no
demonstrative
evidence
that
players
are
competing one against another. Indeed it may
be a software configuration in these machines
would prevent anything other than solitary
play. The designer of the computer software in
question was the person who identified how
these games were to be played. But, there is
no evidence that the group experience was
contemplated in its operation."
26
1130388
HEDA takes issue with the reference by the trial court to
a player's ability "to determine through visual observation
that the group is playing one against another." Considering
this language in context, we are clear to the conclusion that
the trial court meant nothing more than what this Court itself
intended when it stated in the sixth element identified in
Cornerstone that "[t]he game of bingo contemplates a group
activity in which multiple players compete against each other
to be the first to properly mark a card with the predetermined
winning pattern and announce that fact." 42 So. 3d at 86.
Indeed, the full text of the sentence in which appears the
allegedly offending language of the trial court is as follows:
"[T]he traditional game of bingo is a group experience and it
is easy to determine through visual observation that the group
is playing one against the other." As the State argues, in
the games at issue "players race only 'against the computer
clock,' not against other players. Merely linking various
terminals through a central server is not sufficiently like
the traditional game of bingo to satisfy the sixth [element]."
We agree and find nothing in the trial court's conclusions as
to the sixth element warranting reversal.
27
1130388
In addition to the foregoing, HEDA argues that the State,
in order to satisfy its burden of proof in this action, was
required to offer expert testimony concerning the
operation of
the electronic-gaming devices. We disagree. The State
offered ample, and mostly undisputed, evidence demonstrating
the actual game play on the electronic devices at issue. That
testimony included direct testimony from agents who
had
played
the electronic devices and who had personal knowledge
concerning how the games played as well as video footage of
the games being played. No expert technical testimony as to
11
the specific operation of the circuitry or software was
necessary to support the trial court's conclusions that the
devices in question did not play the "game commonly or
traditionally known as bingo."
The trial court concluded its order as follows:
HEDA also argues that there was no evidence indicating
11
that the computer servers seized by the State constituted
illegal gambling devices. The record, however, supports the
trial court's conclusion that the computer servers seized in
this case were related to the operation of the gaming
machines. HEDA's own expert testified that servers were an
integral part of the networked gaming systems. The testimony
indicated that, as the servers at Center Stage were unplugged,
the terminal screens in the gaming area began powering down or
displayed a message that they were "searching for the server."
Furthermore, the servers bore labels such as "Bingo I."
28
1130388
"It is clear that in this case the test factors
identified in the Cornerstone case have not been
fulfilled. ... Clearly the games that the players
play at the machines at issue are not the same as
the traditional game known as Bingo. Not only did
they not qualify with the Cornerstone test, they
place the computer-generated game into an area where
the inception and termination of the game is not
shown to the player. Each of the individual players
has no knowledge of their competitors and no ability
to identify any other player that might be competing
against them. There is no way of verifying another
players' bingo victory and essentially all human
skill has been eliminated from this animated version
of the game. The devices before this Court are not
the ... traditional game known as 'Bingo' as defined
by the Supreme Court."
"[T]he Constitution is not to have a narrow or technical
construction, but must be understood and enforced
according to
the plain, common-sense meaning of its terms." Hagan v.
Commissioner's Court of Limestone Cnty., 160 Ala. 544, 554, 49
So. 417, 420 (1909). As has been noted, "'[o]ur peculiar
security is in the possession of a written Constitution. Let
us not make it a blank paper by construction.'" Cole v.
Riley, 989 So. 2d 1001, 1017 (Ala. 2007) (Bolin, J.,
dissenting and quoting Thomas Jefferson's letter to Wilson C.
Nicholas, September 7, 1803, 10 The Writings of Thomas
Jefferson 419).
"'Laws are made for men of ordinary
understanding, and should, therefore, be
29
1130388
construed by the ordinary rules of common
sense. Their meaning is not to be sought
for in metaphysical subtleties, which may
make anything mean everything or nothing,
at pleasure.'"
Id. (quoting Jefferson's letter to Judge William
Johnson,
June
12, 1823, 15 The Writings of Thomas Jefferson 449-50).
Further, as observed in Fraternal Order of Eagles
Sheridan Aerie No. 186, Inc. v. State, 126 P.3d 847, 859 (Wyo.
2006): "'When we ascend to the bench we do not discard the
ordinary
common
sense
observations,
experiences
and
intelligence of common men.'" (Quoting 37 Gambling Devices v.
State, 694 P.2d 711, 717-18 (Wyo. 1985).)
In accordance with the foregoing, we reiterate today that
the game traditionally known as bingo is not one played by or
within an electronic or computerized machine, terminal, or
server, but is one played outside of machines and electronic
circuitry. It is a group activity, and one that requires a
meaningful measure of human interaction and skill. This
includes attentiveness and discernment and physical, visual,
auditory, and verbal interaction by and between those persons
who are playing and between the players and a person commonly
known as the "announcer" or "caller," who is responsible for
30
1130388
calling out the randomly drawn designations and allowing time
between each call for the players to check their cards and to
physically mark them accordingly. In accordance with the
previously stated list of characteristics, each player
purchases and plays the game on one or more cards that, in a
county such as Houston County (in which the amendment does not
expressly permit "electronic marking machines"), are not
electronic devices or electronic depictions of playing
surfaces but are actual physical cards made of cardboard,
paper, or some functionally similar material that is flat and
is preprinted with the grid and the designations referenced
above.
Roubingo Tables
We turn now to the trial court's ruling that Roubingo did
not constitute the traditional game known as bingo. The trial
court held:
"In
addition
to
the
electronic
machines
found
at
the Center Stage facility there were also other
gambling devices utilized at the facility. One of
these devices was a game identified as 'Roubingo.'
These games were constructed in the form of a table
configured in a similar fashion as the game of
roulette; however, in this case the player purchased
chips from a 'table boss' and waged a bet by placing
the chips on a designated portion of the table.
When all bets are made the dealer draws two balls
31
1130388
from a container blower located on the table. Only
these two balls are drawn and that determines the
winner. The determination of the prize is
designated by the call and numeric value of the
number where the player has deposited his chips,
that is whether the number of the B ball and the
last number of the O ball correspond with the wager
made by the player. Roubingo cannot be construed as
the traditional Bingo game. Bingo contemplates
drawing of a number of balls to determine a winning
pattern. Playing this game is limited to a
selection of two numbers. There is no physical
marking or daubing in this specific game. Any
identification or marking occurs when the chips are
actually placed on the table in the respective
number designation. None of the elements of
Cornerstone are complied with by this device. It is
illegal gambling cloaked in a 'Bingo' costume. This
game is not Bingo as the Supreme Court has defined
that game."
HEDA argues on appeal that the Roubingo tables seized by
the State in fact played the traditional game of bingo as
defined by this Court in Cornerstone and that the trial
court's decision is contrary to the great weight of the
evidence presented at trial. We disagree. Based on our
thorough review of the evidence and the testimony presented at
trial, the trial court correctly ruled that the gaming devices
at issue in this case did not play the game "commonly or
traditionally known as bingo." 42 So. 3d at 86.
12
We do not mean to be understood as directly adopting the
12
analysis of the trial court's order as to this issue.
32
1130388
B. Whether HEDA's property was exempt from forfeiture.
Next, we turn to HEDA's argument that its property was
exempt from the seizure and forfeiture provisions
of
Alabama's
generally applicable antigambling laws, § 13A-12-20 et seq.,
Ala. Code 1975. Amendment No. 569 provides that the Houston
County Commission "may promulgate rules and regulations for
issuing permits or licenses and for operating bingo games
within the county jurisdiction." On February 8, 2010, the
Houston County Commission promulgated a resolution regulating
the operation of bingo in Houston County. That resolution
defined lawful "Bingo Equipment and Supplies" to include
equipment used for playing electronic bingo:
"'Bingo Equipment and Supplies' shall mean any
electronic or mechanical equipment, machine or
device, or computer or other technologic hardware or
device, (i) which is installed, or is to be
installed, at a bingo facility and (ii) which is
used, or can be used to play Bingo as herein
defined. Bingo Equipment and Supplies includes any
machine, device or hardware that assists a player in
the
playing
of
Bingo
Games,
broadens
the
participation levels in a common game and includes
all of the ancillary Bingo supplies. Examples of
Bingo Equipment and Supplies include, but are not
limited to, dispensers, readers, electronic player
stations, player terminals, central computer servers
containing random number generators and other
processing capabilities for remote player terminals,
electronic consoles capable of providing game
results in different display modes, telephones and
33
1130388
telephone circuits, televisions, cables and other
telecommunication circuits, and satellites and
related transmitting and receiving equipment. Bingo
Equipment shall not be deemed to be for any purpose
a 'gambling device' or 'slot machine' within the
meaning of the Code of Alabama 1975, Sections 13A-
12-20(5) and (10) or any other provision of law,
whether now in effect or hereafter enacted."
Resolution 10-10 (2010).
The resolution
further required that
each electronic-gaming-device terminal operated under the
resolution must bear an annually renewable "machine-bingo
stamp." HEDA notes that each of the electronic-gaming devices
at issue in this case bore a "machine-bingo stamp" paid for by
HEDA and issued by Houston County.
HEDA calls our attention to the following portion of the
implementing legislation enacted by the legislature:
"Any other
law providing a
penalty
or
disability
on a person who conducts or participates in bingo
games, who possesses equipment used in conducting
bingo, who permits bingo to be conducted on his or
her premises, or who does other acts in connection
with bingo, shall not apply to the conduct when done
pursuant to this act or rules promulgated under this
act."
§ 45-35-150.15, Ala. Code 1975. HEDA contends that, because
the electronic devices seized by the State were "equipment
used in conducting bingo ... pursuant to ... rules promulgated
under this act," the equipment was not subject to forfeiture
34
1130388
under § 13A-12-30. Accordingly, HEDA argues, the State's
forfeiture action under § 13A-12-30 failed to state a claim
upon which relief could be granted and should have been
dismissed. We disagree.
Section 45-35-150.15 exempts persons from penalties
associated with the operation or participation in "bingo
games" as authorized by Amendment No. 569. In determining
what constitutes a lawful "bingo" game under Amendment No.
569, this Court applies the analysis originally
articulated
in
Cornerstone
and
summarized
in
Part
III.A
above.
Notwithstanding a resolution to the contrary, to the extent
that a gaming device does not meet the definition of bingo as
authorized by Amendment No. 569, it remains a lottery
prohibited under § 65 of the Constitution and, consequently,
punishable under Alabama's generally applicable antigambling
laws. In this case we affirm the trial court's holding that
the gaming devices seized from Center Stage do not play the
game of "bingo" as permitted by Amendment No. 569.
Accordingly, the property in question was subject to
forfeiture under § 13A-12-30.
C. Whether the use of electronic-gaming devices in
Houston County has been "judicially validated."
35
1130388
Next, HEDA argues that "the use of electronic devices for
playing bingo in Houston County has been judicially
validated." HEDA's brief, at 29. Specifically, HEDA refers
to a bond-validation proceeding related to the issuance of
revenue bonds for the purpose of raising money to fund the
multi-use
entertainment
complex
known
as
the
"Country
Crossing
Project" in Houston County, which would eventually include
Center Stage. In 2008, the Houston County Commission
established a public corporation known as the Cooperative
District of Houston County for the purposes of issuing revenue
bonds to develop the Country Crossing Project. A key
component of the planned Country Crossing Project was an
electronic-gaming center, and the revenue bonds were to be
repaid, in part, by a special fee on each "charity bingo
machine" operated within the project.
13
The
Cooperative
District
filed
a
bond-validation
petition
in the Houston Circuit Court pursuant to § 11-81-221, Ala.
Code 1975. That statute allows a public corporation to
The bond-validation order provided that the bonds would
13
be payable, in part, from "the Entertainment Fees to be
imposed by the Cooperative District on each and every charity
bingo machine operated within the Cooperative District at a
rate of $1,312 per machine per year."
36
1130388
"determine its authority to issue ... obligations and the
legality of all proceedings had or taken in connection
therewith," and "the validity of the tax or other revenues or
means provided for the payment thereof." In October 2009, the
Houston Circuit Court entered a final judgment confirming the
validity and enforceability of the bonds issued for the
Country Crossing Project. Upon the entry of a judgment
validating the issuance of obligations issued under § 11-81-
220 et seq., Ala. Code 1975, Alabama law provides:
"[T]he judgment of the circuit court validating and
confirming the issuance of the obligations shall be
forever conclusive as to the validity of such
obligations against the unit issuing them and
against
all
taxpayers
and
citizens
of
each
organizing subdivision, and the validity of such
obligations or of the tax, revenues or other means
provided for their payment and of any pledge,
covenant or provision for the benefit of said
obligations, to the extent that the validity of any
such pledge, covenant or provision shall have been
presented to the court and validated by its
judgment, shall never be called in question in any
court in this state."
§ 11-81-224, Ala. Code 1975.
Center Stage was constructed as part of the Country
Crossing Project. HEDA therefore contends that the Houston
Circuit Court's order validating the bonds used to finance the
Country Crossing Project and approving the repayment of the
37
1130388
bonds from fees imposed on "each and every charity bingo
machine" served as a "forever conclusive" judicial validation
of HEDA's electronic-gaming operation. We disagree.
The final judgment in the bond-validation proceeding did
not in any way decide the central legal issue before the trial
court in this case -– the legality of the specific gaming
devices operated by HEDA and seized by the State. The purpose
of the bond-validation proceeding was to put to rest any
question affecting the validity of the bonds. The legality of
certain gaming machines or devices was plainly not a subject
of those proceedings. Accordingly, we reject HEDA's
contention
that
the
judgment
in
the
bond-validation
proceeding
is in any way dispositive of any issue in this case.14
D. Whether the currency and gambling records were
proper subjects of the forfeiture petition.
Finally, HEDA argues that the trial court erred in
granting the State's petition for forfeiture of the currency
and gaming records seized from Center Stage. First, HEDA
See also Redtop Market, Inc. v. State, 66 So. 3d 204
14
(Ala. 2010) (holding that a court lacks subject-matter
jurisdiction to enter a judgment in a civil action declaring
certain types of gambling devices legal so as to preempt
future law-enforcement efforts that might be directed toward
such machines).
38
1130388
argues that the State failed to prove that the currency seized
had been used as bets or stakes in an illegal gambling
activity. The trial court held:
"All of the currency and gambling paraphernalia
seized from the identified facilities at Center
Stage are clearly connected with the overall
gambling activity at the facility. The currency in
question was confiscated from cash registers,
cabinets and drawers in the cashiers area; the
vault, two [automatic-teller machines] and in an
office area. Agent Borland, the officer in charge
of the currency seizure, carefully detailed the
location, amounts and areas where currency was
located. It affirmatively appears from the
testimony that the currency in issue is clearly
attributable to the illegal gambling at Center
Stage."
Based on the record before us, the trial court's conclusion is
not "contrary to the great weight of the evidence."
Likewise, the record supports the forfeiture of the
documents and records seized from Center Stage. The State
seized records related to winnings, advertising contracts,
documents about contracts and pay rates for gaming systems,
letters concerning Center Stage's tax status and operations,
profit and loss statements, and federal W-2G forms used to
report winnings to the Internal Revenue Service. The State
also seized computers that contained electronic-gambling
records. Section 13A-12-30 provides for the forfeiture of
39
1130388
gambling records possessed in connection with an illegal
gambling operation. Because we are affirming the trial
court's judgment holding that the activity at Center Stage
constituted illegal gambling, the records related to that
activity are also subject to forfeiture.
IV. Conclusion
On the basis of the record before, we conclude that the
trial court did not err in ordering the forfeiture of the
items seized by the State from Center Stage. The judgment of
the trial court is affirmed.
AFFIRMED.
Stuart, Bolin, Parker, Murdock, Main, Wise, and Bryan,
JJ., concur.
Moore, C.J., and Shaw, J., concur in the result.
40 | November 21, 2014 |
fa00ea6f-8c39-492a-b341-5ed6f1da4a57 | Alabama v. Ellis | N/A | 1121390 | Alabama | Alabama Supreme Court | REL:09/30/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
SPECIAL TERM, 2014
____________________
1121390
____________________
Ex parte State of Alabama
PETITION FOR WRIT Of MANDAMUS
(In re: State of Alabama
v.
Andre Lamon Ellis)
(Pike Circuit Court, CV-12-238)
BOLIN, Justice.
The State of Alabama petitions this Court for a writ of
mandamus directing Judge Jeffrey W. Kelley of the Pike Circuit
1121390
Court to vacate his May 17, 2013, order granting Andre Lamon
Ellis's motion for a new trial. We deny the petition.
I. Facts and Procedural History
On March 26, 2012, M.B. was allegedly raped in her
residence located in Hunter's Mountain Mobile Estates. M.B.
identified Ellis in a police photographic lineup as the
perpetrator. Although there was no forensic or physical
evidence linking Ellis to the alleged rape, a video from a
security camera located at Hunter's Mountain on that day
showed Ellis's vehicle entering Hunter's Mountain at 4:41 p.m.
and leaving at 4:46 p.m. Ellis, in fact, lived in Hunter's
Mountain. Following the alleged rape, M.B. went to the
hospital with vaginal injuries requiring multiple surgeries.
M.B. initially reported to her doctor that she had fallen on
a "door stop" in her bathroom but later stated that she had
been raped.
On January 18, 2013, Ellis was convicted of rape in the
first degree regarding Q.C., rape in the first degree
1
Q.C. also lived in Hunter's Mountain and claimed to have
1
been raped by Ellis on the same day M.B. alleged that she was
raped . Although there were separate indictments charging
Ellis with the rapes of both M.B. and Q.C., the cases were
tried jointly.
2
1121390
regarding M.B., and burglary in the second degree regarding
the residence of M.B. Ellis was sentenced to 85 years in
prison. On March 25, 2013, Ellis moved for a new trial,
alleging, among other things, that the State had failed to
disclose crucial evidence in violation of Brady v. Maryland,
373 U.S. 83 (1963). The trial court ordered the State to
disclose in camera certain evidence and, after conducting a
hearing, entered an order dated May 17, 2013, granting Ellis's
motion for a new trial based on the State's failure to turn
over evidence in violation of Rule 16, Ala. R. Crim. P., and
in violation of the principles of law set forth in Brady v.
Maryland. The State filed a motion for reconsideration, on
which the trial court did not rule.
On June 24, 2013, the 38th day after the trial court
ordered a new trial, the State filed a petition for a writ of
mandamus with the Court of Criminal Appeals pursuant to Rule
21, Ala. R. App. P. In its petition, the State sought a writ
directing the trial court to set aside its order granting
Ellis's motion for a new trial. The State had relied on Rule
4(b)(1), Ala. R. App. P., to determine that it had 42 days
from the date of the order to file its petition.
3
1121390
On August 20, 2013, the Court of Criminal Appeals entered
an order dismissing the State's petition after concluding that
it was not filed within a presumptively reasonable time and
that the State had failed to include a "statement of
circumstances constituting good cause" as to why the petition
had been filed outside the presumptively reasonable time. See
Rule 21(a)(3), Ala. R. App. P. The Court of Criminal Appeals
determined that the presumptively reasonable time for the
State to file its petition was seven days from the date of the
trial court's ruling that was subject to the petition. See
Rule 15.7, Ala. R. Crim. P. The State did not file an
application for rehearing with the Court of Criminal Appeals.
State v. Ellis (No. CR-12-1514, Aug. 20, 2013), ___ So. 3d ___
(Ala. Crim. App. 2013) (table).
On August 30, 2013, the State filed its petition for a
writ of mandamus in this Court pursuant to Rule 21(e), Ala. R.
App. P., seeking de novo review of the Court of Criminal
Appeals' dismissal of its original petition, as well as a writ
directing the trial judge to vacate its order granting Ellis's
motion for a new trial. The State included in its petition a
mandatory statement of circumstances constituting good cause
4
1121390
for this Court's consideration. This Court issued an order
dismissing the State's petition as untimely.
On January 27, 2014, the State filed an application for
a rehearing complaining that this Court's order dismissing its
petition for a writ of mandamus failed to "address whether the
State's petition was untimely filed with the Supreme Court or
if the State's original Petition for Writ of Mandamus filed
with the Alabama Court of Criminal Appeals was untimely."
Specifically, the State argued that its original petition
filed with the Court of Criminal Appeals was not untimely
because, it claimed, it did not seek review of a pretrial
order pursuant to Rule 15.7, Ala. R. Crim. P., but rather
sought relief from a posttrial order granting Ellis's motion
for a new trial.
On March 31, 2014, this Court granted the State's
application for a rehearing, and on June 9, 2014, we ordered
the parties to file answers and briefs. We also ordered the
parties to include in their briefs a discussion as to "whether
[this] Court is vested with jurisdiction and whether the
proper time standard for submitting [the State's petition to
5
1121390
the Court of Criminal Appeals] is pursuant to Rule 4(b), Ala.
R. App. P., or Rule 15.7(b), Ala. R. Crim. P."
II. Standard of Review
"Mandamus is an extraordinary remedy and will be
issued only when there is '(1) a clear legal right in
the petitioner to the order sought; (2) an imperative
duty upon the respondent to perform, accompanied by
a refusal to do so; (3) the lack of another adequate
remedy; and (4) properly invoked jurisdiction of the
court.' Ex parte Alfab, Inc., 586 So. 2d 889, 891
(Ala. 1991). 'A decision of a court of appeals on an
original petition for writ of mandamus or prohibition
or other extraordinary writ (i.e., a decision on a
petition filed in the court of appeals) may be
reviewed de novo in the supreme court....' Rule
21(e)(1), Ala. R. App. P."
Ex parte Sharp, 893 So. 2d 571, 573 (Ala. 2003).
III. Discussion
A. Applicable Time: Rule 15.7, Ala. R. Crim. P., or Rule
4(b), Ala. R. App. P.?
Rule 21(a)(3), Ala. R. App. P., provides that "[t]he
presumptively reasonable time for filing a petition [for a
writ of mandamus] seeking review of an order of a trial court
or of a lower appellate court shall be the same as the time
for taking an appeal." The State maintains that, in dismissing
its original petition for a writ of mandamus as untimely, the
Court of Criminal Appeals assumed that the State was taking an
appeal from a pretrial order pursuant to Rule 15.7(b), Ala. R.
6
1121390
Crim. P., and that the court therefore improperly held that
the 7-day period in Rule 15.7 for filing its petition applied
instead of the 42-day period in Rule 4(b), Ala. R. App. P. We
agree.
Rule 15.7, Ala. R. Crim. P., governs pretrial appeals by
the State; it provides, in pertinent part:
"(a) Generally. In any case involving a felony,
a misdemeanor, or a violation, an appeal may be taken
by the state to the Court of Criminal Appeals from a
pre-trial order of the circuit court (1) suppressing
a confession or admission or other evidence, (2)
dismissing an indictment, information, or complaint
(or any part of an indictment, information, or
complaint), or (3) quashing an arrest or search
warrant. Such an appeal may be taken only if the
prosecutor certifies to the Court of Criminal Appeals
that the appeal is not brought for the purpose of
delay and that the order, if not reversed on appeal,
will be fatal to the prosecution of the charge."
(Emphasis added.)
Rule 15.7(b) provides that the State's notice of appeal
from such a pretrial order shall be filed "within seven (7)
days after the order has been entered, but in any case before
the defendant has been placed in jeopardy under established
rules of law." It is clear that the State in this case was
not taking an appeal from a pretrial order "suppressing a
confession or admission or other evidence"; "dismissing an
7
1121390
indictment, information, or complaint"; or quashing an arrest
or search warrant" –- any of which would require the State to
certify that the order appealed from, if not reversed, would
be fatal to the prosecution of the charge. Rather, the State
was seeking review of a posttrial order granting a new trial
following a jury verdict; accordingly, the State could not
have certified that the "order, if not reversed on appeal,"
would be fatal to the prosecution of the charge. Because the
State did not seek review of a pretrial order, but rather of
a posttrial order, we conclude that the State's mandamus
petition in the Court of Criminal Appeals, filed on the 38th
day after the trial court's ruling, was filed within a
reasonable time pursuant to Rule 21, Ala. R. App. P., and Rule
4(b), Ala. R. App. P. Therefore, its petition for a writ of
mandamus filed in this Court within 14 days of the denial of
the State's application for rehearing by the Court of Criminal
Appeals is timely.
Rule 4(b), Ala. R. App. P., contemplates appeals by the
State when authorized by statute or rule:
"When an appeal by the state as of right is
authorized by statute or rule, the notice of appeal
shall be filed in the trial court within 42 days (6
weeks) after the decision, order, or judgment
8
1121390
appealed from; except that any pre-trial appeal by
the state shall be taken within the time allowed by
[Rule 15.7, Ala. R. Crim. P.]."2
(Emphasis added.) The State does not dispute that it has no
right to appeal from an order granting a new trial.
B. Grounds for Issuance of the Writ
The State maintains that, in the absence of a right to
appeal, a writ of mandamus is the appropriate vehicle by which
to challenge the trial court's ruling granting a new trial.
Specifically, the State asserts that this Court should grant
mandamus review because, it says, in granting a new trial in
this case the trial court exceeded its discretion and usurped
the factfinding province of the jury. In Ex parte Nice, 407
So. 2d 874, 879 (Ala. 1981), this Court held that "[m]andamus
cannot be used as a substitute for appeal, when no appeal is
authorized by law or court rule, but mandamus can be used to
prevent a gross disruption in the administration of criminal
The State's power to appeal from an adverse ruling of the
2
trial court is authorized by § 12-12-70(c), Ala. Code 1975 (an
appeal from a judgment holding a statute or ordinance
invalid); § 12-22-90(b), Ala. Code 1975 (an appeal from an
order granting a petition for a writ of habeas corpus); § 12-
22-91, Ala. Code 1975 (an appeal when an act of the
legislature under which an indictment or information is
proferred is held by a lower court to be unconstitutional);
and by Rule 15.7, Ala. R. Crim. P. (providing that appeals may
be taken from certain pretrial orders).
9
1121390
justice." (Emphasis omitted.) This Court in Ex parte Nice
concluded that the Court of Criminal Appeals was presented
with exceptional circumstances justifying its issuance of a
writ of mandamus where the trial court had granted a new trial
based solely on its belief that a witness's testimony was
"dubious," which, the Court held, amounted to a usurpation of
power. This Court cautioned, however, that "[o]ur holding
that mandamus is appropriate ... is not an invitation to the
State to invoke supervisory writs to seek review of lower
court rulings which are adverse. We state again that only the
rarest of circumstances merit intervention by mandamus." 407
So. 2d at 882 (emphasis omitted).
The threshold issue for our review in this case is whether
the State has presented this Court with rare and/or
exceptional circumstances justifying the issuance of a writ
directing the trial court to set aside its order granting
Ellis's motion for a new trial. We conclude that it has not.
It is well settled that
"[i]n cases such as this one, where the court
grants a motion for new trial for grounds other than,
or in addition to, a finding that the verdict is
against the great weight or preponderance of the
evidence, our review is limited:
10
1121390
"'It is well established that a ruling on a
motion for a new trial rests within the
sound discretion of the trial judge. The
exercise of that discretion carries with it
a presumption of correctness, which will
not be disturbed by this Court unless some
legal right is abused and the record
plainly and palpably shows the trial judge
to be in error.'
"Kane v. Edward J. Woerner & Sons, Inc., 543 So. 2d
693, 694 (Ala. 1989) (citation omitted). See also,
Land & Assoc., Inc. v. Simmons, 562 So. 2d 140, 148
(Ala. 1989)."
Curtis v. Faulkner Univ., 575 So. 2d 1064, 1065 (Ala. 1991).
Being mindful of the presumption of correctness that
attaches to a trial court's ruling on a motion for a new
trial, we quote in its entirety the trial court's May 17,
2013, order, which is clearly the product of careful thought
and consideration:
"Prior to the hearing [on Ellis's motion for a
new trial,] this court on March 27, 2013, entered an
order for the State to determine if there are any
interviews or statements taken by law enforcement
regarding the investigation and to provide the court
copies under seal [of] the following:
"1. Copy of a transcript of any interview
or statement that was recorded as a part of
law enforcement's investigation into this
case
that
has
not
previously
been
disclosed.
"2. Copy of all notes, files or summaries
of any interviews or statements taken by
11
1121390
law
enforcement
that
has
not
been
previously disclosed.
"3.
Any
exculpatory
or
impeachable
evidence, statements or interviews not
previously produced.
"In response to said Order the State produced in
camera the following:
"A. Copies of transcript of the March 27,
2012, and May 23, 2012, recorded interviews
with victim M.B.
"B. Copy of the transcript of the interview
with witness M.M. made May 15, 2012.
"C. A CD which contained interviews of
M.B., M.M. and J.H.
"This court made a finding that the two (2)
statements of M.B. and the statement of J.H.
contained exculpatory and/or impeachable evidence
that should have been disclosed and ordered that the
State provide [Ellis] with copies prior to the
hearing on the motion for new trial.
"Prior to the hearing the State provided
additional information in camera for the court to
review. The information provided included a case
summary by Investigator Brian McLendon, an affidavit
by Lee Barnes of the Troy Police Department seeking
a search warrant for telephone records of S.L.F. and
other documents.
"[Charges and Convictions]
"[Ellis] was indicted by a Pike County Grand
Jury in Count I of rape in the first degree regarding
victim Q.C., Count II of rape in the first degree
regarding victim M.B. and burglary in the 2d degree
regarding the residence of M.B.
12
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"A jury returned verdicts of guilty on all three
(3) offenses. [Ellis] was sentenced to eighty five
(85) years in prison on each rape offense and twenty
(20) years on the burglary 2d degree. The sentences
were to run concurrently with each other.
"[Applicable Law]
"The suppression by the prosecution of evidence
favorable to an accused violates due process where
the evidence is material to guilt or to punishment,
irrespective of the good faith or bad faith of the
prosecution. Brady v Maryland, 373 U.S. 83, 83 S.Ct.
1994, 10 L. Ed. 2d 215 (1963). The Supreme Court in
Brady stated that the purpose of sanctions for
suppression of favorable evidence is not to punish
society for misdeeds of a prosecutor, but instead is
the avoidance of an unfair trial to an accused.
Society not only wins when the guilty are convicted
but when criminal trials are fair; our system of
administration of justice suffers when any accused is
treated unfairly. The court in Brady made reference
to an inscription on the walls of the Department of
Justice which reads, 'The United States wins its
point when Justice is done its citizens in the
courts.'
"The U.S. Supreme Court in Giglio v. [United
States], 405 U.S. 150, 92 S. Ct.763, 31 L. Ed. 2d 104
(1972) rejected any distinction between impeachment
and exculpatory evidence and held that impeachment
evidence as well as exculpatory evidence falls within
the 'Brady Rule.'
"Evidence is favorable to an accused if such
evidence, if disclosed and used effectively, may make
the
difference
between
conviction
and
acquittal.
Nape
v. Illinois, 360 U.S. 264, 79 S. Ct. 1173, 3 L. Ed.
2d 1217 (1959).
"A jury's estimate of the truthfulness and
reliability
of
a given witness
may
well
be
13
1121390
determinative of guilt or innocence and it is upon
subtle factors that a defendant's life or liberty may
be deprived. United States v. Bagley, 473 U.S. 667,
105 S. Ct. 3375, 87 L. Ed. 2d 481 (1985). When the
reliability of a witness may well determine guilt or
innocence,
nondisclosure
of
evidence
affecting
credibility falls within the 'Brady Rule.' Giglio
supra; Bagley supra.
"The prosecution has a duty to disclose
impeachment
and
exculpatory
(favorable)
evidence
even
if there has been no request by the accused. [United
States] v. Agurs, 427 U.S. 97, 96 S. Ct. 2392; 49 L.
Ed. 2d 342 (1976).
"The 'Brady Rule' encompasses evidence 'Known
only to the police and not to the prosecutor.' Kyles
v. Whitley. 514 U.S. 419, 115. S. Ct. 1555, 131 L.
Ed. 2d 490 1995).
"The U.S. Supreme Court held in Kyles that a
Brady violation occurred by the failure to disclose
that a witness had tentatively picked at a lineup
someone other than the defendant as the killer and
was told by law enforcement that the wrong person was
identified.
"Brady requires the prosecution to produce
evidence that someone else may have committed a
crime. Nicks v. State, 783 So. 2d 895 (Ala. Crim.
App. 1999), quoting Jarrell v. Balkcom, 735 F.2d.
1242, (11th Cir. 1984). Nondisclosure of exculpatory
evidence bearing on the identity of the perpetrator
has often led courts to hold that the principles of
Brady were violated. See Patton v State, 530 So. 2d
886 (Ala. Crim. App. 1988). A telephone call from an
alleged eyewitness who implicated someone other than
the accused that was not disclosed is a Brady
violation. Hall v. State, 625 So. 2d 1162 (Ala. Crim.
App.
1993).
Pretrial
statements
of
witnesses
implicating someone else other than accused or
containing
details
inconsistent
with
witnesses'
trial
14
1121390
testimony would be favorable and a Brady violation.
Jefferson v. State, 645 So. 2d 313 (Ala. Crim. App.
1994); Martin v State, 839 So. 2d 665 (Ala. Crim.
App. 200l).
"Failure of prosecution to disclose a 'be on the
lookout'
(BOLO)
containing
a
witness's
description
of
the
perpetrators
violated
the
prosecution's
obligation under Brady to inform defendant of
impeachment evidence, where the BOLO description
differed significantly from the Defendant's actual
appearance. Martin v. State, 839 So. 2d 665 (Ala.
Crim. App. 2001).
"To prove a Brady violation, a defendant must
show:
"1.
That
the
prosecution
suppressed
evidence.
"2. That the evidence was of a character
favorable to the defense.
"3. That the evidence was material (or the
defendant was prejudiced).
"Jefferson v. State, 645 So. 2d 313 (Ala. Crim. App.
1994); Ex parte Cannon, 578 So. 2d 1089 (Ala. 1991).
"For a Brady violation, the suppression of
evidence need not have been made knowingly or
negligently by the government. [United States] v.
Pelisamen, 641 F.3d 399 (9th Cir. 2011).
"In determining whether the suppressed evidence
was material for a Brady violation, the court shall
consider the cumulative effect of all suppressed
evidence, and shall not consider each item of
evidence individually. Kyles v. Whitley, 514 U.S.
419, 115 S. Ct. 1555, 131 L. Ed. 2d 490 (1995).
15
1121390
"Evidence is material as to the 'Brady Rule' if
there is a reasonable probability that had the
evidence been disclosed to the defense, the results
of the proceeding would have been different. A
'reasonable probability' is a probability sufficient
to undermine confidence in the outcome. [United
States] v. Baxley, 473 U.S. 667, 682, 105 S. Ct.
3375, 3383, 87 L. Ed. 2d 481 (1985).
"[Analysis]
"The two (2) recorded interviews with M.B. that
were not disclosed have inconsistencies and are
inconsistent with certain trial testimony of M.B. In
one recorded interview M.B. stated that her roommate
had been gone about twenty (20) minutes before the
alleged rape. In the other interview M.B. stated the
roommate had been gone about an hour and thirty (30)
minutes. M.B. in one statement says her telephone was
in the bathroom and in the other she says the
telephone was in the kitchen at the time of the rape.
M.B. gave inconsistent testimony as to the type of
clothes the [rapist] was wearing. M.B. said in the
statement of March 27, 2012, that the rape lasted
like four (4) or five (5) minutes and this would be
inconsistent with the time line which established the
truck of [Ellis] entered the mobile home park at 4:41
p.m. and drove by the office at 4:46 p.m. M.B. did
not tell about her and J.H. (boyfriend) having sex
shortly prior to the alleged rape. At trial M.B.
testified in the State's case-in-chief that she was
sick and feeling bad on the day of the alleged rape.
M.B. did not testify on direct about having sex with
J.H. a couple hours prior to the alleged rape. M.B.
did testify that she and J.H. had sex when called as
an adverse witness by the defense. Defense counsel
only found out about the fact that M.B. had sex with
boyfriend at a bench side conference, just prior to
the State resting its case and after M.B. had
testified. M.B. in the March 27, 2012, statement said
she did not see the penis of the rapist. She said she
closed her eyes. However at trial M.B. testified that
16
1121390
she could see he had on a condom and could see the
erect penis. In the March 27, 2012, statement M.B.
when asked about the rapist she said, 'I was really
scared to look at him in the face'; however, at trial
M.B. testified she would not forget the eyes of the
rapist. At trial M.B. testified she was bent out with
her legs straight at the time of the rape; however,
in one of the nondisclosed statements she said her
knees were bent the whole time of the rape.
"K.H., the roommate, testified at trial that she
and M.B.'s mother left the hospital and went to the
mobile home at about 8:00 p.m. and cleaned up the
blood. In the recorded statement she said they went
to the mobile home about 10:00 p.m.
"J.H., the boyfriend of M.B., gave a recorded
interview to law enforcement, which was not disclosed
to defense counsel. J.H. was not called as a witness
at trial, and defense counsel was not aware that J.H.
was the boyfriend of M.B. until M.B. was called as an
adverse witness. J.H. in his recorded interview
stated that he and M.B. did not have sexual
intercourse the day of the rape. J.H. stated they
were together and then he had to go to a baseball
meeting either at 4 or 4:30 p.m. and after the
meeting, which lasted no more than five (5) minutes,
he called M.B. and she was on the way to the
hospital. The evidence would have been useful to
attack the time line of 4:41 p.m. to 4:46 p.m.
"The text messages and call log of M.B. which
was produced in camera notes that at 4:45 p.m. K.H.
sent a text message to M.B. that stated 'How are you
feeling?' M.B. responded at 4:45 p.m. 'terrible about
to sit in the tub.' M.B. has provided information in
the statements that she was about to take a bath when
she heard a knock at the door and the rape occurred.
This evidence is exculpatory and would be useful for
impeachment purposes, specifically if the rape had
not occurred at 4:45 p.m. and [Ellis's] truck was on
the video passing the office at 4:46 p.m., then the
17
1121390
rape had to have occurred between 4:45 p.m. and 4:46
p.m.
"Additionally, the State did not disclose the
affidavit of Lee Barnes of the Troy Police Department
which was utilized to obtain a search warrant for
cellular telephone records of a suspect other than
[Ellis], namely [S.L.F.]. The affidavit stated the
investigation had led to the suspect, S.L.F., and
that the victim had made a tentative identification
of
S.L.F.
through
a
photographic
lineup.
Additionally
the victim's mother searched MySpace [social-media]
records and located the suspect with a picture and
showed it to M.B. and M.B. became visibly upset. An
artist
developed
a
composite
sketch
of
the
perpetrator with the assistance of the victim and a
person independently identified S.L.F. as the person
depicted in the composite sketch. This information is
obviously exculpatory and was not disclosed and would
be material for a Brady violation. The information
would further be useful for impeachment purposes as
it appears law enforcement ruled out said suspect.
The fact that the victim wrongfully identified
another person would be material.
"[Findings]
"This court is aware that there is not a
constitutional right to discovery in a criminal case.
Discovery is governed by Rule 16, [Ala. R. Crim. P.]
-- the standing discovery order of this Circuit that
ordered the State to comply with Rule 16, and to
provide any exculpatory or impeachable evidence
pursuant to Brady.
"Suppression by the prosecution of evidence
favorable to the defendant violates due process where
the evidence is material to guilt. The truthfulness
or reliability of a witness's testimony may well be
determination of guilt. Evidence favorable to the
defendant which would tend to exculpate him helps
shape a trial and bears heavily on the defendant.
18
1121390
"This court in determining a materiality inquiry
under Brady is not to consider whether, after
discounting the exculpatory [evidence] in light of
the undisclosed evidence, the remaining evidence
would be sufficient to support the jury's conclusion.
Rather, the question is whether the favorable
evidence could reasonably be taken to put the whole
case in such a different light as to undermine the
confidence in the verdict. Strickler v. Greene, 527
U.S. 263, 290, 119 S. Ct. 1936, 144 L. Ed. 2d 286
(1999).
"This court is mindful of the impact granting a
new trial may have on the victims; however this court
is bound by the facts and applicable law in this
matter. The court must weigh and consider the
nondisclosed evidence and determine if evidence was
suppressed, whether the suppressed evidence would be
favorable to the defense, and whether the evidence
was material or, stated otherwise, whether there is
a reasonable probability the nondisclosed evidence
undermined the verdicts.
"This court finds as follows:
"1. The evidence, including the statements
of M.B., J.H., K.H., that victim, M.B.,
identified another person in a photo
lineup, that the time-line log shows that
M.B. was texting at 4:45 p.m. that she was
about to get in the tub and her statement
that she had not gotten in the tub prior to
the rape was suppressed by the State and
the
evidence
is
exculpatory
and
impeachable.
"2. The court further finds that, since
there was no forensic evidence or physical
evidence tying [Ellis] to the rapes and
burglary other than witness testimony, the
credibility, truthfulness, and reliability
of the testimony of such witnesses may well
19
1121390
have been a determining factor of guilt.
The court finds the suppressed evidence is
material and if the evidence had not been
suppressed that there is a 'reasonable
probability' that the results of the
proceeding would have been different and a
reasonable probability is sufficient to
undermine the confidence in the outcome.
"3. Much of the suppressed/nondisclosed
evidence would have provided the defense
with
an
opportunity
to
impeach
the
credibility of the witnesses and the
credibility
[of
the]
investigation.
Portions of the suppressed evidence would
have tended to exculpate [Ellis]. Such
evidence would include the fact that M.B.
had identified another person in a photo
lineup, J.H.'s testimony about calls to
M.B. which could attack the time line, and
the text messages and call log of M.B.
showing text at 4:45 p.m.
"4. That exculpatory and impeach[ment]
evidence
was
suppressed,
that
the
suppressed evidence was favorable to the
defense, and that the suppressed evidence
was material and there is a reasonable
probability that nondisclosure of the
favorable evidence could have undermined
the confidence of the verdicts.
"5. That the suppressed evidence along with
the fact that the mother of M.B. cleaned up
the blood from the scene, that M.B. and
J.H. deliberately deleted text messages
while M.B. was headed to the hospital and
the fact that M.B. initially told the
doctor she fell on something (instead of
being raped); the fact that M.B. was not
truthful and candid on direct about her
actions prior the alleged rape, all that
20
1121390
cumulatively would have led the court to
find that [Ellis] is entitled to a new
trial based on the suppression of evidence
in violation of Brady and the standing
discovery order of this court.
"[Conclusion]
"It is ORDERED that [Ellis's] motion for a new
trial on the two (2) convictions of rape in the first
degree and burglary in the first degree is granted.
The convictions are hereby set aside and vacated due
to Brady violations.
"The court further finds that the suppression or
nondisclosure was not intentional or malicious on the
part of the State; however, this court continues to
have much concern regarding the State's search for
the truth as the evidence disclosed in camera makes
reference to other interviews and statements--
specifically Q.C., the other rape victim, which have
never been provided in camera to the court as
specifically ordered by this court.
"Any other relief sought by [Ellis] on other
grounds will not be addressed as [it is] moot since
the court has granted the motion for new trials based
on the 'Brady Rule' violations and violations of the
standing discovery order of the 12th Judicial
Circuit.
"It is ORDERED that a scheduling conference is
scheduled for the 1st day August, 2013, to address
any pending matters and to set a date for a new
trial."
The State argues in its petition for a writ of mandamus
that the trial court exceeded its discretion and its judicial
authority in granting Ellis a new trial because, it says, the
21
1121390
trial court improperly combed the prosecutor's files and
incorrectly and improperly analyzed the contents in those
files. In support of its argument, the State provides an
item-by-item analysis of each piece of evidence considered by
the trial court, much of which the State claims has no bearing
on the motion for a new trial. However, it is well settled
that the evidence the State failed to disclose to Ellis must
be considered collectively, not item-by-item, in determining
whether the "materiality" requirement of a Brady v. Maryland,
373 U.S. 83 (1963), violation has been satisfied. Kyles v.
Whitley, 514 U.S. 419 (1995). The collective effect of the
nondisclosed evidence in this case -- the fact that M.B. had
identified S.L.F. in a police photographic lineup as being the
perpetrator; the fact that M.B.'s prior statements during the
tape-recorded interviews were inconsistent with her testimony
at trial regarding the time line of events and how those
events occurred; the fact that J.H., M.B.'s boyfriend, stated
in his recorded interview that he had not had sexual relations
with M.B. on the day of the alleged rape; the fact that J.H.'s
statements in the interview regarding his telephone calls to
M.B. could have been used to attack the time line of 4:41 p.m.
22
1121390
to 4:46 p.m.; and the fact that K.H.'s testimony was
inconsistent regarding the time she and M.B.'s mother went to
M.B.'s mobile home to clean up the blood -- is to support the
trial court's conclusion that there was a "reasonable
probability" that the State's nondisclosure of this evidence
would have resulted in a different verdict. The trial court
noted that "since there was no forensic evidence or physical
evidence tying [Ellis] to the rapes and burglary other than
witness
testimony,
the
credibility,
truthfulness,
and
reliability of the testimony of such witnesses may well have
been a determining factor of guilt." "The question is not
whether the defendant would more likely than not have received
a different verdict with the evidence, but whether in its
absence he received a fair trial, understood as a trial
resulting in a verdict worthy of confidence." Kyles, 514 U.S.
at 434. "[A] constitutional error occurs, and the conviction
must be reversed, only if the evidence is material in the
sense that its suppression undermines confidence in the
outcome of the trial." United States v. Bagley, 473 U.S. 667,
678 (1985). We find no error in the trial court's order
analyzing the collective effect of the nondisclosed evidence
23
1121390
and determining that the "materiality" requirement of a Brady
violation had been satisfied. Kyles.
The State also argues that the trial court exceeded its
discretion in granting a new trial because, it says, Ellis
never laid the proper predicate to compel the State to
disclose the statements of M.B., K.H., or J.H., as required by
Ex parte Pate, 415 So. 2d 1140 (Ala. 1981), and Ex parte Key,
890 So. 2d 1056 (Ala. 2003). More specifically, the State
asserts that Ex parte Pate and Ex parte Key required Ellis to
make specific requests during the trial for any pretrial
statements made by any witnesses during the course of the
trial. We find Key and Pate to be inapplicable to the facts
of this case.
In Ex parte Pate, this Court granted certiorari to review
the question "whether or when the defendant in a criminal case
is entitled to inspection of a statement of a prosecution
witness for the purpose of cross-examining or impeaching the
witness." 415 So. 2d at 1140-41 (emphasis added). Ex parte
Pate confirmed the general rule that an accused is not
entitled to discover statements of government witnesses before
trial. In Ex parte Key, this Court held that "[o]nce a
24
1121390
prosecution witness has testified on direct examination,
however, a defendant, upon laying a proper predicate, is
entitled to inspect a prior statement of the witness for the
purpose of cross-examining or impeaching the witness." 890
So. 2d at 1064. Ex parte Key established a two-step process
for determining when a trial court should conduct an in camera
inspection. A defendant must first lay a proper predicate for
an in camera inspection by providing evidence that a statement
exists, then the trial court determines, during the in camera
inspection, "(1) whether the witness's statement differed in
any respect from the witness's testimony at trial, and (2)
whether the statement requested was of such a nature that
without it the defendant's trial would be fundamentally
unfair." Ex parte Key, 890 So. 2d at 1064.
Ellis's
case
presents
a
different fact scenario: Ellis was
not seeking during the trial to inspect a prior statement of
a witness for the purpose of cross-examining or impeaching the
witness. In other words, Ellis learned for the first time
during the trial at a sidebar conference that J.H. and M.B.
had had sexual relations just hours before the alleged rape;
Ellis was not aware that J.H. had been interviewed by law
25
1121390
enforcement. Because J.H. did not testify at trial, Ellis
could not have requested during the trial to use J.H.'s
statement for cross-examination or impeachment purposes. It
was not until after the verdict that Ellis, during further
investigation, learned that J.H. had been interviewed by law
enforcement. At this point, Ellis filed a motion for a new
trial, alleging that the State had withheld crucial evidence
in violation of Brady v. Maryland:
"That during the course of trial at sidebar, the
State revealed that the alleged victim, M.B., had
entered into sexual relations with her boyfriend at
the time of the alleged offense the afternoon she
claimed she had been raped. M.B. had already given
testimony at this point of the trial that she had
[gone] to school and then had come home without
mentioning she had entered into sexual relations with
her boyfriend, herein referred to as J.H. The State
had not disclosed this information prior to trial and
therefore no investigation of the same was conducted
by the defense.
"Since the trial, the defense has through
further investigation discovered that J.H. has
disclosed that he had sex with M.B. the day of the
alleged rape. J.H. has further stated that yes they
did have sex[;] however[,] when asked if there were
any 'toys' he stated no but only after a significant
pause. J.H. has further disclosed that there was a
police interview/interrogations of him and he was
interviewed by Brian McClendon of the Troy P.D.
[Police Department] and another detective that he did
not know. ... J.H. further disclosed he had only one
formal interview at the P.D. and that he was there
for quite a long time. After that he only spoke with
26
1121390
Det. McClendon by phone. J.H. also remembers the
interview being recorded. J.H. stated that he did in
fact say he did not believe that M.B. had been raped
during the P.D. interview but has since come to
believe that she had. When ask[ed] ... why he had
originally not believed her J.H. stated there were
little things going on in their relationship that
made him doubt her sometimes and primarily he did not
believe her because the Police led him through their
questioning of him to believe that they doubted her
story as well. Since the interview of J.H. was not
disclosed to the defense prior to trial, all of the
aforementioned information was unavailable to the
defense prior to trial and therefore no further
investigation on these issues were investigated at
the time. The State never called J.H. at trial.
"....
"Trial counsel was not provided with crucial
evidence in violation of Brady v. Maryland ....
"Further, due to the State's failure to disclose
information regarding M.B.'s sexual conduct the day
of the alleged rape, the defense was further unable
to properly cross-examine the State's expert on other
possible hypotheses for the alleged injuries nor was
the defense afforded the opportunity to evaluate the
need for independent defense witnesses to refute the
State's experts."
The trial court thereafter ordered the State to determine
if there were any interviews or statements taken by law
enforcement regarding the investigation that had not been
previously disclosed and to provide the court with copies
under seal of all such interviews or statements. See Duncan
v. State, 575 So. 2d 1198 (Ala. Crim. App. 1990) (holding that
27
1121390
the knowledge of law-enforcement agents regarding favorable
evidence is imputed to the prosecutor). The State thereafter
produced in camera the interviews of M.B., J.H., and K.H. The
State also provided additional in camera information for the
court's review, including a search warrant for telephone
records of S.L.F., another person M.B. had identified in a
police photographic lineup as being the perpetrator. After
reviewing the State's evidence, the trial court concluded that
some of the evidence should have been disclosed, and it
ordered the State to provide Ellis with copies of that
evidence before the hearing on the motion for a new trial.
Following the hearing, the trial court entered its order,
granting Ellis's motion for a new trial based on the State's
failure to turn over evidence in violation of Rule 16, Ala. R.
Crim. P., and in violation of Brady v. Maryland. See Ex parte
Brown, 548 So. 2d 993, 994 (Ala. 1989)("We have further held
that exculpatory evidence, regardless of its trustworthiness
or admissibility, should be disclosed, and, if it is not
disclosed, that defendant's motion for a new trial should be
granted."). Moreover, pursuant to Rule 16, Ala. R. Crim. P.,
the trial court is authorized to inspect the State's evidence
28
1121390
at any time during the proceedings when it is brought to the
court's attention that a party has failed to comply with the
court's standing discovery order. Rule 16.5, Ala. R. Crim.
P., states:
"If at any time during the course of the proceedings
it is brought to the attention of the court that a
party has failed to comply with this rule or with an
order issued pursuant to this rule, the court may
order such party to permit the discovery or
inspection; may grant a continuance if requested by
the aggrieved party; may prohibit the party from
introducing evidence not disclosed; or may enter such
other order as the court deems just under the
circumstances. The court may specify the time, place,
and manner of making the discovery and inspection and
may prescribe such terms and conditions as are just."
(Emphasis added.)
Because the holdings of Ex parte Pate and Ex parte Key
do not apply under the facts of this case, and because the
trial court was authorized to order the State to provide the
court with copies under seal of all interviews or statements
taken by law enforcement during its investigation that had not
been previously disclosed, the State has failed to demonstrate
that the trial court exceeded its discretion in this regard.
Stated differently, under the circumstances presented, the
trial court's method of handling the situation was proper.
29
1121390
Lastly, the State argues that the trial court exceeded its
discretion in entering its order granting a new trial with
regard to the rape charge involving Q.C. because, it says,
Ellis made no allegation in his motion for a new trial
regarding a discovery violation in the case in which Q.C. is
the named victim nor did the trial court make any findings as
to any alleged discovery violation pertaining to that case.
In support of its argument, the State cites Dunn v. United
States, 284 U.S. 390, 393 (1932)("[E]ach count of an
indictment is regarded as if it was a separate indictment."),
and Murphy v. State, 108 So. 3d 531, 546 (Ala. Crim. App.
2012)("'A jury verdict on each count [of a multi-count
indictment] is independent; a verdict of either conviction or
acquittal of one has no effect or bearing on another.'"
(quoting Hammonds v. State, 7 So. 3d 1055, 1061 (Ala. 2008))).
Specifically, the State asserts that "just because the trial
court is erroneously convinced that a new trial is appropriate
in
one
count
of
a
multi-count
indictment
does
not
automatically give rise to the summary granting of a new trial
in any other count of the same indictment." The State's
argument in this regard is without merit. It is irrelevant
30
1121390
that Ellis made no allegation in his motion for a new trial of
any discovery violation regarding Q.C., because Ellis was
concerned only with the fact that the State had failed to
disclose the recorded interview between J.H. and law
enforcement. As previously stated, Ellis alerted the trial
court in his motion for a new trial of the alleged Brady
violation. The court at that point ordered the State to
provide copies under seal of all notes, files, or summaries of
any interviews or statements taken by law enforcement that had
not been previously disclosed during the course of the
investigation; this information would include any information
pertaining to Q.C. as well as to M.B. More importantly,
however, is the fact that the trial court clearly stated in
its order that the State had violated the discovery order
regarding information pertaining to Q.C.:
"The court further finds that the suppression or
nondisclosure was not intentional or malicious on the
part of the State; however, this court continues to
have much concern regarding the State's search for
the truth as the evidence disclosed in camera makes
reference
to
other
interviews
and
statements
specifically
[regarding]
Q.C.,
the
other
rape victim,
which have never been provided in camera to the court
as specifically ordered by this court.
"Any other relief sought by [Ellis] on other
grounds will not be addressed as they are moot since
31
1121390
this court has granted the motion for new trials
based on the 'Brady Rule' violations and violations
of the standing discovery order of the 12th Judicial
Circuit."
(Emphasis added.) Rule 16, Ala. R. Crim. P., which provides
for discovery in criminal cases, expressly authorizes a trial
court to impose sanctions against a party that fails to comply
with a discovery order. See Rule 16.5, quoted supra. "Brady
v. Maryland ..., requires the government to disclose
exculpatory evidence or risk sanctions." State v. Hall, 991
So. 2d 775, 778 (Ala. Crim. App. 2007). "The imposition of
sanctions upon noncompliance with a court's discovery order is
within the sound discretion of the court." McCrory v. State,
505 So. 2d 1272, 1279 (Ala. Crim. App. 1986). "[S]anctions
imposed for a Brady violation are reviewed to see if the trial
court exceeded its discretion." Ex parte Hall, 991 So. 2d 782,
784-84 (Ala. 2008) (citing State v. Moore, 969 So. 2d 169,
181–82 (Ala. Crim. App. 2006) (recognizing that dismissal of
an indictment is an available sanction for a Brady violation
under the supervisory powers granted trial courts by Rule
16.5, Ala. R. Crim. P.)). Because the State violated the
trial court's discovery order by failing to produce any and
all interviews and statements regarding Q.C., we find no error
32
1121390
in the trial court's ruling granting Ellis's motion for a new
trial as to count one of the indictment charging Ellis with
rape in the first degree of Q.C. The State has simply failed
to provide this Court with any caselaw demonstrating error on
the part of a trial court granting a new trial based on a
party's failure to comply with the discovery provisions of
Rule 16, Ala. R. Crim. P. It is well settled that the
"[f]ailure to comply with [Rule 16] is viewed with disfavor
and is condemned." Smith v. State, 698 So. 2d 189, 206 (Ala.
Crim. App. 1996).
IV. Conclusion
Based on the foregoing, the State has failed to present
this Court with exceptional circumstances justifying the
issuance of a writ directing the trial court to set aside its
order granting Ellis's motion for a new trial. Unlike this
Court's holding in Ex parte Nice that the Court of Criminal
Appeals was justified in finding exceptional circumstances
justifying the issuance of a writ where the trial judge had
granted a new trial solely because he felt the witness's
testimony was "dubious," which, we said, amounted to a
usurpation of power, there are no circumstances, much less
33
1121390
exceptional circumstances, presented in this case justifying
a writ directing the trial court to vacate its order granting
Ellis a new trial. The trial court in this case was clothed
with the discretion to grant a new trial and, in fact, had a
duty to do so upon its finding of a Brady violation, Ex parte
Brown; the trial court is also clothed with discretion in
imposing the appropriate sanctions, i.e., the grant of a new
trial, based on its findings of discovery violations. Ex
parte Moore, supra. Accordingly, the State has failed to
demonstrate a clear legal right to the order sought, Ex parte
Sharp, and its petition is due to be denied. See also State
v. Waters, 453 So. 2d 1067, 1067-68 (Ala. Crim. App. 1984),
holding that "[t]he petition for writ of mandamus seeking to
require a Montgomery Circuit Court judge to vacate and hold
for naught his order granting a new trial is hereby denied on
authority of Ex parte Hooper, 453 So. 2d 1066 (Ala. 1984),
holding that mandamus will not lie to compel the trial court's
exercise of discretion in a particular manner."
PETITION DENIED.
Moore, C.J., and Stuart, Parker, Murdock, Shaw, Main,
Wise, and Bryan, JJ., concur.
34 | September 30, 2014 |
b6221930-bdd4-4377-a4de-8567bc7723cb | Ex parte Alabama Forest Products Industry Workmen's Compensation Self-Insurers' Fund. PETITION FOR WRIT OF CERTIORARI TO THE COURT OF CIVIL APPEALS (In re: Alabama Forest Products Industry Workmen's Compensation Self-Insurers' Fund v. Amos Harris) (Marengo | N/A | 1131321 | Alabama | Alabama Supreme Court | Rel: 12/12/14
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
____________________
1131321
____________________
Ex parte Alabama Forest Products Industry Workmen's
Compensation Self-Insurers' Fund
PETITION FOR WRIT OF CERTIORARI
TO THE COURT OF CIVIL APPEALS
(In re: Alabama Forest Products Industry Workmen's
Compensation Self-Insurers' Fund
v.
Amos Harris)
(Marengo Circuit Court, CV-12-900136;
Court of Civil Appeals, 2121008)
BRYAN, Justice.
WRIT DENIED. NO OPINION.
1131321
Moore, C.J., and Stuart, Bolin, Parker, Shaw, Main, and
Wise, JJ., concur.
Murdock, J., dissents.
2
1131321
MURDOCK, Justice (dissenting).
The Court denies certiorari review of the decision of the
Court of Civil Appeals in this case, see Alabama Forest
Products Industry Workmen's Compensation Self-Insurers' Fund
v. Harris, [Ms. 2121008, June 13, 2014] ___ So. 3d ___ (Ala.
Civ. App. 2014), overruling its previous decision in Osorio v.
K & D Erectors, Inc., 882 So. 2d 347 (Ala. Civ. App. 2003),
and holding that Alabama's Workers' Compensation Act makes
compensable
the
provision
by
nonprofessional
family
members
of
certain assistance to injured employees. Section 25-5-1(13),
Ala. Code 1975, Alabama Workers' Compensation Act, defines
"providers" as
"[a]
medical
clinic,
pharmacist,
dentist,
chiropractor, psychologist, podiatrist, physical
therapist,
pharmaceutical
supply
company,
rehabilitation service, or other person or entity
providing treatment, service, or equipment, or
person or entity providing facilities at which the
employee receives treatment."
Urging the application of the principle of ejusdem generis,
petitioner
Alabama
Forest
Products
Industry
Workmen's
Compensation Self-Insurers' Fund argues that the reference at
the end of 25-5-1(13) to "other person or entity providing
treatment, service or equipment" should be understood as a
3
1131321
reference
to
other
medical
professionals,
not
to
nonprofessional family members of the claimant. The
petitioner also argues that, in Osorio, the Court of Civil
Appeals correctly held that our Workers' Compensation Act
"does not require an employer to provide attendant-care
expenses to the family of a permanently and totally disabled
employee for assisting the employee in his
daily
functioning,"
882 So. 2d at 350, and that the Court of Civil Appeals erred
in the present case by overruling Osorio. Finally, the
petitioner points out that the court in Osorio noted that
Minnesota's Workers' Compensation Act, upon which Alabama's
Workers' Compensation Act generally is modeled, specifically
provides for the payment of nursing services performed by
family members of a permanently and totally
disabled
employee,
see Minn. Stat. § 176.35(1)(b) (2000), whereas Alabama's act
contains no such provision. Because I believe there is a
probability of merit in the petitioner's arguments, I would
grant the petition pending before us. I therefore
respectfully dissent from the denial of further review in this
case.
4 | December 12, 2014 |
0032f563-c40f-4f9e-ba8f-8c8307676af0 | Givianpour v. Curtain, Sr. | N/A | 1130098 | Alabama | Alabama Supreme Court | Rel: 10/24/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
____________________
1130098
____________________
Cameron Givianpour
v.
Thomas J. Curtain, Sr.
Appeal from Jefferson Circuit Court
(CV-12-900647)
PARKER, Justice.1
This case was originally assigned to another Justice on
1
this Court; it was reassigned to Justice Parker on September
9, 2014.
1130098
Cameron Givianpour appeals from the Jefferson Circuit
Court's dismissal of his complaint for the redemption of
certain real property. We reverse and remand.
I. Facts and Procedural History
At a foreclosure sale held on March 1, 2011, Thomas J.
Curtain, Sr., purchased the real property located on Caldwell
Mill Road, Mountain Brook, for $295,000 ("the property"). The
foreclosed mortgagors were Charles Givianpour and Concetta
Givianpour, Cameron Givianpour's parents.
It is undisputed that during their ownership of the
property, the Givianpours leased the property to Amy Newell.
After Curtain foreclosed on the property, he filed a complaint
against Newell in the Jefferson Circuit Court in which he
demanded possession of the property, as well as "damages for
wrongful retention of said real property." On July 15, 2011,
Newell filed a petition for Chapter 7 bankruptcy in the United
States Bankruptcy Court for the Southern Division of the
Northern District of Alabama ("the bankruptcy court"). On
July 29, 2011, Curtain filed in the bankruptcy court a motion
seeking a relief from the automatic stay; the bankruptcy court
on August 9, 2011, granted the motion and lifted the stay. On
2
1130098
November 10, 2011, the Jefferson Circuit Court entered a
summary judgment in favor of Curtain, awarding him possession
of the property and damages. On December 14, 2011, the
bankruptcy court discharged Newell's debt, including any rent
owed for continued possession of the property.
On February 8, 2012, pursuant to § 6-5-252, Ala. Code
1975, Cameron Givianpour presented Curtain with a demand for
2
Section 6-5-252 provides:
2
"Anyone
desiring
and
entitled
to
redeem
may
make
written demand of the purchaser or his or her
transferees for a statement in writing of the debt
and all lawful charges claimed by him or her, and
such purchaser or their transferees shall, within 10
days after such written demand, furnish such person
making the demand with a written, itemized statement
of all lawful charges claimed by him or her. The
redeeming party must then tender all lawful charges
to the purchaser or his or her transferee. If the
purchaser or his or her transferee fails to furnish
a written, itemized statement of all lawful charges
within 10 days after demand, he or she shall forfeit
all
claims
or
right
to
compensation
for
improvements, and the party so entitled to redeem
may, on the expiration of the 10 days, file his or
her complaint without a tender to enforce his or her
rights under this article and file a lis pendens
with the probate court.
"Tender or suit must be made or filed within one
year from foreclosure."
3
1130098
lawful charges for the purpose of redeeming the property. On
3
February 13, 2012, Curtain presented Givianpour a
statement in
the amount of $351,925.10, which amount included the purchase
price, interest, insurance, and ad valorem taxes on the
property. The statement also included a charge for payment of
rent on the property for tenant Newell in the amount of
$4,950: $450 per month from March 1, 2011, through January 31,
2012 ("the rent charge").
Givianpour did not tender the redemption funds to
Curtain. Instead, on February 29, 2012, Givianpour filed a
complaint in the Jefferson Circuit Court against Curtain
seeking to redeem the property. In his complaint, Givianpour
alleged that the rent charge constituted an illegal or
exaggerated charge for which no legal basis exists.
Givianpour stated that because of the allegedly unlawful
Cameron Givianpour had statutory authority to exercise
3
his parents' right of redemption pursuant to § 6-5-248(a)(7),
Ala. Code 1975, which states:
"(a) Where
real estate,
or
any
interest
therein,
is sold the same may be redeemed by:
"....
"(7) Children, heirs, or devisees of
any debtor or mortgagor."
4
1130098
charge he was "unable to ascertain the true amount of the
lawful charges owed" and that he "need[ed] the Court's
assistance to determine the amount of lawful charges properly
owed." Givianpour further stated that he was "ready to do
equity and pay all lawful charges to redeem the property."
Givianpour did not pay any of the redemption funds into the
circuit court as is generally done in accordance with § 6-5-
256, Ala. Code 1975, when a written statement of all debt and
4
charges is provided to the redemptioner.
On March 13, 2012, Curtain filed a "Motion to Dismiss for
Lack of Subject Matter Jurisdiction or for Judgment on the
Pleadings." The motion alleged, among other things, that the
circuit court lacked subject-matter jurisdiction under § 6-5-
256 because Givianpour had failed either to tender the amount
for redemption or to pay the amount for redemption into court
Section 6-5-256 provides:
4
"Upon the filing of any complaint as provided in
these sections and paying into court the amount of
purchase money and the interest necessary for
redemption and all lawful charges, if the written
statement thereof has been furnished or, if not
furnished, offering to pay such debt or purchase
price and all lawful charges, the circuit court
shall take jurisdiction thereof and settle and
adjust all the rights and equities of the parties,
as provided in this article."
5
1130098
with the filing of his complaint. The motion asserted that
Givianpour was "only contesting the $4,950.00 claimed
for
rent
and therefore does not have a valid excuse for not tendering
money into the Court, but could have tendered the minimum
amount due for redemption." The motion further asserted that
because Givianpour had failed to comply "with all the
condition precedents to redemption," his complaint for
redemption was due to be dismissed.
On May 13, 2013, the circuit court entered an order
denying Curtain's motion for a judgment on the pleadings but
granting his motion to dismiss Givianpour's complaint for
lack
of subject-matter jurisdiction. As to the former, the circuit
court denied the motion on the ground that the pleadings were
not "closed" as of March 13, 2012, the date the motion was
filed. As to the latter, the circuit court agreed with
Curtain that Givianpour's failure to pay the amount for
redemption into the court deprived the court of jurisdiction.
Specifically, the circuit court stated that "[p]er Ala. Code
1975, § 6-5-256, an Alabama Circuit Court is not vested with
jurisdiction over a disputed redemption amount claim unless
the redeemer/plaintiff simultaneously pays into Court the
6
1130098
charges presented, or if disputed, the amount that is not
disputed." The circuit court further observed that Alabama
courts have held that strict compliance with § 6-5-256 is
"excused only where the redeemer/plaintiff can demonstrate a
valid excuse for not paying the full redemption amount."
Relying on this Court's decision in Moore v. Horton, 491 So.
2d 921 (Ala. 1986), the circuit court concluded that even
though the rent charge was "either improper, or questionable,
or both," it was "of easy verification." The circuit court
thus concluded that Givianpour "failed to exercise due
diligence to ascertain the proper amount to tender into court
on February 29, 2012, when he filed this action without
tendering the amount owed," and that he "has not demonstrated
any valid excuse" for that failure.
On June 11, 2013, Givianpour filed a motion to alter,
amend, or vacate the circuit court's judgment. In the motion,
Givianpour emphasized the fact that the parties disagreed as
to whether the rent charge was a "lawful charge" under §
6-5-253, Ala. Code 1975. Givianpour also argued, for the
5
Section 6-5-253 provides, in part:
5
"(a) Anyone
entitled
and
desiring
to
redeem
real
estate under the provisions of this article must
7
1130098
also pay or tender to the purchaser or his or her
transferee the purchase price paid at the sale, with
interest at the rate allowed to be charged on money
judgments as set forth in Section 8-8-10[, Ala. Code
1975] (as it is now or hereinafter may be amended),
and all other lawful charges, also with interest as
aforesaid; lawful charges are the following:
"(1)
Permanent
improvements
as
prescribed herein.
"(2) Taxes paid or assessed.
"(3) All insurance premiums paid or
owed by the purchaser.
"(4)
Any
other
valid
lien
or
encumbrance paid or owned by such purchaser
or his or her transferee or if the
redeeming party is a judgment creditor or
junior
mortgagee
or
any
transferee
thereof,
then all recorded judgments, recorded
mortgages and recorded liens having a
higher priority in existence at the time of
sale which are revived under Section
6-5-248(c)[, Ala. Code 1975].
"If the redemption is made from a
person who at the time of redemption owned
the debt for which the property was sold,
the redemptioner must also pay any balance
due on the debt, with interest as aforesaid
thereon to date.
"(5) Mortgagees of the purchaser, or
their
transferees,
are
considered
transferees of the purchaser, and a party
redeeming must pay all mortgages made by
the purchaser or his or her transferee on
the land to the extent of the purchase
price.
8
1130098
first time, that the charge for insurance had not been
"prorated" and that "[t]he statement of lawful charges does
not state the dates on which the premiums begin or end, nor
[does it] reflect the regularity of when they are paid or when
they are owed." The circuit court held a hearing on the
motion on June 26, 2013.
On September 6, 2013, the circuit court entered an order
denying Givianpour's motion to alter, amend, or vacate its
original judgment. In pertinent part, the order stated:
"If the purchaser's mortgages do not
exceed the amount of the purchase price,
the balance must be paid to the purchaser.
"(b) If the redeeming party is the debtor,
mortgagor, their respective spouses, children,
heirs, or devisees then, unless otherwise provided
herein, the judgments, mortgages, and liens revived
pursuant to 6-5-248(d)[, Ala. Code 1975,] are not
lawful charges as defined in subsection (a).
"(c) The purchaser shall be entitled to all
rents paid or accrued including oil and gas or
mineral agreement rentals to the date of the
redemption, and the rents must be prorated to such
date. The purchaser or his or her transferee and his
or her tenants shall have the right to harvest and
gather the crops grown by them on the place for the
year in which the redemption is made, but must pay
a reasonable rent for the lands for the proportion
of the current year to which such redemptioner may
be entitled."
9
1130098
"In this case, the Court determined certain of
the charges claimed were easily computed and not in
dispute. The law does not preclude [Givianpour] from
paying
undisputed
charges,
and,
by
his
own
admission, Givianpour had the money to pay those
charges. While [Givianpour] is certainly entitled to
dispute the rents due and property insurance money
paid, the very nature of this statute is to 'pay the
amount' into Court, and then let the Court determine
proper charges due. As such, the Court agrees with
Curtain
[that]
the
charges
claimed
included
undisputed
amounts
and/or
amounts
readily
ascertainable
by
Givianpour.
Therefore,
[Givianpour's motion] is due to be denied."
Givianpour appeals the circuit court's judgment of May
13,
2013, dismissing Givianpour's
complaint;
he
also
challenges its denial of his motion to alter, amend, or vacate
that order.
II. Standard of Review
"A ruling on a motion to dismiss is reviewed
without a presumption of correctness. Nance v.
Matthews, 622 So. 2d 297, 299 (Ala. 1993). This
Court must accept the allegations of the complaint
as true. Creola Land Dev., Inc. v. Bentbrooke
Housing, L.L.C., 828 So. 2d 285, 288 (Ala. 2002).
Furthermore, in reviewing a ruling on a motion to
dismiss we will not consider whether the pleader
will ultimately prevail but whether the pleader may
possibly prevail. Nance, 622 So. 2d at 299."
Newman v. Savas, 878 So. 2d 1147, 1148-49 (Ala. 2003).
III. Analysis
10
1130098
Givianpour contends that the rent charge listed in the
statement provided by Curtain is not a "lawful charge" under
§ 6-5-253 and that the presence of such an unlawful charge in
the statement constitutes a valid excuse for his not tendering
any amount for redemption when he filed the complaint.
Curtain argues that the rent charge is a "lawful charge" under
§ 6-5-253(c) and that, even if it is not, the readily
ascertainable amount of the unlawful charge -- $4,950 -- means
that the charge does not qualify as a valid excuse for failing
to pay into court the amount not in dispute, i.e.,
$346,975.10.
We begin by determining whether the rent charge was a
"lawful charge" under § 6-5-253. That Code section expressly
lists
five
categories
of
lawful
charges:
permanent
improvements, taxes paid or assessed, insurance premiums paid
or owed by the purchaser, any other valid lien or encumbrance
paid or owned by the purchaser, and "all mortgages made by the
purchaser or his or her transferee on the land to the extent
of the purchase price." § 6-5-253(a). Curtain implicitly
concedes that the rent charge does not fall under the "lawful
charges" specifically listed in § 6-5-253(a). Instead, he
11
1130098
contends that the rental charge is lawful under § 6-5-253(c),
which provides:
"(c) The purchaser shall be entitled to all
rents paid or accrued including oil and gas or
mineral agreement rentals to the date of the
redemption, and the rents must be prorated to such
date. The purchaser or his or her transferee and his
or her tenants shall have the right to harvest and
gather the crops grown by them on the place for the
year in which the redemption is made, but must pay
a reasonable rent for the lands for the proportion
of the current year to which such redemptioner may
be entitled."
The initial issue here is one of statutory construction.
"'Words used in a statute must be given their
natural, plain, ordinary, and commonly understood
meaning, and where plain language is used a court is
bound to interpret that language to mean exactly
what it says. If the language of the statute is
unambiguous, then there is no room for judicial
construction and the clearly expressed intent of the
legislature must be given effect.'"
Blue Cross & Blue Shield of Alabama, Inc. v. Nielsen, 714 So.
2d 293, 296 (Ala. 1998) (quoting IMED Corp. v. Systems Eng'g
Assocs. Corp., 602 So. 2d 344, 346 (Ala. 1992)). "Ala. Code
1975, § 6-5-253(c), provides that the purchaser is entitled to
all rents paid or accrued on the property until the date of
redemption. The redemptioner is entitled to all rents and
profits accruing subsequent to the redemption date." Pankey
12
1130098
v. Daugette, 671 So. 2d 684, 689 (Ala. Civ. App. 1995) (citing
Wallace v. Beasley, 439 So. 2d 133, 136 (Ala. 1983)).
Curtain is essentially reading § 6-5-253(c) to state not
only that he is "entitled to" any rent that accrued during the
period after he purchased the property until the date of
redemption, but also that he can lawfully charge the
redemptioner for any such rents that he is unable to collect
from the tenant. Curtain cites no authority for such an
interpretation of § 6-5-253(c), and a plain reading of the
statute does not support it. Rent charges are not among the
categories of "lawful charges" listed in § 6-5-253(a).
Moreover, § 6-5-253(c) simply delineates which party, as
between the purchaser and the redemptioner, is entitled to
rents collected or accrued before and after the date of
redemption. Curtain already pursued in the circuit court the
individual responsible for paying the rental charge: Amy
Newell, the tenant. See, e.g., Moss v. Cedrom Coal Co., 228
Ala. 267, 269, 153 So. 195, 196 (1934) (discussing the fact
that a tenant is responsible for paying rent to the purchaser
if the tenant has "knowledge ... of said purchase and of the
purchasers' rights thereunder"). The fact that Newell was
13
1130098
discharged of this debt in bankruptcy does not give Curtain a
legal right to charge Givianpour for the unpaid rent. Thus,
the rent charge Curtain submitted in his statement of charges
to Givianpour was not a lawful charge.
The next question before us is whether the inclusion in
the statement of an unlawful charge for rent on the property
constituted a valid excuse for Givianpour not to pay into
court any amount included in the statement when he filed his
complaint for redemption. Answering the foregoing question
requires some background in Alabama's jurisprudence on
redemption.
This Court has stated that "[t]he purpose of the
redemption statutes is to allow a defaulting purchaser, with
certain restrictions, the opportunity to redeem property that
has been lost by foreclosure. Indeed, statutory rights of
redemption are intended to 'rescue' from 'sacrifice' the
property of a debtor." Spencer v. West Alabama Props., Inc.,
564 So. 2d 425, 427 (Ala. 1990). On their face, §§ 6-5-252
and 6-5-253(a) do not provide an exception to the requirement
that a redeeming party tender to the purchaser at foreclosure
the purchase price and all lawful charges as specified by the
14
1130098
purchaser. The only exception from the requirement in 6-5-256
that a redemptioner pay into court "the amount of purchase
money and the interest necessary for redemption and all lawful
charges" upon filing a complaint for redemption is if the
purchaser fails to provide the redemptioner with a statement
of charges within 10 days of a demand for one. See § 6-5-252.
Because of the aforementioned purpose of the redemption
statutes, however, this Court repeatedly has stated:
"'"Courts
of
equity,
in
keeping with the general policy
of redemption statutes, namely,
the prevention of the sacrifice
of real estate by forced sales,
have
excused
the
literal
compliance with these statutes,
and
entertained
bills
for
statutory redemption in a variety
of cases, wherein, because of
some fault of the party from whom
redemption is sought, compliance
would be useless, or, for any
reason, not the fault of the
redemptioner,
it
becomes
impractical to comply."'"
Watts v. Rudulph Real Estate, Inc., 675 So. 2d 411, 413 (Ala.
1996) (quoting Garvich v. Assocs. Fin. Servs. Co., 435 So. 2d
30, 33 (Ala. 1983), quoting in turn Rodgers v. Stahmer, 235
Ala. 332, 333, 179 So. 229, 230 (1938)).
15
1130098
The first case to provide a detailed explanation as to
when a redemptioner is permitted to forgo tendering into court
the amount necessary to redeem was Francis v. White, 160 Ala.
523, 526-27, 49 So. 334 (1909). In Francis, this Court
6
explained:
"The statute ... contemplates that the redemption be
perfected out of court between the parties by each
party's doing that which the statute directs. A
resort to equity is only necessary when the
purchaser or creditor refuses to accept the tender
and to convey, and declines to inform the debtor of
the amount necessary to be tendered, when known to
him and not to the debtor, or when it is impossible
or impracticable for the debtor to conform to the
requirements of the statute without the aid of a
court of equity. If the debtor could be sure that he
had paid or tendered all that the statute requires,
this payment or tender would have the effect, under
the very language of the statute, to reinvest him
with the title, and the purchaser must reconvey to
him. Code 1896, § 3507. It is most often the case
that resort is had to equity to perfect the
statutory right, because without the aid of the
court the debtor cannot know the exact amount
necessary to be paid or tendered. The main object of
the bill is often to ascertain this fact. If the
debtor knows the exact amount which he must pay or
tender, or if by the exercise of due diligence he
The Court
of Civil Appeals has noted that "[a]lthough the
6
redemption statutory provisions have been amended, and/or
repealed and reenacted from time to time, the substance of the
statutory provisions at issue have not changed." Skelton v.
J&G, LLC, 922 So. 2d 926, 931 n. 7 (Ala. Civ. App. 2005).
Because previous cases were interpreting redemption statutes
not materially different than the current ones, those cases
constitute precedent on this subject.
16
1130098
can ascertain it without the aid of the court, then
his bill for this purpose would be without equity.
Equity will not undertake to do that which the
debtor should have done for himself. So, in the bill
to redeem under the statute, the debtor must either
aver a payment or a tender of all the amounts by the
statute required, or to show a valid excuse for
failure therein, before filing, such as nonresidency
of
purchaser,
or
redemptioner's
inability
to
ascertain the amounts necessary to be paid or
tendered, and ask the court to aid him in
ascertaining the true amounts, and offer to pay such
amounts before insisting upon his right to redeem or
to be reinvested with the title. Francis v. White,
142 Ala. 590, 39 South. 174 [(1905)]. Payment or
tender of the amounts necessary to redeem is not in
all
cases
a
prerequisite
to
the
filing
or
maintaining of the bill, yet it is always such to
the perfection of the right to redeem, and the bill
must offer to pay or tender such amounts when
ascertained, and show a valid excuse for not so
doing before the filing of the bill as well as a
good reason why the aid of the court is necessary
for this special purpose."
160 Ala. at 526-27, 49 So. at 335 (emphasis added). In Moore
v. Horton, 491 So. 2d 921, 923 (Ala. 1986), this Court
summarized the explanation in Francis as follows: "[I]n order
to redeem under the statute, one must either aver a payment or
tender of all the amounts required by the statute, or show a
valid excuse for failure to do so."7
As demonstrated by the following summary of Alabama law
7
in Wiltsie on Mortgage Foreclosure, we note that this
principle of law has long been well established in Alabama:
"[I]n an action to enforce the statutory right of
17
1130098
In concluding that the rent charge did not constitute a
"valid excuse" for failing to pay the statutorily required
amount into court, the circuit court relied on a statement in
Moore that "the inclusion of improper or questionable charges
is not, in and of itself, a valid excuse for failure to tender
the amount owed." Id. at 924. Moore, in turn, relied upon
redemption, there must be an allegation of tender
prior to action; Crumpton v. Campbell, 228 Ala. 79,
152 So. 220 [(1934)]; Foerster v. Swift, 216 Ala.
228, 113 So. 31 [(1927)]; see Seals v. Rogers, [172
Ala. 651,] 55 So. 417 [(1911)]; Lacey v. Lacey ...,
39 So. 922 [(Ala. 1905)(not reported in Alabama
Reports)]; or of excuse for failure to make such
tender. Rodgers v. Stahmer, [235 Ala. 332,] 179 So.
229 [(1938)]; Goodwin v. Donohue 229 Ala. 66, 155
So. 587 [(1934)]; Hart v. Jackson Street Baptist
Church of Birmingham, Ala., Inc., 224 Ala. 64, 139
So. 88 [(1932)]; Wittmeier v. Cranford, 199 Ala. 1,
73 So. 981 [(1917)].
"And in addition to alleging a tender, the bill
must show payment into court, where such payment is
not excused. Lacey [sic] v. Fowler, 206 Ala. 679, 91
So. 593 [(1921)]. See Wittmeier v. Cranford, supra.
"A mortgagor seeking to redeem is excused from
alleging a tender where he avers that he did not
know the correct amount to be tendered, and that the
mortgagee's itemized statement (required by statute)
was excessive and obscure. Southside Bank v. Daniel,
221 Ala. 327, 128 So. 779 [(1930)]."
3 A.W. Fribourg and S.V. Elting, Wiltsie on Mortgage
Foreclosure § 1259, at pp. 1892-93 n. 64 (5th ed. 1939).
18
1130098
Johnson v. Williams, 212 Ala. 319, 321, 102 So. 527, 528
(1924). In Johnson, the redemptioner did not tender any
amount before filing a complaint. She contended that payment
was excused because a judgment the purchaser obtained against
her husband in a separate action for $328.76 and a $.95 fee
for recording the foreclosure deed that was listed in the
statement of charges did not constitute lawful charges. The
Johnson Court first concluded that it did not read the
notation in the purchaser's statement of the
separate
judgment
against the redemptioner's husband to be "a condition
precedent for statutory redemption." Johnson, 212 Ala. at
321, 102 So. at 528. As to the recording fee, the Court
stated that it
"was not a proper charge or expense, was not within
the statute (Snow v. Montesano Land Co., [206 Ala.
310, 89 So. 719 (1921)]), and was of easy
elimination by the redemptioner in making the
tender. The amount of interest was of easy
verification. The complainant has shown no excuse
which the law recognizes for failure to aver a
tender; and by the exercise of due diligence she
could have ascertained the necessary and required
amount without the aid of equity."
Id.
In Moore, the redemptioner likewise failed to tender any
amount into court before filing her complaint. She contended
19
1130098
that "because of the failure [of the purchaser] to
specifically and fairly itemize the lawful charges, she was
unable to determine what amount she needed to tender." 491
So. 2d at 923. In response, the Moore Court quoted a portion
of the Francis Court's explanation of when equity may be
invoked in the redemption process, followed by the quotation
of much of the passage from Johnson quoted above. The Moore
Court then stated:
"Therefore,
the
inclusion
of
improper
or
questionable charges is not, in and of itself, a
valid excuse for failure to tender the amount owed.
There must be an exercise of due diligence on the
part of the person seeking redemption to ascertain
the proper amount to be tendered. In a more recent
decision, Dicie v. Morris, 285 Ala. 650, 235 So. 2d
796 (1970), this Court stated that there must be a
bona fide disagreement between the parties as to
what the lawful charges were before one side could
seek the aid of the court. Moore has presented this
Court with no proof of any such disagreement;
moreover, the Hortons have stated that had Moore
offered an amount which they considered reasonable,
the matter might well have been settled at that
time. It appears to us that, had Moore undertaken a
diligent inquiry, she might well have been able to
ascertain the proper amount due to be paid to the
Hortons. We hold that there was ample support for
the trial court's findings that Moore failed to
comply
with
the
statutory
prerequisites
to
redemption and that she failed to allege sufficient
grounds to excuse the statutorily required tender."
491 So. 2d at 924 (emphasis added).
20
1130098
In its order of May 13, 2013, the circuit court concluded
that because the rent charge was "of easy verification,"
Givianpour "failed to exercise due diligence to ascertain the
proper amount to tender into court ...." In its order of
September 6, 2013, the circuit court similarly concluded that
"certain of the charges claimed were easily computed and not
in dispute" and that, therefore, Givianpour should have paid
the "undisputed charges" and allowed the court to "determine
the proper charges due." In so holding, the circuit court
misunderstood the holdings in Johnson and Moore.
In both Johnson and Moore, the Court concluded that the
redemptioner failed to demonstrate that there was a "bona fide
disagreement between the parties as to what the lawful charges
were." Moore, 491 So. 2d at 924. In Johnson, there was not
even a colorable argument that the recording fee was a lawful
charge. In Moore, the redemptioner apparently failed to
explain which charges the parties disagreed about or the basis
for the disagreement on those charges. Under those
circumstances, "the inclusion of improper or questionable
charges is not ... a valid excuse for failure to tender the
amount owed." Moore, 491 So. 2d at 924.
21
1130098
Unlike Johnson and Moore, in the present action it is
clear that Givianpour and Curtain legitimately disagree as to
whether the rent charge is a lawful charge under the statute.
As explained in Francis, when the redemptioner presents a
valid excuse for failing to tender the statutorily required
amount, tender is not required to invoke the aid of the court.
In contrast, although the circuit court acknowledged that the
rental charge was "questionable," it reasoned that Givianpour
should have forwarded the undisputed amount into court before
he could receive the court's aid in determining whether the
rent charge was lawful. In other words, the circuit court
agreed with Curtain's argument that a charge must not only be
unlawful, but also unclear in amount for such a charge to
constitute a valid excuse for failing to tender the redemption
amount.
Previous cases do not support the circuit court's
conclusion. Several cases hold that the presence of an
unlawful charge in the purchaser's statement -- not just
charges that are difficult to ascertain without the aid of a
court -- constitutes a valid excuse for not tendering the
redemption amount.
22
1130098
For example, in Beavers v. Transamerica Financial
Services, Inc., 474 So. 2d 1105 (Ala. 1985), the Beaverses
purchased the subject property at a foreclosure sale.
Transamerica Financial Services, Inc., which held a second
mortgage on the property, gave the Beaverses notice of its
desire to redeem the property, but the parties could not agree
on the proper redemption amount, and Transamerica filed a
complaint for redemption. When Transamerica filed its
complaint, it paid into court what it thought to be the
statutorily required amount, which was placed in an interest-
bearing account at Transamerica's request. The dispute over
lawful charges included the date for calculating interest,
whether Transamerica was entitled to credit for rents the
Beaverses had collected on the property, and whether the trial
court was correct in returning to Transamerica the interest
that had been earned on the sum Transamerica had deposited
with the court upon the filing of the complaint for
redemption. Thus, all the disputed charges were "of easy
verification." In addressing the issue of which party was
entitled to the interest on the sum Transamerica had deposited
into court, the Beavers Court noted that "[i]t is accepted law
23
1130098
... that a redemptioner need not always tender the redemption
amount into the court." Beavers, 474 So. 2d at 1108. The
Court quoted Francis for support of this proposition. The
Court then observed that, because Transamerica was "in good
faith disagreement over the redemption amount," it "was not
required to tender the funds into the court." 474 So. 2d at
1108-09. The fact that Transamerica was not required to
tender any amount, combined with the fact that "§ 6-5-235[,
repealed effective January 1, 1989; now § 6-5-253] does not
include such interest among the items comprising the
redemption amount," led the Court to conclude that "the trial
court correctly returned the excess escrow money to
Transamerica." Id. Thus, in Beavers, the Court concluded
that the redemptioner was not required to pay any redemption
amount into court because of a "good faith disagreement over
the redemption amount," even though the amount in dispute was
easily calculable.
Similarly, in Dicie v. Morris, 285 Ala. 650, 654, 235 So.
2d 796, 799 (1970), the Court concluded:
"In our opinion the bill avers a valid excuse as
to why these amounts were not paid or tendered
before its filing, and the proof supports this
averment. The parties were in bona fide disagreement
24
1130098
as to what were lawful charges, and also, as to the
amounts of some charges. A resort to equity was
necessary to decide these issues, or the appellant,
in the alternative, stood to either pay what she
considered unlawful charges, or lose her right to
redeem. This shows a valid excuse for failure to pay
or tender into court the amounts required by the
statute."
(Emphasis added.)
In Lavretta v. L. Hammel Dry Goods Co., 243 Ala. 34, 36,
8 So. 2d 264, 265 (1942), the Court noted that "[w]hen the
statement of lawful charges claimed includes exaggerated or
illegal demands, or if so questionable that the redemptioner
acting in good faith cannot reasonably ascertain the amount he
should tender for redemption, no tender need be made before
filing a bill to redeem." (Emphasis added.) Applying that
rule to the facts presented in that case, the Lavretta Court
reasoned:
"The transfer, itself is conclusive to the effect
that the debt and deficiency judgment were not owned
by L. Hammel Dry Goods Company within the purview of
the statute, and, for that reason, was not a lawful
charge on redemption from the vendee of the
mortgagee purchaser. Tender and payment into court
were therefore excused."
Id. (emphasis added). See also Davis v. Anderson, 678 So. 2d
140, 143 (Ala. Civ. App. 1995) (noting that "if the redeeming
party claims that the lawful charges claimed by the purchaser
25
1130098
include exaggerated or illegal demands, no tender is required
to be made before filing a complaint to redeem"); Nichols v.
Colvin, 674 So. 2d 576, 579 (Ala. Civ. App. 1995) (quoting
Lavretta, 243 Ala. at 36, 8 So. 2d at 265).
As noted above, the circuit court expressly held, and
Curtain repeatedly insists in his brief to this Court, that
Givianpour was required to pay the undisputed amount into
court and then allow the circuit court to determine whether
the rent charge was lawful. Once again, however, our cases do
not support this conclusion.
In Wallace v. Beasley, 439 So. 2d 133 (Ala. 1983), the
redemptioner, Wallace, filed a complaint because he disagreed
with the Beasleys' assessment of the value of permanent
improvements they had made since purchasing the
real property.
Wallace did not pay any amount into court. The parties
stipulated to an undisputed amount of $11,353.72, but they
disagreed as to the Beasleys' assessment of over $20,000 for
permanent improvements. The Beasleys argued that Wallace's
complaint for redemption was not proper because he failed to
pay any amount into court and, they argued, he did not provide
an adequate excuse for his failure to do so. The Court found
26
1130098
"the Beasleys' contention to be without merit, since,
reviewing the record, we are satisfied that the redemptioner
provided a sufficient excuse -- that there was a bona fide
disagreement as to the amount of lawful charges due in this
case." 439 So. 2d at 136. The Wallace Court did not indicate
that Wallace needed to pay the amount that was not disputed
into court in order to receive a ruling on the amount that was
in dispute.
In Dorrough v. Barnett, 216 Ala. 599, 114 So. 198 (1927),
the Court stated:
"[I]t is now settled that tender or payment into
court of admitted or readily ascertained portions of
the full amount required to redeem is not required,
if other charges are in dispute, and must be
determined in equity before the redemptioner can
know the full terms upon which he must redeem the
property."
Dorrough, 216 Ala. at 601, 114 So. at 200.
On rehearing in Slaughter v. Webb, 205 Ala. 334, 337, 87
So. 854, 856 (1921) (opinion on rehearing), the purchaser
argued that a predecessor statute to § 6-5-252 "requires the
payment into court of debt, interest, and all other lawful
charges as a condition to redemption in all cases, and that,
if the amount of some charges cannot be ascertained, then the
27
1130098
payment into court of such as can be ascertained." 205 Ala.
at 337, 87 So. at 856. In other words, the purchaser made the
same argument on rehearing that Curtain presented to the
circuit court and now presents to this Court. The Slaughter
Court seemed incredulous that it would have to answer such an
argument, stating: "Heretofore we had hardly deemed it
necessary to answer this argument. We read [the predecessor
statute to § 6-5-252] to mean that, if a written statement of
lawful charges has not been furnished, an offer to pay debt
and all lawful charges made in the bill will suffice." Id.
After discussing a few cases cited in its original opinion,
including Francis, the Court concluded in its opinion on
rehearing:
"[The purchaser] cannot find in these cases, or
in the amended statutes, any authority for the
doctrine that the party coming to redeem must make
a partial tender before filing his bill, or with his
bill when filed, though he is unable to ascertain
the total amount of lawful charges due; that he must
offer to give up, or give up if need be, money,
though he does not know that ultimately he will be
allowed to redeem or on what terms he may be allowed
to redeem. The law against partial redemptions was
stated in Prichard v. Sweeney,[109 Ala. 651, 656, 19
So. 730, 732 (1896),] cited in the original opinion,
and it could never have been reasonably conceived to
be otherwise."
28
1130098
Id. (emphasis added). See also 59A C.J.S. Mortgages § 1456
(2009) (stating that, in Alabama, "[t]ender or payment into
court of admitted or readily ascertained portions of the full
amount required to redeem is not required if other charges are
in dispute and must be determined in equity before the
redemptioner can know the full terms on which he or she must
redeem the property." (citing Wallace v. Beasley, 439 So. 2d
133 (Ala. 1983))).
Curtain's only response to these authorities is to cite
Johnson, noting that the Johnson Court stated that the
unlawful charge of $.95 for the recording fee "was of easy
elimination by the redemptioner in making the tender." 212
Ala. at 321, 102 So. at 528. As we already observed, however,
in Johnson no colorable argument existed that a recording fee
for the foreclosure deed was a lawful charge. Thus, there was
no bona fide disagreement between the parties as to the amount
of tender. In this case, Curtain argued to the circuit court,
and he argues to this Court, that the rent charge was a lawful
charge under § 6-5-253(c), a subsection that expressly
references "rents paid or accrued ... to the date of
redemption." The existence of a bona fide disagreement in
29
1130098
this case over the rent charge means that the charge was not
"of easy elimination by the redemptioner." Furthermore, to
the degree that Johnson could be read as requiring a partial
payment of the undisputed amount, Wallace and
Dorrough
clearly
state the contrary and were decided after Johnson.
In sum, our jurisprudence reflects that an unlawful
charge need not be uncertain in its amount in order to
constitute a valid excuse for not tendering the redemption
amount into court. Additionally, our cases provide that
partial payment for the undisputed amount is not required to
invoke the jurisdiction of the circuit court to receive a
determination concerning the disputed amount. The circuit
court erred in concluding otherwise.
IV. Conclusion
We conclude that the rent charge on Curtain's statement
for redemption constituted an unlawful charge, that such an
unlawful charge, over which there is a bona fide disagreement,
constitutes a valid excuse for failure to tender the
redemption amount or to pay it into court, and that payment of
the amount not in dispute is not required to invoke the
jurisdiction of the circuit court to settle the disputed
30
1130098
amount. Accordingly, the judgment of the circuit court is
reversed and the cause is remanded for further proceedings
consistent with this opinion.
REVERSED AND REMANDED.
Moore, C.J., and Stuart, Bolin, Shaw, Main, Wise, and
Bryan, JJ., concur.
31 | October 24, 2014 |
8a2abc19-3622-4134-ab27-024ff40b19a4 | Watts v. Rudulph Real Estate, Inc. | 675 So. 2d 411 | 1940177 | Alabama | Alabama Supreme Court | 675 So. 2d 411 (1996)
Bobby Ray WATTS and Paula Jean Watts
v.
RUDULPH REAL ESTATE, INC.
1940177.
Supreme Court of Alabama.
February 23, 1996.
Carl E. Chamblee, Sr. of Chamblee & Furr, Birmingham, for Appellants.
*412 Jesse P. Evans III and Laurie Boston Sharp of Najjar Denaburg, P.C., Birmingham, for Appellee.
HOOPER, Chief Justice.
The application for rehearing is overruled. The opinion of August 4, 1995, is withdrawn and the following is substituted therefor.
This case involves an attempted redemption of real property. Bobby Ray Watts and Paula Jean Watts commenced this action by filing a complaint to redeem certain property from the purchaser, Rudulph Real Estate, Inc., on October 19, 1993. Rudulph denied in its answer that the Wattses had complied with the appropriate statutes entitling them to redeem the property and further alleged in its answer that the Wattses were barred from bringing the action because of a lack of standing. Rudulph also counterclaimed, requesting damages for mesne rents and occupation by the Wattses from the date of foreclosure.
After an ore tenus hearing, the trial judge entered a final judgment, dated September 20, 1994. The trial judge ruled in favor of Rudulph, holding that the Wattses, by not surrendering possession of the property within the 10-day limit required by statute, had forfeited their right to redeem. The Wattses appealed.
On July 31, 1987, Charles L. Dunn took title to a parcel of real property that includes the Wattses' home. The Wattses have lived in the home continuously since 1971. It is their sole residence, and they continued to live in it after Dunn took title. The Wattses conveyed title to the real estate to Dunn, who mortgaged the property to National Bank of Commerce ("NBC") and took the proceeds of a loan secured by the mortgage as payment for legal fees owed him by Mrs. Watts. Apparently, Dunn and the Wattses had an informal arrangement by which the Wattses agreed to make the monthly payments on the loan and that when the loan was paid off Dunn would reconvey the property to the Wattses. The Wattses made all the regular payments due on the mortgage during the loan term. The loan required a balloon payment at the end. The Wattses could not make the balloon payment, and on August 10, 1993, NBC foreclosed on the mortgage. Rudulph Real Estate, Inc., purchased the property at the foreclosure sale. On August 10, 1993, the day of the foreclosure, Rudulph delivered a letter to Dunn, as the record owner of the property, demanding that he abandon the premises. On August 19, 1993, Dunn conveyed all his right, title, claim, and interest in the property to the Wattses by statutory warranty deed. On that same day, the Wattses sent Rudulph a letter, requesting from Rudulph an itemized statement of all lawful charges claimed by Rudulph and stating their intent to exercise their statutory right of redemption. On the following day, August 20, 1993, after the Wattses had received no response from Rudulph, the Wattses' attorney made his best calculation of the redemption price. The Wattses personally delivered a second letter that same day, accompanied by a check in the amount of $24,415.40, stating their intent to redeem the property. On August 27, 1993, Rudulph sent the Wattses a letter containing a statement itemizing all lawful charges regarding the property. The letter also stated that the correct "redemption price" was $24,551.88 $136.48 above the amount sent by the Wattsesand with the letter Rudulph returned the check for $24,415.40 to the Wattses. The letter stated that by failing to surrender possession of the property they had forfeited their right of redemption. On that same day the Wattses delivered a third letter to Rudulph, with a check for $24,551.88. Rudulph subsequently returned that check also.
The Wattses sued on October 19, 1993, to enforce the right of redemption or to quiet title to the real property. Rudulph counterclaimed for ejectment and mesne rents. The trial court held: (1) that Dunn had assigned the right to redeem the property when he conveyed it to the Wattses on August 19, 1993, but (2) that the Wattses had forfeited the right to redeem the property by failing to surrender possession of the property within 10 days after the foreclosure on August 10, 1993.
The issues in this case are (1) Did the Wattses have the right to redeem the real property? (2) If so, did they properly exercise *413 that right to redeem? and (3) Did the purchaser exercise due diligence and deliver a timely statement of charges?
The trial court correctly held that the statutory warranty deed executed by Dunn to the Wattses was a proper assignment of Dunn's statutory right to redeem the mortgaged property. However, that right was limited to the right Dunn had when he executed the deed. Ala.Code 1975, § 6-5-251(a), states: "The possession of the land must be delivered to the purchaser or purchaser's transferees by the debtor ..., within 10 days after written demand for the possession has been made by, or on behalf of, the purchasers [sic] or purchaser's transferees." Failure to comply with § 6-5-251(a) results in a loss of the right of redemption. Ala.Code 1975, § 6-5-251(c). Therefore, the Wattses had only until August 20, 1993, to either surrender possession of the property, in order to maintain their statutory right to redeem the property, or to pay the redemption price to Rudulph. It is undisputed that the Wattses were still in possession of the property after August 20, 1993.
The fundamental question is: When the Wattses tendered the first check on August 20, 1993, did they, by tendering that check, maintain their statutory right to redeem? This Court has held that redemption statutes will be liberally construed in favor of redemption. "[W]hile their terms are not to be extended by implication beyond what the legislature has authorized or intended, the construction in any case of doubt or ambiguity should be in favor of the right to redeem." Cox v. Junkins, 431 So. 2d 497, 499 (Ala. 1983), quoting 59 C.J.S. Mortgages § 819, p. 1564. This court stated in Garvich v. Associates Financial Services Co., 435 So. 2d 30, 33 (Ala.1983):
Quoting Rodgers v. Stahmer, 235 Ala. 332, 333, 179 So. 229, 230 (1938).
The extent of the redemptioner's flexibility was clarified in Purcell v. Smith, 388 So. 2d 525 (Ala.1980). Under Ala.Code 1975, § 6-3-251, the purchaser has 10 days to respond to the redemptioner's demand for a statement of all debts and lawful charges. In Purcell, this Court held that the running of that 10-day limit began on the day the demand was received. The Court rejected the argument that the 10-day period should begin on the date the demand is placed in the mail. This Court stated:
388 So. 2d at 528-29. The important right at stake for the purchaser was the purchaser's right to claim improvements on the property that would be forfeited by a failure to respond within the 10-day limit. The Court based its holding in Purcell on Hale v. Kinnaird, 200 Ala. 596, 76 So. 954 (1917). In Hale, the purchaser mailed the itemized statement of charges after the 10-day limit; this Court held that the tardiness excused the redemptioner's failure to make a timely tender. The Court in Purcell quoted Hale:
388 So. 2d at 528. Both Purcell and Hale stand for the proposition that the purchaser and the redemptioner each should show "due diligence," so that the other party is not deprived of an important property right.
Applying that standard to the facts in this case, we must conclude that Rudulph Real Estate did not act with due diligence. The Wattses' attorney calculated the redemption price without the purchaser's itemized cost statement. The Wattses asked Rudulph on August 19, by personal delivery, to provide a full itemization of liabilities. On the day they received the lawful right to act, by the conveyance from Dunn, they acted. Rudulph was able to send a demand letter on the very day of foreclosure, yet was somehow unable to provide the itemization requested by the Wattses until eight days after the Wattses had made their request. The Wattses personally delivered to Rudulph a check they thought would cover the redemption amount. The Wattses also stated their intent to immediately tender any remaining cost, and their attorney guaranteed the payment of any remaining cost. The Wattses did all they could to redeem the real property and did so within the 10-day limit. There is no question that they made their effort in good faith. The only reason their redemption efforts were not full and exact was Rudulph's failure to provide the itemization and Rudulph's refusal to accept any of the Wattses' good faith attempts at redemption.
In this case, the redemptioners did all they could to comply with the 10-day limit, and they clearly had the capacity to fully redeem. The only reason for a failure of redemption is the inaction of the purchaser. Further, the redemptioner has the important property right of redemption at stake, a particularly important right when it involves the redemptioner's home. In this case that right was put at risk by the behavior of the purchaser. At the same time, the actions of the redemptioners did not place at risk the purchaser's property right to have the full redemption price paid. The combination of these factors excuses the redemptioners from exact compliance with the 10-day limit on surrendering possession. Even though Rudulph delivered the itemization within the statutory 10-day period, Rudulph's knowledge that the redemptioner's 10-day period for redemption had expired undermines any argument that Rudulph's delivery was made in good faith.
The Wattses' important property right of redemption should not be forfeited because of a lack of due diligence on Rudulph's part. Therefore, the Wattses were excused from exact compliance. Their failure to surrender possession of the property did not forfeit their right to redeem the property. We caution, however, that this opinion should not be interpreted as providing a redemptioner the right to offer a token sum to the purchaser as redemption, with an offer to pay the rest after the 10-day limit has run. This opinion does not focus on the dollar amount tendered, although the dollar amount in this case is one factor considered in determining whether a good faith effort to redeem has been made. Rather, it focuses on the good faith and due diligenceor the lack thereofof both the redemptioners and the purchaser. This opinion addresses the timing of the purchaser's response to a request for itemization, in light of the 10-day redemption period and whether that response represents due diligence. This opinion does not challenge any of the trial court findings of fact.
Accordingly, the judgment of the trial court is reversed and the cause is remanded.
ORIGINAL OPINION WITHDRAWN; OPINION SUBSTITUTED; APPLICATION OVERRULED; REVERSED AND REMANDED.
ALMON, HOUSTON, INGRAM, and BUTTS, JJ., concur. | February 23, 1996 |
6488c012-8a20-4457-b511-66f00427f6cb | Childers v. Darby | N/A | 1130530 | Alabama | Alabama Supreme Court | REL: 09/19/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
SPECIAL TERM, 2014
____________________
1130530
____________________
David Childers and Robert DeShawn Childers
v.
Leroy Darby
Appeal from Lauderdale Circuit Court
(CV-12-900223)
STUART, Justice.
David Childers and Robert DeShawn Childers ("Shawn")
appeal the Lauderdale Circuit Court's judgment quieting title
in a certain piece of real property, on which is situated a
house, in Leroy Darby. We reverse and remand.
1130530
Facts and Procedural History
In August 2012, Darby filed a complaint to quiet title in
certain real property, averring:
"1. This action is brought pursuant to the Code
of Alabama, 1975, as amended, § 6-6-540, et seq.,
and 6-[6]-560, et seq.
"The Defendant land, in which a fee simple
ownership interest is sought, is as follows:
"Beginning at a point on the East line of
the Northeast 1/4 of the Northeast 1/4 of
Section 9, Township 1 South, Range 12,
which said point is 525 feet North of the
Southeast corner thereof; thence West 210
feet; thence North 315 feet; thence East
210 feet to Section Line Road; thence South
315 feet to the point of beginning.
"2. [Darby] claims to have a fee simple title in
or to the said land described hereinabove.
"3. The land that is subject to this complaint
was obtained by [Darby] through THE PROBATE COURT OF
LAUDERDALE COUNTY, ALABAMA to [Darby] at Tax Sale
dated May 5, 2009.
"4. Thereafter upon application to the State
Land Commissioner of the State of Alabama by
[Darby], a deed was proffered to [Darby] on May 8,
2012, the STATE OF ALABAMA proffered to [Darby] a
deed to said parcel recorded in the office of the
Judge of Probate of Lauderdale County, Alabama and
recorded on RLPY 2012, PAGE 20142.
"5. [Darby] has made a party or parties to this
complaint, all persons against whom [Darby] claims
title to said lands through their statutory rights
of redemption, those being:
2
1130530
"A. BARBARA E. HOLLIS, address unknown.[1]
"B. SHAWN CHILDERS, ---- County Road 141,
Florence, AL 35633.
"C. A, B, C, AND ALL OTHER PERSONS OR
ENTITIES CLAIMING ANY PRESENT, FUTURE,
CONTINGENT, REMAINDER OR OTHER INTEREST IN
THE DEFENDANT LANDS DESCRIBED HEREINABOVE,
WHERE TRUE NAME IS UNKNOWN TO THE PLAINTIFF
AT THE PRESENT TIME BUT WHICH WILL BE ADDED
HERETO BY AMENDMENT WHEN ASCERTAINED.
"6. The only person who is known to [Darby] who
has had physical possession of said lands, or any
part thereof since the decree of sale in May 5,
2009, other than [Darby], is the defendant, SHAWN
CHILDERS. [Darby], by and through his attorney of
record, James Q. Stanphill, Jr., sent SHAWN
CHILDERS, a written demand for possession of the
property dated June 20, 2012. [Childers] received
the notice via certified mail on June 28, 2012.
"7. All persons who have at any time within 10
years next preceding the filing of this complaint
assesses [sic] or paid any taxes upon said lands or
any interest therein are:
"A. LEROY DARBY
"B. BARBARA E. HOLLIS
"8. The age, address or legal competency of
defendant BARBARA E. HOLLIS is unknown to [Darby].
It is believed to be, but unknown to [Darby], that
[Hollis] is, at the time of the filing of this
complaint, deceased. The Defendant, SHAWN CHILDERS,
is over the age of 19 years old, residing at ----
The recorded deed for the real property at issue named
1
Hollis as the owner of the property.
3
1130530
County Road 141, Florence, AL 35633, and of legal
competency. The age, address or legal competency of
any other of the hereinabove persons is unknown to
[Darby].
"....
"WHEREFORE FROM THE ABOVE STATED PREMISES,
[Darby] requests that this Honorable Court take
jurisdiction over this cause of action and issue all
orders, notices, demand all publications and take
all such other actions necessary so as to set a date
for hearing to quiet title to the above described
property into [Darby]."
(Capitalization in original.) The complaint was subsequently
amended to name Martha Creasy, Leslie Creasy's widow, and
their children –- Tina Creasy, Robert Creasy, and Roy Creasy
–- as defendants.
2
Shawn answered the complaint. A trial was conducted on
two separate days. After the first day, the trial court
entered the following order:
"This cause came before the Court on complaint
to quiet title, Defendants Barbara Hollis, Martha
Creasy, Tina Creasy, Robert Creasy, and Roy Creasy
were served by publication but failed to appear.
Defendant Robert DeShawn Childers did appear pro se.
"[Darby] presented evidence from Clint Wilkes,
an abstractor, that the title to the property in
A title search established that Hollis had been deeded
2
the property by Martha Creasy, who had inherited the property
at her husband's death.
4
1130530
question, according to the courthouse records, is
vested in Barbara Hollis subject to a tax lien and
tax deed in favor of Leroy Darby. [Darby] testified
that he bought the property at a tax sale in March
2009. He has driven by the property but has never
been on the property. To his knowledge the house
located on the property is occupied by [Shawn] whose
name appears nowhere in the title records. No one
has ever made any effort to redeem the property.
"[Darby] rested his case and the court allowed
[Shawn] to testify in his own behalf.
[Shawn]
[3]
claimed that his father, who is now age 85, bought
the property at a foreclosure sale in 1995 although
he had no firsthand knowledge of this fact. He was
unable to tell the court from whom it was purchased.
[Shawn] further claimed that on a previous occasion
a person tried to evict him from the property
claiming they had bought the land at a tax sale but
a circuit judge in this circuit ruled the tax deed
was invalid. He was unable to tell the court the
names of the litigants, the court case number, or
the time frame for such suit.
"[Shawn]
requested
additional
time
to
gather
his
evidence. Motion granted. The balance of this case
is continued ... for [Shawn] to present any evidence
he has of his claim to title."
Shawn retained counsel and moved the trial court,
pursuant to Rule 19, Ala. R. Civ. P., to join David Childers,
his father, as a defendant in the action. The trial court
granted the motion, and David was added as a party to the
action.
Shawn
testified that he had resided on the property since
3
2000.
5
1130530
On December 3, 2013, the trial resumed. The trial court
admitted into evidence the deposition of David, who testified
that, at a foreclosure sale in 1995, he had purchased the real
property at issue, which consisted of 2.7 acres and on which
was situated a two-bedroom house with various outbuildings.
He stated that he had repaired the house, had cleaned up the
yard, and had used the surrounding land to train his horses
from 1995 through 2003 or 2004. He explained that he had
filed a deed reflecting his ownership of the property but that
he had never paid taxes on the property because he had been
informed by the "tax office" that he was exempt from taxes
because he was 65 years old and totally disabled. According
to David, his son Shawn has lived on the property since 2000.
In support of his testimony, David presented a statement from
the Florence Utilities Department indicating that in 1995
electricity had been connected to the house in his name and
that the account for electrical service to the house has
remained in his name.
Evidence was also presented indicating that the deed
filed by David was not for the property at issue but for an
adjoining one-acre lot. A copy of a quitclaim deed from
6
1130530
Martha Creasy and one of her sons transferring the one-acre
lot adjoining the property at issue to David was admitted into
evidence.
Additionally,
a
mortgage-foreclosure
deed
indicating that the one-acre lot owned by David had been
foreclosed on in 2004 was admitted into evidence, and
additional
evidence
was
admitted
indicating
that
that
property
had subsequently been sold several times.
After considering the testimony and other evidence, the
trial court quieted title in the real property, including the
house, in Darby. Shawn and David moved for a new trial or, in
the alternative, to alter, amend, or vacate the judgment,
arguing, among other grounds, that the trial court had erred
in quieting title in Darby because, they asserted, the
evidence did not establish that Darby was in peaceable
possession of the property. The trial court denied the
motion, and Shawn and David appealed.
Standard of Review
"In an action to quiet title, when the trial
court hears evidence ore tenus, its judgment will be
upheld unless it is palpably wrong or manifestly
unjust. Mid–State Homes, Inc. v. King, 287 Ala.
180, 249 So. 2d 836 (1971); and Webb v. Griffin, 243
Ala. 468, 10 So. 2d 458 (1942). However, the
presumption of correctness does not attach to a
trial
court's
conclusions
of
law.
Cullman
7
1130530
Wholesale, Inc. v. Simmons, 592 So. 2d 1031, 1034–35
(Ala. 1992); Gaston v. Ames, 514 So. 2d 877, 878
(Ala. 1987); Smith v. Style Adver., Inc., 470 So. 2d
1194 (Ala. 1985); and League v. McDonald, 355 So. 2d
695 (Ala. 1978)."
Woodland Grove
Baptist Church v. Woodland
Grove
Cmty. Cemetery
Ass'n, 947 So. 2d 1031, 1036 (Ala. 2006).
Analysis
First, Shawn and David maintain that the complaint filed
by Darby did not satisfy the statutory pleading requirements
to invoke the trial court's jurisdiction over a quiet-title
action. They contend that the complaint is deficient because
Darby did not aver specifically that he was in peaceable
possession of the real property.
Section 6-6-540, Ala. Code 1975, provides:
"When any person is in peaceable possession of
lands, whether actual or constructive, claiming to
own the same, in his own right or as personal
representative or guardian, and his title thereto,
or any part thereof, is denied or disputed or any
other person claims or is reputed to own the same,
any part thereof, or any interest therein or to hold
any lien or encumbrance thereon and no action is
pending to enforce or test the validity of such
title, claim, or encumbrance, such person or his
personal
representative
or
guardian,
so
in
possession, may commence an action to settle the
title to such lands and to clear up all doubts or
disputes concerning the same."
8
1130530
Rule 8, Ala. R. Civ. P., provides that a complaint is
sufficient if it puts a defendant on notice of the claims
asserted against him or her. A rule or statute, however, may
qualify the rule of generalized notice pleading. Bethel v.
Thorn, 757 So. 2d 1154, 1158 (Ala. 1999). Section 6-6-541,
Ala. Code 1975, sets forth the required contents of a
complaint in a quiet-title action, stating:
"The complaint authorized by Section 6-6-540
must describe the lands with certainty, must allege
the possession and ownership of the plaintiff and
that the defendant claims, or is reputed to claim,
some right, title, or interest in, or encumbrance
upon, such lands and must call upon him to set forth
and
specify
his
title,
claim,
interest,
or
encumbrance and how and by what instrument the same
is derived and created."
In this case, although Darby did not include the term
"peaceable possession" in his complaint, the complaint on its
face satisfied the statutory requirements for pleading a
quiet-title action. In the complaint, Darby identified the
statute, § 6-6-540, Ala. Code 1975, pursuant to which his
action was filed and alleged facts demonstrating his
possession of the property. Darby included a legal
description of the property, stated that he had purchased the
property through a tax sale conducted by the Lauderdale
9
1130530
Probate Court in 2009, stated that he had obtained from the
State a deed to the property in May 2012, identified the
parties that might have claim to the property through their
statutory rights of redemption, identified Shawn as the only
person to his knowledge who had had physical possession of the
property, and requested that the trial court conduct a hearing
to quiet title to the property. Those averments by Darby
satisfy the requirements of Rule 8, Ala. R. Civ. P., and § 6-
6-541, Ala. Code 1975, for pleading a quiet-title action.
Next, Shawn and David contend that the trial court erred
in quieting title in Darby because, they say, the evidence
does not support the trial court's finding that Darby was in
peaceable possession of the property, as required by § 6-6-
540,
at
the
time
he
filed
his
quiet-title
action.
Specifically, Shawn and David maintain that because Shawn was
in actual possession of the property at the time Darby filed
his complaint, Darby was not in peaceable possession of the
property.
To establish a prima facie case in a quiet-title action,
the plaintiff must prove that he or she is in peaceable
possession of the real property. § 6-6-540. "[W]hat
10
1130530
constitutes peaceable possession ... must be left for
determination on the facts of each particular case." Webb v.
Griffin, 243 Ala. 468, 471, 10 So. 2d 458, 460 (1942).
The term "peaceable possession" was defined as follows in
George E. Wood Lumber Co. v. Williams, 157 Ala. 73, 76-77, 47
So. 202, 203 (1908):
"So the question arises, what is peaceable
possession? It cannot mean that it is peaceable
unless there be some legal proceeding in progress to
test the title or right to possession; for the
object of the statute is to allow the party who is
in possession, and who cannot force the adversary
claimant to institute any proceeding, to bring said
party into court in order to determine whether he
has any just claim to the property. The word
'peaceable,' then, refers to the character of his
possession. So long as his possession is so clear
that no one is denying the fact of his actual or
constructive possession, it is peaceable, although
some other person may be denying his right to
possession."
In Southern Railway Co. v. Hall, 145 Ala. 224, 226-27, 41
So. 135, 136 (1906), this Court explained that peaceable
possession may be either actual and constructive, stating:
"The word peaceable in connection with the word
possession is used 'as contradistinguished from
disputed or contested possession, and that it should
be under claim of ownership.' Adler v. Sullivan,
115 Ala. 58[2], 22 So. 87 [(1897)].
"'Actual possession, or possession in fact,
exists when the thing is in the immediate occupancy
11
1130530
of the party, or his agent or tenant,' is synonymous
with pedis possessio. 28 Am. & Eng. Ency. Law, (2d
Ed.) 238.
"'Constructive possession, a possession in law,
it is sometimes called, is that possession which the
law annexes to the legal title or ownership of
property, when there is a right to the immediate
actual possession of such property, but no actual
possession.' [Id. at] 239.
"'When one has a legal estate in fee in land, he
has the constructive possession, unless there is an
actual possession in some one else.' It is founded
on the existence of title, in some form. [Id.]"
With regard to constructive possession, a person
demonstrates that he or she is in constructive possession of
real property if he or she has a legal estate in fee in the
real property and no one is in actual possession of the
property. Hinds v. Slack, 293 Ala. 25, 299 So. 2d 717 (1974);
Barry v. Thomas, 273 Ala. 527, 142 So. 2d 918 (1962); and
George E. Wood Lumber Co. v. Williams, supra.
A review of the evidence establishes that the trial court
erred in quieting title in Darby because the evidence does not
establish that Darby was in peaceable possession of the
property. Darby's testimony that he had only driven past the
property several times but had never walked the property or
obtained
actual possession of the property established that he
12
1130530
was not in actual possession of the property. The evidence
further established that, although Darby had legal title to
the property, Shawn was living on the property. Therefore,
because Shawn was in actual possession of the property, the
evidence did not establish that Darby had constructive
possession of the property. Southern Ry. v. Hall, supra.
Because the evidence does not demonstrate that Darby had
either actual or constructive peaceable possession of the
property and because title may not be quieted in one who does
not have peaceable possession, the trial court erred in
quieting title in Darby. Dennison v. Claiborne, 289 Ala. 69,
265 So. 2d 853 (1972); and Chestang v. Tensaw Land & Timber
Co., 273 Ala. 8, 134 So. 2d 159 (1961).
Darby also filed his action pursuant to § 6-6-560, Ala.
Code 1975; however, he cannot satisfy the requirements of
that statute either.
Section 6-6-560 provides:
"When
any
person,
natural
or
artificial,
claims,
either in his own right or in any representative
capacity whatsoever, to own any lands or any
interest therein, and is in the actual, peaceable
possession of the land, or if neither he nor any
other person is in the actual possession of the
lands and he holds, and has held, color of title to
the lands, or interest so claimed, for a period of
13
1130530
10 or more consecutive years next preceding and has
paid taxes on the lands or interest during the whole
of such period, or if he, together with those
through whom he claims, has held color of title and
paid taxes on the land or interest so claimed during
the whole of such period of time, or if he and those
through whom he claims have paid taxes during the
whole of such period of 10 years on the lands or
interest claimed and no other person has paid taxes
thereon during any part of said period, he may, if
no action is pending to test his title to, interest
in or his right to the possession of such lands,
file a verified complaint in the circuit court of
the county in which such lands lie against said
lands and any and all persons claiming, or reputed
to claim, any title to, interest in, lien, or
encumbrance on said lands, or any part thereof, to
establish the right or title to such lands or
interest and to clear up all doubts or disputes
concerning the same."
Section 6-6-560 is applicable when either the plaintiff is in
actual peaceable possession of the property or no one is in
actual possession of the property. Fitts v. Alexander, 277
Ala. 372, 375, 170 So. 2d 808, 810 (1965). Here, the evidence
established that Darby was not in actual possession of the
property and that Shawn was in actual possession of the
property; therefore, Darby's evidence did not establish a
prima facie case under § 6-6-560, and Darby is not entitled to
title being quieted in him under that statute.
Lastly, this Court recognizes that if a defendant has
answered a plaintiff's quiet-title action and the evidence
14
1130530
shows that the defendant has the better title and has
peaceable possession, then a trial court has the authority to
quiet title in the defendant. Chestang v. Tensaw Land &
Timber Co., 273 Ala. at 18, 134 So. 2d at 169. A review of
the record, however, does not establish that either Shawn or
David has peaceable possession of the property or that either
Shawn or David had acquired title to the property by adverse
possession, see Cagle v. Hammond, 51 So. 3d 150 (Ala. Civ.
App. 2010); therefore, the record does not support a judgment
quieting title in either Shawn or David.
Conclusion
Based on the foregoing, the judgment of the trial court
is reversed and the case is remanded.
REVERSED AND REMANDED.
Parker and Wise, JJ., concur.
Moore, C.J., concurs specially.
Shaw, J., concurs in the result.
15
1130530
MOORE, Chief Justice (concurring specially).
I concur with the holding in the main opinion that Leroy
Darby's quiet-title action fails based on his lack of
peaceable possession of the property at issue. I note that, in
a case such as this, when a party has legal title to a
property, but another person is in actual possession, the
person claiming title may bring "an action in the nature of an
action of ejectment." § 6-6-280(a), Ala. Code 1975. The
complaint in such an action "for the recovery of land or the
possession thereof ... is sufficient if it alleges that the
plaintiff was possessed of the premises or has the legal title
thereto ...." § 6-6-280(b), Ala. Code 1975 (emphasis added).
"In a statutory action in the nature of ejectment a
plaintiff may recover by showing legal title to the premises
sued for at the time of the commencement of the suit and the
right
to
immediate
possession."
Atlas
Subsidiaries
of
Florida,
Inc. v. Kornegay, 288 Ala. 599, 601, 264 So. 2d 158, 161
(1972). "Ejectment is a favored action for the trial of title
to land." Kelley v. Mashburn, 286 Ala. 7, 9, 236 So. 2d 326,
327 (1970).
16 | September 19, 2014 |
4d2efbfc-99e5-466f-bcdd-c375afdaacd5 | Deng v. Scoggins | N/A | 1121415 | Alabama | Alabama Supreme Court | Rel: 12/5/14
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
____________________
1121415
____________________
Victor Deng and DM Technology & Energy, Inc.
v.
Clarence "Buddy" Scroggins and Complete Lighting Source,
Inc.
Appeal from Jefferson Circuit Court, Bessemer Division
(CV-07-0563)
BRYAN, Justice.
Victor Deng and DM Technology & Energy, Inc. ("DM"),
appeal from a judgment based on the jury's verdict entered by
the Jefferson Circuit Court in favor of Clarence "Buddy"
Scroggins and Complete Lighting Source, Inc. ("Complete
1121415
Lighting"), on their claims against Deng and DM alleging
breach of contract and fraud. We affirm the judgment as to
the breach-of-contract claim but reverse the judgment as to
the fraud claim, and we remand the case to the circuit court
for a new trial on that claim.
Facts and Procedural History
Scroggins is the owner of Complete Lighting, an Atlanta-
based company that sells lighting equipment, including lamps,
ballasts, and fixtures. Deng is the owner of DM, a
California-based company that also sells lighting equipment.
Scroggins began to work as a sales representative for DM in
late 2004 or early 2005. Scroggins testified that the parties
originally intended for Scroggins to sell DM's fluorescent
products but that he had difficulty selling those products
because DM did not have the necessary stock to fill the orders
he generated.
As part of its business, Complete Lighting sold lighting
equipment to owners of aquariums. Scroggins became aware of
concerns expressed by aquarium owners related to high energy
consumption, costs, and heat caused by existing aquarium-
lighting fixtures. Scroggins testified that, in response to
2
1121415
those concerns, he developed an idea for an LED lamp tube that
could be used in aquariums. Scroggins did not have the
ability to manufacture the LED lamp tube, so he communicated
his idea to Deng, who owned a company in China with
manufacturing capabilities. Deng developed a prototype of
the
LED lamp tube, which he sent to Scroggins. Scroggins
testified that the first prototype was "not even close" to his
original idea. He discussed his concerns with Deng, who,
according to Scroggins, sent him a second prototype that was
better. However, Scroggins still was not satisfied with the
prototype. Scroggins testified that the third prototype Deng
sent him was something that Scroggins thought was marketable.
While the prototype for the LED lamp tube was in
development, a friend of Scroggins's, Skip Busby,
suggested an
alternative use for the LED lamp tubes in display counters in
retail
businesses,
such
as
Wal-mart
Stores,
Inc.
("Wal-mart").
Busby arranged a meeting for Deng and Scroggins in
Bentonville, Arkansas, with one of Wal-mart's suppliers,
Leggett & Platt, Inc., to demonstrate the LED lamp tubes. In
July 2006, while in Bentonville but before the meeting with
Leggett & Platt, Scroggins and Deng executed an agreement that
3
1121415
had been drafted by Scroggins ("the exclusivity agreement").
The exclusivity agreement provided, among other things:
"1. [DM] gives the right to sell to Complete
Lighting exclusively for one year from the signed
date. At the end of this term, said contract will
be reviewed and re-negotiated if needed.
"2. [DM] guarantees 5% commission for present
and future sales from any and all customers
[Complete Lighting] brings of the LED [lamp] [t]ube.
"3. [DM] guarantees to deliver product in
quality condition.
"4. [DM] guarantees not to sell [to]
customer[s]
direct[ly]
without
commissions
to
[Complete Lighting] under any circumstances."
As a result of their meeting with Leggett & Platt,
Gabriel Logan, a limited liability company that sells to Wal-
mart through Leggett & Platt, expressed interest in the LED
lamp tube and, in November 2006, purchased 25 samples, or
$88,940.22 worth of product, from DM. The samples were to be
used in a test run in stores. Scroggins testified that he had
received very positive feedback from Wal-mart and "Zales,"
presumably Zales Jewelry Company, to whom Scroggins testified
he had sent a sample.
From July 2006 to March 2007, there were no further sales
of LED lamp tubes. Scroggins testified that he had trouble
4
1121415
getting working samples from DM that could be delivered to
customers. Another difficulty in selling the LED lamp tubes
was that the drivers in the samples kept burning out. In
1
August 2006, Deng applied for a patent for the LED lamp tube
in the United States. Deng was listed as the sole "inventor"
of the LED lamp tube. Scroggins was not named in the patent
application.
In March 2007, Deng sent Scroggins a letter, stating:
"It is with regret that we find the need to
terminate the contract of 'exclusiveness' regarding
the LED Lamp Tubes as manufactured by us. It is our
belief that the conditions of said agreement have
not been fulfilled. Over an eight month period only
one customer has been produced. As with you, we
also believed the future potential of this customer
could have been vastly significant. However, [DM]
has invested a large amount of dollars for this
product's
R[esearch]
&
D[evelopment].
And
unfortunately, to help continue this new product's
growth,
DM
feels
it
need[s]
to
have
more
sales/customers by this time.
"This termination will be effective March 31,
2007. All commissions accrued up to that date will
be paid as per our agreement."
Deng did not pay Scroggins a commission on the November 2006
sale to Gabriel Logan.
It was later discovered that the problem was not in the
1
design of the LED lamp tube but in the LED lighting itself,
which was not manufactured by DM.
5
1121415
In April 2007, Scroggins and Complete Lighting sued Deng,
DM, and BARTCO Lighting ("BARTCO"), a company to whom Deng and
DM had sold some "Retrofit LED tubes." Scroggins and Complete
Lighting alleged in the complaint:
"14. Upon information and belief, and prior to
the ... unilateral termination of the [exclusivity
agreement], DM Technology and Deng and BARTCO
entered into a conspiracy to not only defraud
Scroggins and Complete Lighting of the proprietary
LED Lamp Tubes technology they created, but also any
and all future commissions or sales associated with
the LED Lamp Tubes.
"15. Upon information and belief, and in
furtherance of the conspiracy, DM Technology and
Deng entered into an agreement with BARTCO wherein
BARTCO would [sell] the LED Lamp Tubes that were
created by Scroggins and Complete Lighting and
subsequently manufactured by DM Technology and Deng.
"16. Scroggins and Complete Lighting also
completed sales to Gabriel Logan and are owed back
commissions for sales.
"17. Scroggins and Complete Lighting are owed
past and future commissions on sales of all LED Lamp
Tubes by DM Technology and Deng and BARTCO.
"18.
Upon information
and
belief,
DM
Technology
and Deng have sold BARTCO over 2.8 million dollars
of LED Tubes, for which Scroggins and Complete
Lighting are owed a five percent (5%) commission of
$140,000.00.
"19.
Upon
information
and
belief,
DM
Technology, Deng and BARTCO have continued the
conspiracy by continuing to market the LED Lamp
6
1121415
Tube[s], by effectuating further sales of LED Lamp
Tubes."
Scroggins and Complete Lighting sought an injunction
preventing Deng, DM,
and
BARTCO from manufacturing, making, or
selling the LED lamp tubes. They also sought damages for,
among other claims, breach of contract and fraud. BARTCO was
eventually dismissed from the case and is not a party to this
appeal.
The action was removed to federal court but was remanded
to the Jefferson Circuit Court because of "fatal procedural
defects in the removal." Deng and DM moved the circuit court
to dismiss the claims against them, arguing that the court did
not have jurisdiction over them. The circuit court initially
granted their motion but later set aside the dismissal on
Scroggins and Complete Lighting's motion to alter, amend, or
vacate the judgment.
In March 2013, the case was tried before a jury. At
trial, questions were posed regarding an alleged promise by
Deng to include Scroggins's name on the patent for the LED
lamp tubes. Scroggins testified that he and Deng had
discussed patenting the idea for LED lamp tubes but did not
discuss a time frame for securing that patent.
7
1121415
Prior to trial, Scroggins had testified by affidavit in
June 2007 and again in May 2008 that
"[a]pproximately a year to a year and a half
into th[e] process [of developing the LED lamp tube]
Deng suggested that the LED light needed to be
patent[ed].
"I did not have the funds available to pay for
the patent, so we agreed that the patent would be
submitted in DM Technology's name.
"It was during this time period that I became
concerned that once the technology was patented
there would be nothing to prevent Deng from stealing
my idea.
"Therefore, in exchange for the patent being
issued to DM Technology's name instead of mine, we
agreed that I would be the exclusive agent
throughout the United States to [sell] the LED Lamp
Tubes [that] DM Technology manufactured. We
subsequently
entered
into
[the
exclusivity]
agreement."
However,
Scroggins
testified
at
trial
that
the
exclusivity agreement was executed in exchange for allowing
Deng to put his name as well as Scroggins's name on the LED-
lamp-tube patent. Scroggins further testified at trial that
the exclusivity agreement was "a temporary thing while we
worked on ... getting [me] on the patent, whatever we had to
do. It was more of a short-term protection for me."
Scroggins also testified that if Deng had not agreed to
8
1121415
include him on the patent, Scroggins "would have looked for
another source" to manufacture the LED lamp tube.
Scroggins testified that around November 2006 he learned
that a patent application for the LED lamp tube was pending in
China. The Chinese patent application did not name Scroggins
as an inventor. Scroggins testified that he called Deng about
the omission and that Deng assured him that this was the
"standard process" in China and that it "would not affect
[their] relationship and the plans that [they] had,"
presumably related to securing the United States patent.
Scroggins also testified that Deng told him the application
for the patent in China was unrelated to the United States
patent application.
Deng testified at trial that he did not include
Scroggins's name on the United States patent application
because the LED lamp tube was not Scroggins's idea. Deng
testified that Scroggins was a sales representative and that
he, Deng, "never had an intent to put Buddy Scroggins'[s] name
on th[e] patent" because "[i]t [was] not [Scroggins's]
business."
9
1121415
At the close of Scroggins and Complete Lighting's case-
in-chief, Deng and DM, on the one hand, and Scroggins and
Complete Lighting, on the other, separately moved for a
judgment as a matter of law ("JML"), which motions were
denied. They renewed those motions at the close of all the
evidence. The circuit court denied the renewed motions for a
JML as well and submitted only the breach-of-contract and
fraud claims to the jury. The breach-of-contract claim was
based on Deng and DM's alleged failure to pay Scroggins the
commission owed on the sale to Gabriel Logan, and the fraud
claim was based on Deng's alleged fraudulent promise to put
Scroggins's name on the patent. The jury returned a verdict
in Scroggins and Complete Lighting's favor on both claims and
awarded them $4,750 in compensatory damages on the breach-of-
contract claim, $1.5 million in compensatory damages on the
fraud claim, and $1.5 million in punitive damages on the fraud
claim.2
Deng and DM argue that the $1.5 million in compensatory
2
damages was actually an award for "nominal compensatory
damages." Deng and DM's brief, at 28. Scroggins and Complete
Lighting argue that the verdict form identified those damages
as "Nominal/Compensatory" damages and that the jury clearly
chose compensatory rather than nominal damages. Deng and DM
cite no evidence to the contrary. The circuit court described
the damages awarded for the fraud claim as "compensatory
10
1121415
On May 1, 2013, Deng and DM filed a motion, renewing
their request for a JML or, in the alternative, requesting a
new trial. Scroggins and Complete Lighting opposed Deng and
DM's motion and moved the circuit court to strike evidence
attached to Deng and DM's motion related to an allegedly fake
2003 Chinese patent for the LED lamp tubes and unauthenticated
tax returns for DM. They also moved for sanctions against
Deng and DM. After a hearing, the circuit court entered an
order denying Deng and DM's motion for a JML or, in the
alternative, a new trial and also denying Scroggins and
Complete Lighting's motion for sanctions. The circuit court
went on to grant Scroggins and Complete Lighting's motion to
strike evidence of the 2003 Chinese patent and the
unauthenticated tax returns. The circuit court also entered
a separate order awarding Scroggins and Complete Lighting
court costs in the amount of $4,133.44. Deng and DM have
damages" in its judgment based on the jury's verdict, and Deng
and DM refer to them as "compensatory damages" in their
renewed motion for a JML or, in the alternative, for a new
trial. In fact, they raise the argument that the damages are
"nominal compensatory damages" for the first time on appeal.
"'An issue may not be raised for the first time on appeal.'"
Allsopp v. Bolding, 86 So. 3d 952, 962 (Ala. 2011).
11
1121415
appealed only the denial of the motion for a JML or a new
trial.
Issues
Deng and DM allege that the circuit court erred in
denying their motion for a JML or, in the alternative, a new
trial because, they argue, (1) the fraud claim is preempted by
federal patent law and, therefore, the circuit court did not
have jurisdiction over that claim; (2) Scroggins and Complete
Lighting changed the basis of their fraud claim during the
course of the trial, which, Deng and DM argue, constituted
"trial by ambush"; (3) the fraud claim was based on
contradictory testimony by Scroggins; (4) Scroggins and
Complete Lighting did not present evidence of
several
elements
of a fraud claim; (5) the compensatory-damages award for the
fraud claim was based on speculative evidence; (6) the
punitive-damages award was not supported by clear and
convincing evidence; and (7) the punitive-damages award was
the result of prejudice, bias, passion, or other improper
motive. Deng and DM also argue, in the alternative, that the
punitive-damages award
is excessive and that they are
entitled
to a remittitur of those damages.
12
1121415
Standards of Review
"When reviewing a ruling on a motion for a JML,
this Court uses the same standard the trial court
used initially in deciding whether to grant or deny
the motion for a JML. Palm Harbor Homes, Inc. v.
Crawford, 689 So. 2d 3 (Ala. 1997). Regarding
questions of fact, the ultimate question is whether
the nonmovant has presented sufficient evidence to
allow the case to be submitted to the jury for a
factual resolution. Carter v. Henderson, 598 So. 2d
1350 (Ala. 1992). The nonmovant must have presented
substantial evidence in order to withstand a motion
for a JML. See § 12–21–12, Ala. Code 1975; West v.
Founders Life Assurance Co. of Florida, 547 So. 2d
870, 871 (Ala. 1989). ... In reviewing a ruling on
a motion for a JML, this Court views the evidence in
the light most favorable to the nonmovant and
entertains such reasonable inferences as the jury
would have been free to draw. Id. Regarding a
question of law, however, this Court indulges no
presumption of correctness as to the trial court's
ruling. Ricwil, Inc. v. S.L. Pappas & Co., 599 So.
2d 1126 (Ala. 1992)."
Waddell & Reed, Inc. v. United Investors Life Ins. Co., 875
So. 2d 1143, 1152 (Ala. 2003).
With regard to a motion for a new trial, this Court has
stated:
"'"It is well established that a ruling on a motion
for a new trial rests within the sound discretion of
the trial judge. The exercise of that discretion
carries with it a presumption of correctness, which
will not be disturbed by this Court unless some
legal right is abused and the record plainly and
palpably shows the trial judge to be in error."'"
13
1121415
Baptist Med. Ctr. Montclair v. Whitfield, 950 So. 2d 1121,
1126 (Ala. 2006) (quoting Curtis v. Faulkner Univ., 575 So. 2d
1064, 1065–66 (Ala. 1991), quoting in turn Kane v. Edward J.
Woerner & Sons, Inc., 543 So. 2d 693, 694 (Ala. 1989), quoting
in turn Hill v. Sherwood, 488 So. 2d 1357, 1359 (Ala. 1986)).
"Furthermore, a jury verdict is presumed to be
correct, and that presumption is strengthened by the
trial court's denial of a motion for a new trial.
In reviewing a jury verdict, an appellate court must
consider the evidence in the light most favorable to
the prevailing party, and it will set aside the
verdict only if it is plainly and palpably wrong."
Delchamps, Inc. v. Bryant, 738 So. 2d 824, 831 (Ala. 1999)
(citations omitted).
Analysis
As a threshold matter, we note that Deng and DM allege no
error in either the jury's verdict or the circuit court's
judgment as they relate to the breach-of-contract claim or the
compensatory-damages award related to that claim. "'An
argument not made on appeal is abandoned or waived.'" Muhammad
v. Ford, 986 So. 2d 1158, 1165 (Ala. 2007) (quoting Avis Rent
A Car Sys., Inc. v. Heilman, 876 So. 2d 1111, 1124 n.8 (Ala.
2003)). Therefore, the judgment is affirmed insofar as it
relates to Scroggins and Complete Lighting's breach-of-
14
1121415
contract claim, and the remaining arguments will be addressed
only as they relate to the fraud claim.
Deng and DM argue that the circuit court "lacked subject
matter jurisdiction over the case because [Scroggins and
Complete Lighting's] claims attacked the validity and
ownership of a patent." Deng and DM's brief, at 12. The
United States Code, 28 U.S.C. § 1338(a), provides, in
pertinent part, that "[t]he [federal] district courts shall
have original jurisdiction of any civil action arising under
any Act of Congress relating to patents" and that "[n]o State
court shall have jurisdiction over any claim for relief
arising under any Act of Congress relating to patents."3
Deng and DM argue that, "prior to trial, Scroggins
maintained that the LED Lamp Tube was his idea. Scroggins
also testified that he and Deng agreed that the patent would
be submitted in DM Technology's name, only. In return,
Scroggins would be the exclusive agent throughout the United
States to sell the LED Lamp Tube." Deng and DM's brief, at
Again, we note that the breach-of-contract claim did not
3
relate to the patent for the LED lamp tube, but to Deng and
DM's alleged failure to pay Scroggins and Complete Lighting
the commission owed under the exclusivity agreement. Thus,
our analysis of this jurisdiction issue is limited to the
fraud claim.
15
1121415
14. However, Deng and DM argue, at trial "Scroggins[ and
Complete Lighting's] counsel told the jury that the case
centered on who actually invented the LED Lamp Tube," id., and
"[Scroggins] testified that Deng had obtained the patent of
Scroggins's
idea
without
Scroggins's
knowledge
or
permission."
Id., at 15. Deng and DM argue that "[t]his ... changed
[Scroggins's] case from one based upon the [exclusivity
agreement] to one attacking the validity of the patent
itself." Id. Therefore, Deng and DM argue, Scroggins and
Complete Lighting's fraud claim is federally preempted under
§ 1338(a) and the circuit court did not have jurisdiction over
that claim.
Deng and DM also cite the statement from University of
Colorado Foundation, Inc. v. American Cyanamid Co., 196 F.3d
1366, 1372 (Fed. Cir. 1999), that "the field of federal patent
law preempts any state law that purports to define rights
based on inventorship" and argue that,
"[i]n returning a verdict in Scroggins[ and Complete
Lighting's] favor on the fraud count, the judgment
necessarily had to have determined that Scroggins,
not DM Technology, was the 'inventor' of the LED
Lamp Tube. In doing so, the jury stepped into a
field that is within the exclusive jurisdiction of
the federal courts, rendering the judgment as void
as a matter of law."
16
1121415
Deng and DM's brief, at 15.
However, in HIF Bio, Inc. v. Yung Shin Pharmaceuticals
Industrial Co., 600 F.3d 1347, 1354 (Fed. Cir. 2010), the
United States Court of Appeals for the Federal Circuit ("the
Federal Circuit") stated: "Despite th[e] broad language [in
American Cyanamid], this court has emphasized that a claim
arises under the patent laws only if the inventorship issue is
essential to the resolution of the claims." The Federal
Circuit noted:
"The district court's jurisdiction under § 1338(a)
'extend[s] only to those cases in which a well-
pleaded complaint establishes either that federal
patent law creates the cause of action or that the
plaintiff's right to relief necessarily depends on
the resolution of a substantial question of federal
patent law, in that patent law is a necessary
element of the well-pleaded claims.'"
HIF Bio, 600 F.3d at 1352 (quoting Christianson v. Colt Indus.
Operating Corp., 486 U.S. 800, 808-09 (1988)).
Citing American Cyanamid, among others, the Federal
Circuit concluded in HIF Bio that the plaintiffs' claims for
a declaratory judgment as to inventorship and slander of title
were preempted by federal patent law because a determination
of inventorship was essential to the resolution of those
claims. The Federal Circuit went on to conclude, however,
17
1121415
that "patent law [was] not essential to plaintiffs' remaining
causes of action," including their fraud claims,
because
"each
cause of action could be resolved without reliance on the
patent laws." 600 F.3d at 1355. The Federal Circuit concluded
that, even though the question of inventorship may be relevant
to a claim, that claim is not preempted where "a determination
of inventorship is not essential to any of the ... elements of
[the claim]." HIF Bio, 600 F.3d at 1356.
The issue of the inventorship of the LED lamp tube may be
relevant to Scroggins and Complete Lighting's fraud
claim,
but
it is not essential to the particular elements of that claim.
"'Fraud'
is
defined
as
(1)
a
false
representation (2) of a material existing fact (3)
relied upon by the plaintiff (4) who was damaged as
a proximate result of the misrepresentation. If
fraud is based upon a promise to perform or abstain
from performing in the future, two additional
elements must be proved: (1) the defendant's
intention,
at
the
time
of
the
alleged
misrepresentation, not to do the act promised,
coupled with (2) an intent to deceive."
Coastal Concrete Co. v. Patterson, 503 So. 2d 824, 826 (Ala.
1987) (citation omitted).
Scroggins and Complete Lighting's fraud claim is based on
Deng's allegedly false promise to put Scroggins's name on the
patent application for the LED lamp tube, his alleged lack of
18
1121415
intent when he made the promise to fulfill that promise, and
the damage Scroggins and Complete Lighting allegedly suffered
by relying on that promise. Scroggins's status as the actual
inventor of the LED lamp tube is not essential to proving any
of those allegations or any other element of a fraud claim
based on an allegedly false promise. Thus, although the issue
of inventorship may be relevant to the fraud claim in this
case, it is not essential to a resolution of that claim, and
"[Scroggins and Complete Lighting's] right to relief [does
not] necessarily depend[] on the resolution of a substantial
question of federal patent law." Christianson, 486 U.S. at
809. Thus, the fraud claim is not federally preempted under
§ 1338(a), and Deng and DM are not entitled to have that claim
dismissed for lack of subject-matter jurisdiction. See HIF
Bio, supra.4
Deng and DM also cite Hunter Douglas, Inc. v. Harmonic
4
Design, Inc., 153 F.3d 1318 (Fed. Cir. 1998), for the
proposition that "if a state-law cause of action requiring a
'false statement' as an element attacks the validity of a
patent, it necessarily depends on a question of federal patent
law and the federal courts have exclusive subject matter
jurisdiction over the action, even where no federal cause of
action is otherwise involved." Deng and DM's brief, at 13.
However, Scroggins and Complete Lighting have not challenged
the validity of the patent or requested any changes be made to
the patent or sought a declaration of rights under the patent.
Instead, they have alleged that Deng fraudulently promised to
19
1121415
Deng and DM also argue that even if the circuit court has
jurisdiction over the fraud claim, they are entitled to a JML
on that claim because "Scroggins [and Complete Lighting]
failed to ... present evidence of reasonable reliance,
proximate cause of damages, or intent to deceive." Deng and
DM's brief, at 42. With regard to reasonable reliance, Deng
and DM argue that "Scroggins's testimony that he relied on
Deng's alleged promise that Scroggins would be put on the
Patent is unreasonable as a matter of law. Scroggins drafted
the [exclusivity] [a]greement. That [a]greement stated that
only Deng would be listed on the patent." Deng and DM's
brief, at 46.
However, the exclusivity agreement does not address the
acquisition of a patent for the LED lamp tube or state who
would be listed on any patent. Scroggins testified at trial
that Deng promised him that "[he] would be a partner" and that
"[he] would be on [the patent]." Scroggins testified that "if
[Deng] had not made that promise," Scroggins would have
located a different source to manufacture the LED lamp tube.
include Scroggins on the patent application for the LED lamp
tube and that Scroggins and Complete Lighting suffered damage
as a result of that false promise. Thus, Deng and DM's
reliance on Hunter Douglas is misplaced.
20
1121415
When the evidence is viewed in the light most favorable to
Scroggins and Complete Lighting as nonmovants, see Waddell,
supra, Scroggins's testimony is sufficient to create a jury
question as to whether Scroggins reasonably relied on Deng's
alleged promise. Thus, Deng and DM have not demonstrated that
they are entitled to a JML in this regard.5
Deng and DM next argue that they are entitled to a JML on
the fraud claim because "Scroggins [and Complete Lighting]
presented no evidence that any alleged misrepresentations by
Deng proximately caused damage to Scroggins [and Complete
Lighting]." Deng and DM's brief, at 47. Deng and DM argue
that, "[u]nder federal patent law, co-inventors of a patent
are not accountable to one another for profits or sales of the
Deng and DM also argue that Scroggins's reliance on
5
Deng's promise to put his name on the patent was unreasonable
because, they say, Scroggins was on notice of the alleged
misrepresentation. However, it is unclear how the evidence
they cite in support of this argument –- i.e., that Scroggins
believed that a retrofit LED tube was essentially the same as
an LED lamp tube, that Scroggins was aware that Deng had sold
retrofit LED tubes to BARTCO a few months before the
exclusivity agreement was signed, that Scroggins prepared the
exclusivity agreement to protect his interest in the LED lamp
tube, and that "Scroggins could not reasonably have believed
that Deng agreed that the Retrofit and LED Lamp Tube[s] were
the same product," Deng and DM's brief, at 47, –- would put
Scroggins on notice that Deng's alleged promise to put his
name on the patent was false.
21
1121415
patented product. Thus, even [if] Scroggins had been listed
on the Patent of the LED [l]amp [t]ube, Deng would have had no
duty to pay Scroggins any royalties." Deng and DM's brief, at
48. However, Scroggins and Complete Lighting did not allege
injuries in the form of lost royalties but, instead, alleged
that Deng and DM had essentially stolen the idea for the LED
lamp tubes by not including Scroggins on the patent and that
Scroggins and Complete Lighting were entitled to recover
damages based on "the value of the stolen product" and lost
opportunities for future sales of that product. Scroggins and
Complete Lighting's brief, at 67.
Deng and DM also make the following argument in their
brief:
"Scroggins did not present any evidence that he
ever attempted to apply for a patent on the LED Lamp
Tube; nor did Scroggins present any evidence that he
ever tried to stop the patent application process;
nor did he complain to the Patent and Trademark
Office that Deng was attempting to patent his idea.
Thus, it is illogical to conclude the Deng's alleged
misrepresentation that he would put Scroggins on the
Patent was the proximate cause of any damage[]
Scroggins may have suffered."
Deng and DM's brief, at 48.
However, Scroggins testified that Deng had promised to
include him on the patent that he, Deng, was going to apply
22
1121415
for, that Scroggins learned that Deng had applied for a patent
in China in Deng's name only some months after the application
had been filed, and that when Scroggins asked Deng about it,
Deng assured him that everything would be as they had planned
(i.e., that both Scroggins and Deng would be included on the
United States patent application for the LED lamp tube). This
testimony is sufficient to create a question of fact as to
whether Deng's allegedly false promise to include
Scroggins on
the
patent proximately
caused Scroggins and
Complete
Lighting's alleged injuries. Therefore, Deng and DM have not
demonstrated that they are entitled to a JML in that regard.
Deng and DM also argue that they are entitled to a JML on
the fraud claim because, they say, Scroggins and Complete
Lighting "failed to present substantial evidence that, when
Deng allegedly promised to put Scroggins on the Patent, Deng
had a present intent to deceive Scroggins and not perform his
promise. Deng's alleged failure to perform a promised act is
not sufficient proof of a present intent to deceive." Deng
and DM's brief, at 49. However, Deng testified at trial that
he never intended to include Scroggins's name on the patent.
Deng and DM do not argue or cite any authority indicating that
23
1121415
this testimony, combined with Scroggins's testimony that Deng
had promised to put his name on the patent, is insufficient to
create an issue of fact for the jury as to Deng's intent at
the time the alleged promise was made. Thus, Deng and DM have
not demonstrated that the circuit court erred in denying their
motion for a JML on that basis.
Deng and DM argue that they are entitled to a new trial
"because [the jury's verdict] was based upon pure speculation
by Scroggins." Deng and DM's brief, at 22. Deng and DM argue
that, "[i]n Alabama, damages cannot be based
upon speculation;
rather, they must be direct and reasonably certain." Deng and
DM's brief, at 22.
This Court has stated:
"[D]amages may be awarded only where they are
reasonably certain. Damages may not be based upon
speculation. ... However, 'this does not mean that
the plaintiff must prove damages to a mathematical
certainty .... Rather, he must produce evidence
tending to show the extent of damages as a matter of
just and reasonable inference.' C. Gamble, Alabama
Law of Damages § 7-1 (2d ed. 1998), as cited in
Industrial Chemical [& Fiberglass Corp. v. Chandler,
547 So. 2d 812, 820 (Ala. 1988)]. The rule that one
cannot recover uncertain damages relates to the
nature of the damages, and not to their extent. If
the damage or loss or harm suffered is certain, the
fact that the extent is uncertain does not prevent
a recovery."
24
1121415
Jamison, Money, Farmer & Co. v. Standeffer, 678 So. 2d 1061,
1067 (Ala. 1996). See also Alabama Power Co. v. Alabama
Public Serv. Comm'n, 267 Ala. 474, 478, 103 So. 2d 14, 17
(1958) ("One of the fundamental rules of damages is that to be
compensable they must be direct and reasonably certain, not
remote and speculative."); Crommelin v. Montgomery Indep.
Telecasters, Inc., 280 Ala. 391, 394, 194 So. 2d 548, 551
(1967) ("[N]either the fact nor amount of damages, nor the
cause of the damages, can rest solely on speculation.").
"'This Court has held that "the general rule is that
compensatory damages are intended only to reimburse one for
the loss suffered by reasons of an injury to a person or
property." Sessions Co. v. Turner, 493 So. 2d 1387, 1390
(Ala. 1986). It is equally well established that damages may
not be awarded where they are remote or speculative.'" Torsch
v. McLeod, 665 So. 2d 934, 940 (Ala. 1995) (quoting United
Servs. Auto. Ass'n v. Wade, 544 So. 2d 906, 912 (Ala. 1989)).
In a fraud action, "[t]he purpose of damages ... is to place
the defrauded person in the position he would occupy if the
representations had been true. All naturally resulting
damages, including expenses incurred as a result of the fraud,
25
1121415
are recoverable, but they must be actual damages proved at
trial." Wilhoite v. Franklin, 570 So. 2d 1236, 1237 (Ala.
Civ. App. 1990) (citation omitted).
Scroggins and Complete Lighting argue that, as a result
of Deng's fraudulent promise to include him on the patent for
the LED lamp tubes, they lost out on the value of that
product, including future sales of the product. At trial,
Scroggins testified as follows:
"Q: When ... you and [Deng] first started
talking about this product and you told him about
your idea as it developed, did y'all ever discuss
either of y'all's opinions about the value of the
product?
"A: Yes, sir, we both did.
"Q: And what, if anything, did [Deng] say about
the value –- his opinion of the value of the
product?
"A: We both agreed it was in the millions."
Scroggins also testified that the possibility that the
LED lamp tubes could be used for more than aquarium lighting
substantially increased Scroggins's opinion of its value. He
stated:
"When [Wal-mart] looked at what they were
looking at, they come out telling me what else it
could be used for. What I thought it was worth
multiplied by 100-fold because we were talking now
26
1121415
not only –- not only displays, we were talking
refrigerator cabinets. We were talking shoe
displays. We were talking sporting displays. We
were talking every display you could think of in the
store and that was only one customer, so you know."
When asked what his opinion as to the value of the LED
lamp tubes was based on, Scroggins responded:
"That you had one trial store that was crazy
about it for one particular part of that store and
when they came out and brought out everything else
that it could be done with, things I hadn't even
thought of, that I realized that one store had just
quadrupled or whatever the word is and that was only
one store out of all of them in the United States,
all the different people."
Scroggins cited no other basis for his testimony that the
LED-lamp-tube idea was worth millions, and Scroggins and
Complete Lighting presented no other evidence as to the value
of the LED lamp tubes or the amount of the loss they incurred
as a result of the alleged fraud. During closing arguments,
Scroggins and Complete Lighting's counsel attempted to
establish a formula that would support Scroggins's testimony
that the value of the LED lamp tubes was "in the millions."
Scroggins's counsel stated:
"[L]et's talk about the damages and why there is
sort of a legitimate basis. ... We know that there
was a Gabriel Logan sale that consisted of $90,000
for 25 stores.
27
1121415
"Now, for 25 stores, that's approximately or
exactly $3,600 per store. ... So Walmart at the time
had over 5,200 stores and Buddy testified about
that. ...
"....
"Now, 5,200 at $3,600 per store, that's how much
it is, $18,720,000, a big number, a substantial
number. You can do that for all sorts of stores.
Gabriel Logan would have been selling to everybody.
I
think
-–
I
think
-–
who
knows,
Target
[Corporation] has thousands of stores talking about
thousands of stores, 1.2 million –- I mean, excuse
me, 6.12 million.
"Well, what would the commission be on ideas
like that, talking about times .05. I mean, we're
just talking about what he would be entitled to
under an exclusive agreement. We're not even
talking about what he would be entitled to if he
owned half the patent like he was supposed to. I'm
trying to be pretty conservative here and when
you're conservative here, you're talking about
almost one million dollars just on Walmart, just on
Walmart. So there is evidence of damages that you
could say yes, that is a reasonable amount of
damages."
The arguments of counsel are not evidence. Scroggins did
not testify as to the per unit value of the LED lamp tubes or
indicate that he had reached his estimate of the value by
taking the per unit cost and multiplying it by the number of
stores Wal-mart had in operation. No evidence was presented
that would corroborate counsel's statement that there was
5,200 Wal-mart stores in operation at the time Scroggins and
28
1121415
Deng sold the 25 samples to Gabriel Logan or that Target
6
Corporation had "thousands" of stores in operation.
Moreover, there was no evidence presented other than
Scroggins's conjecture
that future sales to Wal-mart
or
Target
were pending or likely to happen or that the LED lamp tubes
had been marketed to or sought after by any customers for any
purposes other than aquarium or display-case lighting. In
fact, Deng and DM presented undisputed evidence that, in spite
of the apparent initial enthusiasm of the "one trial store,"
no sales of the LED lamp tubes were made beyond the 25 samples
sold to Gabriel Logan in 2006. Deng and DM received
$88,940.22 for that sale, and that amount did not include the
cost of repairs that had to be made to the 25 samples as a
result of problems with the LED lighting. Thus, Scroggins's
testimony as to the value of the LED lamp tubes was highly
speculative and was insufficient to justify the jury's award
of $1.5 million in compensatory damages on the fraud claim.
Scroggins was asked during trial to give a "ballpark"
6
figure of how many stores Wal-mart had, to which he responded:
"Five thousand, you know, sticks out." Scroggins did not
testify as to the basis of that estimate, and no other
evidence was presented to support it.
29
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Scroggins and Complete Lighting argue that Scroggins's
testimony as to the market value of the LED lamp tubes was in
the nature of opinion evidence, pursuant to § 12-21-114, Ala.
Code 1975, and Delmore v. Gonzales, 903 So. 2d 140 (2004), and
that such testimony is sufficient to support
the
compensatory-
damages award. Section 12-21-114 provides: "Direct testimony
as to the market value is in the nature of opinion evidence;
one need not be an expert or dealer in the article, but may
testify as to value if he has had an opportunity for forming
a correct opinion." In Delmore, this Court determined that
the testimony of the plaintiffs as to the value of certain
property they had inherited from their mother and that, they
argued, had been converted by their stepfather was admissible
to prove damages.
This Court stated:
"[A]ll that is required under §12-21-114, Ala. Code
1975; Rule 701, Ala. R. Evid., and Williamson[ v.
Stephens, 577 So. 2d 1272 (Ala. 1991),] is that a
person's testimony as to value be rationally based
on their perception or based on an opportunity to
form a correct opinion. The evidence, when viewed
in light most favorable to [the plaintiffs], shows
that their testimony was rationally based on their
perceptions or that they had an opportunity for
forming a correct opinion as to the value of their
mother's personal property because their mother
owned some of the property when [one of the
30
1121415
plaintiff's] lived with her and they both visited
their mother's home on a frequent basis. The manner
in which [the plaintiffs] determined the value of
their mother's personal property goes to the weight
that will be assigned by the jury but is not a
question of admissibility. The trial court
erroneously excluded the list of personal property
that included [one of the plaintiff's] determination
of the value of the personal property. The judgment
is reversed as to this issue, and the case is
remanded for further proceedings consistent with
this opinion."
Delmore, 903 So. 2d at 144.
Deng and DM's argument here is not that Scroggins's
testimony as to the value of the LED lamp tubes was
inadmissible but that the testimony, by itself, is not
competent evidence supporting the jury's $1.5 million
compensatory-damages award. See Johnson v. Harrison, 404 So.
2d 337, 340 (Ala. 1981) ("The rule has long been established
that the party claiming damages has the burden of establishing
the existence of and amount of those damages by competent
evidence. ... The award of damages cannot be made upon
speculation, and the plaintiff has the burden of offering
evidence tending to show to the required degree, the amount of
damages
allegedly
suffered.").
Moreover,
unlike the
plaintiffs' testimony in Delmore, Scroggins's testimony that
the LED lamp tubes were worth "millions" was not a statement
31
1121415
as to the actual market value of the LED lamp tubes but as to
the potential market value of that product based on
speculation as to potential uses and future sales. Delmore is
distinguishable in that regard.
Scroggins and Complete Lighting also argue that Deng and
DM's failure to object to Scroggins's testimony that the value
of the LED lamp tubes was "in the millions" "pretermits"
consideration
of
their
argument
on
appeal
that
the
compensatory-damages award is based on speculative evidence.
Scroggins and Complete Lighting's brief, at 39. They cite
Robbins v. Sanders, 890 So. 2d 998 (Ala. 2004), in support of
that argument. However, in Robbins, this Court addressed
whether a failure to object to evidence of certain damages
presented at trial precluded the defendant from arguing on
appeal that "the trial court improperly awarded damages for
claims that were not pleaded in the plaintiffs' complaint."
890 So. 3d at 1009. Robbins does not stand for the
proposition that a failure to object to specific testimony as
to the amount of damages when that testimony is given
precludes an argument on appeal that that testimony is
32
1121415
insufficient, by itself, to support the damages award. Thus,
Scroggins's reliance on Robbins is misplaced.
Moreover, although Deng and DM did not object when
Scroggins testified that the LED lamp tubes were worth
"millions," they did argue in their motion for a JML at the
close of Scroggins and Complete Lighting's case-in-chief and
in their renewed motion for a JML at the close of all the
evidence that the claimed damages were based on "pure
speculation." Deng and DM also objected during closing
arguments to figures presented by Scroggins and Complete
Lighting's counsel, purportedly giving a "legitimate basis"
for the damages. Deng and DM argued that the figures were
"just pure speculation. There's no testimony about that."
This objection and the arguments made in the motions for a JML
were sufficient to preserve this issue for appellate review.
See Ex parte Couilliette, 857 So. 2d 793, 794 (Ala. 2003)
("'"[T]o preserve an issue for appellate review, it must be
presented to the trial court by a timely and specific motion
setting out the specific grounds in support thereof."'"
(quoting McKinney v. State, 654 So. 2d 95, 99 (Ala. Crim. App.
1995)).
33
1121415
The jury's award of $1.5 million in compensatory damages
on the fraud claim was based on speculative evidence as to
possible future uses and the value of potential future sales
of the LED lamp tubes. "Although they need not be proved to
a mathematical certainty, 'damages [for fraud] may not be
awarded where they are remote or speculative. A jury must
have some reasonable basis for the amount of its award.'"
Systrends, Inc. v. Group 8760, LLC, 959 So. 2d 1052, 1075
(Ala. 2006) (quoting Parsons v. Aaron, 849 So. 2d 932, 949
(Ala. 2002)). Therefore, "[t]here being no evidentiary basis
for the compensatory damages awarded [to Scroggins and
Complete Lighting on the fraud claim]," the circuit court
erred plainly and palpably in denying Deng and DM's motion for
a new trial. See Systrends, 959 So. 2d at 1079.
Moreover, "[b]ecause the compensatory-damages award has
been eliminated, the punitive damages awarded on this claim
must also be vacated." Systrends, 959 So. 2d at 1079 (citing
Life Ins. Co. of Georgia v. Smith, 719 So. 2d 797, 806 (Ala.
1998) ("We now require ... that a jury's verdict specifically
award either compensatory damages or nominal damages in order
for an award of punitive damages to be upheld."). Our
34
1121415
decision in this regard pretermits consideration of Deng and
DM's arguments that they were entitled to a new trial because
the award of punitive damages was not supported by clear and
convincing evidence, was excessive, or was the result of
prejudice, bias, passion, or other improper motives. Our
holding in this regard also pretermits consideration of Deng
and DM's arguments that they were entitled to a new trial
because, they argue, Scroggins and Complete Lighting changed
the nature of their fraud claim at trial or because, they say,
Scroggins's testimony at trial contradicted his earlier
affidavit testimony.
Conclusion
For the foregoing reasons, we reverse the circuit court's
judgment based on the jury's verdict in favor of Scroggins and
Complete Lighting on the fraud claim and remand the case for
the entry of an order granting a new trial as to that claim.
We affirm the circuit court's judgment as to the breach-of-
contract claim.
AFFIRMED IN PART; REVERSED IN PART; AND REMANDED WITH
DIRECTIONS.
Moore, C.J., and Stuart, Bolin, Parker, Murdock, Shaw,
Main, and Wise, JJ., concur.
35 | December 5, 2014 |
fb8d1e4f-c88c-4a49-a007-0ccca5a6d5ea | In re: Cleveland II v. Raymond Adams | N/A | 1130986 | Alabama | Alabama Supreme Court | Rel: 11/26/14
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
____________________
1130986
____________________
Ex parte Raymond Adams, as coexecutor of the estate of
Clifford Wayne Cleveland, deceased
PETITION FOR WRIT OF MANDAMUS
(In re: Clifford Wayne Cleveland II and Celeste Cleveland
Minor
v.
Raymond Adams, as coexecutor of the estate of Clifford Wayne
Cleveland, deceased)
(Autauga Circuit Court, CV-14-30)
BRYAN, Justice.
Raymond Adams has petitioned this Court for the writ of
mandamus directing the Autauga Circuit Court (1) to remove
1130986
Clifford Wayne Cleveland II ("Chip" or "Chip Cleveland") as
coexecutor of the estate of Clifford Wayne Cleveland ("the
estate"), (2) to vacate its order prohibiting the estate from
hiring an attorney or a certified public accountant ("CPA"),
(3) to compel Chip and his sister, Celeste Cleveland Minor, to
produce property and assets of the estate that are in their
possession, and (4) to impose sanctions on Chip and Minor.
For the reasons set forth below, we deny the petition.
Facts and Procedural History
Clifford Wayne Cleveland died on March 28, 2014. In his
will, Cleveland named his law partner Louis C. Colley and
business partner Adams as coexecutors of the estate. Colley
and Adams petitioned the Autauga Probate Court to probate the
estate and were granted letters testamentary. On April 30,
2014, the Autauga Circuit Court granted Chip and Minor's
motion, as beneficiaries under Cleveland's will, to have the
probate of the estate removed to that court.
On May 5, 2014, Chip and Minor moved the circuit court to
disqualify Adams as a coexecutor of the estate, arguing as a
basis for disqualification that Adams does not reside in
Alabama. The circuit court set the motion for a hearing on
2
1130986
May 27, 2014, and gave Adams "ten days to provide proof of his
residency." Petition, at Exhibit 5. On May 9, 2014, Chip and
Minor moved the circuit court to prohibit Adams from retaining
any third-party professionals, such as attorneys or CPAs, to
assist with the administration of the estate, arguing that it
was an unnecessary expense. The circuit court entered an
order on that date, granting the motion and prohibiting any
coexecutor or beneficiary from hiring such professional help
"until further order" of the circuit court. The circuit court
also set the issue for further discussion at the May 27
hearing.
On May 16, 2014, Adams filed with the circuit court a
statement of residency, acknowledging that "he currently
resides in North Carolina" but arguing that,
"[c]ontrary to the Motion to Disqualify Co-Executor
filed by [Chip and Minor], out-of-state residency
does not preclude [the] service of an executor
appointed by Will. Rather, Ala. Code § 43-2-22 only
imposes an in-state residency requirement upon
administrators of intestate estates."
Petition, at Exhibit 13. Also on May 16 Colley resigned as
coexecutor of the estate, stating that he did not have time to
fulfill his duties as coexecutor and noting that "[he] ha[d]
been informed by Chip Cleveland, son of [Cleveland], that
3
1130986
[Chip] is willing to assume the role of [c]o-[e]xecutor."
Petition, at Exhibit 10. That same day, Chip moved the
circuit court to substitute him in Colley's place as
coexecutor or, in the alternative, to appoint him as a
coexecutor of the estate. The circuit court granted that
motion and appointed Chip coexecutor on May 19, 2014.
Adams objected to the substitution of Chip as coexecutor,
arguing:
"Neither
the
[w]ill
nor
Alabama
law
provides
any
basis for the substitution of an unnamed co-executor
in the place of a co-executor who resigns his
appointment. Rather, as a matter of law, the sole
remaining co-executor is vested with full authority
to act on behalf of the estate. A court may only
appoint a substitute personal representative when
all of the designated co-executors are unable to
serve."
Petition, at Exhibit 16. The circuit court "noted" Adams's
objection but took no further action with regard to Chip's
appointment.
On May 23, 2014, Adams moved the circuit court to compel
Chip and Minor "to produce all materials within their
possession concerning the assets and liabilities of the
[e]state," petition, at Exhibit 19; to remove Chip as
coexecutor; and to impose sanctions against Chip and Minor.
4
1130986
With regard to the latter, Adams argued that Chip and Minor
had "obtain[ed] the appointment [of Chip as coexecutor]
through misrepresentations of law and fact." Petition, at
Exhibit 20.
On May 26, 2014, Chip and Minor supplemented their motion
to disqualify Adams, adding an argument that Adams had not
timely administered the estate. A hearing was held on May 27,
and on May 28 Adams submitted a response to the supplemental
motion to disqualify him as coexecutor. On May 29, 2014, Chip
and Minor moved the circuit court to compel Adams to produce
certain documents related to the administration of
the
estate.
That same day Adams moved the circuit court to require Chip to
post bond as a coexecutor. The parties filed responses to
those respective motions. On June 5, 2014, Adams supplemented
his motion to require Chip to post a bond. It appears that
there has been no ruling on those motions.
On June 6, 2014, Adams petitioned this Court for mandamus
relief from the circuit court's May 9 order prohibiting Adams
from hiring attorneys or other professionals to assist with
the administration of the estate and from the May 19 order
appointing Chip as coexecutor of the estate. Adams also asks
5
1130986
this Court to instruct the circuit court to "direct [Chip and
Minor] to produce all materials within their possession that
would reflect upon the assets and liabilities of the
[e]state," petition, at 5, and "to enter sanctions against
[Chip and Minor] for the amount of attorneys' fees and costs
determined to have been the result of the ... improper
attempts to usurp control over the [e]state from Adams and/or
Adams' administration of the [e]state." Petition, at 22.
Adams also moved this Court for an emergency stay of the order
appointing Chip as a coexecutor of estate.
On June 13, 2014, Chip moved for sanctions against Adams,
arguing that Adams had presented "willful and
gross
falsehoods
set forth in documents before [the circuit
court],"
including,
among others, that Chip and Minor had pressured Colley to
resign as coexecutor. On June 20, 2014, this Court issued a
stay of the order appointing Chip coexecutor and of "all
proceedings in the case generally ... pending further order of
this Court" and ordered answer and briefs to be filed as to
Adams's petition for mandamus relief.
Discussion
"It is well settled that a writ of mandamus will
issue where the petitioner demonstrates '"(1) a
6
1130986
clear legal right to the order sought; (2) an
imperative duty upon the respondent to perform,
accompanied by a refusal to do so; (3) the lack of
another adequate remedy; and (4) the properly
invoked jurisdiction of the court."'"
Toler v. Murray, 886 So. 2d 76, 78 (Ala. 2004) (quoting Ex
parte Fontaine Trailer Co., 854 So. 2d 71, 76 (Ala. 2003),
quoting in turn Ex parte State ex rel. C.M., 828 So. 2d 291,
293 (Ala. 2002)).
Adams first argues that "[he] has a clear legal right to
have Chip Cleveland removed as co-executor of the estate."
Petition, at 6. Adams argues that the circuit court erred in
granting Chip and Minor's motion to substitute Chip as
coexecutor of the estate in place of Colley because, Adams
argues, "there simply was no legal or factual basis to support
the appointment of Chip in that capacity." Id. Adams argues
that the will named Colley and Adams as coexecutors of the
estate and did not provide for substitution or for the
appointment of a successor coexecutor. Adams notes that,
pursuant to § 43-2-847, Ala. Code 1975, following Colley's
resignation Adams has full authority to administer
the
estate.
Section 43-2-847 provides: "Unless the terms of the will
otherwise provide, every power exercisable by personal co-
7
1130986
representatives may be exercised by the one or more remaining
after the appointment of one or more is terminated ...."1
Adams also argues that under Alabama's statutory scheme
"there is no recognized position of 'substitute executor.'
Rather, when none of the originally named executors remain[s]
to serve, a court must issue 'letters of administration with
the will annexed.' Authority thus would be vested in an
'administrator' rather than an 'executor.'" Petition, at 9
n.1. Adams cites §§ 43-2-27 and 43-2-272, Ala. Code 1975, in
support of this argument. Section 43-2-27 provides, in
pertinent part:
"If no person is named in the will as executor,
or if named executors, one or more, all renounce or
fail to apply within 30 days after probate or are
unfit persons to serve, the residuary legatee, or if
he fails to apply within such time, refuses to
accept or is unfit to serve, then the principal
legatee, is entitled to letters of administration,
with the will annexed ...."
(Emphasis added.) Section 43-2-272(a), Ala. Code 1975,
provides: "If the sole executor or all the executors die,
resign or are removed, the probate court having jurisdiction
of the estate must grant letters of administration, with will
An executor is included in the definition of "personal
1
representative" set forth in § 43-2-691, Ala. Code 1975.
8
1130986
annexed, to the person entitled thereto under section 43-2-
27." (Emphasis added.)
Chip and Minor responded by arguing that the circuit
court acted within its discretion in appointing Chip as
coexecutor in place of Colley. They cite Jones v. McGuirt,
416 So. 2d 970 (Ala. 1985), for the proposition that "this
Court has approved the appointment of successive executors
where a prior executor was either unavailable or unfit to
serve." Chip and Minor's brief, at 6. However, Jones
involved the removal of the sole executor named in the will,
not the resignation or removal of a coexecutor. Moreover,
this Court in Jones did not "approv[e] the appointment of
successor executors"; it instead affirmed orders entered by
the circuit court removing Jones as an executor and as a
trustee of Glenn W. Anthony's estate and appointing a
successor trustee. See Jones, 416 So. 2d at 971. Our
decision in Jones does not indicate that a successive executor
was appointed for Anthony's estate. Thus, Chip and Minor's
reliance on Jones is misplaced.
Chip and Minor also argue that "where a court makes an
appointment of an executor or an administrator of an estate,
9
1130986
such is prima facie evidence that there was a vacancy." Chip
and Minor's brief, at 6 (citing Sims v. Waters, 65 Ala. 442,
443 (Ala. 1880), and Morgan v. Casey, 73 Ala. 222, 225 (Ala.
1882)). However, Sims and Morgan address the appointment of
administrators de bonis non where the administration of an
2
intestate estate had been left vacant. Those cases do not
address whether a substitution can be made if one coexecutor
among others named in a will resigns, nor do they provide for
the appointment of a successor executor even if all named
executors are removed. Thus, those cases do not support the
circuit court's decision to appoint Chip to serve in Colley's
place as coexecutor of the estate.
Chip and Minor also cite Smith v. Alexander, 148 Ala.
554, 42 So. 29 (1906), for the proposition that "an
appointment of an executor will be upheld unless it plainly
appears the appointing court had no jurisdiction." Chip and
Minor's brief, at 7. Again, however, Chip and Minor's
reliance on Smith is misplaced. Smith involved the
appointment of an administrator de bonis non, not the
An "administrator de bonis non" is "[a]n administrator
2
appointed by the court to settle the remainder of an intestate
estate not settled by an earlier administrator or executor."
Black's Law Dictionary 54 (10th ed. 2014).
10
1130986
substitution of a coexecutor. Moreover, the question in Smith
was whether the jurisdiction of the probate court had been
properly
invoked
with
regard
to
the
removal
of
an
administrator and the appointment of an administrator
de
bonis
non in his place. Neither party in this case has challenged
the jurisdiction of the circuit court. Thus, Smith does not
justify the circuit court's appointment of Chip as
coexecutor,
and Chip and Minor have cited no relevant authority to support
their argument that the appointment of an executor must be
upheld unless the appointing court lacked jurisdiction.
Chip and Minor also argue:
"[The circuit court] had the discretion to interpret
[Cleveland's] Will. It is well settled that the
touchstone of the construction of a will is to find
the testator's intention, which is accomplished by
considering all the provisions therein. Lowrey v.
McNeel, 773 So. 2d 449, 453 (Ala. 2000). In naming
[c]o-[e]xecutors
within
[Cleveland's]
will,
[Cleveland] selected his long time law partner,
Louis C. Colley, and his business partner, Raymond
Adams.
"[Cleveland] therefore nominated and appointed
one local in-state citizen, Louis C. Colley, to
coordinate efforts with the out of state resident,
Raymond Adams, in the administration of the Estate.
It seems [Cleveland's] intention was to have a local
resident attorney, familiar with the Estate's local
presence, to carry out the duties of management."
Chip and Minor's brief, at 7-8.
11
1130986
However,
"'"[t]o determine the intent of a testator
or testatrix, the court must look to the
four corners of the instrument, and if the
language
is
unambiguous
and
clearly
expresses the testator's or testatrix's
intent, then that language must govern."
Born v. Clark, 662 So. 2d 669, 671 (Ala.
1995).'"
Beasley v. Wells, 55 So. 3d 1179, 1184-85 (Ala. 2010) (quoting
Cottingham v. McKee, 821 So. 2d 169, 171-72 (Ala. 2001)).
Neither side argues that Cleveland's will is ambiguous, and
none of the provisions of that will indicates that Cleveland's
reason for nominating Colley as coexecutor was to ensure that
a local attorney would assist with the management of his
estate. Moreover, Cleveland's will does not provide for the
substitution or appointment of a successor to the named
coexecutors. Thus, "look[ing] to the four corners of the
instrument," i.e., the will, we cannot say that Chip's
appointment as coexecutor is consistent with the testator's
intent or that the circuit court's appointment of Chip is
justified on that basis.
Chip and Minor also argue:
"The [circuit] court had reason to appoint Chip
Cleveland as a local resident substitute [c]o-
[e]xecutor, as Raymond Adams' own status as a
12
1130986
qualified [c]o-[e]xecutor remained in question under
law before the trial court. [Adams] is disqualified
to be a [c]o-[e]xecutor under § 43-2-22 of the Code
of Alabama."
Chip and Minor's brief, at 9. Section 43-2-22, Ala. Code
1975, provides, in pertinent part:
"(a) No person must be deemed a fit person to
serve as executor who is under the age of 19 years,
or who has been convicted of an infamous crime, or
who, from intemperance, improvidence or want of
understanding, is incompetent to discharge the
duties of the trust. Nor shall any nonresident of
the state be appointed as administrator unless he is
at the time executor or administrator of the same
estate in some other state or territory or
jurisdiction, duly qualified under the laws of that
jurisdiction."
Chip and Minor argue:
"This Court [has] held [that] § 43-2-22 applies to
both the qualifications of executors as well as
administrators in the probate of estates. Burnett
v. Garrison, 75 So. 2d 144, 148 (Ala. 1954).
Additionally, this Court has stated '[w]e recognize
that the disqualification statute (§ 43-2-22) uses
only the word "executor" and that this Court, as far
back as the case of Williams v. McConico, 27 Ala.
572 (1855), has applied this disqualification
statute to administrators also.' Ex parte Holladay,
466 So. 2d 956, 960 (Ala. 1985). This Court
likewise determined § 43-2-22 is controlling on the
fitness of an executor named in a will, and
therefore controls whether petitioner is a fit
executor of the Estate. Riley v. Wilkinson, 23 So.
2d 582, 589 (Ala. 1945)."
Chip and Minor's brief, at 9-10.
13
1130986
Chip
and
Minor's
arguments
in
this
regard
are
disingenuous at best. Although Ex parte Holladay, 466 So. 2d
956 (Ala. 1985), Burnett v. Garrison, 261 Ala. 622, 75 So. 2d
144 (1954), and Riley v. Wilkinson, 247 Ala. 231, 23 So. 2d
582 (1945), do indicate that the disqualifications listed in
§ 43-2-22 for executors also apply to administrators, those
cases do not hold that the two terms are interchangeable for
the purposes of that statute or that executors are subject to
the nonresident restriction set forth in § 43-2-22 for
administrators. In fact, as Adams argues, § 43-2-191, Ala.
Code 1975, expressly allows a nonresident to serve as an
executor in Alabama: "Judges of probate are authorized to
issue letters testamentary to persons named as executors in
wills regularly probated who are nonresidents of this state,
upon like bond and surety and upon the same terms, conditions
and requirements as are required by law of citizens of this
state."
Chip and Minor argue that, "[h]istorically, § 43-2-22 has
been used for the removal of out of state executors by the
language of this Court." Chip and Minor's brief, at 10
(citing Harris v. Dillard, 31 Ala. 191, 192 (1857)). However,
14
1130986
at the time Harris was decided, in 1857, the Alabama Code
expressly included nonresidence among the disqualifications
for executors. See Ala. Code 1852, § 1658 ("No person must be
deemed a fit person to serve as executor: ... [w]ho is not an
inhabitant of this state."). By 1876, however, that
disqualification no longer applied to executors. Ala. Code
1876, § 2340 ("No person must be deemed a fit person to serve
as executor –- 1. Who is under the age of twenty-one years. 2.
Who has been convicted of an infamous crime. 3. Who, from
intemperance, improvidence, or want of understanding, is
incompetent to discharge the duties of the trust."); Ala. Code
1876, § 2379 ("Judges of probate are authorized to issue
letters testamentary to persons named as executors in wills
regularly probated, who are or may be non-residents of this
state, upon like bond and security, and upon the same terms,
conditions and requirements as are required by law of citizens
of this state."). Thus, Chip and Minor have not demonstrated
that Adams is disqualified from acting as coexecutor under the
will on the basis of nonresidence.
In light of the statutory authority cited by Adams in
support of his argument that the circuit court erred in
15
1130986
appointing Chip as coexecutor in place of Colley and the
apparent lack of authority supporting that appointment, we
agree with Adams that he has a clear legal right to have Chip
removed as coexecutor. However, to be entitled to a writ of
mandamus as to this issue at this time, Adams must show not
only that he has a clear legal right to the relief requested,
but he must also show "an imperative duty upon the respondent
to perform, accompanied by a refusal to do so." Toler, 886
So. 2d at 78 (emphasis added). See also Ex parte Barnett, 858
So. 2d 948, 949 (Ala. 2003) ("Mandamus is an extraordinary
writ, and will issue only when the petitioner has demonstrated
that, among other things, 'the respondent has an imperative
duty to perform and has refused to do so.'" (quoting Ex parte
Flint Constr. Co., 775 So. 2d 805, 808 (Ala. 2000))).
As noted previously, Adams filed a motion on May 23
asking the circuit court to remove Chip as coexecutor. The
circuit court has not, as yet, ruled on that motion, which was
filed only two weeks before Adams filed his mandamus petition
with this Court on June 6, and proceedings have been stayed in
the circuit court since June 20, 2014.
16
1130986
Adams does not directly address this prong of the
mandamus standard in his petition. He does argue at one point
that "[i]t appears that the trial court is electing to ignore
all filings submitted by Adams," petition, at 16 n.3, noting
that the circuit court has promptly responded to each motion
filed by Chip and Minor but has not ruled on any of Adams's
affirmative pleadings. We find this alleged difference in
treatment troubling, but we cannot say at this time that the
circuit court has "ignore[d]" Adams's motions or that the
circuit court has refused to act on Adams's request to remove
Chip as coexecutor. Thus, although we agree that the circuit
court erred in appointing Chip as coexecutor, we decline to
issue a writ of mandamus with regard to that appointment at
this time. See Ex parte Barnett, supra.
We decline to grant Adams's other requests for mandamus
relief on the same basis. Adams argues that "[he] has a clear
legal right to retain third-party professionals to
assist
with
estate administration," petition, at 11, and that "the trial
court should be directed to withdraw its May 9, 2014 [o]rder
that prohibits Adams from obtaining the assistance of
attorneys and accountants." Petition, at 14. However, it
17
1130986
appears that Adams has not moved the circuit court to
"withdraw" its May 9 order. He did argue in his motion to
remove Chip as coexecutor and to impose sanctions against Chip
and Minor that Chip's motion to prohibit the hiring of such
assistance was due to be denied. As noted previously, the
circuit court has not ruled on that motion. Moreover, as
Adams himself acknowledges, the circuit court set
the
question
of hiring third-party professionals for the May 27 hearing.
No action has been taken since that hearing, but, as noted,
Adams filed his petition for mandamus relief on June 6, only
10 days after the May 27 hearing, and this Court stayed
proceedings in the circuit court on June 20. Even assuming
that Adams has a clear legal right to have the May 9 order
vacated, he has not demonstrated that the circuit court has
refused a request to so act.
Similarly, Adams argues that "[he] has a clear legal
right to obtain all estate property and records in [Chip and
Minor's] possession," petition, at 14, and that he is entitled
to sanctions against Chip and Minor. The circuit court has
not yet ruled on either of those motions. Adams argues: "To
date, the [circuit] court has taken no action upon Adams'[s]
18
1130986
request to be provided materials under Ala. Code [1975,] § 43-
2-837. Through its silence, the trial court effectively has
denied Adams access to those materials." Petition, at 15.
However, the motion to compel and the request for sanctions
were filed on May 23. Adams's petition for mandamus relief
was filed on June 6, just two weeks later. Adams has cited no
authority -- and we know of none -- indicating that the
failure to rule on a motion within two weeks of its being
filed constitutes a denial of that motion. With these grounds
for mandamus relief, as with Adams's argument regarding the
removal of Chip as coexecutor, he has not met his burden to
"demonstrate[] that, among other things, '[the circuit court]
ha[d] an imperative duty to perform and has refused to do so."
Ex parte Barnett, 858 So. 2d at 949. Thus, Adams is not
entitled to mandamus relief in this regard as well.
Conclusion
We agree with Adams that the circuit court erred in
substituting Chip as a coexecutor of Cleveland's estate.
However, because the circuit court has not yet ruled on
Adams's motion to remove Chip as coexecutor, Adams has not
demonstrated that the circuit court has refused to perform an
19
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imperative duty. See Ex parte Barnett, supra. Similarly,
Adams has not demonstrated that, at this time, he is entitled
to a writ of mandamus, directing the circuit court to vacate
its May 9 order, which prohibits the hiring of an accountant
or an attorney to assist with the administration of the
estate, or directing the circuit court to grant his motions to
compel production of estate property and assets and to impose
sanctions against Chip and Minor. Therefore, we deny Adams's
petition for mandamus relief. We further lift the stay of
proceedings in the circuit court and encourage the circuit
court to address the pending motions expeditiously.
PETITION DENIED.
Parker, Murdock, and Shaw, JJ., concur.
Moore, C.J., and Stuart, Bolin, and Main, JJ., concur in
the result.
20 | November 26, 2014 |
3d8bc66a-3574-44c7-88ea-c5e52aac4e23 | Yanmar America Corporation v. Nichols | N/A | 1130214 | Alabama | Alabama Supreme Court | REL:09/30/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
SPECIAL TERM, 2014
____________________
1130214
____________________
Yanmar America Corporation
v.
Randy Nichols
Appeal from Marion Circuit Court
(CV-09-900054)
BOLIN, Justice.
Yanmar America Corporation ("Yanmar America") appeals
from a judgment entered in favor of Randy Nichols following a
trial by a jury of his claims alleging a negligent failure to
warn. We reverse and remand.
1130214
Facts and Procedural History
I. The Accident
In May 2005, Autrey Nichols purchased a Yanmar model
2210BD tractor from Northside Motors, LLC ("Northside"), in
Hamilton. The Yanmar tractor came equipped with a front-end
loader and a "bush hog" attachment. The Yanmar tractor did
1
not have a rollover-protection structure ("ROPS"). On May 1,
2008, Randy Nichols, the plaintiff and Autrey's brother, used
the Yanmar tractor to bush hog a neighbor's property. The
particular area of the property Randy was to bush hog was a
field that contained a hill, the slope of which increased as
he moved toward the center of the field. Randy did not "walk"
the field to inspect the terrain before bush hogging the
field. Randy testified that he was operating the tractor in
tall grass at "walking speed" when he glanced back at the bush
hog to make sure it was operating properly. Randy stated that
when he looked forward it appeared that the right front tire
suddenly "took a dip," causing the tractor to roll over. The
"'Bush Hog' is the trade name of a large mower generally
1
drawn by a tractor. The term 'bush hog' is often used
generally for such mowers and as a verb indicating the use of
such mowers." Ammons v. Massey-Ferguson, Inc., 663 So. 2d 961,
963 (Ala. 1995).
2
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right front tire of the tractor encountered a slight "drop
off" on the side of the hill, which caused the tractor to roll
over 360 degrees and come to a rest upright on its tires.
Randy was thrown from the tractor. He stated that he
remembered the bush hog "coming over on me" and that he tried
to roll out of the way but was unable to do so. Randy
testified that he threw his arm up to protect his head and
felt excruciating pain. Randy suffered severe injuries,
including an amputated right arm, a crushed hip and leg, and
various other injuries.
Before the accident, Randy had
more than 30 years' experience operating tractors and other
heavy equipment. Randy had operated the subject
Yanmar
tractor
approximately 15 to 20 times without incident before the
accident. Randy testified that he had experience operating
tractors with implements such as front-end loaders, backhoes,
bush hogs, "graderplates," "breaking plows," and "planters."
Randy testified that he had operated tractors both with and
without the ROPS and that he was comfortable operating a
tractor that was not equipped with the ROPS. Randy stated
that he knew that any tractor had the potential to roll over
and that, if a tractor that was not equipped with a ROPS
3
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rolled over, the driver could be seriously injured or killed.
He further testified that he knew how to operate a tractor,
that he was a "safe" tractor operator, and that he had never
rolled a tractor over before the accident in this case.
II. The Gray-Market Tractor and Factors Contributing to the
2
Rollover
The subject Yanmar tractor was manufactured on March 5,
1979, by Yanmar Diesel Engine Co., Ltd. ("Yanmar Japan"), at
3
its Kinomoto plant in Japan. At the time of its manufacture,
the tractor was equipped with a rotary tiller. The tractor was
sold on March 29, 1979, to Kounomiya Yanmar, an authorized
Yanmar dealer in Japan. The Yanmar tractor was "purpose
built" for primary use in the rice paddies of Japan. The
tractor was designed and manufactured in accordance with
Japanese industry and governmental standards in existence at
"Gray market" has been defined as a "'market in which the
2
seller uses legal but sometimes unethical methods to avoid a
manufacturer's distribution chain and thereby sell (esp.
imported goods) at prices lower than those envisioned by the
manufacturer.'" Rife v. Hitachi Constr. Mach. Co., 363 S.C.
209, 217, 609 S.E.2d 565, 570 (S.C. Ct. App. 2005) (quoting
Black's Law Dictionary 989 (8th ed. 2004)). "Gray-market"
products include products that have been produced abroad with
authorization and payment and have been imported into
unauthorized markets. Id.
Yanmar
Japan
subsequently
changed
its
name
to
Yanmar
Co.,
3
Ltd.
4
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the time. The original operator's manual for the tractor
printed by Yanmar Japan and the warning labels affixed to the
tractor were all written in Japanese.
Before 1991, Yanmar Japan had manufactured Yanmar brand
tractors specifically for distribution in the United States.
Subsequent to its entry into the United States market in the
late 1970s, Yanmar Japan established Yanmar America in 1981.
Yanmar America is a wholly owned subsidiary of Yanmar Japan;
one of its functions is to distribute parts for Yanmar
tractors authorized for sale in the United States. In 1991,
Yanmar Japan ceased manufacturing and distributing Yanmar
tractors for sale in the United States market.
Significant design differences existed between those
Yanmar brand tractors manufactured for use in the Japanese
market and those Yanmar brand tractors manufactured for use in
the United States market. The tractors manufactured for the
Japanese market: (1) had relatively slow travel speed, which
was conducive to rice-paddy tilling; (2) had much higher
"lugs" on the tractor tires, which were specially suited for
use in muddy rice paddies; (3) had a standard rotary-tiller
attachment suitable for tilling rice paddies rather than a
5
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front-end loader or a bush hog; and (4) had a four-speed
"power take-off" to accommodate the varying tiller speeds
required in rice-paddy tilling. The operator's manuals and
warning decals for those tractors were printed in Japanese.
Because of the significant differences in the design and
performance of the tractors, the tractors intended for the
Japanese market were never intended to be sold or used in the
United States market.
Dennis
Skogen,
Yanmar
America's
engineering
and
accident-
reconstruction expert witness, testified that the factors
contributing to the rollover here included operating the
tractor on the side slope; encountering the "drop off" on the
side slope; and the configuration of the tractor, which
included operating the tractor with the front-end loader in
the raised position, a lack of ballast in the tires, and the
bush hog on the back. Skogen testified that ballast in the
tires would have decreased the likelihood of a rollover
because it would have lowered the center of gravity of the
tractor. Skogen also stated that operating the tractor with
the front-end loader in the lowered position would also lower
the center of gravity. Skogen also testified that a properly
6
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attached ROPS would have "more likely as not" prevented the
tractor from rolling past 90 degrees, but, given the slope of
the hill on which the rollover occurred, it was possible that
the ROPS would not have prevented the tractor from rolling
past 90 degrees. However, Skogen also stated that the tractor
was not unreasonably dangerous because it was not equipped
with a ROPS. Rather, Skogen testified that the tractor should
not have been imported and sold in the United States in the
first place because it was designed and manufactured for use
in the rice paddies of Japan, and not for use in the United
States equipped with a front-end loader and a bush hog.
Skogen testified as follows:
"Q. Well, what ... made a difference, in your
opinion, about this tractor rolling over and this
injury to Randy ... occurring?
"A. Well, we talked about that before. It's the
slope. It's the drop-off itself. We're talking
about what the tractor is, what the tractor –- its
configuration. It has tires on it, as an example,
for use in rice paddies. It's not the type of tire
that would we would normally see for use on other
tractors in a similar situation .... [T]his tractor
shouldn't have been imported in the first place, so
there wouldn't have been a rollover with this
tractor in the second place with or without a ROPS.
"Q. Okay. What differences that existed in this
tractor that you have listed, as you say it was
7
1130214
designed for use in Japan, made a difference in
causing this rollover or the injuries to Randy?
"A. Well, start off with a tiller on the back.
Now, if you're going to bring the tractor into this
country, it would have a tiller on the back. It
wouldn't have a mower on the back. You wouldn't be
using it for ... mowing. It's used for tilling rice
paddies. You wouldn't have a front-end loader
because, again, the purpose is to have a tiller on
the back. The tiller would be lower in its
configuration. It wouldn't have been used in this
field in the first place because this is not a rice
paddy.
"Q. All right. What else?
"A. Again, I talked about before about the
configuration with the tires. They have higher
tread on them, which can in a sense raise the center
of gravity versus a tractor that has turf tires or
tires that don't have the rice paddy type tires.
"Q. And other than the fact that the tractor
wouldn't be here, you know, if they hadn't imported
it for use in the United States, I want to know
specifically anything besides the tiller and the
fact it wouldn't have a front-end loader, in your
opinion, that are the features you say were made for
Japan that you think were specifically causative in
contributing to this rollover?
"A. It's the configuration of the entire piece
of equipment. It's the fact that it had a mower on
the back and not the tiller. Again, it's a tiller.
The tractor used in Japan didn't have a front-end
loader. Now we come to the configuration of the
tractor, the size of the tractor, the width of the
tractor, the length of the tractor, the weight of
the tractor. It's the tractor that rolls over. You
can't say that there's one part of the tractor that
caused it to roll over in the absence of another
8
1130214
part. It's the configuration of the tractor given
this slope, which, again, I talked about before is
steep, and then given the drop-off or ledge as I
described it before."
Dr. Thomas Carpenter, an agricultural engineer and safety
expert, testified that the primary cause of the rollover was
the lack of stability of the tractor, caused by its narrow
wheel spacing, and the front-end loader being attached to the
tractor. Dr. Carpenter stated that the Yanmar tractor in
question had a tipping angle of 37.4 degrees and a tread width
of 40 inches, whereas similarly sized American-made tractors
manufactured in the same year as the Yanmar tractor at issue
had tipping angles in excess of 45 degrees and tread widths
that varied between 51 inches and 75 inches. Dr. Carpenter
opined that the relative instability of the Yanmar tractor
based on tread width and tipping angle, when compared to the
similarly sized American-made tractors, "resulted in it
overturning" under the conditions in which it was being used
on the day of Randy's accident. Dr. Carpenter further
testified that the addition of the front-end loader
"definitely increased the instability" of the tractor by
moving the center of gravity of the tractor higher and
forward. Dr. Carpenter stated that, based on what he knew of
9
1130214
this tractor's stability characteristics, he would not have
used it to bush hog the property Randy was bush hogging. Dr.
Carpenter testified that a ROPS would likely have prevented
the tractor from rolling more than 90 degrees but that, even
if the tractor had been equipped with a ROPS, he would not
have used it to bush hog the property.
III. The Purchase of the Gray-Market Tractor
Arnold Trimm owned Artec Tractor and Equipment, Inc.
("Artec"), from 1994 until 2006. In the late 1990s Trimm saw
an advertisement in a magazine for used Japanese farm
tractors. Trimm contacted the suppliers of the tractors and
eventually traveled to Japan to meet with the suppliers.
Trimm testified that he was told by the suppliers that the
tractors were "good used farm tractors." Trimm stated that he
was not told that the tractors had been specifically designed
and manufactured for use in Japan and not for use in the
United States. Trimm testified that Artec imported and sold
the used Japanese farm tractors from 1998 until 2005. Artec
sold parts for the used "gray-market" Yanmar tractors it
10
1130214
imported. Artec became an authorized Yanmar America dealer in
July 2005.4
In 2005, some 26 years after the subject Yanmar tractor
Randy was operating was manufactured and first sold primarily
for use in the rice paddies of Japan, Artec purchased the
tractor from a gray-market supplier and imported the tractor
into the United States. On April 28, 2005, Artec sold the
Yanmar tractor to Northside, which, in turn, sold the tractor
to Autrey Nichols.
After purchasing the tractor, Autrey purchased an
English-language version of the operator's manual for the
tractor. The operator's manual explained that the Yanmar
model 2210BD tractor was a gray-market tractor that was
originally manufactured for sale in Japan and that was
subsequently purchased used by a dealer or broker and imported
into the United States. The manual explained certain
differences between the gray-market tractors and the Yanmar
brand tractors manufactured for use in the United States,
The 2005 dealer agreement appointed Artec as an
4
authorized dealer of certain Yanmar brand excavators, wheel
loaders, crawler carriers, and compact back-hoe loaders.
Artec did not become an authorized dealer of Yanmar tractors
because Yanmar had ceased distributing Yanmar tractors to the
United States market in 1991.
11
1130214
including the fact that Japan does not require its tractors to
be equipped with a ROPS, although the tractors manufactured
for use in the United States are required to be equipped with
a ROPS. The manual also contained information and warnings on
the risk of rollovers, particularly while operating the
tractor on slopes; stability issues and the need for ballasts
when operating the tractor with a front-end loader; the
importance of a ROPS; and the need to inspect unfamiliar
terrain before operating the tractor. Autrey did not provide
Randy with the manual and did not discuss with him any
information contained in the manual. Additionally, the front-
end loader and bush hog attachment that accompanied the Yanmar
tractor when it was purchased also came with operator manuals,
and each was affixed with warning decals. Those warning
decals were printed in English and warned of the possibility
of rollover and recommended using a ROPS at all times.
When asked whether he usually read all warning labels
before operating a tractor or other equipment, Randy stated
that he "probably glanced at them, but ... felt like [he] was
a safe operator, and [he] just overlooked them." Randy
testified that he did not need a warning with regard to the
12
1130214
Yanmar tractor in this case. He stated that when he glanced
at the labels on the tractor he was not concerned that the
labels were in Japanese. Randy never saw the operator's manual
for the tractor, the front-end loader, or the bush hog. He
testified that he did not need to read an operator's manual to
know how to operate a tractor and the attached front-end
loader and bush hog. He stated that reading the operator's
manuals for either piece of equipment did not interest him
because he had become so familiar with operating heavy
equipment that he did not need to read the manuals in order to
know how to operate the tractor with the attachments.
IV. Yanmar America's Efforts to Warn Against the Gray-Market
Tractors
Ryan Pott, the director of legal affairs for Yanmar
America, testified that Yanmar America first discovered in
1990 that gray-market
Yanmar
tractors were being imported into
the United States. Pott testified as to various documents
relating to the gray-market tractors. In December 1991, Gary
Bilek, an employee of Yanmar America, notified Yanmar Japan by
letter of certain "problems" Yanmar America was having with
the gray-market tractors, specifically noting that the
purchasers of the gray-market tractors were being told that
13
1130214
they could purchase parts for the tractors from Yanmar
America. Bilek stated in his letter that "we've been
instructed not to help these customers procure spare parts
because they come into the United States without any rollover
protection." Bilek then asked "can anything be done in Japan
to stop the unauthorized sale of these units?"
In 1992, Yanmar America began disseminating in various
trade
publications
safety
notices
concerning
the
safety
issues
associated with the gray-market tractors. On July 24, 1992,
Yanmar Tractor Service U.S.A., Inc., issued a statement to
5
all Yanmar tractor parts and service dealers, informing them
that the gray-market tractors were not designed for
distribution in the United States, that they were being
imported without the approval of Yanmar Japan, and that,
therefore, a parts- and service-support network was not
available for the gray-market tractors. Yanmar America
Yanmar Tractor Service U.S.A., Inc. ("Yanmar Tractor
5
Service"), was a former distributor of authorized Yanmar
tractors in the United States. Subsequent to Yanmar Japan's
cessation of the distribution of Yanmar tractors to the United
States market in 1991, Yanmar Tractor Service became a service
and parts provider for Yanmar tractors in the United States.
It appears from the record that at some point Yanmar Tractor
Service merged with Yanmar America, and Yanmar America became
the service and parts provider for Yanmar tractors intended
for the United States market.
14
1130214
requested
that
the
dealers
inform
those
considering
purchasing
a gray-market tractor as to the lack of available parts and
service support and to inform them that most all the safety
decals were printed in Japanese. Yanmar America also noted in
this statement that "the long term response to the problems
created by Gray Market Tractors will take some time and
careful consideration."
In August 1992, Yanmar Japan conducted a "Study Meeting
on Policy to Cope with Sales in USA of Used Tractors that were
Manufactured for Domestic Market." The purpose of the meeting
was to discuss the concerns of Yanmar Japan management
regarding potential liability arising from the sales in the
United States of the gray-market tractors. It was determined
at this meeting that Yanmar Japan would honor the requests for
parts for the gray-market tractors while it continued to
assess the issue of the gray-market tractors. Pott testified
that there was an internal debate within Yanmar Japan at the
time as to whether it should support the gray-market tractors
with parts and service.
In May 1995, John Sonnentag, a manager in the parts and
service department at Yanmar America, reported by internal
15
1130214
memorandum addressed to Koju Saski, a manager with Yanmar
Japan, regarding a recent meeting he had attended in Japan in
which it had been "indicated [that] all parts are available,
regardless of status." Sonnentag also noted in his memorandum
that the "above information contradicts the position taken by
Gary Bilek's letter." Pott stated that this correspondence
indicated that the gray-market tractors would be supported
with parts and service.
On January 18, 2000, Yanmar America posted on its Web
site an "Important Safety Notice" regarding the gray-market
tractors, which was intended for the parts and service
dealers,
for
potential
purchasers
of
gray-market
tractors,
and
for owners of gray-market tractors. The safety notice
explained what a gray-market tractor was and also explained
the important design and operating differences between
a
gray-
market tractor and those Yanmar tractors specifically
manufactured for use in the United States. The safety notice
did not contain any specific reference to differences in the
stability
of
gray-market tractors
and
those tractors
manufactured for use in the United States, nor did the notice
16
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contain a specific warning regarding the use of front-end
loaders or bush hogs with the gray-market tractors.
In 2002, Yanmar America implemented a computer parts-
blocking program to combat the sale of Yanmar gray-market
tractors in the United States. The parts-blocking program was
designed to stop the sale of replacement parts for the gray-
market tractors. The program required a parts dealer
purchasing parts from Yanmar America to specify both the model
number and the serial number of the tractor for which the part
was being purchased. Yanmar America would be able to discern
from a computer database whether the part was being purchased
for a gray-market tractor based on the model and serial
numbers, and it could then block the sale of that part.
On July 20, 2005, Yanmar America issued another
"Important Safety Notice" that was posted to its Web site
regarding "Gray Market Tractors, Excavators, Wheel Loaders,
and Carriers." This safety notice was substantially similar
to the safety notice issued in January 2000, except that this
notice included excavators, wheel loaders, and carriers, in
addition to the gray-market tractors. The safety notice
explained what a gray-market product was and also explained
17
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the important design and operating differences between gray-
market products and those Yanmar products specifically
manufactured for use in the United States. This particular
safety notice also explained that, as the result of those
safety issues, Yanmar Japan would not support gray-market
tractors, excavators, wheel loaders, and carriers with
replacement parts. Again, this safety notice did not contain
any specific reference to differences in the stability of
gray-market tractors and tractors manufactured for use in the
United States, nor did the notice contain a specific warning
regarding the use of front-end loaders or bush hogs with the
gray-market tractors.
Pott testified that Yanmar Japan and Yanmar America
became concerned that equipment dealers selling gray-market
tractors, owners of gray-market tractors, and potential
purchasers of gray-market tractors may not have been aware of
the
important
differences
between
the
gray-market
tractors
and
those
Yanmar
tractors
manufactured
and
intended
for
distribution in the United States market. Pott testified that
the need for warnings arose out of the way the gray market had
developed, as well as Yanmar Japan's decision to support the
18
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gray-market tractors with genuine Yanmar parts during
a
period
of time in the 1990s, which, he stated, created confusion as
to whether there were significant differences between the
gray-market tractors and those Yanmar tractors intended for
use in the United States market. Pott testified that he
therefore directed in 2008 that the safety notices be mailed
to all authorized Yanmar dealers of parts and service,
construction, and industrial equipment. Artec did
not
receive
the safety notice until 2010, two years after the accident
that is the basis of this action. Pott explained that the
safety notices were not all mailed out at the same time but
that they were done over time.
Yanmar America has filed trademark-infringement lawsuits
seeking to stop the importation and sale of gray-market
tractors through the Internet site "eBay." In January 2004,
6
Yanmar America sent a letter to HDI Tractor, a nonauthorized
Yanmar tractor dealer, threatening legal action if
HDI
Tractor
did not cease importing and selling gray-market Yanmar
tractors. Yanmar America further demanded that HDI Tractor
The Internet site eBay is a consumer-to-consumer online
6
auction and shopping Web site in which individuals and
businesses buy and sell a wide variety of goods worldwide.
19
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contact its customers who had purchased gray-market Yanmar
tractors and inform them that the tractors were not intended
for use in the United States, that they may not be equipped
with proper safety features for use in the United States, and
that HDI Tractor would refund the full purchase price of the
tractor. Yanmar and HDI Tractor eventually entered into a
settlement agreement in which HDI Tractor agreed to send
copies of the "Important Safety Notice" to its customers that
had purchased a gray-market tractor.
In September 2005, Yanmar America sent notices to its
authorized
parts
and
service
dealers
prohibiting
those
dealers
from selling gray-market tractors and from providing parts
and
service for gray-market tractors. The authorized dealers were
required to acknowledge in writing that they would not sell
gray-market products, or they risked losing their status as an
authorized Yanmar dealer. In several instances authorized
parts and service dealers continued to participate in gray-
market activity; those dealers' authorized dealer agreements
were terminated by Yanmar America. It appears from the record
that the notices prohibiting the sale of Yanmar gray-market
tractors and the supply of parts and services for the gray-
20
1130214
market tractors were sent only to authorized Yanmar parts and
service dealers and not to authorized dealers of Yanmar
equipment such as Artec.
As mentioned above, Artec became an authorized dealer of
Yanmar equipment in July 2005. Prior to Artec's becoming an
authorized equipment dealer in July 2005, Yanmar America did
not inquire whether, or confirm that, Artec was selling gray-
market tractors and parts. Artec did not receive any notice
from
Yanmar
America
regarding
gray-market
tractors
until
2010.
Yanmar eventually discovered that Artec had continued to
participate in gray-market activity and terminated its dealer
agreement in April 2013, approximately three weeks before the
start of the trial in this case.
On October 1, 2009, Randy sued Yanmar Japan, Yanmar
America, Artec, and Northside, asserting claims under the
Alabama Extended Manufacturer's Liability Doctrine ("AEMLD")
and a claim alleging breach of an implied warranty. Count I
of the complaint alleged that the tractor was unreasonably
dangerous because it was designed, manufactured, distributed,
and sold without a ROPS. Count II of the complaint alleged
the defendants' negligence in designing, manufacturing,
21
1130214
distributing, and selling the tractor without a ROPS as
standard equipment. Count III of the complaint alleged that
the defendants breached the implied warranty of fitness for a
particular
purpose
in
manufacturing,
distributing,
and
selling
the tractor without a ROPS as standard equipment.
On November 10, 2011, Yanmar Japan moved the trial court,
pursuant to Rule 12(b)(2), Ala. R. Civ. P., to dismiss the
complaint against it for lack of in personam jurisdiction. On
February 28, 2012, Randy amended his complaint to allege that
Yanmar Japan and Yanmar America were:
"a). Reckless or negligent in manufacturing and
selling Yanmar parts which [they] knew were being
ordered for use in Yanmar gray market tractors in
the United States, for which tractors there would
not have been a viable market in the United States
without such parts;
"b). Reckless or negligent in issuing warnings that
Yanmar gray market tractors could not be retrofitted
with ROPS;
"c). Reckless or negligent in performing dealer
audits of Artec before and after it became an
authorized Yanmar dealer, which audits if done in a
reasonable manner would have revealed that Artec was
and had been for many years a volume seller of
Yanmar gray market tractors, and which would have
resulted in gray market tractor warnings being
issued to Artec and prohibitions being imposed on
Artec against selling Yanmar gray market tractors;
22
1130214
"d). Reckless or negligent in failing to warn their
own authorized dealer Artec that Yanmar gray market
tractors were not manufactured in a manner which met
U.S. safety standards, and were not manufactured for
sale in the U.S. as well as in Japan, in the same
manner which it undertook to warn other authorized
Yanmar dealers in Alabama prior to the sale by Artec
of
the
subject
tractor
and
prior
to
Randy
Nichols'[s] injuries;
"e). Negligent in not instructing their authorized
dealer Artec to provide to any purchasers and owners
of Yanmar gray market tractors which Artec had sold
Yanmar's 'Important Safety Notice,' and in not
instructing Artec to advise such purchasers and
owners that suitable ROPS were available for
retrofit on their Yanmar tractors and that such
tractors were not reasonably safe for operation
unless ROPS were installed on the tractors.
"f). Negligent in not prohibiting their authorized
dealers in Alabama from selling Yanmar gray market
tractors, while undertaking to prohibit Yanmar
authorized dealers in Alabama from selling parts
for use in Yanmar gray market tractors."
On March 23, 2012, the trial court conducted a hearing on
Yanmar Japan's motion to dismiss the complaint against it for
lack of in personam jurisdiction. On April 10, 2012, the
trial court entered an order allowing the parties to engage in
further
discovery
and
supplemental
briefing
addressing
Randy's
amended complaint. Following consideration of the parties'
briefs and arguments, the trial court, on October 5, 2012,
23
1130214
entered an order granting Yanmar Japan's motion to dismiss for
lack of in personam jurisdiction.
On February 27, 2013, Randy moved to voluntarily dismiss
the claims against Northside. Randy entered into a pro tanto
settlement with Artec to settle the claims against it for
$550,000. On April 8, 2013, Randy moved the trial court to
dismiss Artec because of the pro tanto settlement the parties
had reached. On April 10, 2013, the trial court entered an
order granting Randy's motion for a pro tanto dismissal of the
claims against Artec. On April 29, 2013, the trial court
entered an order granting Randy's motion to voluntarily
dismiss Northside, leaving only Yanmar America as
a
defendant.
On March 18, 2013, Yanmar America moved the trial court for a
summary judgment arguing, among other things, that it was
entitled to a summary judgment on the claim that it
negligently failed to warn Artec that Yanmar gray-market
tractors did not meet United States safety standards. On April
24, 2013, the trial court entered an order denying Yanmar
America's motion for a summary judgment.
The case proceeded to trial against Yanmar America on
April 29, 2013. At the close of Randy's evidence, Yanmar
24
1130214
America moved the trial court for a preverdict judgment as a
matter of law ("JML"), which the trial court denied. Yanmar
America renewed its motion for a preverdict JML at the close
of all the evidence, which the trial court also denied. On May
3, 2013, the jury returned a verdict in favor of Randy and
against Yanmar America awarding Randy $900,000 in damages.
The trial court reduced the damages award by the amount of the
$550,000 pro tanto settlement with Artec and entered a
judgment of $350,000 in favor of Randy.
On May 31, 2013, Yanmar America moved the trial court for
a postverdict JML or, in the alternative, for a new trial. On
August 14, 2013, the parties filed a joint motion consenting
to extend the time for the trial court's consideration and
ruling on Yanmar America's postverdict motion. Following a
hearing, the trial court, on October 15, 2013, entered an
order denying Yanmar America's postverdict motion. Yanmar
America timely appeals.
Standard of Review
The standard of review for a ruling on a motion for a JML
is as follows:
"'When reviewing a ruling on a motion
for a JML, this Court uses the same
25
1130214
standard the trial court used initially in
deciding whether to grant or deny the
motion for a JML. Palm Harbor Homes, Inc.
v. Crawford, 689 So. 2d 3 (Ala. 1997).
Regarding questions of fact, the ultimate
question is whether the nonmovant has
presented sufficient evidence to allow the
case to be submitted to the jury for a
factual resolution. Carter v. Henderson,
598 So. 2d 1350 (Ala. 1992). The nonmovant
must
have
presented
substantial
evidence
in
order to withstand a motion for a JML. See
§ 12–21–12, Ala. Code 1975; West v.
Founders Life Assurance Co. of Florida, 547
So. 2d 870, 871 (Ala. 1989). A reviewing
court must determine whether the party who
bears the burden of proof has produced
substantial evidence creating a factual
dispute requiring resolution by the jury.
Carter, 598 So. 2d at 1353. In reviewing a
ruling on a motion for a JML, this Court
views the evidence in the light most
favorable to the nonmovant and entertains
such reasonable inferences as the jury
would have been free to draw. Id. Regarding
a question of law, however, this Court
indulges no presumption of correctness as
to the trial court's ruling. Ricwil, Inc.
v. S.L. Pappas & Co., 599 So. 2d 1126 (Ala.
1992).'
"Waddell & Reed, Inc. v. United Investors Life Ins.
Co., 875 So. 2d 1143, 1152 (Ala. 2003)."
CSX Transp., Inc. v. Miller, 46 So. 3d 434, 450-51 (Ala.
2010).
Discussion
26
1130214
Although Randy asserted various theories of recovery
against Yanmar America, the case was tried on a theory that
Yanmar America voluntarily assumed a duty to warn Randy of the
safety issues relative to operating a Yanmar gray-market
tractor by voluntarily undertaking activities to warn Yanmar
dealers, as well as the owners and potential purchasers of
Yanmar gray-market tractors, of the safety issues associated
with operating the Yanmar gray-market tractors and
that Yanmar
America then negligently performed that duty to warn.
I. Voluntary Assumption of the Duty to Warn
Initially, we note that Yanmar America was not the
supplier or manufacturer of the Yanmar gray-market tractor
involved in this case; therefore, it initially owed no duty to
warn the expected users of the gray-market tractor of the
safety issues relative to its use. See Ex parte Chevron Chem.
Co., 720 So. 2d 922 (Ala. 1998). However, "[i]t is well
settled under Alabama law that one who undertakes to perform
a duty he is not otherwise required to perform is thereafter
charged with the duty of acting with due care." King v.
National Spa & Pool Inst., Inc., 570 So. 2d 612, 614 (Ala.
1990). See also United States Fid. & Guar. Co. v. Jones, 356
27
1130214
So. 2d 596, 598 (Ala. 1977)("The law, simply stated, is that
one who volunteers to act, though under no duty to do so, is
thereafter charged with the duty of acting with due care."),
and Fireman's Fund American Ins. Co. v. Coleman, 394 So. 2d
334, 349 (Ala. 1980) (Jones, J., concurring in the result and
stating that "[t]he rule is well established that common law
liability to third parties can arise from the negligent
performance of even a voluntary undertaking").
The trial court concluded as a matter of law that Yanmar
America voluntarily undertook a duty to warn Randy of the
safety concerns associated with the use of a Yanmar gray-
market tractor. Yanmar America acknowledged at trial that it
voluntarily undertook a duty to warn; however, it did not
believe that that duty to warn extended to Randy. Yanmar
America argues on appeal that, by issuing the safety notices
and undertaking activities such as the parts-blocking program
in order to impede the sale of gray-market tractors, it did
not voluntarily assume a duty to warn "every potential user"
of the dangers associated with the use of a gray-market
tractor.
28
1130214
The evidence indicates that Yanmar America became
concerned that Yanmar equipment dealers selling gray-market
tractors, owners of gray-market tractors, and potential
purchasers of gray-market tractors were not aware of the
important differences between the gray-market tractors and
those
Yanmar
tractors
manufactured
and
intended
for
distribution in the United States. Pott stated that the need
for warnings arose out of the way the gray market had
developed in the United States, as well as Yanmar Japan's
decision to support the gray-market tractors with genuine
Yanmar parts during a period in the 1990s, which, he stated,
created confusion as to whether there were significant
differences between the gray-market tractors and those Yanmar
tractors intended for use in the United States. Thus, Yanmar
America began disseminating safety notices for the purpose of
warning Yanmar dealers, owners of gray-market tractors, and
potential purchasers of gray-market tractors of the safety
concerns associated with operating a Yanmar gray-market
tractor. This campaign to warn Yanmar dealers, owners of gray-
market tractors, and potential purchasers culminated in 2008
with a mass mailing to all authorized dealers of Yanmar parts
29
1130214
and service and construction and industrial equipment.
Artec,
the importer and party responsible for putting
the
gray-market
tractor at issue into the stream of commerce, was an
authorized equipment dealer of Yanmar America at the time.
Pott testified that the purpose of the safety notices was to
prevent injury and death to the owners and potential
purchasers of the Yanmar gray-market tractors.
In addition to issuing safety warnings regarding the
gray-market tractors, Yanmar America engaged in other
activities, such as the parts-blocking program, in order to
impede the sale of the gray-market tractors. Thus, it is
clear from the record, as well as from Yanmar America's own
acknowledgment at trial, that it voluntarily assumed a duty to
warn of the safety hazards associated with operating a Yanmar
gray-market tractor.
As for whether the duty to warn undertaken by Yanmar
America extends to Randy, we note that "'[t]he ultimate test
7
of duty to use [due] care is found in the foreseeability that
We reiterate that Yanmar America conceded on the record
7
that it indeed had assumed a duty to warn. Pott testified
that the warnings were intended for owners and potential
purchasers of the gray-market tractors and that the purpose of
the warnings was to prevent injury and/or death.
30
1130214
harm may result if care is not exercised.'" King, 570 So. 2d
at 615 (quoting Bush v. Alabama Power Co., 457 So. 2d 350, 353
(Ala. 1984)). As discussed above, Yanmar America undertook a
duty to issue safety warnings to owners and potential
purchasers of Yanmar gray-market tractors in order to prevent
injury and death resulting from the operation of those
tractors. Therefore, the duty to warn that Yanmar America
voluntarily undertook would apply to foreseeable owners or
operators of the gray-market tractor Autrey purchased.
Obviously, it was foreseeable to Yanmar America that Autrey,
as an owner of a Yanmar gray-market tractor, needed to be
warned of the safety hazards associated with the operation of
a gray-market tractor or risk Autrey's being injured or killed
while operating the tractor. Moreover, it was just as
foreseeable that someone other than Autrey -- in this case
Randy -- might operate the tractor and would also be in need
of a warning via Autrey regarding the hazards associated with
operating the tractor. Thus, we conclude that the duty to
warn of potential hazards associated with operating the gray-
market tractor extended to Randy and that the trial court did
31
1130214
not err as a matter of law in extending the duty to warn to
him.
II. Breach of the Duty to Warn
Randy claims that Yanmar America breached its voluntarily
undertaken duty to warn because: (1) Yanmar
America's warnings
were insufficient to warn of the safety hazard that actually
caused the gray-market tractor to overturn, which was the
propensity of the tractor to roll over under certain
conditions because of its relative instability owing to its
narrow
wheel
spacing
and
weight
configuration
or
distribution,
coupled with tires with higher tread patterns that raised the
center of gravity of the tractor, and (2) because Yanmar
America had failed to ensure that the safety warnings were
disseminated in such a manner that they would actually reach
the potential purchasers and users of the Yanmar gray-market
tractors.
As this Court noted in Beasley v. MacDonald Engineering
Co., 287 Ala. 189, 249 So. 2d 844 (1971), liability for the
8
breach of a duty voluntarily undertaken is governed by
Restatement (Second) of Torts § 324A (1965), which states:
We have not been asked to overrule caselaw adopting
8
Restatement (Second) of Torts § 324A (1965).
32
1130214
"'Liability to third person for negligent
performance of undertaking. One who undertakes,
gratuitously
or
for
consideration,
to
render
services to another which he should recognize as
necessary for the protection of a third person or
his things, is subject to liability to the third
person for physical harm resulting from his failure
to
exercise
reasonable
care
to
protect
his
undertaking, if
"'(a)
his
failure
to
exercise
reasonable care increases the risk of such
harm, or
"'(b) he has undertaken to perform a
duty owed by the other to the third person,
or
"'(c) the harm is suffered because of
reliance of the other or the third person
upon the undertaking.'"
287 Ala. at 193, 249 So. 2d at 487 (quoting Restatement
(Second) of Torts § 324A). See also Commercial Union Ins. Co.
v. DeShazo, 845 So. 2d 766 (Ala. 2002). In accordance with §
324A(a), the trial court instructed the jury that Yanmar
America could be held liable for negligently failing to warn
Randy based on its voluntarily assuming a duty to warn only if
"Yanmar America's negligence increased the risk of harm to
Randy."
Yanmar America argues on appeal that it did nothing to
increase the risk of harm to Randy by issuing the safety
33
1130214
notices in this case and by undertaking other activities to
impede the importation, sale, and use of the gray-market
tractors in the United States. "Section 324A(a) applies only
to the extent that the alleged negligence of the defendant
'exposes the injured person to a greater risk of harm than had
existed previously.'" Herrington v. Gaulden, 294 Ga.
285, 288,
751 S.E.2d 813, 816 (2013) (quoting Taylor v. AmericasMart
Real Estate, 287 Ga. App. 555, 559, 651 S.E.2d 754, 758
(2007)). Moreover, the "test is not whether the risk was
increased over what it would have been if the defendant had
not been negligent. Rather, a duty is imposed only if the
risk is increased over what it would have been had the
defendant not engaged in the undertaking at all." Myers v.
United States, 17 F.3d 890, 903 (6th Cir. 1994). Liability
can be imposed on one who voluntarily undertook the duty to
act only where the actor "affirmatively either made, or caused
to be made, a change in the conditions which change created or
increased the risk of harm" to the plaintiff. Id. See also
Patentas v. United States, 687 F.2d 707, 717 (3d Cir. 1982)
("[T]he comment [c] to section 324A makes clear that
34
1130214
'increased risk' means some physical change to
the
environment
or some other material alteration of the circumstances.").
As mentioned above, Randy claims in part that Yanmar
America breached the duty to warn that it had voluntarily
undertaken
by
issuing
insufficient
safety
warnings
that
failed
to warn of the safety hazards that actually caused the tractor
he was operating to roll over. The evidence is undisputed
that those safety warnings never reached Artec or Randy.
Because neither Artec nor Randy ever saw the safety warnings,
Yanmar America's failure to include more specific information
regarding the hazards of operating a Yanmar gray-market
tractor could not possibly have increased the risk to Randy
over the risk that already existed in the absence of a notice.
See McMellon v. United States, 338 F.3d 287, 295 n.5 (4th Cir.
2003) (observing that "[t]he plaintiffs do not contend, nor
could they, that the government, by posting signs that the
plaintiffs did not see, increased the risk to the plaintiffs
over that which they would have faced had no signs been
posted"), vacated and remanded on other grounds, 387 F.3d 329
(4th Cir. 2004).
35
1130214
Randy also bases his argument that Yanmar America
breached the duty to warn on his claim that Yanmar America had
failed to ensure that the safety warnings were disseminated in
a manner by which they would actually reach the potential
purchasers and users of the Yanmar gray-market tractors. He
points to the testimony of Trimm and Randy in support of this
contention. Trimm testified that if he had been warned that
the Yanmar gray-market tractor was not designed for, and not
safe to operate in, the United States, he would have "passed
the information on" to Northside and would have offered to
purchase the tractor back from Northside. Randy testified
that had he known of the stability issues associated with the
Yanmar gray-market tractor he would not have used it. Randy
argues that Yanmar America's negligence in failing to ensure
that the safety warnings were disseminated to Randy increased
his risk of harm. We disagree.
Yanmar America conceded that it undertook a duty to warn
owners and potential purchasers of the safety hazards
associated with the operation of a Yanmar gray-market tractor
in the United States. Yanmar America issued safety warnings
and also undertook other activities to impede the importation
36
1130214
and sale of gray-market tractors in the United States, the
importations and gray-market sales being circumstances beyond
its control. Although it is undisputed that those safety
warnings never reached Randy, the result is the same as if
Yanmar America had elected not to undertake any such
activities to warn the foreseeable users of the Yanmar gray-
market tractors. By issuing the safety warnings and failing
to ensure that they were disseminated to Randy, Yanmar America
exposed Randy to no greater a risk of harm than he would have
been exposed to previously had Yanmar America chosen not to
act in order to warn the potential users of the gray-market
tractors. Herrington, supra.
We conclude that Randy failed to establish by substantial
evidence that Yanmar America participated in an activity that
increased his risk of harm over any risk of harm that would
have existed had Yanmar America chosen not to warn potential
users of the gray-market tractors in this case. Accordingly,
the trial court erred as a matter of law in denying Yanmar
America's motions for a JML on Randy's failure-to-warn claim.
Conclusion
37
1130214
We reverse the judgment of the trial court and remand the
case for the trial court to enter a judgment consistent with
this opinion.
REVERSED AND REMANDED.
Stuart, Wise, and Bryan, JJ., concur.
Parker, J., concurs specially.
Murdock and Main, JJ., concur in the result.
Moore, C.J., recuses himself.
38
1130214
PARKER, Justice (concurring specially).
I am not yet convinced that the "increases the risk of
such harm" standard set forth in Restatement (Second) of Torts
§ 324A(a) (1965) and applied by the majority in this case
applies to any and all voluntary-warning situations.
39
1130214
MURDOCK, Justice (concurring in the result).
I agree that nothing in the warnings posted by Yanmar
America Corporation or in the physical notices mailed by it to
dealers increased the risk of harm to anyone who might have
seen or received the same, much less someone in Autrey
Nichols's or Randy Nichols's position. As a threshold matter,
however, I question whether Yanmar America conceded that it
understood a duty to warn any person (including Autrey and
Randy) who did not happen upon its Web site postings or
actually receive one of its mailings, and I am not persuaded
that the evidence presented, including the testimony of Ryan
Pott, supports a contrary conclusion. I therefore concur in
the result.
40 | September 30, 2014 |
d67b0601-df0f-4180-9a1e-0fd1df5d3789 | Edwin B. Lumpkin, Jr. v. State of Alabama | N/A | 1131001 | Alabama | Alabama Supreme Court | REL:12/19/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
____________________
1130999
____________________
Edwin B. Lumpkin, Jr.
v.
State of Alabama
____________________
1131000
____________________
Edwin B. Lumpkin, Jr.
v.
State of Alabama
____________________
1131001
____________________
Edwin B. Lumpkin, Jr.
v.
State of Alabama
Appeals from Jefferson Circuit Court, Bessemer Division
(CV-13-10; CV-13-11; and CV-13-12)
STUART, Justice.
Edwin B. Lumpkin, Jr., appeals the orders of the
Jefferson Circuit Court dismissing three cases he had
initiated challenging property-tax assessments made by the
Jefferson County Board of Equalization and Adjustments ("the
Board"). We affirm.
I.
Lumpkin owns and operates Metro Mini Storage, a chain of
self-storage
facilities
with
locations
throughout
the
Birmingham metropolitan area. In 2012, Lumpkin received
notice from Jefferson County regarding the assessed value of
three of his properties located in that county. One property
was
valued
at
$1,268,000;
three
contiguous
parcels
constituting another location were valued at $131,600,
2
1130999, 1131000, 1131001
$130,000, and $142,700, respectively; and six more contiguous
parcels at a third location were valued at $312,000, $243,500,
$854,300, $657,500, $493,200, and $397,900, respectively.
Believing the assessed values of these properties to be too
high, Lumpkin elected to protest their valuation, and, on
August 16, 2012, the Board heard his arguments. On October
18, 2012, the Board issued its rulings on Lumpkin's three
appeals, granting him relief only as to the first property, on
which the assessed value was lowered from $1,268,000 to
$995,400.
On November 16, 2012, Lumpkin, acting pro se, filed three
appeals in the Jefferson Circuit Court (one for each of the
three locations), arguing that the Board's decisions did not
reflect the true market value of the properties and that a
reduction in assessed value was warranted based on the
evidence he had presented. Such appeals are governed by § 40-
3-25, Ala. Code 1975, which provides, in pertinent part:
"All appeals from the rulings of the board of
equalization fixing value of property shall be taken
within 30 days after the final decision of said
board fixing the assessed valuation as provided in
this chapter. The taxpayer shall file notice of
said appeal with the secretary of the board of
equalization and with the clerk of the circuit court
and shall file bond to be filed with and approved by
3
1130999, 1131000, 1131001
the clerk of the circuit court, conditioned to pay
all costs, and the taxpayer or the state shall have
the right to demand a trial by jury by filing a
written demand therefor within 10 days after the
appeal is taken. When an appeal is taken, the
taxpayer shall pay the taxes due as fixed for
assessment for the preceding tax year before the
same becomes delinquent; and, upon failure to do so,
the court upon motion ex mero motu must dismiss the
appeal, unless at the time of taking the appeal the
taxpayer has executed a supersedeas bond with
sufficient sureties to be approved by the clerk of
the circuit court in double the amount of taxes,
payable to the State of Alabama, conditioned to pay
all taxes, interest, and costs due the state,
county, or any agency or subdivision thereof."
Lumpkin's notices of appeal, submitted within 30 days of the
Board's final decisions, were timely filed; however, Lumpkin
did not file the bonds required by § 40-3-25 until April 4,
2014 –– in response to the State's March 17, 2014, motions
moving the trial court to dismiss Lumpkin's appeals based on
his failure to file those bonds. Lumpkin, who had retained
counsel in August 2013, opposed the State's motions to
dismiss, arguing that he had now paid the bonds and that the
failure to do so earlier should not be considered a
jurisdictional defect; however, on April 16, 2014, the trial
court entered an order of dismissal in each of the three
cases. On May 28, 2014, Lumpkin appealed those judgments to
this Court.
4
1130999, 1131000, 1131001
II.
The trial court dismissed the underlying cases based on
Lumpkin's failure to file the bonds required by § 40-3-25.
Thus, the trial court effectively determined that it lacked
subject-matter jurisdiction over the cases. See Ex parte
Shelby Cnty. Bd. of Equalization, [Ms. 1130017, April 11,
2014] ___ So. 3d ___ (Ala. 2014) (noting that a challenge to
a trial court's ruling on a motion to dismiss for failing to
comply with the requirements of § 40-3-25 presented a
"question of subject-matter jurisdiction"). In Newman v.
Savas, 878 So. 2d 1147, 1148-49 (Ala. 2003), this Court set
out the standard of review for a ruling on a motion to dismiss
for lack of subject-matter jurisdiction:
"A ruling on a motion to dismiss is reviewed
without a presumption of correctness. Nance v.
Matthews, 622 So. 2d 297, 299 (Ala. 1993). This
Court must accept the allegations of the complaint
as true. Creola Land Dev., Inc. v. Bentbrooke
Housing, L.L.C., 828 So. 2d 285, 288 (Ala. 2002).
Furthermore, in reviewing a ruling on a motion to
dismiss we will not consider whether the pleader
will ultimately prevail but whether the pleader may
possibly prevail. Nance, 622 So. 2d at 299."
III.
Lumpkin adequately states the issue before this Court in
these appeals as follows:
5
1130999, 1131000, 1131001
"Whether
the
requirement
for
payment
of
security
for costs in [§ 40-3-25] is procedural (an
interpretation that is consistent with other areas
of appellate practice) or jurisdictional, and
therefore required to perfect an appeal."
Lumpkin's briefs, at p. 4. He argues that § 40-3-25 is
1
ambiguous with regard to whether the required bond must be
paid within the 30-day period for taking an appeal from a
ruling of the board of equalization; therefore, he argues,
this Court should apply the rules of statutory construction,
which rules, he argues, mandate a holding that the bond does
not have to paid within that 30-day period. In support of his
argument, Lumpkin notes that the filing of a bond is generally
considered to be a procedural requirement, as opposed to a
jurisdictional requirement, in other appellate proceedings,
including general appeals to this Court or to the Court of
Civil Appeals, appeals to a circuit court from a district
court, and appeals to a circuit court from decisions of state
agencies such as the Alabama Real Estate Commission and the
Department of Human Resources. He further argues that the
bond serves no purpose because taxpayers are required to pay
their court costs and their taxes while any appeal is pending
Lumpkin
filed
substantially
identical
briefs
in
all
three
1
appeals.
6
1130999, 1131000, 1131001
and that the legislature has generally indicated that tax
statutes should be liberally construed to allow disputes to be
decided on their merits.
However, approximately one month before Lumpkin filed
these appeals, this Court released its opinion in Ex parte
Shelby County Board of Equalization, in which this Court
considered the language of § 40-3-25, determined it to be
unambiguous, and held that the failure to timely comply with
its plain-language requirements resulted in the failure to
invoke the trial court's jurisdiction. The specific issue in
Ex parte Shelby County Board of Equalization was whether the
notice of appeal had to be filed with the secretary of the
board of equalization (as well as the circuit court) within 30
days of the final assessment –– not whether the required bond
had to be filed within that same time frame –– but our opinion
made clear that all the requirement of § 40-3-25 had to be
timely met in order to properly invoke the trial court's
jurisdiction. Specifically, we stated:
"The Board maintains that, pursuant to §
40–3–25, a taxpayer, in order to timely challenge a
final tax assessment, must file a notice of appeal
with both the secretary of the Board and the clerk
of the circuit court within 30 days of the final
assessment being challenged. No notice of appeal
7
1130999, 1131000, 1131001
was filed by Central Shelby [LTD.] with the
secretary of the Board; although the Board received
a copy of the notice from the Shelby Circuit Court
clerk, that notice was not mailed to or received by
the Board until after the 30–day period had elapsed.
On the other hand, Central Shelby counters that its
timely filing of its notice of appeal with the
circuit clerk was sufficient to invoke the trial
court's subject-matter jurisdiction even though the
Board indisputably did not receive 'notice' of
Central Shelby's appeal within 30 days of the date
of the final assessment. It further contends that
because the statutory requirement of 'notice' to the
Board appears in a separate sentence, the 30–day
time frame for taking the appeal does not apply to
the notice to the Board.
"This Court has stated that, in applying a Code
section:
"'"'Words used in a statute must
be given their natural, plain,
ordinary, and commonly understood
meaning, and where plain language
is used a court is bound to
interpret that language to mean
exactly what it says. If the
language
of
the
statute
is
unambiguous, then there is no
room for judicial construction
and the clearly expressed intent
of the legislature must be given
effect.'"
"'Blue Cross & Blue Shield v. Nielsen, 714
So. 2d 293, 296 (Ala. 1998) (quoting IMED
Corp. v. Systems Eng'g Assocs. Corp., 602
So. 2d 344, 346 (Ala. 1992)); see also
Tuscaloosa
County
Comm'n
v.
Deputy
Sheriffs' Ass'n, 589 So. 2d 687, 689 (Ala.
1991); Coastal States Gas Transmission Co.
v. Alabama Pub. Serv. Comm'n, 524 So. 2d
8
1130999, 1131000, 1131001
357, 360 (Ala. 1988); Alabama Farm Bureau
Mut. Cas. Ins. Co. v. City of Hartselle,
460 So. 2d 1219, 1223 (Ala. 1984); Dumas
Bros. Mfg. Co. v. Southern Guar. Ins. Co.,
431 So. 2d 534, 536 (Ala. 1983); Town of
Loxley v. Rosinton Water, Sewer, & Fire
Protection Auth., Inc., 376 So. 2d 705, 708
(Ala. 1979). It is true that when looking
at a statute we might sometimes think that
the
ramifications
of
the
words
are
inefficient or unusual. However, it is our
job to say what the law is, not to say what
it should be. Therefore, only if there is
no rational way to interpret the words as
stated will we look beyond those words to
determine legislative intent. To apply a
different policy would turn this Court into
a legislative body, and doing that, of
course, would be utterly inconsistent with
the doctrine of separation of powers. See
Ex parte T.B., 698 So. 2d 127, 130 (Ala.
1997).'
"DeKalb Cnty. LP Gas Co. v. Suburban Gas, Inc., 729
So. 2d 270, 275–76 (Ala. 1998).
"The initial sentence of § 40–3–25 clearly
establishes a 30–day time frame for appealing the
Board's final assessment to the circuit court. The
sentence that follows provides that, in order to
perfect the appeal, the requisite notice of appeal
must be filed with both the Board and with the
circuit clerk. In light of the plain language of
the Code section, this Court finds persuasive the
Board's reliance on the analysis of the Court of
Civil Appeals in State v. Crenshaw, 47 Ala. App. 3,
249 So. 2d 617 (1970), in which, in considering the
identical language of the predecessor statute to §
40–3–25, that court explained:
"'[A] taxpayer may perfect an appeal from
a final assessment of the Board so long as
9
1130999, 1131000, 1131001
he files, within thirty days, a notice of
appeal with the Secretary of the Board and
Clerk of the Circuit Court, a bond for
costs, and, either files a supersedeas
bond, or pays the taxes based on the prior
year's assessment. Such a construction
would require that all of these procedures
would have to be complied with at the same
time for the appeal to be perfected.'
"47 Ala. App. at 5, 249 So. 2d at 619. See, e.g.,
Ex parte State Dep't of Revenue, 102 So. 3d 396,
398–99 (Ala. Civ. App. 2012) (interpreting a similar
provision in § 40–2A–9(g), Ala.Code 1975, as
'requir[ing]
the
party
appealing
from
[an
administrative law judge's] order to file a notice
of appeal with both the [Alabama Department of
Revenue's Administrative Law Division] and the
circuit court within 30 days of the entry of the ...
order'); State Dep't of Revenue v. Welding Eng'g &
Supply Co., 452 So. 2d 1340, 1342 (Ala. Civ. App.
1984) (concluding that former § 40–2–22, Ala. Code
1975, which provided for taxpayer appeals from
assessments by the department of revenue, 'clearly
provides that a timely filing of a notice of appeal
with the secretary of the department is one of the
prerequisites which must be met by a taxpayer in
order to perfect an appeal to the circuit court from
the department's final tax assessments,' that such
filing 'is a jurisdictional requirement, and [that]
there must be compliance with it before a circuit
court has jurisdiction over the subject matter,' and
stating that, 'if such a notice of appeal is not
filed with the secretary of the department within
thirty days from the entry of the final tax
assessment, the taxpayer's appeal to the circuit
court should be dismissed').
"Central Shelby argues that it properly invoked
the trial court's jurisdiction by taking the
underlying appeal to the appropriate circuit court
within 30 days of the challenged final assessment.
10
1130999, 1131000, 1131001
But that is not what § 40–3–25 or the foregoing
authorities require. Central Shelby faults the
circuit clerk for her alleged untimely mailing of
the notice of appeal to the secretary of the Board.
However, the Code section clearly charges the
appealing taxpayer with the responsibility of filing
the notice of appeal with the secretary of the
Board.
"'The right of appeal in tax proceedings is a
right conferred by statute and must be exercised in
the mode and within the time prescribed by the
statute.' Denson v. First Nat'l Bank, 276 Ala. 146,
148, 159 So. 2d 849, 850 (1964). See also Canoe
Creek Corp. v. Calhoun Cnty. Bd. of Equalization,
668 So. 2d 826, 827–28 (Ala. Civ. App. 1995)
(finding, where the appeal bond required by §
40–3–25 was not filed within the 30–day period, that
the appeal of a final tax assessment to the circuit
court was not perfected); Welding Eng'g, 452 So. 2d
at 1342–43 ('When the legislature has prescribed the
means and method of perfecting an appeal from a tax
assessment to the circuit court, that procedure must
be followed.'); Coughlin v. State, 455 So. 2d 17, 18
(Ala. Civ. App. 1983), aff'd, 455 So. 2d 18 (Ala.
1984) ('The rule is that the right to appeal in a
tax proceeding is a right conferred by statute and
must be exercised in the manner and within the time
required by the statute.'); State v. Colonial
Refrigerated Transp., Inc., 48 Ala. App. 46, 50, 261
So. 2d 767, 770 (Ala. Civ. App. 1971) (same). Here,
§ 40–3–25 plainly prescribes that a notice of appeal
from a final assessment of the Board must be filed
with both the circuit court and the secretary of the
Board within 30 days; clearly, both did not occur in
this case.
"As a result of Central Shelby's failure to
comply with the provisions of § 40–3–25, its appeal
was not perfected and the trial court's jurisdiction
was never invoked. Therefore, the appeal was due to
be dismissed as the Board requested."
11
1130999, 1131000, 1131001
___ So. 3d at ___ (emphasis omitted). The Court of Civil
Appeals has similarly interpreted § 40–3–25 when considering
the exact issue we now confront. See Canoe Creek Corp. v.
Calhoun Cnty. Bd. of Equalization, 668 So. 2d 826, 827 (Ala.
Civ. App. 1995) ("[W]e have never held that strict compliance
with a statutory requirement of filing a cost bond in a tax
case is not necessary."). We now adhere to our previous
holding in Ex parte Shelby County Board of Equalization and
reaffirm that the unambiguous language of § 40–3–25 mandates
that the required bond be filed within 30 days after the final
decision fixing the assessed valuation in order to perfect an
appeal pursuant to that statute.
We note, however, Lumpkin's argument, echoed in Chief
Justice
Moore's
dissent,
that
similarly
constructed
notice-of-
appeal statutes have not been interpreted to make the filing
of a cost bond a jurisdictional requirement. We recognize
that the filing of a bond is considered to be a procedural
requirement
as opposed to a jurisdictional requirement in
many
other
appellate
proceedings,
including
general
appeals
to
this
Court or the Court of Civil Appeals, appeals to a circuit
court from a district court, and appeals to a circuit court
12
1130999, 1131000, 1131001
from decisions of certain state agencies. However, it must be
recognized that the basis of each of those types of appeals
stems from a statute other than § 40–3–25, and, although in
some cases the relevant statutes are similar, they are never
identical, and the language of each statute must be
interpreted individually. Indeed, the cost-bond requirements
for appeals to this Court and the Court of Civil Appeals are
governed not by statute but by the Alabama Rules of Appellate
Procedure, and the Committee Comments to Rule 7, Ala. R. App.
P., specifically provide that "[i]t is intended that the
security [for costs] shall be deposited with the filing of the
notice of appeal, but the failure to file such security
contemporaneously is not fatal to the jurisdiction of the
appellate court." This Court has interpreted Rule 7
accordingly. See Bryan v. Brown, 339 So. 2d 577, 579 (Ala.
1976) ("Rule 7, however, pertains only to costs on appeal, and
the failure to give security for costs is not fatal to
appellate jurisdiction.").
Moreover, the other right-of-appeal statutes cited by
Lumpkin, many of which have admittedly been interpreted by the
appellate courts as not requiring the cost bond to be filed
13
1130999, 1131000, 1131001
within the defined period for taking the appeal, generally
also have such explicit language stating that the filing of
the bond is not jurisdictional or, at least, have differences
in their language and construction so as to render the statute
ambiguous on that point, thus allowing a court to interpret
the statute pursuant to the standards for doing so. For
example, in Mallory v. Alabama Real Estate Commission, 369 So.
2d 23 (Ala. Civ. App. 1979), the Court of Civil Appeals held
that the requirement in § 34-27-38, Ala. Code 1975, that a
bond be filed when appealing a decision of the Alabama Real
Estate Commission to the circuit court was merely procedural.
However, the language of § 34-27-38 at that time provided:
"'Findings made by the commission are deemed
conclusive, unless within 30 days after notice of
the decision of the commission has been given to an
applicant or accused, said applicant or accused
shall appeal said finding or ruling to the circuit
court of the county of his residence. In the event
of such an appeal, the circuit court shall hear the
same de novo. Such appeal shall be taken by the
filing of notice of appeal with the clerk of the
circuit court of the county to which the appeal is
taken. Any party taking an appeal shall post a
satisfactory bond in the amount of $200.00 with the
clerk of the circuit court, with at least one
solvent surety, conditioned to prosecute such appeal
to effect and, upon failure to do so, to pay all
costs and damages which may be adjudged against said
party by the circuit court on such appeal. ...'"
14
1130999, 1131000, 1131001
369 So. 2d at 24 (emphasis omitted). Thus, § 34-27-38
unambiguously provided that the appeal "shall be taken by the
filing of notice of appeal with the clerk of the circuit court
of the county to which the appeal is taken." Notably, § 34-
27-38 did not require the contemporaneous completion of any
other act to perfect the appeal –– only the filing of a notice
of appeal with the appropriate circuit court –– although it
thereafter stated that "[a]ny party taking an appeal shall
post a satisfactory bond in the amount of $200.00." Based on
this language, the Court of Civil Appeals was at liberty to
apply the philosophy of the Alabama Rules of Appellate
Procedure and to hold that the posting of the bond was a
procedural requirement because the statute did not dictate
otherwise:
"Of course the appeal in question is not
governed by the [Alabama Rules of Appellate
Procedure] but is instead purely statutory. We,
however, feel that the principle embodied in the
[Alabama Rules of Appellate Procedure] can be
applied by analogy to the statute before us.
Section 34-27-38, Code of Alabama (1975) provides
that 'appeal shall be taken by the filing of notice
of appeal with the clerk of the circuit court of the
county to which the appeal is taken.' Although the
statute contains other language which requires an
appellant to post a $200 bond and have the bond
approved by the circuit clerk, the appeal is
perfected and jurisdiction of the circuit court
15
1130999, 1131000, 1131001
attaches upon the filing of a notice of appeal. The
posting of a satisfactory bond of $200 is merely
procedural."
369 So. 2d at 25.
In contrast, the first sentence of § 40-3-25 provides
that "[a]ll appeals from the rulings of the board of
equalization fixing value of property shall be taken within 30
days after the final decision of said board fixing the
assessed valuation as provided in this chapter." The next
sentence of the statute explains how such an appeal is taken:
"The taxpayer shall file notice of said appeal with the
secretary of the board of equalization and with the clerk of
the circuit court and shall file bond to be filed with and
approved by the clerk of the circuit court, conditioned to pay
all costs ...." Thus, whereas § 34-27-38 required only one
act to take the appeal –– the filing of a notice of appeal
with the circuit court –– § 40-3-25 requires multiple acts to
take the appeal: 1) the filing of a notice of appeal with the
secretary of the board of equalization; 2) the filing of a
notice of appeal with the circuit court; and 3) the filing of
a bond with the circuit court. Thus, based on the different
language employed by the legislature in these two statutes,
16
1130999, 1131000, 1131001
they have been properly interpreted to hold that the filing of
a cost bond was not required to perfect an appeal made
pursuant to § 34-27-38 but is required to perfect an appeal
made pursuant to § 40-3-25.
Lumpkin has also cited Ex parte Doty, 564 So. 2d 443
(Ala. 1990), in which this Court interpreted § 25-4-95, Ala.
Code 1975, and held that the requirement of that statute that
the appealing party file notice of his or her appeal with the
director of the Department of Industrial Relations was
procedural only and need not be completed within the 10-day
period for appealing a decision of that department's board of
appeals. However, the language and structure of § 25-4-95 is
fundamentally similar to § 34-27-38 and was therefore subject
to being similarly interpreted:
"'Within ten days[ ] after the decision of the
2
Board of Appeals has become final, any party to the
proceeding including the director who claims to be
aggrieved by the decision may secure a judicial
review thereof by filing a notice of appeal in the
circuit court of the county of the residence of the
claimant .... In such action, the notice of appeal
need not be verified, but shall state the grounds
upon which a review is sought. A copy shall be
served upon the director or upon such person as the
director may designate (and for the purpose hereof,
Effective July 1, 1995, this period was changed to "30
2
days." In all other respects the quoted language is the same.
17
1130999, 1131000, 1131001
mailing a copy addressed to the director at
Montgomery by registered or certified mail shall be
deemed service on the director), and such service
shall be deemed completed service on all parties
...."
564 So. 2d at 445 (emphasis omitted). Thus, § 25-4-95
provides that an aggrieved party "may secure a judicial
review" of a decision made by the department's board of
appeals merely by "by filing a notice of appeal in the circuit
court of the county of the residence of the claimant" within
the 10-day (now 30-day) period required by the statute. No
other action is explicitly required to "secure a judicial
review," and the other action later required by the statute is
merely incidental to securing that appellate review, that is,
it is procedural as opposed to jurisdictional. Section 25-4-
95 is distinguishable from § 40-3-25.
We next consider Finch v. Finch, 468 So. 2d 151 (Ala.
1985), cited by Chief Justice Moore in his dissent. In Finch,
this Court held that the filing fee for an appeal taken from
the probate court to the circuit court did not have to be paid
within the 42-day appeal period specified in § 12-22-21(5),
Ala. Code 1975. "[A]lthough payment of a filing fee is
required," we stated, "we do not find a jurisdictional defect
18
1130999, 1131000, 1131001
in this case for failure to pay the fee within the time
allowed for the appeal." 468 So. 2d at 154. This case is
akin to Mallory and Ex parte Doty however, inasmuch as the
relevant statutes governing the appeal did not indicate that
the payment of a filing fee was a jurisdictional requirement
to the taking of the desired appeal. Rather, the Finch Court
explicitly noted that neither § 43-2-354, Ala. Code 1975,
which grants an appeal to the circuit court from a judgment of
a probate court, nor §§ 12-22-20 and -21, Ala. Code 1975,
which grant the general right to take an appeal from the
probate court to the circuit court, "provide[] for the
procedure to be followed in taking the appeal." 468 So. 2d at
152. Thus, the Finch Court was not constrained by any
statutory language from applying the more lenient view
generally applied by the appellate courts operating under the
Alabama Rules of Appellate Procedure that "only timely notice
of appeal is jurisdictional." 468 So. 2d at 154. Moreover,
Finch further recognized that § 12-22-25, Ala. Code 1975,
explicitly provides that "'the filing of security for costs is
not a jurisdictional prerequisite'" to an appeal to a circuit
court of a probate court decision. 468 So. 2d at 154.
19
1130999, 1131000, 1131001
Finally, we consider State Department of Human Resources
v. Funk, 651 So. 2d 12 (Ala. Civ. App. 1994). In that case,
the Department of Human Resources argued that the trial court
erred in failing to dismiss an appeal of a decision made by
its administrative hearing officer because the appellant had
not filed the required cost bond within the 30-day period
allowed for taking such an appeal. The statute governing that
appeal, § 41-22-20, Ala. Code 1975, provided as follows at
that time:
"'(b) Except in matters for which judicial
review is otherwise provided for by law, all
proceedings for review shall be instituted by filing
of notice of appeal or review and a cost bond, with
the agency ....
"'....
"'(d) The notice of appeal or review shall be
filed within 30 days after the receipt of the notice
of or other service of the final decision of the
agency upon the petitioner or, if a rehearing is
requested under section 41–22–17, within 30 days
after the decision thereon. The petition for
judicial review in the circuit court shall be filed
within 30 days after the filing of the notice of
appeal or review ....'"
651 So. 2d at 14. The Court of Civil Appeals ultimately held
that there was no jurisdictional requirement that the cost
bond be filed within the 30-day period for perfecting an
20
1130999, 1131000, 1131001
appeal; however, in doing so it distinguished the case from
Baird v. State Department of Revenue, 545 So. 2d 804 (Ala.
Civ. App. 1989). In Baird, the Court of Civil Appeals
interpreted § 40-2-22, Ala. Code 1975, the statute governing
the appeal of a Department of Revenue decision, and held that
"[a] separate and distinct condition [precedent to perfecting
an appeal] is the payment of the assessment or the filing of
a supersedeas bond ...." 545 So. 2d at 806. The Funk court
3
distinguished Baird by noting that, in Funk, the statute
governing the appeal –– § 41-22-20 –– failed to mention the
cost bond in the subsection setting forth the 30-day period
for initiating an appeal, instead providing only that "'[t]he
notice of appeal or review shall be filed within 30 days.'"
Section 40-2-22 at that time read as follows:
3
"'If any taxpayer against whom an assessment is made
by the department of revenue ... is dissatisfied
..., he may appeal ... by filing notice of appeal
with the secretary of the department of revenue and
with the clerk or register of the circuit court of
the county to which the appeal shall be taken within
30 days from the date of said final assessment ...
and, in addition thereto, by giving bond conditioned
to pay all costs to be filed with and approved by
the clerk or register of the court to which the
appeal shall be taken. ...'"
545 So. 2d at 805 (emphasis omitted).
21
1130999, 1131000, 1131001
651 So. 2d at 14. Accordingly, the Court of Civil Appeals
concluded that "nothing in the above-cited statute suggests
that posting security for costs within the statutory time
limit is a jurisdictional requirement for perfecting an
appeal." Id. Thus, the Court of Civil Appeals' decision in
4
Funk was based on the different language and structure of §
41-22-20, whereas the statute in the instant case –– § 40-3-25
–– is clearly more similar to § 40-2-22, which was interpreted
in Baird and acknowledged in Funk to mandate the payment of
the required bond within the 30-day period allowed for appeal.
However, although Mallory, Ex parte Doty, Finch, and
Funk, are distinguishable based on differences in the
statutory language, Luce v. Huddleston, 628 So. 2d 819 (Ala.
Civ. App. 1993), is more problematic. In Luce, the Court of
5
Civil Appeals interpreted § 12-12-70(a), Ala. Code 1975, and
held that filing a cost bond beyond the period allowed for
filing a notice of appeal from a district court to a circuit
court was not a fatal jurisdictional defect. Section 12-12-
Funk also relied in part upon Luce v. Huddleston, 628 So.
4
2d 819 (Ala. Civ. App. 1993), which is discussed infra.
The Court of Civil Appeals reaffirmed its holding in Luce
5
as recently as 2013 in Penick v. Southpace Management, Inc.,
121 So. 3d 1015 (Ala. Civ. App. 2013).
22
1130999, 1131000, 1131001
70(a) provides in pertinent part that "[a]ny party may appeal
from a final judgment of the district court in a civil case by
filing notice of appeal in the district court, within 14 days
from the date of the judgment or the denial of a posttrial
motion, whichever is later ... together with security for
costs as required by law or rule." This language and
structure is materially similar to § 40-3-25 inasmuch as both
statutes include, in the same paragraph setting forth the time
limit for taking the appeal, a requirement that the notice of
appeal and cost bond be filed together. However, despite
these similarities, the Court of Civil Appeals in Luce
interpreted language in § 12-12-70(a) to conclude that the
required cost bond did not have to be filed within the
statutory time for taking an appeal, while in Canoe Creek
Corp., supra, the Court of Civil Appeals interpreted the
similar language in § 40-3-25 to conclude that the required
cost bond did have to be filed within the statutory time for
taking an appeal –– even while citing Luce.6
In Canoe Creek Corp., the Court of Civil Appeals
6
distinguished Luce by noting that it "did not involve an
appeal in a tax case." 668 So. 2d at 827.
23
1130999, 1131000, 1131001
However, upon reviewing these cases, it is apparent that
if there is any error, the error is in Luce. In concluding
that the cost bond required by § 12-12-70(a) could be filed
outside the time for taking the appeal, the Court of Civil
Appeals in Luce cited Bryan and the Alabama Rules of Appellate
Procedure, Finch and other cases involving an appeal from a
probate court to a circuit court, and Mallory. As already
explained, the Alabama Rules of Appellate Procedure do not
apply to appeals from a district court to a circuit court, and
Finch and Mallory are distinguishable. Nevertheless, after
reviewing these cases, the Luce court concluded:
"Nothing in the above-cited statutes and cases
suggests that posting security for costs within the
statutory time limit for appeal is a jurisdictional
requirement for perfecting appeal. Timely posting
of security is not required in appellate cases, nor
in probate to circuit court appeals, nor in
misdemeanor conviction appeals from district to
circuit court. To require contemporaneous posting
of security for costs with the appeal from district
to circuit court would be to continue a vestige from
an earlier era of strict pleading and practice."
628 So. 2d at 820. However, the Luce court failed to
recognize why timely posting of security is not required in
these cases –– timely posting is not required in appellate
cases because the Alabama Rules of Appellate Procedure do not
24
1130999, 1131000, 1131001
require it, and it is not required in appeals from a probate
court to a circuit court because the language of § 12-22-25,
Ala. Code 1975, explicitly provides as much. The Court of
7
The Luce court also stated that timely posting of
7
security was not required in appeals of misdemeanor
convictions from the district court to the circuit court
because, it held, § 12-12-70(b), Ala. Code 1975, provides that
"the filing of an appeal bond is not a jurisdictional
requirement." 628 So. 2d at 820. In support of that
conclusion, Luce cited Ex parte Buckner, 435 So. 2d 1197, 1197
(Ala. 1982), which held:
"Under § 12-12-70(b) it is only a 'bond required
by law or rule' that must accompany the notice of
appeal. Yet, the State has cited no law or rule
requiring a bond to perfect an appeal. We must
conclude that the filing of an appeal bond is not a
jurisdictional
requirement
for
appeal
of
a
misdemeanor conviction from district to circuit
court. This holding is consistent with the practice
in the former county courts, where the purpose of
the appeal bond was 'not to confer jurisdiction on
the circuit court but to enable the defendant to
release himself from custody pending the appeal,' Ex
parte Rodgers, 12 Ala. App. 218, 226, 67 So. 710,
713 (1915) (construing Code 1907, § 6725, Code 1940,
Tit. 13, § 349, Repealed by Acts 1975, No. 1205, §
4-134). Similarly, our holding is consistent with
present
practice
in
appeals
of
misdemeanor
convictions from circuit to appellate courts, for
which Code of Ala. 1975, § 12-22-171, makes posting
bail discretionary with the defendant at any time
pending the appeal."
At the time Ex parte Buckner was decided, § 12-12-70(b)
provided that "'[a] defendant may appeal from a final judgment
in a criminal case by filing notice of appeal, together with
any bond required by law or rule, within 14 days from the date
of judgment or the date of a posttrial motion, whichever is
25
1130999, 1131000, 1131001
Civil
Appeals erred by concluding that, because timely
posting
of security is not required in this small subset of cases, it
is not required in other types of cases that are reliant on
different statutes. In fact, whether a mandated cost bond is
required to be filed within the statutory period for taking an
appeal always depends on the language of the applicable
statute authorizing that particular appeal.
Thus, in the case before us involving § 40-3-25, which is
unambiguous, that statute is the only statute relevant to our
inquiry. For the reasons explained herein and previously in
Ex parte Shelby County Board of Equalization and Canoe Creek
Corp., we hold that a party aggrieved by a decision of a
county board of equalization fixing the assessed value of his
or her property must file the cost bond required by § 40-3-25
within the 30-day period after the board of equalization's
final decision fixing the assessed valuation in order to
later, unless the appeal is to an appellate court.'" 435 So.
2d at 1197. However, the State in Ex parte Buckner cited no
law or rule requiring a bond to perfect an appeal, and its
argument accordingly was
unsuccessful.
In 1986, § 12-12-70(b)
was amended to its current form, which provides that "[a]
defendant may appeal from a final judgment of the district
court in a criminal ... case by filing notice of appeal within
14 days from the date of judgment or from the date of denial
of a post-trial motion, whichever is later, together with such
bond as may be fixed by the court ...." (Emphasis added.)
26
1130999, 1131000, 1131001
perfect an appeal to the circuit court. The language of § 40-
3-25 leaves us no room to hold otherwise, and it would be
inconsistent with our judicial role to attempt to supersede
the statute by applying the philosophy of the Alabama Rules of
Appellate Procedure in spite of clear statutory language to
the contrary. As we reiterated in Ex parte Shelby County
Board of Equalization:
"'It is true that when looking at a statute we might
sometimes think that the ramifications of the words
are inefficient or unusual. However, it is our job
to say what the law is, not to say what it should
be. Therefore, only if there is no rational way to
interpret the words as stated will we look beyond
those words to determine legislative intent. To
apply a different policy would turn this Court into
a legislative body, and doing that, of course, would
be utterly inconsistent with the doctrine of
separation of powers.'"
___ So. 3d at ___ (quoting DeKalb Cnty. LP Gas Co. v. Suburban
Gas, Inc., 729 So. 2d 270, 275–76 (Ala. 1998) (emphasis
omitted)).8
Having concluded that § 40-3-25 is unambiguous, it is
8
unnecessary to consider Lumpkin's arguments that the bond
required by § 40-3-25 serves no purpose or that tax statutes
should be liberally construed to allow disputes to be decided
on their merits.
27
1130999, 1131000, 1131001
IV.
Lumpkin appeals the orders of the trial court dismissing
three appeals he had initiated challenging property-tax
assessments made by the Board of property he owned in
Jefferson County. However, because Lumpkin's appeals are
governed by § 40-3-25 and because he failed to comply with all
the requirements of § 40-3-25 for perfecting his appeals, the
trial court properly dismissed the cases. We affirm.
1130999 –– AFFIRMED.
1131000 –– AFFIRMED.
1131001 –– AFFIRMED.
Bolin, Parker, Shaw, Main, Wise, and Bryan, JJ., concur.
Moore, C.J., and Murdock, J., dissent.
28
1130999, 1131000, 1131001
MOORE, Chief Justice (dissenting).
The issue raised by these three appeals is whether filing
a cost bond within the 30-day statutory period for taking an
appeal to the circuit court from a property-assessment
decision by a county board of equalization is a jurisdictional
requirement for perfecting the appeal. Because I believe that
filing a bond for costs is merely a procedural requirement,
namely a correctable deficiency, I respectfully dissent from
this Court's opinion affirming the judgments of the trial
court.
Facts and Procedural History
Edwin B. Lumpkin, Jr., owns three self-storage facilities
in Birmingham, which correspond with these three identical
appeals. He filed timely notices of appeal from property-tax
assessments by the Jefferson County Board of Equalization and
Adjustments, but he did not file cost bonds until the State's
trial brief alerted him to that omission some 17 months after
the notices of appeal had been filed. The State moved to
dismiss the appeals as jurisdictionally barred for failure to
file the cost bonds within the 30-day appeal period. The trial
court agreed and dismissed the appeals. The majority affirms.
29
1130999, 1131000, 1131001
Discussion
The pertinent portion of the relevant statute reads as
follows:
"All appeals from the rulings of the board of
equalization fixing value of property shall be taken
within 30 days after the final decision of said
board fixing the assessed valuation as provided in
this chapter. The taxpayer shall file notice of said
appeal
with
the
secretary
of
the
board
of
equalization and with the clerk of the circuit court
and shall file bond to be filed with and approved by
the clerk of the circuit court, conditioned to pay
all costs, and the taxpayer or the state shall have
the right to demand a trial by jury by filing a
written demand therefor within 10 days after the
appeal is taken."
§ 40-3-25, Ala. Code 1975 (emphasis added).
In Ex parte Shelby County Board of Equalization, [Ms.
1130017, April 11, 2014] ___ So. 3d ___ (Ala. 2014), this
Court recently stated:
"The
initial
sentence
of
§
40-3-25
clearly
establishes a 30-day time frame for appealing the
Board's final assessment to the circuit court. The
sentence that follows provides that, in order to
perfect the appeal, the requisite notice of appeal
must be filed with both the Board and with the
circuit clerk. In light of the plain language of the
Code section, this Court finds persuasive the
Board's reliance on the analysis of the Court of
Civil Appeals in State v. Crenshaw, 47 Ala. App. 3,
249 So. 2d 617 (1970), in which, in considering the
identical language of the predecessor statute to §
40-3-25, that court explained:
30
1130999, 1131000, 1131001
"'[A] taxpayer may perfect an appeal from
a final assessment of the Board so long as
he files, within thirty days, a notice of
appeal with the Secretary of the Board and
Clerk of the Circuit Court, a bond for
costs, and, either files a supersedeas
bond, or pays the taxes based on the prior
year's assessment. Such a construction
would require that all of these procedures
would have to be complied with at the same
time for the appeal to be perfected.'
"47 Ala. App. at 5, 249 So. 2d at 619."
(Emphasis omitted; emphasis added.)
Thus, in Shelby County, this Court quoted approvingly an
opinion of the Court of Civil Appeals that required a cost
bond to be filed within the 30-day statutory period to perfect
the appeal. Further, this Court stated 50 years ago:
"The right of appeal in tax proceedings is a
right conferred by statute and must be exercised in
the mode and within the time prescribed by the
statute. Here, the appeal bond required by § 110 was
not filed within the thirty days, so the appeal was
not perfected and the bond filed on July 19 was not
in time."
Denson v. First Nat'l Bank of Birmingham, 276 Ala. 146, 148,
159 So. 2d 849, 850 (1964) (citations omitted; emphasis
added). In 1995, the Court of Civil Appeals quoted this
passage from Denson and stated: "[W]e have never held that
strict compliance with a statutory requirement of filing a
31
1130999, 1131000, 1131001
cost bond in a tax case is not necessary." Canoe Creek Corp.
v. Calhoun Cnty. Bd. of Equalization, 668 So. 2d 826, 827
(Ala. Civ. App. 1995).
Notwithstanding the above, Lumpkin asks us to reject
Shelby County's approval of Crenshaw insofar as it would apply
to cost bonds and also to reject predecessor cases like Denson
and Canoe Creek. Lumpkin argues in this Court, as he did in
opposing the motion to dismiss in the trial court, that
similarly constructed notice-of-appeal statutes have not been
interpreted to make the filing of a cost bond a jurisdictional
requirement. Instead, he contends, cases construing those
similar statutes have treated the failure to file a cost bond
as a procedural lapse that can be cured even after expiration
of the statutory time within which to file the notice of
appeal.
Rule 7, Ala. R. App. P., adopted in 1975, states that "in
civil cases security for costs on appeal shall be filed with
the notice of appeal by the appellant in the trial court."
Although failure to file the cost bond coterminous with the
notice of appeal is a procedural error, such omission does not
32
1130999, 1131000, 1131001
forfeit the appeal but may be corrected on motion or notice by
the court. The Committee Comments to Rule 7 state:
"It is intended that the security shall be
deposited with the filing of the notice of appeal,
but
the
failure
to
file
such
security
contemporaneously is not fatal to the jurisdiction
of the appellate court. The failure to file such
security would be the subject of appropriate action
upon notice on motion or notice by the court
itself."
(Emphasis added.)
A year after adoption of the Rules of Appellate
Procedure, this Court stated: "[T]he failure to give security
for costs is not fatal to appellate jurisdiction." Bryan v.
Brown, 339 So. 2d 577, 579 (Ala. 1976). Filing of a cost bond,
therefore, though required by the appellate rules, is not a
jurisdictional requirement subject to the time period for
filing the notice of appeal. Under the practice prior to the
adoption of the appellate rules, "[t]he taking of an appeal
[was] perfected upon the filing of a good and sufficient
surety for costs of appeal." Taylor v. Major Fin. Co., 292
Ala. 643, 649, 299 So. 2d 247, 251 (1974). See also Cooper v.
Acuff, 285 Ala. 437, 439, 233 So. 2d 223, 224-25 (1970) ("The
decisions of this Court are uniform to the effect that the
33
1130999, 1131000, 1131001
appeal dates from the proper filing of security for costs.").
Today that requirement is relaxed.
"Before [the Alabama Rules of Appellate Procedure],
it was the filing of security for costs which
perfected the appeal and fixed the appellate court's
jurisdiction in reviewing decrees from circuit
courts. Tit. 7, § 766, Code of Alabama (1940)
(Recompiled 1958). The rule is now that the failure
to give security for costs is not fatal to appellate
jurisdiction, but it is the timely filing of a
notice of appeal that is jurisdictional."
Mallory v. Alabama Real Estate Comm'n, 369 So. 2d 23, 25 (Ala.
Civ. App. 1979).
In Mallory, the appeal in question, as in this case, was
not to the higher appellate courts and thus was not governed
by the Alabama Rules of Appellate Procedure. Nonetheless, the
Court of Civil Appeals stated: "Of course the appeal in
question is not governed by the [Alabama Rules of Appellate
Procedure] but is instead purely statutory. We, however, feel
that the principle embodied in the [Alabama Rules of Appellate
Procedure] can be applied by analogy to the statute before
us." 369 So. 2d at 25. Also, the appeal in Mallory, like the
one in this case, was from an administrative agency -- in that
case the Alabama Real Estate Commission -- to the circuit
court.
34
1130999, 1131000, 1131001
In Finch v. Finch, 468 So. 2d 151 (Ala. 1985), this Court
held that the filing fee for an appeal taken from the probate
court to the circuit court did not have to be paid within the
42-day appeal period specified in § 12-22-21(5), Ala. Code
1975. "[A]lthough payment of a filing fee is required," we
stated, "we do not find a jurisdictional defect in this case
for failure to pay the fee within the time allowed for the
appeal." 468 So. 2d at 154. "[I]n view of the practice of the
higher appellate courts that only timely notice of appeal is
jurisdictional," this Court reversed the judgment of the
circuit court dismissing the appeal. Id.
Along the same lines, in Luce v. Huddleston, 628 So. 2d
819 (Ala. Civ. App. 1993), the Court of Civil Appeals held
that filing a cost bond beyond the period allowed for filing
a notice of appeal from the district court to the circuit
court was not a fatal jurisdictional defect, even though the
statute at issue there mentioned security for costs and the
notice-of-appeal deadline in the same paragraph. The relevant
statute, § 12-12-70(a), Ala. Code 1975, states, in pertinent
part:
"Any party may appeal from a final judgment of the
district court in a civil case by filing notice of
35
1130999, 1131000, 1131001
appeal in the district court, within 14 days from
the date of the judgment or the denial of a
posttrial motion, whichever is later ... together
with security for costs as required by law or rule."
(Emphasis added.) The court noted, citing Mallory, that "the
principles found in Rule 7, [Ala.] R. App. P., can be
applied." Luce, 628 So. 2d at 820. Surveying other statutes
that do not consider the filing of a cost bond as a
jurisdictional requirement, the court stated:
"Timely posting of security is not required in
appellate cases, nor in probate to circuit court
appeals, nor in misdemeanor conviction appeals from
district
to
circuit
court.
To
require
contemporaneous posting of security for costs with
the appeal from district to circuit court would be
to continue a vestige from an earlier era of strict
pleading and practice."
628 So. 2d at 820 (emphasis added). See also State Dep't of
Human Res. v. Funk, 651 So. 2d 12, 14 (Ala. Civ. App. 1994)
(citing Luce and noting that the cost-bond requirement is not
mentioned in the section of the appeal statute, § 41-22-20,
Ala. Code 1975, that states the time limit for filing a notice
of appeal from the Department of Human Resources to the
circuit court); Penick v. Southpace Mgmt., Inc., 121 So. 3d
1015, 1019 (Ala. Civ. App. 2013) (quoting Luce for the
proposition that "failure to pay costs or give security in
36
1130999, 1131000, 1131001
lieu of costs within the time frame allowed for filing an
appeal was not a jurisdictional defect" in an appeal from the
district court to the circuit court). This Court has also
favorably cited Luce. See Womack v. Estate of Womack, 826 So.
2d 138 (Ala. 2002) (quoting Luce for the proposition that a
cost bond is not jurisdictional and applying that rationale to
an appeal from probate court to circuit court).
That the legislature can expressly distinguish between a
jurisdictional and a nonjurisdictional requirement for
perfecting an appeal is evident in § 40-2A-7(b)(5), Ala. Code
1975 (amended effective October 1, 2014), which governs
appeals to the circuit court from tax assessments of the
Alabama Department of Revenue. This statute removes all
uncertainty as to which requirements for taking an appeal are
jurisdictional and which are procedural. The statute requires
the taxpayer to file a "notice of appeal within 30 days from
the date of mailing or personal service, whichever occurs
earlier, of the final assessment with both the secretary of
the department and the clerk of the circuit court in which the
appeal is filed." § 40-2A-7(b)(5)b.1. (emphasis added). The
next paragraph is equally forthright: "If the appeal is to
37
1130999, 1131000, 1131001
circuit court, the taxpayer, also within the 30-day period
allowed for appeal, shall do one of the following: ... File a
supersedeas bond .... The supersedeas bond ... shall be
conditioned to pay ... any court costs relating to the appeal
...." § 40-2A-7(b)(5)b.2. (emphasis added). After further
stating
for
clarity
that
these
requirements
"are
jurisdictional,"
§
40-2A-7(b)(5)c.1.,
the
statute,
in
§
40-2A-
7(b)(5)c.2., then allows the taxpayer 30 days after a court
order to remedy any unsatisfied requirements in § 40-2A-
7(b)(5)b.2.9
The above-cited authority indicates that the filing of a
cost bond is no longer a jurisdictional requirement for
perfecting an appeal unless the statute pursuant to which the
appeal is being taken expressly requires that the bond be
filed within the period for filing the notice of appeal. Under
these circumstances and to harmonize the construction of
appeal statutes by the appellate courts, I would construe the
appeal-bond requirement in § 40-3-25 as procedural and not
jurisdictional. When he first became aware of the bond
Section 40-2A-7 was originally enacted in 1992 as part
9
of the Taxpayers' Bill of Rights. Section 40-3-25, by
contrast, was enacted in 1939 and has remained unchanged since
that date.
38
1130999, 1131000, 1131001
requirement from the State's motion to dismiss, Lumpkin
immediately filed the bond. Admittedly the filing was 17
months late, but this Court has held that when a statute does
not compel filing a cost bond within the time stated for
filing the notice of appeal, the bond should be filed "within
a reasonable time." Ex parte Doty, 564 So. 2d 443, 446 (Ala.
1989). In determining reasonableness, the trial court should
consider prejudice to the agency "and any excusable neglect."
Id.
Because Denson and Crenshaw predate the 1975 adoption of
the Alabama Rules of Appellate Procedure -- and considerable
authority since 1975 has undermined their reasoning -- I would
reverse the trial court's dismissal of Lumpkin's appeal and
hold that his failure to file a cost bond in the time allotted
for filing the notice of appeal is a procedural, and thus
curable, defect that does not affect the jurisdiction of the
trial court to hear the appeal. As the Court of Civil Appeals
stated in 1982, less than 10 years after adoption of the
Alabama Rules of Appellate Procedure: "Myriad changes have
been made in the past decade in an attempt to eliminate, or
soften the effect of, ultra technical rules of civil trial and
39
1130999, 1131000, 1131001
appellate procedures ...." Hand v. Thornburg, 425 So. 2d 467,
469 (Ala. Civ. App. 1982) (quoted in Luce, 628 So. 2d at 820).
In construing appeal statutes, we should not continue to
perpetuate "a vestige from an earlier era of strict pleading
and practice." Luce, 628 So. 2d at 820. Instead, we should
adopt, as stated in Mallory and Finch, the philosophy of the
Alabama
Rules
of
Appellate
Procedure
"to
disregard
technicality and form in order that a just, speedy and
inexpensive
determination
of
every
appellate
proceeding
on
its
merits may be obtained." Committee Comments to Rule 1, Ala. R.
App. P.
Additionally, by construing a statute to create a
jurisdictional barrier to an appeal to the circuit court from
an administrative agency, we should be mindful of Art. I, §
13, Ala. Const. 1901 ("That all courts shall be open; and that
every person, for any injury done him, in his lands, goods,
person, or reputation, shall have a remedy by due process of
law ....").
Conclusion
I would reverse the dismissal of Lumpkin's appeal and
remand this case to the trial court to consider Lumpkin's late
40
1130999, 1131000, 1131001
filing of a cost bond as a procedural, and not a
jurisdictional, defect.
41 | December 19, 2014 |
45e5261b-d1b4-4ddd-b5ff-6ad3ad3c1c19 | Frank Kruse, Esq., administrator of the estate of Timothy Lovely, M.D., and Southern Medical Group, Inc. v. Jeremy Freeman (Appeal from Walker Circuit Court: CV-07-0134). Affirmed. No Opinion. | N/A | 1121480 | Alabama | Alabama Supreme Court | REL: 09/26/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
SPECIAL TERM, 2014
____________________
1121480
____________________
Frank Kruse, Esq., administrator of the estate of Timothy
Lovely, M.D., and Southern Medical Group, Inc.
v.
Jeremy Freeman
Appeal from Walker Circuit Court
(CV-07-0134)
STUART, Justice.
AFFIRMED. NO OPINION.
Bolin, Parker, Shaw, Main, Wise, and Bryan, JJ., concur.
Moore, C.J., and Murdock, J., dissent.
1121480
MOORE, Chief Justice (dissenting).
In my view the trial court's failure to give a
contributory-negligence instruction constituted reversible
error. Therefore, I respectfully dissent from the no-opinion
affirmance of the judgment of the trial court.
Facts and Procedural History
Although suffering from a degree of cerebral palsy and
mental retardation, Jeremy Freeman nonetheless had been able
to work. After he fell at his house, Freeman was examined on
March 24, 2005, by Dr. Timothy Lovely, who ordered a CT scan
of Freeman's brain and then diagnosed him as suffering from a
mild concussion. On April 4, Freeman returned to Dr. Lovely
and complained about neck pain and numbness in his arms and
hands. Dr. Lovely ordered an X-ray of the upper (cervical)
spine, which revealed only a minor curvature. Thinking that
the crutch Freeman was using following knee surgery might be
causing the numbness, Dr. Lovely referred Freeman to Dr. Gary
N. Russell, the orthopedic surgeon who had performed the knee
surgery, whom he saw the next day.
Two months later Freeman's mother found him helpless in
his bed. He was transported to a hospital, where an MRI
2
1121480
revealed a herniated disk. A spinal fusion relieved the
pressure but left Freeman wheelchair-bound. In 2007 Freeman
sued four doctors, including Dr. Lovely, and associated
hospitals, claiming that their delay in diagnosing the
herniated disk was a breach of the standard of care and had
caused him permanent injury. At trial Dr. Lovely and Southern
Medical Group, Inc., the only remaining defendants, argued
that Freeman had contributed to the delay in treatment by not
informing the three other doctors who had examined him after
April 4 of the numbness in his arms and hands and the neck
pain.
On March 22, 2013, the jury awarded Freeman $3.5 million
in compensatory damages. The trial court denied Dr. Lovely's
posttrial motions on August 1. Dr. Lovely committed suicide on
September 11. His estate appeals.
Discussion
Throughout the trial the court indicated numerous times
that it planned to give an instruction on contributory
negligence, namely that Freeman's failure properly to inform
the doctors of his symptoms contributed to the delay in
treatment of the herniated disk. The court twice formally
3
1121480
denied motions by Freeman seeking to exclude a contributory-
negligence instruction.
"In order to prove contributory negligence, the
defendant must show that the party charged: (1) had
knowledge of the condition; (2) had an appreciation
of the danger under the surrounding circumstances;
and (3) failed to exercise reasonable care, by
placing himself in the way of danger."
Brown v. Piggly-Wiggly Stores, 454 So. 2d 1370, 1372 (Ala.
1984). "The question of contributory negligence is normally
one for the jury. However, where the facts are such that all
reasonable men must reach the same conclusion, contributory
negligence may be found as a matter of law." 454 So. 2d at
1372.
Because two months elapsed between Freeman's visit to Dr.
Lovely and the discovery of Freeman's spinal condition, I
believe a justiciable issue existed as to whether Freeman was
contributorily negligent. In that period Freeman saw a number
of other doctors about his ailments, none of whom diagnosed
the problem until Freeman presented himself at the hospital
for examination in mid-June in a state of paralysis. Certainly
the jury was entitled to find that Freeman did not appreciate
the necessity of fully informing the other doctors of his
symptoms and thus was not negligent. On the other hand, I
4
1121480
believe that Dr. Lovely was entitled to have the jury decide
this fact-bound question based on its evaluation of what
Freeman said to the three other doctors who saw him between
his visit to Dr. Lovely and the manifestation of his
paralysis. Because credible testimony supported Dr. Lovely's
theory of the case, he was entitled to have the jury so
instructed. "The defendant has the right to request
instructions based upon any material hypothesis which the
evidence in his favor tends to establish." Ex parte McGee, 383
So. 2d 205, 206 (Ala. 1980).
For the above reasons, I respectfully dissent.
5 | September 26, 2014 |
734ed85c-b6ea-4bb7-824a-780478190af9 | Anderton v. The Practice-Monroeville, P.C. | N/A | 1121417 | Alabama | Alabama Supreme Court | Rel: 9/26/14
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
SPECIAL TERM, 2014
____________________
1121417
____________________
Eric Anderton and Jackson Key Practice Solutions, LLC
v.
The Practice-Monroeville, P.C.
Appeal from Monroe Circuit Court
(CV-11-900084)
BRYAN, Justice.
Eric Anderton and Jackson Key Practice Solutions, LLC
("Jackson Key"), appeal from the Monroe Circuit Court's order
denying their motion to compel arbitration. We reverse and
remand.
1121417
The Practice-Monroeville, P.C. ("the Practice"), is a
medical-practice group located in Monroeville. Allscripts
Healthcare, LLC ("Allscripts"), sells health-care software to
health-care providers.
Allscripts is a North
Carolina
company
and does not have an office in Alabama. Jackson Key is a
certified "sales-and-service partner" of Allscripts, selling
and servicing Allscripts software, and Anderton is
an
employee
and partial owner of Jackson Key. In May 2011, the Practice
and Allscripts entered into a written contract in which the
Practice purchased health-care software called "MyWay" from
Allscripts through Jackson Key ("the contract").
Although
the
contract was between the Practice and Allscripts, Jackson Key
supported the transaction. The contract provides that
"Allscripts may subcontract its obligations hereunder to a
third party or affiliate." An addendum to the contract
further states that "Allscripts and [the Practice] agree that
the Allscripts MyWay Software shall be hosted by Jackson Key[,
and] that any backup, system performance, data recovery, [and]
service levels will be the responsibility of [Jackson Key]."
The contract contains an arbitration provision, which
states, in pertinent part: "Any dispute or claim arising out
2
1121417
of, or in connection with, this Agreement shall be finally
settled by binding arbitration in Raleigh, NC, in accordance
with the then-current rules and procedures of the American
Arbitration Association ...."
The Practice became dissatisfied with the performance of
the MyWay software and unsuccessfully attempted to cancel its
contract with Allscripts. On September 12, 2011, the Practice
sued Jackson Key and Anderton, but not Allscripts, in the
circuit court. The Practice alleged that Jackson Key,
pursuant to the addendum to the contract, had undertaken sole
responsibility for "system performance" of the MyWay software
that it had implemented for the Practice. The complaint
further alleged that Jackson Key and Anderton were negligent
in establishing the system performance of that software. On
October 21, 2011, Jackson Key and Anderton moved to compel
arbitration based on the arbitration provision in the
contract.
In November 2011, Jackson Key, acting pro se, sued the
Practice in the Monroe District Court. In that action,
Jackson Key alleged that the Practice owed it money for
Microsoft Word software that Jackson Key had purchased for the
3
1121417
Practice. Following a trial, the district court entered a
judgment in favor of the Practice on March 28, 2012. Jackson
Key subsequently appealed that judgment to the Monroe Circuit
Court. Over Jackson Key and Anderton's objection, the circuit
court consolidated that appeal with the action initiated by
the Practice regarding the contract.
The Practice opposed the motion to compel arbitration in
the circuit court. The Practice argued that the circuit court
–– not the arbitrator –– should decide the threshold issue of
whether the dispute over the MyWay software is arbitrable.
The Practice then argued that the circuit court should deny
Jackson Key and Anderton's motion to compel arbitration
because, it said, the dispute was not within the scope of the
arbitration
provision.
Additionally,
the
Practice
argued
that
Jackson Key and Anderton had waived any right to arbitrate by
substantially invoking the litigation process in the district
court. On July 31, 2013, the circuit court denied the motion
1
Although most of the Practice's argument below regarding
1
the waiver issue was in reference to Jackson Key, at times the
Practice referred to the actions in the district court by the
circuit court "defendants," i.e., both Jackson Key and
Anderton. Thus, it appears that the Practice argued that both
Jackson Key and Anderton waived their alleged right to
arbitrate through their conduct in the district court.
4
1121417
to compel, without stating a reason. Jackson Key and Anderton
appealed pursuant to Rule 4(d), Ala. R. App. P., which
authorizes an appeal from an order either granting or denying
a motion to compel arbitration.
Standard of Review
"'This Court's review of an order
granting or denying a motion to compel
arbitration is de novo. ...'
"United Wisconsin Life Ins. Co. v. Tankersley, 880
So. 2d 385, 389 (Ala. 2003). Furthermore:
"'"A motion to compel arbitration
is analogous to a motion for
summary judgment. TranSouth Fin.
Corp. v. Bell, 739 So. 2d 1110,
1114
(Ala.
1999).
The
party
seeking to compel arbitration has
the
burden
of
proving
the
existence of a contract calling
for arbitration and proving that
that
contract
evidences
a
transaction affecting interstate
commerce. Id. 'After a motion to
compel arbitration has been made
and supported, the burden is on
the
non-movant
to
present
evidence
that
the
supposed
arbitration
agreement
is
not
valid or does not apply to the
dispute in question.'"
"'Fleetwood Enters., Inc. v. Bruno, 784 So.
2d 277, 280 (Ala. 2000) (quoting Jim Burke
Auto., Inc. v. Beavers, 674 So. 2d 1260,
1265 n. 1 (Ala. 1995) (emphasis omitted)).'
5
1121417
"Vann v. First Cmty. Credit Corp., 834 So. 2d 751,
753 (Ala. 2002)."
Cartwright v. Maitland, 30 So. 3d 405, 408–09 (Ala. 2009).
Discussion
There is no dispute that a contract calling for
arbitration exists in this case and that that contract
evidences a transaction
affecting interstate commerce. In the
circuit court, the parties disputed whether Jackson Key and
Anderton had waived any right they may have had to arbitration
and whether the Practice's claim falls within the scope of the
arbitration provision. The parties also disputed whether the
circuit court or the arbitrator should decide the issue of
arbitrability. The circuit court did not give a reason for
denying Jackson Key and Anderton's motion to compel
arbitration. We will examine the disputed issues to determine
whether the circuit court could have properly denied the
motion to compel.
I. Issues Relating to Waiver
We first address whether Jackson Key and Anderton waived
any right they may have to arbitration by substantially
invoking the litigation process in Jackson Key's action in the
district court. As a threshold matter, we address whether the
6
1121417
waiver issue is one for the circuit court or the arbitrator to
decide. This Court has stated that "the issue whether a party
has waived the right to arbitration by its conduct during
litigation is a question for the court and not the
arbitrator." Ocwen Loan Servicing, LLC v. Washington, 939 So.
2d 6, 14 (Ala. 2006). However, the general rule that the
2
court and not the arbitrator decides whether a party has
waived the right to arbitration has an exception: issues
typically decided by the court will be decided by the
arbitrator instead when there is "'clear and unmistakable
evidence'" of such an agreement in the arbitration provision.
First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944
(1995) (quoting AT&T Techs., Inc. v. Communications Workers
of
America, 475 U.S. 643, 649 (1986) (alterations omitted)); see
also Marie v. Allied Home Mortg. Corp., 402 F.3d 1, 14 (1st
In Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79,
2
84–85 (2002), the United States Supreme Court stated that "the
presumption
is
that
the
arbitrator
should
decide
'allegation[s] of waiver, delay, or a like defense to
arbitrability.'" (Quoting Moses H. Cone Mem'l Hosp.
v.
Mercury
Constr. Corp., 460 U.S. 1, 24-25 (1983).) However, this
Court and some other courts have concluded that Howsam did not
intend to disturb the traditional rule that the issue whether
a party has waived the right to arbitration by its conduct
during litigation is a question for the court and not the
arbitrator. See Ocwen, 939 So. 2d at 12-14 (thoroughly
discussing the matter).
7
1121417
Cir. 2005) (citing First Options). In this case, Jackson Key
and Anderton argue in their reply brief that the arbitration
provision, by incorporating the rules and procedures of the
American Arbitration Association ("the AAA"), clearly and
unmistakably indicates that the arbitrator, not the court,
should decide the waiver issue. However, Jackson Key and
Anderton first make that argument in their reply brief. "We
do not permit new matters to be raised for the first time in
a reply brief." Birmingham Bd. of Educ. v. Boyd, 877 So. 2d
592, 594 (Ala. 2003).
Although Jackson Key and Anderton argue in their
principal brief that the relevant incorporated AAA rule
provides for the arbitrator rather than the court to decide
whether the dispute falls within the scope of the arbitration
provision, see Part II, infra, they did not make a similar
argument about waiver until they filed their reply brief.
Further, the record on appeal does not indicate that Jackson
Key and Anderton made such an argument about waiver before the
circuit court. Rather, in a filing submitted below, they
"agree[d] that the issue of waiver is for the Court to decide,
but dispute[d] that there has been any waiver." "This Court
8
1121417
cannot consider arguments advanced for the purpose of
reversing the judgment of a trial court when those arguments
were never presented to the trial court for consideration
...." State Farm Mut. Auto. Ins. Co. v. Motley, 909 So. 2d
806, 821 (Ala. 2005). For these reasons, we do not further
discuss whether the AAA rule incorporated into the
arbitration
provision clearly and unmistakably indicates that the
arbitrator instead of the court should decide the waiver
issue.
We next discuss the merits of the waiver issue.
"It is well settled under Alabama law that a
party may waive its right to arbitrate a dispute if
it substantially invokes the litigation process and
thereby substantially prejudices the party opposing
arbitration. Whether a party's participation in an
action amounts to an enforceable waiver of its right
to arbitrate depends on whether the participation
bespeaks an intention to abandon the right in favor
of the judicial process, and, if so, whether the
opposing party would be prejudiced by a subsequent
order requiring it to submit to arbitration. No
rigid rule exists for determining what constitutes
a
waiver
of
the
right
to
arbitrate;
the
determination as to whether there has been a waiver
must, instead, be based on the particular facts of
each case."
Companion Life Ins. Co. v. Whitesell Mfg., Inc., 670 So. 2d
897, 899 (Ala. 1995).
9
1121417
"In order to demonstrate that the right to
arbitrate a dispute has been waived, the party
opposing arbitration must demonstrate both (1) that
the party seeking arbitration substantially invoked
the litigation process, and (2) that the party
opposing
arbitration
would
be
substantially
prejudiced by an order requiring it to submit to
arbitration."
SouthTrust Bank v. Bowen, 959 So. 2d 624, 633 (Ala. 2006)
(some emphasis omitted). "Because there is a strong federal
policy favoring arbitration, waiver of the right to compel
arbitration is not lightly inferred, and the party seeking to
prove waiver has a 'heavy burden.'" Aurora Healthcare, Inc.
v. Ramsey, 83 So. 3d 495, 500 (Ala. 2011) (quoting Paragon
Ltd.
v.
Boles, 987
So.
2d
561, 564
(Ala. 2007)).
"Additionally, as this Court has consistently noted: '[T]here
is a presumption against a court's finding that a party has
waived the right to compel arbitration.'" Bowen, 959 So. 2d
at 633 (quoting Eastern Dredging & Constr., Inc. v. Parliament
House, L.L.C., 698 So. 2d 102, 103 (Ala. 1997)).
Before the circuit court, the Practice argued that
Jackson Key and Anderton had waived any right to arbitration
by litigating the district court action seeking reimbursement
for the Practice's purchase of Microsoft Word programs. As an
initial matter, we note that Jackson Key was the only
10
1121417
plaintiff in the district court action; Anderton was not a
party in that action. Clearly, Anderton did not waive any
right he may have to arbitrate. After being sued in the
circuit court, Anderton's first action was to file, with
Jackson Key, a motion to compel arbitration. Merely filing a
motion to compel arbitration does not substantially
invoke
the
litigation process. See Ex parte Merrill Lynch, Pierce,
Fenner & Smith, Inc., 494 So. 2d 1, 3 (Ala. 1986) (concluding
that there was no waiver when the defendant merely filed a
motion to compel arbitration); and First Family Fin. Servs.
v. Jackson, 786 So. 2d 1121, 1128 (Ala. 2000) (same); see also
Kennamer v. Ford Motor Credit Co., [Ms. 1120689, February 28,
2014] ___ So. 3d ___ (Ala. 2014) (concluding that there was no
waiver of the right to arbitration when a car dealership
merely filed an answer and a motion to compel arbitration).
We also conclude that Jackson Key did not waive any right
it may have to arbitrate the MyWay dispute by litigating the
district court action. In the district court, Jackson Key
alleged that the Practice owed it money for Microsoft Word
software Jackson Key had sold to the Practice. At trial in
the district court, Albert Key, an employee of Jackson Key,
11
1121417
testified that, while Jackson Key was providing training to
the Practice's personnel on the MyWay software, the Practice
asked Jackson Key to purchase and install 10 copies of
Microsoft Word. Key testified that Jackson Key purchased and
installed the Microsoft software but that the Practice failed
to reimburse Jackson Key for the software. Key further stated
that the Microsoft Word transaction was separate from the
contract in which the Practice purchased the MyWay software
from Allscripts. The record does not contain an arbitration
provision addressing the purchase of the Microsoft software.
The district court action presented a distinct issue from
the Practice's claim in the circuit court, i.e., that Jackson
Key and Anderton were negligent in establishing the system
performance of the MyWay software the Practice had purchased
from Allscripts. "Only prior litigation of the same legal and
factual issues as those the party now wants to arbitrate
results in waiver of the right to arbitrate." Larry E.
Edmonson, Domke on Commercial Arbitration § 23:6 (3d ed.
2014). See also Doctor's Assocs., Inc. v. Distajo, 107 F.3d
126, 133 (2d Cir. 1997) (stating that precedent in that
circuit "support[s] the view that only prior litigation of the
12
1121417
same legal and factual issues as those the party now wants to
arbitrate results in waiver of the right to arbitrate" and
that "[o]ther circuits seem to agree that waiver can only
occur when a party has previously litigated the same claims it
now seeks to arbitrate"); Gingiss Int'l, Inc. v. Bormet, 58
F.3d 328, 330-32 (7th Cir. 1995) (stating that a franchisor
who
brought
an
unlawful-detainer
action
against
its
franchisee
did not waive its right to arbitrate other claims brought by
the franchisee because the two suits involved different
issues); and Subway Equip. Leasing Corp. v. Forte, 169 F.3d
324, 328 (5th Cir. 1999) ("[A] party only invokes the judicial
process to the extent it litigates a specific claim it
subsequently
seeks
to
arbitrate.").
Compare
Distajo,
Gingiss,
and Subway with Kennamer, supra (concluding that, in an appeal
from a district court judgment to a circuit court, a credit
company had waived its right to arbitrate an issue after
litigating the same issue in the district court). Jackson
Key's conduct in pursuing its claim in the district court did
not constitute a waiver of any right it may have to arbitrate
a distinct claim brought against it in the circuit court.
Jackson Key's
litigating
its claim regarding Microsoft Word in
13
1121417
the district court did not indicate an "intention to abandon,"
Companion Life, 670 So. 2d at 899, its alleged right to
arbitrate the claim in the circuit court regarding the system
performance of the MyWay software.
Because Jackson Key and Anderton did not substantially
invoke the litigation process, we need not address the element
of substantial prejudice. We conclude that the circuit court
could not have properly denied the motion to compel
arbitration on the ground that Jackson Key and Anderton had
waived any right to arbitration they may have.
II. Issues Relating to the Scope of the Arbitration
Provision
These issues concerns whether Jackson Key and Anderton,
nonsignatories to the contract containing the arbitration
provision, can compel arbitration of the dispute over the
MyWay software. "[G]enerally, a nonsignatory cannot compel
arbitration." Ex parte Stripling, 694 So. 2d 1281, 1283-84
(Ala. 1997). However, there are exceptions to this general
rule. Jackson Key and Anderton argue that they satisfy one of
those exceptions –– the equitable-estoppel exception –– which
allows a nonsignatory to enforce an arbitration provision
under certain circumstances. See Ex parte Stamey, 776 So. 2d
14
1121417
85, 89 (Ala. 2000) (allowing nonsignatories to enforce an
arbitration provision if "(1) ... the scope of the arbitration
agreement signed by the party resisting arbitration
[is] broad
enough to encompass those claims made by that party against
nonsignatories,
or
[if]
those
claims
[are]
'intimately
founded
in and intertwined with' the claims made by the party
resisting arbitration against an entity that is a party to the
contract, and (2) ... the description of the parties subject
to the arbitration agreement [is] not ... so restrictive as to
preclude arbitration by the party seeking it" (emphasis
omitted)).
As a threshold issue, Jackson Key and Anderton argue that
the arbitrator –– not the circuit court –– should decide
whether the arbitration provision may be used to compel
arbitration of the dispute here. This Court has explained
the
threshold
issue
of
"who
decides"
the
issue
of
"arbitrability":
"In ruling on a motion to stay judicial
proceedings following a request for arbitration, the
court is required to decide matters of 'substantive
arbitrability,' that is, (1) whether a valid
agreement to arbitrate exists and, if so, (2)
whether the specific dispute falls within the scope
of that agreement. Dean Witter[ Reynolds, Inc. v.
McDonald], 758 So. 2d [539,] 542 [(Ala. 1999)].
15
1121417
'Procedural arbitrability,' on the other hand,
involves questions that grow out of the dispute and
bear on its final disposition, e.g., defenses such
as notice, laches, estoppel, and other similar
compliance defenses; such questions are for an
arbitrator to decide. See Howsam v. Dean Witter
Reynolds, Inc., 537 U.S. 79, 84, 123 S. Ct. 588, 154
L. Ed. 2d 491 (2002) ('"'procedural' questions which
grow out of the dispute and bear on its final
disposition are presumptively not for the judge, but
for an arbitrator, to decide"'); John Wiley & Sons,
Inc. v. Livingston, 376 U.S. 543, 84 S. Ct. 909, 11
L. Ed. 2d 898 (1964)(holding that an arbitrator
should decide whether the steps of a grievance
procedure were completed, where those steps were
prerequisites to arbitration)."
Brasfield & Gorrie, L.L.C. v. Soho Partners, L.L.C., 35 So.
3d 601, 604-05 (Ala. 2009). To clarify, we note that the
United States Supreme Court has referred to questions of
"substantive
arbitrability"
as
simply
"questions
of
arbitrability" and questions of "procedural arbitrability" as
"procedural questions." Howsam, 537 U.S. at 83. A court
decides issues of substantive arbitrability "[u]nless the
parties clearly and unmistakably provide otherwise." AT&T,
475 U.S. at 649.
The question whether an arbitration provision may be used
to compel arbitration of a dispute between a nonsignatory and
a signatory is a question of substantive arbitrability (or,
under
the
Supreme
Court's
terminology,
simply
16
1121417
"arbitrability"). In First Options, 514 U.S. at 943-46, the
Supreme Court analyzed the question whether an arbitration
agreement binds
a nonsignatory as a question
of
arbitrability.
See also Howsam, 537 U.S. at 84 (noting that in First Options
the Supreme Court held that the question "whether the
arbitration contract bound parties who did not sign the
agreement" is a question of arbitrability for a court to
decide). More recently, the United States Court of Appeals
for the Eighth Circuit succinctly addressed the threshold
issue before us. In Eckert/Wordell Architects, Inc. v. FJM
Properties of Willmar, LLC, 756 F.3d 1098 (8th Cir. 2014), a
nonsignatory sought to compel arbitration of a dispute with a
signatory, as in this case. The court stated:
"Whether a particular arbitration provision may
be used to compel arbitration between a signatory
and a nonsignatory is a threshold question of
arbitrability. See Howsam v. Dean Witter Reynolds,
Inc., 537 U.S. 79, 84–85, 123 S. Ct. 588, 154 L. Ed.
2d 491 (2002) (delineating potentially dispositive
threshold
issues
between
'questions
of
arbitrability' and 'procedural questions'). We
presume threshold questions of arbitrability are for
a court to decide, unless there is clear and
unmistakable evidence the parties intended to commit
questions of arbitrability to an arbitrator. Id. at
83, 123 S. Ct. 588; Express Scripts, Inc. v. Aegon
Direct Mktg. Servs., Inc., 516 F.3d 695, 701 (8th
Cir.
2008).
We
have
previously
held
the
incorporation of the AAA Rules into a contract
17
1121417
requiring arbitration to be a clear and unmistakable
indication the parties intended for the arbitrator
to decide threshold questions of arbitrability. ...
Eckert Wordell's drafting of the architectural
services contract here to incorporate the AAA Rules
requires the same result."
756 F.3d at 1100. See also Knowles v. Community Loans of
America, Inc., (No. 12-0464-WS-B, Nov. 20, 2012) (S.D. Ala.
2012) (not reported in F. Supp. 2d) ("A question as to
'whether the arbitration contract bound parties who did not
sign the agreement' is one that 'raises a "question of
arbitrability" for a court to decide.'" (quoting Howsam, 537
U.S. at 84)).
Like the Eighth Circuit, we have held "that an
arbitration
provision
that
incorporates
rules
that
provide
for
the arbitrator to decide issues of arbitrability clearly and
unmistakably evidences the parties' intent to arbitrate the
scope of the arbitration provision." CitiFinancial Corp. v.
Peoples, 973 So. 2d 332, 340 (Ala. 2007). See also Joe Hudson
Collision Ctr. v. Dymond, 40 So. 3d 704, 710 (Ala. 2009)
(concluding that an arbitrator decides issues of substantive
arbitrability when the arbitration provision incorporated the
same AAA rule as in the present case); and Wells Fargo Bank,
N.A. v. Chapman, 90 So. 3d 774, 783 (Ala. Civ. App. 2012)
18
1121417
(same). The relevant AAA rule incorporated by the arbitration
provision provides: "The arbitrator shall have the power to
rule on his or her own jurisdiction, including any objections
with respect to the existence, scope or validity of the
arbitration agreement." Thus, although the question whether
an arbitration provision may be used to compel arbitration
between a signatory and a nonsignatory is a threshold question
of arbitrability usually decided by the court, here that
question has been delegated to the arbitrator. The
arbitrator, not the court, must decide that threshold issue.
Conclusion
Jackson Key and Anderton did not waive any right to
arbitration they may have. The question whether Jackson Key
and Anderton, as nonsignatories to the contract
containing
the
arbitration provision, can compel arbitration of the dispute
over the MyWay software is a question for the arbitrator, not
the court, pursuant to the arbitration provision in the
contract. The circuit court erred in denying Jackson Key and
Anderton's motion to compel arbitration. We
therefore reverse
the order and remand the case for further proceedings
consistent with this opinion.
19
1121417
REVERSED AND REMANDED.
Stuart, Bolin, Main, and Wise, JJ., concur.
Shaw, J., concurs in part and concurs in the result.
Moore, C.J., and Parker and Murdock, JJ., dissent.
20
1121417
SHAW, Justice (concurring in part and concurring in the
result).
I concur as to Part I of the main opinion. As to Part
II, I concur in the result.
The Practice-Monroeville, P.C. ("the Practice"), agreed
that "any dispute or claim arising out of, or in connection
with," the contract it entered into with Allscripts
Healthcare,
LLC
("Allscripts"),
would
be
settled
in
arbitration under the rules of the American Arbitration
Association. As part of that agreement, the Practice also
agreed that issues of arbitrability, which include whether a
nonsignatory to the contract can enforce the arbitration
provision included in the agreement, would be decided by an
arbitrator. See Eckert/Wordell Architects, Inc. v.
FJM
Props.
of Willmar, LLC, 756 F.3d 1098 (8th Cir. 2014).
Eric Anderton and Jackson Key Practice Solutions, LLC,
argue that their dispute with the Practice is a "dispute or
claim" under the Practice's contract with Allscripts. The
court must first perform a necessary "gate-keeping function"
before compelling arbitration: it must determine whether the
party resisting arbitration has agreed in its contract to
21
1121417
allow the arbitrator to decide whether a nonsignatory to the
contract can enforce its arbitration provision. Here, it is
the function of the court to determine whether the Practice
agreed that an arbitrator could decide whether Anderton and
Jackson Key could take their claims against the Practice to
arbitration. The Practice has the freedom to enter into a
contract that calls for the arbitrator, instead of the trial
court, to make this decision.
22
1121417
MURDOCK, Justice (dissenting).
It is axiomatic that, before a party to a dispute must
submit to the views of some arbitrator as to either the merits
of the dispute or whether the subject of the dispute falls
within the scope of disputes to be decided on the merits by
the arbitrator, a court must first determine whether that
arbitration agreement is in fact one that governs as between
that party and the opposing party to the dispute. By logic
and of necessity, only a court can play this gate-keeping
function. Were it otherwise, then, by logical extension, any
3
party to any dispute could insist on appearing before an
arbitrator, and the opposing party, even one who in fact has
never signed as a party to an arbitration agreement and who
See, e.g., Smith v. Mark Dodge, Inc., 934 So. 2d 375,
3
(Ala. 2006). Smith v. Mark Dodge was a case postured just
like the present case, i.e., where a nonsignatory sought to
force a signatory into arbitration under the terms of an
arbitration agreement containing a clause expressing an
"agree[ment]
to
arbitrate
the
arbitrability
of
any
controversy." This Court made the decision whether the
arbitration agreement governed as between two parties on the
basis of the same equitable-estoppel theory asserted in the
present case. 934 So. 2d at 379, 380-84. A separate dispute
as to whether the subject matter of the dispute fell within
the intended scope of the arbitration agreement was sent to
the arbitrator for decision under the same "arbitrate-the-
arbitrability" clause. Id. at 378-80.
23
1121417
otherwise is not properly governed by any arbitration
agreement under applicable legal principles, nonetheless will
be subjected to the decision of an arbitrator as to whether
this is in fact true or not. Until such a condition is
determined to be true, however, no party is, or should be,
under any obligation to appear before, or to subject himself
or herself to the authority of, some arbitrator, rather than
a court.
4
If, as suggested by the main opinion, the recent decision
4
of the United States Court of Appeals for the Eighth Circuit
in Eckert/Wordell Architects, Inc. v. FJM Properties of
Willmar, LLC, 756 F.3d 1098, 1098 (8th Cir. 2014), is to the
contrary, then, in all logic and necessity, I respectfully
submit that it was decided in error. In point of fact, the
opinion in Eckert offers no meaningful exploration of the
issue before us. In a relatively short paragraph, a three-
judge panel limits the analysis in that case to the narrow
issue whether, as a matter of contractual form, the reference
to American Arbitration Association rules in an arbitration
agreement would satisfy the requirement announced by the
Supreme Court in Howsam v. Dean Witter Reynolds, Inc., 537
U.S. 79, 83 (2002), that there must be "a clear and
unmistakable indication" in the written contract containing
the arbitration provision that the arbitrator is to decide the
scope of the arbitration agreement. After identifying this as
the issue to be addressed by it, the panel cites a single
Eighth Circuit case as precedent for an affirmative answer and
then ends the opinion. 756 F.3d at 1100.
At least one law review article has highlighted why there
may be confusion on this issue: the use of the term
"arbitrability" for two separate ideas. As the author
explains:
24
1121417
"Whether a party is required to submit a
particular dispute to arbitration may contain within
it two completely distinct legal issues. First, a
party may be objecting to arbitration on the ground
that no valid, enforceable arbitration agreement
exists
between
the
parties.
Second,
and
alternatively, a party may be arguing that the
particular dispute does not fall within the scope of
the arbitration agreement. The distinction between
these two objections to arbitration is critical,
because each is governed by its own separate set of
legal rules that govern 'who,' meaning which forum
-- the court or the arbitrator -- is to adjudicate
such objection to arbitration.
"Courts repeatedly recognize that the issue of
who has the jurisdiction to decide the 'question of
arbitrability' is a threshold issue. However, the
use of the term 'arbitrability' in the framing of
this question has introduced and is the source of
substantial confusion. This is because the term
'arbitrability,' as used by courts and commentators
alike, can refer to both of the two above-noted very
different objections to arbitration."
Steven H. Reisberg, The Rules Governing Who Decides
Jurisdictional Issues: First Options v. Kaplan Revisited, 20
Am. Rev. Int'l Arb. 159, 159 (2009).
One federal court not confused about the issue has put it
this way: "The existence of an agreement to arbitrate is
paramount. ... Once the existence of an agreement is
established, courts turn to the question of the 'scope' of the
arbitration agreement, unless the parties have 'clearly and
unmistakeably' delegated the issue of 'scope' to an
arbitrator." Sleeper Farms v. Agway, Inc., 211 F. Supp. 2d
197, 200 (D. Me. 2002) aff'd, 506 F.3d 98 (1st Cir. 2007).
"Thus, if the Court finds that an agreement to arbitrate
exists between the parties, it will leave the second
arbitrability question to an arbitrator." 211 F. Supp. 2d at
200 (emphasis added).
25
1121417
On an even more fundamental level, however, I would add
that today's case is a corollary and natural successor to this
Court's decision in Auto Owners Insurance, Inc. v. Blackmon
Insurance Agency, Inc., 99 So. 3d 1193 (Ala. 2012). The
comments in my dissent in that case, 99 So. 2d at 1199-1203,
are equally applicable to the similar question in this case,
and I incorporate them herein by this reference.
As I concluded in Auto Owners, this Court's approach to
"traditional" arbitrability cases, i.e., those concerning the
substantive scope of an arbitration clause, is "paradoxical."
99 So. 3d at 1201. Specifically, I considered the typical
case, by which I meant a case where the arbitration clause
does not describe a universe of types of disputes whose merits
are to be arbitrated that is any narrower than the universe of
types of disputes within which the arbitrator is to decide if
the particular dispute is of a type whose merits are to be
arbitrated. 99 So. 3d at 1201-02. In such cases, there
logically is no room for decision by the arbitrator -- or, as
I put it in Auto Owners, we "meet ourselves coming" -- on the
threshold question whether the arbitration agreement in
question governs as to the subject matter of the dispute (the
26
1121417
question in Auto Owners). It is the court that of necessity
must answer the threshold question of whether the dispute
falls within the universe of cases as to which the arbitrator
is to decide the question of arbitrability because, until the
court does so, and does so in the affirmative, it has no basis
to send the case to the arbitrator for any purpose. Once it
does so, however, the parameters of the universe of cases in
question have been decided and there logically is no room left
for the arbitrator to define this universe any differently.
Id. at 1201, 1203. "Paradoxically," if the arbitrator were to
take a more narrow view of the universe of cases subject to
arbitration on the merits so as, in turn, to find that the
particular dispute before the arbitrator does not fall within
that universe, then the arbitrator will have made a decision
that conflicts with the view of that universe held by the
court that sent the case to the arbitrator and of necessity
deprives the arbitrator of the authority to make that decision
in the first place. The same would be true in all cases in
which the threshold question is whether the arbitration
27
1121417
agreement is one that governs as between the parties in
question –- the question in the present case.5
Since this Court's decision in Auto Owners, it has come
5
to my attention that the views I expressed therein are
embodied in writings by other commentators and courts, some of
whom frame their criticism of the subject approach to
"arbitrability" in terms of a "circularity" of reasoning.
"[A]ttempts to find a source of arbitral power in
the rules of arbitral institutions alone must be
circular. For example, the [Interstate Commerce
Commission's]
practice
of
referring
cases
to
arbitration once the Court of Arbitration is 'prima
facie satisfied' that an arbitration agreement 'may
exist' is undoubtedly 'a useful administrative line
for an institution's bureaucracy, but such a
standard in itself says nothing about the true
presence of consent.' Whatever may be the 'true
construction' of the institution's rules 'as they
stand without reference to any particular system of
law,' no rational regime of contract law could
countenance that an arbitrator arrogate to himself
the power to determine his own jurisdiction in the
absence of a valid agreement giving him the
authority to do so. A functional analysis is
possible in terms of our desire not to see a matter
entrusted to arbitrators whose own self-interest is
likely to skew the result. But the prevention of
bootstrapping alone provides an adequate account."
Alan Scott Rau, The Arbitrability Question Itself, 10 Am. Rev.
Int'l Arb. 287, 304-06 (1999) (footnotes omitted). See
Sphere Drake Ins. Ltd. v. All Am. Ins. Co., 256 F.3d 587, 591
(7th Cir. 2001) ("[A] person who has not consented ... can't
be packed off to a private forum. Courts have jurisdiction to
determine their jurisdiction not only out of necessity (how
else would jurisdictional disputes be resolved?) but also
because their authority depends on statutes rather than the
parties' permission. Arbitrators lack a comparable authority
to determine their own authority because there is a
28
1121417
non-circular alternative (the judiciary) and because the
parties do control the existence and limits of an arbitrator's
power. No contract, no power."). See also, e.g., China
Minmetals Materials Imp. & Exp. Co. v. Chi Mei Corp., 334 F.3d
274, 288 (3d Cir. 2003) (reasoning that "a contract cannot
give an arbitral body any power, much less the power to
determine its own jurisdiction, if the parties never entered
into it"). Cf. Matterhorn, Inc. v. NCR Corp., 763 F.2d 866,
869 (7th Cir. 1985) ("There would however be a severe problem
of bootstrapping if a party to a contract could be forced to
arbitrate the question whether he had been coerced or deceived
into agreeing to arbitrate disputes arising under the
contract.").
29 | September 26, 2014 |
c07ed5ec-cbd1-4ab9-8419-5c8828fd2876 | First United Security Bank v. McCollum | N/A | 1120302 | Alabama | Alabama Supreme Court | REL: 09/26/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
SPECIAL TERM, 2014
____________________
1120302
____________________
Ex parte First United Security Bank and Paty Holdings, LLC
PETITION FOR WRIT OF CERTIORARI
TO THE COURT OF CIVIL APPEALS
(In re: First United Security Bank and Paty Holdings, LLC
v.
W. Hardy McCollum, Judge of Probate of Tuscaloosa County, et
al.)
(Tuscaloosa Circuit Court, CV-10-901031;
Court of Civil Appeals, 2110828)
1120302
MURDOCK, Justice.
This Court granted certiorari review to clarify our
decision in First Union National Bank of Florida v. Lee County
Commission, 75 So. 3d 105 (Ala. 2011), and to further address
who is the "owner" entitled to recover excess funds received
from the tax sale of real estate. We reverse and remand.
I. Facts and Procedural History
First United Security Bank ("First United") and its
wholly owned subsidiary, Paty Holdings, LLC (sometimes
hereinafter referred to collectively as "the bank"), brought
suit to recover excess funds received by Tuscaloosa County
from the tax sale of real estate owned by Wayne Allen Russell,
Jr., and on which First United had a mortgage. The bank
foreclosed on its mortgage after the tax sale but before the
demand for excess proceeds was made.
In their decision below, the Court of Civil Appeals
stated the facts and the substance of the trial court's
judgment as follows:
"On December 30, 2010, First United Security
Bank filed a verified complaint against W. Hardy
McCollum, in his capacity as Tuscaloosa County Judge
of Probate, and Peyton Cochrane, in his capacity as
Tuscaloosa County Tax Collector, seeking, among
other things, a judgment declaring that it was
2
1120302
entitled to the excess funds Tuscaloosa County
received at the sale of the property for unpaid
taxes. The complaint was later amended to add
Russell as a defendant and Paty Holdings, LLC, as a
plaintiff.
"The case was submitted to the trial court for
a decision upon the parties' briefs and the
following joint stipulation of facts:
"'....
"'4. On or about February 15, 2002,
Wayne Allen Russell, Jr. ... executed a
note and mortgage in favor of First United
Security Bank .... Said mortgage was
recorded
in
the
Probate
Records
of
Tuscaloosa County ....
"'5. On May 25, 2010, ... certain
[parcels of land] subject to the bank's
mortgage ... were sold at a tax sale due to
unpaid 2009 property taxes.
"'6 & 7 [The two parcels at issue were
sold for a combined amount of $42,000, of
which
$32,305.12
represents
excess
proceeds.]
"'8. ... First United Security Bank
assigned its foreclosure bid rights to ...
Paty Holdings, LLC. ... Paty Holdings,
LLC
was
the
highest
bidder
at
[a]
foreclosure sale [on July 8, 2010,] with a
bid in the amount of $2,381,790.00 and
recorded a foreclosure deed .... The bid
amount equaled the amount of [Russell's]
indebtedness to the bank.
"'....
3
1120302
"'10. ... W. Hardy McCollum as
Tuscaloosa County Judge of Probate and
Peyton Cochrane as Tuscaloosa County Tax
Collector informed [First United Security
Bank and Paty Holdings, LLC,] that [they]
must pay the excess bids in order to redeem
the property taxes but that [they] would
not be entitled to a refund of the excess
bids. Instead, [McCollum and Cochrane]
asserted that the excess bids to be paid by
[First United Security Bank and Paty
Holdings, LLC,] will be made payable to ...
Russell. ...
"'...'
"The parties subsequently stipulated that Black
River Holdings, LLC, 'the current owner' of the
property, had proposed to redeem the property and
had assigned any rights it had to the excess funds
to First United Security Bank. The parties also
stipulated that the excess tax-sale proceeds were to
be held pending the trial court's determination of
the case.
"On May 25, 2012, the trial court entered a
judgment, stating:
"'1. The primary issue in this case is
... between ... First United Security Bank
and Paty Holdings, LLC, and ... Wayne Allen
Russell, Jr. who qualifies as the "owner"
or the "person legally representing such
owner" under Ala. Code [1975,] Section
40–10–28. In First Union National Bank of
Florida v. Lee County Commission[, 75 So.
3d 105] (Ala. ... 2011), the Alabama
Supreme Court addressed this very issue
when
it
concluded
"that
when
the
Legislature directs in Section 40–10–28[,
Ala. Code 1975,] that the excess funds from
a tax sale shall be paid over to the owner
4
1120302
or his agent," the term "owner" means "the
person against whom taxes on the property
are assessed." Under the Stipulated Facts
of the parties, that person would be ...
Wayne Allen Russell, Jr.
"'2. [First United Security Bank and
Paty Holdings, LLC,] argue that the result
in this case should be different from that
in First Union National Bank, because
unlike the mortgagee in First Union
National Bank, there had been a foreclosure
by the mortgagee in this case. Thus, in
this case [First United Security Bank and
Paty Holdings, LLC,] contend that as the
foreclosing mortgagee, ... First United
Security Bank is the full owner of the
subject property. This argument would be
persuasive if the foreclosure had occurred
prior to the tax sale, as it is clear from
the opinion in First Union National Bank
that the Supreme Court was referring to a
foreclosure which occurred prior to the tax
sale and not after the tax sale as occurred
in this case.
"'....
"'Accordingly, the Court finds in
favor of [McCollum, Cochrane, and Russell]
and against [First United Security Bank and
Paty Holdings, LLC]. It is therefore the
order of the Court that the relief
requested by [First United Security Bank
and Paty Holdings, LLC,] is hereby denied.
It is the further order of the Court that
... Russell ... is entitled to the refund
of the excess funds from the tax sale at
issue in this case. Costs are taxed to
[First United Security Bank and Paty
Holdings, LLC].'"
5
1120302
First United Sec. Bank v. McCollum, [Ms. 2110828, Nov. 30,
2012] ___ So. 3d ___, ___ (Ala. Civ. App. 2012) (emphasis
added).
II. Standard of Review
"Our standard of review is de novo: 'Because the
issues presented by [this appeal] concern only
questions of law involving statutory construction,
the standard of review is de novo. See Taylor v.
Cox, 710 So.2d 406 (Ala. 1998).' Whitehurst v.
Baker, 959 So. 2d 69, 70 (Ala. 2006). ..."
Ex parte Birmingham Bd. of Educ., 45 So. 3d 764, 767 (Ala.
2009).
III. Analysis
The issue presented here is whether a purchaser at a
foreclosure sale is an "owner" entitled under Ala. Code 1975,
§ 40-10-28, to receive the excess proceeds from a tax sale of
the real property foreclosed upon. Section 40-10-28, as it
1
read at the time of the foreclosure and attempted redemption
in this case, provided, in pertinent part:
"The excess arising from the sale of any real
estate remaining after paying the amount of the
decree of sale, and costs and expenses subsequently
accruing, shall be paid over to the owner, or his
agent, or to the person legally representing such
owner, or into the county treasury, and it may be
Section
40-10-28
was
amended
while
this
case
was
pending.
1
See note 2, infra.
6
1120302
paid
therefrom
to
such
owner,
agent
or
representative in the same manner as to the excess
arising from the sale of personal property sold for
taxes is paid. ..."
This provision does not define "owner" and does not, by its
terms, impose any limitation on when the owner must have
acquired its interest in the property in order to be eligible
to receive the excess proceeds from a tax sale of the
property.
In First Union National Bank of Florida v. Lee County
Commission, 75 So. 3d 105 (Ala. 2011), this Court held that
the term "owner" in § 40-10-28 meant "the person against whom
taxes on the property were assessed," 75 So. 3d at 117, and
that the term "owner" does not include a mortgagee who has not
foreclosed on its mortgage. In reaching this conclusion, this
Court noted (1) that the statute does not define the term
"owner" and (2) that Ala. Code 1975, § 40-10-120(a), specifies
a broader range of persons who are entitled to redeem the
property from a tax sale. This Court then concluded that the
different language in the two related statutes limits the
breadth of the term "owner" in § 40-10-28 so as to exclude
mere mortgagees.
7
1120302
This Court in First Union also rejected the argument that
a mere mortgagee is an "owner" by virtue of the fact that
Alabama is a "title" state in which the mortgagee holds legal
title to property and the mortgagor holds only equitable
title. This Court provided a thorough discussion of
precedent, including Loventhal v. Home Insurance Co., 112
Ala.
108, 115, 20 So. 419, 420 (1896), in support of the
proposition that "equitable title is more than an interest in
property; it is ownership of the property." First Union, 75
So. 3d at 113.
Lastly, this Court in First Union rejected various policy
and equitable arguments in favor of treating a mortgagee as an
owner entitled to the excess proceeds, noting, among other
things, that mortgagees have potential remedies regarding
excess tax-sale proceeds. In this regard, we specifically
made note of the mortgagee's ability to "foreclose upon the
property, purchase it at the foreclosure sale, and thereby
merge the equitable title with the legal title, thus becoming
entitled to any excess funds." 75 So. 3d at 116 (emphasis
added).
8
1120302
The bank argues that this case is distinguishable from
First Union because First United foreclosed its mortgage
before the demand for or the payment of the excess funds and
thus became the "owner" by virtue of owning both legal and
equitable title to the property. We agree.
The Court of Civil Appeals rejected the bank's argument,
holding that First Union stands for the proposition that the
excess funds "are payable only to the person in whose name the
taxes are assessed at the time of the tax sale (or his agent
or representative)." ___ So. 3d at ___ (emphasis added). In
so doing, however, the Court of Civil Appeals erroneously
added a temporal qualification to this Court's holding in
First Union. This addition extends this Court's holding in
First Union beyond its context and imposes a temporal element
on ownership that is not found in the statute itself or in
this Court's opinion in First Union. Nothing in First Union
suggests that there is, or should be, a distinction between
one who completes a foreclosure purchase (or other purchase
for that matter) and becomes the "owner" of the property
before a tax sale and one who completes a purchase after the
9
1120302
tax sale, but before the payout of any excess tax-sale
proceeds.
The issue in First Union was not the timing of a sale or
foreclosure, but whether a mere mortgagee -- with only a bare
legal title to the property -- was an "owner" of the property.
In First Union, the only claimants to the excess proceeds were
a mortgagor/owner (who was also the owner listed on the
assessment, and who apparently was still in possession of the
property) and a mortgagee who had not foreclosed and who had
only bare legal title.
The reference in First Union to "owner" as "the person
against whom taxes on the property are assessed," 75 So. 3d at
114, was not intended to impose any temporal limitation on
when a person must become an "owner" in order to be entitled
to the excess proceeds. Nor was it intended to limit "owner"
to the person or entity listed on the tax assessment, whether
or not that person or entity is the actual owner at the time
of the tax sale (and whether or not the owner was correctly
listed on the assessment).
The Court of Civil Appeals' limitation of "owner" of the
property to the person in whose name the taxes were assessed
10
1120302
at the time of the tax sale not only adds a temporal element
not found in the statute, but also is contrary to (1) the
ordinary meaning of the word "owner" (which does not
ordinarily betoken a prior owner who does not retain any
interest in the property at the time of the events at issue)
and (2) the ordinary expectations of purchasers and sellers of
real estate. Ordinarily, the conveyance of real property
transfers not only the property itself but also all rights
appertaining thereto, unless excepted. We see no reason not
to include the right to receive the excess proceeds in the
rights transferred. See W. Hereford and J. Haithcock, Money
for Nothing: Who Is Entitled to the Excess Paid at a Tax
Sale?, 73 Ala. Law. 424, 427 (2012) (seller of real estate
ordinarily gives up all rights to the sold property, including
the right to the excess proceeds); Ala. Op. Att'y Gen.
2011-087 (2011) (warranty deed normally conveys all rights in
the property, including the right to excess proceeds);
McGallagher v. Estate of DeGeer, 934 So. 2d 391, 40 (Ala. Civ.
App. 2005) (right to rents and profits runs with the land).
Further, as noted above, the opinion in First Union
specifically indicated that one of the possible remedies by
11
1120302
which a mortgagee could protect itself would be a foreclosure
of the mortgage, thereby causing a merger of legal and
equitable title in the foreclosure purchaser and a resulting
entitlement to the excess proceeds. We see no reason to
conclude that such a merger is any more complete when it
occurs before a tax sale than when it occurs after it.
Finally, limitation of the term "owner" to the owner in
whose name the taxes were assessed at the time of the tax sale
often would lead to inequitable results. The "assessed owner"
may not be the actual or equitable owner at the time of the
tax sale, either because the property was sold between the
October 1 assessment date and the date of the tax sale, or
because the assessment was not changed after a sale to reflect
the name of the new owner. In either of those instances,
payment of the excess proceeds to the assessed owner would
represent a windfall to the assessed owner and would unfairly
penalize
the
purchaser/current/actual
owner.
The
injustice
is
particularly acute if the current owner paid the excess
proceeds in order to redeem the property, but the excess
proceeds are then returned to the assessed owner, who did not
12
1120302
pay the taxes, did not contribute to the redemption amount,
and no longer has any interest in the property.2
IV. Conclusion
Based on the foregoing, we conclude that the bank is
entitled to the excess tax-sale proceeds. We reverse the
judgment of the Court of Civil Appeals and remand the case for
further proceedings consistent with this opinion.
While this case was pending, the legislature amended
2
§ 40-10-28 to provide that the excess tax-sale proceeds shall
be paid to "a person or entity who has redeemed the property."
Act No. 2013-370, Ala. Acts 2013 (emphasis added). In
addition to the argument made by the bank as to the meaning of
§ 40-10-28 as written at the time of the events at issue, the
bank also argues that we should consider the amendment to §
40-10-28 to be retroactive and to apply to any property as to
which the excess proceeds had not been paid out as of
August 1, 2013, the effective date of that amendment. The
defendants disagree, contending that the amendment was
intended to apply only to tax sales made on or after that date
and, furthermore, that any other interpretation would upset
settled expectations and would be unconstitutional. Our
judgment of reversal in favor of the bank in this particular
case is not dependent on the bank's argument on this issue.
Even if the bank were correct, in this case the entity
actually attempting to redeem the property is also the "owner"
of the property.
13
1120302
REVERSED AND REMANDED.
Stuart, Bolin, Parker, Shaw, Main, and Wise, JJ., concur.
Moore, C.J., concurs in the result.
Bryan, J., recuses himself.*
*Justice Bryan was a member of the Court of Civil Appeals
when that court considered this case.
14 | September 26, 2014 |
c5905e1a-445c-41da-9fe8-18d61b881212 | Ex parte Collier Kirksey. PETITION FOR WRIT OF CERTIORARI TO THE COURT OF CRIMINAL APPEALS (In re: Collier Kirksey v. State of Alabama)(Mobile Circuit Court: CC-12-2808; Criminal Appeals : CR-12-1383). Writ Denied. No Opinion. | N/A | 1130913 | Alabama | Alabama Supreme Court | Rel: 09/12/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
SPECIAL TERM, 2014
____________________
1130913
____________________
Ex parte Collier Kirksey
PETITION FOR WRIT OF CERTIORARI
TO THE COURT OF CRIMINAL APPEALS
(In re: Collier Kirksey
v.
State of Alabama)
(Mobile Circuit Court, CC-12-2808;
Court of Criminal Appeals, CR-12-1383)
PARKER, Justice.
1130913
WRIT DENIED. NO OPINION.
Stuart, Bolin, Murdock, Shaw, Main, Wise, and Bryan, JJ.,
concur.
Moore, C.J., dissents.
2
1130913
MOORE, Chief Justice (dissenting).
Collier Kirksey was convicted of first-degree robbery,
see § 13A-8-41, Ala. Code 1975, and was sentenced to life in
prison for his role as an accomplice to a robbery at a Winn-
Dixie grocery store. The Court of Criminal Appeals affirmed
his conviction and sentence in an unpublished memorandum.
Kirksey v. State (No. CR-12-1383, April 18, 2014), ___ So. 3d
___ (Ala. Crim. App. 2014) (table). Kirksey makes two
arguments in his petition for certiorari review: That the
evidence was insufficient to convict him of first-degree
robbery and that the prosecutor improperly commented on
Kirksey's decision not to testify. I believe the second issue
has merit.
"[I]n all criminal prosecutions, the accused ... shall
not be compelled to give evidence against himself ...." Art.
I, § 6, Ala. Const. 1901. Section 12-21-220, Ala. Code 1975,
codifies and elaborates on this principle:
"On the trial of all indictments, complaints or
other criminal proceedings, the person on trial
shall, at his own request, but not otherwise, be a
competent witness, and his failure to make such a
request shall not create any presumption against him
nor be the subject of comment by counsel. If the
district attorney makes any comment concerning the
defendant's failure to testify, a new trial must be
3
1130913
granted on motion filed within 30 days from entry of
the judgment."
(Emphasis added.)
During closing argument in Kirksey's trial the prosecutor
stated that "every single employee in that store got up here
and took the stand and took an oath except for [Kirksey]."
Defense counsel immediately moved for a mistrial because the
prosecutor
had
commented on Kirksey's decision not to testify.
The trial court then immediately stated:
"Ladies and gentlemen of the jury, I'm going to
instruct you in a few minutes when counsel are
through with their arguments that every defendant in
a criminal proceeding has an absolute right to --
every citizen has an absolute right not to testify
in a criminal proceeding brought against them, and
the jury will be instructed specifically [that] no
inference whatsoever can be drawn from the exercise
of those constitutional rights."
(Emphasis added.) Kirksey argues that the trial court's
admonition was insufficient to cure the prosecutor's error.
"[C]omment on the defendant's failure to testify is to be
scrupulously avoided." Arthur v. State, 575 So. 2d 1165, 1186
(Ala. Crim. App. 1990). Such comments "are highly prejudicial
and harmful." J.E. v. State, 997 So. 2d 335, 340 (Ala. Crim.
App.
1997).
"[W]here
a
prosecuting
officer
improperly
comments
on a defendant's failure to testify, and the trial court
4
1130913
sustains the objection thereto and promptly and appropriately
instructs the jury of the impropriety of such remarks, then
such remarks should not cause a reversal of the case." Troup
v. State, 32 Ala. App. 309, 319, 26 So. 2d 611, 620 (1946)
(emphasis added). In Whitt v. State, 370 So. 2d 736, 739 (Ala.
1979), this Court delineated the content of an appropriate
curative instruction when a prosecutor has commented on a
defendant's failure to testify.
"We suggest that, at a minimum, the trial judge
should sustain the objection, and should promptly
and vigorously give appropriate instructions to the
jury. Such instructions should include that such
remarks are improper, and to disregard them; that
statements of counsel are not evidence; that under
the law the defendant has the privilege to testify
in his own behalf or not; that he cannot be
compelled to testify against himself; and, that no
presumption of guilt or inference of any kind should
be drawn from his failure to testify."
Kirksey, quoting this language from Whitt, as quoted in
Harrison v. State, 706 So. 2d 1323, 1325 (Ala. Crim. App.
1997), claims that the curative instruction here was weak and
incomplete and that it failed to instruct the jury that the
offending comment was improper and must be disregarded. The
Court of Criminal Appeals, to the contrary, found that the
trial court appropriately cured the error when it instructed
5
1130913
the jury "to disregard the improper reference to Kirksey's
failure to testify and told them not [to] draw any inferences
from the statement."
Although Kirksey is arguing in accord with this Court's
precedent, that precedent is ill founded. In my view the final
sentence of § 12-21-220 should govern: "If the district
attorney makes any comment concerning the defendant's failure
to testify, a new trial must be granted on motion filed within
30 days from entry of the judgment." (Emphasis added.) Once
the prosecutor directly commented on Kirksey's failure to
testify, Kirksey had a statutory right to a new trial,
regardless of the adequacy of the trial court's attempt at a
curative instruction.
In Broadway v. State, 257 Ala. 414, 60 So. 2d 701 (1952),
this Court held that the last sentence of § 12-21-220 was
unconstitutional as a legislative invasion of the judicial
sphere, contrary to the separation-of-powers doctrine. See
also Smith v. State, 370 So. 2d 312, 317 n.3 (Ala. Crim. App.
1979) (noting that to give the last sentence of § 12-21-220
"the mandatory effect which its language imports" "would
violate the Separation of Powers Section (§ 43) of the
6
1130913
Constitution of Alabama" (citing Broadway)). I find Broadway
unpersuasive. The legislature in 1949 determined that a
1
prosecutor's comment on the
defendant's
failure to testify was
ineradicable and incurable, justifying an automatic mistrial
at the defendant's request, and amended what is now § 12-21-
220 by adding the substance of the final sentence. By
judicially striking this sentence, the Court invaded the
legislative prerogative of prescribing rules of procedure for
the courts. The judicial article of the Alabama Constitution,
adopted in 1973, authorizes the Supreme Court to create rules
of procedure that supersede statutes, with two caveats: the
rules may not change substantive rights and the legislature
still retains the power to change any court rule by "a general
act of statewide application." Art. VI, § 150, Ala. Const.
1901. No rule of court has superseded the last sentence of §
12-21-220. Therefore, if this Court had not found that
sentence to be unconstitutional as a legislative invasion of
the judicial sphere, it would still be valid. See § 12-1-1,
Ala. Code 1975 (stating that statutes regulating court
Act No. 124, Ala. Acts 1949.
1
7
1130913
procedure are valid in the absence of contravening court
rules).
In Beecher v. State, 294 Ala. 674, 320 So. 2d 727 (1975),
Justice Jones, concurring specially, joined by Chief Justice
Heflin, stated: "I believe that the constitutional guarantee
of the right against self incrimination is of such quality
that its violation is incurable by any attempt on the part of
the trial court to disabuse the minds of the jury with respect
thereto. This is a bell once rung which cannot be unrung." 294
Ala. at 684, 320 So. 2d at 736. This statement is consistent
with the legislature's determination that such an error is
incurable. In Ex parte Tucker, 454 So. 2d 552 (Ala. 1984),
this Court stated: "Where there is a direct reference to
defendant's failure to testify, it constitutes ineradicable
prejudicial error requiring reversal. Section 6, Const. of
Ala. of 1901, is violated." 454 So. 2d at 553 (emphasis
added). The Court further stated: "In our view, these comments
most probably made an indelible impression upon the jury,
alerting the jury to the defendant's opportunity to refute the
State's case. After such a comment, a defendant must either
testify, or admit guilt by silence." Id. Noting the argument
8
1130913
that any prejudicial impact had been eradicated by the trial
court's instructions to disregard the comments, the Court
repeated: "[W]e consider the comments to be so prejudicial as
to be ineradicable." Id.
Having judicially excised in 1952 the last sentence of §
12-21-220, this Court generally holds that a prosecutor's
direct comment on the failure of a defendant to testify is
curable error. Ex parte Wilson, 571 So. 2d 1251, 1261 (Ala.
1990). Nonetheless, the observations by Justice Jones, joined
by Chief Justice Heflin, in Beecher and this Court's
statements in Tucker indicate that § 12-21-220, far from being
an invasion of the judicial prerogative, is a reasonable and
necessary remedy for a direct reference to the defendant's
decision not to testify.
The existence of similar statutory provisions in other
states has not prompted their appellate courts to strike those
provisions as "plainly an infringement by legislative power
upon judicial power." Broadway, 257 Ala. at 418, 60 So. 2d at
704. A Louisiana statute mandates a mistrial upon the
defendant's motion if the district attorney comments on a
9
1130913
defendant's failure to testify. An admonition or curative
2
instruction is insufficient to repair the error. See State v.
Hall, 297 So. 2d 413, 415 (La. 1974) (noting that "[a]
mistrial is mandatory" upon motion by the defendant when a
"prohibited comment" is made).
2
"Upon motion of a defendant, a mistrial shall be
ordered when a remark or comment, made within the
hearing of the jury by the ... district attorney ...
during the trial or in argument, refers directly or
indirectly to:
"....
"(3) The failure of the defendant to
testify in his own defense; ...
"....
"An admonition to the jury to disregard the
remark or comment shall not be sufficient to prevent
a mistrial. ..."
La. Code Crim. Proc. art. 770.
10
1130913
An Oklahoma statute makes it "mandatory on the trial
3
court to grant a new trial when a prosecutor comments on the
fact that defendant did not testify." Clark v. State, 91 Okla.
Crim. 210, 215, 218 P.2d 410, 413 (1950). "[B]y reason of the
statute no instruction by the court could correct or remedy
such error." Patman v. State, 95 Okla. Crim. 415, 418, 247
P.2d 308, 311 (1952). Far from considering that law as
intruding on the judicial power or "depriv[ing] the circuit
court of its constitutional power to function in a judicial
way," Broadway, 257 Ala. at 418, 60 So. 2d at 704, the
Oklahoma Court of Criminal Appeals quoted the following
statement: "'It matters not what we may think of the policy of
this statute. It is mandatory, and therefore we have no
discretion in the matter, but it is our plain duty to enforce
3
"In the trial of all indictments, informations,
complaints and other proceedings against persons
charged with the commission of a crime, offense or
misdemeanor
before
any
court
or
committing
magistrate in this state, the person charged shall
at his own request, but not otherwise, be a
competent witness, and his failure to make such
request shall not create any presumption against him
nor be mentioned on the trial; if commented upon by
counsel it shall be ground for a new trial."
Okla. Stat. tit. 22, § 701 (emphasis added).
11
1130913
it.'" Patman, 95 Okla. Crim. at 416, 247 P.2d at 310 (quoting
Nowlin v. State, 7 Okla. Crim. 27, 32, 121 P. 791, 792
(1912)).
Likewise, in my view, the Broadway Court had the "plain
duty" to enforce § 12-21-220 as written, and thus improperly
declared that the last sentence was unconstitutional. When
4
the constitutionality of a legislative act is challenged, "it
is the recognized duty of the court to sustain the act unless
it is clear beyond reasonable doubt that it is violative of
the fundamental law." Alabama Fed'n of Labor v. McAdory, 246
Ala. 1, 9, 18 So. 2d 810, 815 (1944). The statements in
Tucker, the special concurrence in Beecher, and the
implementation of similar provisions by courts in other
states
indicate to me that the final sentence of § 12-21-220 is not
clearly unconstitutional.
The Broadway Court also stated that § 12-21-220 reduced
4
the judicial function to a "ministerial act." 257 Ala. at 418,
60 So. 2d at 704. However, in Ex parte Foshee, 246 Ala. 604,
21 So. 2d 827 (1945), the Court held that a legislatively
enacted ministerial rule mandating that a trial court take
oral testimony when so requested by a party did not "hamper
the proper functioning of the trial court." 246 Ala. at 607,
21 So. 2d at 829.
12
1130913
I would grant Kirksey's petition for a writ of certiorari
to consider
whether
we should overrule Broadway, reinstate the
last sentence of § 12-21-220, and grant Kirksey a new trial.
Therefore, I respectfully dissent.
13 | September 12, 2014 |
2e3c80b7-7cb6-4f78-b42b-4a61a8ea4900 | Regions Bank v. Neighbors | N/A | 1130219 | Alabama | Alabama Supreme Court | Rel: 11/14/14
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
____________________
1130219
____________________
Regions Bank
v.
Jerry Wayne Neighbors
Appeal from Montgomery Circuit Court
(CV-13-901459)
BRYAN, Justice.
Regions Bank ("Regions") appeals from an order denying
its motion to compel arbitration. We reverse and remand.
1130219
2
In 1999, Jerry Wayne Neighbors obtained from Union
Planters Bank a loan in the amount of $64,100, which was
secured by a mortgage on real property owned by Neighbors and
his then wife. Regions is the successor in interest to Union
Planters Bank. As part of the loan transaction, Neighbors
executed a dispute-resolution agreement ("the DRA"), which
provides, in pertinent part: "Borrower and Lender irrevocably
agree to settle all disputes between them ... by negotiation,
mediation, and arbitration ...." The DRA further provides
that "'disputes' means all past, present, and future
disagreements,
controversies,
claims,
and
counterclaims
between Borrower and Lender and includes without limitation
all matters relating to this Agreement, any extension of
credit, any tort, any insurance, any service, or any product."
The DRA also states: "Borrower and Lender intend for this
Agreement to cover the broadest range of disputes and legal
issues that may be arbitrated under federal law. Borrower and
Lender agree that any questions as to the scope of this
Agreement shall be determined by the arbitrator (including,
without limitation all issues of formation, consideration,
1130219
When the original loan documents were executed, they were
1
supplemented by a rider that included an arbitration agreement
separate from the DRA. However, the rider indicates that the
arbitration agreement therein would not apply if there is a
"separate Alternative Dispute Resolution Agreement," like the
DRA. However, the arbitration provision in the rider would
apply
if
the
DRA
were
determined
to
be
invalid
or
unenforceable. Regions sought arbitration under the DRA, not
the arbitration provision in the rider or the arbitration
provision in the loan-modification agreement.
3
capacity, fairness, unconscionability, mutuality, duress,
fraud, adhesion, arbitrability, revocability, and waiver)."
In 2008, a loan-modification agreement was executed,
purportedly amending the mortgage. Neighbors denies that he
signed the loan-modification agreement; he claims that his
signature on that document was forged. The loan-modification
agreement also contains an arbitration provision.
In 2013, Neighbors sued Regions, alleging that Regions
had negligently and wantonly allowed an imposter to forge
Neighbors's signature on the loan-modification agreement.
Relying on the DRA, Regions moved to compel the arbitration of
Neighbors's claims. Neighbors opposed the motion to compel
1
arbitration. Following a hearing, the trial court denied the
motion to compel, without stating a reason. Regions appealed
pursuant to Rule 4(d), Ala. R. App. P., which authorizes an
1130219
4
appeal from an order either granting or denying a motion to
compel arbitration.
"'This Court's review of an order
granting or denying a motion to compel
arbitration is de novo. ...'
"United Wisconsin Life Ins. Co. v. Tankersley, 880
So. 2d 385, 389 (Ala. 2003). Furthermore:
"'"A motion to compel arbitration
is analogous to a motion for
summary judgment. TranSouth Fin.
Corp. v. Bell, 739 So. 2d 1110,
1114
(Ala.
1999).
The
party
seeking to compel arbitration has
the
burden
of
proving
the
existence of a contract calling
for arbitration and proving that
that
contract
evidences
a
transaction affecting interstate
commerce. Id. 'After a motion to
compel arbitration has been made
and supported, the burden is on
the
non-movant
to
present
evidence
that
the
supposed
arbitration
agreement
is
not
valid or does not apply to the
dispute in question.'"
"'Fleetwood Enters., Inc. v. Bruno, 784 So.
2d 277, 280 (Ala. 2000) (quoting Jim Burke
Auto., Inc. v. Beavers, 674 So. 2d 1260,
1265 n. 1 (Ala. 1995) (emphasis omitted)).'
"Vann v. First Cmty. Credit Corp., 834 So. 2d 751,
753 (Ala. 2002)."
Cartwright v. Maitland, 30 So. 3d 405, 408–09 (Ala. 2009).
1130219
5
In this case, there is no dispute regarding the existence
of the DRA and the fact that it evidences a transaction
affecting interstate commerce. Rather, the parties disagree
about whether Neighbors's claims are covered by the DRA.
Regions argues that the scope of the DRA is broad enough to
include Neighbors's claims. Regions also argues that the
issue whether the scope of the DRA encompasses Neighbors's
claims is a threshold issue that, under the terms of the DRA,
should be decided by the arbitrator; this argument is
dispositive. Neighbors argues that, because the dispute in
this case involves an alleged forgery, the dispute cannot be
subject to the provisions of the DRA. Neighbors also suggests
that the DRA does not cover his claims because, he says,
pursuant to the terms of the judgment divorcing him and his
wife, he stopped making payments on the original mortgage in
2006
when
his
ex-wife
remarried.
Although
Neighbors
characterizes the dispute otherwise, we conclude that the
dispute in this case concerns the scope of the DRA.
Whether a specific dispute falls within the scope of an
arbitration agreement is a threshold question of "substantive
arbitrability," a term sometimes used by this Court, or simply
1130219
6
"arbitrability" as the United States Supreme Court has called
it. Brasfield & Gorrie, L.L.C. v. Soho Partners, L.L.C., 35
So. 3d 601, 604 (Ala. 2009) (discussing the difference between
questions of "substantive arbitrability" and "procedural
arbitrability"); Howsam v. Dean Witter Reynolds, Inc., 537
U.S. 79, 83-85 (2002) (discussing the difference between
"questions of arbitrability," which this Court has sometimes
referred to as questions of "substantive arbitrability," and
"procedural questions," which this Court has sometimes
referred to as questions of "procedural arbitrability"). As
a threshold matter, a court decides issues of substantive
arbitrability "[u]nless the parties clearly and unmistakably
provide otherwise." AT&T Techs., Inc. v. Communications
Workers of America, 475 U.S. 643, 649 (1986). In this case,
the DRA shows that the parties clearly and unmistakably agreed
to have an arbitrator, not a court, decide substantive-
arbitrability issues concerning the scope of the DRA and,
indeed, all issues of "arbitrability." The DRA provides that
"Borrower and Lender agree that any questions as to the scope
of this Agreement shall be determined by the arbitrator
(including, without limitation all issues of ... arbitrability
1130219
7
...)." Thus, as an initial matter, the arbitrator must decide
whether Neighbors's claims fall within the scope of the DRA.
The trial court erred in denying the motion to compel
arbitration. We therefore reverse the order and remand the
case for further proceedings consistent with this opinion.
REVERSED AND REMANDED.
Stuart, Bolin, Parker, Main, and Wise, JJ., concur.
Shaw, J., concurs in the result.
Moore, C.J., and Murdock, J., dissent.
1130219
8
MURDOCK, Justice (dissenting).
I respectfully dissent.
I do not agree that the issue of arbitrability was for
the arbitrator to decide in this case. Whether the dispute at
issue falls within the scope of the dispute-resolution
agreement was for the trial court to decide. See Anderton v.
The Practice-Monroeville, P.C. [Ms. 1121417, Sept. 26, 2014]
___ So. 3d ___, ___ (Ala. 2014) (Murdock, J., dissenting);
Auto Owners Ins., Inc. v. Blackmon Ins. Agency, Inc., 99 So.
3d 1193, 1199 (Ala. 2012) (Murdock, J., dissenting). | November 14, 2014 |
af03ed16-ab2c-4ad1-88c4-1857227d3974 | Tuscaloosa Resources, Inc. v. Alabama Department of Enviromental Management | N/A | 1130393 | Alabama | Alabama Supreme Court | Rel: 09/26/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
SPECIAL TERM, 2014
____________________
1130393
____________________
Ex parte Alabama Rivers Alliance and Friends of Hurricane
Creek
PETITION FOR WRIT OF CERTIORARI
TO THE COURT OF CIVIL APPEALS
(In re: Tuscaloosa Resources, Inc.
v.
Alabama Department of Environmental Management et al.)
(Tuscaloosa Circuit Court, CV-10-900300;
Court of Civil Appeals, 2120482)
PARKER, Justice.
1130393
Alabama Rivers Alliance and Friends of Hurricane Creek
(hereinafter collectively referred to as "ARA") petitioned
this Court for a writ of certiorari to review the Court of
Civil Appeals' decision reversing a judgment of
the
Tuscaloosa
Circuit Court ("the trial court") dismissing an appeal by
Tuscaloosa Resources, Inc. ("TRI"), of a decision of the
Environmental Management Commission ("the Commission"). See
Tuscaloosa Res., Inc. v. Alabama Dep't of Envtl. Mgmt., [Ms.
2120482, October 4, 2013] ___ So. 3d ___ (Ala. Civ. App.
2013). The Alabama Department of Environmental Management
("ADEM") oversees the Commission. We granted certiorari
review to consider whether the Court of Civil Appeals'
decision conflicts with this Court's decision in Price v.
South Central Bell, 294 Ala. 144, 313 So. 2d 184 (1975), and
the Court of Civil Appeals' decision in Personnel Board of
Jefferson County v. Bailey, 475 So. 2d 863 (Ala. Civ. App.
1985). See Rule 39(a)(1)(D), Ala. R. App. P. For the
following reasons, we conclude that the Court of Civil
Appeals' decision in this case does conflict with Price and
Bailey, and we reverse its judgment.
Facts and Procedural History
2
1130393
In Tuscaloosa Resources, the Court of Civil Appeals set
forth the relevant facts and procedural history, as follows:
"TRI sought a water-pollution permit from ADEM. The
Alabama Rivers Alliance and Friends of Hurricane
Creek (hereinafter referred to collectively as
'ARA') challenged the issuance of the permit through
ADEM's administrative-appeals process. One of the
grounds TRI asserted in its defense of the issuance
of the permit was whether ARA had standing to
contest the permit. At the evidentiary hearing of
the matter, TRI presented evidence regarding the
standing issue. After the hearing, the hearing
officer
submitted
his
recommendations
to
the
Commission. In turn, the Commission entered an
order adopting the hearing officer's recommendation,
which, among other things, concluded that ARA did
have standing to contest the permit, and it upheld
the issuance of the permit to TRI.
"TRI appealed the Commission's order to the
trial court.[ ] The trial court noted that, by
1
As set forth below, ARA subsequently filed an appeal in
1
the Montgomery Circuit Court. Section 41-22-20(b), Ala. Code
1975, allows an aggrieved party to seek judicial review
"either in the Circuit Court of Montgomery County or in the
circuit court of the county in which the agency maintains its
headquarters, or unless otherwise specifically provided by
statute, in the circuit court of the county where a party
other than an intervenor, resides or if a party, other than an
intervenor, is a corporation, domestic or foreign, having a
registered office or business office in this state, then in
the county of the registered office or principal place of
business within this state." TRI does not indicate in its
brief before this Court why it believes that the Tuscaloosa
Circuit Court was the appropriate venue for its appeal. In
its motion to transfer ARA's appeal from the Montgomery
Circuit Court, TRI indicated that venue was appropriate in the
Tuscaloosa
Circuit
Court
because
ARA
"perform[s]
in
Tuscaloosa
County business functions for which [it was] created."
3
1130393
statute, only aggrieved parties can appeal a
decision of the Commission to the circuit court and
found that TRI was not a 'person aggrieved by the
administrative
action'
of
the
Commission.
Therefore, the trial court held, it did not have
subject-matter jurisdiction over the appeal, and it
dismissed TRI's appeal."
___ So. 3d at ___.
Standard of Review
This case concerns TRI's standing to appeal the
Commission's final decision in TRI's favor. The facts related
to TRI's standing to appeal the decision are not in dispute;
thus, only a question of law is presented for our review.
This Court reviews questions of law de novo. National Ins.
Ass'n v. Sockwell, 829 So. 2d 111 (Ala. 2002); Moss v.
Williams, 822 So. 2d 392 (Ala. 2001); and Reed v. Board of
Trs. of Alabama State Univ., 778 So. 2d 791 (Ala. 2000). See
also New L&N Sales & Marketing, Inc. v. Revson, 29 Fed. App'x
582, 582 (Fed. Cir. 2002)(not selected for publication in the
Federal Reporter)("Whether a party has standing to appeal is
a question of law that we review de novo."); Garrison v.
Garrison, 8 So. 3d 904, 906 (Miss. Ct. App. 2009)("Whether a
party has standing to appeal a trial court's judgment is a
question of law, which is reviewed de novo."); and Anderson v.
4
1130393
Access Med. Ctrs., 263 P.3d 328, 330 (Okla. Civ. App.
2011)("'Whether a party lacks standing to appeal is a question
of law, which this Court reviews de novo ....'" (quoting In re
Baby W., 220 P.3d 32, 32 (Okla. Civ. App. 2009))).
Discussion
In Tuscaloosa Resources, the main opinion set forth the
law the Court of Civil Appeals applied, as follows:
"This case does not involve issues related to
the Commission's procedures when hearing the appeal
of an action taken by ADEM, see § 22-22A-7, Ala.
Code 1975; therefore, our review of this case is
governed by the Alabama Administrative Procedure Act
('AAPA'), § 41-22-20, Ala. Code 1975. See Alabama
Dep't of Envtl. Mgmt. v. Legal Envtl. Assistance
Found., Inc., 973 So. 2d 369, 375 n. 3 (Ala. Civ.
App. 2007) (quoting Plumbers & Steamfitters, Local
52 v. Alabama Dep't of Envtl. Mgmt., 647 So. 2d 793,
794–95 (Ala. Civ. App. 1994) ('"because [the case]
concerns a matter unrelated to the perfecting of an
appeal, judicial review of a decision of the
Commission is governed by §§ 41–22–20 and –21"')).
"Section 41–22–20 provides, in pertinent part:
"'(a) A person who has exhausted all
administrative remedies available within
the agency, other than rehearing, and who
is aggrieved by a final decision in a
contested case is entitled to judicial
review under this chapter.'
"(Emphasis added.)
"Black's Law Dictionary 1232 (9th ed. 2009)
defines an 'aggrieved party' as '[a] party entitled
5
1130393
to a remedy; esp., a party whose personal,
pecuniary, or property rights have been adversely
affected by another person's actions or by a court's
decree or judgment.' In Alabama Department of
Environmental Management v. Friends of Hurricane
Creek, 114 So. 3d 47, 51 (Ala. Civ. App. 2012), this
court discussed what constituted an 'aggrieved'
person under the AAPA.
"'We start with the proposition that,
for a person to demonstrate standing to
seek relief in the courts of Alabama, that
person must show "'(1) an actual concrete
and particularized "injury in fact" —- "an
invasion of a legally protected interest";
(2) a "causal connection between the injury
and the conduct complained of"; and (3) a
likelihood
that
the
injury
will
be
"redressed by a favorable decision."'" Ex
parte HealthSouth Corp., 974 So. 2d 288,
293 (Ala. 2007) (quoting Stiff v. Alabama
Alcoholic Beverage Control Bd., 878 So. 2d
1138, 1141 (Ala. 2003), quoting in turn
Lujan v. Defenders of Wildlife, 504 U.S.
555, 560–61, 112 S. Ct. 2130, 119 L. Ed. 2d
351 (1992)). Those elements of an actual
or
imminent
injury,
causation,
and
redressability,
which
have
their
origins
in
the "case or controversy" interpretive
jurisprudence pertaining to Article III of
the United States Constitution, amount to
constitutional minima, at least as to the
judicial branch. See Hollywood Mobile
Estates, Ltd. v. Seminole Tribe
of Florida,
641 F.3d 1259, 1265 (11th Cir. 2011); see
also Pharmacia Corp. v. Suggs, 932 So. 2d
95, 97 n. 4 (Ala. [2005]) (indicating that
Section 139 of the Alabama Constitution of
1901
similarly
empowers
this
state's
judiciary to "'decide discrete cases and
controversies involving particular parties
and specific facts'" rather than answering
6
1130393
abstract questions) (quoting Alabama Power
Co. v. Citizens of Alabama, 740 So. 2d 371,
381 (Ala. 1999)); but see Climax Molybdenum
Co. v. Secretary of Labor, 703 F.2d 447,
451 (10th Cir. 1983) (indicating that
administrative agencies are not bound by
constitutional
"case
or
controversy"
requirements).'"
___ So. 3d at ___.
After setting forth the above law, the Court of Civil
Appeals proceeded to analyze Bailey, supra:
"In Bailey, a deputy sheriff filed a grievance with
the Jefferson County Personnel Board ('the Board')
complaining that Sheriff Bailey had improperly
transferred him from patrol duty to jail duty. The
Board found that the deputy sheriff's complaint was
'grievable' and then, after a hearing on the merits,
entered a decision reinstating the deputy sheriff to
the patrol division. 475 So. 2d at 865. Sheriff
Bailey appealed the decision to the circuit court,
seeking a judgment declaring that matters of job
assignment were within the prerogative of the
sheriff and not subject to review by the Board. The
circuit court determined that the deputy sheriff's
complaint was a matter properly considered by the
Board but also held that the Board's reinstatement
of the deputy sheriff to patrol duty was arbitrary
and capricious. The deputy sheriff appealed to this
court, and Sheriff Bailey cross-appealed. Id.
"The deputy sheriff asserted that, because
Sheriff Bailey had prevailed, he did not have
standing to cross-appeal. However, this court
concluded that, because the circuit court's decision
'could have a prejudicial effect on [Sheriff
Bailey's]
authority
to
assign
and
discipline
subordinates in his department,' he had the right to
7
1130393
cross-appeal the finding that the complaint was
'grievable.' Id. at 866."
Tuscaloosa Resources, ___ So. 3d at ___.
Based on its analysis of Bailey, the Court of Civil
Appeals then stated:
"We find the rationale set forth in Bailey to be
applicable in this case. TRI sought a ruling that
ARA did not have standing to challenge the water-
pollution permit that ADEM had issued. It argues
that, in holding that ARA had standing, the
Commission's ruling subjects TRI to additional
litigation, that is, TRI now must take on the
expense and risk required to defend ARA's appeal of
the Commission's decision in the Montgomery Circuit
Court. However, if the trial court in the
underlying appeal reverses the Commission's ruling
on the issue of ARA's standing, TRI would not be
required to address the merits of the issuance of
the permit. Furthermore, we agree with TRI that the
Commission's ruling weakens procedural protections
against challenges to any permits TRI might require
for future operations. Therefore, we conclude that
TRI has demonstrated that it was aggrieved by the
Commission's decision that ARA had standing to
challenge the permit."
Tuscaloosa Resources, ___ So. 3d at ___. Accordingly, the
Court of Civil Appeals held that the trial court had erred in
dismissing TRI's appeal.
In its petition for certiorari review, ARA alleges that
the main opinion in Tuscaloosa Resources conflicts with Price,
supra, and Bailey, supra. Specifically, ARA alleges that the
8
1130393
conclusion in Tuscaloosa Resources that TRI had standing to
appeal the Commission's decision to the trial court because
TRI was aggrieved by the Commission's decision that ARA had
standing to challenge TRI's application for a water-pollution
permit, even though TRI received all the relief it requested
from
the
Commission
(TRI's
water-pollution
permit
was
granted,
even though the Commission determined that ARA had standing to
challenge
TRI's
application),
conflicts
with
Price
and
Bailey.
We granted certiorari review to address this issue.
For the reasons set forth in Judge Moore's dissent in
Tuscaloosa Resources, which is similar to the reasoning set
forth by ARA in its brief before this Court, we hold that the
Court of Civil Appeals' opinion in Tuscaloosa Resources
conflicts with Bailey and Price, and, thus, the Court of Civil
Appeals' judgment must be reversed. Judge Moore's convincing
dissent states, in pertinent part:
"The main opinion, citing Personnel Board of
Jefferson County v. Bailey, 475 So. 2d 863 (Ala.
Civ. App. 1985), adopts TRI's assertions that the
Commission's ruling subjects TRI to additional
litigation because 'TRI now must take on the expense
and risk required to defend ARA's appeal of the
Commission's decision in the Montgomery Circuit
Court.' ___ So. 3d at ___. The main opinion
further observes that, 'if the trial court in the
underlying appeal reverses the Commission's ruling
9
1130393
on the issue of ARA's standing, TRI would not be
required to address the merits of the issuance of
the permit.' ___ So. 3d at ___.
"Although the main opinion relies on Bailey, I
find
the
circumstances
in
Bailey
to
be
distinguishable from those in the present case. In
Bailey, a deputy sheriff filed a grievance with the
Jefferson County Personnel Board ('the Board'),
asserting that the sheriff had transferred him from
patrol duty to jail duty in the sheriff's department
for disciplinary reasons. 475 So. 2d at 865. The
Board determined that the deputy sheriff's complaint
was 'grievable,' proceeded to hear the merits of the
complaint, and ultimately ruled in the deputy
sheriff's favor, ordering that he be reinstated to
the patrol division. Id. The sheriff then filed a
complaint in the circuit court, seeking a judgment
declaring that matters of job assignment, placement,
and transfer are prerogatives of the sheriff and,
thus, not subject to review by the Board and that
the Board's decision was erroneous. Id. The
circuit court ultimately entered a final judgment
ruling that the Board's decision was arbitrary and
capricious; the deputy sheriff and the Board
appealed from that portion of the circuit court's
order. Id. The circuit court had previously
entered a partial summary judgment, finding that the
deputy sheriff's complaint had been properly before
the Board for its consideration; the sheriff cross-
appealed from that portion of the judgment. Id.
"In determining that, although the sheriff was
the prevailing party below, the sheriff had the
right to cross-appeal the circuit court's finding on
the grievability issue, this court observed that
'the court's decision could have a prejudicial
effect on [the sheriff's] authority to assign and
discipline subordinates in his department.' Id. at
866. This court considered the case of Price v.
South Central Bell, 294 Ala. 144, 313 So. 2d 184
(1975), in reaching its conclusion as to that matter
10
1130393
in Bailey. In Price, the prevailing party below and
1
the appellee before the Alabama Supreme Court
attempted to circumvent the decision reached on the
merits in its favor in the circuit court and to
avoid a potentially unfavorable decision on appeal
by arguing that the action should have been
dismissed because the appellant had failed to
prosecute the action in the name of the real party
in interest. 294 Ala. at 150, 313 So. 2d at 189.
The Alabama Supreme Court explained that '[i]f an
appellee wishes to have rulings of the trial court
adverse to it reviewed, an appellee must either take
a cross-appeal or cross-assign errors upon the
record brought up by appellant.' Id.
"This court determined in Bailey that the
sheriff merely had the right to cross-appeal, not to
initiate an independent appeal on the grievability
issue. The main opinion in the present case
improperly expands that determination to allow for
an independent appeal for appellants who are the
prevailing parties in the circuit court. The
reliance on Price by this court in Bailey supports
the assertion that the sheriff in Bailey, and TRI in
the present case, would not have standing to bring
an independent appeal because they were the
prevailing party in the lower court.
"In Hollywood Mobile Estates, Ltd. v. Seminole
Tribe of Florida, 641 F.3d 1259, 1265 (11th Cir.
2011), cited in Alabama Department of Environmental
Management v. Friends of Hurricane Creek, [114 So.
3d 47 (Ala. Civ. App. 2012)], ... the Eleventh
Circuit Court of Appeals observed:
"'"'[W]e should not speculate concerning
the existence of standing'" because we
"'lack[] the power to create jurisdiction
by embellishing a deficient allegation of
injury.'"
DiMaio
v.
Democratic
Nat'l
Comm.,
520 F.3d 1299, 1301 (11th Cir. 2008)
11
1130393
(quoting Elend v. Basham, 471 F.3d 1199,
1206 (11th Cir. 2006)).'
"TRI filed the present appeal to this court on April
26, 2010. ARA filed an appeal of the Commission's
decision to the Montgomery Circuit Court on May 26,
2010. Thus, at the time TRI filed its appeal, no
appeal by ARA of the Commission's decision in favor
of TRI was pending. As a result, any purported
damage to TRI as a result of its potentially being
required to defend an appeal by ARA was only
speculative, not concrete, at the time TRI filed its
appeal. In accordance with the instruction of
Hollywood Mobile Estates, it would be error to
speculate so as to bestow TRI with standing to
appeal in this case.2
"With regard to TRI's argument, and the main
opinion's
agreement
therewith,
that,
had
the
Commission determined that ARA did not have
standing, TRI would not have been required to
undergo further litigation and incur expenses in
addressing the merits of the issuance of the permit,
___ So. 3d at ___, I note that, under such
circumstances, ARA could appeal the Commission's
decision that it did not have standing, causing TRI
to undergo further litigation, including costs and
time. TRI's argument is circular; to accept its
argument as the main opinion has done would allow
any prevailing party to claim as damage the
possibility of additional time and expense in
defending an appeal and/or further litigation by the
opposing party in any action. Indeed, had the
Commission determined that ARA did not have
standing, TRI might have been required to take on
the additional time and expense of defending an
appeal
of
that
decision
by
ARA
as
well.
Accordingly,
TRI
does
not
have
standing
to
independently appeal a decision wholly in its favor.
"The main opinion also agrees with TRI 'that the
Commission's ruling weakens procedural protections
12
1130393
against challenges to any permits TRI might require
for future operations.' ___ So. 3d at ___. Again,
the only support for that statement is grounded in
Bailey, which I have distinguished above. TRI
offered no further citation to authority in support
of that assertion. ...
"Because I believe the main opinion improperly
allows
TRI
to
bring
an
independent
appeal,
misconstruing Bailey, and because I believe TRI, as
a prevailing party below does not have standing to
bring this appeal, I would dismiss TRI's appeal.
"____________________
" This court also cited Katz v. Red Top Sedan
1
Service, Inc., 136 So. 2d 11 (Fla. Dist. Ct. App.
1962). In that case, however, the appellants had
been successful in the circuit court, but assigned
errors based on their assertion that the damages
awarded had been too minimal. Id. Thus, the
decision in that case has no bearing on the
considerations at issue in the present case.
" See also ACS Enters., Inc. v. Norristown
2
Borough Zoning Hearing Bd., 659 A.2d 651, 654 (Pa.
Cmwlth.
Ct.
1995)
('[A]
prevailing
party's
disagreement with the legal reasoning or basis for
a decision does not amount to a cognizable
aggrievement necessary to establish standing. ...
[T]he mere possibility of future litigation does not
satisfy the requirement that to be considered an
aggrieved party, the party's interest must be
immediately affected by a decision.')."
Tuscaloosa Resources, ___ So. 3d at ___ (Moore, J.,
dissenting). Judge Moore properly concluded that TRI did not
have standing to file an independent appeal from the judgment
entered in TRI's favor.
13
1130393
Conclusion
Based on the foregoing, the judgment of the Court of
Civil Appeals is reversed and the case remanded to that court
for proceedings consistent with this opinion.
REVERSED AND REMANDED.
Stuart, Bolin, Main, Wise, and Bryan, JJ., concur.
Moore, C.J., and Murdock and Shaw, JJ., concur in the
result.
14
1130393
MURDOCK, Justice (concurring in the result).
I agree with Judge Moore's, and therefore the main
opinion's, understanding of Personnel Board of Jefferson
County v. Bailey, 475 So. 2d 863 (Ala. Civ. App. 1985), and
why it fails to support the proposition that a prevailing
party in a case can file an appeal independent of an appeal by
the losing party. I am concerned, however, by the manner in
2
which Judge Moore and this Court in the main opinion both use
"standing" terminology to refer to an aggrieved party's right
to appeal. I believe this moniker presents the potential for
I would stop short of the notion expressed in Justice
2
Shaw's special writing that, even in the absence of an appeal
by the deputy sheriff of the circuit court's ultimate decision
that he was not entitled to reinstatement, there was "nothing
preventing Sheriff Bailey from filing an independent appeal
from the adverse judgment against him in the declaratory-
judgment action" regarding the proper role of the Jefferson
Personnel Board. ___ So. 3d at ___ (Shaw, J., concurring in
the result). I believe it fairly could be questioned whether,
had the deputy acquiesced in the circuit court's decision
reversing the personnel board's action on its merits, there
would have continued to be a present and actual controversy of
the nature contemplated by the Declaratory Judgment Act, §
6–6–220 et seq., Ala. Code 1975, or the requirement of an
ongoing "case or controversy" under Art. VI, § 139, Alabama
Constitution 1901, for the continuation of an appeal. See Ex
parte Valloze, 142 So. 3d 504, 508 and n.2 (Ala. 2013). See
also Harper v. Brown, Stagner, Richardson, Inc., 873 So. 2d
220, 223 (Ala. 2003) ("For a declaratory-judgment action to
withstand a motion to dismiss there must be a bona fide
justiciable controversy that should be settled.").
15
1130393
confusion with the concept of, and the prerequisites for, the
"standing" to sue that so often has drawn the attention of
this Court in recent years.
Indeed, this potential appears to be realized to some
extent even in Judge Moore's dissenting opinion. In a portion
of Judge Moore's dissent quoted by the main opinion, he states
that "'any purported damage to [Tuscaloosa Resources, Inc.
("TRI"),] as a result of its potentially being required to
defend an appeal by [Alabama Rivers Alliance and Friends of
Hurricane Creek (collectively "ARA")] was only speculative,
not concrete, at the time TRI filed its appeal.'" ___ So. 3d
at ___ (quoting Tuscaloosa Res., Inc. v. Alabama Dep't of
Envtl. Mgmt., [Ms. 2120432, Oct. 4, 2013] ___ So. 3d ___, ___
(Ala. Civ. App. 2013) (Moore, J., dissenting)). This
statement implies that, but for the timing of things (the fact
that ARA had not yet filed its own appeal when TRI attempted
to file its appeal), the litigation costs and time that TRI
would incur in defending an appeal by ARA should be considered
a form of "injury" that would be relevant to a "standing"-to-
appeal analysis. I find this implication to be contrary to
the view embodied in the next paragraph of Judge Moore's
16
1130393
writing (with which I fully agree) that the time and expense
of defending an appeal brought by an opposing party is not the
type of injury that informs a "standing" analysis. Tuscaloosa
Resources, ___ So. 3d at ___ (Moore, J., dissenting).
Standing is a concept concerned with substantive rights and
injuries, not appellate-litigation time and costs.
The "standing" commonly addressed by this Court is a
concept that speaks to whether a litigant has the requisite
personal, concrete interest to invoke the aid of the courts in
the first place, i.e., to file a complaint commencing an
action. TRI, or a litigant in its position, does not lose
whatever personal, concrete interest it had at the outset of
the litigation merely by virtue of prevailing in the initial
adjudication of the dispute in a lower court or other
tribunal; until such time as the adjudication of the dispute
is at an end by virtue of the exhaustion of, or lack of proper
invocation of, the appellate process, such a party has as much
of an interest in relation to the dispute as it always had
(and even then has what we normally think of as "standing" to
seek enforcement of the judgment in its favor).
17
1130393
Although they may be somewhat analogous, the restraining
principle at issue here and the issue of "standing" are two
different things. See generally Joan Steinman, Shining
a
Light
in a Dim Corner: Standing to Appeal and the Right to Defend a
Judgment in the Federal Courts, 38 Ga. L. Rev. 813 (Spring
2004); 15A Charles Alan Wright, Arthur R. Miller & Edward H.
Cooper, Federal Practice and Procedure § 3902.1 (2d ed. 1992).
The term "standing to appeal," which admittedly has been used
by federal courts, is in actuality merely a way of referring
to a statutorily granted "procedural right" to have some
higher court conduct some further review of one's case.
"Congress has vested appellate jurisdiction in
the courts of appeals for review of final decisions
of
the
district
courts.
28
U.S.C.
§
1291.
Ordinarily, only a party aggrieved by a judgment or
order of a district court may exercise the statutory
right to appeal therefrom. A party who receives all
that he has sought generally is not aggrieved by the
judgment affording the relief and cannot appeal from
it. Public Service Comm'n v. Brashear Freight
Lines, Inc., 306 U.S. 204 (1939); New York Telephone
Co. v. Maltbie, 291 U.S. 645 (1934); Corning v. Troy
Iron & Nail Factory, 15 How. 451 (1854); 9 J. Moore,
Federal Practice ¶ 203.06 (2d ed. 1975). The rule
is one of federal appellate practice, however,
derived
from
the
statutes
granting
appellate
jurisdiction and the historic practices of the
appellate courts; it does not have its source in the
jurisdictional limitations of Art. III[, U.S.
Const.]."
18
1130393
Deposit Guar. Nat'l Bank v. Roper, 445 U.S. 326, 333-34 (1980)
(emphasis added).
3
That said, I agree with the main opinion to the extent it
can be read as standing for the proposition that TRI was the
prevailing party before the Commission and therefore did not
have the "right" to file an appeal. Further, of course, even
with the subsequent filing of an appeal by ARA, TRI had no
right to "piecemeal" to some different "appellate"
tribunal --
i.e., other than one to which ARA had properly appealed -- its
request for consideration of an alternative ground for
upholding the lower tribunal's decision (which is what ARA's
alleged lack of "standing" to sue would have been in this case
had it been meritorious). Nor could TRI "piecemeal" a cross-
appeal (if it had a basis for one, which, unlike the sheriff
in Bailey, I do not believe it does), to some "appellate"
tribunal other than the one in which the losing party properly
filed its appeal.
If there is any constitutional constraint on the ability
3
of a prevailing party to appeal in the absence of an appeal by
the losing party, it might be the loss of a continuing "case
or controversy" as a result of the loss of an adverse party.
19
1130393
SHAW, Justice (concurring in the result).
I am not convinced that the decision relied upon by the
Court of Civil Appeals, Personnel Board of Jefferson County v.
Bailey, 475 So. 2d 863 (Ala. Civ. App. 1985), supports that
court's decision. Specifically, the cross-appellant in that
case, Sheriff Bailey, had filed a declaratory-judgment action
seeking a determination whether the appellant, the Personnel
Board of Jefferson County ("the Board"), had the power to
overrule his personnel decision. He also filed what was
deemed
as
a
separate
common-law
certiorari
petition
challenging the merits of the Board's holding that overruled
his personnel decision.
Sheriff Bailey first received a nonfinal adverse judgment
on the declaratory-judgment action and then also later
received a favorable judgment on the certiorari petition. The
Board appealed from the judgment against it on the certiorari
petition, and Sheriff Bailey cross-appealed from the adverse
judgment against him on the declaratory-judgment action.
Even
if the Board had filed no appeal, I see nothing preventing
Sheriff Bailey from filing an independent appeal from the
adverse judgment against him in the declaratory-judgment
20
1130393
action. The analysis in Bailey, which focused on whether
Sheriff Bailey could appeal from a favorable judgment, was
misplaced--he was not appealing the favorable judgment on the
certiorari petition. I see no support in Bailey for the Court
of Civil Appeals' decision in the instant case on the issue
whether a party may appeal from a favorable judgment.
Both the Court of Civil Appeals' decision in the instant
case, as well as Judge Moore's dissenting opinion, which is
quoted at length in the main opinion, rely on the test for
standing found in Lujan v. Defenders of Wildlife, 504 U.S. 555
(1992). In my dissenting opinion in Ex parte Alabama
Educational Television Commission, [Ms. 1111494, Sept. 27,
2013] ___ So. 3d ___ (Ala. 2003), I rejected the application
of Lujan in situations other than general constitutional
challenges, especially when the legislature provides a cause
of action and subject-matter jurisdiction by statute.
This case does not present a general constitutional
challenge. Further, the legislature, in Ala. Code 1975, § 41-
22-20(a), has provided Tuscaloosa Resources, Inc., with the
right to appeal to the trial court when it is "aggrieved" by
a decision of the Environmental Management Commission ("the
21
1130393
Commission"). I agree with the portion of Judge Moore's
dissent, quoted in the main opinion, demonstrating that any
"purported damage" to TRI by the Commission's decision is only
speculative and based on conjecture. I thus do not believe
that TRI was "aggrieved" by the Commission's decision for
purposes of § 41-22-20(a).
22 | September 26, 2014 |
68a9142c-a92d-411f-a632-d09d59b88878 | Alabama Municipal Insurance Corporation v. Willie Allen | N/A | 1121006, 1121014, 1121038, 1121039 | Alabama | Alabama Supreme Court | REL: 9/26/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
SPECIAL TERM, 2014
____________________
1121006
____________________
Alabama Municipal Insurance Corporation
v.
Willie Allen
Appeal from Madison Circuit Court
(CV-08-901036)
____________________
1121014
____________________
Alabama Municipal Insurance Corporation
v.
Amber Holmes
Appeal from Madison Circuit Court
(CV-09-901297)
____________________
1121038
____________________
City of Madison
v.
Amber Holmes
Appeal from Madison Circuit Court
(CV-09-901297)
___________________
1121039
____________________
City of Madison
v.
Willie Allen
Appeal from Madison Circuit Court
(CV-08-901036)
PER CURIAM.
The issue in these four appeals is whether the $100,000
statutory cap of § 11-47-190, Ala. Code 1975, applies when a
peace officer, acting outside his employment, is sued in the
officer's individual capacity.
2
1121006; 1121014; 1121038; 1121039
Facts and Procedural History
On January 6, 2008, Amber Holmes and Willie Allen were
injured in an automobile accident when the car they were in
was struck by a police patrol car driven by Richard Alan
Beard. At the time of the accident, Beard, who was employed
by the City of Madison Police Department as a patrol officer,
was on his way to work and was late for his shift. The City of
Madison ("the City") allows its police officers to drive their
patrol cars to their homes, to work, and to gym facilities
(the City pays officers for the time they spend exercising).
Beard was traveling 103 miles per hour in a 45-mile-per-hour
zone at the time of the accident. A drug test performed on
Beard after the accident indicated the presence of marijuana
in his system.
The City had an automobile-insurance policy with Alabama
Municipal Insurance Corporation ("AMIC"). The patrol car
assigned to Beard was included in the policy. The policy
provides:
"1. Who is an Insured
"The following are 'insureds':
"a. You for any covered 'auto'.
3
1121006; 1121014; 1121038; 1121039
"b.
Anyone
else while
using
with your permission
a covered 'auto' you own, hire or borrow ...."
On October 28, 2008, Allen sued Beard individually,
alleging negligence and wantonness. Allen sued State Farm
Mutual
Insurance
Company
("State
Farm"),
seeking
uninsured/underinsured-motorist benefits because the car
driven by Allen and owned by Holmes was insured by State Farm.
Allen also sued
his
car insurer, Government Employee Insurance
Corporation,
seeking
uninsured/underinsured-motorist
benefits.
On November 30,
2009,
Holmes sued Beard individually, alleging
negligence and wantonness. Holmes also sued her insurer,
1
State
Farm,
seeking
uninsured/underinsured-motorist
benefits.
2
On December 30, 2009, State Farm filed a cross-claim
against Beard and purported o file a cross-claim against the
City seeking reimbursement and subrogation for medical
benefits paid to Allen. On November 22, 2010, the City filed
a motion to dismiss the cross-claim, asserting that it was not
named in the complaint and that, therefore, no cross-claim
Neither
Allen's
nor
Holmes's
complaint
alleged
that
Beard
1
was acting in the line of duty at the time of the accident.
These proceedings were stayed while criminal charges
2
against Beard were pursued. Subsequently, the stay was
lifted.
4
1121006; 1121014; 1121038; 1121039
could be filed against it. On January 14, 2011, the trial
court granted the City's motion to dismiss the cross-claim.
On September 20, 2011, Beard filed a motion for a partial
summary judgment (on the issue of damages in both actions,
arguing that the $100,000 damages cap of § 11-47-190, Ala.
Code 1975, and § 11-93-2, Ala. Code 1975, read in conjunction
with the indemnification provisions of § 11-47-24, Ala. Code
1975, applied because he was on duty when the accident
occurred. On November 7, 2011, the trial court consolidated
the actions for trial. The trial court denied Beard's
summary-judgment motion seeking to apply the damages cap.
Beard filed a renewed motion for a partial summary judgment
before trial, again arguing that the $100,000 damages cap
applied in both Allen's and Holmes's actions against him. The
trial court denied the renewed motion for a partial summary
judgment.
Following ore tenus proceedings, the trial court, on
September 25, 2012, entered a judgment in favor of Allen and
against Beard in the amount of $700,000 and a separate
judgment in favor of Holmes and against Beard in the amount of
$1,100,000. In both orders, the trial court stated:
5
1121006; 1121014; 1121038; 1121039
"Ala. Code 1975, Section 11-93-2, limits the
recovery of damages against a governmental entity to
$100,000.00 for bodily injury for one person in any
single occurrence. However, under the language of
the statute and the facts of this case, the
limitation on recovery does not apply to this
judgment against the individual defendant, Richard
Alan Beard."
On November 6, 2012, the City and AMIC filed a joint
motion to intervene in the consolidated action. In their
motion, the City and AMIC argued that both the City and AMIC
were the real parties in interest relating to the collection
of the judgment because Beard was employed by the City and, at
the time of the accident, was driving a car issued to him by
the City and insured by AMIC. AMIC admitted that Beard was an
insured under its policy with the City. That same day, the
City filed a motion to deposit $100,000 with the court to
satisfy the judgment entered in favor of Allen and $100,000 to
satisfy
the
judgment
entered
in
favor
of
Holmes.
Specifically, the City stated:
"The Final Judgment entered against Defendant
Beard was based on his negligence while acting
within the scope of his duties and operating a motor
vehicle as a police officer for the City of Madison.
Thus, pursuant to § 11-47-24, [Ala. Code 1975,] the
City of Madison is required to indemnify Defendant
Beard for the judgment entered against him based
upon his negligence while operating a motor vehicle
engaged in the course of his employment. However,
6
1121006; 1121014; 1121038; 1121039
pursuant to § 11-47-190, [Ala. Code 1975,] when
indemnifying an employee for a judgment entered
against him pursuant to § 11-47-24, the City cannot
be required to pay an amount in excess of $100,000
per injured person. See Ala. Code [1975,] § 11-47-
190; Benson v. City of Birmingham, 659 So. 2d 82
(Ala. 1995). Therefore, the cap in § 11-47-190
applies, and the City of Madison can only be
required to pay up to $ 100,000 of the final
judgment entered against Defendant Beard.
"Furthermore, the cap on damages in § 11-47-190
applies to the judgment entered against Defendant
Beard. As previously stated, § 11-47-190 provides,
'no recovery may be had under any judgment or
combination of judgments, whether direct or by way
of indemnity under Section 11-47-24, or otherwise,
arising out of a single occurrence against a
municipality, and/or any officer or officers, or
employee or employees, or agents thereof, in excess
of a total of $100,000.' Ala. Code [1975,] § 11-47-
190. As the Alabama Supreme Court explained in
Benson v. City of Birmingham, '[t]he need to
preserve the public coffers does not disappear
simply because the plaintiff has proceeded against
a negligent employee of the municipality rather
than, or in addition to, proceeding directly against
the municipality.' 659 So. 2d at 86. The legislature
affirmed this principle when it passed § 11-47-190,
capping damages against municipalities as well as
the
officers,
employees,
and
agents
of
municipalities. See id. at 87. Defendant Beard was
acting as a City of Madison police officer at the
time of the incident made the basis of this cause of
action. Therefore, the $100,000 cap contained in §
11-47-190 applies to the Final Judgment entered
against Defendant Beard.
"On October 25, 2012 the City tendered the sum
of $100,000.00 payable to Willie Allen to satisfy
this judgment. Counsel for Allen rejected this
payment and refused the tender. Attached hereto,
7
1121006; 1121014; 1121038; 1121039
labeled as Exhibit A hereof and made a part hereof
by reference, is a copy of the hand-delivered letter
with attached check.
"Therefore, the City of Madison wishes to
deposit with this Court the sum of $100,000.00 in
damages as full and final satisfaction of this
judgment.
"Pursuant to Rule 67 of the Alabama Rules of
Civil Procedure, the City of Madison, Alabama,
requests that this Court enter an order authorizing
the deposit into the Registry of the Court, the sum
of $100,000.00, and that such sum be deposited by
the Clerk into an interest bearing account with the
Court's authorized banking institution at the rate
of interest prevailing on the date of the deposit.
The City of Madison further requests that the money
not be released to the Plaintiff, except upon full
and final satisfaction of this judgment."
Both Allen and Holmes objected to the joint motion to
intervene. On November 8, 2012, AMIC filed motions for a
declaratory judgment in both actions, arguing that the City
was required to provide Beard with defense counsel under § 11-
47-24 and to indemnify him for any judgment rendered against
him. AMIC further argued that the judgment collected by Allen
or Holmes against Beard is limited to $100,000 under § 11-47-
190.
On December 26, 2012, the trial court granted the joint
motion to intervene but denied the City's motion to deposit
money to satisfy the judgments. On December 27, 2012, Allen
8
1121006; 1121014; 1121038; 1121039
filed a response to AMIC's declaratory-judgment motion and
asserted
additional
defenses,
including
res
judicata,
collateral estoppel, statute of limitations, failing to issue
a "reservation of rights," and Beard's failure to appeal the
trial court's order on the application of the $100,000 cap.
Allen also filed a counterclaim pursuant to §§ 27-23-1 and
27-23-2, Ala. Code 1975, seeking to apply AMIC's insurance
policy to satisfy the judgment. On January 13, 2013, Holmes
filed a response to AMIC's motion for a declaratory judgment
and asserted the same additional defenses asserted by Allen,
along with an argument that § 11-93-2, § 11-47-24, and § 11-
47-190 do not apply to a suit against a governmental employee
in his individual capacity. Holmes also asserted a direct-
action counterclaim against AMIC pursuant to §§ 27-23-1 and
27-23-2.
On January 28, 2013, the City filed a motion "to alter,
amend, or vacate" the trial court's order denying its motion
to deposit money to satisfy the judgments. On February 1,
2013, Beard filed a motion to substitute the City as the real
party in interest.
9
1121006; 1121014; 1121038; 1121039
On March 19, 2013, Allen filed a summary-judgment motion,
arguing that Beard was sued in his individual capacity, that
the City was never sued, that Beard failed to appeal the trial
court's findings that he was not engaged in the performance of
his duties or engaged in work for the City at the time of the
accident, and that, therefore, the municipal-damages cap did
not apply. Allen further argued that because the $100,000
municipal-damages cap did not apply, AMIC as the insurer for
the vehicle operated by Beard was obligated to pay the entire
judgment. On March 26, 2013, Holmes filed a summary-judgment
motion, also arguing that the statutory cap of § 11-47-190
does not apply to an action against a government employee who
is sued in his individual capacity.
On April 12, 2013, the trial court held a hearing on all
pending motions. On April 24, 2013, the trial court entered
an order denying the City's motion to alter, amend, or vacate
its judgment of December 26, 2012, in which the trial court
had denied the City's motion to deposit funds. The trial court
also denied Beard's motion for substitution and entered a
summary judgment in favor of Allen and Holmes and against
AMIC. The City and AMIC appealed separately.
10
1121006; 1121014; 1121038; 1121039
Discussion
The dispositive issue in this case is whether the
$100,000 statutory cap of § 11-47-190 applies when a municipal
peace officer, acting outside his employment with the
municipality, is sued in his individually capacity.
The City argues in case no. 1121038 and case no. 1121039
that the trial court erred in not allowing it to deposit
$100,000 to satisfy the judgment in favor of Allen and
$100,000 to satisfy the judgment in favor of Holmes because
the second sentence of § 11-47-190 uses the phrase "no
recovery of any judgment." The City argues that this phrase
includes a judgment obtained against a
municipal
peace officer
who has been sued in his individual capacity. The City
further argues that § 11-47-24 requires the City to indemnify
its employees for their negligent actions, regardless of
whether the employee is sued in his or her official capacity
or individual capacity. The City argues that, under § 11-47-
24, it is the real party in interest, because it is obligated
to defend and indemnify its employees. Lastly, the City
argues that the trial court should have allowed it to deposit
money to satisfy the judgments because the City's liability is
11
1121006; 1121014; 1121038; 1121039
limited under the statutory cap, and, even if the cap is not
applicable, the City should have been allowed to deposit the
money to stop the accrual of interest on the final judgment.
AMIC argues in case no. 1121006 and case no. 1121014 that
§ 11-47-190 applies to "any judgment" against a municipal
employee. AMIC argues that § 11-47-190 has no field of
operation if it applies only to claims against municipal
employees sued in their official capacity or as a result of
acts occurring within the line of their duty. AMIC further
argues that the historical context of the amendment to § 11-
47-190 and Benson v. City of Birmingham, 659 So. 2d 82, 87
(Ala. 1995), indicate that § 11-47-190 applies to reduce the
collection of "any judgment." AMIC contends that neither
Allen nor Holmes specifically stated that Beard was being sued
in his individual capacity. AMIC argues that Holmes and Allen
do not have standing to challenge the City's indemnification
of Beard under § 11-47-24. Lastly, AMIC argues that § 11-47-
190 is a collections cap and serves to limit the amount Holmes
and Allen can collect against AMIC as the City's insurer.
Section 11-93-2 provides a $100,000 cap for recovery
against "a governmental entity," which, as defined in § 11-93-
12
1121006; 1121014; 1121038; 1121039
1(1), Ala. Code 1975, includes both municipalities and
counties. Under § 11-47-24(a), municipal corporations are
required
to
indemnify
their
employees
under
certain
situations:
"Whenever any employee of a municipal corporation of
the State of Alabama shall be sued for damages
arising out of the performance of his official
duties, and while operating a motor vehicle or
equipment engaged in the course of his employment,
such government agency shall be authorized and
required to provide defense counsel for such
employees in such suit and to indemnify him from any
judgment rendered against him in such suit. In no
event shall a municipal corporation of the state be
required to provide defense and indemnity for
employees who may be sued for damages arising out of
actions which were either intentional or willful or
wanton."
Section 11-47-190 provides:
"No city or town shall be liable for damages for
injury done to or wrong suffered by any person or
corporation, unless such injury or wrong was done or
suffered through the neglect, carelessness, or
unskillfulness of some agent, officer, or employee
of the municipality engaged in work therefor and
while acting in the line of his or her duty, or
unless the said injury or wrong was done or suffered
through the neglect or carelessness or failure to
remedy some defect in the streets, alleys, public
ways, or buildings after the same had been called to
the attention of the council or other governing body
or after the same had existed for such an
unreasonable
length
of
time
as
to
raise
a
presumption of knowledge of such defect on the part
of the council or other governing body and whenever
the city or town shall be made liable for damages by
13
1121006; 1121014; 1121038; 1121039
reason of the unauthorized or wrongful acts or
negligence, carelessness, or unskillfulness of any
person
or
corporation,
then
such
person
or
corporation shall be liable to an action on the same
account by the party so injured. However, no
recovery
may
be
had
under
any
judgment
or
combination of judgments, whether direct or by way
of indemnity under Section 11-47-24, or otherwise,
arising out of a single occurrence, against a
municipality, and/or any officer or officers, or
employee or employees, or agents thereof, in excess
of a total $100,000 per injured person up to a
maximum of $300,000 per single occurrence, the
limits set out in the provisions of Section 11-93-2
notwithstanding."
Both the City and AMIC cite Suttles v. Roy, 75 So. 3d 90
(Ala. 2010). In Suttles, a pedestrian sued the City of
Homewood and one of its police officers, who was driving a
motorcycle that struck her. The police officer was sued in
both his official and individual capacities. Homewood and the
officer argued that the officer was immune from suit in his
individual capacity because, they argued,
he was acting within
the line and scope of his employment. This Court noted that
a sheriff and municipal peace officers are protected from
suits seeking damages from them in their individual capacity
by two different forms of immunity: Sheriffs are protected by
State immunity under Ala. Const. 1901, art. I, § 14, and
municipal
peace
officers
are
protected
by
State-agent
immunity
14
1121006; 1121014; 1121038; 1121039
under the principles set out in Ex parte Cranman, 792 So. 2d
392 (Ala. 2000). We noted that it appeared that the trial
court had not yet addressed whether the facts would support a
finding that the officer was entitled
to
State-agent immunity.
In Suttles, Homewood and the officer argued that if the
pedestrian could sue the officer in his individual capacity,
then the recoverable damages against the officer were capped
at $100,000 under § 11-47-190. This Court stated that,
although
the statutory cap on recovery against "a
governmental
entity" set forth in § 11-93-2 applied to a suit against a
municipal employee in his official capacity, it did not apply
to a suit against a municipal employee who is sued in his
individual capacity. With regard to § 11-47-190, this Court
noted:
"[The officer] and Homewood also state in the
'summary of argument' and the 'conclusion' portions
of their brief that the plain language of § 11-47-
190 provides that no recovery may be had against an
employee of a municipality in excess of $100,000,
regardless of whether the employee is sued in his
individual or official capacity. No explanation or
elaboration on this argument is found in the initial
brief, and no authority is cited supporting their
interpretation of the Code section. Therefore, we
decline to address this issue."
15
1121006; 1121014; 1121038; 1121039
75 So. 3d at 99 n.5. Additionally, when this Court overruled
the officer and Homewood's application for rehearing, Justice
Shaw concurred specially, stating:
"In the third issue in their brief on rehearing,
Homewood and [the officer] contend that, if [the
pedestrian] is able to assert individual-capacity
claims against [the officer], then any damages award
must be capped at $100,000 by Ala. Code 1975, §
11–47–190. As noted in the opinion on original
submission, we have refused to address this issue
based on the lack of argument regarding it in
Homewood and [the officer's] initial brief. Because
we do not address this issue, it must wait to be
resolved on another day."
75 So. 2d at 104 (emphasis added).
While the appeals in the present case were pending, the
issue whether claims against a municipal employee sued in his
individual capacity are subject to the statutory cap of § 11-
47-190 when those claims fall within the "willful and wanton"
exceptions to the doctrine of State-agent immunity under Ex
parte Cranman, 792 So. 2d 392 (Ala. 2000), was before this
Court in Morrow v. Caldwell, [Ms. 1111359, March 14, 2014]
So. 3d (Ala. 2014). This Court stated in Morrow:
"The first sentence of § 11-47-190 recognizes
the principle that municipalities are generally
immune from suit ('No city or town shall be liable
for damages ....') and then provides an exception
for actions seeking damages for the negligent acts
of the agents or employees of municipalities
16
1121006; 1121014; 1121038; 1121039
('unless such injury or wrong was done or suffered
through the neglect, carelessness, or unskillfulness
of some agent, officer, or employee'). There is no
exception in the statute allowing an action against
a municipality for the wanton or willful conduct of
its agents or employees. Cremeens v. City of
Montgomery, 779 So. 2d 1190, 1201 (Ala. 2000)('A
municipality
cannot
be
held
liable
for
the
intentional torts of its employees. See Ala. Code
1975, § 11-47-190 ....'); Town of Loxley v. Coleman,
720 So. 2d 907, 909 (Ala. 1998) ('This Court has
construed § 11–47–190 to exclude liability for
wanton misconduct.').
"Further, this Court has interpreted the first
sentence of § 11-47-190 as serving
"'to limit municipality liability to two
distinct
classes.
In
the
first
classification, the municipality may be
liable, under the doctrine of respondeat
superior, for injuries resulting from the
wrongful conduct of its agents or officers
in the line of duty. In the second
classification, the municipality may be
liable for injuries resulting from its
failure to remedy conditions created or
allowed to exist on the streets, alleys,
public ways, etc., by 'a person or
corporation not related in service to the
municipality.'
Isbell
v.
City
of
Huntsville, 295 Ala. 380, 330 So. 2d 607,
609 (1976); City of Birmingham v. Carle,
191 Ala. 539, 542, 68 So. 22, 23 (1915).
The municipality must have actual or
constructive notice of the condition. If
the claim is predicated under the second
classification, then the third party shall
also be liable. Isbell, supra, 330 So. 2d
at 609, Carle, 191 Ala. at 541-42, 68 So.
at 23.'
17
1121006; 1121014; 1121038; 1121039
"Ellison v. Town of Brookside, 481 So. 2d 890, 891-
92 (Ala. 1985).
"The second sentence of § 11-47-190, which
provides a cap on any recovery on a judgment
resulting therefrom, begins with the word 'however.'
The use of the sentence adverb (or conjunctive
adverb)
'however'
indicates
that
the
second
sentence
3
modifies the preceding sentence. Thus, it sets a
limit on the 'recovery' stemming from a 'judgment'
or 'judgments' that result from the liability
allowed by the exception contained in the first
sentence. So, while the first sentence provides
that a municipality may be liable for the negligent
acts of its agents or employees, the second
sentence, by starting with the word 'however,'
limits the 'recovery' from any such resulting
'judgment.' In other words, the 'recovery' that is
capped to $100,000 by the second sentence is the
recovery for any liability in a negligence action
allowed by the first sentence. Thus, when the
second sentence of § 11-47-190 is read in light of
the first sentence, it is clear that the second
sentence is meant to be a limitation on the amount
of damages a person or corporation may recover from
a municipality in those limited situations in which
the municipality may be held liable.
"Morrow advances a different reading of the
second sentence of § 11-47-190. Specifically, he
points to the language that 'no recovery may be had
under any judgment ... against ... any ... employee
... in excess of' $100,000 and contends that this
provides a blanket cap on any damages awarded
against any municipal agent or employee in any
action. In other words, he would interpret the
second sentence as limiting recovery from actions
that are different from the actions allowed by the
first sentence, including recovery in actions
alleging wanton or willful conduct against municipal
employees in their individual capacity. This
reading of § 11-47-190 improperly disconnects the
18
1121006; 1121014; 1121038; 1121039
second sentence from the context of the entire
section and fails to acknowledge the conjunctive
adverb 'however' that links the second sentence to,
and causes it to modify, the first sentence.
"Further, it is clear that the reference to
judgments against 'any officer or officers, or
employee or employees, or agents' in the second
sentence is made because of the need to be clear
that municipal liability is limited to $100,000 even
where that liability is a function of an action
against one of those persons in their official
capacity or of the special statutory indemnity
imposed on a municipality by 11-47-24, Ala. Code
1975. As to the former, in Smitherman v. Marshall
County Commission, 746 So. 2d 1001, 1007 (Ala.
1999), this Court held that 'claims against county
commissioners and employees in their official
capacity are, as a matter of law, claims against the
county and subject to the $100,000 cap contained in
§ 11-93-2[, Ala. Code 1975, capping damages against
governmental entities at $100,000].' Similarly,
claims that are brought against municipal employees
in their official capacity are also, as a matter of
law, claims against the municipality.
"By the same token, because of the need to be
clear that municipal liability is limited to
$100,000 even where that liability is a function of
an action against a municipal employee in his or her
official capacity or of the special statutory
indemnity imposed on the city by 11-47-24, the
second sentence of § 11-47-190 specifically
addresses 'judgments ... by way of indemnity under
Section 11-47-24' that arise from judgments against
'any officer or officers, or employee or employees,
or agents' of a municipality.
"Section 11-47-24, Ala. Code 1975, provides:
"'(a) Whenever any employee of a
municipal corporation of the State of
19
1121006; 1121014; 1121038; 1121039
Alabama shall be sued for damages arising
out of the performance of his official
duties, and while operating a motor vehicle
or equipment engaged in the course of his
employment,
such
government
agency
shall
be
authorized and required to provide defense
counsel for such employees in such suit and
to indemnify him from any judgment rendered
against him in such suit. In no event shall
a municipal corporation of the state be
required to provide defense and indemnity
for employees who may be sued for damages
arising out of actions which were either
intentional or willful or wanton.
"'(b) All municipal corporations of
the State of Alabama are hereby authorized
to contract at governmental expense for
policies of liability insurance to protect
employees
in
the
course
of
their
employment.'
"As this Court noted in Benson v. City of
Birmingham, 649 So. 2d 82, 87 (Ala. 1995), by
amending § 11-47-190 in 1994 to add the second
sentence, the legislature clarified the fact that
the limitation on recovery against a municipality
also limits the amount for which a municipality may
indemnify a negligent employee.
"Finally, no language in § 11-47-190 suggests
that it is intended to apply to claims against
municipal employees who are sued in their individual
capacities. Rather, when the statute is read as a
whole, it is clear that the limitation on recovery
in the second sentence of § 11-47-190 is intended to
protect the public coffers of the municipality, not
to protect municipal employees from claims asserted
against them in their individual capacity.4
20
1121006; 1121014; 1121038; 1121039
" A sentence or conjunctive adverb 'is a word
3
that modifies a whole previous statement. Frederick
Crews, The Random House Handbook 403 (6th ed. 1992).
" Under § 11–47–24(a), the City would not be
4
required to indemnify Morrow for any judgment
against him that was based on damage resulting from
his intentional, willful, or wanton conduct."
Morrow, So. 3d at .
In the present case, the City's and AMIC's arguments that
the second sentence of § 11-47-190, which provides that no
recovery from a municipality may be had under "any judgment,"
whether direct or by way of indemnification under § 11-24-74,
includes
"judgments"
against
an
employee,
ignore
the
placement
of the second sentence as a limitation on the "recovery"
stemming from the "judgments" that result from the liability
allowed by the first sentence in § 11-47-190. The first
sentence provides that a municipality may be liable for the
negligent acts of its agents or employees. The second
sentence, by starting with the word "however," limits the
"recovery" from any "judgment" resulting from that liability.
In other words, the "recovery" that is capped to $100,000 by
the second sentence is a recovery against a municipality in a
negligence action, as contemplated by the first sentence (as
well as a recovery against a municipality in an indemnity
21
1121006; 1121014; 1121038; 1121039
action, as also referenced in the second sentence). The City
and AMIC would interpret the second sentence as limiting
recovery from actions that are different from the actions
allowed by the first sentence, including actions against a
municipal employee in his or her individual capacity where
that employee was acting outside the line of his or her duty.
This reading disconnects the second sentence from the first.
It also ignores the language in the second sentence referring
to indemnification under § 11-47-24, which provides that an
employee's actions must "aris[e] out of the performance of his
official duties" in order for the municipality to have
liability when an employee is sued individually, and it
conflicts with Morrow.
The City argues that § 11-47-24 requires it to indemnify
its employees for their negligent actions, regardless of
whether the employee is sued in his or her individual or
official capacity. The City ignores the language in § 11-47-
24 that such conduct has to "aris[e] out of the performance of
his official duties" and "while the employee is engaged in the
course of his employment" with the municipality. Although
obligated under § 11-47-24 to defend and indemnify its
22
1121006; 1121014; 1121038; 1121039
employees when they are sued in their individual capacity,
that obligation
arises
only in reference to alleged misconduct
occurring in the performance of official duties.
The City argues that it is the "real party in interest"
under Rule 17, Ala. R. Civ. P., and § 11-47-24 because it is
obligated to defend and indemnify its employees. Rule 17
requires that "[e]very action shall be prosecuted in the name
of the real party in interest." (Emphasis added.) This Court
has stated that "'the real party in interest principle is a
means to identify the person who possesses the right sought to
be enforced.'" State v. Property at 2018 Rainbow Drive, 740
So. 2d 1025, 1027 (Ala. 1999)(quoting Dennis v. Magic City
Dodge, Inc., 524 So. 2d 616, 618 (Ala. 1988)). However, the
City would not supplant Beard as the real party in interest.
The fact remains that Allen and Holmes have sued Beard,
individually, and he is personally liable to them under the
judgments that have been entered. Even if the City had an
obligation under § 11-47-24 to indemnify Beard (which it does
not because his acts were found by the trial court in un-
appealed judgments to be outside the scope of his employment),
the City intervened, arguing that it was "the real party in
23
1121006; 1121014; 1121038; 1121039
interest relating to the collection of the judgment[s]"
because it had a duty to indemnify Beard, and it argued that
the judgments were limited to $100,000. Rule 17 applies to
ensure that an action is being "prosecuted" by the proper
plaintiff, and it serves to protect a defendant against a
subsequent action by the party actually entitled to relief.
The City has not cited any authority to support applying Rule
17 to an intervenor seeking to satisfy the judgments against
a defendant.
Lastly, the City argues that the trial court erred in not
allowing it to deposit $200,000 to satisfy both Allen's and
Holmes's judgments because § 11-47-24 requires
it
to indemnify
its employees. As discussed above, § 11-47-24 does not
require a municipality to indemnify those employees who are
acting outside the performance of official duties. In
conjunction with its argument regarding depositing the money
with the court, the City argues that it should have been
allowed to deposit the money in order to stop the accrual of
interest on any amount owed under the judgments. However, the
City did not raise this argument in the trial court. The
City's arguments at the trial court level were limited to
24
1121006; 1121014; 1121038; 1121039
depositing $200,000 to satisfy both judgments. It is well
settled that this Court will not reverse a trial court's
judgment based on arguments not presented to the trial court.
Lloyd Noland Hosp. v. Durham, 906 So. 2d 157 (Ala. 2005).
AMIC argues that § 11-47-190 has no field of operation if
it applies only to cases brought against a municipal employee
in his official capacity or for acts occurring within the line
of his duty. AMIC argues that, because § 11-93-2 (capping
damages at $100,000) is a cap on damages against a
governmental entity (which must necessarily be paid out of
public coffers), § 11-47-190 must also cover individual-
capacity claims against municipal employees (which would
otherwise be paid out of the employee's individual assets), or
there would be no distinction between the damages cap in § 11-
93-2 and the cap in § 11-47-190 because both would place a cap
on damages against municipal employees only in their official
capacity. In short, AMIC is arguing that § 11-93-2 and § 11-
47-190 would cover the same claims unless § 11-47-190 did not
also pertain to claims against municipal employees sued in
their individual capacity. However, AMIC ignores
the language
25
1121006; 1121014; 1121038; 1121039
in § 11-47-190 that the City's obligation to indemnify an
employee is limited.
We agree that municipal liability is limited to $100,000
even where that liability is a function of an action against
a municipal employee in his or her official capacity or of the
special statutory indemnity imposed on the municipality by §
11–47–24. The second sentence of § 11–47–190 specifically
addresses judgments by way of indemnity under § 11–47–24 that
arise from judgments against any officer or officers, or
employee or employees, or any agent or agents of the
municipality. When § 11-47-190 is read as a whole, it is
clear that the limitation on recovery in the second sentence
is intended to protect the public coffers of the municipality,
not to protect municipal employees from claims asserted
against them in their individual capacity.
Next, AMIC argues that the historical context of the 1994
amendment to § 11-47-190 and Benson v. City of Birmingham, 659
So. 2d 82, indicates that § 11-47-190 applies to reduce the
collection of "any judgment." First, we note that Benson
involved a judgment where the peace officer was acting within
the line of his duty for the purposes of imposing liability on
26
1121006; 1121014; 1121038; 1121039
the municipality under the doctrine of respondeat superior.
The present case involves actions arising outside the
employee's line of duty. Second, as already discussed, in
Morrow and Suttles we explained why the language used in § 11-
47-190 is not applicable to "any" judgment.
AMIC argues that Beard was not actually sued in his
"individual capacity" because neither Allen's nor Holmes's
complaints contain the phrase "individual capacity." Both
complaints allege facts indicating that Beard was acting
outside his employment as a police officer when the accident
occurred. The language of the complaint as a whole is
determinative of whether a municipal employee is being sued in
his or her individual or official capacity. Ex parte Alabama
Dep't of Mental Health, 837 So. 2d 808, 811-12 (Ala. 2002).
AMIC argues that Allen and Holmes do not have standing to
challenge the City's indemnification of Beard
under
§ 11-47-24
because, it says, there is no authority expressly prohibiting
the City from indemnifying Beard. The question before us is
not whether there is any statute that prohibits a municipality
from
voluntarily
indemnifying
an
employee
in
Beard's
position,
and we decline to address that issue. The question before us
27
1121006; 1121014; 1121038; 1121039
is whether there is a statute that obligates the City to do
so. For the reasons discussed above, we conclude that there
is not.
Lastly, AMIC argues that § 11-47-190 is a collection cap
and limits the amount Allen and Holmes can collect against
AMIC as the City's insurer. In support of this argument AMIC
cites St. Paul Fire & Marine Insurance Co. v. Nowlin, 542 So.
2d 1190 (Ala. 1988). In Nowlin, the plaintiff recovered a
$500,000 malpractice verdict against the Druid City Hospital
Board. The trial court, relying on § 11-93-2, reduced the
verdict to $100,000. This Court reinstated the verdict.
After remand, the trial court reinstated the original verdict
and entered a judgment thereon. The plaintiff, pursuant to §
27-23-2, obtained a writ of garnishment to collect $400,000
(the hospital board's insurer had paid the $100,000 reduced
verdict). The insurer and the hospital board objected to the
garnishment on the ground that, because § 11-93-2 limited the
hospital board's liability to $100,000, the insurer's
liability was also limited to $100,000. The trial court
ordered the garnishment to issue. This Court reversed the
trial court's judgment and held that § 11-93-2 was not
28
1121006; 1121014; 1121038; 1121039
unconstitutional, that § 11-93-2 limited the liability of the
insurer to $100,000, the liability of the hospital board, and
that § 11-93-2, therefore, limited the plaintiff's rights
under § 27-23-2 against the insurer.
Nowlin
is
distinguishable
because
in
Nowlin
the
municipality's liability was limited by the statutory damages
cap and, in turn, the municipality's insurer's liability was
also limited by the cap. In the present case, the statutory
damages cap does not apply to Allen's and Holmes's judgments
against Beard individually.
We note that it would be unlikely that a municipal
employee would by covered by insurance paid for by the
municipality
for
acts
outside
the
employee's
employment.
Here,
however, the City obtained an insurance policy for its police
cars. The City opted to have its police officers' vehicles
insured for activities outside the officers' employment, and
AMIC accepted premiums for such coverage and has admitted that
Beard was an insured under its policy with the City.
3
Conclusion
AMIC does not raise any argument as to whether the City
3
had the authority under § 11-47-24(b) to purchase insurance
for activities outside employment.
29
1121006; 1121014; 1121038; 1121039
The $100,000 statutory cap of § 11-47-190 does not apply
when a peace officer, acting outside his employment, is sued
in his individual capacity. The limitation on recovery in the
second sentence of § 11-47-190 is intended to protect the
public coffers of the municipality, not to protect municipal
employees from claims asserted against them in their
individual capacity. The cap on damages for claims against
a municipality does not limit the recovery on a claim against
a municipal employee, acting outside his employment, when he
is sued in his individual capacity. We recognize that
municipal employees were not the intended subject of the
legislature's enactment of § 11-17-190, and we also recognize
4
"[T]he fact and amount of liability by a municipal
4
employee in his or her individual capacity were not and are
not proper, or intended, subjects of the legislature's
enactment of §§ 11–47–190 and –191 and their predecessors.
Instead, employees, officers, and agents of a municipality
find themselves referenced in the last sentence of § 11–47–190
simply because of the need to be clear that governmental
liability is limited to $100,000 even where that liability is
a function of an action against one of those persons in his or
her official capacity or of the special statutory indemnity
obligation imposed on the municipality
by
§ 11–47–24, Ala.Code
1975. The legislature's use of the word 'however' to introduce
the second sentence of § 11–47–190, and the relationship
between the first and second sentences of § 11–47–190 that, as
discussed in the main opinion, it reflects, simply reinforces
this understanding." Morrow, So. 3d at . (Murdock, J.,
concurring specially) (emphasis omitted).
30
1121006; 1121014; 1121038; 1121039
that the legislature is better suited to speak
comprehensively
on the individual liability of municipal employees. Based on
the foregoing, the judgment in favor of Allen and against AMIC
is affirmed; the judgment in favor of Holmes and against AMIC
is affirmed; the judgment in favor of Holmes and against the
City is affirmed; and the judgment in favor of Allen and
against the City is affirmed.
1121006 –- AFFIRMED.
1121014 –- AFFIRMED.
1121038 –- AFFIRMED.
1121039 –- AFFIRMED.
Moore, C.J., and Stuart, Bolin, Parker, Shaw, Main, Wise,
and Bryan, JJ., concur.
Murdock, J., concurs in the rationale in part and concurs
in the result.*
*Although Justice Murdock did not attend oral argument in
this case, he has viewed a video recording of that oral
argument.
31
1121006; 1121014; 1121038; 1121039
MURDOCK, Justice (concurring in the rationale in part and
concurring in the result).
I concur in the main opinion with the exception of its
comment regarding the latter of the two issues addressed in
this writing. First, I wish simply to reiterate my
understanding that the $100,000 cap expressed in § 11-47-190,
Ala. Code 1975, would be inapplicable to a claim against
Richard Alan Beard in his individual capacity, even if the
claim had arisen from acts or omissions by Beard while acting
within the line and scope of his employment or, in the
language of § 11-47-24, Ala. Code 1975, "out of the
performance of his official duties." As explained in Morrow
v. Caldwell, [Ms. 1111359, March 14, 2014] ___ So. 3d ___
(Ala. 2014), and reconfirmed here, § 11-47-190 is intended to
protect municipal coffers; the cap on municipal liability
expressed therein is only that -- a cap on municipal
governmental liability (whether for payment of damages to a
third party or of indemnity to its own employee). The cap is
simply inapposite to a judgment against any other entity,
32
1121006; 1121014; 1121038; 1121039
including a municipal employee sued in his or her individual
capacity.5
The main opinion comments that "the legislature is better
suited to speak comprehensively on the individual
liability of
municipal employees." ___ So. 3d at ___. First, our existing
statutory and caselaw jurisprudence arguably already speaks
comprehensively to the question. State-agent immunity, as
developed extensively in our caselaw, will apply in most cases
involving municipal law-enforcement officials, particularly
when they are acting within the line and scope of their
duties; it will apply in many cases to non-law-enforcement
municipal employees. In addition, there may be instances in
which municipal employees are sued where, notwithstanding the
filing of a lawsuit by a third party, the nature of the
employee's obligations to his or her municipal employer do not
in fact also create a duty on the part of an employee to the
The nature of the employee's conduct may serve
to relieve
5
a municipality from any indemnity obligation at all (if the
tortious conduct does not arise out of the performance of
official duties), or it may leave the municipality with up to
a $100,000 obligation (if the tortious conduct does arise out
of the performance of official duties). Either way, it does
not apply to limit the amount of any underlying damages
verdict rendered against the employee personally, rather than
in his or her official capacity.
33
1121006; 1121014; 1121038; 1121039
third party. See generally, e.g., Morrow v. Caldwell, ___
So. 3d at ___ (Murdock, J., concurring specially) ("[T]he
question before us in this permissive appeal is limited to
whether, if an employee of a municipality is personally liable
for a tort he or she commits in the course of his or her
employment by a municipality, that liability can exceed the
$100,000 cap referenced in § 11–47–190. Any such liability,
however, would of course depend as a threshold matter on the
existence of a duty that was personal to the employee (not
merely a duty of his or her employer) and that ran to the
plaintiff (and not merely from the employee to his or her
employer). This and other questions concerning the
prospective liability of a municipal employee in Wayne
Morrow's position are not before us, and the main opinion
should not be understood as implying any answer to them.").
As to any circumstances outside the foregoing, i.e., where the
employee is not considered a State agent and has breached some
individual duty owed by him or her to a third party,
provisions of the Alabama constitution appear to present an
obstacle to a legislative prescription of limits
on
individual
liability. Id. (citing Garner v. Covington Cnty., 624 So. 2d
34
1121006; 1121014; 1121038; 1121039
1346 (Ala. 1993), and Home Indem. Co. v. Anders, 459 So. 2d
836 (Ala. 1984), for the proposition that, it is only because
"[t]he common-law doctrine of governmental immunity for
municipal and county governments predates ... the adoption of
the 1901 Constitution, that [that] doctrine survived the
adoption of that Constitution, including §§ 11 and 13 thereof
... and is subject to modification by the legislature"); see
also Smith v. Schulte, 671 So. 2d 1334 (Ala. 1995).
35 | September 26, 2014 |
64580f9d-1692-421c-a368-ead6d6278f35 | Smith v. B2K Systems, LLC et al | N/A | 1130742 | Alabama | Alabama Supreme Court | Rel: 09/12/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334)
229-0649), of any typographical or other errors, in order that corrections may be made
before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
SPECIAL TERM, 2014
_________________________
1130742
_________________________
Ex parte B2K Systems, LLC; Ingenuity International, LLC;
and Robert A. Przybysz
PETITION FOR WRIT OF MANDAMUS
(In re: Nannette Smith
v.
B2K Systems, LLC; Ingenuity International, LLC; and Robert
A. Przybysz)
(Jefferson Circuit Court, CV-14-00163)
MAIN, Justice.
1130742
B2K Systems, LLC, a Delaware limited-liability company;
Ingenuity
International,
LLC,
a
foreign
corporation
("Ingenuity");
and
Robert
A.
Przybysz
(hereinafter
referred
to
collectively as "the petitioners") petition for a writ of
mandamus seeking enforcement of an outbound forum-selection
clause and the reversal of a preliminary injunction entered by
the Jefferson Circuit Court. With respect to the forum-
selection-clause issue, we deny the petition. With regard to
the preliminary injunction, we treat the petition as a timely
filed direct appeal pursuant to Rule 4(a), Ala. R. App. P.,
and we reverse and remand.
I. Facts and Procedural History
This matter arises from a business dispute. The
respondent, Nannette Smith, was the founder and president of,
and the sole shareholder in, B2K Systems, Inc. ("B2K Inc"), a
Birmingham-based
Alabama
corporation
that
developed
specialized software for point-of-sale retailers. In August
2012, B2K Inc sold its assets to B2K Systems, LLC ("B2K LLC"),
a Delaware corporation set up for the purpose of acquiring B2K
Inc's assets. The purchase price totaled $6,900,000, with B2K
Inc to receive an initial payment of $200,000 and the
2
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remainder to be paid in monthly installments to B2K Inc and as
salaries paid to Smith and her son, Josh Smith. Although the
purchase price was to be paid incrementally, according to the
asset-purchase agreement B2K Inc's assets, including its
intellectual property, were to be transferred to B2K LLC
immediately upon closing in September 2012.
The asset-purchase agreement referenced various "related
agreements" to be executed as part of the purchase. Those
related agreements included a promissory note to be executed
by B2K LLC in favor of Smith and a guarantee of that note
executed by Ingenuity, a holding company owning the majority
shares of B2K LLC. The asset-purchase agreement also called
for B2K LLC and Smith to execute a five-year employment
agreement naming Smith president of B2K LLC and providing an
annual base salary of $200,000. Smith was also granted 20%
ownership of B2K LLC.
On September 1, 2012, Przybysz, the managing member and
CEO of B2K LLC and Ingenuity, executed the promissory note on
behalf of B2K LLC and the guaranty agreement on behalf of
Ingenuity. That same day, B2K LLC and Smith entered into the
employment
agreement,
pursuant
to
which
Smith
became
president
3
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of B2K LLC. Each agreement –- the asset-purchase agreement,
the employment agreement, the promissory note, and the
guaranty agreement -– contained a forum-selection clause.
Although the scope of the forum-selection clauses are in
dispute, they, at the least, established Kent County,
Michigan, as a permissible forum for resolution of disputes
arising from the various agreements. All the agreements
provided that the law of the State of Delaware would govern.
Following the purchase, relations between Smith and B2K
LLC deteriorated. B2K LLC stopped making the monthly payments
on the promissory note. On March 3, 2014, Przybysz, as the
managing member of B2K LLC, acted to terminate Smith's
employment with B2K LLC. Przybysz met with Smith in B2K LLC's
Birmingham office and handed her a termination letter, which
explained that the termination of her employment was "for
cause." The same day, B2K LLC filed for and received a
temporary restraining order ("TRO") from the Kent, Michigan,
Circuit Court. The TRO enjoined Smith from
"(a) entering onto any premises owned, leased,
and/or operated by [B2K LLC]; (b) contacting [B2K,
LLC]'s employees, vendors, and/or current customers,
(c) using or disclosing [B2K LLC]'s confidential
information, including passwords, logins, and/or
4
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client lists; and (d) soliciting any business from
[B2K LLC]'s current clients and customers."
Along with its request for the TRO, B2K LLC filed a
complaint in the Kent Circuit Court alleging Smith had
misrepresented the status of B2K LLC's projects, had
squandered resources on nonapproved budgeted expenses, had
misappropriated funds and equipment, had prepared fraudulent
expense reports, had sent fraudulent invoices to clients, and
had misrepresented insurance records. The complaint alleged
breach of Smith's employment agreement with B2K LLC, breach of
fiduciary duty, and breach of the asset-purchase agreement.
On March 4, 2014, the day after the Michigan TRO was
issued, Smith filed a complaint and a petition for a TRO in
the Jefferson Circuit Court ("the trial court"), seeking her
own TRO against the petitioners and also seeking monetary
damages for breach of the employment contract and the
promissory note. Smith's complaint alleged that B2K LLC had
failed to make the monthly payments required under the note
and that B2K LLC had failed to honor her employment agreement.
Smith requested a TRO restraining the petitioners as follows:
"a.
Precluding the [petitioners] from entering,
visiting, or otherwise disturbing the business
5
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of B2K LLC and any other business located on
the premises of [B2K LLC's office location];
"b.
Precluding the [petitioners] from removing any
assets, tangible or intangible, including
software,
hardware,
property,
intellectual
property, or any other asset contemplated by
the purchase agreement referenced herein;
"c.
Precluding the [petitioners] from enforcing the
out-of-state order;
"d.
Precluding the [petitioners] from copying,
scanning,
altering,
changing,
running,
removing, using, destroying, and/or wasting any
code,
intellectual
property,
software,
passwords,
computer
programs,
computers,
servers,
tablets,
printers,
cds,
storage
devices,
flash
drives,
external
storage,
internal storage, hard drives, external hard
drives, USB drives, or any other item that
stores information;
"e.
Further, the [petitioners] shall be precluded
from interfering with [Smith] and any other
employees of B2K LLC from the normal operation
of their business including the use of the
assets in the furtherance of the business;
"f.
The
[petitioners]
are
precluded
from
terminating Smith from her employment without
cause until a hearing on the merits may be had;
"g.
All parties shall maintain the status quo until
such time as a hearing on the merits can be
preformed and a trial on the merits for the
other claims obtained;
"h.
Any other and further relief that this Court
deems appropriate."
6
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On March 4, the trial court issued the TRO and set a
hearing on a preliminary injunction for March 12, 2014. That
same day, the petitioners moved to dissolve the TRO and to
dismiss Smith's lawsuit, arguing, in part, that under the
various forum-selection clauses contained in the parties'
agreements, either the Kent, Michigan, Circuit Court or the
United States District Court for the Western District of
Michigan were the exclusive forums for Smith's lawsuit. On
March 10, Smith filed a response in opposition to the
petitioners' motion to dismiss. Smith argued that venue in
the trial court was proper, that the forum-selection clauses
were permissive rather than mandatory, and that Michigan was
a seriously inconvenient forum. On March 11, 2014, Smith
filed an amended complaint adding two additional claims, one
alleging breach of the asset-purchase agreement and another
alleging breach of the guaranty agreement.
On March 12, 2014, the trial court conducted an
evidentiary hearing, which included the testimony of Smith,
Przybysz, and other witnesses. On March 26, 2014, the trial
court issued a preliminary injunction. In its order, the
trial court addressed and rejected the petitioners' argument
7
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that Michigan was the proper forum for the dispute. The trial
court noted that the forum-selection clauses were "inartful"
and concluded that venue was proper in both Alabama and
Michigan.
The preliminary injunction essentially awarded total
control of B2K LLC and its assets to Smith. The injunction
instructed the petitioners to reinstate Smith as president of
B2K LLC, to pay her salary, to provide operating expenses, and
to refrain from interfering with or entering the Alabama
business operations of B2K LLC until further order of the
court. Specifically, the preliminary injunction required as
follows:
"a.
The [petitioners] shall immediately formally
reinstate Smith to her position of President of
B2K LLC and shall pay her according to the
terms
and
conditions
of
her
employment
agreement.
"b.
The [petitioners] shall provide an operating
account for Smith with check writing authority
and properly fund the operational expenses of
B2K LLC.
"c.
The [petitioners] shall not take any adverse
employment action against Smith, or other
employees, while this injunction remains in
force and effect absent permission from this
Court or written agreement between Smith and
B2K LLC.
8
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"d.
[Petitioners] Ingenuity and Robert A. Przybysz
shall not enter the premises [of B2K LLC].
"i.
The [petitioners] shall not disrupt
the business operations of B2K LLC or
other
business
located
[at
the
business address of B2K LLC].
"ii.
The [petitioners] shall not interfere
with Smith or any other employee of
B2K LLC from engaging in the normal
operation of their business.
"e.
The [petitioners] shall not access (including
remote access), alter, change, run, remove,
dispose of, copy, scan, amend, waste, interfere
with, or otherwise control the assets, tangible
or intangible, of B2K LLC without express
permission of this Court or through express
written agreement of the parties and signed by
all parties with notary verification of the
signatures. These assets shall include but are
not limited to the following:
"i.
software
"ii.
source code
"iii.
hardware
"iv.
servers
"v.
drives/storage (external or internal)
"vi.
computers
"vii.
laptops
"viii.
property
"ix.
intellectual property
"x.
passwords
"xi.
tablets
"xii.
printers
"xiii.
cds
"xiv.
flash drives
"xv.
USB drives
"f.
Ingenuity shall immediately determine the
'value of all of [B2K LLC's] equity on a fiscal
9
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year end basis calculated as five times EBITDA
and allocated on a pro rata membership basis
for the fiscal year ending in 2013. This must
be completed no later than thirty (30) days
after the entry of this Order.
"g.
The [petitioners] shall adequately provide
operating expenses to B2K LLC, including
payment of employee salaries/wages, business
expense, rent, accounts payable, and others as
necessary
and
due,
including
payment
to
venders."
The petitioners filed this petition for a writ of
mandamus 13 days after the entry of the preliminary
injunction. The
petition
seeks dissolution of the preliminary
injunction and also challenges venue based on the forum-
selection clauses.
II. Analysis
A. The forum-selection clauses
The threshold issue raised by the petitioners is whether
this action is governed by one or more outbound forum-
selection clauses purportedly requiring the parties to
litigate this dispute in Michigan. The petitioners argue
1
that the trial court erred in refusing to enforce the forum-
We recognize that the competing Michigan and Alabama
1
injunctions raise potential comity concerns. Those concerns
are neither raised nor briefed by the parties, and we decline
to address them ex mero motu.
10
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selection clauses in the various agreements at issue and,
therefore, in refusing to dismiss Smith's lawsuit as being
brought in an improper venue.
This Court has held that an order denying enforcement of
an outbound forum-selection clause is properly reviewable by
a petition for a writ of mandamus:
"'"[A] petition for a writ of mandamus is the
proper vehicle for obtaining review of an order
denying enforcement of an 'outbound' forum-selection
clause when it is presented in a motion to dismiss."
Ex parte D.M. White Constr. Co., 806 So. 2d 370, 372
(Ala. 2001); see Ex parte CTB, Inc., 782 So. 2d 188,
190 (Ala. 2000). "[A] writ of mandamus is an
extraordinary remedy, which requires the petitioner
to demonstrate a clear, legal right to the relief
sought, or an abuse of discretion." Ex parte Palm
Harbor Homes, Inc., 798 So. 2d 656, 660 (Ala. 2001).
"[T]he review of a trial court's ruling on the
question of enforcing a forum-selection clause is
for an abuse of discretion." Ex parte D.M. White
Constr. Co., 806 So. 2d at 372.'"
Ex parte Textron, Inc., 67 So. 3d 61, 65-66 (Ala. 2011)
(quoting Ex parte Leasecomm Corp., 886 So. 2d 58, 62 (Ala.
2003)).
Here we are initially presented with an issue concerning
the interpretation of the four forum-selection clauses
included in various related agreements. The trial court
concluded, and Smith argues, that the clauses are unclear and
11
1130742
that they therefore must be construed as merely designating
Michigan as a permissible forum, not the exclusive forum.
The petitioners, on the other hand, contend that the forum-
selection clauses establish Michigan as the mandatory and
exclusive forum for resolution of this dispute. Thus, before
we reach the parties' arguments concerning the enforceability
of the forum-selection clauses, we must first decide whether
the provisions at issue actually restrict venue to the federal
and state courts in Michigan. See Ex parte CTB, Inc., 782 So.
2d 188, 191 (Ala. 2000) (finding no reason to address
arguments concerning the reasonableness of enforcing a forum-
selection clause when the clause could not be interpreted as
requiring that the action be filed in Indiana).
Smith's complaint alleges a breach of each of the four
related agreements. Each agreement contains its own forum-
selection clause. The forum-selection clause in the asset-
purchase agreement provides:
"The
parties
(a)
irrevocably
submit
to
the
jurisdiction of any Michigan or federal court
sitting in Grand Rapids, Michigan, in any action
arising out of this agreement, (b) agree that all
claims in any action may be decided in either court,
and (c) waive, to the fullest extent that they may
effectively do so, the defense of an inconvenient
forum."
12
1130742
(Emphasis added.) The forum-selection clause in the
promissory note provides: "Any dispute shall be brought in the
appropriate state or federal court in Kent County, Michigan
and the parties agree that said courts have personal and
subject matter jurisdiction over all disputes regarding this
Note and waive any claims to the contrary." (Emphasis added.)
The
forum-selection
clause
in
the
employment
agreement
states:
"This Agreement shall be enforced in the State of Michigan in
either Kent County Circuit Court or the United States District
Court for the Western District of Michigan and such applicable
court shall be deemed to have subject matter and personal
jurisdiction of the parties with respect to any dispute."
(Emphasis added.) The clause in the guaranty agreement
provides: "Guarantor irrevocably agrees and consents that any
action against Guarantor for collection or enforcement
of
this
guaranty may be brought in any state or federal court that is
located in, or whose
district includes, Kent
County,
Michigan,
and that any such court shall have personal jurisdiction over
Guarantor for purposes of that action." (Emphasis added.)
The problem before us is that, when read individually,
two of the provisions appear to be "exclusive," while the
13
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other two are "permissive." In construing the four forum-
selection clauses, it is important to recognize the
relationship between the four agreements. The asset-purchase
agreement specifically references the three other "related"
agreements, which were apparently executed contemporaneously
2
with the asset-purchase agreement. Indeed, execution of the
The asset-purchase agreement provides, in part:
2
"In connection with [B2K LLC's] purchase of the
Purchased Assets, ... (2) [B2K LLC] and Nannette
Smith and Josh Smith have agreed to enter into the
Employment Agreements; and (3) the parties have
agreed to take various other actions, all as
described in this Agreement and in the Related
Agreements."
The term "related
agreements"
is defined in the asset-purchase
agreement as follows:
"'Related Agreements' are all written agreements,
other than this Agreement, which are executed and
delivered by [B2K LLC] or [B2K Inc] pursuant to this
Agreement in connection with [B2K LLC's] purchase of
the Purchased Assets or the other transactions
contemplated by this Agreement (including the
Noncompetition Agreement, the Employment Agreement,
the Promissory Note, ..., Guaranty Agreement, and
the other agreements contemplated thereunder),
regardless of whether such other agreements are
expressly referred to in this Agreement."
Other provisions of the asset-purchase agreement require the
parties to execute the employment agreement, promissory note,
and guaranty agreement, which were attached as exhibits to the
asset-purchase agreement.
14
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"related agreements" was required by the asset-purchase
agreement. The well recognized principles of contract
construction require that related contemporaneously executed
documents should be read together. We note that the
petitioners have cited no authority and make only conclusory
arguments as to how the four forum-selection clauses, when
read together, should be construed. The trial court,
construing the four clauses together, found them to be
permissive rather than mandatory. Because we are presented
with no viable argument or citation of authority regarding the
proper standards for interpreting or enforcing the forum-
selection clauses at issue, we decline to disturb the trial
court's determination that its exercise of authority in this
case was not prohibited by those clauses.3
Based on the foregoing, we hold that the petitioners have
failed to establish a clear legal right to the dismissal of
Rule 21(a)(1)(D), Ala. R. App. P., which is similar to
3
the analogous Rule 28(a)(10), Ala. R. App. P., governing
briefs in appeals, requires a petition for an extraordinary
writ filed in an appellate court to cite statutes and
authorities supporting the proposition that the writ should
issue. This Court stated in Ex parte Showers, 812 So. 2d 277,
281 (Ala. 2001), "[i]f anything, the extraordinary nature of
a writ of mandamus makes the Rule 21 requirement of citation
to authority even more compelling than the Rule 28 requirement
of citation to authority in a brief on appeal."
15
1130742
Smith's
action based on
the forum-selection clauses.
Accordingly, as to the venue issue, the petition for the writ
of mandamus is due to be denied.
B. The preliminary injunction
The
petitioners
next
challenge the
preliminary
injunction
entered by the trial court. Initially, we note that the
proper method to challenge an injunction is by a direct appeal
under Rule 4(a)(1), Ala. R. App. P. However, because the
petition for a writ of mandamus was filed within the time for
taking an appeal under Rule 4(a)(1) and raised an issue for
which mandamus review was appropriate, we will treat the
petition,
insofar
as
it
challenges
the
preliminary
injunction,
as a timely filed appeal from an order granting a preliminary
injunction. See Ex parte Hollis & Wright, P.C., 987 So. 2d
530, 531 (Ala. 2007) (treating a petition for a writ of
mandamus challenging an injunction as an appeal under Rule
4(a)(1)); Ex parte Health Care Mgmt. Grp. of Camden, Inc., 522
So. 2d 280, 281 (Ala. 1988) (same).
The petitioners make two general arguments in opposition
to the preliminary injunction. First, they argue that Smith
failed to establish the four well known
requirements
necessary
16
1130742
for the issuance of a preliminary injunction. Second, they
argue that, even if the elements necessary for the issuance of
the injunction in a normal case were met, the injunction in
this case requires the petitioners to perform certain
affirmative acts. They contend that this aspect of the
injunction required a higher standard of proof, which, they
say, Smith did not meet.
Alabama law controls the issuance of a preliminary
injunction under Rule 65, Ala. R. Civ. P. "The decision to
grant or to deny a preliminary injunction is within the trial
court's sound discretion. In reviewing an order granting a
preliminary
injunction,
the
Court
determines
whether
the
trial
court exceeded that discretion." SouthTrust Bank of Alabama,
N.A. v. Webb-Stiles Co., 931 So. 2d 706, 709 (Ala. 2005).
Questions of law, however, are reviewed de novo. Holiday
Isle, LLC v. Adkins, 12 So. 3d 1173, 1176 (Ala. 2008).
This Court has set forth the requirements for a
preliminary injunction on numerous occasions.
"A preliminary injunction may issue only when
the party seeking the injunction demonstrates
"'"(1) that without the injunction the
[party] would suffer irreparable injury;
(2) that the [party] has no adequate remedy
17
1130742
at law; (3) that the [party] has at least
a reasonable chance of success on the
ultimate merits; and (4) that the hardship
imposed
on
the
[party
opposing
the
preliminary injunction] by the injunction
would
not
unreasonably
outweigh
the
benefit
accruing
to
the
[party
seeking
the
injunction]."'
"Ormco Corp. v. Johns, 869 So. 2d 1109, 1113 (Ala.
2003) (quoting Perley v. Tapscan, Inc., 646 So. 2d
585, 587 (Ala. 1994))."
SouthTrust Bank, 931 So. 2d at 709.
The petitioners argue that Smith has failed to establish
any of the above four elements. Because we conclude that
Smith failed to prove she would suffer irreparable injury if
the injunction were not issued, we reverse the order of the
trial court granting the preliminary injunction.
Our cases hold that a preliminary injunction should be
issued only when the party seeking the injunction can
demonstrate that, without the injunction, he or she would
suffer irreparable injury for which there is no adequate
remedy at law.
"'"'Irreparable
injury'
is
an
injury
that is
not
redressable in a court of law through an award of
money damages." [Perley v. Tapscan, Inc.], 646 So.
2d [585,] 587 [(Ala. 1994)] (citing Triple J Cattle,
Inc. v. Chambers, 551 So. 2d 280 (Ala. 1989)).
However, "courts will not use the extraordinary
power of injunctive relief merely to allay an
18
1130742
apprehension of a possible injury; the injury must
be imminent and irreparable in a court of law."
Martin v. City of Linden, 667 So. 2d 732, 736 (Ala.
1995); see also Borey v. National Union Fire Ins.
Co. of Pittsburgh, 934 F.2d 30, 34 (2d Cir. 1991)
(stating that "a mere possibility of irreparable
harm is insufficient to justify the drastic remedy
of a preliminary injunction").'"
Monte Sano Research Corp. v. Kratos Defense & Sec. Solutions,
Inc., 99 So. 3d 855, 862 (Ala. 2012) (quoting Ormco Corp. v.
Johns, 869 So. 2d 1109, 1113 (Ala. 2003)). "The party seeking
the injunction has the burden of demonstrating that it lacks
an adequate remedy." Monte Sano Research, 99 So. 3d at 862.
In the present case, Smith alleges that, because B2K LLC
ceased making the monthly purchase payments required by the
promissory note, it has breached the asset-purchase agreement
and the promissory note. Smith also claims that because
Ingenuity has failed to remedy B2K LLC's default under the
note, Ingenuity has
breached
the guaranty agreement. Finally,
she alleges that her termination as president of B2K LLC was
a breach of the employment agreement. The petitioners argue
that each of these alleged breaches, if proven, can be
redressed through an easily quantifiable award of money
damages. Further, they argue that Smith has not presented any
evidence of an imminent injury to support the injunction. In
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short, they argue, Smith has not established an imminent and
irreparable injury.
Smith argues that the trial court correctly held that
Smith's potential loss of control over B2K LLC's intellectual
property established the irreparable-injury requirement. The
trial court concluded, and the parties agree, that B2K LLC's
chief asset is the source code for its software. The trial
court cited the following provision of the
guaranty
agreement:
"[B2K Inc] shall have the right to demand transfer of the pro
rata amount of [Ingenuity]'s membership units in [B2K LLC] to
pay the full amount of any uncured default." Based on the
4
ownership-shifting provision in the guaranty agreement, the
trial court concluded that Smith would likely prevail at trial
and that the assets of B2K LLC, namely the software and source
code, would be shifted to her control. It further concluded
5
that the letter of termination to Smith represented Smith's
The guaranty agreement provides a formula to be used to
4
calculate the value of Ingenuity's equity in B2K LLC.
The payee/creditor on the promissory note and the
5
guaranty agreement is listed as B2K Inc. The material before
us indicates that B2K Inc has been dissolved. For the purpose
of this appeal, we assume, without deciding, that Smith is the
appropriate party with capacity to enforce the various
agreements.
20
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imminent loss of control over the software and source code and
that monetary damages would not suffice to compensate Smith
for that loss. Specifically, the trial court concluded:
"If Smith is successful on the merits, she will
be entitled, through the terms of the Guaranty
[agreement], to a shift in the ownership of B2K LLC.
The ownership of B2K LLC in turn owns the assets of
B2K LLC which necessarily includes the software and
source code to the software. The parties agree that
this software and the source code are unique and
that loss of rights to, and ownership interest in,
this
software
will
cause
irreparable
injury.
Further, the harm is immediate as is clear from the
evidence, including the attempted, alleged, and
potential termination of Smith as president of B2K
LLC.
"....
"Smith does not have an adequate remedy at law
because she seeks more than monetary damages, and
such monetary damages, taken alone, will be
insufficient to fully compensate her. Smith has at
least a twenty percent (20%) ownership interest in
B2K LLC. B2K LLC owns the software and source code.
The
software
and
source
code,
as
discussed
previously, are unique and extremely difficult to
value purely in monetary damages. In fact, the
parties agreed that monetary damages 'would be
extremely difficult, if not impossible, to estimate
or determine and which may not be adequately
compensated by monetary damages alone.' ... Since
ownership in B2K LLC and its assets is likely to be
shifted pursuant to the Guaranty [agreement], money
damages alone will not be an adequate remedy at
law."
21
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On appeal, Smith restates the reasoning contained in the
trial court's order. Smith argues, as the trial court
concluded, that her imminent loss of control over B2K LLC's
software and source code establishes an irreparable injury.
Smith argues:
"The purpose of the injunction is to insure against
the serious injury that would occur should [Smith]
lose possession of the source code and other
software. Without the source code the business is
not operational, and thus her continued employment
is necessary to preserve the status quo until proper
valuations can take place and final dispositions can
be made."
Smith's brief, at 17. Other than her potential loss of
control of the software and source code, she identifies no
other ground of irreparable injury.
We certainly understand the importance of the software
and source code to B2K LLC's business. We further understand,
given
Smith's
partial
ownership
and
her
potentially
controlling interest in B2K LLC, that the continued operation
of B2K LLC is important to Smith. Thus, we do not doubt that
destruction or loss of the software and source code could
result in irreparable injury to B2K LLC, and, by virtue of her
ownership interest in B2K LLC, to Smith. Nevertheless, we
fail to understand from the evidence before us why Smith's
22
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continued employment as president of B2K LLC, or her absolute
control of B2K LLC, is a necessary condition to the
preservation of the software and source code.
There is no evidence in the record indicating that the
software and source code are in any imminent danger. The
source code is owned by B2K LLC. Smith testified that the
source code is stored in an electronic library located at B2K
LLC's office in Birmingham. Smith testified that B2K LLC's
system contains a number of redundancies designed to protect
the source code. For example, the system prevents any one
person from accessing or modifying all the source code at any
one time. Smith also testified that the source code is backed
up every night to remote servers. Although Smith testified
that an unqualified operator could accidentally cause damage
to the source code, there was no evidence indicating that any
such damage was likely to occur if Smith is removed as
president of B2K LLC. Certainly there was no evidence
indicating that the petitioners intended to damage or destroy
the source code. To the contrary, the trial court found that
all the parties shared a common interest in the success of B2K
LLC:
"While
the
parties'
relationship
is
currently
23
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acrimonious, they also all want B2K LLC to be successful. The
parties have all invested significant time and money into the
business, including the development of the software
and
source
code." Accordingly, from the record before us, we see no
merit to Smith's contention that her loss of control over B2K
LLC, and thus the software and source code, would cause her to
suffer an "immediate and irreparable injury," necessitating
the issuance of the preliminary injunction.6
Nor, given our conclusion above, can we say that Smith
lacks an adequate legal remedy. Should she prevail on her
breach-of-contract claims, monetary damages representing the
debt owed under the asset-purchase agreement, the promissory
note, and the guaranty agreement appear to be adequate and
easily quantifiable. The same can be said for the breach of
Smith's employment agreement. See Perley v. Tapscan, Inc.,
646 So. 2d 585 (Ala. 1994) (affirming the trial court's
refusal to enter a preliminary injunction reinstating a
minority shareholder to his position as president of a company
We do not mean to be understood as precluding the entry
6
of an injunction should Smith present evidence of an imminent
threat of compromise to the software or the source code,
although we do question whether such a threatened injury would
require an injunction as broad in scope as the one now at
issue.
24
1130742
on the ground that money damages would provide adequate legal
remedy). Moreover, our conclusion that Smith has an adequate
legal remedy is reinforced by the trial court's conclusion
that "[i]f Smith is successful on the merits, she will be
entitled, through the terms of the Guaranty [agreement], to a
shift in the ownership of B2K LLC." Because Smith, if
7
successful, will be entitled to an award of money damages and
to a potential pro rata shift in ownership shares from
Ingenuity, her alleged injuries are not irreparable.
Smith has failed to convince us that, without the
injunction,
she
would
suffer
irreparable
injury.
Accordingly,
she was not entitled to the preliminary injunction, and the
order of the trial court issuing the injunction is due to be
reversed. Because we hold that the preliminary injunction is
due to be dissolved, we pretermit discussion of the
petitioners' remaining arguments.
We express no opinion at this time as to the construction
7
or
application
of this particular provision because that issue
is not before us. We note, however, that the petitioners have
not challenged the trial court's conclusion that, if
successful, Smith may be entitled to some or all of
Ingenuity's ownership shares in B2K LLC.
25
1130742
III. Conclusion
With regard to the trial court's denial of the
petitioners' motion to dismiss based on the outbound forum-
selection clauses, we deny the petition for the writ of
mandamus. With regard to the petitioners' challenge of the
preliminary injunction, which we treat as a timely filed
direct appeal under Rule 4(a)(1)(A), Ala. R. App. P., we
reverse the order of the trial court entering the preliminary
injunction and remand the case to the trial court for that
court to dissolve the preliminary injunction.
PETITION
DENIED;
REVERSED
AND
REMANDED
WITH INSTRUCTIONS.
Stuart, Bolin, Parker, Murdock, Shaw, Wise, and Bryan,
JJ., concur.
Moore, C.J., concurs in part and dissents in part.
26
1130742
MOORE, Chief Justice (concurring in part and dissenting in
part).
I concur in the majority opinion so far as it denies the
petition for a writ of mandamus on the venue issue, but I
dissent from the majority opinion to the extent that it orders
the dissolution of the preliminary injunction.
27 | September 12, 2014 |
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