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Mazda Motor Corporation ("Mazda") appealed a judgment entered against it on two jury verdicts resulting from two product liability claims filed in Alabama. The claims stemmed from an accident involving a “Mazda 3” driven by then 16-year-old Sydney McLemore, with 15-year-old Natalie Hurst as a passenger. McLemore was driving 55 miles per hour in a 35 mile-per-hour zone when she lost control of the car; the car spun around and hit a light pole before coming to a stop, then burst into flames. McLemore suffered third-degree burns covering approximately 15 percent of her body; Hurst died from burn injuries. Hurst’s parents filed suit against Mazda and McLemore, asserting wrongful death, and pertinent here, product liability claims. Specifically, they alleged that Mazda erred by designing the 2008 Mazda 3 so that a plastic fuel tank was positioned one-half inch from a steel muffler that had sharp protruding edges so that when hit, the muffler's sharp edge cut the fuel tank, causing the fuel tank to fail and allowing gasoline vapors to escape and to ignite, which caused the post-collision fuel-fed fire. The Alabama Supreme Court concluded after review of the trial court record that the trial court did not err with respect to the admission of certain expert testimony. McLemore’s wantonness claim should not have been submitted to the jury, and the judgment must be reversed insofar as it included an award based on that claim. The record did not support an award of punitive damages in connection with McLemore’s claim against Mazda. Further, Mazda has failed to present any argument that would counsel in favor of a remittitur of the Hursts' damages award on their wrongful-death claim, and, therefore, the jury's $3.9 million award in favor of the Hursts and against Mazda. The trial court was therefore affirmed in part, reversed in part and remanded for further proceedings. View "Mazda Motor Corporation v. Hurst" on Justia Law

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In case no. 1130590, Kathryn L. Honea appealed the denial of her motion to vacate an arbitration award entered in favor of Raymond James Financial Services, Inc. ("Raymond James"), and Bernard Michaud, an employee of Raymond James (collectively, "RJFS"). In case no. 1130655, RJFS appealed the trial court's denial of its motion to dismiss for lack of jurisdiction; that appeal was dismissed. Honea opened several investment accounts with Raymond James. Honea and Raymond James executed a "client agreement" that included an arbitration provision. Honea filed a complaint in the Jefferson Circuit Court asserting that she had opened four accounts with Raymond James and that Michaud had acted as her financial advisor as to those accounts. She alleged that RJFS engaged in "abusive brokerage practices" in that her investments were not diversified, "were far too risky," and "were of poor quality." The arbitration panel dismissed Honea's breach-of-fiduciary-duty, negligence, wantonness, fraud, and Alabama Securities Act claims and proceeded to hear the breach-of-contract claims. An arbitration panel entered an award in favor of RJFS. The arbitration panel found that "Michaud did not sufficiently know his client nor make sufficient inquiry to attempt to know his client, her holdings, and/or her investment experience. These failures contributed to losses in [Honea's] account." However, the arbitration panel "denied" Honea's breach-of-contract claims, stating that they were "barred by the applicable statutes of limitations." Although the Alabama Supreme Court found one contract appeared to govern this case and that RJFS breached its duties by failing to properly understand Honea's investment knowledge before March 2000, Honea contended that allegedly improper transactions--the excessive use of margin and overly aggressive, high-risk trading occurring after March 2000--represented independent breaches of the FINRA rules. Those claims accrued within the six-year limitations period before her complaint was filed. Further, any knowledge by Honea of her losses did not mean that the trading activity was proper. Thus, to the extent that any transactions after March 2000 would be considered separate breaches of contract unrelated to the failure to properly know Honea, her holdings, or her investment experience, or setting up an "unsuitable" account, the Court found Honea demonstrated probable merit--for purposes of a Rule 59(g) hearing--that those claims would not be barred by the statute of limitations. Honea demonstrated that, in relation to the certain breach-of-contract claims, she was entitled to a Rule 59(g) hearing on her motion to vacate the arbitration award. View "Honea v. Raymond James Financial Services, Inc." on Justia Law

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In October 2009, the Town of Summerdale filed a complaint against East Central Baldwin County Water, Sewer and Fire Protection Authority (ECBC) and the county commission, seeking a judgment declaring that the 2002 and 2008 amendments to ECBC's certificate of incorporation were void. The 2002 amendment expanded ECBC's geographic service area, and the 2008 amendment authorized ECBC to include sewer services in certain parts of its service area. Summerdale sought a declaration that the 2002 amendment and the 2008 amendment were void because the county commission's approval of the amendments was based on incorrect facts set forth in the applications for the amendments. In June 2012, the trial court entered a partial summary judgment declaring the 2002 amendment void. On appeal, the Court of Civil Appeals, by order, set aside the Rule 54(b) certification and dismissed the appeal because the partial summary judgment did not address the validity of the 2008 amendment. The trial court then entered a new order stating that its partial summary judgment also applied to the 2008 amendment. ECBC appealed. After review, the Alabama Supreme Court concluded the Court of Civil Appeals applied the wrong standard of review and that, therefore, its decision was reversed. The Supreme Court also concluded that the summary judgment was erroneous because: (1) it did not give appropriate weight to the county commission's findings as to the adequacy of the existing services; and (2) there appeared to be genuine questions of material fact that would have precluded summary judgment. View "Ex parte East Central Baldwin County Water, Sewer and Fire Protection Authority." on Justia Law

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Wells Fargo Bank, N.A. appealed a circuit court's denial of its claim for attorney fees against National Bank of Commerce ("NBC"). The claim at issue in this appeal stemmed from a lawsuit concerning the deposit of a check issued by Jennifer Champion, treasurer of Jefferson County, for $178,916.42 in settlement of claims made in Winston v. Jefferson County, a class-action lawsuit concerning excess tax bids. The check was drawn on Jefferson County's account with Wachovia Bank, N.A. (a predecessor to Wells Fargo), and it was jointly payable to the order of Carl Prewitt, Debra Prewitt, Renasant Bank, and Moore Oil Co., Inc. ("Moore Oil"). After the check was issued, it was mailed to the Prewitts, received by Debra Prewitt. The check was stamped "for deposit only," and it was deposited to an account in the name of Liberty Investing, LLC ("Liberty Investing"), at Red Mountain Bank (a predecessor to NBC), using a remote scanner that was provided by NBC's predecessor to Creative Edge Landscaping, Inc. It is undisputed that the check was deposited without endorsements and that the Prewitts were not signatories on the Liberty Investing account. Wells Fargo's predecessor paid the check and debited Jefferson County's account. The Prewitts received the proceeds of the check over time through a series of withdrawals and transfers from the Liberty Investing account. Moore Oil became aware of the check, and by a letter it demanded that Jefferson County pay Moore Oil the amount of the check because, Moore Oil contended, it was entitled to the proceeds of the check. The Alabama Supreme Court fetermined Wells Fargo's claim for reimbursement of attorney fees expended in defense of the claim brought by Moore Oil lacked support in the applicable statutory scheme. Furthermore, neither of the "special equity" rules under which Wells Fargo claimed entitlement to reimbursement of its attorney fees was applicable in this situation. Finding no reversible error as to the denial of attorney fees to Wells Fargo, the Supreme Court affirmed the trial court. View "Wells Fargo Bank, N.A. v. National Bank of Commerce" on Justia Law

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Mark Robert Engel and Daniel Michael Engel appealed a probate court’s order disqualifying them as co-executors of their mother's estate and appointing a third party to administer the estate. Some of their siblings alleged Mark and Michael had been selling some of their mothers’ personal property without express permission to do so. Mark and Daniel argued the probate court stated that it was disqualifying them because the heirs, which included them, did not get along and for "efficiency of administration," which they claimed were not proper grounds for disqualifying them from serving as co-executors. The Alabama Supreme Court found no reversible error and affirmed the probate court. View "Engel v. Amonett" on Justia Law

Posted in: Trusts & Estates

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Jewels by Park Lane, Inc. ("JBPL"), and Kathy Cassidy, the national director for JBPL, sought a writ of mandamus compelling the Circuit Court to vacate its order denying their motion to dismiss an action against them on the ground of improper venue arising out of a forum-selection clause, and to enter an order dismissing the case. JBPL was a multilevel marketing company that sold jewelry through independent contractors who host parties offering JBPL's jewelry line for sale. Jennifer Miller became a “director” for LBPL. Miller sued JBPL and Cassidy, alleging JBPL promised to employ her for a 12-month period and to pay her $4,000 a month for that period. Miller set out claims alleging account stated, open account, breach of contract, and fraud. Miller sought compensatory damages, punitive damages, and attorney fees. The employment agreement contained a “forum selection clause” in which any disputes between the parties would be settled in accordance with the laws of Illinois. Miller admitted that the director agreement contained a forum selection clause but argued that she would not have entered into the agreement but for the fraud perpetuated by JBPL and Cassidy. The Alabama Supreme Court concluded JBPL and Cassidy have shown a clear legal right to have the action against them dismissed on the basis that venue in the Tallapoosa Circuit Court was, by application of the outbound forum-selection clause, improper. The trial court exceeded its discretion in denying their motion to dismiss Miller's action. View "Ex parte Jewels by Park Lane, Inc." on Justia Law

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In 2015, RPM Cranes and its owner Muhammad Wasim Ali sued the defendants CraneWorks, Inc. and its owners, David Upton ("David") and Steve Upton ("Steve"), and Russell Brooks, Rick Yates, and Casey Markos, alleging that Brooks, Yates, and Markos had violated their employment agreements by going to work for CraneWorks and that CraneWorks' hiring of Brooks, Yates, and Markos likewise violated those employment agreements. David and Steve were named as defendants by virtue of their ownership of CraneWorks. RPM and Ali sought monetary damages and injunctive relief. The trial court entered a permanent injunction in favor of RPM and Ali and against the defendants. The Alabama Supreme Court found the injunction at issue in defendants' appeal was not specific in its scope: the order stated that the defendants were "permanently restrained and enjoined from contacting, in any way, whatsoever, any of those clients which are now clients of RPM Cranes." The order failed, however, to specify which clients were included in the injunction. RPM and Ali introduced no evidence as to who RPM's clients were or whether it had developed any clients of its own that Yates and Brooks did not bring onboard as a result of their previous jobs with other entities. In other words, the injunction was broad and vague rather than "specific in [its] terms." The Court reversed the trial court's order and remanded for further proceedings. View "Brooks v. RPM Cranes, LLC" on Justia Law

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Rainbow Cinemas, LLC ("Rainbow"), Ambarish Keshani, and Harshit Thakker (collectively, "the defendants") appealed a circuit court order denying their motion to compel arbitration of a contract dispute with Consolidated Construction Company of Alabama ("CCC"). In the contract at issue here, CCC agreed to provide specified services in constructing a movie theater for Rainbow. The parties signed the American Institute of Architects "Document A101-2007 -- Standard Form of Agreement Between Owner and Contractor where the basis of payment is a Stipulated Sum" ("the agreement"). The agreement incorporated by reference American Institute of Architects "Document A201-2007 -- General Conditions of the Contract for Construction" ("the general conditions"). In 2016, after having already initiated the arbitration process, CCC sued the defendants. Among other things, CCC alleged that the defendants had fraudulently induced it into entering into the contract. Specifically, CCC alleged that the defendants knew that the contract required an initial decision maker and that the defendants also "knew they had not contracted for [initial-decision-maker] services from the [initial decision maker]." CCC alleged that the defendants "failed to inform CCC ... that Rainbow had not contracted with [architect Hay] Buchanan to act as [the initial decision maker]." The Alabama Supreme Court reversed and remanded, finding that the contract incorporated the AAA's Construction Industry Arbitration Rules, which state that "[t]he 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." 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 was delegated to the arbitrator. The arbitrator, not the court, had to decide that threshold issue. View "Rainbow Cinemas, LLC v. Consolidated Construction Company of Alabama" on Justia Law

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Rochester-Mobile, LLC, and Salzman-Mobile, LLC ("Rochester-Salzman"), appealed a judgment entered against them in a declaratory-judgment action relating to the validity of a 25-year sublease between Rochester-Salzman and Southern Family Markets of Mobile South University BLVD, LLC ("SFM"), and C&S Wholesale Grocers, Inc. ("C&S"). The trial court concluded that because the sublease was not recorded pursuant to section 35-4-6, Ala. Code 1975, the sublease was void for the remainder of the term extending beyond 20 years. After review, the Alabama Supreme Court held that the sublease in this case was not void under the provisions of section 35-4-6. Accordingly, the trial court erred in entering a judgment on the pleadings in favor of SFM and C&S and against Rochester-Salzman. Given this holding, the Court pretermitted discussion of the issue whether the sublease contained separate agreements that are independently enforceable, regardless of the validity of the sublease. View "Rochester-Mobile, LLC v. C&S Wholesale Grocers, Inc." on Justia Law

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This action concerned a piece of real property located in Calhoun County, Alabama. Lynda Newman, individually and as personal representative of the estate of Oscar Newman, deceased, appealed the summary judgment entered in favor of Michael and Rhonda Howard. The Howards owned the property in 2003 and in April 2003 mortgaged the property to secure a note. In 2007, the Howards conveyed the property by general warranty deed to Lynda and Oscar Newman; Oscar, Lynda's husband, subsequently died. It was undisputed that, unbeknownst to the Newmans, the 2003 mortgage was not satisfied by the Howards before the conveyance and remained an encumbrance on the property. The Newmans and the Howards were involved in litigation concerning numerous claims against one another, as well as others, involving deeds, financing agreements, mortgages, and contracts between the various parties concerning several pieces of real property, including the property at issue in this case. Before a final judgment was reached in that litigation, in December 2014 the parties dismissed the lawsuit and entered into a "settlement agreement and mutual release agreement." Also in December 2014, shortly after Lynda signed the agreement, she attempted to sell the property at issue here. During the process of closing on the sale of the property, Lynda's attorney conducted a title search of the property and discovered that the property was encumbered by the 2003 mortgage. Lynda requested that the Howards satisfy the mortgage pursuant to the terms of the May 16, 2007, warranty deed. The Howards refused. Following a hearing, the circuit court granted the Howards' summary-judgment motion on the sole basis that Lynda had released any claims she may have had against the Howards. Lynda appealed. The Alabama Supreme Court reversed, finding Lynda timely objected to the Howards' reliance on the affirmative defense of settlement and release in their summary-judgment motion and equally clear that an amendment to specially plead that affirmative defense was not made by the Howards. The circuit court erred in granting the Howards' summary-judgment motion based on an unpleaded affirmative defense of release. View "Newman v. Howard" on Justia Law