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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

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Margaret Hulgan tripped and fell at a Fourth of July celebration at a City of Guntersville-owned Civitan Park. She sued the City, and the City claimed immunity under Alabama recreational-use statutes. The trial court denied the City’s motion to dismiss, and the City appealed. Finding that the City demonstrated it had a clear legal right to immunity, and that Hulgan failed to present substantial evidence to overcome the City’s right to immunity, the Alabama Supreme Court granted the City mandamus relief, and ordered the trial court to enter summary judgment in favor of the City. View "Ex parte City of Guntersville." on Justia Law

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Family Security Credit Union ("FSCU") appealed the trial court's denial of its motions to compel arbitration in eight separate but closely related cases. Action Auto Sales ("Action Auto") was a car-financing group that financed the vehicle inventory of Pine City Auto ("Pine City"), a used-car dealership. Action Auto held titles to the vehicles in inventory, and released a title only when a vehicle was sold, and Pine City paid off a proportional amount of the inventory financing. Pine City eventually went out of business without paying off the inventory financing on some of the vehicles it had sold. Action Auto sued Pine City and the purchasers of eight vehicles who had purchased vehicles from Pine City and financed those purchases through FSCU. Action Auto sought possession of the vehicles and money damages. The purchasers each filed counterclaims and cross-claims against Action Auto and Pine City and third-party claims against FSCU, alleging negligence, wantonness, and conspiracy. The purchasers' third-party claims against FSCU were based on FSCU's alleged failure to perfect its security interest in the vehicles before financing the purchasers of the vehicles. FSCU moved for each of those third-party claims to be submitted to arbitration. The purchasers opposed the motions to compel arbitration, but they did not submit any evidence. After review, the Alabama Supreme Court concluded the trial court erred in denying FSCU's motions to compel arbitration in each of the eight cases, and remanded all for further proceedings. View "Family Security Credit Union v. Etheredge" on Justia Law

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Lamar Ragland appeals the dismissal of his bad-faith claim against State Farm Mutual Automobile Insurance Company. Ragland sought punitive damages from State Farm based on State Farm's alleged bad-faith failure to pay and related failure to subject his claim for underinsured-motorist ("UIM") benefits to a cognitive review. State Farm moved to dismiss Ragland's claims, because Ragland had filed a separate civil action in 2014 that had not yet been resolved. After review, the Alabama Supreme Court dismissed Ragland's claim as being from a nonfinal judgment. View "Ragland v. State Farm Mutual Automobile Ins. Co." on Justia Law

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Julie Gerstenecker borrowed money from her mother-in-law Janice Gerstenecker, for help in repaying her student loans. According to Janice, Janice agreed to repay Julie's student loans and Julie agreed to repay Janice by "pay[ing] [Janice] $700 a month until [Julie and Adam's child] turned one. And then the payments would rise to $1,000." Janice testified that the terms of the agreement between her and Julie were not reduced to writing. Julie testified that she had never borrowed money from Janice and that she does not recall Janice telling her that Janice would lend her money to repay her student loans. Adam Gerstenecker, Janice's son and Julie's husband, also testified at trial; his testimony supported his mother's version of the agreement. Adam and Julie would eventually divorce. Some repayments were made, but ultimately Janice sued Julie for the balance owed. The trial court found Julie breached the agreement she had with Janice. However, the Alabama Supreme Court found the trial court erred in reading an acceleration-of-payments clause into the agreement between Janice and Julie. The Supreme Court reversed the trial court's damages award and remanded this case for the trial court to determine the amount owed based on the accrued payments as of the date of the judgment and not the full amount of the outstanding loan balance. View "Gerstenecker v. Gerstenecker" on Justia Law

Posted in: Contracts