Justia Alabama Supreme Court Opinion Summaries

Articles Posted in Business Law
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The Tuscaloosa City Council passed an ordinance limiting the maximum occupancy of certain restaurants, affecting a sports bar owned by CMB Holdings Group. The ordinance required establishments with restaurant liquor licenses to maintain occupancy limits based on their configuration as restaurants, not as bars or entertainment venues. This change reduced the sports bar's maximum occupancy from 519 to 287, negatively impacting its revenue. CMB Holdings Group sued the City of Tuscaloosa, the mayor, city council members, and the fire marshal, alleging racial discrimination and other claims.The Tuscaloosa Circuit Court dismissed most of CMB's claims, including those for money damages against the City and personal-capacity claims against the mayor and councilors due to legislative immunity. The court also dismissed claims for procedural and substantive due process, equal protection, and others, leaving only claims for declaratory and injunctive relief under the Alabama Constitution's Contracts Clause. CMB requested the court to alter or amend its judgment or certify it as final for appeal purposes. The court denied the request to alter or amend but granted the Rule 54(b) certification, allowing CMB to appeal the dismissed claims.The Supreme Court of Alabama reviewed the case and determined that the Rule 54(b) certification was improper. The court found that the adjudicated and unadjudicated claims were closely intertwined, particularly regarding whether the ordinance affected vested rights or mere privileges and whether it served a legitimate public interest. The court concluded that separate adjudication could lead to inconsistent results and dismissed the appeal for lack of a final judgment. View "CMB Holdings Groupv. City of Tuscaloosa" on Justia Law

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Lavonne S. Mottern died after receiving a contaminated intravenous injection at Princeton Medical Center, operated by Baptist Health System, Inc. (BHS). Donald J. Mottern, as administrator of Lavonne's estate, filed claims against BHS, Meds I.V., LLC (the manufacturer of the injection), and three individuals associated with Meds I.V. The claims against Meds I.V. and the individuals were settled, leaving only the claims against BHS, which included negligence, wantonness, a claim under the Alabama Extended Manufacturer's Liability Doctrine (AEMLD), and a breach of implied warranty under the Uniform Commercial Code (UCC).The Jefferson Circuit Court dismissed all of Mottern's claims against BHS, including the negligence and wantonness claims, which BHS conceded should not have been dismissed. BHS argued that the AEMLD and UCC claims were subject to the Alabama Medical Liability Act (AMLA) and required proof of a breach of the standard of care. The trial court agreed and dismissed these claims, leading to Mottern's appeal.The Supreme Court of Alabama reviewed the case and agreed with BHS that all of Mottern's claims, including those under the AEMLD and UCC, are subject to the AMLA's standard-of-care provisions. The court held that the AMLA applies to all actions for medical injury, regardless of the theory of liability, and requires proof of a breach of the standard of care. The court reversed the trial court's dismissal of the negligence and wantonness claims and remanded the case for further proceedings consistent with its opinion. The main holding is that the AMLA's standard-of-care provisions apply to all claims alleging medical injury, including those under the AEMLD and UCC. View "Mottern v. Baptist Health System, Inc." on Justia Law

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Radiance Capital Receivables Twelve, LLC ("Radiance") appealed a judgment from the Henry Circuit Court in favor of Bondy's Ford, Inc. ("Bondy's"). Radiance had garnished the wages of David Sherrill, who worked for Bondy's. Bondy's stopped paying on the garnishment, claiming Sherrill had left its employment, but continued to pay for Sherrill's services through a company created by Sherrill's wife. Radiance argued that Bondy's should still comply with the garnishment by withdrawing funds owed for Sherrill's services.The Henry Circuit Court had initially entered a garnishment judgment in favor of SE Property Holdings, LLC, which was later substituted by Radiance. Bondy's reported Sherrill's employment termination in September 2019, two months after the required notice period. Radiance filed a motion for judgment against Bondy's, arguing that Sherrill continued to provide services to Bondy's through his wife's company, KDS Aero Services, LLC. Bondy's responded with a motion to dismiss, claiming Sherrill was an independent contractor. The trial court granted Bondy's motion to dismiss and denied Radiance's motion.The Supreme Court of Alabama reviewed the case de novo. The court found that genuine issues of material fact existed regarding whether Bondy's payments to KDS Aero Services were actually owed to Sherrill. The lack of a contract or invoices between Bondy's and KDS Aero Services, coupled with inconsistencies in Sherrill's representations about his employment and residence, suggested potential fraud or misuse of corporate form to hide funds. The court reversed the trial court's judgment and remanded the case for further proceedings, emphasizing that neither party had met the burden for summary judgment. View "Radiance Capital Receivables Twelve, LLC v. Bondy's Ford, Inc." on Justia Law

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This case involves a contractual dispute between Alabama Plating Technology, LLC (APT) and Georgia Plating Technology, LLC (GPT), DVEST, LLC, and Jin Kim. The dispute arose from an asset-purchase agreement for a brake-plating plant. After the purchase, APT claimed indemnity from the sellers for environmental issues, unpaid accounts payable, and certain inoperable assets, alleging these were retained liabilities or breaches of warranties by the sellers. The sellers sued APT for breach of contract due to setoff of losses against annual installment payments.The trial court found in favor of APT regarding the environmental issues and unpaid accounts payable, but sided with the sellers on the inoperable-assets claim. It also rejected APT's claim for attorneys' fees and legal expenses. Both parties appealed.The Supreme Court of Alabama reversed the trial court's judgment denying APT relief on its inoperable-assets claim and its claim for attorneys' fees and legal expenses. It affirmed the trial court's judgment granting APT relief on its environmental-issues and unpaid-accounts-payable claims, and the denial of the sellers' request to accelerate the remaining installment payments owed to them by APT. View "Alabama Plating Technology, LLC v. Georgia Plating Technology, LLC" on Justia Law

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During the COVID-19 pandemic, John Svensen wrote a check to Jeff Hester's company, Ginesis, for several thousand bottles of hand sanitizer. The check bounced, leading Ginesis to sue Svensen and his company, Marketpointe, for the owed money. After a series of legal proceedings, Hester pressed charges against Svensen for the bad check, resulting in Svensen's arrest. The Lauderdale Circuit Court later dismissed the criminal complaint due to the statute of limitations, and Svensen subsequently sued Hester for malicious prosecution.The Lauderdale Circuit Court initially entered a default judgment against Svensen and Marketpointe for failing to answer Ginesis's complaint. After Svensen successfully vacated the default judgment, the court set a bench trial. However, Svensen did not appear, leading to another default judgment against him. After Svensen provided an excuse, the court vacated the default judgment and reset the trial. Meanwhile, Hester, on the advice of his attorney, took the bounced check to the Lauderdale County Sheriff's Department, leading to Svensen's arrest.The Supreme Court of Alabama affirmed the circuit court's summary judgment in favor of Hester. The court found that Hester had probable cause to believe that Svensen had committed the crime of negotiating a worthless negotiable instrument, as it is a crime in Alabama to knowingly write someone a bad check. The court rejected Svensen's argument that Hester lacked probable cause because the one-year statute of limitations for misdemeanor offenses had expired. The court reasoned that the expiration of the limitations period does not affect whether the defendant actually committed the offense charged. View "Svensen v. Hester" on Justia Law

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This case involves a dispute among Players Recreation Group, LLC, an Alabama limited-liability company, three of its members, Jason L. McCarty, Felix McCarty, and Doyle Sadler, and S&M Associates, Inc., a company owned by Sadler. The LLC, established in 1999, owns and operates a bowling alley known as 'the Super Bowl.' In 2003, S&M, a company owned by Sadler, loaned the LLC $150,000, which is evidenced by a promissory note. In 2006, the Super Bowl began incurring substantial losses, and the LLC ultimately defaulted on the promissory note payable to S&M. In July 2015, S&M and Sadler sued the LLC and the other members of the LLC, asserting a breach-of-contract claim and a claim seeking an accounting. In August 2015, the LLC, Jason, and Felix filed an answer and a counterclaim, alleging that Sadler had breached his duty of loyalty and his duty of care to the LLC.The case proceeded to a bench trial. The parties initially stipulated that the LLC owed S&M a total of $310,139.66 on the promissory note; the trial court ultimately entered a judgment against the LLC for that amount based on the parties' stipulation. The case was then tried solely on the counterclaims asserted against Sadler by the LLC, Jason, and Felix. The trial court entered a judgment against Sadler on the counterclaims, based on its findings that Sadler had breached not only a duty of loyalty and a duty of care to the LLC, but also the implied covenant of good faith and fair dealing owed to the LLC. The trial court assessed damages against Sadler in the amount of $368,167.92.On appeal to the Supreme Court of Alabama, Sadler argued that the trial court erred insofar as it entered a judgment against him on the counterclaims asserted against him by the LLC, Jason, and Felix. The Supreme Court of Alabama agreed and reversed the judgment entered against Sadler on the counterclaims asserted against him because there was no evidence to support findings that Sadler had breached the duty of loyalty and the duty of care owed to the LLC or the implied covenant of good faith and fair dealing, and remanded the case to the trial court for the entry of a judgment consistent with this opinion.On remand, S&M and Sadler filed a motion for attorney's fees, costs, and expenses. The trial court denied the motions for attorney's fees, costs, and expenses. The trial court also found that the LLC had incurred $2,713,230.33 in expenses without contribution by Sadler or Scott Montgomery. That finding was not disturbed on appeal and has become the law of the case. The trial court took judicial notice that Jason and Felix McCarty have perfected, as the remaining members of the LLC, that claim or debt by filing a second mortgage with the Probate Court of Jefferson County, which second mortgage is inferior to the mortgage held by the late Ferris Ritchey’s real estate company, and the perfection of this claim makes it a priority over and superior to the claims of other creditors, including S&M.S&M and Sadler appealed the trial court's order on remand. The Supreme Court of Alabama affirmed the trial court's order on remand insofar as it denied S&M's and Sadler's requests for attorney's fees and costs, reversed the order insofar as it addressed the LLC's mortgage executed in favor of Jason and Felix and its purported priority, and remanded this case with instructions for the trial court to set aside that portion of its order that addressed the LLC's mortgage and its purported priority. View "S&M Associates, Inc. v. Players Recreation Group, LLC" on Justia Law

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The case revolves around a dispute between the City of Gulf Shores and Coyote Beach Sports, LLC. The city passed a municipal ordinance regulating the motor-scooter-rental business, which required renters to possess a specific type of license. Coyote Beach Sports, a Louisiana-based company that rented motor scooters in Gulf Shores, claimed that this ordinance effectively halted its business as most customers did not possess the required license. Consequently, Coyote filed a complaint against the city, seeking a judgment declaring the ordinance invalid, monetary damages, and attorney fees and costs.The case was first heard in the Baldwin Circuit Court where, after a jury trial, the court declared the ordinance preempted by state law. The jury awarded Coyote $200,416.12 in compensatory damages. The city appealed the trial court's judgment. Later, Coyote filed a motion for attorney fees, and the trial court awarded Coyote $59,320 in attorney fees without holding a hearing. The city appealed this order as well.The Supreme Court of Alabama reviewed the case and the issue of whether the municipal ordinance was preempted by state law. The court concluded that the ordinance was not preempted under any of the three recognized circumstances under which municipal ordinances are preempted by state law. The court found a distinct difference between the state's requirement for a license to operate a motorcycle or motor-driven cycle and a municipality's regulation of the rental of such vehicles. The court also found no conflict between the ordinance and state law. Therefore, the Supreme Court of Alabama reversed the judgment of the circuit court and the order awarding Coyote attorney fees, remanding the matters for further proceedings. View "City of Gulf Shores v. Coyote Beach Sports, LLC" on Justia Law

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The dispute involves a disagreement between two brothers, Brian and William "Bill" Bento, over the distribution of the assets and liabilities of their joint business, Bento Construction, LLC, following its dissolution. Brian filed a complaint seeking judicial dissociation of Bill as a member of the company, its dissolution, and a declaration of each party's rights and interests in the company. Bill countered, seeking damages and the dissolution of the company. An agreement led to an order that dissolved the company and dissociated Bill as a member.The order assigned contracts for performance of work by Bento Construction to Brian's new company, Brian Bento Construction, LLC. It also tasked the parties with winding down the company's operations. Despite the dissolution, the company continued to operate for the limited purpose of winding up its affairs. The company had several unsettled obligations, based on projects contracted before the dissolution date, and was also involved in several pending lawsuits regarding disputed invoices.The trial court issued an order distributing personal property and accounts in possession of each brother to the respective brother. It also made Brian responsible for all debts and obligations of Bento Construction. However, the order did not address the company's incomplete projects or the ongoing lawsuits. Both brothers appealed the trial court's order.The Supreme Court of Alabama found that the trial court's order was not a final judgment as it did not conclusively determine all the matters presented regarding the distribution of the company's assets. It did not discuss or attempt to allocate any portion of the revenues that may arise from the incomplete projects or the lawsuits. Therefore, the court dismissed the appeals. View "Bento v. Bento" on Justia Law

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In this case from the Supreme Court of Alabama, the court held that the Majestic Mississippi, LLC ("Majestic") and Linda Parks did not owe any duty of care to the passengers on a charter bus that crashed en route to Majestic's casino. The bus was chartered by Linda Parks, a resident of Huntsville, to transport herself, family members, friends, and acquaintances from Huntsville and Decatur to the casino. The bus was owned by Teague VIP Express, LLC, a separate entity. As a result of the accident, Betty Russell, an occupant of the bus, was killed, and other occupants, including Joseph J. Sullivan and Rachel W. Mastin, were injured. Felecia Sykes, as administrator of the estate of Russell, and Sullivan and Mastin, sued Majestic and Parks on various theories of negligence and wantonness.The court found that Majestic did not have a duty to provide accurate weather information to the passengers. The court also found that Majestic did not have a duty to conduct due diligence on the bus company before allowing it to transport patrons to its casino. Moreover, Parks did not have a duty to ensure the safety of the bus passengers. The court further held that no joint venture existed between Majestic, Parks, and Teague VIP Express.Thus, the court affirmed the lower court's decision granting summary judgments in favor of Majestic and Parks. View "Sykes v. Majestic Mississippi, LLC" on Justia Law

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In the case before the Supreme Court of Alabama, David and Anna Roberson appealed from an order by the Jefferson Circuit Court that dismissed their indemnification claim against Drummond Company, Inc. ("Drummond"). David, a former vice president of Drummond, was convicted of bribery in federal court for approving payments that were part of an environmental public-relations campaign. After his conviction, Drummond continued to pay David's salary and benefits for a period, but later terminated his employment. The Robersons then sued Drummond and others, asserting multiple claims, including one for indemnification. They alleged that Drummond had directed David to make the payments that were later deemed to be bribes, and that he had incurred damages as a result, for which Drummond had a duty to indemnify him. The circuit court dismissed the indemnification claim, ruling that indemnification generally comes into play in a contractual arrangement, and the Robersons had neither produced nor alleged the existence of a contract or agreement establishing such a duty. The Robersons appealed this decision.The Supreme Court of Alabama affirmed the lower court's decision. The court found that the losses the Robersons sought to recover were not indemnifiable, as they were not judicially imposed liabilities to a third party or out-of-pocket expenses that David incurred in processing the invoices. The court also found that the Robersons failed to demonstrate they had sufficiently pleaded a claim for common-law indemnification. The court rejected the Robersons' argument that Drummond's resolution to pay David's salary and benefits constituted a contract for indemnification, stating that the obligation they alleged Drummond undertook was not a promise to indemnify David, but simply a promise not to fire him. Finally, the court found that the Robersons had failed to preserve their claim for court-ordered indemnification under the Alabama Business and Nonprofit Entity Code for appellate review, as they had not asserted this argument in the trial court. View "Roberson v. Drummond Company, Inc." on Justia Law