Justia Alabama Supreme Court Opinion Summaries

Articles Posted in Business 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

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In November 2015, Joseph H. Reeves contracted with Wilson Floor & Wallcovering, Inc. ("Wilson Floor") and its owner, Tom Wilson, to replace the wood flooring in his home. After the work was completed, Reeves found the new flooring to be unlevel and claimed that Wilson Floor and Tom Wilson refused to make further repairs. Reeves filed a complaint against "Tom Wilson" and "Wilson Flooring" in May 2017, alleging negligence, fraudulent suppression, fraudulent inducement, and breach of contract.The Supreme Court of Alabama reviewed the case after the Autauga Circuit Court dismissed Reeves's claims against Wilson Floor due to "lack of service" under Rule 4, Ala. R. Civ. P. Although it was undisputed that Reeves's attempted service on Wilson Floor was ineffective, the Supreme Court of Alabama concluded that Wilson Floor was adequately informed of Reeves's action against it, and hence, the trial court's dismissal of his claims against Wilson Floor was prohibited under Rule 4(i)(2)(C).The Court noted that while Tina Wilson, Tom Wilson's wife, was not Wilson Floor's registered agent, she was one of the company's listed officers and could accept service on its behalf. As Tina had actually received the summons and the complaint, the Court established that Wilson Floor was informed of Reeves's action within time to avoid default. Therefore, the Supreme Court of Alabama reversed the trial court's order dismissing Reeves's action against Wilson Floor and remanded the case for further proceedings. View "Reeves v. Wilson Floor and Wallcovering, Inc." on Justia Law

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In this case before the Supreme Court of Alabama, the plaintiffs were the children of Robert Crum Jr., who was killed when the concrete truck he was driving overturned due to a tire failure. The tire was a 10-year-old Hankook AH10 tire, and the plaintiffs sued the companies that allegedly designed, manufactured, and distributed the tire, Hankook Tire America Corporation and Hankook Tire & Technology Co., Ltd. ("Hankook"). The plaintiffs alleged that the tire was defective and caused the accident. They sought to depose Hankook's designated corporate representative, Won Yong Choi, and claimed that he provided evasive answers or did not answer at all. They also alleged that Hankook's attorney consistently interrupted the deposition, objected to questions, and instructed Choi not to answer. As a result, the plaintiffs moved the trial court to impose sanctions against Hankook.The trial court granted the motion and imposed sanctions that included prohibiting Hankook from having any corporate representative give testimony at trial that went beyond Choi's deposition testimony, barring Hankook from disputing at trial that the failed tire was defective, and striking 10 of Hankook's affirmative defenses. The trial court also ordered the plaintiffs to submit evidence of the attorneys' fees and costs they had incurred in preparing for and taking Choi's deposition. After they did so, the trial court entered an order awarding the plaintiffs $66,550 in attorneys' fees.Hankook petitioned the Supreme Court of Alabama for a writ of mandamus, asking the court to direct the trial court to vacate the sanctions order and the fee order. The Supreme Court of Alabama granted the petition, holding that the sanctions imposed by the trial court were not authorized by Rule 37(d) because Choi did not fail to appear for the Rule 30(b)(6) deposition. Therefore, the court directed the trial court to vacate both its initial order sanctioning Hankook and its later order imposing a monetary sanction. View "Ex parte Hankook Tire America Corporation PETITION FOR WRIT OF MANDAMUS" on Justia Law

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The Supreme Court of Alabama has reversed an order by the Dale Circuit Court, which held Omni Healthcare Financial, LLC in contempt for failing to comply with a subpoena. This case arose from claims asserted by Amy Lee Walker against Eric Irvin Reese and SCP Distributors, LLC, following an automobile collision. Omni, a North Carolina-based factoring company, had purchased certain accounts receivable from a medical provider who had treated Walker. The accounts receivable are secured by an interest in any recovery that Walker obtains from her lawsuit against the defendants. The defendants had served a nonparty subpoena on Omni's registered agent in Alabama, seeking certain documents. Omni later responded with some documents but also asserted objections to the subpoena. The defendants then filed a motion asking the circuit court to hold Omni in contempt of court for failing to comply with the subpoena. The circuit court granted this motion, leading to Omni's appeal. The Supreme Court of Alabama found that the trial court erred by holding Omni in contempt, as the subpoena was invalid. It was determined that the subpoena seeking documents located in North Carolina needed to be issued by a North Carolina court and served in accordance with North Carolina law. As the defendants had not asked a North Carolina court to direct Omni to produce the documents, they had not complied with the requirements to hold Omni in contempt. The case was reversed and remanded for further proceedings. View "In re Omni Healthcare Financial, LLC" on Justia Law

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In this case, Eli Global, LLC, and Greg Lindberg appealed a summary judgment entered against them by the Mobile Circuit Court in Alabama. The dispute involved Eli Global's alleged failure to fulfill its obligations on a promissory note and Lindberg's alleged failure to fulfill his obligations on a guaranty of that promissory note. The promissory note and guaranty were part of an agreement to purchase a healthcare company. Eli Global and Lindberg also challenged the circuit court's award of attorney fees and expenses to the plaintiffs.The Supreme Court of Alabama affirmed the lower court's judgment finding Eli Global and Lindberg liable based on the promissory note and the guaranty, and its award of the principal amount plus interest due based on that liability. The court found that the promissory note was not a negotiable instrument under New York law, and even if it was, the plaintiffs were not required to prove who possessed the promissory note because Eli Global and Lindberg waived that argument in the lower court. In addition, the court found that one of the plaintiffs did not release his claims against Lindberg that were based on the guaranty.However, the court remanded the case back to the lower court to provide a more detailed explanation for the award of attorney fees and expenses. The court found that the lower court's order did not provide sufficient explanation on how it determined the award of attorney fees and expenses. The lower court was instructed to return its explanation to the Supreme Court within 42 days. View "Eli Global, LLC v. Cieutat" on Justia Law

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Southern Lift Trucks, LLC ("Southern"), was an Alabama-based, heavy-equipment dealer for Hyundai Construction Equipment Americas, Inc. ("Hyundai Construction"). In May 2022, it filed suit against Hyundai Construction and its alleged parent company, Hyundai Heavy Industries Co., Ltd. (collectively, "Hyundai") asserting various claims. It also sought a preliminary injunction to prevent Hyundai from, among other things, unlawfully allowing Hyundai's dealers to sell certain equipment in Southern's designated territories or advertising that other dealers are authorized to sell that equipment in Southern's territories. Following a hearing, the circuit court entered an order granting Southern's request for a preliminary injunction. After the circuit court issued its injunction order, Southern learned that another Hyundai dealer had allegedly sold some equipment in one of Southern's territories. As a result, Southern filed a petition seeking a finding of contempt and sanctions against Hyundai. Following a hearing, the circuit court entered an order granting Southern's contempt petition. Hyundai appealed that contempt order on due process grounds. Because Hyundai was not given adequate notice of all the contempt allegations asserted against it before the hearing on those allegations (as required by Rule 70A, Ala. R. Civ. P.), the Alabama Supreme Court reversed the contempt order and remanded the case for further proceedings. View "Hyundai Construction Equipment Americas, Inc.v. Southern Lift Trucks, LLC" on Justia Law

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Luxottica of America, Inc., Jeremiah Andrews, Jr., and Anthony Pfleger appealed a circuit court judgment entered in favor of plaintiff Jackie Lee Bruce on Bruce's claims alleging that Andrews and Pfleger, Luxottica employees, defamed him and publicly placed him in a false light by accusing him of shoplifting. Andrews was the manager of the "Sunglass Hut" store at a shopping center in Montgomery. Luxottica owned the store. Andrews was working when Bruce entered the store. Another man, who was known by Andrews to have recently shoplifted from the store, entered the store immediately behind Bruce. Andrews suspected Bruce was acting as the shoplifter's accomplice on this particular occasion. Surveillance video showed Bruce walking back and forth five or six times before walking away from the store. Bruce explained his pacing as simple indecision about whether to visit another store or to instead leave the shopping center. Shortly after Bruce walked away, the shoplifter left the store with sunglasses without paying for them, which Andrews witnessed. Bruce testified that a friend named Orlando had driven Bruce to and from the shopping center and he denied knowing the shoplifter or seeing him steal sunglasses. Andrews reported the incident to Montgomery police and to defendant Pfleger, who was a former police officer and the asset-protection manager for Luxottica responsible for investigating shoplifting. After attempting without success to obtain the assistance of police, Pfleger contacted Central Alabama Crimestoppers, giving the organization photographs of the shoplifter, Bruce, and the shoplifter's other alleged accomplices so that Crimestoppers could make the information public in an attempt to identify the suspects. In addition to photographs, Pfleger provided Crimestoppers with a written synopsis of multiple incidents at the store. After review of the trial court record, the Alabama Supreme Court concluded Andrews could not be held liable because, under the McDaniel/Burney rule, he did not publicize any statements about Bruce. And, because Pfleger enjoyed a qualified-privilege defense, he too could not be held liable. The Court surmised the only basis for Luxottica's possible liability was vicarious liability for Andrews's and Pfleger's actions. Because those parties were not liable, neither was Luxottica. Accordingly, the Supreme Court reversed the trial court's judgment and remanded the matter. View "Luxottica of America, Inc., et al. v. Bruce" on Justia Law

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Petitioners Insurance Express, LLC ("Insurance Express"), Wayne Taylor, and Julie Singley sought a writ of mandamus to direct a circuit court to vacate an order staying the underlying action against defendants Lynne Ernest Insurance, LLC ("LEI"), Lynne Ernest, Chynna Ernest, and Deadra Stokley. According to the complaint, Lynne and Stokley were longtime employees of Insurance Express. It alleged that they, while still employed by Insurance Express, entered Insurance Express's office after business hours and, without authorization, made electronic copies of various business records related to Insurance Express's clients and insurance policies. Lynne and Stokley resigned soon after and began employment with LEI, which purportedly had been formed by Lynne and Chynna and was a direct competitor of Insurance Express. Lynne and Stokley, it is alleged, then induced some Insurance Express clients to transfer their policies to LEI. Insurance Express sought injunctive relief to, among other things, prevent defendants from communicating with past or current customers of Insurance Express and to require defendants to return any customer information taken by them. It further sought damages for breach of contract, conversion, intentional interference with business relations, breach of fiduciary duty, and civil conspiracy. After review, the Alabama Supreme Court found petitioners established they had a clear legal right to the relief they sought. The Court granted their petition and directed the trial court to vacate its order granting a stay. View "Ex parte Insurance Express, LLC, et al." on Justia Law

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Plaintiffs Karen Watters and Cheryl Yarbrough appealed the grant of summary judgment entered in favor of Birmingham Hematology and Oncology Associates, LLC, d/b/a Alabama Oncology ("Alabama Oncology"), and Brian Adler on their claims alleging defamation and wantonness. Plaintiffs were formerly employed by Alabama Oncology. In August 2019, an anonymous letter was delivered to various physicians at several Alabama Oncology locations. The letter alleged that there had been illegal and unethical behavior by four staff members, two of whom were plaintiffs, and that there was "a massive lawsuit brewing." The letter also warned that an attorney would be contacting Alabama Oncology regarding a class-action lawsuit. In response to the letter, Alabama Oncology's executive director, Chris Barnes, contacted Alabama Oncology's outside legal counsel, Bradley Arant Boult Cummings LLP ("Bradley Arant") for advice on responding to the letter and preparing for the threatened litigation. Bradley Arant began conducting an internal investigation regarding the allegations in the anonymous letter. Ultimately, after the conclusion of the internal investigation, Alabama Oncology terminated plaintiffs' employment. Plaintiffs sued Alabama Oncology, and certain executive staff, alleging that their employment had been wrongfully terminated based on the executives' conspiracy to defame the plaintiffs and the results of what they alleged was a "sham investigation." The Alabama Supreme Court found that plaintiffs' "bare assertion that they satisfied their burden to defeat the summary-judgment motion" was insufficient to warrant reversal; the Court affirmed the trial court's judgment. View "Watters, et al. v. Birmingham Hematology and Oncology Associates, LLC, d/b/a Alabama Oncology, et al." on Justia Law