Justia Alabama Supreme Court Opinion Summaries

This issue this case presented for the Supreme Court's review centered on the ownership interests in and control of Autauga Automotive, LLC, a limited liability company that owned and operated a Ford Motor Company franchise in Prattville known as "Gilmore Ford." Frank Moultrie appealed a circuit court judgment which held that the interests of Charles O. Wall II and Moultrie in the profits and losses of Autauga Automotive were 90% and 10%, respectively, but that Moultrie was divested of his 10% interest for failing to pay a required capital contribution. The Supreme Court affirmed in part, and reversed in part. That part of the circuit court's judgment holding that Moultrie was divested of his interest in Autauga Automotive by failing to make a capital contribution pursuant to Wall's September 2012 capital call was reversed, and the case remanded back to the circuit court with instructions to enter a judgment in favor of Moultrie on that claim. The case was affirmed in all other aspects. View "Moultrie v. Wall" on Justia Law

Defendants William Mudd, John Whitaker, Phillip Luke, and David Wells, and the law firm in which they were members, Whitaker, Mudd, Simms, Luke, & Wells, LLC ("WMSLW") petitioned for a writ of mandamus to direct the 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. This case stemmed from a dispute when one of the firm's members left, and disagreements arose pertaining to the departing members' share of the accounts, transfer of client files, and other related matters. The departing member sued defendants alleging defamation, libel, oppression of a minority shareholder, misrepresentation, breach of contract and accounting irregularities. After review of the specific facts of this case, the Supreme Court granted the petition and directed the Chambers Circuit Court to transfer the case to the Jefferson Circuit Court because venue was not proper in Chambers County. View "Ex parte WMS, LLC," on Justia Law

Victor Deng and DM Technology & Energy, Inc. ("DM") appealed a judgment based on a jury's verdict in favor of Clarence "Buddy" Scroggins and Complete Lighting Source, Inc. ("Complete Lighting"), on their claims against Deng and DM alleging breach of contract and fraud. Upon review of the dispute, the Supreme Court reversed the circuit court's judgment in favor of Scroggins and Complete Lighting on the fraud claim and remanded the case for the entry of an order granting a new trial as to that claim. The Court affirmed the circuit court's judgment in all other respects. View "Deng v. Scoggins" on Justia Law

Corner Stone Funeral Chapel, Inc. appealed a judgment ordering a receiver to transfer the assets of a cemetery business to MVMG, LLC, its competitor. Mountain View Memory Gardens & Mausoleum, Inc. owned a cemetery in Rainsville known as Mountain View Memory Gardens and Mausoleum. Jeanette Mince, the sole owner and officer of the corporation, died in 2008, leaving the corporation to her two daughters. Neither daughter was interested in operating the corporation, and they expressed an intention to disclaim any interest in it. In 2009, the Alabama Department of Insurance 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 Pre-need 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 pre-need-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. Ridling also asked the trial court to appoint a receiver to take control of the corporation and eventually to liquidate and dissolve the corporation, subject to the trial court's supervision. During the receivership period, individuals owning plots and vaults in the cemetery formed the MVMG Mausoleum Association during the receivership period to preserve the cemetery. The receiver unsuccessfully attempted to find a buyer for the cemetery, and she eventually concluded that the cemetery was unmarketable. The receiver then 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 in part, the corporation's approximately 1,155 outstanding preneed contracts. Two entities presented proposals seeking the transfer of the assets, of which the cemetery is the main asset: Corner Stone and MVMG, LLC. The receiver recommended that the trial court accept Corner Stone's proposal. Following an ore tenus trial, the trial court disagreed with the receiver's recommendation and decided to accept the LLC's proposal. Corner Store appealed the trial court's decision. "We cannot say that the trial court exceeded its discretion in ordering the transfer of the corporation's assets to the LLC." Thus, the Supreme Court affirmed. View "Corner Stone Funeral Chapel, Inc. v. MVMG, LLC " on Justia Law

Tender Care Veterinary Hospital, Inc. ("TCVH"), appealed the grant of summary judgment entered in favor of First Tuskegee Bank on breach-of-fiduciary-duty and fraud claims stemming from a construction loan TCVH received from First Tuskegee 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 argued, 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 this action in April 2009, those claims were barred by the two-year statute of limitations that governed them. Accordingly, the summary judgment entered by the trial court in favor of First Tuskegee was affirmed. View "Tender Care Veterinary Hospital, Inc. v. First Tuskegee Bank " on Justia Law

In 2004, Paint Rock Turn, LLC purchased a sod farm and related farm equipment. To partially finance the purchase, Paint Rock borrowed $1,706,250 from First Jackson Bank. 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. In early 2009, Paint Rock filed a Chapter 11 bankruptcy petition. The filing of the petition operated as an automatic stay and precluded First Jackson from foreclosing on the sod farm or retaking the equipment. The bankruptcy petition was dismissed later that year, and a few months later, First Jackson moved forward with its intent to foreclose by publishing the first of three notices of a foreclosure sale on the Paint Rock property. On the morning of the scheduled sale, Paint Rock filed a second bankruptcy petition, which stayed the sale. This second petition was dismissed a month later for failure to file the proper schedules and statements. First Jackson published another notice that the foreclosure sale was rescheduled for December 30, 2009. December 26, Paint Rock filed a third bankruptcy petition. Four days later, the bankruptcy court lifted the automatic stay, expressly finding that Paint Rock misused the bankruptcy process to "hinder and delay First Jackson's efforts to foreclose its mortgage and security agreement." First Jackson was the high bidder at the sale, purchased the property, and sent Paint Rock a letter demanding possession of the sod farm. In early 2010, First Jackson filed an ejectment action. The same day, Paint Rock demanded access to the farm to recover "emblements in the form of sod which is being grown on the real property recently foreclosed upon ...." Paint Rock also 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 result of being unable to harvest the sod. Paint Rock also sought damages for conversion of "plats of sod" contained on the sod farm. First Jackson sold the sod farm to Mrs. Goodson, subject to any claim Paint Rock may have to the emblements growing on the property. Paint Rock filed a joint third-party complaint against First Jackson and Mr. and Mrs. Goodson, alleging conversion and detinue, as well as the emblements claim. After the trial court denied motions for a summary judgment filed by First Jackson and the Goodsons, 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 the ground that Paint Rock was not an at-will tenant. After Paint Rock withdrew its detinue claims and the trial court granted a JML on the wantonness claims, leaving only the conversion and negligence claims. The jury awarded Paint Rock damages against First Jackson for conversion of a sod cutter and cut sod that had been loaded on a tractor-trailer when First Jackson took possession of the property. The jury also awarded Paint Rock damages against the Goodsons for conversion of business property and equipment. Paint Rock appealed the JML in favor of the defendants on the emblements claim; First Jackson cross-appealed the judgment awarding Paint Rock damages for conversion of the cut sod. The Supreme Court affirmed with regard to Paint Rock's emblements claim, but reversed on the conversion of the cut sod claim. View "Paint Rock Turf, LLC v. First Jackson Bank et al. " on Justia Law

The Alabama Supreme Court consolidated cases that arose out of an action brought by Guy Willis against three defendants: Alaska Bush Adventures, LLC ("Alaska Bush") and Hugh and Ryan Krank (collectively, the defendants). The Kranks are the owners and operators of Alaska Bush, an outfitter that provided guided hunting trips in Alaska. In December 2011, Willis entered into a written contract with Alaska Bush pursuant to which Alaska Bush would lead a guided hunting trip in Alaska. Willis also claimed 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. A few months after the trip, Willis sued the defendants in Alabama seeking damages for breach of contract, misrepresentation, and suppression. Willis's claims against 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 misrepresented the quantity of wild game that would be available on the hunt. 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, defendants filed an answer to Willis's complaint and an objection to Willis's applications for entry of a default judgment. Thereafter, defendants filed a motion to compel Willis to arbitration pursuant to an arbitration agreement found in the written contract. Defendants then each filed an individual motion to dismiss Willis's complaint for lack of personal jurisdiction. The trial court issued an order denying the defendants' respective motions to dismiss and their motion to compel arbitration. In case no. 1130184, defendants petitioned the Alabama Supreme Court for a writ of mandamus to challenge the denial of their motions to dismiss for lack of personal jurisdiction; in case no. 1130231, they appealed the trial court's denial of their motion to compel arbitration. The Supreme Court concluded after review that defendants were not entitled to mandamus relief on the jurisdiction question, but met their burden in their motion to compel arbitration. View "Willis v. Alaska Bush Adventures, LLC et al." on Justia Law

In 1999, Cooper and Robert L. Flowers formed C&F Enterprises, LLC. C&F owned a parcel of property in Huntsville, upon which it built a shopping center known as College Plaza. Pursuant to an "Amended and Restated Operating Agreement," MTA, Inc. became a member of C&F. The operating agreement provided that MTA, Flowers, and Cooper each owned a one-third interest in C&F. C&F borrowed $650,000 from the Southern Development Council, Inc. ("SDC"), a community-development program; that debt was memorialized by a promissory 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. A few years later, C&F received a foreclosure letter with respect to the note. Counsel for MTA sent Cooper a letter informing him of MTA's intent to exercise its right of first refusal pursuant to section 16 of the operating agreement. In 2012, MTA filed a complaint against Cooper and Flowers, alleging multiple issues, but of pertinence for this appeal, 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. After a hearing, the trial court entered an order granting MTA's summary-judgment motion. Because genuine issues of material fact still remained at the time the trial court granted summary judgment, the Supreme Court concluded the trial court erred in this respect. The trial court's order was reversed, and the case remanded for further proceedings. View "Cooper v. MTA, Inc." on Justia Law

Jeffrey Wright and Myron Allenstein filed separate complaints against A-1 Exterminating Company, Inc.; Terry Buchanan; Edward Wrenn; and David Wrenn (collectively, "A-1"). In the complaints, plaintiffs alleged that, on the date of the initial termite bonds they were issued, A-1 Exterminating promised to identify and recommend the appropriate services to protect the plaintiffs' houses or property from termites. Plaintiffs stated that in their contract with A-1, plaintiffs had paid for the initial service, the issuance of the termite bond, and annual renewal premiums. During subsequent periodic visits to the subject properties, A-1 sprayed liquids and either represented to plaintiffs or led plaintiffs to believe that those applications were treatments for termites. But in 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 regular, watered-down pesticide that might only be strong enough to kill ants and possibly spiders. 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." The trial court entered an amended protective order in both cases. Plaintiffs then filed petitions for the writ of mandamus with the Supreme Court seeking a rescission. The Supreme Court found the protective orders overbroad: "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 tailored so that it uses the least restrictive means necessary to protect A-1's right to a fair trial." The Court granted plaintiffs' petitions for mandamus relief, and remanded the cases for further proceedings. View "Wright v. A-1 Exterminating Company, Inc., et al." on Justia Law

Electric Insurance Company petitioned the Supreme Court for a writ of mandamus to direct the Circuit Court to allow Electric, an uninsured-motorist insurer, to "opt out" of the trial of the underlying case. The issue presented by this petition was whether Electric asserted its right to opt out within a reasonable time. Upon review, the Supreme Court concluded that it did; thus, it granted the petition and issued the writ. View "Bolt v. Electric Insurance Company" on Justia Law