Justia Alabama Supreme Court Opinion Summaries

Following a two-day trial in May 2013, a Bullock County jury returned a $450,000 verdict in favor of Michael Shepherd on a breach-of-warranty claim he asserted against Barko Hydraulics, LLC. Shepherd purchased a Barko 495ML knuckle boom loader ("the 495ML loader") from G&S Equipment Company in 2008 for use in his logging operation. In November 2010, when the 495ML loader had approximately 4,300 hours on its clock, Shepherd transported it to G&S Equipment for repairs after the hydraulic pumps began making noise. G&S Equipment confirmed that the hydraulic pumps had failed and notified Shepherd that the needed repairs, costing approximately $10,000, would not be covered under the warranty because the warranty period had expired. At Shepherd's request, G&S Equipment contacted Barko, which confirmed that it would not authorize or reimburse G&S Equipment for making the needed repair because of the expiration of the warranty. At that point, Shepherd told G&S Equipment that he could not afford to pay for the repairs to the 495ML loader, nor could he continue to meet his obligation to Wells Fargo (the bank that lent him the purchase money for the loader). He left the loader with G&S Equipment, notified Wells Fargo of its location, and of his intention to make no further payments on it. Wells Fargo subsequently repossessed the loader, sold it, and obtained a $124,184 deficit judgment against Shepherd. Shepherd then sued Barko, G&S Equipment, and Cummins Mid-South, LLC, the manufacturer of certain component parts of the 495ML loader, asserting fraud, negligence and/or wantonness, and multiple breach-of-warranty claims. Shepherd sought both compensatory damages for lost profits and mental anguish and punitive damages. Ultimately, G&S Equipment and Cummins Mid-South were dismissed from the action, and, during the course of the trial, all of Shepherd's claims against Barko except a breach-of-express-warranty claim were withdrawn or dismissed. Barko's subsequent postjudgment motion renewing its previous motion for a judgment as a matter of law or, in the alternative, for a new trial was denied by the trial court. Barko then appealed to the Supreme Court. After review, the Court concluded the trial court erred in not granting Barko's postjudgment motions. The case was remanded for entry of an order granting Barko's motion for a new trial. View "Barko Hydraulics, LLC v. Shepherd " on Justia Law

The Practice-Monroeville, P.C., is a medical-practice group located in Monroeville. Allscripts Healthcare, LLC, based in North Carolina with no Alabama offices, sells health-care software to health-care providers. Jackson Key Practice Solutions, LLC is a certified "sales-and-service partner" of Allscripts, selling and servicing Allscripts software, and Anderton is an employee and partial owner of Jackson Key. In May 2011, the Practice and Allscripts entered into a written contract in which the Practice purchased health-care software called "MyWay" from Allscripts through Jackson Key. The contract contained an arbitration provision, which stated in pertinent part: "Any dispute or claim arising out of, or in connection with, this Agreement shall be finally settled by binding arbitration in Raleigh, NC, in accordance with the then-current rules and procedures of the American Arbitration Association ...." The Practice became dissatisfied with the performance of the MyWay software and unsuccessfully attempted to cancel its contract with Allscripts. The Practice sued Jackson Key and Anderton, but not Allscripts, in circuit court. Jackson Key and Anderton moved to compel arbitration based on the arbitration provision in the contract. Anderton and Jackson Key appealed the Circuit Court's order denying their motion to compel arbitration. After review, the Supreme Court found the circuit court erred in its decision, reversed and remanded the case for further proceedings. View "Anderton v. The Practice-Monroeville, P.C. " on Justia Law

Tommy Sundy petitioned for a writ of mandamus to direct the circuit court to dismiss third-party claims asserted against him by accounting firm Frost Cummings Tidwell Group, LLC ("FCT"). Adams Produce Company, Inc. ("APCI"), purchased Crestview Produce of Destin, Inc., from Sundy. As part of the transaction, APCI and Sundy executed a promissory note in the amount of $850,000, and Sundy became an employee of APCI. FCT alleges that, based on representations from APCI and Sundy, certain budget and bonus projections were set for APCI, but those goals were not met. Because of that failure, Sundy was not entitled to bonuses that had been paid to him throughout 2009. With the alleged help and direction of FCT, APCI recharacterized the bonuses as repayments of principal on the promissory note. The nonpayment of certain amounts to Sundy in the context of this action effectively increased APCI's income and decreased its indebtedness. APCI also allegedly entered into an oral, undocumented agreement with Sundy stipulating that it would make him whole in future years for the forfeited bonus payments. In 2009, APCI's shareholders decided to sell the company to API Holdings, LLC. API Holdings alleges that it discovered that, contrary to representations made by FCT in an audit report, APCI's financial statements were fraudulent, causing API Holdings to believe that APC was worth more than it actually was. API Holdings sued FCT asserting claims of negligent misrepresentation, auditing malpractice, fraud, and other claims of professional malfeasance. Among several other claims, API Holdings alleged that FCT had failed to uncover misrepresentations by Sundy and APCI and that FCT had acted fraudulently in confirming the recharacterization of Sundy's bonuses as payments on principal of the promissory note. A few months later, APC filed for Chapter 11 bankruptcy protection. APC filed an adversarial complaint in FCT's bankruptcy case, alleging that FCT's audit work had painted a false financial picture of APC upon which APC had relied in continuing to operate its business even after reaching the point of insolvency. FCT filed a third-party complaint with the bankruptcy court against Sundy and others. FCT's complaint alleged various theories under Alabama law as bases for FCT to "recover over" against Sundy. Sundy subsequently moved to dismiss FCT's third-party complaint on the basis of 6-5-440, Ala. Code 1975, Alabama's abatement statute. The circuit court denied the motion, and Sundy then filed his petition for a writ of mandamus seeking to have the Supreme Court direct the circuit court to vacate its judgment denying his motion to dismiss and to order the circuit court to dismiss FCT's claims against Sundy asserted in its third-party complaint at circuit court. The Supreme Court concluded that FCT's third-party claims against Sundy were not barred by the abatement statute. The circuit court properly declined to dismiss those claims. Therefore, the Court denied the petition for a writ of mandamus. View "In re: API Holdings, LLC v. Frost Cummings Tidwell Group, LLC" on Justia Law

On May 10, 2013, CAG MLG, L.L.C. sued Bart Smelley and Smelley Family Investments, L.L.C., alleging six counts of misrepresentation and/or fraud and a single count of unjust enrichment. Smelley responded with a motion to dismiss, arguing that CAG was a foreign limited-liability company formed and organized in the State of Florida in 2010 and that it was "not registered or qualified to do business in the State of Alabama." Smelley also alleged that CAG had domesticated in Wyoming as Oceans, LLC, in March 2011 and that CAG was subsequently dissolved as a Florida entity in April 2011. Smelley argued that CAG "failed to state the jurisdictional element establishing its ability to maintain an action in its initial pleading." Accordingly, Smelley argued, the circuit court lacked "subject matter jurisdiction and/or personal jurisdiction over the matters contained in the [c]omplaint." CAG amended its complaint to add an eighth count requesting that the circuit court issue an injunction preventing Smelley from selling a piece of real property. Smelley amended its motion to dismiss to include the additional claim. CAG filed a motion to strike the paragraphs of Smelley's motion to dismiss that alleged that CAG was a foreign entity that was not registered to transact business in Alabama and the exhibits attached in support thereof. The circuit court held a hearing on the motions, and, the next day, issued an order granting CAG's motion to strike the objected to paragraphs of Smelley's motion. The court dismissed the request for an injunction as moot, and instructed the parties to file briefs regarding the remainder of Smelley's motion. Later that year, the circuit court granted Smelly's motion. CAG appealed. On review, the Supreme Court found that the circuit court granted Smelley's motion to dismiss without considering the exhibits attached thereto (having struck those exhibits pursuant to CAG's motion). Accordingly, Smelley's motion was not converted to a motion for a summary judgment. The the circuit court's dismissal of CAG's complaint would have only been proper if CAG's alleged lack of capacity was evident from the face of CAG's complaint. The Court concluded that it was not. Therefore, the circuit's court's dismissal of the complaint was reversed. View "CAG MLG, L.L.C. v. Smelley" on Justia Law

Clay Merches petitioned the Alabama Supreme Court for a writ of mandamus to direct the trial court to dismiss claims against him for lack of personal jurisdiction. The underlying case concerned a missing flatbed trailer owned by Builders Transportation, a Tennessee company. The plaintiffs were Alabama residents. The complaint alleged that the parties had entered into a contract in which Builders Transportation and Dwight Bassett (employee of Builders Transportation) had agreed to pay the plaintiffs $10,000 in return for information about the location of the missing trailer. The plaintiffs further alleged that Builders Transportation and Bassett had breached that contract by failing to pay the plaintiffs $10,000 for the information given about the trailer, which was located in a field in Hale County. Instead of receiving $10,000, the plaintiffs were arrested in Hale County and charged with receiving stolen property and conspiracy to commit theft of property. Those charges were later dismissed. In July 2012, the plaintiffs amended their complaint to add Merches, an employee of Builder Transportation as a defendant. The claims and factual allegations made against Merches in the amended complaint were the same as those made against Builders Transportation and Bassett. Upon review, the Supreme Court concluded Merches lacked sufficient contact with Alabama to support the trial court's exercise of personal jurisdiction over him. Accordingly, the Court issued the writ.View "Brantley v. Bassett" on Justia Law

Petitioners B2K Systems, LLC, a Delaware limited-liability company; Ingenuity International, LLC, a foreign corporation; and Robert A. Przybysz, sought a writ of mandamus seeking enforcement of an outbound forum-selection clause and the reversal of a preliminary injunction entered by an Alabama Circuit Court. This matter arose out of a business dispute. Respondent Nannette Smith, was the founder and president of, and the sole shareholder in, B2K Systems, Inc., a Birmingham-based Alabama corporation that developed specialized software for point-of-sale retailers. In 2012, B2K, Inc. sold its assets to B2K Systems, LLC (a corporation set up for the purpose of acquiring B2K Inc's assets). Przybysz, the managing member and CEO of B2K LLC and Ingenuity, executed the promissory note on behalf of B2K LLC and the guaranty agreement on behalf of Ingenuity. That same day, B2K LLC and Smith entered into the employment agreement, pursuant to which Smith became president of B2K LLC. Each agreement (an asset-purchase agreement, employment agreement, promissory note, and guaranty agreement) contained a forum-selection clause. All the agreements provided that the law of the State of Delaware would govern (the forum selection clauses in each lie at the heart of this appeal). Following the purchase, relations between Smith and B2K LLC deteriorated. In 2014, Przybysz acted to terminate Smith's employment with B2K LLC, "for cause." The same day, B2K LLC filed for and received a temporary restraining order ("TRO") from a Kent, Michigan Circuit Court. Along with its request for the TRO, B2K LLC filed a lawsuit against Smith alleging breach of Smith's employment agreement with B2K LLC, breach of fiduciary duty, and breach of the asset-purchase agreement. The day after the Michigan TRO was issued, Smith filed a complaint and a petition for a TRO in Alabama ("the trial court"), seeking her own TRO against the petitioners and also seeking monetary damages for breach of the employment contract and the promissory note. The Alabama court issued the TRO. Petitioners then moved to dissolve the TRO and to dismiss Smith's lawsuit, arguing, in part, that under the various forum-selection clauses contained in the parties' agreements, either the Kent, Michigan Circuit Court or the United States District Court for the Western District of Michigan were the exclusive forums for Smith's lawsuit. Smith argued that venue in the Alabama court was proper, that the forum-selection clauses were permissive rather than mandatory, and that Michigan was a seriously inconvenient forum. The trial court noted that the forum-selection clauses were "inartful" and concluded that venue was proper in both Alabama and Michigan. The petitioners filed this petition for a writ of mandamus 13 days after the entry of the preliminary injunction. Because the Alabama Supreme Court was presented "with no viable argument or citation of authority regarding the proper standards for interpreting or enforcing the forum-selection clauses at issue," it declined "to disturb the trial court's determination that its exercise of authority in this case was not prohibited by those clauses." As such, petitioners failed to establish a clear legal right to the dismissal of Smith's action based on the forum-selection clauses. As to the venue issue, the petition for the writ of mandamus was also denied: Smith failed to convince the Court that, without the injunction, she would suffer irreparable injury. View "Smith v. B2K Systems, LLC et al" on Justia Law

The L.B. Whitfield, III Family LLC appealed a circuit court judgment that ordered the Family LLC to wind up its affairs following its dissolution on the death of its sole member and to return 22 shares of Class A voting stock in Whitfield Foods, Inc. to Virginia Ann Whitfield, Almeida Fair Whitfield Strawder, and Valerie Lee Whitfield Puckett ("the sisters"). Upon review of the dispute, the Supreme Court concluded that the trial court erred in ordering the Family LLC to return the 22 voting shares to only the sisters. The Court affirmed the portion of the trial court's judgment finding that the Family LLC was dissolved and ordering that the Family LLC must wind up its affairs, provide an accounting of its assets, distribute those assets in equal shares to Louie, Virginia Whitfield, Valerie Puckett, and Almeida Strawder, and file articles of dissolution in the office of the judge of probate of Montgomery County.View "L.B. Whitfield, III Family LLC v. Whitfield et al. " on Justia Law

Andrew J. Gentry III ("Drew Gentry") appealed a circuit court judgment dismissing his claims against Daniel Lindsey, Sr., Jackson Thornton & Co., P.C. ("Jackson Thornton"), Daniel Lindsey, Jr., Justin M. Parnell ("Matt Parnell"), Parnell & Crum, and Wilbur Investments, LLC ("Wilbur Investments"). In 1992, Andrew J. Gentry, Jr. ("Andy Gentry") petitioned for Chapter 11 bankruptcy protection. Andy Gentry hired Charles N. Parnell III ("Nick Parnell"), an attorney at Parnell & Crum, to represent him in the bankruptcy proceedings. Nick Parnell hired Daniel Lindsey, Sr., a certified public accountant with Jackson Thornton, to assist him. According to Drew Gentry, who (Andy Gentry's son), Andy Gentry suffered from a mental illness throughout his life, which, Drew Gentry argued, was not controllable by medication at the time of the bankruptcy proceedings. Drew Gentry argues that, at the time of the bankruptcy proceedings, Nick Parnell and Daniel Lindsey, Sr., knew of Andy Gentry's reduced mental capacity and also knew that Andy Gentry was terminally ill with AIDS. Andy Gentry died in 1995, while the bankruptcy proceedings were pending. During the bankruptcy proceedings and prior to Andy Gentry's death, Nick Parnell and Daniel Lindsey, Sr., incorporated LeeCo Properties, Inc. ("LeeCo"), in the names of their minor sons, Matt Parnell and Daniel Lindsey, Jr. Nick Parnell and Daniel Lindsey, Sr., persuaded Andy Gentry and the bankruptcy court to allow the transfer of certain real estate owned by Andy Gentry to LeeCo in return for either payment of the debts owed on those properties or the assumption of those debts. The bankruptcy proceedings concluded in 1997. In 2010, Nick Parnell and Matt Parnell acquired the interests of Daniel Lindsey, Sr., and Daniel Lindsey, Jr., in LeeCo. LeeCo's assets were later transferred to Wilbur Investments, and LeeCo was dissolved in December 2010. Drew Gentry sued over the transfer of his father's assets to LeeCo. In March 2013, the circuit court entered a certification, pursuant to Rule 54(b), making final the dismissal of the claims against Daniel Lindsey, Jr., the Jackson Thornton defendants, Matt Parnell, Parnell & Crum, and Wilbur Investments. The circuit court did not make final the dismissal of the claims in an amended complaint against Nick Parnell, presumably because claims remained pending against him in the original complaint. Drew Gentry appealed the circuit court's judgment to the Court of Civil Appeals. In August 2013, the Court of Civil Appeals transferred the appeal to the Supreme Court, citing a lack of subject-matter jurisdiction. Daniel Lindsey, Jr., and Nick Parnell separately moved this Court to dismiss them from the appeal. Daniel Lindsey, Jr., argued that Drew Gentry had not listed him on the notice of appeal and that the notice of appeal did not "give[] any indication of an intent to appeal the judgment in favor of [Daniel] Lindsey, Jr." Nick Parnell argued that claims remained pending against him in the circuit court, that "there ha[d] been no final judgment against him," and that "the [circuit] court's [March 20 judgment] did not include him." The Supreme Court denied the motion filed by Daniel Lindsey, Jr., but granted Nick Parnell's motion and dismissed him from the appeal. Because the Rule 54(b) certification was improper, Drew Gentry's appeal was dismissed. View "Gentry III v. Lindsey, Sr., et al. " on Justia Law

Tiffin Motorhomes, Inc. sued Edgetech I.G.,Inc., n/k/a Quanex I.G. Systems, Inc.; Quanex Building Products Corporation; Thompson I.G., LLC, and RDM Consulting, LLC; and Wynne Enterprises, Inc. Edgetech filed a motion to dismiss the claims against it for lack of personal jurisdiction; the trial court denied the motion. Edgetech then filed this petition for a writ of mandamus requesting that the Supreme Court direct the trial court to vacate its order denying the motion to dismiss and to enter an order granting the motion and dismissing the case against it. Finding that the trial court erred in denying Edgetech's motion to dismiss, the Supreme Court granted Edgetech's petition and issued the writ. View "Tiffin Motorhomes, Inc. v. Thompson I.G., LLC et al. " on Justia Law

U.S. Bank National Association and U.S. Bancorp sought a writ of mandamus ordering the Jefferson Circuit Court to dismiss the malicious-prosecution case filed against them by Sterne, Agee & Leach, Inc. that arose out of a lawsuit prosecuted by U.S. Bank entirely in the State of Washington. The principle of "lex loci delicti" requires that the law of the state in which the antecedent lawsuit was terminated in favor of the complaining party governs a malicious-prosecution claim. Thus, Washington law governed Sterne Agee's claim of malicious prosecution. Accordingly, U.S. Bank's petition for writ for mandamus was granted, and the circuit court was ordered to dismiss Sterne Agee's malicious-prosecution case.View "Sterne, Agee & Leach, Inc. v. U.S. Bank National Association" on Justia Law