Justia Alabama Supreme Court Opinion Summaries

Articles Posted in Contracts
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Protective Life Insurance Company ("Protective") appealed a circuit court judgment entered on a jury verdict against Protective and in favor of Apex Parks Group, LLC ("Apex"), in the amount of $11,495,890.41. Apex, a California-based corporation, owned and operated 16 moderately sized amusement parks, water parks, and family-entertainment centers nationwide. Apex's founder and chief executive officer was Alexander Weber, who had possessed 43 years' experience in the industry and who was critical to Apex's success. Because of Weber's importance, in early 2016 Apex sought a "key-man" insurance policy on Weber. Protective is a Birmingham-based insurance company owned by the Dai-ichi Corporation. At that time, Weber was 64 years old. Answers from Weber's interview with a paramedical examiner were incorporated into the Apex application for insurance. Weber underwent a series of medical examinations, all of which were reported and incorporated into the key-man policy. In November 2016, after the first premium payment was made and the policy went into effect, while on vacation with his wife, Weber died. Shortly after Weber's death, Apex submitted its claim under the policy for the $10-million benefit. Protective then began a contestable-claim investigation, contending Weber's complete medical history was not disclosed, thereby voiding the policy. Protective thereafter refunded the premium Apex paid. Apex sued Protective asserting claims of breach of contract and bad faith in failing to investigate all bases supporting coverage and in making false promises that the claim would be paid. After review, the Alabama Supreme Court determined Protective was entitled to judgment as a matter of law on Apex's claim of breach of contract, and the trial court erred by submitting this claim to the jury for consideration. Accordingly, that portion of the trial court judgment was reversed. "Because Protective demonstrated that Weber made a material misrepresentation and Apex failed to introduce substantial evidence to the contrary, Protective was entitled to rescind the policy, which was a complete defense to Apex's claims of breach of contract. Thus, the trial court erred in denying Protective's motions for a judgment as a matter of law." View "Protective Life Insurance Company v. Apex Parks Group, LLC" on Justia Law

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Kevin Crook appealed summary judgment entered in favor of Allstate Indemnity Company ("Allstate Indemnity"), Allstate Insurance Company ("Allstate Insurance"), and The Barker Agency (hereinafter collectively referred to as "the defendants"). Crook owns lake-front property in Tuscaloosa County. The property consists of a house, a bathhouse, a garage, a deck, and a boat dock. In 2006, Crook, through The Barker Agency, obtained property insurance on the house and other structures from Allstate Indemnity. Allstate Indemnity issued a policy to Crook ("the policy") and provided uninterrupted insurance coverage of Crook's house from 2006 through 2015. On February 12, 2015, Allstate Indemnity conducted an inspection of the property for underwriting purposes. After the inspection, on February 23, 2015, The Barker Agency sent Crook a letter with the results, finding no "issues that impact [Crook's] current coverage, and you do not need to do anything further. ...our inspection... focused only on identifying certain types of hazards or conditions that might impact your future insurance coverage. It may not have identified some other hazards of conditions on your property." In April 2015, a storm damaged the deck and the boat dock. Ultimately, Crook sued defendants for breach of contract, bad-faith failure to pay a claim, negligent/wanton procurement of insurance, and estoppel, all relating to the policy's coverage of the storm damage. After review, the Alabama Supreme Court found no reversible error in the grant of summary judgment in favor of defendants and affirmed. View "Crook v. Allstate Indemnity Company, et al." on Justia Law

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In appeal no. 1180355, Donald Porter, Marc Porter, Porter Capital Corporation, Porter Bridge Loan Company, Inc., Lowerline Corporation, CapitalPartners Leasing, Inc., and CapitalPartners Leasing, LLC (hereinafter referred to collectively as "the Porter defendants"), appealed a judgment entered in favor of Byron Porter Williamson in his action seeking specific performance of a shareholders agreement that Williamson had entered into with Donald and Marc ("the agreement"). In appeal no. 1180634, Williamson cross-appealed the same judgment seeking prejudgment interest on the full amount of the judgment. The question presented for the Alabama Supreme Court's review was whether the trial court exceeded the scope of Williamson's request for specific performance of the agreement by awarding Williamson a monetary sum representing the value of his interest in the Porter companies based on a valuation process that differed from the valuation process set forth in the agreement. The Porter defendants did not challenge the trial court's determination that Williamson's retirement was a "triggering event" under the agreement that required the Porter defendants to "acquire" Williamson's shares under paragraph 9 of the agreement. They argued only that the trial court awarded relief beyond the scope of a request for specific performance of the agreement. The Supreme Court concurred the trial court's determination of share value used an evaluation process inconsistent with the agreement. The cross-appeal was dismissed and the matter remanded for further proceedings. View "Porter, et al. v. Williamson" on Justia Law

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Joshua Rogers appealed a preliminary injunction preventing Rogers from soliciting any employees or clients of Burch Corporation, his former employer, as contractually agreed to under restrictive covenants in an employment agreement. The Alabama Supreme Court determined there was nothing justiciable concerning the preliminary injunction because the nonsolicitation clause in the employment agreement expired, at the latest, on December 6, 2019. Therefore, the case was moot and the Court dismissed the appeal. View "Rogers v. Burch Corporation" on Justia Law

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Consolidated appeals stemmed from an August 2012 transaction in which SMM Gulf Coast, LLC ("SMM"), purchased the assets of four salvage and recycling businesses in Alabama and Mississippi. After that transaction closed, Dade Capital Corporation ("Dade"), a creditor of one of the businesses whose assets were purchased by SMM, and Dade's president David Fournier, who owned stock in that same business, sued SMM, the four businesses that had sold their assets to SMM, and various individuals associated with those businesses alleging that Dade and Fournier should have received a greater share of the purchase price paid by SMM. Following a bifurcated trial, the trial court found that Dade and Fournier's claims were barred by a release agreement that Fournier executed in conjunction with the transaction and entered a judgment against them. SMM, two of the businesses that had sold their assets to SMM, and two individuals with ownership interests in those businesses subsequently moved the trial court to award them attorney fees, court costs, and litigation expenses in accordance with a prevailing-party provision in the release agreement. The trial court denied their motions, and those parties appeal, arguing that the prevailing-party provision entitles them to the requested awards and that they have not waived their right to recover the requested amounts. The Alabama Supreme Court determined that none of the reasons the trial court used as grounds for denial SMM's reimbursement motions was a proper basis for denial. Judgment was reversed and the matter remanded for the trial court to consider the evidence submitted by SMM and the appellant sellers in conjunction with their motions for reimbursement and to enter an appropriate award based on that evidence. View "Collier v. Dade Capital Corporation" on Justia Law

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Brad Dupree sued PeoplesSouth Bank ("PeoplesSouth"), alleging that PeoplesSouth wrongfully gave the proceeds of a $100,000 certificate of deposit to his father, not him. Jimmy Dupree was Brad's father. In 1993, Jimmy opened the CD at issue here; it was issued in both Brad's and Jimmie's names. Handwritten edits on the CD later reversed the order of the names to "Jimmy Dupree and Brad Dupree" and also replaced Brad's taxpayer ID number with Jimmy's taxpayer ID number. A handwritten note, dated December 1993 on the back of the CD stated "changed order of names to report interest under Jimmy's SS#." No evidence was offered as to who made the handwritten changes, and they were not initialed by either Jimmy or Brad. Brad was a minor at the time the CD was issued and did not contribute any money to the purchase of the CD. In November 2010, before filing this case, Brad, his mother, and his stepbrother sued Jimmy alleging Jimmy had wrongfully converted certain personal property, including the CD. In 2012, while the 2010 action was pending, Jimmy cashed the CD without notifying Brad. PeoplesSouth issued a cashier's check payable to the order of "Jimmy Dupree or Brad Dupree" for the amount of the CD less amounts set off by PeoplesSouth related to Jimmy's business loan. Jimmy cashed the check and then spent the funds. Brad learned during mediation of the 2010 action that Jimmy had cashed in the CD and was advised by the mediator to sue PeoplesSouth. The circuit court entered judgment in favor of the bank. Brad appealed, arguing he should have won on his breach-of-contract claim and awarded $100,000 in damages. The Alabama Supreme Court determined that without any rights in the CD by virtue of an inter vivos gift, Brad could not show he was damaged by PeoplesSouth's alleged nonperformance, and he was therefore unable to prevail on his breach-of-contract claim. Judgment in favor of the bank was affirmed. View "Brad Dupree v. PeoplesSouth Bank" on Justia Law

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Jeanne Oaks and Parkerson Construction, LLC ("Parkerson"), were engaged in a dispute concerning Parkerson's reconstruction of Oaks's fire-damaged residence in Huntsville, Alabama. Parkerson initiated the action, claiming that Oaks owed it more than $50,000 for its work. Oaks filed counterclaims alleging, among other things, that Parkerson misrepresented itself and performed deficient work. Parkerson moved the trial court to order that Oaks's counterclaims be arbitrated based on a provision in an unauthenticated work-authorization agreement that was attached to the motion. The trial court granted Parkerson's motion and ordered that Oaks's counterclaims be arbitrated. The Alabama Supreme Court reversed the trial court's arbitration order, however, because Parkerson did not meet its burden of establishing the existence of a contract calling for arbitration. View "Oaks v. Parkerson Construction, LLC" on Justia Law

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LED Corporations, Inc. ("LED"), and Anthony Florence petitioned the Alabama Supreme Court for a writ of mandamus to direct the Etowah Circuit Court ("the trial court") to vacate its order denying their motions to dismiss for lack of personal jurisdiction an action filed against them by SDM Electric, LLC ("SDM"), and to enter an order dismissing the case against them. SDM is an Alabama corporation that served as an electrical subcontractor for a construction project at a high school in Calhoun County, Alabama. LED is a Florida corporation owned by Florence, its sole shareholder. In 2017, SDM contacted LED to solicit a bid for lighting fixtures for use in the construction project. SDM executed and delivered to LED a purchase order for lighting fixtures; SDM paid LED the balance of the purchase order. The fixtures were never shipped, and, in late 2018, SDM sued LED and Florence (among others), for breach of contract, fraudulent misrepresentation and conversion. The Alabama Supreme Court affirmed the trial court, concluding SDM satisfied its burden in opposition to LED's and Florence's motions to dismiss by showing that LED and Florence has sufficient contacts with Alabama to support the exercise of specific personal jurisdiction and that the exercise of jurisdiction over them "complies with traditional notions of fair play and substantial justice." View "Ex parte LED Corporations, Inc." on Justia Law

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Mark Rosenthal ("Mark"), as personal representative of the estate of Richard Rosenthal, deceased ("Richard"), appealed the grant of summary judgment entered in favor of JRHBW Realty, Inc., d/b/a RealtySouth ("RealtySouth"), and Charles Valekis on Richard's claims alleging breach of contract and negligence/wantonness. In early June 2013, Richard retained RealtySouth through its agent Valekis to assist him in locating a new house to purchase. Valekis told Richard about an unlisted property that Valekis believed would meet Richard's needs. Richard testified that he told Valekis that he would not buy the home without having a structural engineer examine it. Richard testified that, based on Valekis's representation that he had had a structural engineer inspect the home and on Valekis's representation that Garland Caudle, a home inspector (but not a structural engineer) had not found any structural issues, he placed an offer on the home. Richard closed on the home on July 19, 2013, and he moved into the home soon thereafter. After he had lived in the home for several months, Richard concluded that the home was too small and that he needed a larger home. He again engaged the services of Valekis and RealtySouth to sell the home. After the home was placed on the real-estate market, Richard began to notice problems with it. Valekis subsequently informed Richard that numerous potential buyers were concerned with the condition of the home. Ultimately, Richard had the home inspected by a foundation-repair contractor, and that contractor recommended that Richard hire a structural engineer. The structural engineer determined the home was experiencing significant structural distress and estimated that fixing the issues would cost over $100,000. In 2015, Richard sued RealtySouth, Valekis, Caudle, Foundations Unlimited of Alabama, and the Coopers (the previous owners of the house). The Alabama Supreme Court concluded Mark's allegation of a breach of contract by Valekis apart from the agency agreement was without merit. As the circuit court concluded, the agency agreement "contains language that RealtySouth and Valekis did not assume any responsibility to inspect the property or retain building experts to inspect the property," so the Court concluded the agency agreement did not provide a basis for Richard's breach-of-contract claim. Accordingly, the circuit court correctly entered a summary judgment in favor of RealtySouth and Valekis with respect to any alleged breach of contract. View "Estate of Richard Rosenthal v. JRHBW Realty, Inc., d/b/a RealtySouth" on Justia Law

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Plaintiff Warner Wiggins appeals a circuit court's order compelling him to arbitrate his claims against Warren Averett, LLC. Warren Averett was an accounting firm. Eastern Shore Children's Clinic, P.C. ("Eastern Shore"), a pediatric medical practice, was a client of Warren Averett. In September 2010, while Wiggins, who was a medical doctor, was a shareholder and employee of Eastern Shore, Warren Averett and Eastern Shore entered an agreement pursuant to which Warren Averett was to provide accounting services to Eastern Shore ("the contract"). The contract contained an arbitration clause. Thereafter, Wiggins and Warren Averett became involved in a billing dispute related to the preparation of Wiggins's personal income-tax returns. In 2017, Wiggins filed a single-count complaint alleging "accounting malpractice" against Warren Averett. Warren Averett filed an answer to Wiggins's complaint, asserting, among other things, that Wiggins's claims were based on the contract and were thus subject to the arbitration clause. A majority of the Alabama Supreme Court concluded the determination of whether Wiggins' claims were covered under the terms of the arbitration clause was delegated to an arbitrator to decide. Therefore, it affirmed the trial court's order. View "Warner W. Wiggins v. Warren Averett, LLC" on Justia Law