Justia Alabama Supreme Court Opinion Summaries

Warrior Met Coal, LLC sued Eickhoff Corporation alleging certain pieces of heavy mining equipment Eickhoff had manufactured and sold to Warrior Coal were defective. Eickhoff subsequently moved the trial court to compel Warrior Coal to arbitrate its claims pursuant to an arbitration provision in contracts executed after the sale of the equipment, not the original purchase-order contracts associated with the allegedly defective equipment. The trial court denied the motion to compel arbitration and Eickhoff appeals. The Alabama Supreme Court determined the breach-of-warranty, breach-of-contract, and products-liability claims asserted by Warrior Coal in its action against Eickhoff were at least arguably connected to the master service agreements inasmuch as those contracts addressed Eickhoff's obligation to provide an employee to assist with the maintenance and operation of the longwall shearers (the allegedly defective equipment). Accordingly, because the parties also agreed in the master service agreements that the AAA commercial arbitration rules would govern any arbitration, and because those rules empowered the arbitrator to decide questions of arbitrability, the trial court erred when it instead at least implicitly resolved the arbitrability issue in favor of Warrior Coal in its order denying Eickhoff's motion to compel. That order was accordingly reversed and the case remanded for the trial court to enter an order granting Eickhoff's motion to compel arbitration and staying proceedings in the trial court during the pendency of the arbitration proceedings. View "Eickhoff Corporation v. Warrior Met Coal, LLC" on Justia Law

Dr. Tara Lynd, M.D. appealed the grant of summary judgment entered in favor of Marshall County Pediatrics, P.C. ("MCP"), in her action seeking a judgment declaring the proper valuation of her shares in MCP. In July 1978, John Packard, M.D. filed articles of incorporation forming MCP, a medical practice specializing in pediatrics in Guntersville, Alabama. At the same time, MCP adopted bylaws. Those bylaws reference a separate "stockholder agreement," but one was never executed. Over time, Dr. Packard hired other physicians to work with him in MCP. In 2005, Dr. Packard hired Dr. Lynd as a pediatrician to work for MCP. In 2013, Dr. Packard retired from practice, and he sold MCP to four other physicians who were then working for MCP: Dr. David Chupp, Dr. Don Jones, Dr. Sarah Rhodes, and Dr. Lynd. At the time of sale, each physician paid Dr. Packard $1,000, with the understanding that he or she would pay Dr. Packard the remaining amount due for his or her shares, with interest, over a period of several years. At the time the four physicians acquired MCP from Dr. Packard, they accepted the bylaws without alteration. They did not execute a stockholder agreement. In 2014, Dr. Lynd telephoned each of the other physicians to inform him or her that she would be leaving MCP. Dr. Rhodes testified in her affidavit that, upon Dr. Lynd's severance from MCP, the other three physicians did not dispute that Dr. Lynd was owed her portion of the receivables/production bonuses generated by MCP. A dispute formed over the valuation of her shares. The Alabama Supreme Court determined Dr. Lynd failed to demonstrate that she should receive the fair value of her stock in MCP, and that the trial court did not err in denying her motion for a summary judgment. View "Lynd v. Marshall County Pediatrics, P.C." on Justia Law

Dr. Tara Lynd, M.D. appealed the grant of summary judgment entered in favor of Marshall County Pediatrics, P.C. ("MCP"), in her action seeking a judgment declaring the proper valuation of her shares in MCP. In July 1978, John Packard, M.D. filed articles of incorporation forming MCP, a medical practice specializing in pediatrics in Guntersville, Alabama. At the same time, MCP adopted bylaws. Those bylaws reference a separate "stockholder agreement," but one was never executed. Over time, Dr. Packard hired other physicians to work with him in MCP. In 2005, Dr. Packard hired Dr. Lynd as a pediatrician to work for MCP. In 2013, Dr. Packard retired from practice, and he sold MCP to four other physicians who were then working for MCP: Dr. David Chupp, Dr. Don Jones, Dr. Sarah Rhodes, and Dr. Lynd. At the time of sale, each physician paid Dr. Packard $1,000, with the understanding that he or she would pay Dr. Packard the remaining amount due for his or her shares, with interest, over a period of several years. At the time the four physicians acquired MCP from Dr. Packard, they accepted the bylaws without alteration. They did not execute a stockholder agreement. In 2014, Dr. Lynd telephoned each of the other physicians to inform him or her that she would be leaving MCP. Dr. Rhodes testified in her affidavit that, upon Dr. Lynd's severance from MCP, the other three physicians did not dispute that Dr. Lynd was owed her portion of the receivables/production bonuses generated by MCP. A dispute formed over the valuation of her shares. The Alabama Supreme Court determined Dr. Lynd failed to demonstrate that she should receive the fair value of her stock in MCP, and that the trial court did not err in denying her motion for a summary judgment. View "Lynd v. Marshall County Pediatrics, P.C." on Justia Law

International Paper Company and three employees (Janet Pridgeon, Joni Harris, and Shawn Blenis) sought a writ of mandamus directing the Wilcox Circuit Court to rule upon a pending motion to dismiss a case against them for improper venue, based on an outbound forum-selection clause in a waste services agreement between International Paper and JRD Contracting & Land Clearing, Inc. ("JRD C & L"). After review, the Alabama Supreme Court determined the circuit court exceeded its discretion by failing to rule on, and instead "taking under advisement," the motion to dismiss the third-party complaint based on improper venue while allowing discovery on the merits to proceed and setting deadlines for summary-judgment motions and setting the trial date. Therefore, the Supreme Court issued the writ and directed the circuit court to issue an order addressing the merits of IPC's motion to dismiss based on improper venue. The Court expressed no opinion as to whether IPC's motion should or should not be granted; "[w]hile the writ [of mandamus] will issue to compel the exercise of discretion by a circuit judge, it will not issue to compel the exercise of discretion in a particular manner." View "Ex parte International Paper Company et al." on Justia Law

SCI Alabama Funeral Services, LLC, d/b/a Elmwood Cemetery and Mausoleum ("SCI"); Service Corporation International; SCI Funeral Services, LLC; Elmwood Cemetery Co.; Phyllis Pesseackey; and Jonathan Wheatley (collectively, "the defendants") appealed an order denying their motion to compel arbitration. The circuit court denied the motion to compel because it concluded that the relevant arbitration provision was unconscionable and thus unenforceable. In 2004, Johnnie Hinton ("Johnnie") signed a contract with SCI to purchase the interment rights to two burial spaces in Elmwood Cemetery. The contract contained an arbitration provision stating that "any claim" that Johnnie "may have" against SCI must be resolved by arbitration. In August 2016, Johnnie's husband, Nathaniel Hinton, passed away. Johnnie began to make arrangements to have Nathaniel buried in one of the two burial spaces to which she had acquired interment rights in 2004. SCI then informed Johnnie that someone else had mistakenly been buried in Nathaniel's space. According to Johnnie's complaint, the space she acquired for Nathaniel is next to the space where her father is buried. At Johnnie's request, SCI disinterred the deceased who was buried in the space Johnnie had acquired and buried him elsewhere so that Nathaniel could be buried in the space; Nathaniel was subsequently buried there. In September 2016, Johnnie sued SCI and the other defendants, alleging breach of contract and several other claims. The defendants moved to compel arbitration, citing the arbitration provision in the contract. Johnnie argued that the arbitration provision was unenforceable because, she said, the contract does not evidence a transaction affecting interstate commerce and the arbitration provision is unconscionable. The circuit court denied the motion to compel, concluding that the arbitration provision is unconscionable. Both substantive unconscionability and procedural unconscionability must be shown to establish unconscionability as a defense to an arbitration provision; these are separate, independent elements. The Alabama Supreme Court determined the arbitration provision in this case was not substantively unconscionable, and did not need to consider the issue of procedural unconscionability. The circuit court erred in denying the motion to compel arbitration. Therefore, the Court reversed the order and remanded the case for the circuit court to enter an order granting the motion to compel arbitration. View "SCI Alabama Funeral Services, LLC v. Hinton" on Justia Law

Nautilus Insurance Company ("Nautilus") and Lyon Fry Cadden Insurance Agency, Inc. ("LFC"), separately petitioned the Alabama Supreme Court for writs of mandamus directing the the trial court to vacate its orders denying their motions to dismiss the action filed against them by Precision Sand Products, LLC ("Precision"). From June 10, 2015, to June 10, 2016, Precision had in place a commercial general-liability insurance policy it had purchased from Nautilus through LFC, an insurance broker. In March 2016, Terry Williams sued Precision seeking recovery for injuries he allegedly suffered on Precision's property during the period the policy was in effect. Pursuant to the terms of the policy, Precision demanded that Nautilus defend and indemnify it against the Williamses' claims. Nautilus agreed, under reservation of rights, to defend Precision against the Williamses' claims. Then Nautilus filed a declaratory-judgment action against Precision and the Williamses at the federal district court, seeking a judgment declaring that, pursuant to an exclusion in the policy, Nautilus was not obligated to defend and indemnify Precision against the Williamses' claims. Precision filed in the Williamses' action a "crossclaim complaint" against Nautilus and LFC ("the state action"), asserting against both Nautilus and LFC various contract and negligence claims. Before the Alabama Supreme Court, LFC argued Precision could not recover against LFC for fraudulently procuring inadequate insurance or for negligently failing to procure adequate insurance unless and until Precision was actually denied coverage for, or a defense against, the Williamses' claims. The Supreme Court found the trial court, as a court of general jurisdiction, clearly had the constitutional and statutory authority to hear the types of claims Precision asserted against LFC. Thus, LFC did not demonstrate it had a clear legal right to dismissal from the state action based on a lack of subject-matter jurisdiction over Precision's claims. Nautilus has demonstrated that, under section 6-5-440 Ala. Code 1975, it had a clear legal right to dismissal from the state action. Accordingly, the Court granted Nautilus's petition and issued the writ directing the trial court to dismiss Nautilus from the state action. Furthermore, the Court determined LFC failed to carry its burden of demonstrating that it had a clear legal right to dismissal from the state action. Accordingly, LFC's petition was also denied. View "Ex parte Nautilus Insurance Company." on Justia Law

Terex USA, LLC ("Terex"), petitioned the Alabama Supreme Court for a writ of mandamus directing the Circuit Court to enforce an outbound forum-selection clause contained in a distributorship agreement between Terex and Cowin Equipment Company, Inc. ("Cowin"), and to dismiss Cowin's action against Terex based on improper venue pursuant to Rule 12(b)(3), Ala. R. Civ. P. Before August 2015, Cowin, a heavy-equipment dealer, had served as an authorized dealer of heavy equipment manufactured by the Liebherr Group for approximately 30 years. Cowin alleged Terex, a heavy-equipment manufacturer, began aggressively recruiting Cowin to become a dealer of its equipment in Alabama, Georgia, and Florida. At the time, Warrior Tractor & Equipment Company, Inc. ("Warrior"), was serving as the dealer for Terex's equipment in the region. Based on assurances from Terex that Cowin would be the only Terex dealer in the territory, Cowin allowed its relationship with Liebherr Group to expire. In August 2015, Cowin entered into a distributorship agreement with Terex to sell Terex heavy equipment in Alabama, Georgia, and Florida. Subsequent to entering into the distributorship agreement with Cowin, Terex entered into a new distributorship agreement with Warrior without providing notice to Cowin that Warrior would be reentering the heavy-equipment market. Cowin alleged Terex's failure to give it notice that Warrior would be reentering the market was contrary to common industry practices. Cowin sued Terex and Warrior, asserting various claims arising from Terex's alleged violation of the Alabama Heavy Equipment Dealer Act, sec. 8-21B-1 et seq., Ala. Code 1975 ("the AHEDA"). Terex moved the trial court pursuant to Rule 12(b)(3), Ala. R. Civ. P., to dismiss Cowin's complaint, arguing that venue in Jefferson County was improper because of the forum-selection clause in the distributorship agreement designating either the United States District Court for the Northern District of Georgia or the Georgia state court in Atlanta as the proper forum for any dispute between the parties arising from the distributorship agreement. "An outbound forum-selection clause is exactly the type of provision the legislature intended to prohibit because it would undermine the remedial measures and protections the legislature clearly intended to afford heavy-equipment dealers under the AHEDA; this is especially so as to the outbound forum-selection clause in this case, which also contains a choice-of-law provision designating Georgia law as controlling." The Alabama Supreme Court concluded Terex failed to establish a clear legal right to the relief it sought, so the Court denied its petition for a writ of mandamus. View "Ex parte Terex USA, LLC." on Justia Law

John Hoehn ("John") and his wife, Margaret, jointly owned the Foley Flea Market in Foley, Alabama ("the property"). In 2009, John, Margaret, and Roman Fitzpatrick (John and Margaret’s daughter) entered into an agreement to sell John's "1/2 undivided interest in the property" to Fitzpatrick and her then-husband, Paul Kihano. The agreement specified that Margaret would "retain her 1/2 undivided interest in the property." The agreement stated that Fitzpatrick and Kihano "shall be entitled to enter into possession of [the] property so long as [they are] not in default in the performance of [the agreement]." The agreement also made clear that title to John's "1/2 undivided interest in the property" would not pass to Fitzpatrick and Kihano until all the payments had been made under the agreement. John executed a quitclaim deed conveying his one-half interest in the property to Margaret; the quitclaim deed made no mention of the agreement. In 2013, Margaret changed the locks on the property so that Fitzpatrick could no longer access the property or operate the flea market. Fitzpatrick quit making payments under the agreement in December 2013. Fitzpatrick, with her sisters, initiated this lawsuit against Margaret, Kihano, and Mixon alleging intentional interference with a contract and intentional interference with business relations; against John's estate, breach of contract; and against Margaret, Kihano, and Mixon, tortious interference with an inheritance. In case no. 1160393 (Margaret's cross-appeal of the circuit court's judgment in favor of Fitzpatrick on Fitzpatrick's claims of interference with a contract and intentional interference with business relations), the Alabama Supreme Court reversed judgment in favor of Fitzpatrick and rendered judgment in favor of Margaret. In case no. 1160348 (Fitzpatrick's appeal of the amount of Fitzpatrick's compensatory-damages award and the circuit court's judgment in favor of Margaret on Margaret's counterclaim against Fitzpatrick), the Supreme Court dismissed the appeal as moot insofar as Fitzpatrick challenged the compensatory-damages award and affirmed the judgment on Margaret's counterclaim. View "Fitzpatrick v. Hoehn" on Justia Law

STV One Nineteen Senior Living, LLC ("STV"), appealed a circuit court order denying its motion to compel arbitration of certain counterclaims filed against it by Dixie Boyd, by and through her agent, Mary Alice Boyd-Kline, under a valid power of attorney. Dixie Boyd and Mary-Alice Boyd-Kline, as holder of Boyd's power of attorney, signed a "residency agreement" with STV, which operated an assisted-living facility. STV agreed to provide Dixie Boyd with a private apartment and other related services, including, among other things, utilities, housekeeping, laundry, meals, maintenance, planned activities, transportation, and security and protection. The residency agreement contained an arbitration clause. The Alabama Supreme Court determined the plain language of the arbitration clause encompassed Boyd's counterclaims, and the trial court erred, therefore, in denying STV's motion to compel arbitration. View "STV One Nineteen Senior Living, LLC v. Boyd" on Justia Law

EvaBank appealed the grant of summary judgment in favor of Traditions Bank, TBX Title, Inc., and Terry Williams. In 2013, EvaBank customers William Michael Robertson and Connie Robertson, entered into a purchase agreement with Terry Williams, pursuant to which Williams agreed to purchase the Robertsons' property located on County Road 35 in Hanceville ("the property"). EvaBank held two mortgages on the property. Williams financed his purchase through Traditions Bank. TBX Title, a Traditions Bank subsidiary, acted as the closing agent for the real-estate transaction. EvaBank faxed Traditions Bank the payoff statement for the wrong EvaBank customer, Michael Roberson, with an address in Moulton, Alabama. TBX Title closed the real-estate transaction between the Robertsons and Williams. Traditions Bank thereafter delivered a check to EvaBank; EvaBank accepted and negotiated the check and applied the proceeds to the loan of Michael Roberson. TBX Title wired the net sales proceeds from the closing to the Robertsons. TBX Title recorded the warranty deed and mortgage and mailed the deed to Williams. When EvaBank contacted William Robertson about his loan being past due; Robertson responded that the loan should have been paid off at the closing with the proceeds from the sale. EvaBank learned at this point that there was a problem with the payoff statement it had provided. EvaBank sent Traditions Bank an e-mail explaining its mistake and noting that it had made a demand upon William Michael Robertson to pay the remaining balance due on the EvaBank mortgages but that Robertson had refused. Accordingly, EvaBank informed Traditions Bank that it would not release it mortgages encumbering the Robertsons' property until the balance on the loan they were securing had been fully satisfied. Traditions Bank sued EvaBank, asserting a claim of slander of title and seeking a judgment declaring that it was the first lienholder on the property. All parties moved for a summary judgment. The trial court entered judgment in favor of Traditions Bank and TBX Title, on the basis of equitable estoppel, on the claims involving those parties and dismissed all other claims. The Alabama Supreme Court determined that Traditions Bank and TBX Title were on notice of one or more discrepancies between the payoff statement and the closing documents, which, through the exercise of due diligence, would have revealed the fact that the payoff statement was not for the loan secured by the Evabank mortgages encumbering the property being sold by the Robertsons. Therefore, the Court concluded as a matter of law, that Traditions Bank and TBX Title's reliance on the payoff statement, without further inquiry, was not reasonable. Accordingly, they could not rely on estoppel as a basis on which to claim a priority interest in the property. View "Evabank v. Traditions Bank, et al." on Justia Law