Justia Alabama Supreme Court Opinion Summaries

In 2005, Water's Edge, LLC purchased lots 62-69 of "Re-Subdivision A" in Baldwin County, commonly referred to as Gulf Shores Yacht Club and Marina ("the property"). Fairfield Financial Services, Inc. loaned Water's Edge $12.8 million of the $13 million needed to purchase the property. In 2006, Fairfield notified Water's Edge that it would not renew Water's Edge's loan. The members of Water's Edge authorized the managers to seek new financing. In December 2006, Vision Bank agreed to loan Water's Edge $14.5 million. Vision Bank later merged with SE Property Holdings, LLC ("SEPH"). Certain members of Water's Edge signed agreements guaranteeing all of Water's Edge's debt to SEPH. In October 2008, SEPH notified Water's Edge that the loans were in default. In October 2010, SEPH sued Water's Edge and 28 individuals, including the guarantors, based on the promissory notes and guaranty agreements pertaining to the various loans issued over the years. The trial took place in late 2014. The trial court did not submit the case to the jury, but instead discharged the jury and entered an order granting SEPH's motion for a JML. The trial court found the guarantors and the other defendants jointly and severally liable on continuing unlimited guaranty agreements. The trial court found each of them individually liable for differing amounts based on continuing limited guaranty agreements they had signed. A month later, the trial court revised its earlier order, taking into account settlements and declarations of bankruptcy that certain guarantors had declared. The guarantors timely filed a motion to alter, amend, or vacate the judgment, which the trial court denied. The guarantors then appealed. The Alabama Supreme Court dismissed the appeals, finding that the trial court's judgment was not final because the trial court did not have jurisdiction to dismiss SEPH's claims against one of the guarantors, and the trial court did not certify its order as final pursuant to Rule 54(b). "An order entered in violation of the automatic bankruptcy stay is void as to the debtor, thus leaving the claims against [one of the guarantors] pending and rendering the judgment nonfinal. A nonfinal judgment will not support an appeal." View "Gaddy v. SE Property Holdings, LLC" on Justia Law

In appeal no. 1140870, Southern Cleaning Service, Inc. ("SCSI"), appealed the grant of summary judgment entered favor of Essex Insurance Company and Genesee General Agency, Inc. (collectively, "the insurance defendants"), on SCSI's claims stemming from Essex's refusal to provide SCSI coverage under a commercial general-liability policy based on an alleged failure to timely notify Essex of the facts leading to the claim for coverage. In appeal no. 1140918, the insurance defendants cross-appealed the trial court's denial of their requests for costs. Winn-Dixie Montgomery, LLC entered into a contract with SCSI for provide floor-care and general janitorial services to multiple grocery stores in central Alabama. SCSI entered into a subcontract with Phase II Maintenance Systems, LLC, whereby Phase II became responsible for providing those services. That subcontract required Phase II to carry a minimum level of liability insurance and to list both SCSI and Winn-Dixie as "additional insureds" on such policies. Phase II contacted Alabama Auto Insurance Center ("Alabama Auto") for a policy; Alabama Auto in turn contacted Genesee, a managing general agency located in Georgia that connected independent agents like Alabama Auto with different insurance companies that provided the type of coverage being sought by the independent agent's customer. Ultimately, Genesee sent Alabama Auto a quote for a commercial general-liability policy issued by Essex that would meet Phase II's needs, and Alabama Auto presented that quote to Phase II. Phase II accepted the quote; Alabama Auto transmitted notice of that acceptance to Genesee; and Genesee, which held issuing authority for Essex, then issued Phase II the desired policy on behalf of Essex. In 2011, Beverly Paige was shopping at a Phase II-serviced Winn-Dixie in Montgomery when she allegedly slipped on a wet floor, fell, and was injured. A Phase II employee on duty at the store at the time of the fall reported the incident to Phase II's owner and president, William Wedgeworth, that same day, and Wedgeworth has given sworn testimony indicating that he separately notified both SCSI and Alabama Auto of the incident on the next available business day,and further specifically asked Alabama Auto to notify Genesee of the incident. After review of the trial court record, the Supreme Court concluded the trial court erred in granting summary judgment, citing several disputes of material fact that should have precluded the court's ultimate decision. As such, the Supreme Court reversed and remanded the outcome for further proceedings. The cross appeal was rendered moot. View "Essex Insurance Company and Genesee General Agency, Inc. v. Southern Cleaning Service, Inc." on Justia Law

James Cherry appealed the grant of summary judgment entered against him and in favor of Pinson Termite and Pest Control, LLC, and Jerry Pinson. In 2011, Cherry purchased a home. The sales contract required the seller to provide a "Wood Infestation Inspection Report (WIIR)." A termite-services contract with Pinson Termite ("termite bond") was transferrable from the seller to Cherry, but it was disputed whether the bond actually transferred to Cherry. In late 2011, Cherry began remodeling him home when he discovered extensive termite damage. A State inspector confirmed the damage and sent Pinson a letter that it had "observed findings of subterranean termite damage" that were not mentioned on the WIIR and that, although the WIIR "indicates the structure was treated by your company, ... we did not observe all mechanics of subterranean control work." The State inspector monitored Pinson's re-treatment of the house. At about the same time, Cherry and Pinson signed a contract for an extension of the termite bond. Shortly thereafter, cherry hired an attorney, who sent Pinson a letter offering to settle his claim for the re-treatment of his home. The State inspector sent Cherry a letter advising that it had supervised Pinson's re-treatment of the house and that if Cherry had any question he should contact the State within 10 days of receiving the letter. If he did not contact, the letter stated the State would "assume that the matter has been resolved." There was no record of any further contact between Cherry and State inspector. Approximately one year after the State letter, Cherry sued Pinson Pest, and Pinson alleging fraud; negligence; negligent hiring, training, and supervision; and breach of contract and seeking "equitable relief pursuant to the 'made whole' doctrine." When summary judgment was granted in favor of Pinson, Cherry appealed arguing that the trial court erred. After review, the Alabama Supreme Court agreed that the trial court erred in entering summary judgment in favor of Pinson, reversed and remanded for further proceedings. View "Cherry v. Pinson Termite & Pest Control, LLC" on Justia Law

Clatus Junkin, a resident of Fayette County, owned and operated Johnco Materials, Inc., a sand and gravel pit located in Lowndes County. At some point in time, Junkin purchased diesel fuel from Southeastern Energy and had it delivered to Johnco Materials. When Southeastern Energy did not receive payment for the fuel, Southeastern Energy sued Johnco Materials and Junkin, individually, in Lowndes County. With regard to Junkin, Southeastern Energy alleged that "Junkin was personally liable to Southeastern Energy for diesel fuel that was sold and delivered to Johnco Materials." At the request of the parties, the Lowndes Circuit Court entered a consent judgment against Johnco Materials and in favor of Southeastern Energy for an agreed-upon amount and dismissed Junkin from the action with prejudice. Junkin then sued Southeastern Energy in Fayette County alleging malicious prosecution by Southeastern Energy in the Lowndes County case. Southeastern Energy moved to dismiss the malicious prosecution action or, in the alternative, to transfer the action to "Montgomery County, Alabama, or any other proper venue, pursuant to Rule 82(d), Ala. R. Civ. P., and governing law." Southeastern Energy Corp. petitioned the Alabama Supreme Court for a writ of mandamus ordering the Fayette Circuit Court to vacate its order denying Southeastern Energy's motion for a change of venue for the underlying action and directing the Fayette Circuit Court to grant the motion and transfer the action to the Montgomery Circuit Court (case no. 1150033). Southeastern Energy filed a second petition for a writ of mandamus asking the Supreme Court to direct the Fayette Circuit Court to vacate an order transferring the underlying action to the Lowndes Circuit Court, and to direct the Fayette Circuit Court to enter an order transferring the action to the Montgomery Circuit Court (case no. 1150294). Finding no errors in the transfer orders, the Supreme Court dismissed Southeastern Energy's petition in case no. 1150033, and denied its petition in case no. 1150294. View "Ex parte Southeastern Energy Corp." on Justia Law

Kindred Nursing Centers East, LLC, d/b/a 0791-Kindred Transitional Care and Rehabilitation-Whitesburg Gardens ("Whitesburg Gardens"), owned and operated a long-term care and rehabilitation facility. Whitesburg Gardens was sued by Lorene Jones, and appealed an order denying its motion to compel arbitration of Jones's claims. The Supreme Court reversed and remanded: Jones was mentally competent when she was admitted to and during her stay at the facility. Because precedent held that competent residents of nursing homes could be bound by arbitration agreements executed by their representatives, the Court held that Jones was so bound. Moreover, in view of the evidence indicating that Jones passively permitted her daughter Yvonne Barbour to act on her behalf in signing the admission forms and the lack of evidence indicating that Jones ever objected to Barbour's signing those forms, the Court held that Barbour had the apparent authority to bind Jones at the time Barbour signed the admission documents. Under these circumstances, Whitesburg Gardens proved the existence of a valid contract calling for arbitration. The trial court erred in denying the motion to compel arbitration. View "Kindred Nursing Centers East, LLC. v. Jones" on Justia Law

In appeal no. 1140870, Southern Cleaning Service, Inc. ("SCSI"), appealed the grant of summary judgment in favor of Essex Insurance Company and Genesee General Agency, Inc. on SCSI's claims stemming from Essex's refusal to provide SCSI coverage under a commercial general-liability policy ("the Essex policy") based on the alleged failure to timely notify Essex of the facts leading to the claim for coverage. In appeal no. 1140918, the insurance defendants cross-appeal the trial court's denial of their requests for costs. In August 2006, Winn-Dixie Montgomery, LLC ("Winn-Dixie"), entered into a contract with SCSI that obligated SCSI to provide floor-care and general janitorial services to multiple Winn-Dixie grocery stores in central Alabama. In 2011, a store customer allegedly slipped and fell on a wet floor, and sued. Winn-Dixie sought indemnification from SCSI. SCSI sought indemnification from Phase II, one of its cleaning subcontractors. Phase II, SCSI, and Winn-Dixie again asked Essex to provide them with a defense and indemnity under the terms of the Essex policy; however, their requests were denied. With regard to appeal no. 1140870, the Supreme Court concluded that the summary judgment entered in favor of the insurance defendants should have been reversed because there was a genuine issue of material fact as to who among the insurance defendants acted under the doctrine of apparent authority to settle the Winn Dixie customer's slip and fall claim. The Court pretermitted all discussion of the other grounds for reversal SCSI offered. Because the insurance defendants would have been entitled to the costs they seek in appeal no. 1140918 only if there was a final judgment in their favor, that appeal was dismissed as moot. View "Essex Insurance Co. v. Southern Cleaning Service, Inc." on Justia Law

Hoover General Contractors – Homewood, Inc. ("HGCH"), appealed a circuit court order denying its motion to compel arbitration of its dispute with Gary Key regarding work performed by HGCH on Key's house in Jasper after that house was damaged by a fire. Six months after Key sued HGCH asserting claims stemming from HGCH's work rebuilding Key's house after a fire, HGCH moved the trial court to compel Key to arbitrate those claims pursuant to an arbitration clause in the contract Key had entered into with HGCH. The trial court denied HGCH's motion to compel; however, that denial was error because Key failed to establish through substantial evidence that HGCH had waived its right to arbitration by substantially invoking the litigation process. Accordingly, the order entered by the trial court denying HGCH's motion to compel arbitration was reversed by the Supreme Court and the case remanded for the trial court to enter a new order compelling Key to arbitrate his claims ursuant to the terms of his contract with HGCH. View "Hoover General Contractors - Homewood, Inc. v. Key" on Justia Law

Plaintiffs James Jordan, Sara Jordan Muschamp, and William Jordan (as representative of the estate of Emma K. Jordan, deceased) sued the Thomas Jefferson Foundation, Inc. ("TJF") for: (1) misrepresentation; (2) "slander, libel, and trade infringement"; (3) fraud; (4) wantonness; (5) suppression; (6) negligence; (7) breach of contract; and (8) tortious interference with business relations. TJF was a nonprofit organization that owned and curated a museum in Monticello, the historic home of Thomas Jefferson. In 1957, Juliet Cantrell lent TJF a "filing press" for display at Monticello. Cantrell passed away in 1976 and bequeathed the filing press, which was then on loan to TJF, and the dressing table to Emma. In 1977, Emma lent TJF the dressing table for use in the museum. Certain "loan agreements" were executed with TJF when the furniture was lent to TJF, and there were subsequent loan agreements executed by Emma, James, and Sara. The loan agreements were silent as to whether TJF had the authority to perform any "conservation" work on the furniture without first obtaining permission from plaintiffs. In November 2007, plaintiffs removed the furniture from Monticello and shipped it to Sotheby's in New York with the intent to sell it. Sotheby's "research consultants" questioned the authenticity of the dressing table, and determined that the filing press was not in sufficiently original condition to be offered for bid. Sotheby's declined to place either piece of furniture for sale at auction; according to plaintiffs, Sotheby's found that the value of the dressing table had been "destroyed" and that the filing press then had a market value of $20,000 to $30,000, whereas "its fair market value would be around $4 million" had TFJ not performed conversation work on it. Only the claims (6), (7), and (8) above were presented to the jury; the remaining claims were disposed of before the case went to the jury. The jury returned a verdict in favor of TJF on all three counts, and the trial court entered a judgment on the jury's verdict. Plaintiffs filed a motion for a new trial, arguing, in pertinent part, that TJF did not disclose that it had insurance and that, therefore, "the venire was not properly qualified as to insurance." The trial court granted plaintiffs' motion. TJF appealed, arguing, among other things, that the trial court erred in granting plaintiffs' motion for a new trial. After review, the Alabama Supreme Court reversed the trial court's judgment insofar as it granted the plaintiffs' motion for a new trial, and affirmed the trial court's judgment insofar as it granted TJF's motion for a JML on the plaintiffs' suppression claim. View "Thomas Jefferson Foundation, Inc. v. Jordan" on Justia Law

Dannelly Enterprises, LLC ("Dannelly"), appealed a circuit court order granting a motion to compel arbitration filed by Palm Beach Grading, Inc. ("PBG"). In the fall of 2006, PBG entered into negotiations with Corvias Military Living, LLC, f/k/a Picerne Military Housing LLC; Picerne Construction/FRK, LLC; Rucker-Picerne Partners, LLC; and Rucker Communities, LLC (collectively, "the contractors"), to perform work on a project known as the Ft. Rucker RCI Family Housing, Munson Heights, Phase 1A, at Fort Rucker, Alabama. Apparently, in preparing to bid on the project, PBG contacted various subcontractors, including Dannelly, to get bids for various aspects of the project that PBG would be responsible for if it entered into an agreement with the contractors to complete the project. Although the work order issued by PBG stated that "[a] Sub-contract will be created by PBG for billing purposes," neither party submitted into evidence such a contract between PBG and Dannelly. PBG argued that Donnelly accepted benefits under existing contracts because Dannelly was hired by PBG to perform work on the project and was paid for the work it completed. The Supreme Court found, however, that PBG did not present any argument as to why it believed Dannelly was not simply operating under and benefiting from the agreement between PBG and Dannelly, which was memorialized by PBG's work order. The Court concluded that PBG failed to demonstrate that the arbitration provision in the master subcontract agreement applied to the third-party claims it asserted against Dannelly. Furthermore, there was a genuine issue of material fact as to whether Dannelly and PBG entered into PBG's standard subcontract agreement. The case was reversed and remanded to the circuit court for further proceedings. View "Dannelly Enterprises, LLC v. Palm Beach Grading, Inc." on Justia Law

Federal Insurance Company appealed a circuit court order denying its motion to compel arbitration of the breach-of-contract claim asserted against it by Kert Reedstrom. In 2008, Reedstrom entered into a written employment agreement with Marshall-Jackson Mental Health Board, Inc., d/b/a Mountain Lakes Behavioral Healthcare ("MLBHC"), to begin serving as its executive director in Guntersville. During the course of Reedstrom's employment with MLBHC, MLBHC held an executive-liability, entity-liability, and employment-practices-liability policy issued by Federal Insurance that generally protected certain MLBHC officers and employees described as "insureds" in the policy from loss for actions committed in the course of their employment with MLBHC. It was undisputed that Reedstrom was an "insured" covered by the Federal Insurance policy. The Federal Insurance policy contained an arbitration provision. A separate endorsement to the Federal Insurance policy further highlighted the arbitration provision and explained that its effect was that any disagreement related to coverage would be resolved by arbitration and not in a court of law. In July 2010, MLBHC terminated Reedstrom's employment and, in December 2010, Reedstrom sued MLBHC alleging that his termination constituted a breach of his employment contract. MLBHC asserted various counterclaims against Reedstrom based on his alleged misconduct while serving as executive director. Thereafter, Reedstrom gave Federal Insurance notice of the claims asserted against him and requested coverage under the terms of the Federal Insurance policy. Federal Insurance ultimately denied his claim and refused to provide him with counsel to defend against MLBHC's claims. A jury returned a verdict awarding Reedstrom $150,000 on his claim against MLBHC and awarding MLBHC $60,000 on its claims against Reedstrom. Consistent with its previous denial of his request for coverage, Federal Insurance refused Reedstrom's request to satisfy the judgment entered against him. Reedstrom sued Federal Insurance, asserting one claim of breach of contract and seeking $72,000 in damages ($60,000 for the judgment entered against him and $12,000 for the attorney fees he incurred in defending those claims). The Supreme Court reversed and remanded, finding that the trial court did not articulate its rationale for denying the motion to compel arbitration. The denial was apparently based on the court's resolving at least one of the arbitrability issues raised by Reedstrom in his favor and against Federal Insurance. However, because the subject arbitration provision delegated to the arbitrators the authority to resolve such issues, the trial court erred by considering the waiver and nonsignatory issues raised by Reedstrom instead of granting the motion to compel arbitration and allowing the arbitrators to resolve those issues. View "Federal Insurance Company v. Reedstrom" on Justia Law