Justia Alabama Supreme Court Opinion Summaries

In 2010, Baldwin Mutual Insurance Company (BMIC) filed an "Application for Temporary Restraining Order, Motion for a Preliminary Injunction and Complaint for Declaratory Judgment" against 122 individuals who were insured under various insurance policies issued by BMIC. According to the complaint, the insureds, through their legal counsel, had sent a letter requesting BMIC provide copies of the policy file for each of the insureds, and the letter accused BMIC of "bad faith" as to its treatment of the insureds. According to BMIC's complaint, the various insurance policies at issue provided that BMIC or an insured could invoke an appraisal process if BMIC and the insured could not reach an agreement as to the amount of compensation due the insured for a loss covered under the insured's policy. BMIC asked that the restraining order "enjoin[] the [insureds] from engaging in the appraisal process and stay[] the time in which [BMIC] has to identify an appraiser or otherwise participate in said process." Also, BMIC asserted that "it will be caused immediate and irreparable injury, loss or damage should it be required to engage in the appraisal process demanded prior to determining whether [the insureds] separately and severally are entitled to invoke the appraisal process." BMIC appealed the Circuit Court's order modifying a previous order granting BMIC injunctive relief. Based on its review of the record, the Supreme Court concluded the circuit court erred by ordering BMIC to engage in the appraisal process before the insureds satisfied their respective post-loss obligations and before BMIC had sufficient information on which it could decide whether it disagreed with the respective claims of the insureds. Accordingly, the Court reversed the circuit court and remanded this matter for further proceedings. View "Baldwin Mutual Insurance Company v. Adair et al. " on Justia Law

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

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

State Farm Mutual Automobile Insurance Company petitioned the Supreme Court for a writ of mandamus to direct the Clarke Circuit Court to vacate its order denying State Farm's motion to transfer this case to the Mobile Circuit Court and to enter an order granting the motion. The underlying action arose from an automobile accident that occurred in Mobile County in 2010. Sandra Banks, a resident of both Clarke and Mobile Counties, sued Robert Spray, a resident of Baldwin County, and State Farm. Banks alleged that she suffered injuries as a result of the wrongful, negligent, and/or wanton conduct of Spray when the vehicle he was driving and owned struck her vehicle. Additionally, Banks alleged that at the time of the accident she had a policy of insurance with State Farm, which included uninsured-/underinsured-motorist coverage, and that she was due proceeds under her coverage. Because both the "convenience of parties and witnesses" and the "interest of justice" prongs of the doctrine of forum non conveniens compelled the transfer of this case from Clarke County to Mobile County, the Supreme Court concluded the trial court abused its discretion in refusing to transfer the action. Therefore, the Court granted State Farm's petition and issued a writ directing the Clarke Circuit Court to vacate its order and to enter an order granting the motion.View "Banks v. Spray" on Justia Law

Paul Kennamer and Dorothy Kennamer appeal an order entered by the Marshall Circuit Court compelling them to arbitrate their claims against Ford Motor Credit Company LLC and Ray Pearman Lincoln, Inc. (the dealership). The Kennamers had problems with the used car they purchased and stopped making payments on the loan they obtained through Ford Credit and the dealership. After review of the retail-installment contract at the center of this controversy, the Supreme Court affirmed the circuit court's decision insofar as it granted the dealership's motion to compel arbitration and reversed insofar as it granted Ford Credit's motion to compel arbitration. View "Kennamer v. Ford Motor Credit Company LLC" on Justia Law

In late 2005 or early 2006, Corey Culverhouse began constructing a house for himself on a five-acre lot in Hartford. He obtained a policy from Alfa Mutual Insurance Company to insure the house during the remainder of the construction process and after construction was completed. In 2009, a minor fire damaged the kitchen of the house. Culverhouse submitted a claim to Alfa, which paid for a remediation company to clean and repair the smoke damage caused by the fire. During this process, Culverhouse moved out of the house and into a barn on his property. After about two weeks of living in the barn, Culverhouse moved into a house he was constructing for eventual sale across the road from his house. Later that year, another fire damaged the house. This time, the fire could not be extinguished, and the house, its contents, and an adjacent swimming pool were completely destroyed. Culverhouse promptly informed Alfa. Alfa immediately questioned the Culverhouse's claim because he had not submitted with his claim an inventory of the contents of the house and supporting documentation, and he had not submitted any evidence supporting the large claim he had submitted for loss of use in the two-month period prior to the second fire. Culverhouse ultimately sued Alfa for payment of the claim. A hearing on the summary-judgment motion was held on in 2013, and the trial court granted Alfa's motion and dismissed each of Culverhouse's claims; the trial court also dismissed an Alfa counterclaim as moot. Culverhouse thereafter retained a new attorney and, on moved the trial court to alter, amend, or vacate its order. The trial court granted Culverhouse's motion in part and amended its summary-judgment order so as to exclude Culverhouse's breach-of-contract claim from the judgment, leaving it as the only remaining claim in the case. Alfa's argument on appeal did not relate to the merits of Culverhouse's breach-of-contract claim. Rather, it concerned only whether the trial court acted properly by amending its summary-judgment order to resurrect that claim in response to Culverhouse's motion to alter, amend, or vacate the judgment pursuant to Rule 59(e). Finding no reversible error, the Supreme Court affirmed the trial court's decision. View "ALFA Mutual Insurance Co. v. Culverhouse " 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