Justia Alabama Supreme Court Opinion Summaries

Southeast Construction, L.L.C. ("SEC") appealed a Circuit Court order enforcing, a previous judgment entered by that court based on an arbitration award in favor of WAR Construction, Inc ("WAR"). Upon review of the facts of this case, the Supreme Court affirmed in part, reversed in part, and remanded for further proceedings. The Court concluded the circuit court erred in finding in a January 9 order that "all liens and claims against SEC ... from WAR's subcontractors/suppliers that filed a lien on the project ... ha[d] been released and/or adequate security ha[d] been provided." Furthermore, the Court concluded the circuit court erred in finding that WAR had "attempt[ed] to comply with what the Supreme Court ordered the circuit court to implement as of May 13, 2011," and that WAR was entitled to have the interest owed under the arbitrators' award and the May 9 judgment calculated from that date. View "Southeast Construction, L.L.C. v. WAR Construction, Inc. " on Justia Law

This case arose from a contract between Roanoke Healthcare Authority (doing business as Randolph Medical Center) and Batson-Cook Company, a general contractor, to renovate the medical center, located in Roanoke. Batson-Cook received written notice from Roanoke Healthcare that work on the renovation project had been suspended. Batson-Cook notified one of its subcontractors, Hardy, of the suspension and stated that "[t]he contract has been suspended by [Roanoke Healthcare] through no fault of Batson-Cook ... or its subcontractors. [Roanoke Healthcare] is currently out of funding and has subsequently closed the facility while seeking a buyer." Liberty Mutual, the project's insurer, alleged in its answer that Roanoke Healthcare failed to pay Batson-Cook $241,940.51 for work performed pursuant to the contract. Batson-Cook sent Hardy a change order the change order deducted from the subcontract the $147,000 in equipment and materials another subcontractor Hardy hired, Johnson Controls, Inc. (JCI), had furnished for the renovation project and for which it has not received payment. JCI notified Liberty Mutual, Roanoke Healthcare, Batson-Cook, and Hardy by certified letters of its claim on a payment bond. The letters identified Batson-Cook as the general contractor and Hardy as the debtor. Liberty Mutual denied the claim. JCI sued Liberty Mutual, alleging JCI was entitled to payment on the payment bond Liberty Mutual had issued to Batson-Cook. Upon review, the Supreme Court concluded JCI was a proper claimant on the payment bond. Therefore, the circuit court erred in entering a summary judgment in favor of Liberty Mutual and denying JCI's summary judgment motion. View "Johnson Controls, Inc. v. Liberty Mutual Insurance Company " on Justia Law

Alfa Life Insurance Corporation ("Alfa") and Brandon Morris, an agent for Alfa, appealed a judgment entered against them following a jury verdict for Kimberly Colza, the widow of Dante Colza. In 2010, Morris met with Dante to assist him in completing an application for a life-insurance policy. There was disputed evidence as to whether Morris asked Dante whether he had had a moving traffic violation, a driver's license suspended, or an accident in the prior three years, it was undisputed that Morris entered a checkmark in the "No" box by that question. The evidence indicated that Dante applied for the Preferred Tobacco premium rate. Dante named Kimberly as the beneficiary under the policy. At the close of the meeting, Kimberly wrote a check payable to Alfa for $103.70, the monthly Preferred Tobacco premium rate. Kimberly testified at trial that Morris informed them that Dante would be covered as soon as they gave Morris the check. Dante was later examined by the medical examiner. During the examination, Dante informed the examiner that his family had a history of heart disease and that he had had moving traffic violations within the past five years. The day after he had his medical examination, Dante was killed in an accident. Two days later, Alfa received the medical examiner's report, which indicated that Dante's family had a history of heart disease, that Dante's cholesterol was above 255, and that Dante had had moving traffic violations in the past five years. In light of the report, Alfa's underwriters determined that Dante was not eligible for the Preferred Tobacco rate for which he had applied; rather, the proper classification would have been the Standard Tobacco rate (which had a higher premium). Additionally, in light of the moving vehicle violations, Dante was a greater risk to insure and a "rate-up" of $2.50 per $1,000 worth of coverage was required. Alfa notified Kimberly by letter that no life-insurance coverage was available for Dante's death "because no policy was issued and the conditions of coverage under the conditional receipt were not met." Kimberly sued Alfa seeking to recover under the terms of the conditional receipt (an acknowledgment of the policy). She alleged, among other claims, that Alfa had breached the contract and had acted in bad faith when it refused to pay life-insurance benefits on Dante's death. Kimberly also sued Morris, alleging, among other claims, that he had negligently failed to procure insurance coverage for Dante. After a trial, the jury found that Alfa had breached the contract and had in bad faith refused to pay the insurance benefits due, and that Morris had negligently failed to procure insurance. Upon review, the Supreme Court concluded Alfa and Morris were entitled to a judgment as a matter of law on those claims, and the trial court erred by submitting the claims to the jury for consideration. View "Alfa Life Insurance Corporation v. Colza " on Justia Law

Guardian Builders, LLC, and E. Wayne Tackett appealed a Circuit Court order denying their motion to vacate or modify an arbitration award entered in favor of Randy Uselton and his wife Melissa. In 2010, the Useltons sued Guardian alleging several claims arising from Guardian's construction of a house for the Useltons. Guardian subsequently filed a motion to compel arbitration, and the circuit court granted that motion. In late 2011, the arbitrator entered a final award in favor of the Useltons. Guardian subsequently filed a motion to vacate or modify the arbitration award to the circuit court, to which it attached a copy of the arbitration award. The Useltons filed a 'motion to confirm' the arbitration award. The circuit court entered an order purporting to deny Guardian's motion to vacate or modify the arbitration award, purporting to grant the Useltons' motion to confirm the arbitration award, and purporting to order Guardian to pay $1,421.75 in Better Business Bureau fees and facility costs related to the arbitration. Guardian objected only to a subset of the damages that were awarded the Useltons that were not directly related to the poorly constructed house, specifically, attorney fees and arbitration fees (including both the arbitrator fee and the forum fee charged by the Better Business Bureau of North Alabama ("the BBB"), which administered the arbitration). Furthermore, Guardian argued the arbitrator lacked the authority to award the Useltons attorney fees and arbitration fees. The Supreme Court agreed that the arbitrator exceeded his authority by awarding those remedies. The trial court's judgment was reversed and the case remanded for the trial court to enter a modified judgment subtracting attorney fees and arbitration fees from the award made to the Useltons. View "Guardian Builders, LLC v. Uselton " on Justia Law

Nationwide Retirement Solutions, Inc. ("NRS"), appealed a circuit court judgment awarding PEBCO,Inc. over a million dollars in attorney fees and $29,132.01 in expenses. In 2007, participants in the State of Alabama Public Employees Deferred Compensation Plan filed a class action against Nationwide Life Insurance Company ("NL"), NRS, the Alabama State Employees Association ("ASEA"), and PEBCO, Inc., alleging breach of fiduciary duty, conversion, and breach of contract in the administration of the Plan. The parties filed a "Stipulation of Settlement," which the trial court approved in its final order entered in 2011. Pursuant to the settlement, NL and NRS paid $15.5 million to the participants in the Plan and $2.9 million in attorney fees to settle class claims against all defendants, including ASEA and PEBCO. In its findings of fact, the trial court stated: "ASEA is being permitted to retain more than $12 million in sponsorship payments that it allegedly received unlawfully, and ASEA is receiving full release from any liability." A day before the parties filed their "Stipulation of Settlement," Nationwide moved for an order barring ASEA and PEBCO from filing any indemnification claims. The trial court granted the order except for claims for attorney fees and costs. "[I]n light of Nationwide's substantial contributions to the settlement," the court wrote that it was "fair and reasonable that ASEA and PEBCO be barred from pursuing any claims against Nationwide for reimbursement, indemnification, or contribution other than claims for attorney fees and costs ...." A month before entering its final order in the class action, the trial court ordered severance of ASEA and PEBCO's claim for fees and directed the Circuit Court clerk to docket that claim as "a separate and independent action," with ASEA and PEBCO as plaintiffs and NL and NRS as defendants. The trial court found that the indemnification clause in the agreement required that NRS pay the fees and costs incurred by ASEA and PEBCO in defending the class action. Noting that NRS "has contended, and still contends, that indemnification is improper based on the language of the agreement and the attending facts," the trial court stated that it "has held hearings on that issue and by prior order has ruled that indemnification is appropriate. The instant action was filed to enforce indemnification." The court ordered NRS to pay PEBCO $863,988.50 in attorney fees and $15,297.54 in expenses for the class-action litigation, and $210,039 in attorney fees and $13,834.47 in expenses for litigating the severed cross-claim. NRS timely appealed that decision to the Supreme Court. The Supreme Court reversed and remanded: "[b]ecause NRS did not fail to perform those duties under the agreement that ultimately gave rise to the class action, it did not, as a matter of law, breach the indemnification clause in the agreement. . . . Alabama does not permit a party to seek indemnification for defending against its own allegedly wrongful acts." View "Nationwide Retirement Solutions, Inc. v. PEBCO,Inc. " on Justia Law

This case involves a dispute between Bessemer Water Service (BWS) and Lake Cyrus Development Company, Inc. (LCDC) over a contract referred to as the "1998 water agreement." In "Bessemer I," the Supreme Court concluded that the trial court had exceeded its discretion in holding that the 1998 water agreement was a valid binding contract and in awarding LCDC $224,979.83 because the agreement was entered into violation of section 39-2-2 and was therefore void. On appeal, the Attorney General intervened and filed a complain seeking to recover payments BWS made to LCDC under the 1988 water agreement. The trial court ultimately entered a judgment in favor of the Attorney General (for the benefit of BWS). LCDC thereafter filed a postjudgment motion requesting the trial court alter, amend or vacate its judgment, or in the alternative, order a new trial. The trial court denied LCDC's motion; that denial was brought before the Supreme Court in this case. After review, the Supreme Court held the trial court's denial of LCDC's motion should have been reversed. The case was then remanded for further proceedings. View "Lake Cyrus Development Company, Inc. v. Bessemer Water Service " on Justia Law

Pennsylvania National Mutual Casualty Insurance Company filed suit against Roger D. Allen, Homeland Vinyl Products, Inc., and Deric Miner, individually and as the personal representative of the estate of Jane Miner, seeking a declaratory judgment that it owed no duty of defense or indemnity to Allen for claims arising out of a fatal automobile accident that occurred in New Jersey. Allen was a New Jersey resident, and moved to dismiss the claims against him for lack of personal jurisdiction. In response, the trial court dismissed the case in its entirety. The insurance company appealed that decision. But finding no reversible error, the Supreme Court affirmed. View "Pennsylvania National Mutual Casualty Insurance Company v. Allen " on Justia Law

Charles Gower petitioned the Supreme Court to vacate an arbitration award in favor of Turquoise Properties Gulf, Inc., Caribe Realty, Inc., Larry Wireman, and Judy Ramsey Wireman(collectively, "Turquoise"). The underlying dispute arose from Gower's preconstruction agreement to purchase a condominium unit in a complex developed by Turquoise. The arbitrator's decision was based in large part on Turqoise's successfully raising a statute-of-limitations defense to Gower's claims. The Supreme Court found that Turquoise expressly argued, and then abandoned, one specific statute-of-limitations defense and then it never again urged the arbitrator to apply a statute of limitations to the various claims actually brought by the claimants. Through its arguments, Turquoise distilled the issues and arguments submitted to the arbitrator for consideration. Gower argued, and the Supreme Court agreed, that Turquoise "affirmatively chose to forgo any statute of limitations defense to the [c]laimants' ... claims and therefore did not submit [the] same to the Arbitrator for decision." Therefore, the Supreme Court concluded that because the issue of the applicability of a statute of limitations was not submitted to the arbitrator for decision, the arbitrator exceeded his powers in applying a statute of limitations to Gower's claims. The Court reversed the judgment entered on the arbitrator's award, and remanded the case for further proceedings. View "Gower v. Turquoise Properties Gulf, Inc., et al. " on Justia Law

The Supreme Court affirmed the trial court's judgment in this case to the extent that it concluded Parker Towing was not entitled to indemnity for $25,000 it paid landowners in settlement of landowners' claims against it. The landowners sued Parker Towing and Triangle Aggregates, Inc. stemming from their claims of breach of contract pertaining to properties they originally leased to Parker, which were subsequently purchased by Triangle. Parker argued it was not liable for the landowners' claims following its sale of the properties to Triangle. However, the Supreme Court reversed the trial court's judgment with respect to its conclusion that Triangle was not required to indemnify Parker Towing for its attorney fees and other litigation expenses incurred to defend against the claims asserted against Parker Towing for breaches of the agreements with the landowners. The fees and expenses incurred by Parker Towing as a result of those breaches were covered by the indemnification agreement between Parker Towing and Triangle. View "Parker Towing Company, Inc. v. Triangle Aggregates, Inc. " on Justia Law

Gambro Renal Products, Inc. hired The Facility Group, Inc. ("TFG"), as the general contractor for the construction of a facility designed to produce kidney dialysis filters in Opelika. TFG contracted with the Hardy Corporation for specialized piping work on the project. Absolute Welding Services, Inc. ("AWS"), is a subsidiary of Rayco Industrial, Inc., a subsubcontractor hired by Hardy. Although the negotiations on the subcontract at issue in these appeals were between AWS and Hardy, the subcontract was executed by Rayco and Hardy. A dispute arose over whether the exclusion of "passivation" and the installation of piping in Rayco's offer was incorporated into its subcontract. Rayco filed a complaint against Hardy, Gambro and 15 fictitiously named parties, seeking an accounting, a declaratory judgment, a reformation of the contract, and perfection of a lien. Rayco asserted claims for damages for breach of contract, unjust enrichment/quantum meruit, and "work and labor done." Both parties unhappy with the eventual trial court order resolving the dispute, appealed the order. After careful consideration of the contracts and the trial court record, the Supreme Court reversed in part, and affirmed in part. The case was remanded with instructions for further proceedings. View "Hardy Corporation v. Rayco Industrial, Inc. " on Justia Law