Justia Alabama Supreme Court Opinion Summaries

Target Media Partners Operating Company, LLC ("Target Media"), and Specialty Marketing Corporation d/b/a Truck Market News ("Specialty Marketing"), both publishers of magazines directed to long-haul truck drivers and to the truck-driving industry, have been in a commercial-contract dispute since 2007 in which each party alleged breach-of-contract claims against the other. Specialty Marketing also alleged fraudulent-misrepresentation and promissory-fraud claims against Target Media and Ed Leader, Target Media's vice president of trucking, and sought punitive damages in addition to compensatory damages. The jury returned a verdict in favor of Specialty Marketing on its breach-of-contract and promissory-fraud claims against Target Media, in favor of Leader on the promissory-fraud claim against him, in favor of Specialty Marketing on its fraudulent-misrepresentation claim against Target Media and Leader, and in favor of Target Media on its breach-of-contract counterclaim against Specialty Marketing. Target Media and Leader appealed that aspect of the judgment entered on the jury verdict in favor of Specialty Marketing on its claims against Target Media and Leader. Specialty Marketing did not appeal the judgment insofar as it found in favor of Target Media on Target Media's counterclaim. Upon review of the matter, the Supreme Court affirmed the trial court's order denying Target Media's motion for a judgment as a matter of law (JML)and/or a new trial as to Specialty Marketing's breach-of-contract claim. The Court reversed the trial court's order denying Target Media and Leader's motion for a JML as to Specialty Marketing's fraudulent-misrepresentation and promissory-fraud claims. The case was remanded back to the trial court for entry of a JML in favor of Target Media and Leader as to Specialty Marketing's fraudulent-misrepresentation claim and to enter a JML in favor of Target Media as to Specialty Marketing's promissory-fraud claim. Because the Court concluded that the trial court should have granted a JML as to Specialty Marketing's fraudulent-misrepresentation and promissory-fraud claims, the Court pretermitted consideration of the other arguments made by the parties regarding those claims. View "Target Media Partners Operating Company, LLC v. Specialty Marketing Corp." on Justia Law

Southeast Construction, L.L.C. ("SEC") appealed a circuit court's judgment and WAR Construction, Inc. ("WAR") filed a cross-appeal (which was treated as a petition for a writ of mandamus). The matter came before the Supreme Court following the appeal of the entry of the arbitration panel's ruling on the parties' respective construction contract claims. The decision resulted in a net award to WAR of $373,929. SEC filed a motion for modification of the award. WAR responded with a "Motion for Clerk's Entry of Arbitration Award as Final Judgment" pursuant to Rule 71C, Ala. R. Civ. P. The circuit court entered an order in which it declined to have the award entered as a judgment at that time. Eventually the court did enter an order based upon the arbitration award, and the parties appealed. "Given the nature of the award made by the arbitrators in this case and the nature of the resulting judgment the circuit court properly ordered the clerk to enter, it is apparent that the circuit court must take some additional responsibility for enforcing that award and the resulting judgment. To the extent WAR complain[ed] in its petition of the circuit court's reluctance to do so, [the Supreme Court agreed] with WAR" and, accordingly, ordered the circuit court to take appropriate action to enforce the judgment it has entered based upon the arbitrators' award. View "Southeast Construction, L.L.C. v. WAR Construction, Inc. " on Justia Law

The Phenix City Board of Education ("the Board") sought mandamus relief from the Russell Circuit Court's denial of the Board's motion to dismiss or, in the alternative, for a summary judgment on claims brought against it by The Lisle Company, Inc. ("Lisle"). Because the Board is immune from suit pursuant to § 14, Ala. Const. 1901, the Supreme Court granted the Board's petition and issued the writ. View "Lisle Company, Inc. v. Phenix City Board of Education" on Justia Law

BancorpSouth Bank petitioned the Supreme Court for a writ of mandamus to direct the trial court to vacate its order denying the bank's motion to strike a jury demand in the complaint filed against it by Plaintiff Thomas L. Busby and to enter an order granting the Bank's motion, thereby enforcing Busby's waiver of a jury trial. The dispute arose from a construction loan to which Plaintiff Busby guaranteed. The loan agreement contained the jury trial waiver in the event of a dispute between the parties. The borrower defaulted on the loan, and the bank sought payment from Plaintiff. Plaintiff sued the bank, alleging multiple counts of fraud, misrepresentation and breach of contract. Upon review, the Supreme Court concluded that the bank demonstrated that it had a clear legal right to have the jury demand stricken. Accordingly the Court granted the petition, issued the writ, and directed the trial court to enter an order granting the bank's motion. View "Busby v. BancorpSouth Bank" on Justia Law

Shirley Spencer and Christy Gee petitioned the Supreme Court for a writ of mandamus to direct the Greene Circuit Court to vacate its judgment granting the motion of K & K Excavating, LLC ("K & K"), to enforce a forum-selection clause and transferring the petitioners' action against K & K to the Tuscaloosa Circuit Court. In 2007, Spencer contracted with K & K for the installation of a septic system at the petitioners' house in Eutaw. The petitioners separately contracted with S. Boyd, Inc. ("Boyd"), to conduct the excavation work necessary to install the septic system. The contract between the parties included a forum-selection clause. When mediation of the case proved unsuccessful, the Greene Circuit Court ordered another pretrial conference to be held. K & K filed a reply brief in support of the transfer motion. The Greene Circuit Court ultimately entered an order granting the transfer motion as to K & K and severing the petitioners' claims against K & K from those asserted against the Boyd defendants; the Greene Circuit Court denied the transfer motion as to the Boyd defendants. The petitioners did not challenge the validity of the forum selection clause. Instead, the petitioners argued only that K & K waived its right to enforce the forum-selection clause "by defending the lawsuit in Greene County for two years, through multiple pretrial conferences and completion of party discovery." The Supreme Court agreed. Under the facts of this case, K & K's substantial invocation of the litigation process in Greene County clearly evinced its intention to abandon its right to enforce the forum-selection clause in favor of the judicial process. Therefore, the Court granted the petition and directed the trial court to vacate its order granting the transfer motion. View "Spencer v. S. Boyd, Inc." on Justia Law

In December 2005, Charles Baggett and Diana Morris were involved in an automobile accident, as a result of which Baggett was injured. Baggett sued Morris, who was insured by Sagamore Insurance Company. Baggett added his underinsured-motorist ("UIM") carrier, State Farm Mutual Automobile Insurance Company as a party to the action. The limit of State Farm's UIM policy was $60,000. Before Baggett commenced the action against Morris, State Farm paid Baggett $25,000, the limit of the liability policy issued by Sagamore to Morris, to protect its potential subrogation interest against Morris. At the time State Farm advanced the $25,000 to Baggett, Baggett executed an agreement entitled an "Advancement of Funds to Protect Future Subrogation Rights." State Farm opted out of the action. Following a jury trial, Baggett obtained a judgment against Morris for $181,046. Therefore, Baggett was entitled to $85,000--the total of the limits of both the Sagamore policy ($25,000) and the State Farm policy ($60,000). Sagamore paid $25,000; State Farm, rather than paying Baggett $35,000 and receiving credit pursuant to the "Advancement of Funds" agreement for the $25,000 it had advanced, mistakenly paid $60,000, resulting in an overpayment to Baggett of $25,000. As a result of the overpayment, the trial court ordered Baggett to reimburse State Farm $25,000, less a one-third attorney fee under the common-fund doctrine. State Farm appealed. The Court of Civil Appeals affirmed the trial court's judgment, without an opinion. State Farm petitioned the Supreme Court seeking review of the application of the common-fund doctrine. Upon review, the Court found that State Farm was entitled to a refund of the overpayment, and that if an attorney fee was due Baggett's attorney with respect to all or part of the $85,000 actually owed in the aggregate by Sagamore and State Farm, then the fee should be taken from the $85,000, not from the $25,000 State Farm overpaid and as to which it was entitled to be reimbursed. View "State Farm Mutual Automobile Insurance Company v. Baggett" on Justia Law

Following an automobile accident in which Tracy Mitchell was injured when the vehicle in which she was a passenger, State Farm Mutual Automobile Insurance Company, Mitchell's insurer, paid Mitchell's medical expenses, among other coverage payments, and then sought, through subrogation, reimbursement from the driver Amy Kirk's insurer, Cotton States Mutual Insurance Company. Mitchell filed a personal-injury action against Kirk, State Farm, and fictitiously named defendants, alleging as to State Farm, among other things, that State Farm's right to recover from any damages awarded its payment of Mitchell's medical expenses was subject to a reduction, pursuant to the common-fund doctrine, for attorney fees incurred by Mitchell in pursuing the personal-injury action. The circuit court granted State Farm's summary-judgment motion, holding that the common-fund doctrine did not obligate State Farm to pay a pro rata share of Mitchell's attorney fees. Mitchell appealed the circuit court's decision to the Court of Civil Appeals. The Court of Civil Appeals reversed the circuit court's summary judgment, concluding that a common fund was created requiring State Farm to contribute to Mitchell's attorney fees; that the common-fund doctrine had not been contractually abrogated; and that the common-fund doctrine was not negated by State Farm's "active participation" in pursuing subrogation recovery. The Supreme Court granted certiorari review to determine, as a matter of first impression, the narrow question whether, under the common-fund doctrine, the subrogated insurance carrier was responsible for a pro rata share of the injured insured's attorney fees incurred in the process of obtaining an award against which the carrier has asserted a right of reimbursement. The Court affirmed the Court of Civil Appeals' judgment. View "Mitchell v. State Farm Mutual Automobile Insurance Co." on Justia Law

Morgan Keegan & Company, Inc. and Regions Bank (hereinafter referred to collectively as "Regions") appealed an order of the Baldwin Circuit Court which granted in part and denied in part their motions to compel arbitration in an action filed against them by Baldwin County Sewer Service, LLC ("BCSS"). In 2001 BCSS began discussing with AmSouth Bank ("AmSouth"), the predecessor-in-interest to Regions Bank, options to finance its existing debt. AmSouth recommended that BCSS finance its debt through variable-rate demand notes ("VRDNs").1 In its complaint, BCSS alleged that in late 2008 it received a notice of a substantial increase in the variable interest rates on its 2002, 2003, 2005, and 2007 VRDNs, which constituted BCSS's first notice that the interest-rate-swap agreements recommended by Regions did not fix the interest rate on the VRDNs but, instead, exposed BCSS to "an entirely new increased level of market risk in the highly complex derivative market." BCSS sued Regions Bank and Morgan Keegan asserting that Regions falsely represented to BCSS that swap agreements fixed BCSS's interest rates on all the BCSS debt that had been financed through the VRDNs. Following a hearing on the motions to compel arbitration, the trial court entered an order in which it granted the motions to compel arbitration as to BCSS's claims concerning the credit agreements but denied the motions to compel arbitration as to BCSS's claims concerning the failure of the swap transactions to provide a fixed interest rate. The trial court reasoned that the "Jurisdiction" clause in a master agreement, in combination with its merger clause, "prevent[ed] any argument that the VRDN arbitration agreement applies to disputes concerning the swap agreements" and that those clauses demonstrated that it was "the parties' intention, as it relates to the interest-swap agreement and any transaction related to that agreement, that the parties would not arbitrate but instead [any dispute] would be resolved by proceedings in a court of competent jurisdiction." Upon review, the Supreme Court concluded that Regions presented evidence of the existence of a contract requiring arbitration of the disputes at issue. The Court reversed the order of the trial court denying the motions to compel arbitration of BCSS's claims concerning the master agreement and the swap agreement and remanded the case for further proceedings. View "Regions Bank v. Baldwin County Sewer Service, LLC " on Justia Law

The United States District Court for the Northern District of Alabama, Eastern Division certified two questions of first impression to the Alabama Supreme Court: whether a coverage exclusion clause in an automobile insurance policy applied to the use of the vehicle used for transporting people or delivering newspapers (as part of the insured's job) was enforceable. A secondary issue was whether that exclusion applied when an accident takes place after the delivery of the last paper, "but while the insured is driving back to his point of origin or some other location." Scott and Lori Touart Thomas were injured as the result of an automobile accident; Lori had been driving. The Thomases recovered a judgment in state court against defendant Kenneth Gooden, Jr., the driver of the other vehicle. The dispute involved whether the Thomases were entitled to recover from Nationwide under the provisions of a Nationwide automobile liability insurance policy naming Gooden as an insured. Upon review, the Supreme Court concluded that the answer to the first certified question is "yes:" a clause in an automobile liability-insurance policy excluding coverage for the "use of any motor vehicle to carry persons or property for a fee" could be enforced as to an insured if the finder of fact concludes that the insured delivers newspapers for a fee and that the insured was using the covered vehicle for that purpose at the time of the accident. With regard to the second question, the Court concluded that the answer to the second certified question is "no:" a clause in an automobile liability-insurance policy excluding coverage for the "use of any motor vehicle to carry persons or property for a fee" cannot be enforced as to an insured after the delivery of the "property," i.e., newspapers in this case, is complete. View "Nationwide Mutual Ins. Co. v. Thomas" on Justia Law

Limestone Creek Developers, LLC ("LCD"), sued Stuart Trapp and two companies in which Trapp had a controlling interest (Kyvest, Ltd., and Redesign, Inc.) after Trapp was unable or unwilling to close on a contract he had personally entered into agreeing to purchase all the lots in a new subdivision owned by LCD. The trial court entered a summary judgment in favor of the Trapp defendants, and LCD appealed. While expressing no opinion with regard to whether that contract violated state law, the Supreme Court nevertheless held that the contract in question was void because it violated section 1.2.3 of the MCSR. Accordingly, the trial court correctly entered a summary judgment in favor of the Trapp defendants on LCD's breach-of-contract claim, as well as LCD's other claims, which were dependent on that contract. The judgment of the trial court was affirmed. View "Limestone Creek Developers, LLC v. Stuart Trapp et al. " on Justia Law