Justia Alabama Supreme Court Opinion Summaries

These consolidated appeals arose from the same facts: in 1990, Richard L. Parker applied to American Family Life Assurance Company of Columbus (Aflac) for a cancer-indemnity insurance policy. Aflac issued Parker a policy. The term of the 1990 policy was month-to-month; the monthly premium was $28.50. Aflac received payments for the 1990 policy from August 25, 1990, to August 17, 1996. Parker applied for a new policy in May 1996 for when the 1990 policy was set to terminate. The 1996 policy took effect August 16, 1996, and used the same number as the 1990 policy. Parker renewed the policy once again in 2009, but the 2009 policy contained an arbitration clause. By a special waiver, the 2009 policy's language stated that Parker would give up his "current" policy and its benefits for the benefits in the new one. Parker paid according to the term of the 2009 policy. But in 2010, Parker sued Aflac asserting a claim of bad faith for Aflac's alleged failing to pay policy benefits owed under the 1990 policy. Aflac responded by filing a motion to compel arbitration according to the terms of the 2009 policy. The circuit court conducted a hearing on the motion and denied it. Upon review, the Supreme Court concluded that Aflac satisfied its burden of proving that an arbitration agreement existed that applied to Parker's claims against it. Because there was no issue as to whether the contract containing the arbitration agreement affected interstate commerce, the burden then shifted to Parker to offer evidence refuting the evidence offered by Aflac and Hunter; Parker offered no evidence to refute that evidence and presented "no persuasive argument" that Aflac failed to meet its burden. The Court reversed the circuit court's decision and remanded the case for further proceedings. View "American Family Life Assurance Company of Columbus v. Parker " on Justia Law

Auto Owners Insurance, Inc. (Auto Owners) appealed a circuit court's denial of its motion to dismiss or, in the alternative, to compel arbitration in an action against it filed by Blackmon Insurance Agency, Inc. Blackmon and Auto Owners entered into an "agency agreement" authorizing Blackmon to act as an agent for the sale of Auto Owners' insurance in Alabama (the 1995 agreement). A 2005 document entitled "Letter of Instructions" was alleged to be an independent document from the 1995 agreement. Auto Owners contended that the 2005 document was contemplated by and incorporated into the 1995 agreement. The 2005 document contained instructions governing the issuance of a variety of bonds by an agency of Auto Owners. In late 2010, Blackmon filed a complaint in the circuit court seeking a declaratory judgment as to the arbitrability of a dispute between Blackmon and Auto Owners as to which Auto Owners had already initiated arbitration proceedings in its home state of Michigan. Blackmon also alleged that in the Michigan arbitration proceeding Auto Owners based its claims on the 2005 document and a 2009 agreement. Upon review of the matter, the Alabama Supreme Court concluded that the circuit court erred in denying Auto Owners' motion to compel arbitration. The Court therefore reversed that order and remanded the case for the circuit court to grant the motion to compel arbitration and either issue a stay of these proceedings pending arbitration or dismiss the case. View "Auto Owners Insurance, Inc. v. Blackmon Insurance Agency, Inc. " on Justia Law

Husband and wife Emmett and Debra Jackson appealed the grant of summary judgment in favor of Wells Fargo Bank, N.A. in their action against the bank and trustee. The Jacksons challenged a foreclosure sale of their property. The Jacksons refinanced an existing home loan; in so doing, they gave a mortgage on the property which was subsequently assigned to Wells Fargo. Although the mortgage was, in turn, assigned to the trustee, the bank continued to function as the "servicer" of the loan. By 2007, the Jacksons were in arrears on their mortgage payments. While the Jacksons and the bank were engaged in negotiations for forbearance, the Jacksons did not make certain scheduled payments. During the negotiations, a debt-collection representative of the trustee sent the Jacksons a "NOTICE OF ACCELERATION OF PROMISSORY NOTE AND MORTGAGE." The house was put up for sale, and a foreclosure deed was issued to a third party. The Jacksons then sued the bank, the trustee, and the purchaser of the property alleging negligent or wanton foreclosure and breach of contract. The bank and trustee moved for summary judgment, contending that the Jacksons lacked any basis from which to contest the foreclosure sale. Upon review, the Supreme Court found that the Jacksons presented no basis on which to reverse the summary judgment as to their claim of negligent or wanton foreclosure, however, the Court agreed that the acceleration letter was fundamentally flawed. The Court reversed the grant of summary judgment on the breach of contract claim, and remanded the case for further proceedings. View "Jackson v. Wells Fargo Bank, N.A." on Justia Law

Now defucnt Galt Industries, its former president, his wife, and a former employees sued Aegis Strategic Investment Corporation and its sole shareholder Mark Heisz, alleging Aegis failed to fulfill certain terms of an asset-purchase agreement. Following a jury trial, the trial court entered a judgment awarding Galt $824,000 in damages, and held Aegis jointly and severally liable for those damages. Aegis appealed. Finding that the evidence presented at trial did not support the trial court's decision, the Supreme Court reversed the decision and remanded the case for further proceedings. View "Heisz v. Galt Industries, Inc." on Justia Law

Jim Walter Resources, Inc. (JWR) sought a petition for a writ of mandamus to direct the Tuscaloosa County Probate Court to record certain filings without the payment of a recording tax. Walter Energy, JWR's parent company, acquired Western Coal Corporation of Canada. As part of the acquisition, Walter entered into a credit agreement with Morgan Stanley, which required Walter's subsidiaries to execute contingent guaranties of Walter's financing debt in the event Walter defaulted. JWR secured its guaranty of Walter Energy's financing debt by executing mortgages on its real and leasehold properties. Also as part of the credit agreement, JWR was required to record the mortgages in the probate offices in the counties in which the properties were located. When JWR sought to record the mortgages and related UCC filings in Tuscaloosa, the Tuscaloosa County Probate Court refused to record the documents unless JWR paid the recordation tax. The probate judge maintained that there was no statutory requirement that under Alabama law that the debt being secured be the mortgagor's debt, and as such, because JWR was recording its financing statements for Walter's debt, JWR was still responsible for paying the tax. Upon review, the Supreme Court found that JWR's liability was contingent on Walter's default, and JWR's contingent guaranty did not constitute an unqualified promise to pay Walter's indebtedness under the credit agreement. The Court found the contingent guaranty was not within the scope of the applicable statute, and accordingly, the Court granted JWR's petition and issued the writ. View "Jim Walter Resources, Inc. v. McCollum" on Justia Law

The Travelers Indemnity Company of Connecticut appealed a judgment in which it was ordered to pay $251,913.91 to Willie A. Miller. Smith House Movers, Inc. (Smith), was hired was hired to move houses located in the path of road construction to be performed. Miller entered into a contract with Smith to purchase one of the houses and to move it from Red Bay to Vina. The contract provided that Smith was to move the house, pour a foundation, and place the house on the new foundation. Smith cut the house into two pieces and delivered the first piece. However, the foundation was improperly poured and did not fit, and the house had been damaged in the move. Ultimately Miller had to hire another company to complete the move and repair the damage. Miller then sued Smith alleging breach of contract, negligence and wantonness. Smith did not answer or appear, and Miller moved to a default judgment against Smith. In an attempt to collect the amount of the default judgment, Miller sent a copy to Smith's general liability insurer, Travelers. As Miller tried to get Travelers to respond to its demand, Miller learned that Smith had declared bankruptcy. Two years following the default judgment, the bankruptcy trustee lifted its stay on Smith's affairs to allow him to collect on the default judgment to the extent that the insurance coverage would allow. Travelers subsequently denied the claim. Miller then sued Travelers for payment. Travelers moved for summary judgment to dismiss Miller's claim, arguing that the general liability policy did not provide coverage based on the terms in the policies. The trial court denied the motion, and eventually entered judgment against the company. Travelers then appealed to the Supreme Court. The issue before the Court was whether the notice of the original lawsuit was timely. The Court found that because Miller's knowledge of Smith's certificate of insurance from the underlying lawsuit put Miller on notice that he should have notified Travelers of the default judgment. As such, the Court concluded that Miller was barred from recovering under Smith's policies. The Court reversed the trial court and remanded the case for further proceedings. View "Travelers Indemnity Company of Connecticut v. Miller" on Justia Law

Plaintiffs Ronald Browning and Susan Browning, Bubba Beck and Debbie Beck, Allen Caprara and Pam Caprara, Bobby Fayet and Cindy Fayet, David Kennamer and Brad Kennamer, Steve Russell and Melinda Russell, and Gary Strickland and Jennifer Strickland sued Jeff Cornelius, among others, alleging various claims related to investments they made in corporations in which Cornelius was allegedly a principal. The trial court entered a default judgment against Cornelius based upon his purported failure to appear for his deposition, awarding the plaintiffs a total of $975,000 in damages. Cornelius moved the trial court pursuant to Ala. R. Civ. P. Rule 60(b) to set aside the default judgment, arguing that he had not received notice that the motion for a default judgment had been filed. After a hearing, the trial court denied Cornelius's motion to set aside the default judgment, and Cornelius appealed. Upon review, the Supreme Court concluded that the trial court's judgment was inconsistent with due process and was therefore void. Cornelius was entitled to have the default judgment set aside, and accordingly, the Court reversed the trial court and remanded the case for further proceedings. View "Cornelius v. Browning" on Justia Law

GE Capital Aviation Services, Inc., (now known as GE Capital Aviation Services, LLC), Pemco World Air Services, Inc., and Alabama Aircraft Industries, Inc. have fiercely litigated a commercial-contract dispute since 2004 in which each party alleged breach-of-contract and fraud claims against the other. The parties entered an agreement for the conversion, maintenance and inspection of aircraft leased through GE Capital. GE Capital and Pemco each sought punitive damages in addition to compensatory damages. The litigation culminated in a jury trial that lasted approximately three weeks. The jury returned a verdict in favor of Pemco on all of its claims, awarded Pemco $2,147,129 in compensatory damages and $6,500,000 in punitive damages, and returned a verdict in favor of Pemco on all of GE Capital's counterclaims. GE Capital appealed the jury verdict and the trial court's order denying GE Capital's postjudgment motions. GE Capital did not appeal the judgment in favor of Pemco on its counterclaims. Upon review, the Supreme Court reversed the trial court's order denying GE Capital's motion for a JML as to Pemco's fraud claims and its breach-of-an-implied-contract claim. The Court also reversed the trial court's order denying GE Capital's motion for a new trial. The case was remanded for further proceedings. View "GE Capital Aviation Services, LLC v. Pemco World Air Services, Inc." on Justia Law

Defendant National Security Fire & Casualty Company appealed a circuit court order that certified a class for a class action lawsuit. Plaintiff Maurice DeWitt's mobile home was damaged by Hurricane Katrina, and at the time of his loss, Plaintiff was insured by National Security. In 2007, Plaintiff filed suit in circuit court against National Security and other insurance companies alleging that the Defendants breached his insurance policy when they did not include a 20% "general contractor overhead and profit" (GCOP) amount in its loss payment. Specifically, Plaintiff alleged the insurance companies did not take into account Plaintiff's loss and the need for additional general contractor services in rebuilding his home. Plaintiff sought to represent similarly situated policyholders whose claims were allegedly miscalculated in the same fashion. Upon review, the Supreme Court concluded that Plaintiff did not satisfy his burden of establishing the predominance and superiority requirements to certify his class action. Accordingly, the Court held that the trial court exceeded its discretion in cerfifying the class. View "National Security Fire & Casualty Company v. Maurice DeWitt " on Justia Law

In separate petitions, the Hampton Insurance Agency and Ginger Spencer, Acceptance Indemnity Insurance Company and Ashland General Agency all defendants in an action filed by Mary Alice Patton, d/b/a Hole in the Wall Lounge, petitioned the Supreme Court for a writ of mandamus to direct the trial court to transfer the action to the Tuscaloosa Circuit Court. Ms. Patton purchased insurance for her lounge from Ms. Spencer, an independent insurance agent for Hampton. At issue was the nature and extent of the coverage Ms. Patton sought. The lounge was destroyed by fire in 2009. Upon filing her insurance claim, Ms. Patton was informed that her policy did not include coverage for property damage. Accordingly, Ms. Patton sued because "defendants were negligent and/or wanton in their procurement of full coverage insurance for [Patton] on her lounge building and its contents." Hampton responded with a motion to dismiss or in the alternative, to transfer the case on grounds that the case was filed in an improper venue. Upon review, the Supreme Court found that the defendant insurance companies met the requirements for the writ of mandamus. The Court directed the trial court to vacate its order denying defendants' motions to transfer, and to enter orders granting those motions to transfer to the Tuscaloosa Circuit Court. View "Patton v. Hampton Insurance Agency" on Justia Law