Justia Alabama Supreme Court Opinion Summaries

The dispute arose from a contract signed on May 12, 2021, under which Kindra Cooper agreed to purchase a house from Highland Rim Investments, LLC. Delays in closing led the parties to enter into three extensions, but the sale never concluded. Cooper then sued for specific performance, declaratory judgment, and damages, later amending her complaint to add additional defendants and claims, including various forms of misrepresentation and a request to pierce Highland Rim’s corporate veil. During litigation, certain claims were dismissed, and after a jury trial, the jury awarded Cooper compensatory and punitive damages against Highland Rim and Monique Dollone, but found for other defendants on the misrepresentation claims.The Madison Circuit Court entered judgment on the jury's verdict, awarded Cooper attorney fees, granted her motion to pierce the corporate veil as to one defendant, and later appointed a receiver over Highland Rim to preserve its fiscal health until the judgment was satisfied. The defendants moved for post-judgment relief, which was denied, and then appealed both the judgment and the receivership order.The Supreme Court of Alabama reviewed the appeals. It found that the trial court erred by requiring the parties to strike the jury from a list of only 21 prospective jurors, rather than the 24 required by Alabama Rule of Civil Procedure 47(b). This procedural error mandated reversal. The Supreme Court of Alabama held that the trial court’s judgment in favor of Cooper and its order appointing a receiver over Highland Rim must be reversed. The cases were remanded for further proceedings consistent with this opinion. View "Highland Rim Investments, LLC v. Cooper" on Justia Law

The dispute arose after Will Pecue contracted with Gulf Coast Dock Masters/H5K Company, LLC, represented by Ryan Hess, to replace two piers near Pecue's residence. One pier, the "harbor pier," was completed and paid for in full, while the other, the "social pier," was left unfinished after Pecue terminated the contract. Pecue became dissatisfied upon discovering that nontreated lumber was used on the social pier, contrary to contract specifications. Although some boards were replaced, Pecue claimed Hess refused to fix all affected areas and ultimately sent a notice of default. Pecue also asserted that H5K was not a legitimate business entity, which he argued prevented him from obtaining contractual remedies.The Baldwin Circuit Court held a bench trial, during which Pecue pursued only a fraud claim against Hess and H5K, seeking substantial damages. Pecue testified about the alleged misrepresentation of H5K's existence and Hess's refusal to remedy the workmanship issues. The trial court entered judgment in favor of Pecue for $100,000 against Hess and "Ryan Hess D/B/A Gulf Coast Dock Masters." Hess filed a postjudgment motion challenging the sufficiency of the evidence for fraud, but the motion was denied.The Supreme Court of Alabama reviewed the case, applying both the ore tenus and de novo standards of review as appropriate. The court found that the evidence did not support Pecue's claim of fraud. Specifically, there was no misrepresentation of material fact regarding H5K’s existence, and any alleged misrepresentation did not proximately cause Pecue’s damages. Further, there was no evidence of promissory fraud. The Supreme Court of Alabama reversed the trial court’s judgment and remanded the case with instructions to enter judgment in favor of Hess on Pecue’s fraud claim. View "Hess v. Pecue" on Justia Law

After both parents contracted COVID-19 in 2020, they asked their daughter to move from Tennessee to Alabama to care for them. In exchange for her agreement to relocate and provide care, the parents promised to convey an interest in their Orange Beach condominium to the daughter. The parents, acting in their individual capacities, executed a deed purporting to transfer an interest in the property to themselves and their daughter as joint tenants. The daughter was not aware that the condominium was, in fact, owned by a revocable trust for which the parents served as trustees.The parents later sought to annul the deed in the Baldwin Circuit Court, arguing that the deed was ineffective because the property was owned by the trust and they had not executed the deed as trustees. They also contended that the conveyance was voidable under Alabama law because a material part of the consideration was the daughter’s promise to support them. The daughter sought reformation of the deed to reflect the parents' trustee status and counterclaimed for fraud and breach of warranty. The Baldwin Circuit Court annulled the deed and dismissed the daughter’s counterclaims.The Supreme Court of Alabama reviewed the case. It held that the controlling statute, § 8-9-12, Ala. Code 1975, permitted annulment of a real property conveyance when a material part of the consideration was an agreement to provide support, regardless of whether the grantor acted as an individual or trustee. The Court further held that annulment of the deed extinguished any warranties arising from the conveyance and rendered the fraud counterclaim untenable. Accordingly, the Supreme Court of Alabama affirmed the judgment, upholding annulment of the deed and dismissal of the counterclaims. View "Schumpert v. Wallace" on Justia Law

Fifteen local United Methodist Church congregations in Alabama initiated civil actions against the Alabama-West Florida Conference of the United Methodist Church, Inc., seeking to quiet title to the church properties they occupied and used for worship. The Conference and its board of trustees joined the cases and filed counterclaims, asserting that the properties were either owned by the Conference’s board or held by the local churches in trust for the Conference or its board. Both sides relied primarily on secular documents, such as deeds and corporate records, though the Conference also referenced trust provisions in the Book of Discipline.Trial courts in various counties reviewed the motions by the local churches to dismiss the Conference’s counterclaims, arguing that the courts lacked subject-matter jurisdiction under the ecclesiastical-abstention doctrine, which prohibits courts from resolving matters of church doctrine or internal governance. The trial courts granted the motions to dismiss the counterclaims but allowed the local churches’ quiet-title claims to proceed. The Conference and its board then petitioned the Supreme Court of Alabama for writs of mandamus, seeking to overturn the dismissals.The Supreme Court of Alabama determined that the trial courts erred in dismissing the counterclaims for lack of subject-matter jurisdiction. The Court held that the property disputes could be resolved under neutral principles of law without requiring the courts to decide ecclesiastical matters. Because both parties relied on the same secular materials, and the counterclaims did not require adjudication of religious doctrine, the ecclesiastical-abstention doctrine did not bar jurisdiction. The Supreme Court issued writs of mandamus, directing the trial courts to vacate their orders dismissing the Conference’s counterclaims. View "Mt. Zion of Autauga County, Inc. v. Alabama-West Florida Conference of the United Methodist Church, Inc." on Justia Law

Mark Weaver, the owner of a commercial property in Gadsden, entered into a ten-year lease with Frios Gourmet Pops, LLC, managed by Andy Harp, in 2016. The lease required monthly rent payments of $4,800, with Harp as a personal guarantor. The lease contained specific provisions addressing default, termination, and the parties’ obligations in the event of breach. In 2018, Harp assigned the lease to Frios Manufacturing, LLC, involving Kevin Harper as a new guarantor. After the original business moved out of the property in early 2019, Harp attempted to find new tenants and eventually established Gardens on Air, LLC on the premises. However, this venture ended in July 2019, and by early 2020, the Frios defendants stopped paying rent. Weaver subsequently terminated their right of possession and reentered the property, later reletting it at a lower rent and ultimately selling it.The Etowah Circuit Court first denied Weaver’s request for summary judgment and instead partially granted summary judgment to the Frios defendants, concluding that Weaver’s recovery was limited to the rent accrued before the termination of tenancy. The trial court excluded evidence of damages beyond that amount and, after a bench trial, awarded Weaver damages limited to unpaid rent, interest, and attorney’s fees up to the time of termination. Weaver’s postjudgment motion was denied by operation of law, and he appealed.The Supreme Court of Alabama reviewed the case de novo, holding that the lease provisions allowed for posttermination damages, including the difference between reserved rent and rent received from reletting, and reasonable costs incurred due to breach. The Court found that the trial court erred in limiting Weaver’s recovery to accrued rent only and excluding evidence of further damages. The judgment was reversed, and the case was remanded for further proceedings consistent with the Supreme Court’s opinion. View "Weaver v. Frios Gourmet Pops, LLC" on Justia Law

A Delaware limited liability company entered into an agreement to purchase real property in Jefferson County, Alabama, from an Alabama limited partnership. The agreement included provisions for the recovery of attorneys’ fees by the prevailing party in litigation arising from the contract. Disputes arose regarding whether the buyer satisfied conditions to extend the closing date, leading the seller to declare the agreement terminated. The buyer sued the seller, the seller’s general partner (a California corporation), and various individual limited partners (in both their personal capacities and as trustees of family trusts), seeking among other relief, damages for breach of contract and a declaration of rights under the agreement. The contract also provided for reimbursement of transaction costs and attorneys’ fees under certain circumstances.The case proceeded in the Jefferson Circuit Court. The court granted summary judgment for the buyer on liability, finding the seller had breached the agreement, and set the issue of damages for a jury trial. Subsequently, disputes arose about whether attorneys’ fees should be decided by the jury or the court. The circuit court ruled that attorneys’ fees recoverable by the prevailing party under the contract would be determined by the court after trial, not by the jury. The seller, general partner, and limited partners sought a writ of mandamus from the Supreme Court of Alabama, arguing they were entitled to a jury trial on attorneys’ fees.The Supreme Court of Alabama denied the petition for writ of mandamus. The Court held that the petitioners failed to demonstrate a clear legal right to a jury determination of prevailing party attorneys’ fees under the contract, because they did not adequately show that the Alabama Constitution or statutes provide such a right for this type of claim. The Court declined to overrule the circuit court’s decision to reserve the issue of attorneys’ fees for judicial determination following the trial on damages. View "Ex parte Vestavia Hills, Ltd." on Justia Law

A veteran and his spouse obtained a VA-guaranteed loan to purchase a home. After the veteran’s employment was disrupted due to the U.S. withdrawal from Afghanistan, the couple experienced financial hardship and defaulted on their mortgage. The lender, a bank, initiated foreclosure proceedings. The couple attempted to reinstate their mortgage by tendering the full amount to bring the loan current, as provided by the mortgage contract, but allege that the bank and its foreclosure law firm failed to accept their payment or provide a means for payment. The property was sold to third-party purchasers at a foreclosure sale for more than the outstanding loan balance. The couple claims they did not receive adequate notice or an opportunity to exercise their statutory right of redemption.The third-party purchasers filed an ejectment action in Madison Circuit Court. The couple defended against the action and brought counterclaims against both the purchasers and the bank, alleging breach of good faith and fair dealing, breach of contract, wrongful foreclosure, unjust enrichment, and seeking declaratory relief. The trial court dismissed all claims against the bank and the third-party purchasers and granted summary judgment on the ejectment. The couple amended their pleadings, but the trial court again dismissed all claims. They appealed to the Supreme Court of Alabama. During the appeal, they settled with the third-party purchasers, leaving only their claims against the bank.The Supreme Court of Alabama held that Alabama law does not recognize an independent cause of action for breach of the duty of good faith and fair dealing and affirmed dismissal of that claim. However, the Court found that the couple adequately pleaded claims for breach of contract (due to the bank’s alleged refusal to allow reinstatement), wrongful foreclosure, and unjust enrichment. The Court reversed dismissal of those claims and remanded the case for further proceedings. View "Laborde v. Citizens Bank, N.A." on Justia Law

A group of property owners and their subdivision’s architectural committee initiated a lawsuit against two individuals and their investment company, alleging that the defendants began residential construction on two lots within a Guntersville subdivision without necessary building permits, failed to follow approved construction plans, and violated local building codes. The subdivision was governed by recorded restrictive covenants requiring written approval from the architectural committee for all construction. The defendants, who are experienced in homebuilding and acknowledged their awareness of the covenants, submitted plans and received approval but later built structures that did not conform to the approved plans and did not seek further approval for significant changes.The Marshall Circuit Court granted summary judgment in favor of the plaintiffs on the defendants’ counterclaims and conducted a bench trial. The trial court found that the defendants knowingly violated the restrictive covenants by constructing unapproved structures and rejected the argument that initial approval allowed them to build anything they chose. The court ordered the defendants to either bring the construction into compliance with previously approved plans, seek new approval within 30 days, or submit a removal plan for the unapproved structures if approval was not obtained. The defendants’ motions to alter the judgment or extend time for approval were denied.On appeal, the Supreme Court of Alabama examined whether the trial court erred by not applying the relative-hardship test, which can prevent enforcement of covenants if the hardship to the violator greatly outweighs the benefit to those enforcing them. The Supreme Court held that, although the defendants did not waive the hardship defense, the trial court properly declined to apply it because the defendants’ willful and intentional misconduct—knowingly constructing non-conforming structures—barred them from equitable relief under the clean-hands doctrine. The Supreme Court of Alabama affirmed the trial court’s judgment. View "Dendy v. Ryan" on Justia Law

The dispute arose when a property owner obtained a building permit from a city and was required, under the city’s standard procedures, to submit a form containing financial information about subcontractors before the city would conduct necessary inspections and issue a certificate of occupancy. The property owner refused to provide the requested information, leading the city to withhold inspections. As a result, the property owner filed suit, seeking a declaratory judgment that the city lacked authority to require such information and requesting an order compelling the city to perform the inspections. The owner also sought damages for delays allegedly caused by the city’s refusal to inspect.After the property owner settled with the city’s building inspector, the case proceeded in the Baldwin Circuit Court. The jury was asked to decide both the declaratory judgment and damages claims, ultimately finding in favor of the property owner and awarding over $3.5 million in damages. The city appealed. The Supreme Court of Alabama, in a prior decision, held that the damages claim was barred by substantive immunity and reversed the damages award, but did not address the declaratory judgment claim, remanding the case for further proceedings.On remand, the Baldwin Circuit Court entered judgment for the property owner on the declaratory judgment claim but did not award damages. The city appealed again. The Supreme Court of Alabama held that, because the inspections had already been completed and all requested relief had been granted or resolved, no justiciable controversy remained. Therefore, the trial court lacked subject matter jurisdiction to enter a declaratory judgment. The Supreme Court of Alabama reversed the trial court’s judgment and remanded the case for dismissal. View "City of Orange Beach v. Boles" on Justia Law

A Georgia limited-liability company owned and operated a hotel in Birmingham, Alabama, which was subject to a $10,710,000 loan secured by a mortgage, an assignment of leases and rents, and other collateral. The loan was eventually assigned to a bank acting as trustee for a mortgage trust. After the hotel owner allegedly defaulted on its loan obligations and mismanaged the property, the bank filed a complaint in the Jefferson Circuit Court seeking the appointment of a receiver to manage the hotel and ensure payment of operating expenses. The court appointed a receiver and issued orders outlining the receiver’s duties, including managing the hotel and paying its expenses.Following the appointment, disputes arose between the hotel owner, the receiver, and the bank regarding whether the receiver was required to pay expenses incurred before the receivership began (“pre-receivership claims”). The hotel owner sought to compel the receiver to pay these claims, while the receiver and the bank objected, arguing that such payments could harm the receivership estate and improperly prioritize unsecured creditors over the secured lender. The circuit court ultimately issued an order in July 2024 clarifying that the receiver was required to pay pre-receivership expenses, prompting the receiver to appeal.The Supreme Court of Alabama reviewed whether the July 2024 order was an appealable interlocutory injunction and whether the circuit court erred in requiring the receiver to pay pre-receivership claims without regard to creditor priority. The court held that the order was injunctive in nature and appealable. It further held that the circuit court exceeded its discretion by requiring the receiver to pay all pre-receivership claims unconditionally, as this could harm the receivership estate and the interests of priority creditors. The Supreme Court reversed the July 2024 order and remanded the case for further proceedings. View "Kolessar v. SJP Investment Partners, LLC" on Justia Law