Justia Alabama Supreme Court Opinion Summaries

The Supreme Court consolidated two cases for the purposes of this opinion. Each of the plaintiffs in these cases attended a foreclosure auction, was the successful bidder at that auction, paid money for the auctioned property, and received a foreclosure deed to the property. Each plaintiff brought an ejectment action under Alabama law, claiming good title to the property at issue and the right to eject the original debtor. Upon review, the Supreme Court concluded that the trial courts had subject-matter jurisdiction over these cases, including any issue as to the validity in fact of the plaintiffs' title to the property (this being one of the elements of proof required in an ejectment action). The Supreme Court reversed the trial court in the "Strudivant" case, but affirmed in the "Harris" case. View "Sturdivant v. BAC Home Loans Servicing, LP" on Justia Law

GMAC Mortgage, LLC challenged the reversal of a circuit court judgment entered on GMAC Mortgage's ejectment action against Reginald and Diana Patterson. Upon review the Supreme Court reversed the appellate court's and remanded for further proceedings: "We … recognize, contrary to the holding of the Court of Civil Appeals, that, with respect to nonjudicial foreclosures through the exercise of a power of sale, there is no 'initiation of foreclosure proceedings' with the import ascribed to it. Nor does a 'foreclosure' of the mortgagor's rights occur at some midpoint in that process. We are left then with the notion, long established as it turns out, that the 'foreclosure' of a mortgagor's rights does not occur until the 'end,' when a deed divesting the mortgagor of its rights is signed and delivered to a purchaser." View "Patterson v. GMAC Mortgage, LLC " on Justia Law

The Board of Equalization and Adjustment of Shelby County appealed a consent judgment reflecting an agreement between the Board and Shelby 39, LLC. The Board argued the circuit court lacked subject-matter jurisdiction over certain matters decided by the consent judgment. Upon review, the Supreme Court affirmed. View "Board of Equalization and Adjustment of Shelby County v. Shelby 39, LLC " on Justia Law

In case no. 1111525, M & F Bank ("M & F") appealed a summary judgment entered in favor of First American Title Insurance Company ("FATIC") on negligence, breach-of-contract, and bad-faith-failure-to-pay claims M&F asserted against FATIC related to a title-insurance policy ("the title policy") FATIC issued M & F in connection with a mortgage loan made by M & F to a developer of property in Auburn. In case no. 1111568, FATIC appealed the grant of summary judgment entered in favor of M & F on FATIC's counterclaims asserting abuse of process, conspiracy, breach of contract, and negligence. Upon review of both cases, the Supreme Court affirmed both judgments. View "M & F Bank v. First American Title Insurance Company " on Justia Law

The O'Neals appealed a circuit court order that granted Bama Exterminating Company, Inc.'s motion to compel arbitration. The dispute arose shortly after the O'Neals closed on the purchase of a house. As part of the loan disclosures, Bama Exterminating prepared an inspection report that the house was termite-free. The report did disclose a prior infestation at the house's carport from several years earlier. Mr. O'Neal signed the report right below the arbitration provision. Two weeks after closing, the O'Neals discovered "bugs" in the walls. They called Bama Exterminating who confirmed that the bugs were termites. The O'Neals then sued Bama Exterminating alleging negligence, wantonness and breach of contract. Bama Exterminating answered their complaint with the affirmative defense of the arbitration clause in the inspection report. The parties moved toward trial in the circuit court. When mediation failed, Bama Exterminating moved the court to compel arbitration. The O'Neals argued that the exterminator waived its right to compel arbitration by its participation in the litigation process. The Supreme Court found the exterminator did not waive its right to compel arbitration, and therefore affirmed the circuit court's decision to grant the company's motion. View "O'Neal v. Bama Exterminating Company, Inc. " on Justia Law

Timmy and Stephanie Blackmon sued Eddie Powell (d/b/a Powell Plumbing Company) for negligence, wantonness, breach of implied warranties and breach of contract following a water-line rupture that caused extensive flooding and water damage. The trial court granted summary judgment in favor of Powell, and the Blackmons appealed. Finding the evidence in the trial court record supported the motion for summary judgment, the Supreme Court affirmed. View "Blackmon v. Powell" on Justia Law

Fred and Nancy Eagerton petitioned the Supreme Court for a writ of mandamus to direct the Circuit Court to enter a judgment as a matter of law in their favor and against SE Property Holdings, LLC, consistent with the Court's mandate in "Eagerton v. Vision Bank," (99 So. 3d 299 (Ala. 2012)). SE Property Holdings, LLC, is the successor by merger to Vision Bank. The underlying suit arose from a loan that the Eagertons personally guaranteed, secured by a mortgage on property within the Rock Creek Tennis Club in Fairhope. The bank declared the original and second loans in default and accelerated balances due under both. The bank sued the primary obligor, and the Eagertons as person guarantors on one of the original loans. The primary obligor declared Chapter 11 bankruptcy. The reorganization plan consolidated the two loans. The obligor eventually defaulted on the terms of the reorganization plan. The bankruptcy was dismissed, the property foreclosed, and the money obtained in the foreclosure sale was applied to the consolidated loan. The Eagertons argued that the Chapter 11 reorganization of the debts of primary obligor (the consolidation of the original loan with the second loan), created a new indebtedness not encompassed by their guaranty contracts. The Eagertons therefore argued that the creation of this new indebtedness, without their knowledge or consent, operated to discharge them from any further obligations under their guaranty contracts. The bank, on the other hand, argued, among other things, that the consolidated loan was a replacement note contemplated by the guaranty contracts and that the Eagertons had waived the material-modification defense. The Supreme Court in "Eagerton v. Vision Bank" concluded that the Eagertons' guaranty contracts were unambiguous; that based on the language in the guaranty contracts the Eagertons did not intend to guarantee any indebtedness other than that indebtedness arising out of the original loan and any extensions, renewals, or replacements thereof; and that, once the Eagertons' original loan was modified pursuant to the Chapter 11 reorganization of Dotson 10s, the Eagertons were at that point discharged from any further obligations under their guaranty contracts. Because the circuit court did not follow the mandate in the Court's prior decision in "Vision Bank," the Supreme Court granted the Eagertons' petition and issued the writ. View "SE Property Holdings, LLC v. Eagerton" on Justia Law

Defendants The Pantry, Inc., and Herndon Oil Corporation appealed a judgment entered on a jury verdict in favor of plaintiffs Kaycee Mosley and Alana Byrd. The appeals primarily concerned whether Kaycee and Alana's mother, Murel Mosley, unreasonably withheld consent to Herndon Oil's assignment of a lease between Murel and Herndon Oil. Upon review of the matter, the Supreme Court reversed the judgment and remanded the case, concluding that Murel unreasonably withheld consent to the assignment of the lease from Herndon Oil to The Pantry. Thus, Herndon Oil had the right under the lease agreement to assign the lease to The Pantry despite Murel's failure to consent. Furthermore, neither Herndon Oil nor The Pantry could be liable on a conversion claim. View "The Pantry, Inc. v. Mosley" on Justia Law

Appellants R & G, LLC, George D. Copelan, Sr., Gilman Hackel, and Robert Yarbrough appealed a $1.3 million circuit court judgment entered against them and in favor of RCH IV-WB, LLC ("RCH"). In July 2005, Wolf Bay Partners, L.L.C., executed a promissory note with Wachovia Bank in the original principal amount of $2.5 million. That note was secured by a mortgage on two parcels of property in Baldwin County and guaranteed by each of the appellants, as well as by Defendants GDG Properties, LLC, David W. Mobley, and George D. Gordon. By written agreement of the parties, the amount of the indebtedness was subsequently increased to $2.9 million. Wachovia Bank thereafter assigned its interest in the note and mortgage to RCH Mortgage Fund IV, LLC. Wolf Bay Partners subsequently defaulted on its payment obligations under the terms of the promissory note, and RCH Mortgage Fund IV accordingly commenced foreclosure proceedings on the property secured by the mortgage. In early 2009, RCH, a newly created affiliate of RCH Mortgage Fund IV, purchased the property at a foreclosure sale for $2 million and RCH Mortgage Fund IV thereafter assigned RCH all of its rights under the loan. In June 2009, RCH sued the defendants, seeking to recover $1.1 million allegedly still due on the promissory note, plus interest after the proceeds of the foreclosure sale were applied to the debt. A bench trial was held, at which the defendants challenged the evidence put forth by RCH indicating that the foreclosed-upon mortgage had been properly assigned to RCH Mortgage Fund IV by Wachovia Bank. The defendants also argued that it was improper for RCH Mortgage Fund IV to sell the foreclosed property as a single unit instead of as two separate parcels and that RCH Mortgage Fund IV accepted an allegedly unconscionably low purchase price at the foreclosure sale. The trial court ultimately excluded the evidence put forth by RCH indicating that the mortgage had been assigned to RCH Mortgage Fund IV and set aside the foreclosure and sale because, for all that appeared, the wrong party had conducted the foreclosure and sale. The trial court made no ruling on the defendants' other arguments because it found that RCH Mortgage Fund IV was the wrong party to conduct the foreclosure and sale. RCH appealed the trial court's judgment to the Supreme Court, which held that RCH's evidence of mortgage assignment should have been considered by the trial court. On remand, RCH in light of the Supreme Court's reversal, all that was left for the trial court but to enter a final judgment in RCH's favor. RCH's brief was served on all defendants; however none filed a response. The trial court entered judgment in favor of RCH. Defendants Hackel and Yabrough moved the trial court to alter, amend or vacate its judgment in favor of RCH. Unsuccessful, they appealed. Upon review, the Supreme Court concurred with the trial court's new judgment in favor of RCH, and affirmed. View "R & G, LLC v. RCH IV-WB, LLC " on Justia Law

Alamo Title Company ("Alamo"), petitioned the Supreme Court for a writ of mandamus to direct the Jefferson Circuit Court to vacate its order that denied Alamo's motion to dismiss an action filed against it by P.B. Surf, Ltd., and to enter an order dismissing the action for lack of personal jurisdiction. This dispute concerned the disbursement of proceeds from the sale of the an apartment complex in Houston, Texas. According to P.B. Surf, at the time the sale was scheduled to close in late 2011, a dispute arose over who was entitled to the net proceeds of the sale and where the net proceeds were to be deposited after the closing. After the closing, Alamo wired a portion of the net proceeds from the sale to a Birmingham Wells Fargo bank account pursuant to instructions from several of the sellers. P.B. Surf sued Alamo and several other defendants, alleging, among other things, conspiracy. Alamo moved the trial court, pursuant to Rule 12(b)(2), Ala. R. Civ. P., to dismiss P.B. Surf's claims against it for lack of personal jurisdiction. In an amended complaint, P.B. Surf alleged that Alamo was partially responsible for what it alleged was the improper distribution of the proceeds among Defendants Guy Savage and Willem Noltes, and P.B. Surf. When the trial court denied its motion to dismiss, Alamo moved to reconsider which was also denied. Considering the minimum-contacts analysis in the context of specific personal jurisdiction, the Supreme Court concluded that the requisite minimum contacts for the trial court's exercise of specific jurisdiction over Alamo did not exist. Furthermore, the Court found that Alamo's contacts with Alabama were not continuous and systematic so as to support the trial court's exercise of general personal jurisdiction over Alamo. Therefore, the petition for a writ of mandamus established clear legal right to dismissal of P.B. Surf's complaint. View "In re: P. B. Surf, Ltd. v. Savage" on Justia Law